Practical guide for Ukrainian businesses entering the Romanian market

Incentive plans for Ukrainian businesses in Romania

There are certain incentive plans in Romania that can be beneficial for individuals as well as companies from Ukraine.

Incentives for Ukrainian individuals

Individuals working as IT specialists or in the Research & Development field may benefit from an exemption from the standard 10% income tax, under certain conditions expressly mentioned in the Romanian domestic legislation.

Incentives for Ukrainian businesses

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.

Relocating a business from Ukraine to Romania

There are no legal provisions directly addressing the transfer of a company from Ukraine to Romania, only the incorporation of a new company is possible.

Company formation in Romania

Recommended company type: Limited Liability Company (SRL)

Minimum registered capital: Minimum 1 RON

Registrations required to run a business in Romania

• Establishing the company and having a registered seat in Romania
• Registering in the Commercial Register, and depending on object of activity, obtaining the necessary licenses
• Registering for a VAT number
• If the company will have employees, registration within the labour authority will be necessary

Requirements on foreign investors in Romania

The citizens of the EU or EEA who will form the statutory body have to prove their integrity by submitting a notarized affidavit related fiscal record.

For Ukrainian individuals, the same rules apply and no visa is required for entering Romania.

Sanctions

Conducting a business without required registration can result in the revenue (obtained from unregistered / undeclared activities) being confiscated.

Key taxes for businesses in Romania

Corporate income tax

• CIT: 16%

Newly incorporated company would be subject, by default, to microenterprises tax until the value of the total revenue per year exceeds the threshold of EUR 1,000,000. In this case, the rates are:

• 1%, provided that the entity would have at least one employee
• 3%, having no employees

Note: Such rate would apply to the total revenue registered at the level of the entity, on a quarterly basis.

Value-added tax

• Standard VAT: 19%
• Reduced VAT:
  • 9%, for several types of goods and services, such as (but not exhaustively): food, non-alcoholic beverage, orthopaedic products, plants, medicines for human and veterinary use
  • 5%, for several types of goods and services, such as (but not exhaustively): books, newspapers, access to cultural and sport events, social houses, catering and restaurant, hotel accommodation

Personal taxation of employees relocated from Ukraine to Romania

Personal income tax rate

• 10% in general
• 0% for IT specialists, employees with disabilities and employees who work in research and development or Technological Development field, under certain conditions

Contributions paid by the employer

In Romania, the employer pays only the work insurance contribution, which is 2.25%.

Contributions paid by the employee

• Health insurance: 10%
• Pension insurance: 25%

Romanian legislative measures in relation to Ukraine

The Government Decision 20/2022 set support measures and humanitarian assistance for Ukrainian individuals. More info can be found in our recently published article.

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We have years of experience in supporting businesses to grow in Romania. Benefit from our free 1-hour long market entry consultancy that includes:

• Brief analysis of your needs based on the information provided
• Country-specific aspects that may be important to your investment
• Basics of local tax, accounting and legal rules in Romania