Company formation in Romania – Emigrating to Romania
Company formation in Romania has been increasingly popular for some time. The “Micro-Company Tax Regime” introduced in 2018 has certainly contributed significantly to this trend.
Since its introduction, it has been reformed multiple times, and as of January 1, 2024, micro-enterprises with an annual turnover of less than 60,000 EUR are taxed at 1%, while those with a turnover of 60,000 – 500,000 EUR are taxed at 3% on their revenue.
The standard corporate tax rate for companies that do not meet the conditions for micro-enterprises is 16% and is applied to annual profits.
Inhaltsverzeichnis
General information about Romania
Romania is a country bordered to the north by Ukraine and Moldova, to the west by Hungary and Serbia, to the south by Bulgaria, and to the east by the Black Sea. Major cities include Bucharest, Cluj, Sibiu (Hermannstadt), Iasi, Timisoara, and Constanta.
Key facts about Romania
- Member of the European Union since January 1, 2007
- Member of NATO since March 29, 2004
- Schengen Area membership as of March 1, 2024 (air and sea)
- Official language: Romanian
- Capital: Bucharest
- Government type: Semi-presidential republic
- Population: 19 million
- Gross Domestic Product (GDP): 384 billion USD
- Internet TLD: .ro
- National currency: Romanian Leu (RON)
- Country code: +40
Key facts about the tax system in Romania
- Personal income tax rate: 10%
- Social contributions: 35%
- Corporate tax rates: 1%, 3%, and 16% (standard)
- Withholding tax: 8% (on dividends)
- VAT rates: 19% (standard), 9% (reduced), 5% (highly reduced)
Key developments
Only one micro-company allowed from now on
1% corporate tax for annual turnover of less than 60,000 €
3% corporate tax for annual turnover of less than 500,000 €
Introduction of e-Factura (Electronic Invoice)
Increase of the minimum wage to around 660 EUR (gross)
Accession to the Schengen Area
Company formation in Romania
Romania has been increasingly popular as a business location for some time. The “Micro-Company Tax Regime” introduced in 2018 has certainly contributed to this development. If you want to start a company in Romania or emigrate to Romania, we can assist you in turning your plans into reality.
Since its introduction, the regime has been reformed several times, and as of January 1, 2024, micro-companies with an annual turnover of less than 60,000 EUR are taxed at 1%, while those with a turnover between 60,000 and 500,000 EUR are taxed at 3% based on their revenue. The standard corporate tax rate is 16%, which is applied to the annual profit.
Target audience
Who is a company formation in Romania suitable for? This primarily depends on your business model and the goals you are pursuing. Typically, our clients come from the following industries and groups:
- Marketing, Sales, and Media
- Coaching, Speakers, and Writers
- IT and Programming
- HR and Recruiting
- Remote Workers
- Trade
- Manufacturing
- Services
- Logistics
- Commission-based businesses
If the company formation is also for tax reasons, Romania is particularly attractive with its Micro-Company Regime, offering tax rates of only 1%, 3%, or 16% at the company level. The withholding tax on profit distributions from corporations, such as the S.R.L., is only 8%.
Advantages
- Low wage level
- Well-educated workforce
- Affordable square meter prices
- Low taxation of micro-companies
- Favorable geographic location
- Good logistics (Several international airports)
- Member of the European Union
- Member of the Schengen Area
Legal forms in Romania
What legal forms exist in Romania? The most common legal form for capital companies is undoubtedly the S.R.L., while for sole proprietors, the legal form is called P.F.A. From a tax perspective, the P.F.A. status is irrelevant, as in addition to the 10% income tax, there are also additional 35% social security contributions.
| German designation | Romanian designation |
| Limited (Ltd) | Societate cu raspundere limitata (S.R.L.) |
| Public limited company (PLC) | Societate pe actiuni (S.A.) |
| General partnership (GP) | Societate in nume colectiv (S.N.C.) |
| General partnership (GP) | Societate comandita simpla (S.C.S.) |
| Kommanditgesellschaft auf Aktien (KGA) | Societate in comandita pe actiuni (S.C.A.) |
| Einzelunternehmen | Persoana fizica autorizata (P.F.A.) |
Since the Romanian S.R.L. is the most common legal form among capital companies, the following text will primarily focus on the S.R.L.
Taxes and contributions for legal entities in Romania
| Scope of application | Type of tax | Tax rate | Tax base | Assessment base |
| With micro-company regime | Corporate income tax | 1% | Revenue | < 60.000 EUR |
| With micro-company regime | Corporate income tax | 3% | Revenue | < 500.000 EUR |
| Without micro-company regime | Corporate income tax | 16% | Profit | Amount of profit |
| All corporations | Withholding tax / dividend tax | 8% | Profit distribution | Amount of dividends |
Note: Until a yearly turnover of 60,000 EUR, companies are not obligated to charge and remit VAT. In return, the right to deduct input VAT is also eliminated.
Key features of the Romanian S.R.L.
- Legal form: Legal entity that acquires its own legal personality upon registration in the Trade Register
- Number of shareholders: Minimum one shareholder, maximum 50 shareholders
- Share capital: 200 RON
- Liability: Limited liability of shareholders to the extent of their contributions, the company is liable with its assets
- Management: At least one natural person
- Accounting: Obligation to maintain accounting records
- Bodies: General Assembly of Shareholders, Management, Supervisory Board (optional)
Micro-Company Regime in Romania
The Micro-Company Regime is designed to relieve micro-enterprises in Romania, particularly by reducing bureaucracy and the tax burden. However, this special tax regime is subject to certain conditions:
- The company must be a corporation established in Romania (LLC / S.R.L.).
- The company must have at least one full-time employee in Romania who is subject to social security contributions.
- A maximum of 20% of the annual turnover may consist of consulting services.
- The annual turnover must not exceed 500,000 EUR.
- The Micro-Company status must be requested within 30 days after the company’s establishment.
Important: If any of these conditions are no longer met, the company will be subject to the usual taxation rules. As a result, the regular corporate tax rate will apply, which is currently 16% and is levied on profits.
Tax comparison between Germany and Romania
In the following examples, we assume that all profits are withdrawn by a natural person with the corresponding tax residence in the respective country and transferred to private assets.
| Basis: 59.000 € annual revenue | |
 Germany |
 Romania |
| 8.850 EUR (15% Corporate income tax) | 590 EUR (1% Corporate tax with micro-company regime) |
| 8.850 EUR (ca. 15% Commercial tax) | - |
| 10.325 EUR (25% Capital gains tax) | 4.673 EUR (8% Dividend tax) |
| 568 EUR (5,5% Solidarity surcharge) | - |
| 29.729 EUR (48,46% Total tax burden) | 5.263 EUR (8,92% Total tax burden) |
| -24.466 EUR Taxes per year (-82%) | |
| Basis: 499.000 € Annual revenue | |
|
Germany |
Romania |
| 74.850 EUR (15% Corporate tax) | 14.970 EUR (3% Corporate tax with micro-company regime) |
| 74.850 EUR (15% Corporate income tax) | - |
| 87.325 EUR (25% Capital gains tax) | 38.722 EUR (8% Dividend tax) |
| 4.803 EUR (5,5% Solidarity surcharge) | - |
| 241.828 EUR (48,46% Total tax burden) | 53.692 EUR (10,76% Total tax burden) |
| -236.565 EUR Taxes per year (-78%) | |
| Basis: 510.000 € Annual revenue | |
|
Germany |
Romania |
| 76.500 EUR (15% Corporate tax) | 81.600 EUR (16% With standard corporate tax) |
| 76.500 EUR (15% Corporate tax) | - |
| 89.250 EUR (25% Capital gains tax) | 34.272 EUR (8% Dividend tax) |
| 4.909 EUR (5,5% Solidarity surcharge) | - |
| 247.159 EUR (48,46% Total tax burden) | 115.872 EUR (22,72% Total tax burden) |
| -131.287 EUR Taxes per year (-53%) | |
Payroll and salary accounting in Romania
| Simplified calculation scheme for the tax burden on wages and salaries | |
| Amount | Designation |
| 1.200 EUR | Gross salary |
| - 300 EUR | Social security (25%) |
| - 120 EUR | Health insurance (10%) |
| = 780 EUR | Subtotal |
| - 78 EUR | Income tax (10%) |
| = 702 EUR | Net salary |
There is no income tax allowance in Romania.
Requirements
- Impunity in Romania
- Freedom from tax debts in Romania
- Legal age
- Legal capacity
Procedure
- Introductory meeting to get to know each other
- Order placement and payment via our website
- Submission of proof of identity and proof of residence
- Submission of the powers of attorney prepared by us and signed by you
- Company formation by representation through power of attorney (company name reservation, drafting of articles of association, notary appointment, registration in the trade register)
- Application for tax numbers
- Registration as an employer for social security
- Preparation of a managing director’s contract
- Application for Micro-Company status
- Submission to the Register of Beneficial Owners
- Application for the NIF (tax number for non-residents, required for account opening)
- Account opening at a Romanian bank (requires personal presence)
Company Formation in Romania: Service Overview
- Reservation of company name
- Registered address (12 months)
- Registered agent (12 months)
- Drafting of articles of association
- Preparation of all powers of attorney
- Arrangement of notary appointment
- Representation at the notary appointment via power of attorney
- Registration in the trade register
- Application for the NIF for opening a business bank account
- Medical health certificate
- Preparation of a valid managing director’s contract
- Employer registration for social security
- Entry in the Register of Beneficial Owners
- Valuable information about the S.R.L. and tax matters
Support by a licensed tax advisor in Romania
Once your S.R.L. is registered in the Trade Register, it acquires rights and obligations, including toward tax authorities. To ensure that you don’t miss any deadlines and that everything is in order, you will be supported by an experienced and licensed tax advisor in Romania. We are happy to provide you with a personalized offer.
Emigrating to Romania
If you want to emigrate to Romania, there are several things to consider: After all, you don’t want to waste time, money, or energy on experiments and aim to reach your goal as quickly as possible: starting a new chapter in life and peacefully managing your business.
Target audience
Who emigrates to Romania? Typically, our clients are individuals who provide various reasons for their emigration to Romania:
- Charm of Eastern Europe
- Geographical location
- Emerging economy
- Starting fresh abroad
- Romantic reasons
- Frustration in the home country
- Access to skilled labor
- Low cost of living
- Extremely low taxes
Benefits
- Low food prices
- Low energy costs
- Low real estate prices (rent/purchase)
- Very low taxes
- Favorable geographical location
- Good flight connections
- Uncomplicated emigration due to the freedom of establishment for EU citizens
- Efficient travel through Schengen Area membership (March 2024)
Taxes and contributions for individuals
| Type of tax or levy | Tax rate / Levy burden | Basis |
| Income tax | 10% | Earned income (self-employed and employed work) |
| Social contributions | 35% | Earned income (self-employed and employed work) |
| Value-added tax (standard rate) | 19% | Consumption (Any consumption except for the reduced and very reduced goods and services) |
| Value-added tax (reduced rate) | 9% | Consumption (medicines, medical devices, books, newspapers, magazines, cultural events, hotel services) |
| Value-added tax (strongly reduced rate) | 5% | Consumption (social housing, food, hotels, restaurants, amusement parks, and sports facilities) |
Establishing residence in Romania
To ensure that you comply with local registration requirements, settle in Romania quickly, and avoid costly mistakes, entrust us with assisting you in establishing your residence in Romania.
This will help you avoid expensive errors, time wasted, and unpleasant experiences. We are well-versed in Romania, particularly in Bucharest, and will allow you to benefit from our insider knowledge.
Real Estate Market in Romania
The real estate market in Romania varies from place to place. Naturally, property prices are lower in rural areas than in cities. There are also significant differences from city to city.
The most expensive city is undoubtedly the capital, Bucharest. However, even in Bucharest, property prices are relatively modest compared to major German cities.
To help you quickly get an overview of current prices and locations, we recommend using our relocation service and benefiting from our real estate agent network.
Employment Contract in Romania
As part of the company formation in Romania, we also draft a valid, bilingual employment contract that complies with legal requirements. Romania also has a working hours law, which means that only one full-time job per person is allowed. Exceptions apply to executive mandates.
Requirements
There are two groups of people when immigrating to Romania: EU citizens, who enjoy the right of establishment, and citizens from third countries. The procedure for EU citizens is relatively simple, while the procedure for citizens from third countries is significantly more complex.
If you do not hold EU citizenship, please contact us so that we can discuss your individual options with you. For citizens of the European Union, the following applies:
- Valid rental agreement
- Valid employment contract
- Correct application submission
- Appointment with IGI (Inspectoratul General pentru Imigrari)
- Personal attendance at the immigration office appointment
Process
After you have entrusted us with the task of professionally assisting you with your relocation or immigration to Romania, one of our qualified team members will contact you.
In the next step, we will request some documents from you. Afterward, we will prepare the necessary, personalized powers of attorney for you, which you will need to sign and return to us with notarized certification.
We will submit the documents in the correct format to the immigration authorities and schedule the corresponding appointments. Then, we will coordinate regarding the administrative procedures.
At each appointment, one of our team members will always be present to accompany you, assist with communication issues through valuable translation support, and ensure that you reach your goal quickly.
Usually, you will receive the Certificate of Residence or Certificat de Înregistrare within 72 hours.
Residence in Romania: Overview of Services
- Access to our real estate agent network in Bucharest
- Arrangement of all administrative appointments
- Police registration
- Application for personal tax number
- Application for personal social security number
- Certificate of Residence
- Required medical health certificate
- Personal assistance by our staff member
- Valuable information on country-specific nuances and recommendations
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How we can assist you
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