Companies can be incorporated by natural persons or legal entities and must register to the territorial Trade Register. Certain activities need prior authorization (e.g. credit institutions, insurance brokers, companies which produce, sell firearms and ammunition, pension entities). Certain activities need to be authorized after the registration of the company (e.g. work agent, transportation).

The main document needed for incorporating a company is the articles of incorporation. This document must specify the following:

The types of documents requested by the Trade Register for the company establishment are:

• Proof of verification of company name availability and its reservation thereof
• articles of incorporation for the incorporated company
• excerpts issued by the Trade Register where the shareholders are incorporated- legal entities
• the identity document of the shareholders natural persons
• passport or ID of the future director appointed for the Romanian company
• the document attesting the right of use over the space with destination of registered office ( e.g. lease agreement)
• standard application form(s)

On the incorporation, the company in registered with the Romanian Fiscal Authorities by submitting the registration request with the Trade Register. However, in order to choose the appropriate tax regime, subsequent formalities with the tax authorities are necessary to be performed.

Tax rates

The standard corporate income tax rate in Romania is 16% and the standard VAT rate is 19%.

Romanian taxpayers who meet certain conditions (e.g., at least one employee, a turnover of up to 500,000 euros, consultancy and management activities accounting for a maximum of 20% of total revenues, etc.) may qualify for the microenterprise income tax of 1% on turnover.

Romanian taxpayers that are carrying on activities such as gambling and nightclubs are either subject of 5% rate from the revenues obtained from such activities or 16% of the taxable profit, depending on which is higher.

Besides the VAT 19% rate, the following reduced rates would apply:

• 9% for restaurant and catering services, hotel accommodation, water supply, food -save for food containing a certain amount of sugar, beverages – save for alcoholic beverages, medical treatments, prosthesis, housing under certain conditions, etc.
• 5% for schoolbooks, newspapers, magazines, admission fees to castles, museums, sport events, etc.

Registration requirements

VAT registration for taxable persons having the place of business activity in Romania should be performed when the annual turnover of EUR 88,500 (RON 300,000) is exceeded.

Voluntary VAT registration before the threshold is exceeded is also possible. The VAT registration procedure is complex, and several types of documents are required. Non-resident taxable persons established in Romania through fixed establishments and non-residents having no actual presence in Romania can register without observing the above threshold. However, a VAT number must be in place before the commencement of the economic activity.

A taxable person not registered for normal VAT purposes in Romania and not required to register is liable to request the special VAT registration in the following situations:

• purchase of services from persons established outside Romania having the place of supply in Romania
• supply of services with place of supply in another EU Member State
• intra-community acquisitions of goods from another EU Member State cumulatively exceeding the annual threshold of EUR 10,000 (RON 34,000)

The incorporation of the company, the mentions or the liquidations are tax free as per Law no. 265/2022.

Amounts for publishing the documents (e.g. resolutions, Articles of incorporation) in the Romanian Official Gazette will apply.

Special taxation of micro-enterprises

The microenterprise regime is optional and may be enjoyed by all companies obtaining revenues below the threshold of EUR 500,000 computed at the NBR exchange rate valid for the last day of the financial year and met several other criteria (e.g. revenues from consulting and management services lower than 20% out of the total revenues, one minimum employee etc.).

The microenterprise tax rate applicable is 1%.

Incentives for companies

Companies doing business in Romania could benefit from the following incentives:

Tax facilities regarding R&D expenses

Companies may benefit of an extra 50% tax depreciation for the eligible R&D expenses and may also apply the accelerated depreciation for these expenses.

Tax exemption on reinvested profit

The facility refers to the exemption of corporate tax of the profit re-invested in certain types of assets.

Opening a bank account

For a Romanian company it is mandatory to have a bank account. For opening a bank account, the legal representatives’ personal presence is mandatory at the opening. In the previous years, the banks also accepted a special notarized Power of attorney for another individual, but this practice changed and usually, at the opening, they request the presence of the administrator of the company.

Subsequent modifications in the statute of the company

All modifications regarding the statutory information of the companies (change of registered seat, mandate of directors, change of the shareholders or directors etc.) need to be registered at the Trade Register in 15 days as of the amending deed.

Unique European identifier (EUID)

All Romanian companies receive, beside the unique registration number and the Trade Register identification number, the unique European identifier (EUID).

Through the system of interconnection of the Trade Register institutions in Europe, documents and information relating to the professionals registered in the Trade Register of each country are made available to the public. It will be possible to obtain information on identification and status of a company in the European Union and to obtain copies of certificates of electronic documents.