Setting up a Business in Romania

“A dynamic nation of cultural and ethnic diversity”

Romanian legislation lists the following types of business organization:

• 1. Limited liability company (societate cu raspundere limitata - SRL);
• 2. Joint stock company (societate pe actiuni - SA);
• 3. General partnership (societate în nume colectiv - SNC);
• 4. Limited partnership (societate în comandita simpla - SCS);
• 5. Limited partnership on shares (societate în comandita pe actiuni - SCA);
• 6. Branch of a foreign company;
• 7. Silent partnership (asocatie în participatiune - not a legal entity);
• 8. Sole proprietorship;
• 9. Family association.

All such entities (except for the silent partnership), if registered in Romania, are considered as resident in Romania for tax and currency regulation purposes and must comply with statutory requirements in Romanian legislation for book and record keeping.

The silent partnership is considered as resident in Romania for tax purposes, while for currency regulation purposes it will have the Leader’s status.

Dividends/net profits are to be distributed according to the approved annual accounts.

The family association and sole proprietorship are types of businesses generally not available to foreign investors with the exception of EU citizens and European Economic Area citizens.

There are no specific investment approvals required for establishing a business in Romania.

The procedure requires the fulfillment of certain legal formalities including a delegated judge’s decision and registration with the Romanian Trade Registry and the Local Fiscal Administration.

Limited Liability Company

The minimum equity capital requirement for a limited liability company (Romanian: ‘Societate cu Raspundere Limitata’ or SRL) is currently RON 200 and the minimum value per part is currently RON 10.

The maximum number of equity partners in such a company is 50.

An SRL is managed by one or more administrators who may have full or limited powers and who may be either Romanian or foreign nationals.

There is no distinction in Romania between companies operating with or without foreign share capital.

Joint Stock Company

The minimum share capital requirement for a joint-stock company (Romanian: ‘Societate pe Actiuni’ or SA) is RON 90.000 and the minimum nominal value per share is currently RON 0.1. The Govern can modify, outside one in 2 years, the minimum value of the registered capital in accordance with the exchange rate in the manner that this quantum represents the equivalent in RON for EURO 25.000.

When an SA is established, at least 30% of the subscribed share capital, or 100% in respect of contributions in kind, must be immediately contributed upon formation of the company and all subscribed share capital must be fully paid in within:

• for the shares issued for a contribution in cash, in 12 months from the company registration date
• for the shares issued for a contribution in kind, in maximum 2 years from the company registration date

Shares must be held by a minimum of 2 shareholders at all times (there is no maximum) and can be open to either public or private subscription.

One or more ‘Board of Directors’ members, who may or may not be shareholders of the company, govern the daily operations of the SA. Board members should convene a meeting at least once per month to decide on the topics of the agenda, with decisions being taken on the basis of the majority of votes given by those members of the Board who are present.