Romania is a southeastern country and has been an EU member since 2007. In the last 1.5 years, over 1 million Ukrainians have immigrated here. This number continues to grow, primarily due to Ukrainian entrepreneurs wanting to enter the local market. Registering a company in Romania opens up the opportunity to provide services or products to nearly 500 million European consumers and offers various other significant advantages. Therefore, if you are looking for a suitable jurisdiction for your business, it’s worth considering this country. Romania provides excellent conditions for opening and developing a company, attracting entrepreneurs, including foreigners, with favorable conditions.

 

Access to all the benefits of doing business in Romania is possible only if you know how company registration works, what requirements are imposed on licensees, how long the registration process usually takes, and its cost. Qualified specialists from the Lawrange Attorneys Association can answer these and other questions, as well as handle all registration tasks. Our in-depth knowledge of the necessary legal and financial information and extensive experience in registering legal entities will greatly support those wishing to register a company in Romania.

 

Why Doing Business in Romania Is Profitable

The European Commission’s forecasts for this jurisdiction have been consistently positive for several years. GDP growth is steadily predicted, contributing to the overall economic development and individual businesses. Starting a business is possible not only for locals but also for foreign citizens. Existing laws allow for obtaining a loan to open a company in Romania. This situation resulted from the persistent, well-planned efforts of the Romanian government, which initiated effective reforms long before joining the EU.

 

Adhering to the main directives of the European Union, Romania has paved the way for modernizing its infrastructure and attracting investments. Thanks to this, Romania represents a market with excellent prospects for developing various types of businesses. Its advantageous strategic location and a stable, business-friendly climate in the country facilitate the easy establishment of a company.

 

Convenient Location

Situated in the center of Europe, Romania remains a strategically important transportation hub. The presence of the largest and deepest port in the Black Sea contributes to specific advantages in Black Sea exports. Thanks to a well-established transportation network with other countries, Romania provides easy access to other EU markets and the Middle East. The country has a network of 100 industrial parks, making it much easier for entrepreneurs to find the most suitable location for their business.

 

Favorable Tax Environment

Opening a company in Romania is considered by many entrepreneurs as a real way to ease the tax burden. The country is not considered an offshore jurisdiction, which positively affects the status of any business. Comparatively, the Romanian tax regime is most attractive for small businesses; with a turnover of less than €500 million per year, the tax will be 1% of the annual turnover, provided that the enterprise employs one or more employees. For other companies, a 16% profit tax rate applies, which is also one of the lowest rates in Europe. Additionally, Romania offers several tax incentives for new companies, including exemptions from tax payments for the first few years. Entrepreneurs in the following five free trade zones can also benefit from customs and tax incentives:

 

  • Curtici-Arad
  • Braila
  • Galati
  • Giurgiu
  • Southern Constanta and Bessarabia

 

Convenient Registration

Creating a business in Romania can be done relatively quickly. It takes about 7-14 days from the application submission to registration. Remote registration is also allowed. An electronic digital signature can also be obtained remotely. This is possible due to the absence of strict requirements from the regulator and easy compliance when opening an account and conducting payments. The registered capital when opening a company is only €50.

 

Qualified Workforce

Romania has become a hub for skilled professionals in various fields. Combined with relatively low labor costs, this creates favorable conditions for finding suitable employees. A significant portion of Romanian professionals is proficient in the English language. It is the most widely taught language in Romania (the second mandatory language in 80% of Romanian schools). The country is witnessing an increase in the number of research centers and highly qualified IT specialists. Romania is among the top ten countries globally in terms of the number of certified IT specialists.

 

Accessibility of Markets

Romanian entrepreneurs have access to markets in Europe, the CIS, and the Middle East, allowing them to move goods and services freely without any additional fees or restrictions. Trade is conducted with lower administrative costs than in other European countries, meaning companies only need to pay standard expenses when sending goods abroad. In the case of providing goods and services to government institutions, Romanian enterprises can take advantage of the opportunity to enter into state contracts with the EU.

 

Forms of Business Operations in Romania

If you are interested in registering a business in Romania, it is advisable to determine the legal form of the future company in advance. Local legislation offers a wide choice of legal forms, with some being popular among entrepreneurs due to various advantages, while others are less common but still used in a business organization.

 

Features of Authorized Physical Person (PFA)

An authorized physical person can conduct any economic activity primarily using their own labor. While working in a specific field, PFAs cannot hire third parties. An authorized individual can engage in business only if they officially register an office in Romania.

 

Choice of Sole Proprietorship

Unlike the previous legal form, this option allows the use of hired labor. Only a natural person-entrepreneur can open a sole proprietorship in Romania, and they are required to:

 

  • Have a central office within the jurisdiction.
  • Submit an application to the Trade Registry (in the district where business activities will take place).

 

It is worth noting that individuals and sole proprietors cannot benefit from preferential tax treatment, which explains the low popularity of these legal forms.

 

What to Know About Limited Liability Company (SRL)

Most local and foreign entrepreneurs prefer the SRL form. This legal form is analogous to LLC and LTD in other European jurisdictions. SRL founders are not personally liable for the debts and obligations of the business. Owners of small and medium-sized businesses prefer this legal form due to minimal capital requirements and simplified management rules. The registered capital is only 50 dollars, and SRL can be founded by both natural and legal persons. There can be no more than 50 participants, and all of them can be foreigners. Like LLC and LTD, the liability of each participant is limited to the amount invested in the capital.

 

Important Information about Joint Stock Company (SA)

Romanian SA is mandatory for companies in the insurance and banking sectors. It is one of the most complex legal forms in the country. SA can be open or closed and must have at least 5 shareholders responsible within the limits of their contributions and one director. There are no citizenship requirements for shareholders. The minimum registered capital is €25,000, with at least 30% of this amount paid during the company’s opening in Romania. Free transfer of SA shares is allowed and can be traded on organized markets.

 

A Few Words About Limited Partnership

Registering a company in Romania as a limited partnership involves joint responsibility for losses by both partners and contributors. Unlike participants, partners do not engage in business activities. The basis for opening such a legal form is a founding agreement.

 

Required Documents

Business registration in Romania is possible with the founder’s passport (foreign and internal), a document confirming the address of residence, an individual tax number, and several names for the future company (in order of preference). Also required is the preparation of:

 

  • Articles of Association or shareholder agreement.
  • Detailed information about the company’s structure – administrators, members, etc.
  • Information describing the business direction and geography.
  • Reserved name – contact the Trademark Registry.
  • Documentation for each founder.
  • Documentary evidence of the contribution of the registered capital.
  • Notarized sheet containing samples of authorized signatures.
  • Proof of the existence of a physical office in Romania – this can be, for example, a lease agreement.
  • Administration contracts, questionnaires, AML declarations.

 

If a corporate entity is a participant in the company, additional documents providing information about the structure of that entity are required:

 

  • Extract from the Trade Registry.
  • Resolution to create a Romanian subsidiary.
  • Power of attorney granting the right to sign founding documents.
  • Recommendation letter from a bank.
  • Information about the beneficiary community.

 

Business registration in Romania is possible only when submitting documents in the official language. Therefore, some documents need to be translated, notarized, and apostilled.

 

Business Registration (Company Formation) in Romania Step by Step

One of the first steps that every entrepreneur takes when setting up a company in Romania is choosing the legal form of the enterprise and a unique name, followed by its reservation in the Trademark Registry. In case one is already taken, at least 3 names are submitted in order of preference. There are several other important stages to follow.

 

Writing a Business Plan

The document should describe your business strategy. Calculations of investments, expected revenues, risks, and other nuances of entrepreneurial activity are made for its preparation. The business plan should be based on an analysis of the Romanian market and local conditions for the enterprise’s development. It is also important to use information about the level of competition in the niche and its characteristics when writing. The thoroughness and correctness of the business plan determine not only obtaining a positive response from the local regulator but also the future success of the company.

 

Obtaining Permits for Business Activity and Entry into the Country

To conduct any business activity in Romania, it is necessary to obtain the relevant permit from the Trade and Foreign Investment Center. Its specialists will assess the entrepreneur and the expected financial profit. The competent authority requires 60 days to consider the application. The entrepreneur will use a positive verdict as a basis for obtaining a business visa – a document that allows foreigners to stay in Romania for business purposes. The application process for a business visa takes about 40 days.

 

Visa Application Features

A positive decision to conduct business activities in Romania involves the preparation of a long-term D/A visa. State diplomatic missions and visa centers are responsible for issuing it; the entrepreneur must personally visit any of them in advance.

 

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To apply for a D/A visa, one should prepare:

 

  • A completed application form.
  • A valid passport.
  • Bank statements confirming a balance of at least €500.
  • Proof of residence.
  • A valid certificate of no criminal record.
  • Medical insurance.

 

Thirty days before the visa expires, one can begin obtaining a residence permit, which should be renewed annually for the next 5 years. Afterward, an application for permanent residency can be submitted. After 3 more years, you can apply for Romanian citizenship.

 

Opening a Bank Account in Romania

Individuals interested in conducting business comfortably with the opportunity to engage in financial transactions in Romania and the European Union should consider opening a bank account. This significantly expands the spectrum of entrepreneurial possibilities, extending to the scale of an international company.

 

For this purpose, in Romania, you can avail of services from:

 

  • Multiprofile financial institutions – specialized in serving various business segments.
  • Specialized banks – catering to enterprises in specific industries.

 

A steady growth in service quality characterizes all Romanian banks. According to some analysts, banks in this country have a good chance of catching up with leading global banks in the next few years.

 

In banking institutions in Romania, the following services are available:

 

  • Deposit issuance.
  • Opening private and corporate accounts.
  • Remote monitoring of the account status, etc.

 

To open an account, you should personally visit the bank with:

 

  • A set of copies of the passports of founders, administrators, and shareholders of the company.
  • The company’s charter.
  • A copy of the company registration certificate.
  • An extract from the Trade Register (not older than 7 days).
  • Signature samples.

 

If the company in Romania has a corporate shareholder, then it is necessary to provide a resolution on creating the corresponding legal entity. Additionally, they may require:

 

  • Income statement.
  • Extract from another bank previously used for services.
  • Credit history.

 

When submitting documents to open an account, be prepared that the bank may refuse without explaining the reasons. To pay the share capital into the current account, you need to prove the legality of the origin of the funds.

 

Features of Romanian Taxation

Romania’s tax environment is one of Europe’s most favorable for conducting business. Evidence of this is the low-income tax rates:

 

  • 1% on income from gambling activities.
  • 1% on profit with an annual turnover of less than 1 million EUR.
  • 5% on dividend income.
  • 16% on all other types of income.

 

The income tax rate for individuals is 10%. Any new company is classified as a micro-enterprise, making it possible to pay minimal taxes under a simplified scheme.

 

The VAT rate in Romania is 19%, but it can be reduced to 9% and 5%. This is possible for companies operating in industries such as restaurants, tourism, medical, and others.

 

Signing agreements with more than 80 countries worldwide on the absence of double taxation makes Romania a comfortable jurisdiction for developing one’s own business. Non-resident entrepreneurs pay taxes only on the income earned in Romania. Romanian residency opens the possibility of establishing a branch in any EU country.

 

Employers must regularly pay social contributions, the rates of which periodically change. Because of this, it is crucial to monitor current legislative acts to avoid legal issues.

 

Why Choose Lawrange

If you value professionalism, responsibility, and transparency in lawyers, then we recommend seeking support from Lawrange. Our team comprises experienced lawyers, legal experts, accountants, and IT specialists who are well-versed in registering companies in Romania. Professional support will protect you from making mistakes that individuals often face when registering a Romanian company independently.

 

Our specialists will:

 

  • Help gather the documentation package for opening a company and a bank account.
  • Submit registration documents to the Trade Register.
  • Register you for tax purposes.
  • Assist in obtaining licenses for specific types of activities, etc.

 

With our assistance, you will be able to successfully overcome all legal formalities, ensuring an efficient start to your business in Romania.

 

Conclusion

Romania is a promising country for business. It can offer a high level of technology, a steadily growing economy, and a convenient tax policy with favorable incentives for entrepreneurs. You can register a company here within 5-10 days. Still, before that, it is essential to go through several important stages: decide on the organizational and legal form and name, obtain a business visa, open a bank account, etc. To make establishing a Romanian company easier and more convenient, we recommend seeking support from Lawrange. You will receive a complete range of services related to business registration in this jurisdiction.

 

FAQ

Is a loan available for foreigners to open a business in Romania?

The opportunities for non-residents in this context are more limited than for Romanian citizens. Only a few banks offer loans to non-resident founders. The main condition is a well-thought-out business plan and a clear justification that the funds will be used efficiently.

 

How long does it take to register a company and open an account?

The registration of a company in Romania takes approximately 10 working days from the moment the application is submitted to the Trade Register. An additional 1-3 days are required to open a bank account. However, it takes about 60 days to obtain approval for the business plan, and a few weeks to choose and reserve a name.

 

What expenses are involved in registering a company in Romania?

The overall expenses amount to approximately €1,000 and include, among other things, the fee for the services of the National Trade Register Office and 24% VAT. You should also pay commission fees to this fund and to the Ministry of Finance in the total amount of just over €70.

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