Company formation in Romania

Before deciding to set up a new company in Romania, read the information below to understand the characteristics of a Limited Liability Company / Societate cu Raspundere Limitata (SRL):

Shareholders: the SRL company can be founded by 1 shareholder (up to 50), who is a natural person or a legal entity. There is an opportunity to create a SRL with a single shareholder.

Director: the company is required to have at least 1 director. The director can be a resident or non-resident of the country.

Company secretary: no requirement.

Minimum share capital: there is no minimum authorized share capital for a SRL.

Legal address: the registered office of the company must be in Romania. According to the laws of the country, it is considered valid once the lease agreement has been concluded.

Liability: the liability of each shareholder is limited to the value of their own share in the declared share capital.

Accounting: company is required to prepare and submit financial statements.

• The standard rate is 16%.
• Companies whose turnover for the previous year exceeded €50,000,000 and which in the reporting year set their CIT below the minimum turnover tax are liable to pay CIT at the level of the minimum turnover tax - 1%.
• Romanian taxpayers engaged in activities such as gambling and nightclubs are taxed at a rate of 5% of income derived from such activities or 16% of taxable income, whichever rate is higher.

• employees with disabilities
• IT specialists (up to Lei 10,000 (approx. €2,009) gross per month)
• employees who work in the construction, agriculture and the food industry (up to Lei 10,000 (approx. €2,009) gross per month)
• employees who work in R&D or technological development field

• The standard rate is 19%.
• There are reduced rates of 9% (water, food & beverage industry, medical treatments and prosthesis, hotel accommodation, restaurant and catering services, provision of social housing under certain conditions, entrance fees to sports events, castles, museums and cinemas) and 5% (school books, newspapers, magazines).
• The mandatory VAT registration must be performed when the annual turnover of Lei 300,000 (approx. €60,277) is exceeded.

Double taxation avoidance agreements in Romania: Albania, Armenia, Algeria, Australia, Azerbaijan, Austria, Belgium, Belarus, Bangladesh, Bulgaria, Bosnia and Herzegovina, Canada, China, Cyprus, Croatia, Czech Republic, Denmark, Ecuador, Egypt, Ethiopia Estonia, Finland, France, Germany, Georgia, Greece, Hungary, Iceland, India, Indonesia, Ireland, Iran, Israel, Italy, Japan, Jordan, Hong Kong, South Korea, Kazakhstan, North Korea, Kuwait, Latvia, Lebanon, Luxembourg, Lithuania, Macedonia, Malta, Malaysia, Mexico, Moldova, Morocco, Namibia, Nigeria, the Netherlands, Norway, Philippines, Pakistan, Poland, Portugal, Qatar, Russia, Singapore San Marino, Saudi Arabia, Slovakia, Serbia, South Africa, Slovenia, Spain, Sudan, Sri Lanka, Switzerland, Sweden, Syria, Tajikistan, Tunisia, Thailand, Turkey, Turkmenistan, UK, the UAE, United Kingdom, the USA, Uzbekistan, Uruguay, Vietnam and Zambia.