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25 November 2023

Register a company in Romania and pay a 1% income tax

Establishing a business in Romania presents an incredible opportunity to benefit from a favorable tax system. By registering a company in this vibrant European country, you can take advantage of the attractive 1% income tax rate. This low tax rate is a significant advantage for entrepreneurs and investors looking to maximize their profits and minimize their tax burden. Do you want to register a company in Romania? It is very easy to start a business when you combine passion with desire. Open a company in Romania in 3 days. No public notary needed. Headquarter included.  Your business, our mission

 

Starting a business in Romania limited liability company

 

When you decide to register a company in Romania, you are opening doors to a multitude of possibilities. Not only will you be able to tap into the country's growing market and skilled workforce, but you will also enjoy the benefits of a remarkably low income tax rate. With just a 1% income tax, you can retain a larger portion of your company's earnings, allowing you to reinvest in your business, expand operations, or even reward your hardworking employees.

 

Starting a business can be an exhilarating journey, especially when you merge your passion with a burning desire to succeed. Imagine the thrill of embarking on this adventure in Romania, a country known for its rich history and vibrant culture. What's even more exciting is that you can establish your very own company in just three days, without the hassle of involving a public notary.

 

Why is recommended to start a business in Romania? Almost a tax heaven. From 1% turnover tax and 8% dividend tax

 

We invite you to consider the opportunity to start a business in Romania, our country having one of the lowest income taxes for the companies in comparison to other EU and non-EU jurisdictions. So, Romania is the best place to start a company.

 

Thus, if you register a company in Romania, you will have a European business holding that is subject to a turnover tax from 1% to 3%. These tax quotas are quite comparable with the tax rates from the offshore and tax heaven jurisdictions. Your company will be registered in 3 days, remotely, our services including professional legal assistance during the company incorporation process and opening a bank account in Romania.

 

For a synthesis of this article, please see the section ”5 solid reasons why you should consider investing in Romania” available here, on the first page.

 

Income tax. 1% to 3% on the company's turnover. Why you should start business in Romania?

 

The tax rates on the turnover of the Romanian microenterprises, as per the latest amendments brought in force to the Fiscal Code by the Law no. 296/2023, will be the following starting with 2024:

 

  • 1% turnover tax to be paid by Romanian companies whose turnover does not exceed EUR 60,000 and have at least one employee.

 

  • 3% - turnover tax to be paid by: a) the companies with revenues exceeding EUR 60,000 or b) the companies engaged in activities corresponding to the following NACE codes: 5821 - Computer game editing activities, 5829 – Editing activities of other software products, 6201 - Custom software development (client-oriented software), 6209 - Other information technology service activities, 5510 - Hotels and other accommodation facilities, 5520 - Accommodation facilities for holidays and short stays, 5530 - Caravan parks, campgrounds, and camps, 5590 - Other accommodation services, 5610 - Restaurants, 5621 - Event catering activities, 5629 - Other food service activities not included in other categories, 5630 - Bars and other beverage serving activities, 6910 - Legal activities – only for legal entities not fiscally transparent, established by lawyers according to the law, 8621 - General medical practice, 8622 - Specialized medical practice, 8623 - Dental practice, 8690 - Other human health activities. 

 

  • 16% corporate tax for companies whose turnover exceeds EUR 500,000 in a fiscal year.

 

Additionally, it is provided that in the event that companies which are subject to a 1% tax exceed the revenue threshold of EUR 60,000 in a fiscal year, the company will owe a 3% tax starting from the next quarter after surpassing the threshold. The same rule applies to companies that commence the activities mentioned in the letter b) above during the fiscal year.

 

Dividend tax. 8% of the profit distributed to the shareholders. That's why you should start a business in Romania

 

The profit obtained by the companies may be distributed as dividends to the company's shareholders, being subject to the taxation in Romania. In most of the cases, the dividends are approved and paid yearly, after the financial statements for the previous year has been prepared and approved by the general meeting of the shareholders, but it can be distributed also on a quarterly basis, during the financial year.

 

The company's shareholders are entitled to cash dividends, only after the dividend tax of 8% is determined by the company and withheld in order to be paid to the Romanian tax authority.

 

The dividend tax is, in principle, a withholding tax, meaning that when a Romanian company distributes or pays dividends to a Romanian legal entity, the company must withhold, declare and pay the dividends tax to the state budget.

 

You can find out more about the dividend tax by reading our blog article Taxation for the company registered in Romania: distribution of the dividend and the dividend tax.

 

Do not hesitate to contact us at tudor@roadvocacy.ro or by calling at +40 723 77 37 59 or use the contact form on our website at www.roadvocacy.ro.

 

Contact us for more details about the company formation and taxation 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

 

 

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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