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Formation of a Romanian commercial company

                       The following criteria and conditions of formation and operation  of Romanian commercial companies are regulated by the Romanian laws

  a. Structure

                        99% percent of  Romanian commercial companies are  registered under the form of SRL ( more similar with Ltd in England, Gmbh in Germany,  SARL in France or SRL in Italy) or under the form of  SA (more similar with PLC in England,  SG in Germany, SA in France and Italy)

                        The law accepts  three other types but they are not used practically

b. Registration

                        The registration of a Romanian commercial company is made at the Romanian Register of Commerce. The registration is regulated  by the law 26/1990 together with the post amendments

                        A Romanian commercial company has to register itself at the Internal Revenue Service in order to receive a fiscal code number

c. Activities

                        Romanian companies may only be involved in commercial and service activities-i.e. production, construction, services, trade and import-export activities. For special  activities  there is a need for  prior approval

d. Employment

                        Romanian commercial companies can only employ Romanian  persons. For foreign employees they must obtain a  “work permit”. In the absence of such permit, a foreign citizen can not be employed by a local company

e. Ownership

                        Romanian law allows foreign entities (corporate bodies or individuals) to be shareholders of  Romanian commercial companies

                          One shareholder of the company is allowed for an SRL. He can be of any nationality and there is no  need to be resident  in Romania. The minimum number of  shareholders in a joint stock company is five

f. Directors

                           The directors of a Romanian commercial company can be of any nationality and resident anywhere  in the world .They can be an individual or a corporate body. If  a  corporate body there is a need to name an individual person  as representative.There is not  need for a company secretary

g. Financing - Bank Account

                           Romanian commercial companies must use exclusively accounts opened at a  resident bank. However, the Romanian commercial company may open bank accounts abroad only in special circumstances and only with the prior approval of the Romanian Central Bank  

h. Registered office.

                        The company has to have a registered office. There is no  need for a registered  agent  

i.  The Tax

                         The rate of   corporate tax is 25%.

                         For companies which obtain  profit from export activities, the tax is only 5%.

                         For companies that invests in special areas , the profit can be 0% for up to 10 years

                         Dividend withdrawn from a Romanian commercial company is taxable usually at 5 %

j.  V.A.T.

                         Practically, every Romanian commercial company is subject to Value Added Tax

                    The standard rate is 19 % but can be lower or even exempt for some products

k. Accounts

                         Balance sheets have to be filed with the Internal Revenue Service twice a year.

                         However, a dormant company may only issue a statement of “no activity” instead of filing  balance sheets.