The Republic of Romania is situated in southeastern Europe bordering Ukraine, Moldova, Hungary, Serbia, and Bulgaria. The country is spread over an area of 238, 391 sq. km and is home to nearly 19 million people with Bucharest as its capital.
Romania has a diverse landscape that includes the Carpathian Mountains, the Danube River, and the Black Sea coast. Its history is rich and complex, having been influenced by various civilizations and empires, including the Roman Empire, the Ottoman Empire, and the Soviet Union.
Types of business structures in Romania
In Romania, there are several types of business structures that individuals and companies can choose from, depending on their specific needs and goals. The most common types of business structures in Romania are tabulated below along with their capital requirements
| S# | Type of company | Local name | Min. required paid-up capital |
| 1. | Sole Proprietorship | Întreprindere Individuală | No minimum capital required |
| 2. | Limited Liability Company (LLC) | Societate cu Răspundere Limitată – SRL | Single shareholder: €40 Multiple shareholders: €2,000 |
| 3. | Joint Stock Company (JSC) | Societate pe Acțiuni – SA | Unlisted JSC: €18,900Listed JSC: €50,800 |
| 4. | Partnership | Asociere în Participațiune – AP | No minimum capital required |
| 5. | Branch | Sucursală | No minimum capital required |
| 6. | Representative offcie | Reprezentanță | No minimum capital required |
Sole proprietorship
This is the simplest and most common type of business structure in Romania. It is suitable for small businesses and entrepreneurs who want to operate on their own without partners or shareholders. The owner is personally responsible for all the business’s debts and liabilities.
Limited Liability Company
Preferred option for small and medium-sized businesses. A limited liability company offers protection to its shareholders, which means that the company’s debts and liabilities are separate from the owner’s personal assets.
Joint Stock Company
This type of business structure is suitable for larger businesses that need to raise capital from multiple shareholders. The shareholders have limited liability, and the company’s shares can be traded on the stock exchange.
Partnership
This type of business structure is suitable for two or more people who want to start a business together. The partners share the profits and losses of the business and have unlimited liability for its debts and liabilities.
Branch
A branch is an extension of a foreign company in Romania. It operates under the same legal entity as the parent company and has the same business objectives, but it is subject to Romanian laws and regulations.
Representative Office
A representative office is similar to a branch, but it does not have the power to conduct commercial activities. Its main function is to promote and market the parent company’s products and services in Romania.
Cost of registration and incorporation
The cost of registering and incorporating a company may vary depending on the legal form, the complexity of the business, and the services needed. Here is a general overview of the costs involved for registering and incorporating some of the most common types of businesses in Romania.
Sole proprietorship
The cost of registering a sole proprietorship in Romania is relatively low, and it can be done online through the National Trade Register Office (ONRC) or through a one-stop shop for company registration services. The registration fee is €40).
Limited Liability Company
The cost of registering an SRL in Romania is higher than that of a sole proprietorship. The registration fee is €70 for online registration or €80 for registration through a one-stop shop. In addition to the registration fee, there may be additional costs, such as legal fees, accounting fees, and notary fees, depending on the company’s specific needs.
Joint Stock Company
The cost of incorporating an SA in Romania is higher than that of an SRL, due to the higher minimum capital requirement and more complex legal requirements. The registration fee is €142 for online registration or €170 for registration through a one-stop shop. In addition to the registration fee, there may be additional costs, such as legal fees, accounting fees, notary fees, and fees for listing the company’s shares on the stock exchange.
Partnership
The cost of registering a partnership in Romania is similar to that of a sole proprietorship. The registration fee is €40; while there may be additional costs, such as legal fees etc.
Branch
The cost of registering a branch in Romania is relatively low. The registration fee is €70 for online registration or €80 for registration through a one-stop shop. Other costs include legal fees and notary fees, etc.
Business environment in Romania
Romania has a developing business environment, and the country has made significant progress in recent years in terms of attracting foreign investment, improving infrastructure, and promoting entrepreneurship.
Here are some of the key factors that make Romania’s business environment attractive:
Strategic location
The strategi location of Romania provides access to the European Union (EU) and the Commonwealth of Independent States (CIS) markets. The country has access to major transportation routes, including highways, railways, and ports, making it a hub for logistics and distribution.
Access to a skilled workforce
Romania has a large and skilled workforce, with a strong focus on technical and scientific education. The country has several reputable universities that produce a steady stream of graduates in fields such as engineering, IT, and healthcare.
Low labor costs
Compared to rest of the Europe, Romania is lower labor rates which make it an attractive destination for investors; local and foreign alike.
Favorable tax regime
Romania has a competitive tax regime, with a flat corporate income tax rate of 16% and a value-added tax (VAT) rate of 19%. The country also offers various tax incentives and exemptions to promote investment in certain sectors, such as research and development.
Business-friendly regulations
Romania has made significant progress in reducing bureaucracy and simplifying business regulations. The government has implemented several reforms to streamline the process of starting a business, obtaining permits, and registering property.
However, there are also some challenges to doing business in Romania, including corruption, inadequate infrastructure in some regions, and a lack of transparency in some sectors. Additionally, the country has faced some political instability in recent years, which can create uncertainty for businesses. Nevertheless, Romania remains an attractive destination for investors and entrepreneurs looking to tap into the country’s growing economy and strategic location.
