Company Formation in Romania

Company Formation in Romania

Romania is a southeastern European country known for the forested region of Transylvania, ringed by the Carpathian Mountains. Its preserved medieval towns include Sighi┼čoara, and there are many fortified churches and castles, notably clifftop Bran Castle, long associated with the Dracula legend. Bucharest, the country’s capital, is the site of the gigantic, Communist-era Palatul Parlamentului government building.

Romania is a developing country, with a high-income economy, ranking 49th in the Human Development Index. It has the world's 45th largest economy by nominal GDP. Romania experienced rapid economic growth in the early 2000s; its economy is now based predominantly on services. It is a producer and net exporter of machines and electric energy through companies such as Automobile Dacia and OMV Petrom. Romania has been a member of the United Nations since 1955, NATO since 2004, and the European Union since 2007. The majority of Romania's population are ethnic Romanian and Eastern Orthodox Christians, speaking Romanian, a Romance language.

 

Company Formation Romania

No matter the fact that the investors in a Romanian company are residents or foreigners (or ventures), in both cases, they are treated the same and benefit from the same opportunities of developing economic activities in Romanian. All entities operate as independents and are separate by their shareholder's/partners' legal units, having their own patrimony, possessions, appellation, administration, registered capital, headquarters, and bank accounts.

 All businesses must be registered at ONRC (the National Trade Register Office - Romanian Chamber of Commerce and Industry) and the corporation starts to exists since the date of registration. ONRC is a public institution that keeps statistical information of economic activities. The process of company incorporation in Romania states that every business must have at least a shareholder for an SRL and two for a SA. Additionally, one person can't be a unique associate in more than one company. Shareholders can be either companies or individuals and can all be non-Romanians.

 

Steps for opening up a company in Romania

 

An SRL (Limited Liability Company – Societate cu raspundere limitata) is the most frequent type of company in Romania. The following steps must be checked:

  1. First, must be checked the availability and reserve the company’s name. This procedure is done through the Trade Register.
  2. The second step is to provide the necessary documents for the company formation in Romania.  SRL companies are registered through the local Trade Register Office and will require documents from the shareholders and administrators such as Articles of Association (must contain certain information), Affidavits, and Specimen Signatures. In case the shareholders are foreign companies then the Romanian Trade Register will also require their registration documents for proof of their existence.
  3. An entrepreneur can open a company in Romania and choose to delegate powers to a representative through a Power of Attorney.
  4. A bank account has to be opened and the minimum share capital subscribed (around 50 EUR). 
  5. Provide a company office for registration purposes only (virtual office provided by Servicii SRL).
  6. The last step when starting a company in Romania is to submit the file to the Trade Register and appear before the Trade Register judge for the Romanian company formation.
  7. The usual time frame for opening a company in Romania is 5 business days from the date the entire documentation is ready and provided to the authorities to register the Romanian Company. 

 

How long does it take to open a Romanian company? 

 The procedure of company formation in Romania will take five working days (this is calculated since the date on which all the necessary documents are subscribed to the local authorities). In order to register a limited liability company, the necessary minimum share capital is EUR 40, while for a joint-stock company, the capital is established at EUR 25,000. 

 

What are the duties of the Romanian Trade Register?

Legal registration operations such as the formation of new Romanian companies, change of the social headquarters of the company, change of any clause of the articles of association, cession of social shares and others, require the verification of the file and documents by a clerk and a Trade Register judge

The Trade Register judges review the submitted information, the correctness of the paperwork from the legal point of view (articles of incorporation, affidavits, specimen signatures, etc.) and either request further information from the shareholders and/or directors or their representatives or approve the operation.

 From the date of approval of the incorporation of a Romanian company, the Romanian Trade Register usually requires approximately 3-5 business days to issue the Certificate of Incorporation. Other useful information about the Trade Register and its activities throughout Romania are presented below:

 

  • the Trade Register is a public institution and is obliged under the local law to issue, at the expense of the person requesting it, official copies of the documents registered in its database;
  • it must also provide information regarding the registered data and offer information in regards to the existence of certain documents in the records of the Romanian Trade Register;
  • the decisions of the Trade Register judges are open to appeal in a term not exceeding 15 days;
  • the Romanian Trade Register has set up offices in 42 counties, at a national level.

 

How can one register a business with the Trade Register in Romania? 

 The procedure on how to start a business in Romania depends on the type of legal entity that is selected for incorporation. All types of companies that are recognized under the Romanian law have to be registered with this institution and this also refers to businesses that are not considered corporate bodies (such as the sole trader); our team of lawyers in Romania can provide legal assistance on how to register a local company.  

 Thus, the documents required by the institution will also vary. In the case of a private limited company, one of the most common ways to start a business here, investors have to prepare numerous documents and this is why we recommend getting in touch with our team of Romanian lawyers. For this type of company, there are 19 documents that have to be completed, for example

 

How can an investor register a Romanian SRL?

Since the Romanian SRL is the most common business form selected for registration in this country, we will present below the steps for forming this type of company. Prior to starting the registration process, the investors must gather all the documents and information required by the local authorities. Some of the most common information that must be presented upon the registration of a new Romanian business are the following: 

  • personal information regarding the company’s shareholders, such as their names, nationalities, country of residence, and date of birth;
  • the name of the person who is appointed as a general manager;
  • the company’s proposed name and the business activities that will be developed here;
  • the participation of each shareholder at the company’s capital, the nominal value of each share, and the percentage of shares owned by each shareholder;
  • the company’s registered office (the proof regarding this information is done through various documents that attest to the fact that the company operates in the given location). 

The procedure of company formation in Romania starts by selecting a suitable company name. In order to do so, the investor has to reserve a company name by completing a reservation form, which will be then submitted to the Trade Registry. Following this procedure, the institution will issue a certificate (on the same day) that will certify the fact that the company name was reserved. This document is available only for a period of three months. 

Foreigners who are not residents of Romania may also register a business here, but they will need to declare on their own responsibility that they do not have any financial debts in the country where they reside. This document generally has to be submitted in original. If the document is written in a foreign language, a certified translation has to be added to the file, and this is done through a public notary.

Once all the required documents are submitted with the Trade Register Office and after the institution will verify the applicant’s file, the company will receive a unique registration code (CUI). Formally, a company is recognized as a legal entity in Romania once it is registered with the Trade Register.

How many businesses were registered in Romania?

Since the Trade Register is the main institution where local businesses are registered, the institution also holds the current statistics on the businesses incorporated here. The latest data for the current year (2019) covers the period of January to September, and foreign or local investors should know that: 

 the highest number of companies registered with the Trade Register between January-September 2019 was recorded in Bucharest, the capital city of the country, which accounts for 13,542 businesses (all business types included);

Since the Trade Register is the main institution where local businesses are registered, the institution also holds the current statistics on the businesses incorporated here. The latest data for the current year (2019) covers the period of January to September, and foreign or local investors should know that: 

 

  • the highest number of companies registered with the Trade Register between January-September 2019 was recorded in Bucharest, the capital city of the country, which accounts for 13,542 businesses (all business types included);
  • more than 4,000 businesses were registered in the counties of Timis (4575 companies) and Iasi (4320 companies);
  • the number of businesses registered in Iasi increased on a year-to-year basis by 18.10%;
  • in Cluj, one of the largest cities in Romania, there were incorporated 5043 companies;
  • in Brasov, another important city in Romania, the number of companies registered in the same period was 3837;
  • on a year-to-year basis (compared to the period of January-September 2018), the number of businesses registered in Brasov increased by 33.60%;
  • in Prahova there were 3849 new incorporations, marking an increase of 33.70% compared to the same period of 2018.

 

Taxes in Romania

Income tax for the company in Romania equals 16%, except for small businesses (they pay only 3%).

VAT is 24% (preferential tariff of 9% is set for such fields of activities as pharmaceuticals, newspapers, movies, museums, books, hotels, and 5%  - for constructional materials).

Natural persons pay income tax at a fixed rate of 16%.

We will register a ready-made company in Romania for you within the shortest time possible. It has never been easier to buy a company in Romania. Registering a company in Romania is one of the simplest and cheapest ways to start a legitimate international entrepreneurial activity. Registration of companies in Romania is one of the main directions of our work.