Establishing a company in Romania is an attractive opportunity for foreign investors seeking to access the European Union market. As an EU member since 2007, Romania offers a dynamic business environment, low corporate tax rates, and a variety of legal forms suited for different business needs. This guide provides a comprehensive overview of entity types, capital requirements, shareholder liability, and the tax system in Romania to support those interested in establishing a company in Romania.
Legal Entity Types in Romania
Foreign investors have several options when it comes to establishing a company in Romania, depending on their business size, investment strategy, and liability preferences. Romanian law also allows the formation of branches, representative offices, and permanent establishments.
1. General Partnership – Societate în nume colectiv (SNC)
- Requires at least 2 associates
- No minimum capital requirement
- Unlimited joint liability for partners
- Capital amount can be freely determined by associates
This form is best suited for close collaborations based on mutual trust.
2. Limited Partnership – Societate în comandită simplă (SCS)
- Two types of partners: active and silent
- Silent partners liable only up to their contribution
- No minimum capital
- Flexibility in defining capital structure
This is an option for small or specialized ventures when establishing a company in Romania with different levels of partner engagement.
3. Joint-Stock Company – Societate pe acţiuni (S.A.)
- Minimum 2 shareholders
- Minimum capital: 90,000 lei (~€25,000)
- Shareholders’ liability limited to their capital contribution
- Can be closed (private) or public
Suitable for large-scale investments or companies aiming to raise capital through public offerings.
4. Limited Partnership by Shares – Societate în comandită pe acţiuni (SCA)
- Combines elements of a joint-stock and partnership structure
- Capital requirement: 90,000 lei
- Silent partners have limited liability
- Active partners manage the company
This structure is more complex but viable when diverse ownership and operational roles are needed.
5. Limited Liability Company – Societate cu răspundere limitată (S.R.L.)
- Most popular form when establishing a company in Romania
- Minimum capital: 200 lei (~€40)
- Maximum of 50 partners
- Liability limited to capital invested
- Can be formed by a single individual or legal entity
The S.R.L. structure is ideal for small and medium-sized enterprises and allows full foreign ownership.
Taxation in Romania
Understanding the tax obligations is a vital part of establishing a company in Romania.
Corporate Income Tax
- Standard rate: 16% (among the lowest in the EU)
VAT Registration
- Mandatory for businesses with turnover above 220,000 lei (~€50,000)
Value-Added Tax (VAT)
- Standard rate: 19%
- Reduced rate (9%): Applies to food, medicine, water, accommodation, books, newspapers
- Super-reduced rate (5%): Applies to social housing, some books, event tickets
These tax rates offer a competitive edge for businesses looking to grow in Eastern Europe.
Conclusion
Whether you plan to open a small LLC or a large-scale joint-stock company, establishing a company in Romania provides foreign investors with flexibility, low operational costs, and access to the EU market. The country’s tax advantages and legal framework make it one of the most investor-friendly destinations in the region.
If you’re considering establishing a company in Romania, understanding the structures and tax rules is essential. For further guidance or help with the process, we recommend consulting with a local advisor or company formation specialist.For more information, please feel free to contact us.
