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ROMANIA
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Romania with efficiency and assurance.
WHY ROMANIA?
Romania is a country in Southeast and Central Europe. It lies on the lower course of the Danube, north of the Balkan Peninsula, and on the northwestern shore of the Black Sea. It borders Ukraine to the north and east, Hungary to the west, Serbia to the southwest, Bulgaria to the south, Moldova to the east, and the Black Sea to the southeast. It is the twelfth-largest country in Europe by area, covering 238,397 km2 (92,046 mi2), and the sixth-most populous member state of the European Union, with 19 million inhabitants. The capital, largest city and economic centre is Bucharest. Other major cities include Cluj-Napoca, Iași, Constanța, Timișoara and Brașov.Romania is a developed country with a high-income economy and is widely regarded as a middle power in international relations.
The country possesses 11 UNESCO World Heritage Sites. Romania is a global net exporter of automotive parts and is an increasingly prominent technology centre with some of the fastest internet speeds in the world. Romania is a member of several international organisations, including the European Union, NATO, and the BSEC.
In 2024, Romania had a GDP (PPP) of around $894 billion and a GDP per capita (PPP) of $47,203. According to the World Bank, Romania is a high-income economy. According to Eurostat, Romania’s GDP per capita (PPS) was 77% of the EU average (100%) in 2022, an increase from 44% in 2007 (the year of Romania’s accession to the EU), making Romania one of the fastest growing economies in the EU.
ADVANTAGES
Doing business in Romania offers significant advantages, notably a highly skilled, multilingual workforce, highly competitive operational and labour costs, and full access to the European Union single market. Additionally, businesses benefit from favourable taxation, including a widely utilized micro-enterprise tax rate.
Favourable Tax Environment
Romania is renowned for having one of the most attractive taxation systems in Europe, particularly for small and medium-sized enterprises (SMEs).
- Micro-enterprise Tax: Companies with revenues up to a specific limit ((€100,000) as per recent adjustments) can benefit from a very low revenue-based tax rate rather than standard corporate income tax.
- Dividend Tax: The country imposes a flat, low rate on dividends, making it highly efficient to extract profits from your business.
- Double Taxation Treaties: Romania has an extensive network of double taxation treaties to protect international investors.
Skilled and Multilingual Workforce
Romania boasts an exceptionally talented labour pool.
- Tech-Savvy: There is a well-established reputation for excellence in IT, engineering, and mathematics.
- Language Skills: A large portion of the workforce is multilingual, with high proficiency in English, German, French, Spanish, and Italian, which facilitates seamless communication with international clients.
Low Operating Costs
Compared to Western European countries and major global hubs, the cost of doing business in Romania is highly competitive
- Lower Overheads: Expenses such as office space rental, utilities, and administrative/accounting fees are significantly more affordable.
- Labor Costs: While salaries are rising, competitive labour costs still allow businesses to maximize their operating budgets.
Strategic Location and Connectivity
Located at the crossroads of Central, Eastern, and Southeastern Europe, Romania acts as a vital commercial gateway.
- EU Market Access: As an EU member state, businesses registered in Romania enjoy free movement of goods, services, capital, and labour across the entire European Union.
- Logistics: Continuous infrastructure improvements, supported by European Union Funds, are modernizing roads, railways, and utilities.
Growing Economy and Diverse Industries
Romania features a dynamic economy with robust GDP growth potential, making it fertile ground for multiple sectors:
- Technology & IT: A booming tech hub with strong support for startups and software development.
- Manufacturing & Automotive: Highly attractive for manufacturing due to the skilled labour and geographic advantage.
- Renewable Energy & Agriculture: Rich in natural resources with extensive fertile agricultural land and ongoing investments in green energy.
TAX REGIME
Personal Taxation
- Income Tax: A standard flat rate of 10% applies to almost all personal revenues, including salaries, freelance earnings, capital gains, and rental income. There is no tax-free allowance.
- Dividends: Dividend income is generally taxed at a flat 5%.
- Social Contributions: In addition to income tax, employees and the self-employed must pay mandatory social charges, which include a 25% pension contribution (CAS) and a 10% health insurance contribution (CASS).
- Residency: Residents are taxed on their worldwide income, while non-residents are only taxed on Romanian-sourced income.
Corporate Taxation
- Standard CIT: Standard corporate profits are taxed at 16%.
- Micro-enterprise Regime: Companies with an annual turnover below EUR 500,000 can qualify for the micro-enterprise regime, which taxes turnover instead of profit: 1% for revenues up to EUR 60,000, and 3% for revenues between EUR 60,000 and EUR 500,000.
- Large Corporations: Companies with an annual turnover exceeding EUR 50 million are subject to a minimum turnover tax of 1% in addition to their 16% standard CIT (the higher of the two applies).
Value Added Tax (VAT)
- Standard Rate: 19% applies to most goods and services.
- Reduced Rates: Lower rates of 9% (e.g., food, water supply, medical equipment) and 5% (e.g., certain housing, books, and cultural events) apply to specific essentials.
ROMANIA COMPANIES
Limited Liability Company (SRL – Societate cu RăspundereLimitată)
By far the most common entity, accounting for over 90% of registered businesses in Romania.
- Liability: Shareholders are only liable to the extent of their subscribed share capital.
- Capital: Minimum share capital is extremely low (can be as low as RON 1).
- Founders: Can be established by 1 to 50 shareholders.
Joint Stock Company (SA – Societate pe Acțiuni)
Designed for larger corporations, major investments, and businesses planning a public listing.
- Liability: Shareholders are liable only for the value of their subscribed shares.
- Capital: Requires a minimum share capital of approximately €25,000.
- Founders: Requires a minimum of 2 shareholders.
Sole Proprietorship (PFA – PersoanăFizicăAutorizată)
Ideal for freelancers, independent contractors, and small-scale, localized trades.
- Liability: The owner is personally liable for all business debts with their entire personal estate.
- Capital: No minimum share capital requirement.
- Setup: Streamlined process compared to corporate entities.
Special Startup SRL (SRL-D)
Tailored specifically for first-time entrepreneurs in Romania.
Benefits: Offers exemptions from paying certain social security contributions for hired employees and provides access to specific state funding programs.
Partnerships
These are less common, but established for specific activities or professional services. The main variants are General Partnerships (SNC – SocietateînNumeColectiv) where partners have unlimited joint liability, and Limited Partnerships (SCA – SocietateînComandită pe Acțiuni).
Foreign Company Extensions
International businesses can establish a presence in Romania through two main forms:
- Branch (Sucursala): An extension of the parent company that can conduct commercial activities but operates without independent legal personality.
- Representative Office (Reprezentanță): Restricted solely to non-commercial activities like marketing, market research, or liaison. It cannot generate revenue in Romania
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Get in touch with the right people to get the right help in setting up your business in Romania .
enquiries@chandrawatpartners.com.