Contact us >>

05 October 2023

10 facts you need to know about the limited liability company in Romania

Discover the ins and outs of setting up limited liability company in Romania! If you're looking to establish a business in this vibrant European country, understanding the concept of a limited liability company (LLC) is crucial | It offers numerous advantages for entrepreneurs, protecting your personal assets while enjoying the flexibility and simplicity of running your own company

 

Guide to set up limited liability company in Romania

 

Let's delve deeper into the benefits of setting up an LLC in Romania. One of the key advantages is the limited liability protection it provides. As the name suggests, your personal assets are shielded from any liabilities incurred by the company. This means that if your business faces financial difficulties or legal issues, your personal belongings, such as your house or car, are generally safe from being seized to cover the company's debts.

 

Let's find out why setting up a limited liability company in Romania is a real plus for your business. Another advantage of an LLC in Romania is the ease of management and decision-making. Unlike other business structures, an LLC allows for a flexible management system. You can choose to have a single director or a board of directors, depending on your preferences and the needs of your business. This flexibility extends to decision-making as well, as the company's shareholders have the freedom to determine the rules and regulations that govern the company's operations. Additionally, an LLC in Romania can be established with just one shareholder and one director, making it an attractive option for small businesses or startups.

 

Furthermore, an LLC offers a level of credibility and professionalism that can be beneficial for attracting investors and business partners. The structure of an LLC provides a clear separation between the company and its owners, which can enhance the perception of stability and reliability. This can be particularly advantageous when seeking funding or entering into business agreements. Additionally, an LLC can have up to 50 shareholders, allowing for potential growth and expansion of the company. This scalability can be appealing to entrepreneurs who have long-term goals of expanding their business operations. Overall, the advantages of a limited liability company make it a popular choice for many entrepreneurs looking to start their own business.

 

All you need to know about setting up a limited liability company in Romania (LLC = SRL societate cu raspundere limitata). Romanian limited liability company incorporation in just 3 days. Advantages and disadvantages. What to consider in order to decide a company registration in Romania?

 

The limited liability company LLC (in Romanian: SRL - societate cu răspundere limitată) is the most used form of corporate vehicle in Romania, being chosen also as the safest for its shareholders and directors. The Romanian LLC is also the most suitable in matter of cost efficiency, with the minimum incorporation cost and almost no share capital contribution required for setting up the company.

 

Advantages for registering a company in Romania as a limited liability company

 

Let's find out why setting up a limited liability company in Romania is a real plus for your business. 

1. Foreign citizens and legal persons can incorporate their own limited liability company; contrary to other EU jurisdictions, Romania allows foreigners quickly and easily to own and operate their own company without any restrictions.

 

Romania welcomes foreign citizens and legal entities with open arms, offering them the opportunity to establish their very own limited liability company within its borders. This means that individuals from all corners of the globe, as well as organizations from various industries, can take advantage of the favorable business environment in Romania and set up their operations here. Whether you're an ambitious entrepreneur looking to expand your business or a multinational corporation seeking to tap into new markets, Romania provides a fertile ground for growth and success.

 

2. The liability of the shareholders is limited to their capital contribution subscription; that's setting up a limited liability company in Romania is an important shield towards company's creditors and banks

 

Shareholders are protected by a legal provision that limits their liability to the amount they have invested in the company. This means that if the company faces financial difficulties or legal issues, shareholders are not personally responsible for any debts or obligations beyond their initial capital contribution. This provides a sense of security for shareholders, as they can invest in the company without the fear of losing more than what they have already put in.

 

3. Quick incorporation proceedings in Romania, the limited liability company being set up within two working days;

 

Time is of the essence when it comes to starting your limited liability company, and we recognize the need for a fast and efficient registration process. Our incorporation proceedings have been designed to expedite the registration of your company, ensuring that you can begin operations within just 2 days. Our dedicated team of professionals will guide you through each step, from preparing the necessary documentation to filing the required forms. With our expertise and commitment to efficiency, you can rest assured that your company will be registered promptly, allowing you to embark on your entrepreneurial journey without unnecessary delays.

 

4. Setting up limited liability company in Romania may belong only to one single shareholder; the maximum number of shareholders in the Romanian limited liability company in 50 (fifty).

 

In Romania, it is possible for a company to be formed with just one shareholder. This means that an individual can establish a business on their own without the need for additional partners or shareholders. This offers a great advantage for entrepreneurs who prefer to have full control and decision-making power over their company. Whether it's a small startup or a larger enterprise, the option of a single shareholder company formation provides flexibility and autonomy.

 

On the other hand, the Romanian limited liability company has a maximum limit of 50 shareholders. This means that if you decide to establish a company with multiple shareholders, you can have up to 50 individuals or entities involved in the ownership structure. This allows for the possibility of pooling resources, expertise, and capital from a diverse group of investors or partners. It also provides the opportunity for shared responsibilities and decision-making, which can be beneficial in certain business scenarios.

 

5. The Romanian limited liability company may have at least one director or even more, which are appointed by the general meeting of the shareholders; the directors are the company's legal representatives before local authorities and third parties. The company's directors may be natural persons or legal persons, being names in the setting up process.

 

When it comes to the governance structure of a Romanian limited liability company, the power to appoint directors lies in the hands of the general meeting of the shareholders. This meeting serves as a platform for shareholders to come together and make important decisions regarding the company's management. The shareholders have the authority to select one or more directors who will be responsible for overseeing the day-to-day operations and strategic direction of the company. This process ensures that the interests of the shareholders are represented and that the company is led by competent individuals who can make sound business decisions.

 

6. The Romanian societate cu răspundere limitată represents a separate and distinct Romanian entity, which is able to buy lands, buildings and other immovable assets in Romania and the whole European Union in circumstances such as a Romanian citizen. So, in fact setting up a limited liability company means born of a legal person, similar to a natural one.

 

7. The Romanian limited liability company is registered by default with the Romanian Trade Registry as micro enterprise and will automatically pay the 1% income tax, only it has an employee within a 30 days term since of its incorporation.

 

To see more about the taxation of the Romanian SRL societate cu răspundere limitată, please consult our specialized article What taxes your Romanian company pays? Chapter I or What taxes your Romanian company pays? Chapter II

 

The Romanian limited liability company possesses the unique advantage of being able to acquire various types of immovable assets, including lands and buildings, not only within Romania but also across the entire European Union. This remarkable ability is comparable to that of a Romanian citizen, granting the company the freedom to expand its real estate portfolio beyond national borders. With this privilege, by setting up a company in Romania you can explore investment opportunities in different countries within the European Union, diversifying its assets and potentially maximizing its profits.

 

8. The limited liability company set up in Romania may choose to apply the corporate income tax regime since its incorporation, providing that it fulfills certain conditions in terms of value of share capital and number of employees.

 

9. The fiscal registration number is allocated by the Trade Registry at the moment the Romanian limited liability company setting up;

 

10. The Romanian limited liability company must register, since its setting up, at least one office address / headquarter, the the correspondence, notices, subpoenas will be submitted by the authorities. This headquarter address can not be a PO box. In order to find more about the company, please read our blog article The headquarter of your company.

 

11. Low costs for setting up and maintaining active the Romanian limited liability company, compared to other EU states.

 

In addition to the financial benefits, Romania offers a favorable business environment that encourages growth and innovation. The country boasts a skilled and educated workforce, with a strong emphasis on technology and entrepreneurship. The government has implemented various initiatives to support startups and small businesses, providing access to funding, mentorship programs, and networking opportunities. This supportive ecosystem, combined with the low costs of incorporation and maintenance, makes Romania an ideal destination for entrepreneurs looking to establish and grow their businesses in the EU.

 

Disadvantages of setting up a limited liability company in Romania

 

1. The setting up process of the limited liability company in Romania is not easy, being a complex one, designated especially to be carried out by corporate business lawyers.

 

To see more about our specialized attorneys at law for company formation matters, you are invited to meet our team.

 

2. The headquarter of the Romanian limited liability company must be registered with the Trade Registry within the setting up proceedings, being public, as well as its shareholders.

 

3. Annual financial tax reporting is mandatory.

 

Documents needed for setting up a limited liability company in Romania

 

The main documents necessary for starting the specific procedures for setting up a limited liability company in Romania include several documents., as follows:

 

  • application-form for the company incorporation, issued by the form preapproved by  O.N.R.C (i.e., Romania’s National Trade Registry Office);

  • reservation of the company name (in the county or at a country level);

  • articles of incorporation, including the identity data of the shareholders and directors, the main object of activity, as well as the secondary object of activity; company associates / administrators; the contribution to the share capital of each of the associates.

  • fiscal record of each of the associates and administrators of the company;

  • the deed of ownership right on the space where the registered office is established/loan or contract rental of the respective space;

  • the agreement of the owners/tenants association, if the case;

  • the agreement of the neighbors, in some specific cases;

  • copy of the Identity Card/Passport of the shareholders;

  • statements from the company’s associates (authenticated), including the company's beneficial owner (UBO)

 

How long does it take to set up a limited liability company in Romania?

 

Within approximately 3 days since the setting up process was initiated by submitting the incorporation request, the company’s incorporation documents will be issued by the Romanian Trade Registry, meaning here the identification documents for the company, similar to the identity card for the natural person.

 

Of course, this 3 days term will be complied with only if the submitted documents comply with the legal requirements and does not have inadequacies. 

 

So, the registration of a Romanian company requires effort, attention to details and documentation, specific mainly to the corporate lawyers. So, a good knowledge of all relevant incorporation provisions by the lawyer ensures the company registration process. Our Romanian Advocacy lawyers are specialized in all corporate matters, starting from setting up a company in Romania, to more complex operations, such as mergers, acquisitions and spin off.

 

A coordinator lawyer from Romanian Advocacy will handle the whole setting up process, in order that your project will be completed within the planned schedule.

 

Don't hesitate to reach out! You can send us an email at tudor@roadvocacy.ro or give us a call at +40 723 77 37 59. You can also use the contact form on our website at www.roadvocacy.ro. We're always here to help and answer any questions you may have. Contact us here for more details about the company formation in Romania.

 

The blog of the Romanian lawyer

 

 

 

The Lawyer's corner is nothing else but a legal blog dedicated only for entrepreneurs and investors in Romania 

 

Weekly usefull posts about the investors' first steps in Romania, from the perspective of practicing business law, servicing our clients' needs and litigation, written and published by a Romanian litigation lawyer with over 15 years experience

 

 

  1. ro
  2. en

Romanian Advocacy

 

| Your Business | Our Mission |

Romanian Advocacy

 

| Your Business | Our Mission |

Romanian Advocacy

| Your business | Our mission |

 

Full range of legal services for businesses, companies and individuals. Your lawyers in Romania.

 

Romanian Advocacy

| Your business | Our mission |

 

Full range of legal services for businesses, companies and individuals.

 

Visit us at our headquarters:

 

Romanian Advocacy

4th Știrbei Vodă St., entrance D, apt. 127, 010111, Bucharest, Romania

 tudor@roadvocacy.ro

 +40 723 773 759