How to register a company in Romania?

In order to register a company in Romania, you need to choose the type of company form you want to incorporate, to prepare the necessary documents and to submit the application to the Romanian Trade Registry. Most common forms of companies in Romania are the Limited Liability Company (LLC), Joint Stock Company (SA) and sole trader (PFA).

How long does it take to open a company in Romania?

The company formation in Romania process will take 2 working days, since the date the incorporation application is submitted to the Romanian Trade Registry.

What is the main advantage to open a company in Romania?

One of the lowest taxation in EU: 1% turnover tax for the companies whose turnover does not exceed EUR 60,000 and have at least one employee or 3% turnover tax if the companies has a revenue exceeding EUR 60,000 or the companies is engaged in some specific activities.

Can I start a company in Romania as a foreigner?

Foreign citizens and legal persons can quickly and easily incorporate their own company in Romania, without any restrictions. There is no need for a Romanian shareholder and director

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04 September 2023

Post incorporation compliance for your Romanian company

Ensuring compliance with post-incorporation requirements is an essential aspect of company incorporation in Romania. Once a company is incorporated, there are several legal obligations that need to be fulfilled to maintain compliance with the local regulations | Post incorporation compliance legal duties in Romania in 5 steps

What are the legal duties after incorporating business

Are you struggling with post incorporation compliance for your company in Romania? Look no further! Our experienced lawyers specializes in company incorporation and will guide you through the compliance maze. From filing the necessary documents to meeting all legal requirements, we've got you covered. Trust us to handle your compliance needs with utmost professionalism.

Post-incorporation duties for companies registered in Romania include opening a bank account, subscribing share capital, hiring an accounting service, and hiring at least one employee. These duties are essential for the smooth functioning, financial management, and legal compliance of the company. By fulfilling these obligations, the company can establish a strong foundation for its operations and ensure its long-term success.

This article sums a post incorporation checklist that includes all the important steps that follow the incorporation of your business in Romania, according to the Romanian legislation.

Obtaining the certificate of incorporation for your company, as we explained in our previous blog article - 5 steps for setting up a company in Romania, is the most exciting moment in your business start up journey. Your company is already born as an artificial person, but also it has certain legal rights and liabilities. Shareholders are the owners of the company and the directors are the brains and organs. That is to say, you - as the shareholders and directors are the parents of your company.

But as a parent, you are responsible for the actions and inactions of your company and personally liable to comply with the legal requirements provided by the Romanian legislation. Here are the essential steps to take after incorporation of your business, bearing in mind that ignorantia juris non excusat - ignorance of the law is not an excuse:

Opening the bank account with a Romanian bank. The company registered in Romania can not work without a banking account

After the company incorporation, it is necessary to open a current bank account in the name of your company with any Bank in Romania. All the transactions in the name of the company should be carried our by using the company bank account only.

Once your company has been officially incorporated, the next crucial step is to establish a current bank account under the name of your business with any reputable bank in Romania. This is an essential requirement to ensure smooth financial operations and to separate your personal finances from your company's funds. By opening a dedicated business account, you can effectively manage your company's financial transactions, receive payments from clients, and make necessary payments to suppliers and employees.

When selecting a bank for your company's current account, it is important to consider factors such as the bank's reputation, accessibility, fees, and the range of services they offer. Research different banks in Romania and compare their offerings to find the one that best suits your business needs. Additionally, some banks may provide additional benefits such as online banking facilities, business credit cards, and specialized financial services tailored to the needs of businesses. By carefully choosing the right bank, you can ensure a seamless banking experience and lay a solid foundation for your company's financial success.

The following are the documents and details usually required by the Romanian banks for opening a current bank account for your registered company in Romania :

Certificate of incorporation of the company;
Constitutive deed / articles of association of your company;
General meeting of the shareholders or board of directors resolution for opening and operation of bank account;
Ultimate beneficial owner (UBO) statement issued by the company's director.

In this respect, kindly note that you need to personally be present at the bank headquarters in order to sign all the necessary documents.

Deposit the company share capital in 3 months since its incorporation in Romania

Once you have opened the company bank account, the signatories of the constitutive deed / articles of association will have to deposit the subscription money as mentioned as share capital. Every shareholder will hold such a number of shares as per his subscription money as agreed by them in the constitutive deed.

Within three months from the date of incorporation, it is imperative to complete the deposit of the share capital. This timeframe allows the company to promptly secure the necessary funds to kickstart its operations and ensure its financial stability. By fulfilling this requirement, the company demonstrates its commitment to responsible financial management and establishes a strong foundation for future growth and success. It also enables the company to comply with legal and regulatory obligations, fostering transparency and accountability in its financial affairs. Therefore, timely deposit of the share capital is a crucial step in the early stages of a company's journey towards achieving its goals and objectives.

Contracting accounting and tax declaration services as soon after the company registration in Romania

Maybe this is the most important legal duty for your company, which has to maintain proper books of accounts. The books of account must give a true and fair view of the company affairs.

One of the key compliance aspects is tax registration and reporting. After incorporating a company in Romania, it is crucial to register for various taxes, such as corporate income tax, value-added tax (VAT), and social security contributions. Additionally, regular tax filings and reporting obligations need to be met to avoid penalties or legal issues. This includes submitting annual tax returns, VAT declarations, and payroll reports.

Every company has to draft and keep the books of account based on all receipts payments and incomes and to comply with legal requirements under Companies Law no. 31/1990 and other various laws. The books of accounts and financial statements shall give a true and fair view of the financial status of your company. Bookkeeping and accounting starts with recording of accounting transactions such as receipts and payments.

We may provide you accounting services for your company, depending on your specific needs.

Contract at least one employee within a 30 days term from the incorporation date, in order to pay less taxes (1% income tax on the company turn over, instead of 16% corporate tax)

Additionally, it is required to hire at least one employee after incorporation. This employee can be a director, a manager, or any other position necessary for the company's operations. Hiring an employee not only helps in managing day-to-day tasks but also ensures compliance with labor laws and regulations. It is important to follow the proper hiring procedures, including drafting employment contracts and registering the employee with the relevant authorities.

This condition may be fulfilled by concluding a labor agreement between you (as individual) and your company.

Boost your tax savings by hiring just one employee! By contracting at least one employee, you can take advantage of a fantastic 1% income tax rate. Imagine the possibilities of reducing your tax burden while simultaneously expanding your workforce. It's a smart move that pays off in more ways than one!

Applying for registration for VAT purposes with the already registered company in Romania

We may provide this service of VAT registration for your company, depending on your specific needs within the incorporation proceedings or later, after the incorporation is done by the Romania Trade Registry.

Final conclusion

In summary, post-incorporation compliance in Romania encompasses various aspects such as tax registration and reporting, accounting standards, and corporate governance. Meeting these compliance requirements is crucial for the smooth operation of a company and to avoid any legal or financial consequences. It is advisable to seek professional assistance or engage a compliance service provider to ensure that all the necessary obligations are met in a timely and accurate manner.

Now you know the important steps after incorporation of your company in Romania, you may proceed to start your business activities and continue to make your dreams come true.

Don't let post incorporation compliance in Romania overwhelm you. Our professional company incorporation services are here to simplify the process for you. With our expertise, you can rest assured that all your compliance obligations will be fulfilled accurately and on time. Take the stress out of compliance and let us handle it for you.

To learn more about the Romanian law related to companies, contact us for your queries. Don't hesitate to reach us at tudor@roadvocacy.ro or +40 723 77 37 59 or using the contact form on at www.roadvocacy.ro. We're here to help and answer any questions you may have.

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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