Need to register a new company in Romania?
The company formation procedures in Romania are not straightforward, as the Romanian legislation is generally requiring a long list of conditions to be fulfilled, and documentation to prepare. The long list of paperwork and the complex procedure is what makes things difficult when embarking on the journey of a Romanian startup.
In this article we’re explaining a short list of most important aspects you should know for setting up a new company in Romania. Aspects such as: what type of company is most frequently used, do I need a physical address for the company, etc. Feel free to contribute to our article (by leaving a comment below) if you have some practical experience in this area.
Now let’s dive into details.
Who can start a company in Romania?
As per the Romanian company incorporation law, anyone can start a company in Romania, irrespective of their nationality. Both EU or non-EU citizens are allowed to set up a business in Romania. Of course, depending on the foreigner’s specific situation, or on the position of the foreigner in the future company, additional documents may be required by the authorities.
The foreign citizen who wants to be shareholder in the Romanian company doesn’t need to have a residency permit for Romania, or any other type of legal right of stay in Romania.
What type of company is most commonly used?
Most common type of company that is used under the Romanian laws is the limited liability company (in Romanian: “societate cu răspundere limitată” or simply put: SRL). Compared to other types, the limited liability company is much easier to set up, as you need to fulfill less conditions than in the case of, for example, a joint stock company (in Romanian: “societate pe acțiuni”). The conditions a SRL must fulfill under the applicable laws are most flexible. More exactly, we believe the main advantages are:
- Limited share capital requirements: minimum share capital shareholders must contribute at the registration is 200 LEI (this is approximately 40 euros)
- Shareholders are liable only within the limit of the share capital contributed to the company
- Better flexibility in administration requirements: no minimum or maximum percentage of capital per shareholder
- Option to contribute capital in money, but also in assets.
What aspects should I think about before I register a new company?
Main aspects you should clarify and decide prior to starting the incorporation of the company are:
Decide on the type of legal entity that would match your business needs:
Most commonly used types of vehicles for carrying out business activities in Romania are the limited liability company (SRL) and the joint stock company (SA). There are also some other types that are worth investigating, such as: company limited by shares (SCA), general partnership (SNC), limited partnership (SCS). Also, if you already own a company abroad, you may rather not register a new company in Romania, but only set up a branch of your foreign company.
Decide on future shareholders and director/s of the company:
This is an important detail that must be reflected in the articles of incorporation. Also, you should decide if any legal entity will be named as shareholder of the new company. The maximum number of shareholders (individuals or legal entities) that a company may have is 50.
Choose at least 3 alternatives for the company’s name:
The 3 alternatives will have to be selected in a preferential order. Each of them will be checked against the name availability with the Trade Register Office. Depending on this, a name will be reserved, and the reservation will be valid for 3 months. During this time, the registration file will have to be submitted with the Trade Register Office.
Decide on the location of the company’s headquarters:
The new company must have a registration address, which will act as its headquarters. For this purpose, your disposal over the location must be proved with a lease agreement or ownership documents over the place.
As alternative, the company’s address can also be temporarily hosted into an attorney’s office. But the period for which you can host in an attorney’s office is limited to 12 months. After this period you are obliged to move the headquarters to a real address.
Select the company’s main business activities and also the secondary ones:
This is an important detail that must be also reflected in the acts of incorporation of your company. As per Romanian laws, the business activities that a company may carry out are classified under official registration codes, specific for each industry and branch of industry. Thus, the classification codes related to your economic activities must be reflected in the incorporation deeds of the company.
What is the right path for setting up a company in Romania as an expat?
If you are an expat already living in Romania and want to start your own business in Romania, there is definitely a certain standard recommended path to follow. Our lawyers, having an experience of more than 10 years in company set-up matters, have shared this below. This is really valuable recommendation, as it helps you streamline the process as much as possible, avoiding waste of time, money and energy. Here are the recommended steps:
- Reserve the company’s name with the Romanian Registry of Commerce
- Prepare and sign the company’s deeds of incorporation (taking into account the details explained above)
- Open the company’s bank account and transfer the company’s social capital into the account
- Find a future physical address for the company, and sign the rental/lease agreement
- Prepare and sign the other required documents, such as: sample of signature for the director, and other required statements (many of them must be authentified by a notary)
- Register the company set-up application file to the Romanian Registry of Commerce
Once step 6 is finalized, your company will be ready for business in approximately 3 to 5 business days. Wish you success in your Romanian entrepreneurial plans!