How to open a company in romania

Step-by-step guide to open a company in Romania

Romania has become one of the most attractive destinations for business in Europe, with over 100,000 new companies registered annually. Its low corporate tax rate of 16% and strategic location within the European Union make it a hotspot for entrepreneurs looking to expand their ventures. With a GDP growth rate of 4.8% in 2023, the country offers immense business opportunities across industries. In this blog post, we will learn the step-by-step process of how to open a company in Romania.

Choosing the right business structure

Selecting the correct business structure is essential as it defines the company’s operational framework, liability, and tax obligations. Romania offers several business structures to suit different entrepreneurial needs.

• The Limited Liability Company (SRL) is the most popular choice for small and medium-sized enterprises (SMEs). It requires at least one shareholder and a minimum share capital of 1 RON, making it highly accessible for new businesses. Shareholders’ liabilities are limited to their contributions, offering protection against personal financial loss.
• The Joint Stock Company (SA) is an ideal choice for larger organisations or ventures requiring significant investments. This structure demands a higher minimum share capital, typically 90,000 RON, and at least two shareholders. It is best suited for companies planning to issue shares or list on stock exchanges.
• Sole Proprietorships are also available, catering to individual entrepreneurs who wish to operate independently. However, this structure does not protect liability, as the owner is responsible for all debts.

Reserving a company name

A unique and distinguishable company name is mandatory when registering a business in Romania. The process begins with a name reservation application submitted to the National Trade Register Office (ONRC).

To avoid delays, ensure the proposed name does not conflict with existing businesses. Conduct a preliminary search through the ONRC’s online database to confirm availability. Once chosen, submit the reservation request and the appropriate fee to the ONRC. Approved names are reserved for three months, allowing sufficient time to complete the company registration process.

Preparing required documents

Proper documentation forms the backbone of the company registration process. Incomplete or incorrect documents can lead to significant delays or rejections.

Article of association

The key document is the Articles of Association, which outlines the company’s purpose, structure, operational procedures, and shareholder contributions. This legal document must be drafted with precision, often requiring professional assistance from a legal expert.

Proof of registered office

Additionally, founders and shareholders must provide valid identification documents. For foreign nationals, this typically includes a passport and proof of residency. A proof of registered office is also required, showing the company’s official address. This can be a rented office, a commercial property, or virtual office service.

Other documents

• Specimen signatures of company directors.
• Bank confirmation of deposited share capital.
• Power of attorney if a third party handles the registration.

Opening a corporate bank account

Opening a corporate bank account in Romania is critical, as it allows the company to deposit its share capital and conduct financial transactions.

Choose a reputable bank that offers comprehensive business banking services. Some of the top banks in Romania include Banca Transilvania, BRD Groupe Société Générale, and Raiffeisen Bank.

To open the account, provide the following:

• Company name reservation certificate.
• Founders’ identification documents.
• Articles of Association.
• Proof of registered office.

Once the account is established, deposit the minimum share capital as your chosen business structure requires. The bank will issue a certificate confirming the deposit, which must be submitted during the company registration.

Bank account considerations for foreigners

Opening a corporate bank account is a key step in establishing a company in Romania, and foreign nationals may encounter additional requirements compared to local entrepreneurs.

Foreigners must often provide additional identification documents, such as a valid passport and proof of residency. Non-EU nationals may also need a visa or work permit to complete the process. Some banks may request a notarised translation of documents not in Romanian, adding another layer of preparation.

In cases where foreign shareholders or directors are involved, banks may require a company registration certificate and a power of attorney if a representative handles the account opening. A detailed business plan might also be requested to evaluate the company’s legitimacy and financial projections.

To simplify the process, working with banks with experience dealing with foreign clients is advisable. Reputable banks like Banca Transilvania and Raiffeisen Bank offer specialised services for international business owners, including multilingual staff and tailored banking solutions.

Engaging a local advisor or consultant can further streamline the process, ensuring that all documentation meets Romanian regulations and avoiding potential delays.

Registering the company with ONRC

Registering with the National Trade Register Office (ONRC) is the formal step in establishing your company. This process officially recognises your business as a legal entity in Romania.

Submit the complete set of documents, including:

• Articles of Association.
• Proof of name reservation.
• Bank certificate confirming share capital deposit.
• Specimen signatures and proof of registered office.

The ONRC will review the documents and issue a registration certificate upon submission. The process typically takes three to five working days. This certificate proves your company’s legal existence and allows you to proceed with business operations.

Obtaining tax registration

Every company operating in Romania must register with the tax authorities to obtain a unique tax identification number (CUI).

To begin, visit the local office of the Romanian National Agency for Fiscal Administration (ANAF). Submit the following documents:

• ONRC registration certificate.
• Articles of Association.
• Identification documents of directors and shareholders.

Once registered, the company will receive a tax identification number. Businesses with an annual turnover exceeding 300,000 RON are required to register for VAT. Additionally, corporate income tax filings must be submitted annually.

Complying with labour laws

If your company plans to hire employees, complying with Romanian labour laws is essential. These regulations protect workers’ rights and ensure fair employment practices.

Employers must draft employment contracts for all hires, specifying job responsibilities, salaries, and benefits. These contracts must be registered with the Labour Inspectorate.

Social security contributions are mandatory, covering health insurance, pensions, and unemployment benefits. Employers are responsible for deducting these contributions from employee salaries and submitting them to the relevant authorities.

Ensure that your workplace adheres to occupational safety and health standards. Regular inspections may be conducted by authorities to verify compliance.

Additional compliance steps

Beyond the foundational steps, businesses in Romania may need to comply with additional regulatory requirements, depending on their industry and operational scope.

Industry-specific permits and licences

Depending on the type of business, companies in Romania may need to obtain specific permits or licences. These ensure compliance with industry regulations, such as environmental, health, and safety standards. For instance, food service businesses must secure health and safety certifications, while manufacturing firms may require environmental impact assessments. Construction companies often need additional building permits and zoning approvals. Ensuring adherence to these requirements protects businesses from legal penalties and ensures smooth operations within regulated sectors.

Intellectual property registration

Businesses in creative industries, such as software development, design, or media, should safeguard their intellectual property. Registering trademarks, copyrights, or patents with the Romanian State Office for Inventions and Trademarks (OSIM) is essential to secure exclusive rights. This step prevents unauthorised use of intellectual property and strengthens a company’s market position. Additionally, intellectual property registration enhances credibility, making collaborating with partners and clients who value secure and well-protected business assets easier.

Record-keeping and financial compliance

Romanian businesses must maintain accurate records and adhere to strict financial compliance standards. Annual financial statements must be submitted to the Ministry of Public Finance, ensuring transparency and accountability. Companies may also need audits, particularly if they meet certain financial thresholds or operate in regulated industries. Proper record-keeping simplifies compliance with these requirements and provides a clear financial picture for stakeholders. Employing reliable accounting practices or partnering with professional services ensures adherence to these obligations.

Timeline and costs of opening a company in Romania

Tips for foreign entrepreneurs

Foreign nationals interested in opening a company in Romania often face unique challenges. However, with proper guidance, the process can be streamlined.

Understanding residency requirements

EU citizens face minimal restrictions when setting up a business in Romania, while non-EU nationals often require additional permits or authorisations. Familiarising yourself with residency requirements is crucial to ensure compliance and smooth business operations. Consulting local authorities can provide clarity on legal procedures.

Hiring local advisors

Engaging a Romanian legal or financial advisor simplifies the company formation process. These experts are well-versed in local laws and regulatory procedures, offering valuable guidance for avoiding common bureaucratic pitfalls. Their support ensures accuracy in documentation and adherence to local business requirements.

Using company formation agencies

Company formation agencies offer end-to-end support, handling tasks such as document preparation, registration, and compliance. These services save time and reduce errors, making them ideal for foreign entrepreneurs unfamiliar with Romanian regulations. Partnering with an agency ensures a streamlined experience.

Forming local partnerships

Collaborating with local businesses or organisations can provide crucial insights into Romania’s market dynamics, customer behaviour, and regulatory landscape. Building partnerships fosters credibility and eases market entry while providing access to essential resources and networks.

Challenges and solutions

Setting up a business in Romania, while rewarding, may present challenges. Bureaucratic processes, language barriers, and unfamiliar regulations can be daunting for foreign entrepreneurs.

Navigating bureaucratic processes

Romania’s administrative procedures can be time-consuming, with extensive paperwork required for company registration. To mitigate delays, ensure all documents are accurate and complete. Hiring professional services to manage these tasks can streamline the process and improve efficiency.

Overcoming language barriers

Language differences can complicate interactions with Romanian authorities and stakeholders. Hiring bilingual advisors or translators ensures clear communication and compliance with local regulations. This approach reduces misunderstandings and improves the overall experience.

Adapting to business culture

Understanding Romanian business etiquette and cultural norms is essential for building strong relationships. Respecting these traditions fosters trust and credibility with stakeholders, contributing to smoother negotiations and collaborations in the long term.

Staying informed on legal changes

Romanian laws and regulations can evolve, affecting business operations. Regular consultations with local experts and staying updated on policy changes help businesses adapt quickly and maintain compliance. This proactive approach minimises potential disruptions.

FAQs

How much does it cost to set up a company in Romania?

Setting up a company in Romania typically costs between €300 and €800, depending on the type of business structure. These costs include fees for name reservation, document preparation, and registration with the ONRC. Additional costs may arise for legal assistance or hiring a company formation agency. The minimum share capital for an SRL is 1 RON, making it highly affordable. Expenses may vary for non-residents requiring extra permits.

Can a foreigner own a business in Romania?

Yes, foreigners can fully own and operate businesses in Romania. EU citizens face fewer restrictions, while non-EU nationals may need additional permits or work authorisations. Romania offers a welcoming business environment, and its laws allow 100% foreign ownership in most industries. Collaboration with local advisors is recommended for compliance with all legal requirements.

How long does it take to open a company in Romania?

The process of opening a company in Romania usually takes 7 to 10 working days. This includes name reservation, document preparation, and registration with the ONRC. Factors such as incomplete documents or delays in tax registration can extend the timeline. Working with a company formation agency can expedite the process for smoother and quicker results.

What does sa mean in Romania?

In Romania, “SA” stands for “Societate pe Acțiuni,” which translates to “Joint Stock Company.” This business structure is suited for larger organisations requiring significant capital. It requires a minimum share capital of 90,000 RON and at least two shareholders. SA companies can issue shares often used for publicly traded entities.

Which is the best company in Romania?

Romania has numerous successful companies across industries, making it difficult to pinpoint the best. However, large corporations like OMV Petrom, Banca Transilvania, and Bitdefender are highly regarded for their performance and innovation. The “best” company depends on individual preferences, industry focus, and market dynamics.