Establishing a business in Romania
Romania has been a member of European Union since 2007 and it represents an important market for the investors in Europe and an exciting opportunity to expand and develop theirs business.
Foreign investors can choose between a variety of legal forms for conducting business in Romania.The main legal forms of business entities in Romania are summarized below with their specific information ; the minimum number of shareholders/stockholders, the minimum share capital, the liability of the shareholders/stockholders.
Romanian law allows also foreign investors to form in Romania branches, permanent establishments or representative offices.
- It can be founded by at least 2 associates
- Law does not require and does not fix a minimum capital for this form of Company.
- Unlimited liability for the debts of the social partners.
- Associates have the freedom to establish the value of the share capital after their own interests
- Two categories of partners: sleeping partners and active partners
- Assumes an unlimited and joint liability of active partners for the company’s obligations. The sleeping partners may be kept liable only up to the value of their subscribed registered capital
- The company shall have at least two associates
- The law does not require minimum capital.
- Founders are free to determine by mutual agreement between the value and structure of initial capital.
- The number of shareholders can not be less than two
- The registered capital of the joint-stock company cannot be lower than 90.000 lei (25.000 euro)
- The shareholders may be kept liable only up to the value of their subscribed registered capital
- It may be provided in one of two forms: closed joint stock company or public Company
- Two categories of partners: sleeping partners and active partners
- Assumes an unlimited and joint liability of active partners for the company’s obligations. The sleeping partners may be kept liable only up to the value of their subscribed registered capital
- The registered capital of the joint-stock company cannot be lower than 90.000 lei (25.000 euro)
- The limited partners have no management authority and they are not responsible for the debts of the partnership. They respond in the limit of the subscribed shares
- The registered capital of the joint-stock company cannot be lower than 200 lei
- The number of partners may not exceed 50
- The partners may be kept liable only up to the value of their subscribed registered capital
- According to the Company Law (Law 31/1990, a limited liability company can be formed with just one sole shareholder (who can be a foreigner) as an individual or a legal entity can be a sole shareholder only in a limited liability Company
Taxation in Romania
VAT registration
Companies with an annual turnover equals or exceeds the exemption threshold of 220,000 lei (approx.50,000 euro) are required to register for VAT
Value Added Tax – VAT in Romania
The standard VAT rate in Romania is 19% and applies to all all other taxable goods and services
A reduced rate of 9% applies Foodstuffs; pharmaceutical products; medical equipment for disabled persons; books; newspapers and periodicals; hotel accommodation; water supplies; restaurants and catering services; some beer; soft drinks.
Extra-reduced rate 5% applies to Social housing; books (excluding e-books); newspapers and periodicals; admission to cultural events; admission to sporting events.
The standard corporate income tax rate is 16%. it is one of the lowest in Europe
Corporate Income Tax in Romania