A step-by-step guide to open a company in Romania as a foreigner
Have you ever wondered why Romania is becoming popular for foreign entrepreneurs? What makes this Eastern European country an excellent location for starting a business? If you are considering expanding your business or starting a new one, Romania offers many opportunities that might surprise you. Romania has many good reasons to attract foreign investors, from a growing economy and a stable political environment to a well-educated, multilingual workforce. In this blog post, we’ll explore the steps to open a company in Romania as a foreigner, looking at the legal requirements, the types of businesses you can start, and the support services that can help you succeed in this promising market.
Why Choose Romania for Your Business?
Romania boasts a rapidly growing economy, making it an attractive destination for foreign entrepreneurs. The country offers a stable political environment, a relatively low cost of living, and access to the European Union market. Additionally, Romania has a well-educated and multilingual workforce, which is a significant advantage for businesses seeking skilled employees. The government’s pro-business policies and various incentives for foreign investors further enhance Romania’s appeal as a business hub.
Types of Business Entities Available
When you open a company in Romania, you must choose the appropriate business entity that suits your needs. The most common types of business entities in Romania are:
Limited Liability Company (SRL)
The Limited Liability Company, or SRL, is the most popular choice for small and medium-sized businesses. It offers limited liability to its shareholders, meaning their assets are protected in case of business debts or liabilities. An SRL can be established with a minimum share capital of RON 200 (approximately €45), requiring at least one shareholder.
Joint Stock Company (SA)
A Joint Stock Company, or SA, is suitable for larger businesses and requires a higher minimum share capital of RON 90,000 (approximately €20,000). An SA can be privately or publicly traded, offering more capital-raising flexibility. This type of company requires at least two shareholders and a board of directors.
Branch and Representative Office
Foreign companies can also establish a branch or a representative office in Romania. A branch operates as an extension of the parent company and can engage in commercial activities. At the same time, a representative office is limited to non-commercial activities such as market research and promotion.
Legal Requirements for Foreigners
To open a company in Romania as a foreigner, you must know the legal requirements and procedures. Here are the key legal considerations for foreign entrepreneurs:
Residency and Work Permits
Non-EU citizens must obtain a residence permit to live and work in Romania. The residence permit is typically issued for one year and can be renewed. On the other hand, EU citizens can stay in Romania for up to 90 days without a residence permit but must register with the local authorities if they plan to stay longer.
Legal Restrictions and Allowances
Foreigners can own and manage companies in Romania, but certain industries may have restrictions or require special permits. Before starting the registration process, you must check the specific regulations for your industry.
Steps to Open a Company in Romania
Now that you understand the legal requirements and business entities let’s examine the steps to open a company in Romania.
1. Choosing the Right Business Structure
The first step is to decide on the type of business entity that best suits your needs. As mentioned earlier, the most common options are SRL, SA, branch, or representative office. When deciding, consider factors such as the size of your business, capital requirements, and liability protection.
2. Reserving a Company Name
You must reserve a unique company name once you have chosen the business structure. The name must be distinct and not already used by another business. You can check the availability of your desired name and reserve it through the National Trade Register Office (ONRC).
3. Drafting the Articles of Association
The Articles of Association is a legal document that outlines the company’s structure, purpose, and operating procedures. This document must include information such as the company’s name, registered address, share capital, and details of the shareholders and directors. It’s advisable to seek legal assistance when drafting the Articles of Association to ensure compliance with Romanian law.
4. Submitting Necessary Documents to the Trade Register
To officially register your company, you must submit the required documents to the Trade Register. These documents typically include:
- The Articles of Association
- Proof of registered office
- Shareholders’ identification documents
- Proof of share capital deposit
- Other relevant legal documents
The Trade Register will review your application and issue a registration certificate if everything is in order.
Required Documentation
When you open a company in Romania, you must provide several essential documents. Here is a detailed list of the required documentation:
Identification Documents for Foreign Shareholders
Foreign shareholders must provide valid identification documents, such as passports or national ID cards, which must be translated into Romanian and notarised.
Proof of Registered Office
You must provide proof of your company’s registered office, which can be a rental agreement or property ownership documents. The registered office is the official address where your company will be located.
Articles of Association
As mentioned earlier, the Articles of Association is a crucial document that outlines the company’s structure and operations. It must be carefully drafted and comply with Romanian law.
Additional Legal Documents
Depending on the business entity and industry type, you may need to provide additional legal documents, such as special permits or licenses. It’s essential to check the specific requirements for your business sector.
Post-Registration Requirements
After successfully registering your company, you need to fulfill several post-registration requirements to ensure your business operates legally in Romania.
Tax Registration
All companies in Romania must register for tax purposes with the National Agency for Fiscal Administration (ANAF). This includes obtaining a tax identification number (CIF) and registering for corporate tax, VAT, and other applicable taxes.
VAT Registration
If your company’s annual turnover exceeds a certain threshold, you must register for VAT. The current threshold is RON 300,000 (approximately €61,000). VAT registration is essential for conducting business activities and issuing invoices.
Social Security and Employment Registration
If you plan to hire employees, register with the local labour office and obtain a social security code. This ensures compliance with employment laws and enables you to pay social security contributions for your employees.
Obtaining Necessary Licenses and Permits
Certain industries require specific licenses and permits to operate legally in Romania. Before starting your business activities, ensure you obtain all the necessary approvals from the relevant authorities.
Costs and Fees Involved
Understanding the costs of opening a company in Romania is crucial for budgeting and financial planning. Here are some of the primary costs and fees you need to consider:
Registration Fees
The registration fees vary depending on the type of business entity and the services the Trade Register provides. On average, you can expect to pay between €100 and €200 for registration.
Notary and Legal Fees
Notary and legal fees cover the cost of drafting and notarising the necessary documents. These fees can range from €200 to €1,000, depending on the complexity of the documentation and the services required.
Additional Costs for Foreign Entrepreneurs
Foreign entrepreneurs may incur additional costs, such as translating and notarising identification documents, obtaining residence permits, and hiring legal and financial advisors.
Financial and Legal Considerations
When you open a company in Romania, you must be aware of the financial and legal considerations to ensure compliance and avoid potential issues.
Corporate Tax Rates
Romania has a relatively low corporate tax rate of 16%, one of the weakest in the European Union. However, it’s essential to stay updated on any changes in tax regulations that may affect your business.
Employment Laws and Regulations
Romania has comprehensive employment laws that protect the rights of employees. As an employer, you must comply with these regulations, including working hours, minimum wage, and employee benefits.
Capital Requirements
Different business entities have varying capital requirements. For example, an SRL requires a minimum share capital of RON 200, while an SA requires RON 90,000. Ensure you have the necessary capital to meet these requirements.
Support Services for Foreign Entrepreneurs
Opening a company in Romania can be challenging, especially for foreign entrepreneurs. Fortunately, there are several support services available to assist you:
Legal and Financial Advisory
Hiring legal and financial advisors can help you navigate the complex legal and regulatory landscape in Romania. They can assist with drafting legal documents, obtaining permits, and ensuring compliance with local laws.
Business Consultancy Services
Business consultancy firms can provide valuable insights and support for establishing and growing your business in Romania. They offer market research, business planning, and strategic advice services.
Government and Private Sector Support
Romania offers various incentives and support programs for foreign investors. The Romanian government and private sector organisations provide resources, grants, and financial assistance to encourage foreign investment.
Timeline for Company Registration
Here is a table summarising the timeline for opening a company in Romania:
| Steps | Description | Estimated Time |
| Choosing a business structure | Decide on the type of business entity (SRL, SA, etc.) | 1-2 days |
| Reserving a company name | Check availability and reserve the company name | 1-2 days |
| Drafting the Articles of Association | Prepare the company’s foundational document | 3-5 days |
| Preparing and translating documents | Translate and notarize necessary documents | 3-5 days |
| Submitting documents to the Trade Register | Submit all required documentation to the Trade Register | 1-2 days |
| Trade Register review | Official review of the application | 5-7 days |
| Issuance of registration certificate | Receive the official registration certificate | 1-2 days |
| Tax and VAT registration | Register for tax identification number and VAT | 3-5 days |
| Social security and employment registration | Register with the local labour office | 3-5 days |
| Obtaining licenses and permits | Acquire any industry-specific licenses and permits | Varies by industry |
Overall, opening a company in Romania can take approximately 3-4 weeks, depending on the complexity of your business and the efficiency of the registration process.
Estimated Costs to Open a Company in Romania in 2024
Here’s a table outlining the estimated costs required to open a company in Romania in 2024:
| Cost item | Description | Estimated cost € |
| Registration Fees | Fees for registering the company with the Trade Register | 100-200 |
| Notary Fees | Fees for notarizing documents | 50-100 |
| Legal Fees | Legal assistance for drafting and reviewing documents | 200-1000 |
| Share Capital | Minimum share capital for SRL | 45 |
| Translation Fees | Translating and notarizing identification documents | 50-100 |
| Office Rental | Proof of registered office | 50-100/ month |
| Residence Permit Fees | For non-EU citizens | 60-120 |
| Additional Licenses/Permits | Industry-specific licenses and permits | 100-500 |
| Financial Advisory Fees | Assistance with tax and financial | 100-500 |
This table provides an overview of the primary costs involved in opening a company in Romania, helping you budget effectively for your new business venture.
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FAQs
Can foreigners do business in Romania?
Yes, foreigners can do business in Romania and own and manage companies, but certain industries may have specific restrictions or require special permits. It’s important to check the regulations for your industry before starting the registration process.
What are the requirements for a company in Romania?
To start a company in Romania, you must choose a business structure, reserve a company name, draft the Articles of Association, and submit the required documents to the Trade Register. You’ll also need proof of a registered office, identification documents, and potentially industry-specific permits.
How long does it take to open a company in Romania?
Opening a company in Romania typically takes about 3-4 weeks. This timeline includes choosing a business structure, reserving a name, preparing documents, and completing registrations with the Trade Register, tax authorities, and social security offices.
Is Romania a good country to start a business?
Yes, Romania is an excellent country to start a business due to its growing economy, stable political environment, low cost of living, and access to the EU market. Additionally, Romania has a well-educated, multilingual workforce and offers various incentives for foreign investors.
What are the risks of business in Romania?
Business risks in Romania include navigating complex bureaucracy and dealing with corruption in specific sectors. Economic volatility and underdeveloped infrastructure in some regions can affect operations. Additionally, frequent regulatory changes can create uncertainty and require businesses to adapt continuously.
