Company Registration in Romania with 1% Corporate Tax

By Jony - On Sep 28, 2023

We offer you the opportunity to establish a company in Romania, which means becoming the owner of a European business entity in the country with remarkably low corporate tax rates, in some cases as low as 1%. The company registration process can be conducted remotely, and our comprehensive service package provides expert guidance at every step of the way.

Two Types of Companies in Romania

Two kinds of companies can be opened in Romania: an SRL (societate cu raspundere limitata) or an S.A. (societate pe actiuni).

The SRL, the local equivalent of the LLC, is the most widespread business form that provides the following unique benefits:

At the opening, the minimum share capital must amount to RON 200 (around EUR 45)
A minimum share value is RON 10 (around EUR 3);
One shareholder and one director minimum;
No mandatory residence requirements for shareholders or managers;
Full foreign ownership allowed;
Low corporate taxes, especially for micro-companies.

A Romanian joint stock company, S.A., can be opened in two ways: with all founders simultaneously subscribing to the registered capital or via announcing a public subscription. Romanian JSCs have the following features:

Minimum registered capital is EUR 25,000;
A minimum initial amount of subscribed capital is 30%, with the rest to be invested within one year);
In case of public subscription, it is mandatory to issue a prospectus for the Trade Register;
The company must have two or more shareholders;
The entire registered capital must be subscribed, with each shareholder paying at least half of the worth of the subscribed shares at the moment of company registration.

Prime Advantages of Company Registration in Romania

For micro-companies with an annual turnover of under EUR 1,000,000, corporate tax rates range from 1% to 3%;
Romania’s European Union membership offers several advantages.
Romania has double taxation avoidance agreements with 87 countries, which is extremely advantageous for doing business internationally;
Foreign investors can establish multiple micro-companies in Romania, provided their turnover remains below the 1 million euros threshold.
Romania boasts political stability, ensuring a secure environment for business operations.
The well-developed banking sector provides local entrepreneurs convenient access to global financial institutions.

Upon company registration in Romania, your entity will be assigned both a local identification number and a unique European code (EUID). This code facilitates European-wide recognition and grants access to various electronic certificates.

Corporate Taxation in Romania

Romania maintains a standard corporate profit tax rate of 16%. However, small companies with an annual turnover below one million euros are categorized as ‘micro-companies,’ subject to a more favorable tax regime:

Romanian companies with at least one employee are liable for a 1% tax rate;
Companies without employees face a 3% tax rate.

These competitive tax rates are similar to many offshore jurisdictions. Additionally, Romania imposes a 5% tax on dividends, which can be disbursed in tangible or monetary forms once a quarter. Selected bonuses are exempt from taxation.

Company Registration Prerequisites in Romania

The following steps are mandatory to initiate company registration in Romania:

Compile the application documents;
Select a company name;
Choose business activities from the classified index;
Pay the state duties to the Company Register;
Appoint a company director (can be a foreign national). The company must have at least one physical person as a director, with legal entities allowed as co-directors;
Secure a local office, either through lease or purchase;
Establish a corporate account with a local bank.
Submitting accounting reports is essential in Romania.

Application Document Requirements for Company Registration in Romania

Application documents for company registration in Romania necessitate:

Passport copies of prospective company owners;
Signature samples;
A Power of Attorney authorizing us to apply with the trade register and set up a corporate bank account on your behalf (physically mailed to Romania).
A Letter of Responsibility (we will provide a sample).

All application documents must have notarized translations into Romanian. Opening a bank account may require a personal visit from the authorized signer.

Costs of Company Registration in Romania

Our comprehensive company registration service package is available at 2,100 EUR. This package encompasses:

State duties to the Trade Register;
Notary fees;
Translation and notarization fees;
The minimum required charter capital deposit (50 euros);
Expert assistance in selecting a local bank;
Guidance and facilitation of the bank account opening;
Courier delivery of essential documents.

We must emphasize that opening a physical company office in Romania is mandatory, and a legal address alone will not suffice. Choosing a 12-month upfront office rental at EUR 3,960 can provide cost-saving benefits.

The total minimum expense for establishing your company in Romania is EUR 2,100 + 3,960 = EUR 6,060, ensuring your business’s operational presence.

Additional accounting services will vary based on workload, starting at EUR 220 monthly, plus VAT when applicable. Our supplementary services in Romania include:

Registration Services for VAT purposes – 350 EUR;
NIF acquisition (non-resident tax ID) – 350 EUR.

Extending company registration in Romania is free. Maintenance costs encompass office rent, accounting services, and the 1% corporate tax, applicable to companies with at least one employee. The state also charges some employee-related taxes.

Leveraging Tax Benefits While Registering a Company in Romania

Initiate a consultation with an International Wealth expert;
Answer the expert’s inquiries so we can evaluate our ability to serve your specific case;
Cover the cost of the company registration and 12-month office rent, totaling 6,060 EUR;
Supply the necessary application documents;
With the provided Power of Attorney, we will execute company registration in Romania and establish a bank account in the country on your behalf. The bank may request a personal visit from the authorized signer;
After opening the corporate bank account, your Romanian-registered company will be fully operational.

We can facilitate getting VAT and NIF for your Romanian company upon request. For inquiries regarding registering a company in Romania and seizing the opportunity to benefit from the lowest corporate taxes, please email us at [email protected], chat with us online, or use messenger services.

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