Tag romanian companies

Set up a Limited Liability Company in Romania

The most common forms of companies in Romania are the Limited Liability Company, the Joint Stock Company and Branches.

The Limited Liability Company in Romania has:

• The share capital is divided into equal shares and, according to Law no. 31/1990, it cannot be less than 1 RON.
• A Limited Liability Company in Romania may have between 1 and 50 shareholders.
• The shareholders are liable in the limit of the contribution to the share capital.

Documents requested by the Trade Register for the company formation are:

• Proof of reservation of company name
• Articles of incorporation for the new Romanian company
• Excerpts issued by the Trade Register where the shareholders are incorporated- legal entities (if they are)
• The identity document of the shareholders natural persons (ID, Passport)
• Passport or ID of the future director of the Romanian company
• The document attesting the right of use over the space with destination of registered office ( e.g. lease agreement, property) and the ownership property documents
• standard application.

Taxation of LLC company in Romania 2023

The tax rates used for micro-company income tax are:

• 1% for micro-companies with one or more employees.
• 3% for micro-companies with no employees.

The standard corporate income tax rate is 16%. Taxpayers that are carrying on activities such as gambling and nightclubs are either subject to 5% rate of the revenue obtained from such activities or to 16% of the taxable profit, depending on which is higher.

Romanian micro company tax regime starting with the first fiscal year and will remain under this tax regime if it meets all of the following criteria:

• The maximum threshold of annual turnover is EUR 500.000.
• Income generated from consultancy and management activities is not more than 20% of the annual turnover;
• It does not carry out any banking, insurance and reassurance, capital markets, gambling or upstream oil & gas activities;
• The share capital must be held by entities other than the state or the local authorities.

Moreover, the Romanian company has to pay to the state the imposed social contributions (pensions, health, work contribution) and the income tax for each employee.

There are no citizenship or residency requirements in order to register a Limited Company in Romania.

Our team of Romanian Lawyers can assist you for the set up of a LLC in Romania and our team of Romanian accountants can take on the fiscal set up of your newly formatted company.

Contact us for more info in order to set up a Romanian Limited Liability Company.

Hiring experienced bankruptcy legal services in Romania can provide you with many benefits that can make your bankruptcy process easier, faster, and more effective.

If you are a small to medium sized company owner in Romania, you may be facing some financial challenges due to the economic downturn, the pandemic, or other factors.

You may be struggling to pay your debts, keep your business running, and maintain your reputation. You may be wondering if bankruptcy is an option for you and how it can affect your assets and future prospects.

In this article, we will explain how bankruptcy works in Romania, what are the different types of bankruptcy procedures available, and what are the steps and requirements for filing for bankruptcy.

We will also show you how hiring experienced bankruptcy legal services in Romania can help you protect your assets, negotiate with your creditors, and recover from your financial difficulties.

What are the types of bankruptcy procedures in Romania?

Bankruptcy is a legal process that allows a company that is insolvent or unable to pay its debts to restructure its finances, liquidate its assets, or close its operations.

Bankruptcy can help a company avoid lawsuits, foreclosures, and seizures from its creditors and other parties.

Bankruptcy can also provide a fresh start for a company that wants to continue its business or start a new one.

In Romania, there are three main types of bankruptcy procedures:

• Reorganization: This is a procedure that allows a company to restructure its debts and operations under the supervision of a judicial administrator and a creditors’ committee. The company must submit a reorganization plan that outlines how it will pay its creditors, reduce its costs, and increase its revenues. The plan must be approved by the court and the creditors. The company can continue its business during the reorganization process, but it must follow the terms of the plan and report its progress regularly.

• Liquidation: This is a procedure that involves the sale of the company’s assets to pay off its debts. The company must appoint a liquidator who will manage the liquidation process and distribute the proceeds to the creditors according to their priority. The company must cease its business activities during the liquidation process and dissolve its legal entity after the completion of the process.

• Simplified procedure: This is a procedure that applies to small companies that meet certain criteria, such as having less than 50 employees, less than 10 million lei in assets, or less than 10 million lei in debts. The simplified procedure is faster and cheaper than the regular procedures and involves less court involvement and paperwork. The company can choose between reorganization or liquidation under the simplified procedure.

Each type of bankruptcy procedure has its advantages and disadvantages depending on the situation and goals of the company.

For example, reorganization can allow a company to keep its assets and business relationships, but it can also be more complex and costly than liquidation.

Liquidation can allow a company to get rid of its debts quickly, but it can also result in the loss of its assets and reputation.

Simplified procedure can be more convenient and efficient for small companies, but it can also limit their options and flexibility.

How to choose the best type of bankruptcy procedure for your company?

Choosing the best type of bankruptcy procedure for your company depends on several factors, such as:

• The size and nature of your company
• The amount and type of your debts
• The value and condition of your assets
• The feasibility and profitability of your business plan
• The expectations and preferences of your creditors
• The legal and tax implications of each option

To make an informed decision, you need to evaluate your financial situation carefully and realistically. You also need to consult with an experienced bankruptcy lawyer who can advise you on the pros and cons of each option and help you prepare and submit the necessary documents.

What are the steps and requirements for filing for bankruptcy in Romania?

Filing for bankruptcy in Romania involves several steps and requirements that vary depending on the type of procedure chosen. However, some general steps and requirements are:

• Determining the insolvency condition: A company is considered insolvent if it has stopped paying its debts for more than 60 days or if it has liabilities that exceed its assets. A company can file for bankruptcy voluntarily if it meets these criteria or involuntarily if one or more of its creditors file a bankruptcy petition against it.
• Preparing and submitting the bankruptcy petition: The company or the creditor must prepare and submit a bankruptcy petition to the competent court within 30 days from the occurrence of the insolvency condition. The petition must include various documents and information, such as the financial statements, the list of creditors and debtors, the inventory of assets and liabilities, and the proposed type of bankruptcy procedure.

• Opening the bankruptcy procedure: The court will examine the bankruptcy petition and decide whether to open or reject the bankruptcy procedure within 10 days from receiving it. The court will also appoint a judicial administrator or a liquidator who will oversee the bankruptcy process and represent the interests of the creditors.
• Notifying the parties involved: The court will notify all the parties involved in the bankruptcy process, such as the company, the creditors, the employees, and other stakeholders. The parties will have 15 days to submit their claims or objections to the court or to challenge the appointment of the judicial administrator or liquidator.
• Implementing the bankruptcy plan: Depending on the type of procedure chosen, the company or the judicial administrator will prepare and submit a bankruptcy plan to the court and the creditors within a certain period of time. The plan will specify how the company will pay its debts, restructure its operations, or liquidate its assets. The plan must be approved by the court and a majority of the creditors. The company or the judicial administrator will then execute the plan according to its terms and conditions.
• Closing the bankruptcy procedure: The bankruptcy procedure will end when the company has fulfilled its obligations under the plan, when there are no more assets to be distributed, or when there are no more claims to be settled. The court will issue a decision to close the procedure and discharge the company from its debts. The company will then resume its normal activities or cease to exist.

What are the benefits of hiring experienced bankruptcy legal services in Romania?

Hiring experienced bankruptcy legal services in Romania can provide you with many benefits that can make your bankruptcy process easier, faster, and more effective. Some of these benefits are:

• Professional guidance and representation: Hiring experienced bankruptcy legal services in Romania can provide you with professional guidance and representation throughout your bankruptcy process. They can help you choose the best type of bankruptcy procedure for your situation, prepare and submit all the necessary documents, represent you in court and negotiations, protect your rights and interests, and facilitate the implementation of your bankruptcy plan.
• Negotiation skills and expertise: Hiring experienced bankruptcy legal services in Romania can provide you with negotiation skills and expertise that can help you reach favorable agreements or compromises with your creditors and other parties. They can help you reduce your debts, lower your interest rates, extend your payment terms, or obtain waivers or discounts. They can also help you avoid litigation or arbitration that can be costly.
• Asset protection and recovery: Hiring experienced bankruptcy legal services in Romania can provide you with asset protection and recovery that can help you preserve or recover your valuable assets. They can help you identify and secure your exempt assets, such as your personal belongings, tools of trade, or pension funds, that are not subject to liquidation or seizure. They can also help you recover your assets that have been fraudulently transferred, concealed, or misappropriated by others.
• Business continuity and revival: Hiring experienced bankruptcy legal services in Romania can provide you with business continuity and revival that can help you keep your business running or start a new one. They can help you maintain your business relationships, contracts, licenses, and permits during your bankruptcy process. They can also help you restructure your business operations, improve your cash flow, and increase your profitability. They can also help you access new sources of funding, such as loans, grants, or investors, that can support your business growth and development.

Why Romania is a Cost-Effective and Attractive Location to Start a Business

 Low Taxes

Start a Business in Romania and Benefit from a Flat Corporate Tax Rate of Only 16%.

Affordable Labor Costs

Take Advantage of Affordable Labor Costs and a Skilled Workforce When You Start a Business in Romania.

Low Living Expenses

Keep Your Overhead Low with Low Living Expenses in Romania.

 Favorable Business Climate in Romania

Explore Romania’s Pro-Business Environment and Streamlined Business Registration Processes

Tax Incentives

Romania has one of the lowest corporate tax rates in the European Union, and there are also double taxation avoidance treaties in place to help businesses save even more money.

Romania offers various tax incentives to incentivize foreign investment and promote business growth in the country.

Some of the key tax incentives available for businesses in Romania include:

• Reduced corporate tax rate: Romania has one of the lowest corporate tax rates in the European Union at only 16%. This flat tax rate applies to all businesses, regardless of size or industry.
• Tax exemptions: Romania offers tax exemptions for certain types of income, including dividends and interest, which can help businesses reduce their tax burden.
• VAT exemptions: Small businesses with an annual revenue of less than 220,000 EUR are exempt from charging and paying value-added tax (VAT) in Romania.
• Research and development (R&D) incentives: Companies engaged in R&D activities in Romania are eligible for tax credits and exemptions on certain expenses related to research and development.
• Employment incentives: Romania also offers various employment incentives to encourage job creation and workforce development. These incentives include wage subsidies, social security exemptions, and training grants.

Streamlined Business Registration Processes

To register a business in Romania, you’ll need to provide several documents and complete several steps.

Here’s an overview of the registration process and the documents required:

1. Choose a legal entity: The first step in the registration process is to choose a legal entity for your business. Common legal entities in Romania include sole proprietorships, limited liability companies (LLCs), joint-stock companies, and partnerships.
2. Obtain a unique registration code (CUI): Once you’ve chosen a legal entity, you’ll need to obtain a unique registration code (CUI) from the Romanian Trade Register. This code is required for tax and legal purposes and identifies your business in the Romanian business registry.
3. Register with the Trade Register: You’ll need to register your business with the Romanian Trade Register by submitting a registration application and the required documents.
4. Obtain tax registration: Once your business is registered with the Trade Register, you’ll need to obtain tax registration from the National Agency for Fiscal Administration (ANAF). You’ll need to provide your CUI, as well as other documents such as your articles of incorporation and identification documents.
5. Obtain any necessary permits or licenses: Depending on the type of business you’re starting, you may also need to obtain additional permits or licenses from local or national authorities.

Stable Political and Economic Climate

Access to Skilled Labor

In Romania, you’ll find a highly skilled and educated workforce, particularly in fields such as IT, engineering, and manufacturing. This skilled labor pool is due in part to Romania’s strong education system, which emphasizes science, technology, engineering, and mathematics (STEM) fields. Additionally, many Romanians are fluent in multiple languages, including English, French, German, and Spanish, making them valuable assets for businesses with international operations.

When you start a business in Romania, you’ll have access to this highly skilled labor pool at a fraction of the cost of other European countries. Labor costs in Romania are among the lowest in the EU, which can help you reduce your overhead and increase your profit margins. Moreover, the Romanian government has implemented various programs and initiatives to support workforce development and training, ensuring that the labor force remains skilled and competitive.

Investment Opportunities

Nevertheless, Romania offers a wide range of investment opportunities across various industries. Some of the most promising industries for investment in Romania include:

• IT and software development: Romania has a rapidly growing IT sector with a highly skilled and educated workforce. The country is home to numerous tech startups and multinational companies, making it an attractive destination for businesses in the industry.
• Manufacturing: With a strong tradition in manufacturing and a location at the crossroads of major European markets, Romania offers favorable conditions for businesses in the manufacturing sector. The country’s low labor costs and skilled workforce make it an ideal location for companies looking to manufacture and export products.
• Agriculture and food processing: Romania has a favorable climate and fertile soil, making it an ideal location for agriculture and food processing businesses. The country is a major producer of wheat, corn, and other crops, as well as wine and other food products.
• Renewable energy: Romania has made significant investments in renewable energy in recent years, particularly in wind and solar power. The country’s favorable regulatory environment and abundant natural resources make it an attractive destination for businesses in the renewable energy sector.
• Tourism and hospitality: With a rich history, diverse culture, and beautiful landscapes, Romania has significant potential for growth in the tourism and hospitality industry. The country is home to numerous historic sites, natural landmarks, and cultural attractions, making it an ideal destination for travelers.

 Legal Considerations

Ensure Compliance with Local Laws and Regulations with the Help of an Experienced Commercial Lawyer When You Start a Business in Romania.