Since its entry in Europe, Romania is seen as an example of economy mutation form strong socialism to an integrated liberalist model. Opening to international trade, liberalisation of private sectors, privatisation policies and innovation development todays enable Romania to achieve an impressive constant annual GDP growth of 5%. These factors make Romania to be expected as one of the most promising hub for future European investments.
In the line of its free market mutation, Romania has make strong reforms of its tax regime. The standard rate of corporation tax has been reduced to 16%. However, corporation tax is much lower for companies with less than ten employees and €100,000 annual turnover, for which corporation tax is just 3%.
What are the main kinds of company in Romania?
The two most popular forms of business entity in Romania are:
- Limited liability company (SRL)
- Joint stock company (SA)
Main features of an SRL
- Minimum share capital for an SRL of €50, provided the business has no more than fifty shareholder
- Must have between one and fifty shareholders
- Shareholders may be Romanians or foreign nationals
- Low administrative and reporting requirements
Part of its international new strategy and foreign investments, Romania has made very simpler, faster and cheaper incorporations of new entities and trading conditions. As well as reducing corporation tax to a flat rate of 16%, the government has eased regulatory requirements across the board, ranging from building permits to customs procedures and labour laws.
Enhanced by the steady growth of the country, Romania has kept an unemployment rate below 6%. But with a large, well-educated workforce and low average salaries, there should be little difficulty for foreign companies when it comes to recruitment.
Romania offers a wide range of financial incentives to foreign investors. These include tax breaks, cheap loans and free access to public utilities, with particular benefits for investors seeking to create employment in disadvantaged areas.
Companies are required to maintain accounting records in the Romanian language and in Romanian Lei. All companies are required to prepare and file annual financial statements at the end of the financial year which follows the calendar year. Companies that are not listed and do not exceed a certain turnover, assets and number of employees may produce simplified financial statements. Companies exceeding these limits must also have a mandatory audit of their accounts.
Please contact us and we will be pleased to discuss matters in greater detail.