The incorporation of a company in romania: key steps
The most common company status in Romania is Limited Liability Company (Societate cu răspundere limitată - SRL). The main characteristics of the Romanian LLC are:
- The number of partners cannot exceed 50;
- Partners can be Romanian or foreign;
- It is possible to create a Romanian LLC with a single shareholder;
- The minimum share capital is 1 RON
- The transfer of shares is free between the partners, but requires the agreement of three quarters of the partners when transferring to third parties;
- The appointment of an auditor is only mandatory if the number of partners exceeds 15.
The path to incorporate of the Romanian company
The process of creating a Romanian company such as a LLC must follow the following timeline:
- Preparation and drafting of the constitutive act (the statutes);
- Translation and authentication of the documents provided if the partners or the manager are foreign;
- Obtaining proof of address from the head office;
- Registration in the Trade Register and obtaining the Unique Registration Code (CUI) in the Trade Register (essential to bind the company legally);
- Opening of the company's bank account into which the share capital will be paid. Opening an account with a Romanian bank presupposes that the company can demonstrate its effective economic presence on Romanian territory, by means of local infrastructure and personnel.
The process of creating a Romanian company thus takes between 2 and 5 weeks, depending on whether the partners are Romanian or foreign.
Registration of the company for VAT purposes
After the incorporation of the company, a specific formality follows at the Romanian Tax Administration, so that the company should be subject to the payment of VAT.
Certain criteria have to be met, especially at the level of the office where the company operates and a control shall be carried out for such purpose by the administration at the registered office of the company.
Registration with the Register of Intra - Community Operators
Romanian companies (whether or not they are registered for VAT purposes in Romania) contemplating to carry out intra-community operations (intra-community acquisitions / deliveries / services) have to request their registration with the Register of Intra-community Operators (ROI) in order to obtain an intra-community VAT number, before carrying out the concerned transactions.
In order to prepare the registration file with ROI, several steps have to be taken, particularly involving the procurement of the criminal record certificate for all partners and directors of the company. The duration of the ROI registration process is theoretically of 2 to 4 weeks.
The registered office
As already said, the registration of a company with the Trade Register is possible only if that company has a registered office.
Providing a registered office is not a common service in Romania, but some business centers offer this service and LPG Romania has both its own business center and partnerships in this area.
Taxation
Company tax:
Corporation tax will take:
- or the form of a tax on turnover: 1% on turnover and income if the turnover is less than 500,000 EUR and employs at least one employee.
- either in the form of a tax on the profit: 16% on the profit when the turnover is greater than 500,000 EUR or if the company achieves a turnover of less than 500,000 EUR and opts for this system
VAT
The current VAT rate is 19%.