There are seven types of companies in Romania. The most popular among foreign investors is a limited liability company, the so-called “SRL”. A public limited company (SA) is the other popular legal form of company in Romania. Romanian entrepreneurs who earn close to a minimum wage find a sole proprietorship the right form of business.
Company types in Romania – key information.
Among the basic types of companies in Romania, the following groups are worth paying attention to:
- Limited liability company (SRL) – this is one of the most common forms of business in the Romanian economy. With SRL, entrepreneurs have limited liability for the company’s obligations – up to the amount of their personal contribution,
- Public limited company (SA) – a solution beneficial mainly to the largest legal entities. On the one hand, it allows for financing through the issuance of shares, but, on the other hand, it requires numerous formalities and regular publication of financial statements,
- Sole proprietorship (PFA) – the preferred option for the smallest businesses and entrepreneurs whose taxable income is close to a minimum salary in Romania ca 500-600 euro/month.
Types of companies – comparison
The table shows basic information about companies in Romania:
| Company type in Romania | Min. share capital | Min. number of partners | Liability of partners | Taxation of Income | Other taxes |
| General partnership Societate in nume colectiv (SNC) |
– | 2 | Unlimited liability of the trader | PIT: 10% | – |
| Limited liability company (LLC/LTD) Societate cu raspundere limitata (SRL) |
200 RON | 1 | Under the amount of the contribution made | CIT: 16%/Income tax: 1% | Dividend tax: 8% |
| Branch of a foreign enterprise Sucursala | – | – | The parent company (the parent company) is responsible for the liabilities | As for the parent company | As for the parent company |
| Sole proprietorship Persoana fizicaautorizata (PFA) |
– | – | Unlimited liability of the trader | PIT: 10% | 35% Social Security |
| Limited joint-stock partnership Societate in comandita pe actiuni (SCA) | €25,000 | 2 | General partners: joint and several liability, limited partners: liability up to the amount of contributions made | CIT: 16% | Dividend tax: 8% |
| Limited partnership Societate in comandita simpla (SCS) |
– |
2 (1 general partner, 1 limited partner) |
General partners: joint and personal liability, limited partners: liability up to the amount of contributions | CIT: 16% | Dividend tax: 8% |
| Public limited company Societate pe actiuni (SA) |
€25,000 | 2 | Under the amount of the contribution made | CIT: 16% | Dividend tax: 8% |
*The 1% income tax covers micro businesses that employ at least one full-time employee. The reduced rate is intended to encourage more employment.
VAT for Romanian companies has a basic rate of 19% and reduced rates of 9% and 5%. Social security contributions and income tax – for both employees and companies – are paid by the entrepreneur by the 15th of the month following the accounting month. For all types of companies in Romania, the tax on dividends, i.e., the portion of profit paid out to shareholders, is relatively low at just 5%.
In addition, the good news for entrepreneurs doing business in Romania is that some income is exempt from taxation. For example, dividends are tax exempt if they are paid by a Romanian company (or by a company based in Romania) to another Romanian entity that has held at least 10% of the shares in that company for at least 1 year prior to the date of payment. This applies to all types of companies in Romania.
Registering a company in Romania.
Romania’s dynamically developing economy is a an attractive market for domestic and foreign entrepreneurs. If you wish to do business in Romania in the form of a company, its registration in the relevant register is mandatory. The necessary documentation varies depending on the type of company. In order to register a company in Romania, the following steps, among others, must be performed:
- prepare a scan of proof of identity (e.g., ID card),
- fill out a business registration application electronically (via portal: oncr.ro) or on paper,
- draft articles of incorporation that identify, among other things, the members of the board of directors and the president,
- collect specimen signatures of the company’s partners and its proxies,
- prepare information on the tax residency of the partners.
Company Romania helps with registration of any legal form of business in Romania. For more information please see a detailed steps to register a limited company in Romania.
