In recent years Romania has introduced a number of new facilities for people interested in investing in Romania, a country rich in resources and natural sites and an attractive destination for investors who are looking for a strong base for their operations throughout the EU and globally.
The low corporate tax, the facilities in the process of registration of a company, the low costs of maintaining a company, as well as the affordable labor are all factors that potential investors should consider when looking for viable destinations.
Reasons to invest in Romania
Romania became particularly attractive for important foreign investors starting from 2005, a hallmark year for the Romanian corporate tax law. It was during 2005 that the flat-rate tax of 16 % was implemented and became applicable to both corporate and personal income tax. The flat low rate, combined with the cheap labor cost, strategic location and rich natural resources firmly placed Romania on the map of interesting investment locations.
Romania has been a member state of the EU since 2007. Its national currency has still remained the Romanian Lei, with certain fluctuations in the exchange rate with the Euro.
Since entering the EU, the Fiscal Code has been amended in order to be harmonized to the European regulations and all EU directives have been implemented in respect of indirect taxes (VAT and excises) as well as for direct taxes (parent-subsidiary, royalties and interest)
The legislation has been adapted to implement a certain number of international regulations and, even though Romania is not a member state of the OECD, the transfer pricing rules are fully aligned and applied.
Types of companies
The process of registering a Romanian company is an easy one, with local directors not a requirement and 100 % non-Romanian shareholding allowed.
The two main types of companies are the SRL (limited liability company) and SA (joint-stock company) and the main difference is in the low share capital the first type requires (200 Lei, less than 50 Euro) as well as the ability of having anywhere between 1 and 50 shareholders. The SA, on the other hand, requires a minimum share capital of 90,000 Lei (around 20,000 Euro) and allows registration with a minimum of two shareholders.
In special cases of stock companies (e.g. leasing companies) the minimum share capital should be even higher, even up to 200,000 Euro.
Requirements and procedure
The registration procedure is quite simple when it involves only one individual shareholder. If a legal entity is involved, the procedural steps are a bit more complex but in any case the registration typically does not take more than 10 working days.
The first step in the registration process is to reserve a name for the company and deposit the capital of the company. What follows is the collection all the required documents: IDs, statements for the shareholders and administrators, proof of the address (rent contract, etc.), issuing the Articles of Association, as well as translated and notarized powers of attorneys. Following the above, the next step is to fill in the application at the Romanian Trade Register and to submit all the required documentation. The Register then provides a date on which the decision or newly incorporated company is to be picked up.
Once a company is issued the certificate of incorporation, a corporate bank account can be opened. In order to open a bank account, Romanian banks require all corporate documents and the ID of the signatory/ies. It is very important to know that investors complete the procedure through powers of attorney (apostilled), without needing to travel to Romania.
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