Romania, a full member of the European Union since January 1, 2007 and a NATO member since 2004, is one of Eastern Europe’s most strategically positioned markets. With access to the Black Sea, a dynamic economy, and a location bridging the Balkans and mainland Europe, Romania serves as an ideal gateway for investors seeking entry into EU markets. The country offers fast and cost-efficient company formation procedures, competitive corporate taxes, and a highly skilled workforce, making it an attractive hub for international business expansion.
Company Types in Romania
Romania recognizes several legal company forms. The most common are:
- Limited Liability Company (SRL)
- Joint Stock Company (SA)
- General Partnership (SNC)
- Limited Partnership (SCS)
- Joint Limited Partnership (SCA)
- Sole Proprietorship (PFA)
Among these, SRL and SA are the preferred corporate structures for foreign investors.
Limited Liability Company (SRL)
The SRL (Societate cu răspundere limitată) is the most advantageous and widely used company type in Romania, particularly for foreign investors seeking flexibility, low capital requirements, and simple operation.
- Minimum Share Capital: 200 RON (approx. €40).
- Capital is divided into shares, and each share must be worth at least 10 RON.
- Can be established by one or more partners (up to 50).
- All shareholders may be foreign; no Romanian partner is required.
- A person who owns an SRL as sole shareholder cannot be the sole shareholder of another SRL.
- Liability is limited to the value of contributed capital.
- Shares cannot be publicly traded or listed.
- Management and decision-making are fast and uncomplicated compared to SA structures.
Joint Stock Company (SA)
The Joint Stock Company (Societate pe acţiuni) is typically chosen by investors planning large operations or preparing for public offerings.
- Minimum Share Capital: 90,000 RON (approx. €18,000).
- At least 30% of the capital must be paid at incorporation; the remainder must be paid within 12 months.
- Minimum of 5 shareholders (individuals or legal entities).
- Liability is limited to contributions.
- Shares can be freely transferred without requiring consent from other shareholders.
- Dividends are distributed based on proportional contribution unless otherwise specified.
Which Company Type Should You Choose?
The right structure depends on your business model, investment size, sector, expected turnover, and tax considerations. Many foreign investors choose the SRL due to its simplicity and low entry barriers. Transitioning to another company type later is also possible.
Taxation & Incentives in Romania
Minimum Wage
As of 2022: 2,550 RON gross (€515), 1,524 RON net (€305).
Corporate Income Tax
- Small companies (< €1,000,000 revenue): 1% or 3% tax rate.
- Standard CIT: 16%.
Dividend Tax
5%.
VAT
Standard 19%. Companies under €60,000 annual turnover are VAT-exempt.
Personal Income Tax
10% flat rate.
Filing Frequency
Monthly, quarterly, semi-annual, or annual depending on company type and activity.
Income Tax Exemptions
- IT sector employees
- R&D employees
- Construction workers
Corporate Tax Incentives
- Profits reinvested in technological equipment, computers, or software are tax-exempt.
- Companies operating in innovation and R&D can receive up to 10 years of corporate tax exemption.
Investment Incentives
For foreign investments above €1,000,000, expenditures such as:
- new building construction,
- office rental costs,
- intellectual property acquisitions,
- technical equipment investments
may be supported by the Romanian government. Incentive rates vary by region:
- Bucharest: 10%
- West Region / Ilfov: 35%
- Other regions: 50%
Foreign Investor Company Formation Process in Romania
There is no legal distinction between foreign-owned and Romanian-owned companies. Foreign investors enjoy equal rights under company law, tax law and free-movement regulations.
Since 1997, Romania significantly simplified incorporation procedures. The only institutions investors usually deal with are:
- The Regional Trade Registry Office (Registrul Comerțului)
- Notary Public (for authentication of incorporation documents)
Once the company is registered, activity may begin immediately.
General Steps
- Submit at least 3 company name proposals.
- Prepare and notarize the Articles of Association.
- Deposit company capital.
- Submit application and required documentation to the Trade Registry.
- Publication of the incorporation decision in the Official Gazette.
- Register with the General Directorate of Public Finance and obtain a tax ID.
Licensing authorities review activity-based permits within one week after Trade Registry registration. Most licenses are issued within two weeks.
Required Documents Summary
- Notarized Articles of Association
- Bank receipt confirming capital deposit
- Proof of ownership or rental agreement for company headquarters
- Statement confirming no illegal activities
- Manager’s appointment documents
- For foreign companies: notarized and translated founding documents
- Proof of paid registration fees
Note: Individuals convicted of fraud, embezzlement, bribery, forgery or similar offences cannot act as founders, directors or auditors.
Opening a Branch in Romania
Branches do not have separate legal personality and operate under the foreign parent company. They must be registered with the Trade Registry in the region where they operate.
- Submit registration application to the local Trade Registry
- Provide notarized translations of parent company documents
- Submit board resolution including branch address, activities, and authorized representative
- Provide proof of headquarters for the branch
Opening a Representative Office in Romania
Representative offices cannot conduct commercial activities. They operate solely for marketing, promotion, and liaison purposes. They cannot issue invoices.
Representative offices must first obtain approval from the Ministry of Economy (Foreign Trade Department). Approval is usually issued within 30 days, after which registration with the Chamber of Commerce is completed.
Attractive Sectors for Foreign Investment
Romania has grown significantly since joining the EU in 2007. FDI increased from €10 billion in 2003 to €83.9 billion in 2019.
Key Industries
- Manufacturing (32%)
- Construction & Real Estate (15%)
- Trade & Retail
- Financial Intermediation
Rapidly Growing IT & Technology Sector
Romania aims to become an IT & Communications hub for Eastern Europe. The sector reached €6.5 billion in 2022. The government offers major incentives:
- Corporate tax exemption on reinvested profits
- 10-year corporate tax exemption for R&D companies
- 0% income tax for IT and R&D employees
Automotive Industry
With an annual industry turnover exceeding €30 billion, Romania offers major opportunities for auto parts manufacturers.
Infrastructure Development
Large government-led infrastructure projects supported by EU funds create significant opportunities for foreign investors.
Agricultural Machinery, Healthcare, and Tourism
These sectors continue to grow and attract foreign investment.
Main Investment Cities
- Bucharest
- Constanța
- Galați
- Iași
- Cluj-Napoca
- Timișoara
- Brașov
- Craiova
Foreigners may purchase residential and commercial property but cannot directly purchase land. However, a Romanian company established by the foreigner can own land.
Our Services (SonsözPartner)
- International Company Formation
- New Business Setup
- Company Acquisitions
- Branch Registration
- Bank Account Opening
- Registered Address & Trade Registry Services
- Residence & Work Permit Advisory
- Business Planning & Strategy
- Visa Consulting
- Accounting & Tax Compliance
- Investment & Incentive Advisory
- Audit & Financial Consulting
- Market Research
Where Should You Begin?
Before starting, you should prepare a business plan that clearly outlines your vision, target sector, operational model, expected investment, and long-term goals. Visiting Romania and establishing preliminary contacts with local partners can significantly improve your market entry strategy.
After the research and planning stage, the next step is execution. The safest and most cost-effective approach is to work with an experienced local partner or advisory team.
SonsözPartner collaborates with trusted partners across Europe, including Romania, Montenegro, Bulgaria, Germany, the Netherlands, Belgium and the United Kingdom. We provide end-to-end advisory for company formation, residence permits and all operational processes abroad.
You can start the process by submitting your details through our “International Services Application” page.