Opening a Business in Romania – Why you NEED our help!

Romania, a vibrant and rapidly developing European country, offers a wealth of opportunities for entrepreneurs and investors interested in opening a business in Romania. With its strategic location, competitive tax rates, and several growing sectors, it’s no wonder that more and more businesses are looking to expand into this thriving market!

But setting up a company here in Romania requires a skilled lawyer, so contact our law office today and we’ll start the process.

In this guide, we will walk you through the essential steps to successfully establish a business in Romania, from choosing the right business structure to navigating the regulatory environment and understanding the local culture. Let’s embark on this exciting journey together!

Opening a Business in Romania – Key Takeaways

• Choose the right business structure and consult with experts to ensure success in Romania.
• Register your company by selecting a name, preparing documentation, and following procedures.
• Take advantage of competitive tax rates & incentives while navigating local laws for successful operations.

Choosing the Right Business Structure for Your Limited Liability Company

In Romania, the available legal entities for business structures include Limited Liability Company (SRL), Joint Stock Company (SA), and branches. Each structure comes with its own set of requirements, benefits, and limitations. For instance, an SRL used to require a minimum of 200 RON registered capital, but now there is no minimum amount that you need for share capital. Also, can have no more than 50 associates, while an SA requires a a minimum share capital of 90,000 RON share capital and must have at least 2 shareholders. The most prevalent type of business structure in Romania is the SRL, registered with the National Trade Registry Office.

One option worth considering when establishing a Romanian company is acquiring a shelf company, such as joint stock companies or limited liability companies. The main benefit of this option is the tax exemption and lack of registration requirement, as the company is already registered with Romanian authorities. Selecting a business structure that fits your needs will lay a solid foundation for your venture in Romania.

Weighing the pros and cons of each business form and consulting with legal and financial experts is a crucial step in determining the best option for your specific situation. Establishing the right business structure from the outset will help you to navigate the national market more efficiently and increase your chances of success.

Registering Your Company At The National Trade Registry Office

Once you have chosen the appropriate business structure, the next step is registering your company in Romania . The first step in the registration process is to select a company name and verify its availability. This crucial step sets the tone for your company’s identity and helps you build a strong brand presence in the market.

Preparing the necessary documentation is another essential aspect of company incorporation. This includes:

• Articles of incorporation
• Affidavits
• Specimen signatures
• Other documents as stipulated by the local authorities

The approval of a Romanian company registration is typically achieved within three business day. Take into account that, according to Law no. 265/2022, while the incorporation of the company is tax-free, fees are charged for the publication of documents in the Romanian Official Monitory and are payable to the Trade Registry Office.

Registering your company before the Romania’s authority, may seem daunting, but with the right guidance and attention to detail, it can be a smooth and straightforward process. Ensuring that you have all the required documents in order and following the proper procedures will set your business on the right path.

Taxation and Incentives For Your Romanian Company And Joint Stock Company

Romania offers micro enterprises an attractive corporate tax, rates and incentives for businesses and business owners, making it an appealing destination for both natural persons, local and foreign investors. The country boasts:

• A competitive 1% or 3% for the micro enterprises
• A 16% corporate income tax rate applied at the taxable base
• A 19% Value-Added Tax (VAT) rate
• Various exemptions available for specific industries and activities, regulated by the tax authorities.

Businesses in Romania have many benefits, including:

• Profit tax on any profits reinvested in new technological equipment used for business is 0%
• Software developers and employees in the R&D sector are exempt from income tax
• R&D equipment depreciates quickly
• The Romanian state incentivizes investments made by foreign companies in Romania with a value of at least EUR 1 million, with incentive rates varying depending on the region in which the investment is made

These tax incentives create a favorable environment for businesses to grow and thrive in the Romanian market.

Maintaining up-to-date knowledge about the tax rates, incentives, and exemptions applicable to your business can maximize your financial performance and guarantee compliance with Romanian tax laws. Working with experienced tax advisors and legal professionals can help you navigate the complex, tax law and landscape and optimize your tax strategy. We’ll recommend all the right people after you contact us.

Banking and Financial Requirements

Opening a Romanian bank account is mandatory for Romanian companies. The process recommends legal representatives to be present during the account opening procedure, as banks no longer accept Power of Attorney as a valid form of authorisation. This ensures transparency and accountability in the financial transactions of your company.

Not only is having a bank account in Romania a legal requirement, but it also facilitates the smooth operation of your various business activities. It allows you to manage your finances efficiently, conduct transactions with clients and suppliers, and monitor your company’s financial health.

Be prepared to dedicate time and effort to open an account in Romania and ensure that you have the necessary documentation and legal representation during the process.

Employment and Labor Laws

As an employer in Romania, you must comply with various labor laws, including minimum wage requirements, working hours, and employee benefits. Additionally, under the Romanian micro-company regime, companies must hire at least one full-time employee in order to benefit of the 1% micro taxation. This regime applies with various exceptions. If a micro-company limited part-company’s employee contract ends, it is necessary to hire a new employee within 30 days in order to maintain the micro-company regime.

Complying with employment and labor laws helps to maintain a positive work environment and prevent potential legal issues. By understanding and following these regulations, you can foster a strong company culture that attracts and retains top talent, ultimately contributing to the success of your business.

Navigating the Regulatory Environment

Successfully navigating the regulatory environment in Romania requires understanding local laws, obtaining necessary licenses and permits, and staying updated on changes in legislation. Depending on your business type and activities, you may need to acquire licenses from the local municipality, the Ministry of Economy, or other government agencies.

Regularly reviewing official government websites, subscribing to newsletters and other publications, and consulting legal advisors can help you stay informed about the latest regulations and ensure compliance with the Romanian legal framework.

Staying abreast of the regulatory environment, including European Union regulations, can help minimize risks and maximise opportunities for your business in Romania.

Key Sectors for Investment

Investment in Romania is particularly promising in key sectors such as:

• IT&C
• Automotive industry
• Agriculture
• Bio-industry
• Creative industries
• Commerce industries

The country’s advantageous internet infrastructure and strategic location make it an attractive destination for businesses in these sectors.

Cities like Bucharest, Cluj-Napoca, and Timisoara are especially suitable for establishing IT&C businesses. Furthermore, there are appealing tax deductions for personnel in the IT&C and R&D sectors in Romania. Focusing on these key sectors and capitalizing on Romania’s unique advantages can position your business for success in this burgeoning market.

Legal Support and Services

Our legal support and services are available for both local and foreign investors looking to establish a company in Romania, preparing all the necessary documents, including assistance with company formation, registration, VAT registration procedure, and ongoing compliance. Collaborating with experienced partners or consultants can prove advantageous when navigating the Romanian business environment, as we can offer beneficial advice and assistance on local customs, regulations, and other essential aspects of conducting business in Romania.

Whether you need help with:

• Company formation
• Accounting services
• Virtual office setup
• Bank account openings
• Foreign investments
• Anything else

Partnering with a reputable Romanian law firm like ours can provide you with valuable guidance and support throughout the process. For foreign investors, this support can be invaluable in overcoming potential challenges and facilitating a smooth entry into the Romanian market. The fact is our clients are succeeding in business, and we can help you succeed as well.

Foreign Branches and Representative Offices

Foreign companies can open branches as a legal person and representative offices in Romania for commercial and non-commercial activities, respectively, by fulfilling specific legal requirements and obtaining necessary approvals. A branch in Romania is an extension of a foreign company that does not possess independence or legal personality and can undertake actions in the name of the parent company. For a representative company’s head office here, foreign investors must secure authorization from the Foreign Trade Department of the Romanian Ministry of Economy and Trade.

Opening a branch or representative office in Romania can be a strategic move for foreign companies looking to expand their presence in the region. Adhering to the legal requirements and obtaining the necessary approvals will enable micro companies for you to establish a successful presence in the Romanian market and take advantage of the country’s growth opportunities.

Cultural Considerations and Tips for Success

Understanding the local culture, establishing strong connections with business owner, and working with experienced partners or consultants are key steps to succeeding in the Romanian business environment for local and foreign entrepreneurs.

Some important aspects of Romanian culture include:

• Hospitality
• Politeness
• Hard work
• Punctuality
• Loyalty
• Respect for elders

By keeping these values in mind and incorporating them into your business practices, you can increase your chances of success in Romania.

Gaining insight into the local culture can be achieved by:

• Observing the behavior of locals
• Reading literature related to the culture
• Conversing with individuals who have lived in Romania for an extended period

Establishing strong connections in Romania requires patience, commitment, and a genuine respect for the regional culture. By embracing these cultural norms and building meaningful relationships, you can increase your chances of success in the Romanian market.

Summary

In conclusion, establishing a successful business in Romania requires expert legal help from our law firm, careful planning, understanding the local market, and navigating the regulatory environment. By choosing the right business structure, registering your company, taking advantage of tax incentives, and staying compliant with labor laws, you can set your business on a path to success in this thriving market.

Additionally, understanding the local culture and working with experienced partners can help you overcome challenges and seize opportunities in Romania. With this comprehensive guide, you are now better equipped to embark on your entrepreneurial journey in the dynamic Romanian market.

Frequently Asked Questions

Can a foreigner own a business in Romania?

Yes, foreigners can own a business in Romania and they can open a business here with only the Passport. They must submit documents and an application form to start the process. This is something we will do for you.

How much does it cost to set up a company in Romania?

The cost of incorporating a company in Romania can be up to EUR 3,500. This includes government fees and local bank account opening however please contact us for the update pricing. The prices (government fees etc) change regularly so contact our office for up to date information.

Is Romania a good country to start a business?

Romania is an ideal country for starting a business from all the EU member states, with reduced office rent costs, minimum capital amounts, lower salaries and lower corporate taxes, and numerous double taxation avoidance treaties.

How to start a small business in Romania?

To start a small business in Romania, you should begin by contacting our law office so that we can find out the best strategy for you, then selecting the company type and registering the company establishment and its name. Prepare the incorporation file, register the company and consult with an accountant to ensure compliance with all relevant laws and regulations.

What are the main types of business structures in Romania?

In Romania, the three main business structures are Limited Liability Company (SRL), Joint Stock Company (SA), and branches, providing entrepreneurs with a range of legal entity name options to suit their needs.

Business owners who make use of our legal services when starting their businesses succeed at a higher rate than businesses who try to do it all on their own. Contact us today!