Site icon TechRound

How To Start A Business In Romania

Romania

Romania, a country in the heart of Europe, is also becoming a popular place for businesses.

However, there’s a lot to consider before setting up a business in Romania. Here, we talk through everything you need to think about before, as well as everything to do during, setting a business up in Romania.

Why Choose Romania?

 

Romania is an appealing destination for foreign entrepreneurs and investors for a number of reasons. Firstly, it is located in the heart of Europe, giving businesses access to the wider continent.

The country also has a corporate tax rate of 16%, beating out many other countries. Additionally, the Romanian government is investing a lot in its startup economy by offering incentives for businesses to come and operate on Romanian soil.

 

Government Incentives

 

Romania has a number of programmes to encourage entrepreneurs into the country. Some of these include:

In addition to this, the country also offers tax breaks for companies and workers that are contributing to sectors like technology, research and development and innovation.

 

Do UK Citizens Need Visas To Start Businesses in Romania?

 

UK citizens that want to start a business in Romania will need the right visas.

Romania has a Long-Stay Visa for Commercial Activities (D/AC), which is designed for non-EU nationals who want to start a business in the country. To get one, entrepreneurs will need proof of a solid business plan, the financials and health insurance.

If a UK citizen is going to work at a company, they will be able to get a work permit, sponsored by the company. Alongside a working visa, anyone looking to live in Romania needs a residence permit, which is renewed every year. It’s important to note that business leaders will need a clean criminal record in order to move to the country.

 

 

How Long Does It Take To Set Up A Business in Romania?

 

If you are planning to register a new business, the entire process can take up to 20 days. Whilst this is slightly longer than in other European countries, it’s still a short enough time to ensure business isn’t disrupted too much.

 

How Much Does It Cost To Set A Business Up In Romania?

 

It will cost around €3,850 to set up a business, but entrepreneurs will also have to pay governmental fees and bank fees. Additionally, if the business structure requires a minimum share capital, this cash will also have to be deposited during incorporation.

 

Taxes in Romania

 

Romania has a flat corporate income tax rate of 16% for resident companies and foreign companies that operate through a permanent establishment. This competitive rate is good for entrepreneurs that want to avoid a heavy tax burden that exists in other countries across Europe.

The standard VAT rate of Romania is currently 19%, although reduced rates can apply to specific services and essential goods. Businesses must register for VAT if their annual turnover exceeds RON 300,000.

Romania also offers a unique feature for smaller businesses which is the micro-tax regime. This means a lower tax rate (either 1% or 3%) on turnover for companies that meet certain criteria, such as having limited annual revenue and employee numbers. This regime can be a major advantage for startups.

 

A Step-by-Step Guide To Starting A Business in Romania

 

Here’s a roadmap to help you set up a business in Romania.

 

Step 1: Choose Your Business Structure

First, you’ll need to work out what type of business you are setting up. Some options include:

 

Step 2: Register The Company Name

Once you decide on the structure, you’ll need to register with the local Trade Registry. This involves submitting 3 names, ranked by most to least preferential. The name will then be selected, which can be used to register the company.

 

Step 3: Prepare Relevant Documents

When you register the company at the Trade Registry, you will need documents like:

You will also need a tax identification number, which you can get at the General Directorate of Public Finance,

 

Step 4: Submit The Documents and Pay The Fees

Once you have your documents together, file them at the National Trade Register Office. You will need to pay an incorporation cost of €3,850, but it’s a good idea to have more money set aside for other costs like accounting, solicitors fees setting up an office and more.

 

Step 5: Open a Bank Account

Once you have your tax identification number, you will be able to open a local bank account. This will allow you to manage your business finances and pay employees or shareholders. This bank account is where you will need to deposit your share capital, and will be used for tax accounting.

 

 

Something To Consider: Employee Law in Romania

 

If you are planning to hire employees for your business in Romania, it’s important to know employee law.

The standard work week in Romania is 40 hours, and working days may have a maximum of 8 hours. There employees are entitled to overtime work and 20 days of annual leave.

The current minimum wage in Romania is RON3,700.00 per month, which works out at around 743.37 Euros. When it comes to parental leave, Romania allows 126 days of maternity leave, which can be split and taken both before and after the expected date.

 

Starting A Business In Romania

 

Setting up a business in Romania can be an amazing opportunity for entrepreneurs. It comes with access to the EU market, easy set-up and competitive tax rates.

By following our guide, you can make sure you’re set to launch a business in Romania and grow your business in one of Eastern Europe’s most exciting economies.

Exit mobile version