Company registration is the process of formalizing the status of a legal entity in accordance with the laws of a certain country. During this process, the company is officially recognized as a legal entity with its own legal capacity.
To receive this status, it is necessary to provide certain documentation and fulfill the requirements established by the state authorities. Due to registration, the entity is able to conduct commercial activities, conclude contracts, participate in court proceedings and perform other legally significant actions.
If you plan to start a business in Europe, Romania is an excellent choice for registering your company. The Manimama team has conducted in-depth research, analyzed the main subtleties of incorporating in Romania, and is ready to share its results and help you choose the right jurisdiction.
What are the main advantages of incorporating a company (business) in Romania?
1. Promising location:
Romania’s unique geographical position makes it an ideal bridge between Western Europe and the Balkans. It offers easy access to markets in both regions, creating vast opportunities for international trade and logistics. This strategic location enables companies to expand their business networks efficiently and enhance their competitiveness.
2. Favorable tax system:
With a corporate tax rate of 16%, Romania boasts one of the most attractive tax policies in the EU. This creates a business-friendly environment by reducing the financial burden on companies. Such a policy stimulates entrepreneurship and attracts international corporations seeking cost-efficient operations.
3. Advanced banking system:
Romania’s banking system is renowned for its stability and diverse services. Businesses can access financial tools, including local and international transactions, credit facilities, and investment services. This robust financial support fosters business growth and attracts new investments.
4. Developed infrastructure:
Recent investments in transportation, energy, and digital networks have significantly enhanced Romania’s infrastructure. The advanced level of development ensures efficient delivery of goods, reliable transport connections, and stable energy resources for businesses. These improvements simplify business operations and contribute to economic growth.
5. Highly skilled workers:
Romania takes pride in its highly skilled professionals, particularly in the IT and engineering sectors. The local workers are multilingual and offer competitive salary levels compared to other EU countries. This makes Romania an ideal destination for tech companies seeking talent to drive innovative projects.
6. Strong international cooperation:
As a member of the European Union, Romania provides businesses with seamless access to the EU’s single market of over 500 million consumers. Additionally, companies benefit from numerous EU trade agreements, which simplify import and export activities. This opens up tremendous opportunities for business growth and scaling.
How to register a company in Romania and what are the main requirements for such registration?
Step 1. Initial setup
- Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
- Preparation and filing of the package of documents.
Step 2. Company registration
- Select a unique company name and register it with the Romanian Trade Register.
- Prepare the required documents and file them with the Trade Register (company registration request may be submitted with qualified electronic signature via the Trade Register portal or at any of the Trade Register offices).
- Get all the official documents prepared and get them approved by the Trade Registry.
- Register with the Social Security Authorities and Labour Authorities (in case it has employees).
- Obtain a business license or permits (if applicable).
Requirements for registering a company in Romania on the example of a Limited Liability Company / Societate cu Raspundere Limitata (SRL):
- Shareholders: the SRL company can be founded by 1 shareholder (up to 50), who is a natural person or a legal entity. There is an opportunity to create a SRL with a single shareholder.
- Director: the company is required to have at least 1 director. The director can be a resident or non-resident of the country.
- Company secretary: no requirement.
- Minimum share capital: there is no minimum authorized share capital for a SRL.
- Legal address: the registered office of the company must be in Romania. According to the laws of the country, it is considered valid once the lease agreement has been concluded.
- Liability: the liability of each shareholder is limited to the value of their own share in the declared share capital.
- Accounting: company is required to prepare and submit financial statements.
What do you have to know about taxes when registering a company in Romania?
Corporate income tax (CIT):
- The standard rate is 16%.
- Companies whose turnover for the previous year exceeded €50,000,000 and which in the reporting year set their CIT below the minimum turnover tax are liable to pay CIT at the level of the minimum turnover tax – 1%.
- Romanian taxpayers engaged in activities such as gambling and nightclubs are taxed at a rate of 5% of income derived from such activities or 16% of taxable income, whichever rate is higher.
Personal income tax (PIT):
Exemption from the taxation:
- employees with disabilities;
- IT specialists (up to Lei 10,000 (approx. €2,009) gross per month);
- employees who work in the construction, agriculture and the food industry (up to Lei 10,000 (approx. €2,009) gross per month);
- employees who work in R&D or technological development.
Value-added tax (VAT):
- The standard rate is 19%.
- There are reduced rates of 9% (water, food & beverage industry, medical treatments and prosthesis, hotel accommodation, restaurant and catering services, provision of social housing under certain conditions, entrance fees to sports events, castles, museums and cinemas) and 5% (school books, newspapers, magazines).
- The mandatory VAT registration must be performed when the annual turnover of Lei 300,000 (approx. €60,277) is exceeded.
For readers
Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Romania. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.
By choosing our company formation service in Romania, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Romania and pave the way for your business success!
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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
