Tag transfer tax in Romania

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.

When buying or selling property in Romania, it’s essential to consider the various taxes associated with the transaction. Real estate taxes in Romania include transfer tax, local taxes, registration fees, and property taxes.

• The transfer tax is calculated based on the property’s purchase price and ranges from 0.5% to 3% depending on the location of the property.
• Notary fees, which are typically between 0.5% and 2% of the purchase price, are paid to the notary public who oversees the transfer of property ownership.
• Local taxes, which are based on the property’s value, range from 0.25% to 1%. Registration fees, which are paid to the Romanian Land Registry when registering the transfer of property ownership, are typically between 0.15% and 0.5% of the purchase price.

It’s important to note that real estate taxes in Romania can vary based on location and other factors.

Therefore, it’s advisable to consult with a Romanian real estate lawyer to get a precise estimate of the taxes involved.

In addition to real estate taxes, there are other costs associated with buying or selling property in Romania.

These include legal fees, survey fees, agency fees, mortgage fees, repairs and renovations, property management fees, utility connection fees, moving costs, and insurance.

• Legal fees are typically between 1% to 3% of the purchase price, while survey fees range from 0.1% to 0.5%.
• Agency fees typically range from 1% to 3% of the purchase price.
• Mortgage fees include application fees, valuation fees, and arrangement fees.
• Repairs and renovations costs vary depending on the work needed to be done.
• Property management fees cover the cost of maintaining common areas in a condominium or apartment complex.
• Utility connection fees vary based on location and services provided.

Property taxes in Romania are calculated based on the property’s value and are paid annually.

The rate of property tax varies depending on the property’s location, but it typically ranges from 0.08% to 0.2%.

To ensure an informed decision and protect your investment, it’s crucial to consult with a Romanian real estate lawyer who can provide a detailed breakdown of all the costs involved.

By carefully considering all of the costs associated with the transaction, you can make an informed decision and ensure that your investment in Romania is protected.