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If you want to do business with a foreign company based in the EU, where the state does not complicate business with a disproportionate tax burden, we have a solution for you: setting up a company in Romania with VAT registration.

Why set up a company in Romania and start doing business here

Economical growth
As already mentioned, Romania is characterized by exceptional economic growth compared to other European countries, which attracts more investors to enter the Romanian market, mainly from Europe, but also from Turkey or Israel.

Stable legal system
Romania has a relatively stable legal system that is gradually being harmonized with European law. So you won't have any problems adapting to the new legislation. Favorable tax conditions are also worth mentioning.

Low taxation

The basic corporate tax rate is 16 %, making Romania one of the lowest taxed countries in the European Union.

In addition, under certain conditions, it is possible to obtain the status of a so-called micro company, which allows you to pay only 3 % of the total income. The condition is that the company must have an annual turnover of up to EUR 1,000,000, less than 9 employees and more than half of the revenue must come from activities other than consulting and management. If the company achieves a turnover of more than EUR 35,000, it is subject to VAT registration, the basic rate of which is 19%, the reduced rate is then 9 %. Withholding tax for dividend payments is 16 %.

The economy is growing in all areas. In Romania, the price of real estate has also increased significantly in recent years.
In addition, Romania has a relatively cheap labor force. The Romanian market is currently experiencing a dynamic and attractive period, so it is a good time to enter it. Look to the future! Set up a company in Romania and open new doors for your business.

Establishment of a company in Romania

Setting up a Romanian SRL company in Romania is really very fast. In order for the company to be incorporated, proof of identity (valid ID card) must be presented, and the company is normally incorporated within 10–12 days. When setting up a company, you can immediately apply for VAT allocation, the rate is 24 %.

The most commonly established companies in Romania are SRL, equivalent to our limited liability company, and SA, which corresponds to a joint stock company. The more frequently used form is the SRL, in which case one shareholder and one executive are sufficient for establishment (the maximum number is 50).

But as in other European jurisdictions, you cannot avoid paperwork. The company must be based in Romania, keep accounts and file tax returns. Under certain conditions, the company is also subject to an audit.

The share capital of the company is 200 RON (that's about 45 EUR). It sounds silly and is just a formality, no big investment is needed.

One important thing we would like to warn you about – the register of companies is publicly accessible. Romania thus offers a low level of anonymity. You get more anonymity if you use nominee services. Every person – and an entrepreneur in particular – has the right to privacy. That's our opinion! Anonymity is a matter of principle, and you have the right to it!

And one last thing. Romania has signed more than 80 double taxation treaties.

Basic information

  • Type of legal entity: Limited Liability Company (SRL)
  • Establishment time: 4 working days
  • Number of shareholders: minimum 1, maximum 50
  • Shareholders: they can be FO or business entities
  • Share capital: minimum 200 RON (approx. 45 EUR), maximum not defined
  • Shares on bearer: not allowed
  • A registered address in Romania is required
  • Local registered agent is not required
  • Directors: the minimum is 1, a natural person
  • Residence function of the director: directors do not have to be resident in Romania

Taxation

  • The corporate income tax rate is 16 %
  • Branch tax rate 16 %
  • The capital gains tax rate is 16 %
  • The dividend tax rate is 5 %
  • Interest, royalties, commission 16 %
  • Net operating losses can be carried against income for 7 years forward
  • The standard VAT rate is 20 % for most goods and services. Special rates for some goods and services 5 % or 9%
  • VAT registration is mandatory if the company's taxable turnover exceeds EUR 65,000 in the last 12 months
  • Double taxation agreements with more than 80 countries applied, determining tax rates on dividends, interest and royalties
  • Accounting. Accounting and the preparation of accounts is necessary, a tax return must be filed
  • The audit is not mandatory
  • Anonymity and privacy. Information about administrators and shareholders is published in the company register.

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