Business Opportunities in Romania
Romania is a high-income mixed economy with highly skilled labor and the Human Development Index offering vast potential opportunities. In terms of total nominal GDP, Romania bags the 10th position. Thus, plenty of reasons exist to consider setting up a company in Romania.
When planning to establish a company in Romania, you must look for foreign direct investments, especially if you are a foreigner. In 2019, the Romanian government established an FDI screening framework to create more business opportunities. After all, the government is keen to develop the country’s economy. As per the data of the United States Census Bureau, almost three billion dollars of trade was conducted between Romania and the United States till 2022. Therefore, heading to Romania with a fresh business plan is highly beneficial.
The strategic location of Romania adds to the advantage of doing business here. Its proximity to Moldova, Ukraine, Hungary, Serbia, and Bulgaria provides easy access to these markets where companies can expand their business. To ease the life of its citizens, the country’s Ministry of Research, Innovation, and Digitization aims at digitizing the whole country. All these reasons make Romania a prime location to undergo company registration in Romania.
Benefits of Starting a Business in Romania
The advantages of doing business in Romania are as follows:
Low taxation
Of all European countries, Romania has the lowest corporate tax. Besides, the country has signed multiple double-taxation agreements which protect companies from double taxation. In addition, the Romanian Fiscal Code relieves the corporate tax from businesses dealing with equipment that imparts technological benefits. Furthermore, the micro-enterprises in Romania need to pay a turnover tax of 1% for enterprises with at least one employee and 3% for enterprises without employees.
Flexible company ownership
You can establish a business in Romania as a sole shareholder. Post-July 2020, entrepreneurs are permitted to have multiple companies and function as sole shareholders. Entrepreneurs can receive dividends at an interval of every three months.
Robust banking sector
The healthy banking sector in Romania makes it a suitable country for business, with the lowest NPL rate in Europe. So, you can easily take up a loan in your company’s name for business growth.
EU membership benefits
Being a member of the EU countries, Romania can trade freely with other EU countries. The country can easily sell its products and services to the member states without restrictions. Furthermore, establishing a company in Romania can provide you with a larger target audience because Romanian businesses can approach the population of EU members.
Strategic geographic position
The dynamic geographical location of Romania acts as an advantage. It serves as a gateway between the Middle East and other European countries. In addition, Romania gives access to the Constanta Port as a gateway to the Black Sea. This provides easy transportation and adds to seamless export and import purposes.
Requirements for Starting a Business in Romania
The requirements to do business in Romania are as follows:
Work visa and permit
Since Romania belongs to the European Union, citizens belonging to other European Union countries do not need a work permit to start a business here. However, there are some other countries whose citizens do not need any work permits or visas. These countries include Switzerland, Iceland, Norway, and Liechtenstein.
A foreign investor must submit a work permit to set up an offshore company in Romania. Investors can apply for work permits depending on the type of business entity established. The various work permits available include seasonal workers, trainees, athletes, permanent employees, nominal work, and cross-border workers.
Company name
One of the crucial steps in the procedure for incorporation of a company in Romania is registering the company name. After finding a unique name for your company, you must register it at the local Trade Registry. Make sure to be as specific as possible.
Company address
You should allot a company address in which all legal documents will be registered. This must be the official postal address of the company.
Taxation
The standard corporate tax in Romania is 16%, which applies to all Romanian and foreign companies with a branch in Romania. A company can opt for micro-company revenue tax only if it meets these criteria:
- The revenue earned by the company should not cross EUR 500,000.
- The company should neither be under dissolution or liquidation.
- The owner of share capitals of the company must have no connection to state or administrative-territorial units.
- The company must have at least one employee.
- 80% of the company’s revenue should be earned from activities other than consulting and management.
- Its shareholders should have more than 25% voting rights in a maximum of three other micro-companies of Romania.
Director and company secretary
For Romanian business incorporation, you need at least one director and shareholder.
Types of Business Structures in Romania
Before getting into the Romanian new company incorporation, learn the various business structures as given below:
The Romanian limited liability company
- Should have a capital of 200 RON
- Should have at least one shareholder
- Shareholders are liable to the company’s debt according to their capital participation.
- Can have a maximum of 50 members
- Can have one or more directors
- Directors can be from a foreign country
- A director can be appointed for a limited period
The Romanian joint stock company
- Suitable for investment projects
- Must be registered by at least two founders
- Should have a minimum capital of 90,000 RON
- The General Assembly of Stockholders stands as the crucial body.
The Romanian collective name Company
- Based on the full trust of the associates
- Must have at least two shareholders
- The non-transmissible share capital of the company
- No minimum amount of share capital required
- Shareholders liable for the company’s obligations
The Romanian sleeping partnership company
- Must have at least two shareholders
- Shareholders are liable for the company’s debts
- The law prescribes no minimum number of shareholders
- At least one shareholder should be liable for the company’s debts
- Decisions of the company depend on the votes of the shareholder
- Transmission of the company’s interests to other entities only when mentioned in the legal document of the company
The Romanian partnership limited by shares
- Shareholders have different types of liability
- Company’s capital based on stocks
- Must have a share capital of 90,000 RON
- Shareholders take part in the administration
Company Registration Process
The company registration process in Romania is given below:
Step 1: Selecting company type
- The company registration process in Romania starts with opting for a suitable business entity.
- Companies can opt for a business entity depending on the business requirement. For local and foreign entrepreneurs, limited liability is the most suitable type of company.
Step 2: Company name registration
- Choose a unique company name to get it registered in the local Trade Registry.
- Ensure that your company name represents your business idea.
Step 3: Preparing company incorporation file
- In the third stage, you must provide the necessary documents and submit them to the Trade Register Office.
- Articles of Association and affidavits with specimen signatures of the shareholders and the directors are necessary.
Step 4: Registering the company
- Draft all formal documents and get them approved by the Trade Register Office.
- The Trade Register Office will establish the company as a micro-enterprise.
- This registration process can take up to ten working days.
Step 4: Consulting with an accountant
- This is the final step in which you must look for a reliable accountant to take care of your company records.
How Much Does It Cost to Incorporate a Company in Romania?
The cost of incorporating a company in Romania is EUR 3,850 in the first year. From the second year, no such costs are required. However, on average, the whole process takes EUR 8,820. This includes company incorporation, local bank account opening, and governmental fees.
Are Foreigners in Romania On Certain Passes Allowed to Start a Business in Romania?
Foreigners can proceed with offshore company registration in Romania, provided they submit a relevant work permit. The types of work permits include seasonal workers, trainees, athletes, permanent employees, nominal work, and cross-border workers.
To apply for the work permit, these are the eligibility criteria:
- Foreign entrepreneurs or investors should not have any criminal record.
- Foreign entrepreneurs or investors should provide a medical certificate to prove he is a person with a sound mind and body.
- Foreign entrepreneurs or investors must meet all the legal provisions.
- Foreign entrepreneurs or investors must fall into the category of foreign citizens.
To get a long-term visa, these are the documents required:
- The work permit
- A valid passport
- Proof of settlement in Romania
- Two recent photographs with clear pictures
- Medical insurance proof for the duration of the visit
- Proof of sufficient financial stability to sustain
- Proof of travel accommodation
- A background check or police clearance from the country of residence
For an extension of stay, you can appeal to the IGI. Make sure to apply at least 30 days before the visa expiration. However, you can extend your work permit by a year in Romania.
Government Assistance for Foreign-owned Businesses
To augment the country’s economy, the government provides programs and grants for starting a business in Romania. The Startup Nation Romania is a national program to support startups by providing national budget funds of 200,000 Lei (43,000 Euros). This is suitable for elderly entrepreneurs. However, the Romania Startup Plus is a similar program for all entrepreneurs, irrespective of age group.
Some other government assistance includes the following:
- Startmeup Romania (a non-profit program to support businesses)
- Vitas Romania (targets the start-up market)
- good.bee Credit (finances small enterprises)
- ROMCOM (provides short-term loans to start-ups as working capital)
How Multiplier Can Help
Multiplier is one of the most comprehensive platforms that helps establish businesses globally. With the team’s consistent assistance, you can find the best talents in the world. Multiplier encourages easy navigation despite a country’s complex legal framework. With us, you can be sure to get an uncomplicated company incorporation process. We prioritize compliance and incorporate companies overseas, following the rules and regulations of the specific country thoroughly.