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20 December 2023

Setting up company in Romania

Embarking on the journey of setting up a company in Romania can be an exciting and rewarding experience. With its strategic location, vibrant economy, and skilled workforce, Romania offers a plethora of opportunities for entrepreneurs and investors alike. However, navigating the intricacies of the Romanian business landscape requires careful planning and a comprehensive understanding of the local regulations and cultural nuances

 

Simplify the process of setting up company in Romania with our expert lawyers

 

Setting up a company in Romania involves complying with various legal and administrative procedures. Firstly, you will need to choose an unique name for your business and reserve it with the Trade Register. This step ensures that your company's name is not already in use and protects your brand identity. Next, you will need to draft the company's articles of association, which outline the internal regulations and governance structure. These documents must be drafted by a lawyer and submitted to the Trade Registry, along with other required forms and supporting documents, such as proof of address and identification data for the company's headquarter and shareholders and directors' address. It is essential to familiarize yourself with the Romanian tax system and ensure compliance with all tax obligations to avoid any legal issues in the future. 

 

In this blog post, we will take you through the entire process of setting up a company in Romania, from start to finish. We will cover everything you need to know, including the legal requirements, necessary documents, and the different types of business structures available. Whether you're a local entrepreneur or an international investor looking to expand your business into Romania, this guide will provide you with all the information you need to successfully establish your company in this vibrant European market.

 

Which type of Romanian company is recommended for setting up?

 

If the growth of your business in Romania is on your mind, the limited liability company (LLC), known as SRL (societate cu răspundere limitată) in Romanian, is the top choice for starting a company. It ensures the safety of shareholders and directors, and is also an economical option. The process of establishing an LLC in Romania involves minimal incorporation expenses, does not demand a significant share capital contribution and has an incredible taxation, being one of the lowest tax rates in EU.

 

Discover further information about limited liability companies in Romania by reading our insightful blog article ”Limited liability company in Romania

 

What are the advantages of setting up a company in Romania?

 

Setting up a limited liability company (LLC) can provide numerous advantages for entrepreneurs and business owners. Romania presents a multitude of benefits for establishing a business, making it an alluring choice for both ambitious entrepreneurs and savvy investors. Explore the primary reasons why setting up a company in Romania is a smart choice:

 

1. Both foreign nationals and legal entities have the opportunity to create their own limited liability company in Romania. Our country offers an unique opportunity for both foreign individuals and legal entities to set up their own limited liability company.

 

2. Shareholders are only responsible for the amount they have invested in the company, ensuring their liability is limited to their capital contribution subscription. One of the key advantages is the protection it provides for personal assets.

 

By establishing a limited liability company, the owners' personal assets are separate from the company's liabilities. This means that if the company faces financial difficulties or legal issues, the owners' personal assets, such as their homes or savings, are generally protected. This provides a sense of security and minimizes the risk associated with running a business.

 

3. In just a matter of days, you can witness the swift and efficient process of incorporating a limited liability company in Romania. With streamlined procedures and expert guidance, your company can be registered and ready to operate within a mere three days. This remarkable speed ensures that you can hit the ground running and start making your mark in the Romanian business landscape without any unnecessary delays.

 

4. The company can be owned by a sole shareholder, meaning a single individual has complete ownership. However, if you're considering adding more shareholders to your company, keep in mind that the maximum limit is set at 50.

 

5. In the realm of Romanian limited liability companies, the appointment of directors is determined by the shareholders during a general meeting. These directors serve as the company's legal representatives, ensuring smooth interactions with local authorities and third parties.

 

6. The Romanian limited liability company is an unique and independent entity in Romania. It has the ability to acquire lands, buildings, and other immovable assets not only in Romania but throughout the entire European Union.

 

7. Lowest tax in Europe. By default, the Romanian limited liability company is registered with the Romanian Trade Registry as a micro enterprise, which means it will automatically pay the 1%/3% income tax, as follows:

 

  • 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, Romania has a network of double taxation treaties with numerous countries, which can further reduce the tax burden for companies engaged in international business activities. These tax advantages, combined with the country's strategic location and access to the European market, make Romania an attractive destination for entrepreneurs and businesses looking to establish a limited liability company.

 

8. When setting up a Romanian limited liability company, it is mandatory to register at least one office address or headquarters.

 

This address will be used for all official correspondence, notices, and subpoenas from the authorities. Please note that a PO box cannot be used as the headquarters address. However, we can offer you a virtual headquarters service where we will receive all your correspondence and ensure timely delivery to you.

 

We can provide you with a virtual headquarter, where we receive all your correspondence and deliver to you in proper time. In order to find more about the company, please read our blog article The headquarter of your company.

 

9. No need to subscribe a minimum share capital at the time of incorporation. 

 

In fact, you can choose to subscribe to the share capital even after the company has been incorporated. However, it's important to note that for a limited liability company (SRL), you must pay 30% of the subscribed capital within 3 months from the registration date, but before commencing any operations under the company's name.

 

10. Setting up a Romanian limited liability company comes with significantly lower costs when compared to other European Union countries.

 

What are the requirements for the shareholders and directors for setting up a company in Romania? 

 

Romania welcomes foreign investors with open arms, as there are no restrictions imposed on them when setting up a company. Whether you're a local or a foreign businessman, Romania offers equal opportunities for company formation. The best part is, the nationality of the appointed directors doesn't matter at all. Romanian law embraces corporate shareholders and directors, creating a welcoming atmosphere for business ventures.

 

What documents do we need from you for setting up company in Romania? 

 

Get ready to plunge into the essential paperwork needed to establish a limited liability company in Romania. To kickstart the specific procedures for setting up your company, we require the following key documents from you:

 

  • the company name you desire;

  • ID card or passport for the shareholders and directors;

  • short description of the main activity object of the company;

  • headquarter - let us know if you already have a premise or we can set the headquarter at our law office, as a virtual headquarter, only for correspondence;

 

What documents we prepare for the company set up in Romania? 

 

Based on this information you provide, we shall prepare the necessary documents to be submitted within the incorporation file:

 

1. Booking of the company name from the Romanian Trade Registry.

 

2. Drafting the Articles of Association, providing all the rules governing the company and the relationship between the shareholders and directors.

 

3. Drafting the affidavits, signature specimen and statements to be signed personally by the shareholders and directors, ascertaining their will to act as main characters in the company.

 

4. Drafting the headquarter document (legal assistance agreement - for the headquarter at the law office, rental or lease agreement, bailment or sale agreement).

 

5. Drafting and submitting the motion for the company set up.

 

Essential steps to setting up your company

 

Once you have determined the appropriate business structure, it's time to set up your company in Romania. The registration process involves several steps, which we will outline below:

 

1. Discover the perfect name for your company that aligns with the regulations set by the Romanian legislation. Ensure its uniqueness by verifying its availability on the National Trade Register Office's website.

 

2. It's time to put together all the required paperwork! Make sure you have the necessary documentation, which includes the Articles of Association, identification documents of shareholders and directors, and proof of address for the registered office.

 

3. Once you have prepared all the necessary documents, it's time to submit your incorporation file to the Romanian Trade Registry. This step is crucial in the process of establishing your company in Romania. The Trade Registry acts as the official authority responsible for registering and incorporating businesses in the country. After the Trade Registry has processed your incorporation file, you can expect your company to be ready within just 2 working days. This efficient turnaround time allows you to swiftly move forward with your business plans and start operating in Romania.

 

4. Pay the registration fee and submit the application for registration to the Trade Register Office. The office will review your application and supporting documents, and if everything is in order, your company will be registered.

 

5. Obtain the incorporation documents, tax identification number (CIF) and register for VAT if applicable. These steps are necessary to ensure compliance with Romanian tax regulations.

 

By following these steps, you can successfully set up your company in Romania and begin your entrepreneurial journey in this vibrant market.

 

What is the typical duration for setting up a company in Romania?

 

Setting up a company in Romania typically takes around 2 working days. We understand that time is of the essence when it comes to starting a business, and we strive to make the process as efficient as possible for you.

 

What are the legal duties after setting up a company in Romania?

 

Receiving the certificate of incorporation for your company marks a thrilling milestone in your entrepreneurial journey. Your company is now officially incorporated as a legal entity, with its own set of rights and responsibilities in Romania. Remember, even after the setting up process, the nature of your company's activities will determine its legal obligations.

 

Starting a new company can be overwhelming, but we're here to make it easier for you. Our range of services covers all the essential post incorporation requirements, ensuring your company is fully operational. We'll assist you in opening a bank account with a reputable Romanian bank and ensure the share capital is subscribed within 3 months. Our team can also take care of your accounting and tax declaration needs, providing you with expert assistance. Plus, we'll help you hire at least one employee within 30 days of incorporating, allowing you to enjoy a reduced 1% income tax rate. Need to register for VAT? No problem! We'll guide you through the process and help you obtain the EORI custom registration number. Let us handle the details while you focus on growing your business!

 

Explore on our blog article for more details on the ”Post incorporation compliance for your Romanian company.” Find out everything you need to know about setting up company in Romania after the incorporation duties. 

 

Don't hesitate to get in touch with us! 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.

 

 

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.

 

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