Romania is famous for its high economy, expert labor, and human development index, which offers many financial opportunities. However, when it comes to the total GDB, Romania ranks 10th. The country offers many exciting opportunities for new companies to start a business. Also, Romania helps with tax incentives, provides legal support, and allows companies to understand the cultural nuances to be successful. When you have decided to start a new company in Romania, you should consider foreign direct investors, mainly if you are a foreigner.
In 2019, the government of Romania started an FDI screening framework for the creation of business opportunities. Romania works to make life easier for citizens, so the Ministry of Digitization and Innovation aims to digitize the country. For these reasons, Romania has become the main place where many companies start their businesses. In our blog guide, we will get to know about the process of company registration in Romania in detail.
Requirements for Starting a Business in Romania
The following are some requirements for Starting a Business in Romania:
Work visa and permit
Romania comes under the European Union so all the citizens of other European Union countries don’t require work permits for business startup. Other than this, there are many other countries such as Switzerland, Iceland, Norway and Liechtenstein which don’t require a work permit.
It is important for the foreign investor to submit a work permit to set up an offshore company in Romania. However investors have the opportunity to apply for work permits based on the business type.
Company name
Initially you must choose a company name. Once you find the unique name for your company, you have to register it to the local Trade Registry. However, ensure to be specific while finding the company name.
Company address
You have to allot the company address to register all legal documents. You should keep the official postal company address.
Taxation
The company tax in Romania is about 16%, which is applicable to Romanian and foreign companies. Moreover, income tax rules for companies and individuals working in Romania cover tax rates on profits and dividends with different incentives that are applied to a variety of sectors and income. If the company follows the following criteria, then it can get micro-company revenue tax:
- The company should earn revenue less than or equal to EUR 500,000.
- The company should not come under dissolution.
- The company owner should not have a connection to state and administrative units.
- It is crucial for the company to hire at least one employee.
- The company's shareholders must have 25% or more voting rights in almost three micro companies.
- Companies should generate almost 80% of revenue from other activities instead of consulting and management.
Director and company secretary
To start a business in Romania, you need a director and shareholder.
Accounting Requirements
You need to understand the accounting requirements to manage finance and comply with rules in Romania. In this you must maintain financial records and focus on all the accounting standards. Companies need to prepare and submit financial records annually such as balance sheets, notes of financial records and profit and loss records.
Moreover companies need to follow all the rules of international financial reporting standards and Romanian Accounting Standards. It is better for companies to contact the expert accountant to understand and follow all accounting rules and avoid any penalty.
How Much Will It Cost to Start a Company in Romania?
For the first year, you have to invest almost EUR 3,850 for starting a company in Romania. However you don’t need to pay such a cost for the next few years. But the average investment for starting a company is about EUR 8,820. This cost covers company startup, bank account opening and government fee.
Company Registration Process – Step-by-Step Guide
The following is the registration process in Romania:
Step 1: Selecting company type
To register your company in Romania, you have to find a suitable business entity.
You may find the business entity according to business needs. For local and foreign entrepreneurs, the suitable option is limited liability.
Step 2: Company name registration
Now, you need to register your company name in the local Trade Registry.
Make sure to find the company name that represents a business idea.
Step 3: Preparing company incorporation file
Now you have to provide all the main documents to the National Trade Register Office which is the major role player in the application of new business and maintain the record of registered businesses and entities.
The company also needs the signatures of shareholders and directors on Association articles and affidavits.
Step 4: Registering the company
Make a draft of formal documents and ask the Trade Register Office for approval.
The Trade Register Office will start the micro-enterprise corporation.
To complete the registration process, you have to wait for ten working days.
Step 5: Consulting with an accountant
In this step, you have to find the reliable and certified accountant for taking care of your company’s record.
Step 6: Compiling Company Incorporation Documents
In this step, you have to collect all the documents necessary for the formal registration of the company. However, you have to comply with Romanian legal standards. The following are documents necessary for Romanian company incorporation:
- Articles of Association (AOA)
- Memorandum of Association (MOA)
- Proof of minimum share capital payment
- Identification documents of the shareholders and directors
- Proof of the company’s registered office address
Make sure to prepare all documents accurately for submission in the Trade Registry Office to avoid any issues or rejection in the registration of the company. Ensure to collect all necessary documents needed for formal company registration that are compliant with Romanian legal standards.
Conclusion:
You need to choose a reliable platform that allows businesses to start a new company. Choose a team that is consistent and assists so you may find the dedicated team. The platform allows easy navigations regardless of complex legal framework. So you can get the best company startup process. The platform helps in incorporating companies overseas by following all the rules of the country!
