Doing business in Romania

How quickly can I set up a business?

5 days after the application is submitted (online procedure). Certified documents are due

What is the minimum investment needed?

There is no minimum investment

How can I raise finance?

Leasing, bank loans, shareholders loan, crowdfunding, EU funds.

What are the legal requirements for setting up my business?

The most usual structure is Ltd Company: no minimum share capital required, no audit requirements up to certain size of business.

What structure should I consider?

Depending on the complexity of the shareholders structure. Ltd is the most usual due to relaxed financial and control requirements, however less flexible than Joint stock companies in terms of shareholders’ decisions and type of rights.

What advice can you give me in regards to payroll and taxation requirements?

Payroll taxes and social security contributions consist mainly of employee pension contributions of 25%, health insurance contributions of 10% and personal income tax of 10%. Employers generally also pay a 2.25% labour insurance contribution. The national minimum gross salary is RON 4,050 per month, although different minimum rates may apply to certain sectors.

The standard corporate income tax rate is 16%. Qualifying micro-enterprises with annual revenues not exceeding EUR 100,000 may apply a 1% tax on revenue instead of the standard corporate income tax, subject to meeting the applicable eligibility conditions. Certain large companies may also be subject to minimum turnover tax rules.

Dividend tax is 16%.

Personal income tax is generally 10%.

The standard VAT rate is 21%, with a reduced rate of 11% applying to certain qualifying goods and services.

The VAT registration threshold is RON 395,000.

For intra-EU distance sales of goods and certain cross-border services to consumers, an EU-wide threshold of EUR 10,000 applies.

Tax returns and payments may be due monthly, quarterly or annually, depending on the type of tax and the taxpayer’s circumstances.

Financial statements are generally prepared and filed annually.

Statutory audit is not mandatory for all limited liability companies. Audit requirements depend on factors including the company’s size and whether applicable statutory thresholds are exceeded.

Is there anything else that I should know?

Bucharest is the main city (population 2million), generating more than 25% of the National GDP. Cluj Napoca is the second largest city (population 500 k), it has the highest ranked University in Romania and the most accelerated development, mainly in IT industry. Timisoara and Oradea in the west and Iasi in the east are emerging as well.