Setting up a company in Romania (e.g. in the form of an S.R.L.) can enable considerable tax advantages. However, not only the Romanian tax legislation, but also Romania as a business location is highly interesting.
Especially in rural areas, Romania is rapidly developing its infrastructure, which is leading to noticeably rising real estate prices. Now is the best time to set up a company in Romania and to look into investments and the real estate market.
We will help you from the initial consultation to the implementation of your plans and will be there for you as your English-speaking partner.
Your advantages with Izbuc 37 Consulting S.R.L.
- Professional advice
- 800 EUR formation fee for an SRL with one shareholder and one managing director
- Foundation time approx. 12-15 working days
- No travel necessary
- Supervision of the entire process by a Romanian specialist lawyer
- Commission-free brokerage of a company location (rent) if no own real estate is available in Romania
- Commission-free arrangement of a tax advisor for all questions before and after the company formation
Favourable company taxation in Romania
Romanian company tax is ideally 1% of turnover. This depends on the type of company, the total turnover and the number of employees. From a turnover of EUR 500,000 per year (until 31 December 2022: EUR 1,000,000), it is no longer the turnover that is taxed, but the profit. Here the tax rate is 16%.
In the case of profit withdrawals (dividends), they can generally expect 5% withholding tax. However, this only applies if it is actually withdrawn. If the profit remains in the company as a reinvestment, no Romanian withholding tax is due.
Various legal changes for micro-enterprises in Romania will come into force on 01.01.2023. We will be happy to advise you, even if you have already founded a company.
Many reasons speak for a company in Romania
In addition to the tax savings, there are numerous other arguments for choosing a location in Romania
- Qualified workforce and low wage costs (minimum wage: from LEI 2,550 / approx. EUR 515 for full-time work)
- Low taxes, rents and real estate prices
- Advantages due to EU membership and over 70 double taxation agreements
- Freedom of establishment and business-friendly company law
- Financial sector, politics, economy and judiciary are stable
- Only 1% or 16% corporate tax (depending on turnover)
- Only 5% withholding tax
- Required share capital: 1 LEI (0.20 EUR)
Before setting up your Romanian business
A rough business plan should be in place. Finally, the branches in which your company will operate must be determined. You may well need to obtain credentials, health certificates, certificates or special attestations. Likewise, you may have to fulfil special requirements.
Together with our tax advisors and our specialist lawyer, we will be happy to check your concept or collection of ideas for feasibility, so that there are no delays after the foundation, when the business starts. We can also work out a complete business plan together with you.
The process of setting up a company (SRL) in Romania
Unfortunately, going to the municipal administration is not enough to set up a company in Romania. Setting up a company in Romania is much more complex.
The essential steps are:
- The company location must be proven (purchase or rent).
- Several proposals for the company name must be submitted.
- The company's activity must be assigned to industry codes.
- A managing director must be named contractually.
- A bank account must be opened.
- The share capital must be paid in (at least 1 LEI / approx. 0.2 EUR).
What you should bear in mind when setting up a company in Romania
You will find many providers on the internet whose prices and services vary considerably. As a rule, setting up a company in Romania is offered from around 800 EUR. However, there are additional, often hidden costs for opening a bank account, the commercial register, VAT ID number, notary and translator. You can therefore expect to pay around 1,500 EUR.
With us you pay a fixed flat rate of 800 EUR for the company formation including all fees and costs !
Whether the foundation of a Romanian company leads to tax savings or becomes a cost-intensive boomerang depends on whether the tax office of your country of origin accepts the overall structure you have built up or not. You alone are liable if your incorporation agency has not checked whether all the legal framework conditions have been complied with.
We only set up companies if we are fully convinced of the concept and the legality !
Pay attention to other costs and follow-up costs
A Romanian company naturally needs a registered office in Romania. We recommend the purchase of a property for various reasons. With an inexpensive renovation property, or a building plot (e.g. with an office container or simple prefabricated building), expensive rents can be saved and converted directly into capital. Especially as this gives you a safe argument against objections from your tax office in your country of origin.
If this is not possible, office space must be rented. Many agencies like to offer this as a "service" and it can quickly cost 100 to 150 EUR per month. Often, however, it is not necessary to have the company headquarters in Bucharest, Sibiu or Cluj-Napoca. Especially not if you do not have any customer traffic or, for example, provide services online.
We provide you with legally compliant office space from 40 EUR per month, commission-free !
Some start-up agencies see company formation as an initial business in order to then earn money with further, often overpriced services. Especially with office rents, tax advice and accounting services. We will gladly put you in touch with our German-speaking tax consultant free of charge.
You are therefore well advised to compare not only the costs of setting up a company, but also the ongoing costs of running the business.