Company registration in Romania as a foreigner can be an excellent opportunity to tap into the dynamic and growing economy of Eastern Europe. Romania offers a strategic location, favourable business environment, and access to the European Union’s Single Market.

This guide provides a step-by-step approach to help non-resident entrepreneurs understand the requirements, procedures, and benefits of starting a business in Romania. With insights from legal experts and practical advice, this article will ensure you have all the information you need to make an informed decision.

Company Registration in Romania for Non-Residents - BMA Legal

Business Structures Available in Romania for Non-Residents

1. Limited Liability Company (SRL)

The SRL, or “Societate cu Răspundere Limitată,” is the most common choice for both local and foreign entrepreneurs. Features include:

  • Limited Liability Protection: Shareholders are liable only to the extent of their capital contribution.
  • Flexibility: An SRL can be founded with a minimum share capital of 1 RON, and it can have up to 50 shareholders.
  • Management Options: The company can be managed by one or more administrators, who can be non-residents.

2. Joint-Stock Company (SA)

An “SA,” or “Societate pe Acțiuni,” is typically used for larger businesses and companies looking to go public. Characteristics include:

  • Minimum Share Capital: 90,000 RON (about 18,000 EUR), which must be fully subscribed and paid up.
  • Suitable for Public Listings: Ideal for businesses planning an IPO or seeking significant outside investment.

3. Branches and Subsidiaries of Foreign Companies

  • Branch: Operates as an extension of a parent company, without separate legal personality. It is subject to Romanian law and taxation.
  • Subsidiary: Functions as a separate legal entity and provides more flexibility in terms of local operations.
  • Representative Office: Can only carry out non-commercial activities like market research and promotional activities.

4. Partnership Structures

Although less common, partnerships (general and limited partnerships) can be established. However, these entities involve shared liability among partners and may not offer the same protections as a limited liability company.

Company Formation in Romania as a Non-Resident

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Eligibility Criteria for Non-Residents

Shareholder Requirements

Romania imposes no restrictions on foreign ownership, allowing non-residents to fully own and control local companies. As a foreigner, you can act as the sole shareholder or partner with others, either individuals or legal entities.

Registered Address Requirements

All companies must have a registered office in Romania, which serves as the official address for legal notices and correspondence. Options for fulfilling this requirement include:

  • Leasing Office Space: Renting an office or co-working space in Romania.
  • Virtual Office Services: Some companies opt for a virtual office to establish a legal address.
  • Using a Law Firm’s Address: Many law firms, including BMA Legal, provide temporary hosting for a company’s registered office for a maximum period of one year.

Capital and Legal Compliance

  • Minimum Share Capital: For an SRL, the minimum capital requirement is 1 RON, whereas for an SA, it’s 90,000 RON.
  • Required Documentation: You will need to submit identification documents, proof of address, and other necessary documents, such as certificates of incumbency for the legal entities that will hold the positions of shareholders or directors / administrators of the Romanian entity.

Appointment of an Administrator

Every company must appoint at least one administrator who can manage the business operations. There are no residency requirements for administrators, allowing foreign nationals to manage Romanian companies.

Step-by-Step Guide to Company Registration in Romania

1. Reserving the Company Name

Start by reserving a unique company name through the Trade Registry. The chosen name should not be similar to existing registered businesses. The reservation is valid for one month.

2. Securing a Registered Office

Establish a registered office for your company. You’ll need to submit documents proving your lease agreement or ownership of the property or use a temporary registered office service.

3. Drafting the Articles of Incorporation

This document should include:

1. Details of Shareholders and Capital Contributions.
2. Company’s Activities: Clearly stating the business scope, using NACE codes for classification.
3. Management Structure and Administrator Roles.
4. How resolutions will be taken in the General Meetings of the Shareholders.
5. Ultimate Beneficial Owner Information.
6. Duration of the Company (if not intended to operate indefinitely).

4. Submitting the Incorporation Documents

Submit the necessary documentation to the Trade Registry:

1. Articles of Incorporation.
2. Proof of Registered Office Address.
3. Identification Documents for Shareholders and Administrators.
4. Statements regarding the activities that will be carried out by the company, UBO and fiscal record of the shareholders and administrators.
5. Tax and foreign investment forms.

5. Tax Registration and VAT Compliance

After the company is incorporated, it will automatically receive a tax identification number. You may also need to register for VAT if your annual turnover exceeds 395,000 RON or if you plan to engage in VAT-applicable activities.

6. Publication in the Official Gazette

The incorporation of the company will be published in Romania’s Official Gazette. This is a standard step in formalising the establishment of your company.

1. Reserving the Company Name

Start by reserving a unique company name through the Trade Registry. The chosen name should not be similar to existing registered businesses. The reservation is valid for one month.

2. Securing a Registered Office

Establish a registered office for your company. You’ll need to submit documents proving your lease agreement or ownership of the property or use a temporary registered office service.

3. Drafting the Articles of Incorporation

This document should include:

1. Details of Shareholders and Capital Contributions.
2. Company’s Activities: Clearly stating the business scope, using NACE codes for classification.
3. Management Structure and Administrator Roles.
4. How resolutions will be taken in the General Meetings of the Shareholders.
5. Ultimate Beneficial Owner Information.
6. Duration of the Company (if not intended to operate indefinitely).

4. Submitting the Incorporation Documents

Submit the necessary documentation to the Trade Registry:

1. Articles of Incorporation.
2. Proof of Registered Office Address.
3. Identification Documents for Shareholders and Administrators.
4. Statements regarding the activities that will be carried out by the company, UBO and fiscal record of the shareholders and administrators.
5. Tax and foreign investment forms.

5. Tax Registration and VAT Compliance

After the company is incorporated, it will automatically receive a tax identification number. You may also need to register for VAT if your annual turnover exceeds 390,000 RON or if you plan to engage in VAT-applicable activities.

6. Publication in the Official Gazette

The incorporation of the company will be published in Romania’s Official Gazette. This is a standard step in formalising the establishment of your company.

Company Formation in Romania as a Non-Resident

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Post-Incorporation Essentials

Opening a Business Bank Account

To facilitate local transactions and ensure compliance, you will need to open a Romanian bank account. Requirements may include:

  • Incorporation Documents.
  • Proof of Registered Office.
  • Personal Identification of Company Administrators.
  • Authorized Signatories’ Presence at the Bank: Most of the Romanian banks require physical presence.

Setting Up Accounting and Bookkeeping

Romania requires companies to maintain proper accounting records. Key obligations include:

  • Annual Financial Statements: Filing with the tax authorities.
  • VAT and Tax Returns: Monthly or quarterly, depending on turnover.
  • Tax Payments: Corporate income tax or Micro-Enterprise tax, dividend tax, social security contributions (if applicable).

Employment and Labor Law Compliance

If you plan to hire employees, you must comply with Romanian labour laws. Key areas to consider are:

  • Employment Contracts: Must be registered with the labour inspectorate.
  • Minimum Wage Compliance: Adjusted periodically.
  • Social Security Contributions: The company is responsible for employee contributions.

Ongoing Corporate Governance

Adherence to corporate governance practices is essential for maintaining the company’s good standing. This includes organizing annual general meetings, filing required reports, and keeping the Trade Registry updated on any changes to the company’s details.

Understanding Taxation and Incentives in Romania

Corporate Income Tax & Micro-Enterprise Tax Rates

Romania’s flat corporate income tax rate is 16%. For micro-enterprises (companies with annual revenue below 250,000 EUR and at least one employee), the tax rate ranges from 1% (for companies with annual revenue up to 60,000 EUR) to 3% (for companies with annual revenue between 60,000 EUR and 250,000 EUR or those that carry out certain activities in IT, HORECA or medical sectors).

VAT Compliance

Companies engaging in activities subject to VAT need to register for VAT purposes. The standard VAT rate is 21%, with reduced rate of 11% applicable to specific goods and services.

Dividend Tax

A 10% tax applies to dividends distributed to shareholders. In some cases, exemptions are available for EU parent-subsidiary companies.

Tax Incentives for R&D

Romania offers incentives for companies involved in research and development.

Strategic Benefits of Romania’s Location

Romania’s strategic position within the European Union offers businesses a gateway to Eastern, Central, and Western Europe. The country’s proximity to major markets like Germany, Italy, and Turkey ensures easy access to both suppliers and customers across the continent.

Romania’s well-developed infrastructure—particularly in telecommunications, logistics, and transportation (lately)—enhances its appeal for international businesses.

Pro-Business Policies and Investment Incentives

Romania encourages foreign investment through various incentives:

  • Tax Incentives for IT and R&D Sectors: The government offers tax exemptions for IT professionals, along with R&D incentives like tax reductions on innovation-based projects.
  • Grants and EU Funding: Romanian businesses can benefit from grants aimed at fostering growth in sectors such as technology, agriculture, and manufacturing.
  • Flexible Employment Laws: Compared to some other EU countries, Romania’s labour laws provide more flexibility in hiring and managing employees.

Favorable Tax Environment

Romania’s tax regime is relatively straightforward, with a corporate tax rate of 16%. The country also offers an advantageous tax rate for micro-enterprises, ranging from 1% to 3% based on turnover and the type of activity. In addition, the VAT rate of 19% is moderate, and goods and services in certain industries may qualify for reduced rates.

Access to Skilled Labor

Romania has a well-educated workforce, particularly in technical fields like engineering, IT, and finance. The country produces a high number of STEM graduates each year, and labour costs are lower compared to Western Europe, making it an attractive option for companies looking to optimise their expenses while maintaining high-quality services.

Understanding the local business culture can make a significant difference:

  • Building Relationships: Romanian business culture values personal relationships, so take time to establish rapport with partners and clients.
  • Formality in Initial Meetings: Although business attire and formal communication are typical at first, relationships often become more relaxed over time.
  • Negotiation Approach: Negotiations tend to be straightforward. However, flexibility and mutual respect are valued.

Common Challenges and How to Overcome Them

Language Barriers

Although many professionals speak English, some documents need to be in Romanian. Working with a local law firm ensures compliance and accurate translation.

Bureaucracy

Administrative processes can be complex. Streamline them by seeking professional assistance from experienced legal consultants or service providers.

Understanding Regulatory Changes

Laws and regulations in Romania may change, so staying informed or working with a knowledgeable advisor is crucial for compliance.

Frequently Asked Questions (FAQs)

Yes, you can start a Romanian company remotely. Many steps, such as reserving the company name, submitting incorporation documents, and even setting up a bank account , can be done online or through a legal representative with a power of attorney. However, some documents may need to be notarised, translated, and apostilled depending on the requirements.

The process typically takes between 5 to 10 working days, depending on how quickly the documents are prepared and submitted, as well as the processing time of the Trade Registry. This timeline may vary if additional approvals or document translations are needed.

Yes, you can transfer funds, but you may need to comply with local banking regulations and anti-money laundering laws.

Yes, hiring a local accountant is highly recommended and even mandatory to ensure compliance with Romanian accounting standards and tax obligations.

There are no specific legal restrictions for non-residents to become shareholders in a Romanian company. Foreign individuals or companies can fully own Romanian businesses, with no mandatory local partner requirement. However, non-residents will need to provide identification documents (such as passport copies and proof of their current address).

Yes, a Romanian company can be 100% foreign-owned. There is no requirement for local ownership or local partners, making Romania an attractive destination for international entrepreneurs who wish to maintain full control of their business.

Generally, foreign-owned companies in Romania can engage in a wide range of business activities. However, some industries, such as financial services, insurance, and healthcare, may require special licenses or regulatory approvals. It’s important to verify any industry-specific regulations before starting your business.

No, there is no requirement for a company director or administrator to be a Romanian resident. A non-resident can act as the company administrator. However, having a local administrator can be beneficial for handling day-to-day operations and liaising with local authorities.

Romanian companies must meet various ongoing compliance requirements, including:

  • Filing annual financial statements with the Trade Registry.
  • Submitting VAT returns if registered for VAT.
  • Paying corporate taxes, social contributions, and other relevant taxes.
  • Updating the Trade Registry with any changes to company details (e.g., change of registered address, administrators, or shareholders).

Registration delays may occur due to:

  • Incomplete or improperly filled documentation.
  • Delays in obtaining notarised or apostilled documents, especially from abroad.
  • Issues with verifying the company name’s availability.
  • Delays caused by the Trade Registry.

The minimum share capital requirement for an SRL in Romania is 1 RON. This nominal amount makes it easy and affordable for anyone to start a business. However, for practical purposes and to cover initial expenses, a higher capital contribution is recommended.

Yes, foreign-owned companies registered in Romania can apply for EU funding, grants, and government incentives, provided they meet the eligibility criteria for the specific programs. These programs are often aimed at fostering innovation, research and development, technology, and rural development. Having a Romanian-registered company gives you access to these opportunities.

Non-residents can choose from various company types, with the most common being a Limited Liability Company (SRL), Joint Stock Company (SA), or a Branch/Subsidiary. The SRL is the most popular choice due to its simplified setup process and limited liability for shareholders. Each type has different requirements for share capital, management structure, and reporting obligations, so it’s important to select the one that best fits your business needs.

No, the company can be registered without having a bank account.

While it’s not mandatory to have a fully operational office, you do need to provide a registered address for the company. This can be a virtual office or the address of a legal representative, such as a lawyer, who offers registered office services. Having a physical presence may be advantageous for certain business activities or industries, but it is not a legal requirement.

Yes, a Romanian company can hire foreign employees. However, hiring non-EU citizens may involve additional steps, such as obtaining work permits and residence visas. EU citizens can work in Romania without a visa, but they still need to be registered with the local authorities. It’s advisable to consult an immigration lawyer to ensure compliance with all employment regulations.

A non-resident can apply for VAT registration for their Romanian company either during the incorporation process or afterwards. VAT registration will be required if the company engages in transactions that exceed the VAT threshold or conducts business with other EU countries.

Company Formation in Romania as a Non-Resident

Reach out to BMA Legal for assistance

✓ Romania offers a strategic entry to the EU market.

✓ BMA Legal guides you through the setup process.

✓ Our experts support you from registration to compliance.

Schedule a consultation to get started today.

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