Romania – Ready Made Shelf Companies – Company Formation

Romania

Romania is one of the youngest European Union Members and with nearly 20 million inhabitants, it is one of the most populous countries not only in the CEE region but on the entire continent. The state’s cultural and financial heart beats in the capital, Bucharest.

Ever since the accession to the EU in 2007, Romanian economy is continuously expanding, and is currently the leader in terms of GDP growth in the continent. Romania is classified as a developing country. The official language is Romanian. The official currency is leu (RON). Even though the country is in the EU, it is not a member of the Schengen zone. Romanian companies must be entered into National Trade Register Office, which operates under the supervision of the Ministry of Justice. The most popular business structure is a limited liability company (SRL) that can have from one to fifty shareholders. The minimum share capital of such company is 200 RON. The nominal value of one share cannot be lower than 10 RON.

An important thing to note is that Romanian company law does not allow one person (natural or legal) to be the only shareholder in more than one business entity. Moreover, a sole-shareholder entity cannot be a sole shareholder in another company. Shareholders are required to appoint one or more directors who will manage company affairs.

Limited liability companies need to hold at least one Shareholders’ Meeting a year and file annual financial statements to Romanian authorities. Tax number is issued to Romanian business entities automatically when they are registered in the National Trade Register Office. The general corporate tax rate is 16%, calculated on worldwide income. Meanwhile, representative offices pay lump sum tax in the amount of 18,000 RON. Capital gains are taxed according to the general rules. Taxpayers are allowed to carry losses forward for as long as seven years. Research and development fiscal incentives are in place. Withholding tax on dividend payments is 5%. Withholding tax on interest is 16%. In the 2018 Doing Business Report, Romania was ranked 45th. Although bureaucracy, corruption and the state of infrastructure are still something to be wary of, in the recent years the country has made a significant progress to shortening economic distance to Western Europe. Romania has good broadband coverage, skilled workforce and low cost of labour. Romania is a semi-presidential democratic republic. The legislative power is wielded by the parliament consisting of the Chamber of Deputies and the Senate as well as the government headed by the Prime Minister. Romanian President is the head of state. General elections are held every four years and presidential elections every five years. The list of the biggest banks in Romania include such entities as Banca Transilvania (domestic bank), Banca Comercială Română, BRD and UniCredit Bank. Other international banks and bank groups in the country are Raiffeissen, ING, Credit Agricole, Citibank and OTP Bank. The National Bank of Romania serves as the supervisor and resolution authority for the banking sector.