In order to set up a company in Romania, you first need to choose the type of business form, to prepare the file and to submit the application at the Trade Register. Note that the most common forms of business in Romania are the Limited Liability Company along with the Joint Stock Company and Branches.
Download our 2022 Company Formation Guideline for more information regarding the complete procedure, minimum requirements and documentation, or read more below:
Legal forms of business, minimum capital, contribution
The type of business forms available in Romania are summarized below with their specific information: the minimum share capital, the liability of the shareholders/stockholders, the minimum number of shareholders/stockholders.
The most common forms of business used in Romania are the Limited Liability Company along with the Joint Stock Company and Branches.
General Partnership (Societate in nume colectiv | S.N.C.)
Limited Partnership (Societate in comandita simpla | S.C.S.)
Limited Liability Company (Societate cu raspundere limitata | S.R.L.)
Joint Stock Company (Societate pe actiuni | S.A.)
Company Limited by Shares (Societate in comandita pe actiuni | S.C.A.)
Branch (Sucursala)
Sole Entrepreneur (Persoana Fizica Autorizata)
Minimum documentation
Companies can be founded by natural or legal entities and must register to the Trade Register. Certain activities need prior authorization (e.g. credit institutions, insurance brokers, companies which produce, sell firearms and ammunition, pension entities). Certain activities need to be authorized after the registration of the company (e.g. work agent, transportation licence).
The main document needed for incorporating a company is the articles of incorporation. This document must specify the following:
The types of documents requested by the Trade Register for the company establishment are:
- articles of incorporation for the new founded company
- certificates of incorporation of the shareholders
- articles of incorporation of the shareholders
- excerpts issued by the Trade Register where the shareholders are incorporated
- creditworthiness letter for shareholders
- passport or ID of the future director of the Romanian company
- lease agreement for the headquarter and the landlord property documents
- application form(s)
After the incorporation, the company must register within the Romanian Fiscal Authorities in 30 days.
Registration process and registration time
The incorporation procedure of a Romanian company consists mainly in:
- reserving the name of the company
- drafting the relevant documents (mainly constitutive act of the company and shareholders and directors’ statements)
- filling the registration application within the Trade Register
The registration of a company is mandatory in Romania.
- The incorporation procedure must be initiated by request.
- The registration request must be filed with the competent Trade Register Office.
- Company registration request may be submitted with electronic signature via the Trade Register portal or at the registrar’s office of the authority.
The same term applies also for approval of mentions (e.g. update of the Act of Incorporation, revocation of directors, appointing of directors, relocation of headquarter).
This procedure consists in 2 steps. First, the GSM resolution will be published in the Official Gazette in order to be brought to the attention of the public and, afterwards, the interested parties may submit an opposition to the liquidation request.
A newly registered company must also register with the Tax Authorities, Social Security Authorities and Labour Authorities (in case it has employees).
Shareholders (company board)
Regarding the shareholders of different forms of companies in Romania:
- The shareholders of General Partnership or the Joint Stock Company are severally liable for the social obligations.
- In the LLC’s case, the number of shareholders cannot be higher than 50 and the shareholders are liable only up to the subscribed capital.
General overview of corporate taxes
Tax rates
The standard corporate income tax rate in Romania is 16% and the standard VAT rate is 19%.
Romanian taxpayers that are carrying on activities such as gambling and nightclubs are either subject of 5% rate from the revenues obtained from such activities or 16% of the taxable profit, depending on which is higher.
Besides the VAT 19% rate, the following reduced rates would apply:
- 9% for water, food, beverages (except alcoholic drinks), medical treatments, prosthesis etc.
- 5% for restaurant and catering services, hotel accommodation, social housing under certain conditions and to schoolbooks, newspapers, magazines, admission fees to castles, museums, sport events etc.
Registration requirements
Starting 1st of April 2018, the mandatory VAT registration for taxable persons having the place of business activity in Romania should be performed when the annual turnover of EUR 88,500 (RON 300,000) is exceeded.
Voluntary VAT registration before the threshold is exceeded is also possible. The VAT registration procedure is complex, and several types of documents are required. Non-resident taxable persons established in Romania through fixed establishments and non-residents having no actual presence in Romania can register without observing the above threshold. However, a VAT number must be in place before the commencement of the economic activity.
A taxable person not registered for normal VAT purposes in Romania and not required to register is liable to request the special VAT registration in the following situations:
- purchase of services from persons established outside Romania having the place of supply in Romania
- supply of services with place of supply in another EU Member State
- intra-community acquisitions of goods from another EU Member State cumulatively exceeding the annual threshold of EUR 10,000 (RON 34,000)
Fees and penalties
The incorporation of the company, the mentions or the liquidations are tax free as per modified provisions of the updated Law no. 26/1990.
The amounts for publishing the documents (e.g. resolutions, Acts of incorporation) in the Romanian Official Gazette will apply.
Investment incentives
Special taxation of micro-enterprises
Starting with 2018, the applicability of the microenterprise regime extended, and more companies are subject to this taxation regime. As such, the microenterprise tax is mandatory for all companies obtaining revenues below the threshold of EUR 1,000,000 computed at the NBR exchange rate valid for the last day of the financial year.
Companies have the possibility to opt to be corporate income taxpayers if the share capital is at least RON 45,000 and have minimum two (2) employees.
The microenterprise tax rate applicable are:
- 1% of the revenues for microenterprises that have at least 1 employee
- 3% of the revenues for microenterprises with no employees
The taxation regime applicable will be determined based on the Company’s revenues as at December 31st of the previous fiscal year. If the Company will record revenues exceeding EUR 1,000,000 during the year, it will become corporate income taxpayer starting with the quarter in which this threshold has been exceeded.
Income tax exemption for programmers
Main conditions
A company that conducts creative activities of computer programs for trading purpose can benefit of (salary) income tax exemption for its employees engaged in such activities, under certain conditions provided by law. The tax exemption is granted only for Romanian entities that perform the creation of computer programs to achieve a final product or a component of the final product for trading purposes.
Starting with February 1st, 2018, tax exemption in the IT industry is also granted to those employees who do not have a bachelor’s degree at all, but are enrolled at a university (not necessarily on the IT area), as well as to those who have graduated superior education programs with a short duration. The main condition is that these employees perform one of the activities stipulated in the local legislation, otherwise they cannot benefit from the tax exemption.
Other aspects
Opening a bank account
For a Romanian company it is mandatory to have a bank account. For opening a bank account, the legal representatives’ personal presence is mandatory at the opening. In the previous years, the banks also accepted a special notarized POA for another individual, but this practice changed and usually, at the opening, they request the presence of the administrator of the company.
Subsequent modifications in the statute of the company
All modifications regarding the statutory information of the companies (change of registered seat, mandate of directors, change of the shareholders or directors etc.) need to be registered at the Trade Register in 30 days.
Unique European code (EUID)
All Romanian companies receive, beside the unique registration number and the Trade Register identification number, the unique European code (EUID).
Through the system of interconnection of the Trade Register Institutions in Europe, documents and information relating to the professionals registered in the Trade Register of each country are made available to the public. It will be possible to obtain information on identification and status of a company in the European Union and to obtain copies of certificates of electronic documents.
