Registering a company in Romania - YB Case 2024

Company registration in Romania


Registering a Company in Romania

In 2024, Romania's economy will continue to grow and remain attractive to foreign investment. Thanks to its EU membership, strategic location, and growing emphasis on innovation, the country offers numerous opportunities for businesses and investors. In this guide, we'll explore the process of registering a company in Romania and key legal considerations.

Ensuring the investment attractiveness of Romania in 2024

Here are the key factors attracting non-resident businessmen to the Romanian economy:

EU membership and access to the single market
Romania's membership in the European Union remains the cornerstone of its economic success. The EU provides a stable and integrated market with over 500 million consumers, creating a strong basis for trade and investment. In 2024, Romania will continue to benefit from the free movement of goods, services, capital, and labor within the EU, streamlining business operations and expanding market coverage.
Competitive tax environment
Competitive taxation system makes incorporation in Romania more attractive for business. A predictable tax regime, coupled with various incentives for investors, encourages both local and foreign companies to set up operations in Romania.
Investment incentives
For economic growth, Romania actively offers investment incentives. These may include grants, tax breaks, and support for research and development projects. In 2024, we can expect the government to continue to stimulate investment, especially in sectors that are in line with Romania's growth strategies, such as technology, renewable energy, and manufacturing.
Technological advances
Romania has made significant strides in the technology sector, attracting attention as a hub for software development. Bucharest, the capital, is increasingly seen as the technology hub of Europe. In 2024, Romania's focus on innovation and digital transformation is likely to create opportunities for both tech startups and established companies.
Infrastructure development
EU funds have played an important role in modernizing Romania's infrastructure. In 2024, we can expect further refinements in transport networks, including roads and railways, as well as energy supplies and digital infrastructure. These developments will improve logistics and connectivity, benefiting businesses in various sectors.
Access to EU funding
Romania continues to have access to EU funds and programs designed to stimulate economic development and entrepreneurship. Businesses can use these funds for growth initiatives and innovation projects. In 2024, even more companies will be able to take advantage of these resources to improve their competitiveness.
Commitment to sustainability
Environmental sustainability is becoming increasingly significant around the world. Romania is taking steps to align with EU sustainable development goals and reduce carbon emissions. Companies that invest in sustainable practices and renewable energy may find Romania's commitment to environmental responsibility particularly attractive.
Skilled workforce
Skilled labor available to start a business in Romania, especially in the mechanical engineering sector. This talent pool continues to attract businesses that require specialized skills. In 2024, the government will invest more in education and skills development to further expand workforce capabilities.
Favorable business culture
Romania's business culture is evolving and becoming more transparent and investor-friendly. The government's efforts to reduce bureaucracy and make it easier to do business must continue, making it more attractive to entrepreneurs and investors.

Other Benefits of Expanding Business to Romania

Registering a company in Romania as a non-resident offers other benefits:

Limited Liability:
By establishing a limited liability company (SRL) in Romania, your personal assets are generally protected from the company's liabilities. This limits your financial risk to the amount invested in the company's share capital.
Ease of Registration:
Romania has simplified procedures for company registration, making it relatively straightforward for non-residents to establish a business. The process typically involves clear steps and can be completed efficiently.
No Residency Requirements:
Romania does not impose residency requirements for company directors or shareholders. This means you can own and manage a Romanian company without having to reside in the country.
Strategic Location:
Romania's geographical location in Eastern Europe makes it a valuable hub for businesses looking to serve both Western and Eastern European markets. It offers excellent logistics and transportation connectivity.
Political Stability:
Romania is a stable democracy with a commitment to democratic values and the rule of law, reducing political risks for businesses.
Legal Framework:
As an EU member, Romania aligns its legal framework with EU laws and regulations, providing a predictable and transparent legal environment for businesses.
Cultural and Language Factors:
Romania's diverse culture and multilingual population can be advantageous for businesses seeking to reach a wide range of European markets.
These benefits make Romania an attractive destination for non-resident entrepreneurs. Nevertheless, it's essential to conduct thorough market research, understand local regulations, and seek professional advice to navigate the specific requirements and challenges of operating a business in Romania successfully. Additionally, keeping abreast of any changes in Romanian business and tax laws is crucial for ongoing compliance and success.

Legal and Tax Aspects of Doing Business in Romania for Non-Residents

It's crucial for non-resident businesses to collaborate with legal and tax professionals well-versed in Romanian laws and regulations. Additionally, staying informed about changes in the legal and tax landscape is essential for maintaining compliance and optimizing your business's financial performance in Romania.

Below, we provide common Romanian legal and tax aspects.

Legal aspects to consider when registering a business in Romania:

  • Corporate Governance: Ensure compliance with Romanian corporate governance laws, which may vary depending on the type of business entity.
  • Contractual Agreements: Work with legal counsel to draft contracts and agreements, ensuring they conform to Romanian law.
  • Intellectual Property: Protect your intellectual property rights through trademark and patent registrations as needed.
  • Work Permits: Non-resident employees may require work permits, depending on their nationality and the nature of their work in Romania.
  • Data Protection: Comply with GDPR regulations when handling personal data.

Tax aspects to consider when opening a firm in Romania:

  • Corporate Income Tax: Romania's corporate income tax rate is 16%. Non-resident companies are typically subject to this rate on their Romanian-sourced income.
  • Value Added Tax (VAT): Understand Romanian VAT regulations, including the standard rate of 19% and reduced rates for specific goods and services.
  • Withholding Tax: Non-residents may be subject to withholding tax on various types of income, such as dividends, interest, and royalties.
  • Transfer Pricing: Comply with transfer pricing rules, especially for related-party transactions.
  • Social Security Contributions: Non-resident employees may have social security obligations in Romania. Check the applicable bilateral social security agreements.
  • Double Taxation Treaties: Explore any double taxation treaties between Romania and your home country to determine the tax treatment of income.
  • Tax Deductions and Incentives: Investigate available tax deductions and incentives for non-resident businesses, including those related to research and development or specific industries.
  • Customs Duties: If involved in international trade, be aware of customs duties and regulations.
  • Local Taxes: Check for local taxes and fees that may apply to your business operations.
  • Financial Reporting: Comply with financial reporting requirements, including any specific obligations for non-resident businesses.
  • Permanent Establishment (PE): Understand the concept of a PE in Romania, which may trigger additional tax obligations for non-resident companies.
  • Exit Strategies: Plan for potential exit strategies, such as liquidation or selling the business, considering the tax implications.

Forms of Company Registration in Romania for Non-resident

When registering a company in Romania, foreign entrepreneurs have several forms or types of legal entities to choose from. The choice of company form depends on business goals, size, and specific requirements.

Here are the primary forms and requirements for company registration for non-residents in Romania:

  1. Limited Liability Company (SRL):
    1. Ownership: Foreign or joint venture.
    2. Liability: Limited to share capital.
    3. Minimum Capital: 200 RON.
    4. Management: Directors can be non-residents.
    5. Taxation: 16% corporate income tax.
  2. Joint Stock Company (S.A.):
    1. Ownership: Foreign or joint venture.
    2. Liability: Limited to subscribed shares.
    3. Minimum Capital: 90,000 EUR.
    4. Management: Board of directors, non-resident CEO.
    5. Taxation: 16% corporate income tax.
  3. Branch Office:
    1. Ownership: Extension of foreign company.
    2. Liability: Parent company responsible.
    3. Minimum Capital: None for the branch.
    4. Management: Non-resident management possible.
    5. Taxation: Same as other Romanian companies.
  4. Representative Office:
    1. Ownership: Extension of foreign company.
    2. Liability: Parent company responsible.
    3. Minimum Capital: None for the representative office.
    4. Management: Non-resident management possible.
    5. Taxation: Typically not subject to corporate income tax but limited commercial activities.
When deciding on the appropriate form of company registration in Romania as a non-resident, consider factors such as your business objectives, capital availability, and the level of control you wish to maintain. Our consultants ensure compliance with Romanian regulations, so you can make an informed choice that aligns with your specific business needs.

Documents Required for Obtaining Business License in Romania

The specific documents required for obtaining a business license in Romania can vary depending on the type of business activity and the local regulations in the city or region where you plan to operate. However, here is a general list of common documents you may need when applying for a business license in Romania:

  • Business Plan.
  • Company Registration Documents.
  • Proof of Legal Address.
  • Tax Identification Number (CIF).
  • Identification Documents for stakeholders and representatives.
  • Criminal Record Certificates (if required).
  • Health Certificate (if applicable).
  • Professional Qualifications and Licenses (if necessary).
  • Environmental Permits (if applicable).
  • Industry-Specific Licenses (if relevant).
  • Payment of Fees.
  • Power of Attorney (if someone else handles the application).
  • Requirements may vary based on your business type and location.
Our consultants will provide you with comprehensive support and ensure a smooth and compliant company registration process. Contact us in a way convenient for you, or fill out the application form for a preliminary consultation.
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