Romania
Company Formation
Romania is one of the fastest-growing economies in Central and Eastern Europe, offering a highly competitive business environment with access to the European Union’s single market.
Known for its skilled workforce, particularly in IT and engineering, Romania has become an attractive destination for international companies and start-ups looking to establish a presence in the EU.
With a favourable tax regime, low operational costs and strategic location, Romania is ideal for businesses seeking to operate efficiently in Europe.
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Why Romania
- Romania is an ideal location for company formation, offering a low-tax environment, cost-effective operations and access to the European Union.
- With a corporate tax rate of 16%, it provides significant financial advantages.
- Romania’s low operational costs create a favorable setting for both start-ups and established businesses.
- Access to the EU single market allows free movement of goods, services and capital across Europe.
- The country offers a highly skilled workforce, particularly in IT, engineering and manufacturing, along with tax exemptions on dividends and capital gains from subsidiaries.
- Start-ups benefit from government grants, a low-cost environment and opportunities for expansion into EU markets, making Romania a strategic choice for growth.
Key Contacts
Alexia Panzavecchia
Claire Marie Calleja Zammit
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Useful Links
Key Information Overview
 | Types of Companies | Limited Liability Company (SRL), Joint Stock Company (SA), Branch |
 | Minimum Share Capital | SRL: RON 200, SA: RON 90,000 |
 | Registered Office | Must have a registered office in Romania |
 | Shareholders & Directors | At least 1 shareholder, 1 director |
 | Bank Account | Must open a local bank account and deposit share capital |
 | Tax Regime | 16% corporate tax, optional microenterprise tax (1-3%) |
 | Time to Complete Incorporation | 2-4 weeks |
 | Annual Maintenance Costs | Varies based on company size, includes compliance and accounting costs |
 | Audit Requirements | Mandatory for larger companies |
 | Market Access | Access to EU markets, low-cost business environment |
 | Key Benefits | Low corporate tax, cost-effective labor market |
 | Legal Framework | Based on civil law |
 | Physical Presence Requirements | Registered office required |
 | Corporate Governance Requirements | At least 1 director and 1 shareholder; board meetings required |
 | Language Requirements | Romanian, English may be used for certain documents |
 | Tax Residency Rules | Managed and controlled from Romania |
 | Required Documents | Memorandum & Articles of Association, ID proof, registered office address |
 | Compliance & Reporting | Annual returns, financial statements, VAT filings |
 | Employee and Payroll Requirements | Must comply with Romanian employment laws, including social security contributions |
Types of Companies
Romania provides several corporate structures to accommodate various business needs, ranging from small enterprises to large multinational corporations.
01
Limited Liability Company (SRL)
- The most common type of company in Romania, suitable for small and medium-sized businesses.
- Minimum share capital requirement: RON 1 (approximately €0.20), making it highly accessible for start-ups.
02
Joint Stock Company (SA)
- Ideal for larger businesses, particularly those looking to raise capital through public offerings or issue shares publicly.
- Minimum share capital requirement: RON 90,000 (approximately €18,000).
03
Branch of a Foreign Company
Foreign companies can establish a branch in Romania, operating as an extension of the parent company.
04
Sole Proprietorship
Suitable for individuals conducting business independently, although it does not provide limited liability protection.
05
Special Purpose Vehicles (SPVs)
Romania is becoming a popular jurisdiction for establishing Special Purpose Vehicles (SPVs), particularly in sectors like real estate, investment and financial services, due to its tax efficiency and strategic location within the EU.
Holding Company
Romania’s holding company regime is attractive for managing subsidiaries and investments across Europe, with tax exemptions on dividends and capital gains from qualifying subsidiaries.
Securitisation Vehicle
SPVs are commonly used in Romania for securitising financial assets, providing a well-regulated and tax-efficient environment for financial transactions.
Investment Funds
Romania’s regulatory environment supports the establishment of SPVs for managing investment funds, with benefits such as tax efficiency and access to the EU market.
Real Estate Holding Company
Romania’s SPVs are often used to hold real estate investments, providing legal and tax advantages for investors in the booming property market.
Start-Ups
Romania is a growing hub for start-ups, particularly in sectors like technology, fintech and renewable energy. Its skilled workforce, low costs and strong government support make it an attractive destination for entrepreneurs.
Tax Incentives:
- Corporate Tax Rate: Romania has a competitive corporate tax rate of 16%, which is one of the lowest in the European Union.
- Tax Incentives for SMEs: Small and medium-sized enterprises (SMEs) benefit from reduced tax rates, particularly those with revenues under €1 million.
Government Grants and Support:
- Start-Up Nation Programme: Provides grants to start-ups, covering up to 100% of eligible costs for innovative business ventures.
- EU Funding: Romania also benefits from EU structural funds, providing financial support to businesses in key sectors like technology, infrastructure and energy.
Business Support:
Incubators and Accelerators: Romania has a growing network of incubators and accelerators, offering mentorship, access to funding and office space for new businesses.
Access to Markets:
EU Membership: Romania’s membership in the EU provides start-ups with access to the single market, allowing for free trade and expansion opportunities across Europe.
Low Operating Costs:
Cost-Effective Environment: Romania offers some of the lowest operational costs in the EU, making it highly attractive for start-ups looking to reduce overhead.
A-
Grade A-: Start-Up Friendly
Romania offers a favourable environment for start-ups, with a competitive tax regime, government grants and low operational costs. Its strong tech ecosystem and access to the EU single market make it an attractive destination for entrepreneurs.
Benefits
INCORPORATING IN ROMANIA OFFERS STRATEGIC ADVANTAGES, INCLUDING A COMPETITIVE TAX REGIME AND LOW OPERATIONAL COSTS WITHIN THE EUROPEAN UNION.
Competitive Corporate Tax Rate
Romania’s corporate tax rate of 16% is one of the lowest in the EU, providing significant tax savings for businesses.
Access to EU Markets
As a member of the European Union, Romania offers businesses access to the EU single market, allowing the free movement of goods, services and capital across Europe.
Highly Skilled Workforce
Romania has a well-educated workforce, particularly in sectors like IT, engineering and manufacturing, providing businesses with access to skilled talent.
Low Operating Costs
Romania offers one of the most cost-effective environments for business operations within the EU, making it ideal for companies looking to minimise expenses.
Favourable Holding Company Regime
Romania’s holding company regime provides tax exemptions on dividends and capital gains from qualifying subsidiaries, making it attractive for managing international investments.
Requirements
Incorporating a company in Romania requires fulfilling several legal and administrative obligations. Below are the key requirements for establishing a company.
01
Shareholders
A Limited Liability Company (SRL) requires a minimum of one shareholder. There are no restrictions on the nationality or residency of shareholders.
02
Directors
At least one director is required for an SRL. Directors can be of any nationality and there are no residency requirements.
03
Company Secretary
There is no legal requirement for a company secretary in Romania, though some companies choose to appoint one for administrative purposes.
04
Registered Office
Every company must have a registered office in Romania, which will serve as its official address for legal correspondence.
05
Minimum Share Capital
The minimum share capital for Limited Liability Companies (SRL) is RON 1, while Joint Stock Companies (SA) require RON 90,000.
06
Bank Account
A corporate bank account must be opened in Romania, where the initial share capital will be deposited.
Mergers & Acquisitions
TAILORED SUPPORT to fast-track your market entry
Our Mergers & Acquisitions services are designed to assist clients in acquiring existing companies with pre-established licenses, streamlining the process of entering or expanding in key markets. These services are particularly relevant for investors seeking to fast-track their market entry while ensuring efficient and compliant solutions.
Identifying Suitable Businesses
We help clients locate companies that meet their specific goals, focusing on entities with strong operational histories and the required licenses.
Legal and Regulatory Assistance
Our experts guide clients through the unique legal and compliance frameworks of each market, ensuring a smooth acquisition process with minimal risk.
Valuation & Due Diligence
We conduct in-depth assessments of the target company’s financial and operational status, providing transparency and confidence in the acquisition.
Post-Acquisition Support
For clients who decide to divest, we offer comprehensive services to facilitate the sale of the company and transfer of licenses.
Frequently Asked Questions
What is the corporate tax rate in Romania?
Romania has a corporate tax rate of 16%, which is competitive in the European market.
Does Romania impose withholding taxes on dividends?
Yes, a 5% withholding tax applies to dividends, but this can be reduced or eliminated under double taxation treaties.
What legal structures are available for businesses in Romania?
The most common legal structures include the Limited Liability Company (Societate cu Răspundere Limitată, SRL) and Joint Stock Company (Societate pe Acțiuni, SA).
Are audited financial statements required in Romania?
Yes, larger companies must file audited financial statements, while smaller businesses may qualify for an exemption.
What is the VAT rate in Romania?
Romania’s standard VAT rate is 19%, with reduced rates of 9% and 5% for certain categories of goods and services.
Does Romania have double taxation treaties?
Yes, Romania has double taxation treaties with over 80 countries to avoid dual taxation of income.
What are the residency requirements for directors in Romania?
Romania does not require directors to be residents, though having local management can simplify administrative processes.
What is the process for incorporating a company in Romania?
Incorporation involves registering with the Trade Registry, drafting the Articles of Association and depositing the minimum share capital.
Are there tax incentives for businesses in Romania?
Yes, Romania offers tax incentives for R&D and technology investments, as well as exemptions for certain types of income.
How long does it take to incorporate a company in Romania?
Incorporating a company in Romania typically takes around 2 to 4 weeks, depending on the complexity of the business.
Need assistance?
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