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Types of Romanian Companies

by Vlad Cuc

As a general rule, foreign investors do no have to respect any specific investment criteria for company formation in Romania, even though in certain economic sectors a special permit will be required by the local authorities. Our team of Romanian lawyers can provide an extensive presentation on the types of companies that can be registered in this country, and may also assist investors in registering any of the business forms presented below, but also registering them for tax purposes, including for VAT

The registration procedure itself requires the fulfillment of certain legal formalities such as registration with the Trade Registry of Romania and Fiscal Administration (which is actually done automatically by the Trade Register). The incorporation of a company is done by filing the company’s articles of association with the Trade Register.

From the date of registration in the Trade Register, the company will acquire legal personality as a merchant and can therefore commence its economic activity. The Law nr.31/1990, the Romanian law regulating the commercial companies that can be set up here, their formation and the way they ought to conduct their activity, establishes five types of legal entities investors can select if they want to register a Romanian company

The Romanian limited liability company – “Societate cu Raspundere Limitata” (SRL)

The limited liability company in Romania represents the most popular vehicle for starting a Romanian company. It needs a capital of RON 200 and it can be incorporated by minimum one shareholder. The basic characteristic of this company type and the main reason for which it is a very popular vehicle amongst investor is given that the liability of the shareholders towards the company’s debts is limited to their capital participation. 

As we presented above, the minimum share capital for a Romanian limited liability company is of RON 200, which has to be divided into shares that have a value of minimum RON 10. The Romanian LLC can have a maximum of 50 members. The company’s shareholders can have the quality of individuals or corporate bodies. 

A Romanian LLC can have one or more directors, who may have full or limited powers; they can be Romanian or foreign citizens. A director can be appointed for a limited or unlimited period of time. In case the LLC has a sole shareholder, then this shareholder can also be an employee of the respective company (in this case a Labor Agreement must be drafted and filed with the Labor Chamber in Romania). We can help you with the formalities for company formation in Romania.

Register a limited liability company in Romania 

The limited liability company in Romania represents a popular way to develop a business activity in this country due to the fact that investors have numerous advantages, one of them being the fact that the shareholders have limited liability regarding the company’s debts. They will become liable only to the extent of their capital participation, and this can be a major advantage on starting a business, as it represents a way through which an investor is guaranteed to have only few risks. 

Another advantage of this company type is that the investors will not spend a long period of time with the incorporation steps, as the company can be founded in a period of only 3 days, as long as all the documents necessary for this procedure are drafted, signed and completed in accordance with the requirements of each institution. 

The registration procedure of a limited liability company in Romania can be done with the help of our Romanian lawyers, who can help investors in preparing all the required papers. Our lawyers can help businessmen in the process of completing the forms that are necessary for the process of company formation.

Prior to registering the company, businessmen should study the registration steps, in order be sure that they have prepared for each step in accordance with the basic requirements. The basic step when starting a company in Romania is to decide on the legal entity of the company. If the businessmen have decided to open a limited liability company in Romania, the next step will be to propose a trading name. 

Our team of lawyers in Romania can help investors receive legal advice on the law regulation the manner in which businessmen can select suitable trading names but one should know that the main requirement is to have a name that is unique at a national level. 

The trading name should have other characteristics as well, for instance, it must contain the legal entity under which the company operates – meaning, the limited liability company in Romania, or the abbreviation, LLC or SRL (in Romanian). According to the law in Romania, investors are not required to participate in the process of company formation in Romania in person, as they can delegate specialists or Romanian lawyers to represent them. 

This can be done through the power of attorney, a document that stipulates who can represent a party and in what specific situations. The company must also secure a business address, this being a compulsory procedure. Investors have to present a document regarding the types of activities that will be carried out by the company, as well as personal details of the company’s representatives. 

The limited liability company in Romania must have director who can be only a natural person. Please mind that the person who will become the director of the company should comply with certain legal requirements – having at least 18 years old, having a clean criminal record and other similar matters. 

This company type can be registered as a micro-company, which is defined as a business with no employees or with very few employees. If the company qualifies as micro-company, then it will benefit from a set of tax advantages. Here, investors should know that the corporate income tax can be charged at a rate of 1% or 3%, depending on the number of employees (one or more employees, or no employees, respectively). 

This represents a major tax advantage for investors interested in stating a company in Romania, as the standard corporate income tax is charged at a rate of 16%. The lower tax rates were introduced with the purpose of encouraging local and foreign businessmen to start a small business in this country. 

If you need assistance on the tax advantages and obligations that can be appear for a limited liability company in Romania, we invite you to send your inquiries to our Romanian lawyers. Our lawyers have an in-depth expertise in tax matters and can help you in understanding the local tax system and the tax requirements that will be applied to your particular situation. 

Please mind that in Romania there aren’t any taxes that are charged at a regional level or on a county. Thus, the tax system is a uniform one, the taxes paid in Bucharest, the country’s capital city, are the same as the one in any other region or Romanian city

Businesses that work in the gambling industry are required to pay a corporate income tax charged at a rate of 5% from the company’s revenue or at a rate of 16% on the taxable profit. Such companies can’t opt for one of the two tax systems, they will have to pay the tax which will result in a larger tax contribution. 

Below, you can watch a short presentation on the entities available for company formation in Romania: 

The Romanian joint-stock company – “Societate pe Actiuni”

It represents a type of company that can be incorporated by those interested in listing the company on the local stock exchange. The joint stock company in Romania represents the legal entity with the most complex structure. It is generally set up with the purpose of entering important investment projects.

It is especially designed for the needs of large companies. It must be registered by at least two founders, who have the quality of stockholders and it needs a minimum share capital of RON 90,000. The General Assembly of Stockholders represents the most important body of the company. The decisions regarding the company status refer to matters such as: 

  • legal change of the company’s status or the change of the company’s social headquarters;
  • its object of activity and the creation or the dissolution of eventual secondary registered offices;
  • the prolongation of the society duration and the increase of the registered capital;
  • the issuance of new shares, which can increase the company’s capital;
  • any other modification of the articles of association are taken by The General Assembly of Stockholders.

The company can be administrated by a sole administrator or a board of administrators if the administration system is unitary or by a directorship and a board of supervisors if the company is administrated in a dual system of administration; our team of Romanian lawyers can offer more information on the types of administration systems this type of company can have.

The Romanian “collective-name company” (Societatea in Nume Colectiv)


It does not represent a very common type of Romanian entity. This type of company is based on the full trust of the associates. The collective name company must be registered by minimum two founders (known as shareholders). The company’s share capital is comprised of interests and they are not transmissible. The obligations of the company are guaranteed through the assets that it owns. 

When it comes to the share capital of the collective name company, the law does not impose a minimum amount for the share capital, which means that the shareholders are free to determine the amount of the capital according to the needs of the company. The shareholders have, amongst numerous other obligations, the one of not competing with the activities developed by the company. 

Thus, the company’s shareholder is not allowed to be the member of another unlimited liability company registered in the same field of activity. The most important feature of this company is the fact that the shareholders are personally liable for the obligations of the company.

This liability is subsidiary and this means that the creditors of the company will first try and obtain the debt from the company and only if the company does not pay its debt, then the creditors can recover the debt from the shareholders. The shareholders have the following rights:  

  • they have the right to participate at the company’s meetings;
  • they have the right to take management decisions concerning the company;
  • the shareholders are also entitled to receive dividends and use the company’s financial funds;
  • however, the right to use the company’s funds is clearly stated in the company’s statutory documents;
  • provided that the company will be liquidated, the shareholders have the right of receiving the assets with which they have contributed in the company. 

The Romanian “sleeping partnership company” – “Societate in Comandita Simpla”

It is not a very common business form that can be found in Romania. A basic characteristic of this company type is that it needs to be incorporated by two shareholders, who become personally liable for the debts of the company and who are called “comanditati” and the shareholders that are only liable based on the amount of the shared capital that they subscribe, which are called “comanditari”.

The law does not establish a minimum number of shareholders, but it’s mandatory for the company to have at least a shareholder that is personally liable for the company’s debts and another shareholder who is liable only to the amount of his or her participation at the company’s capital.

The company’s decisions have to be established based on the vote of the shareholders, and a decision can be taken in the moment when there is a shareholders’ majority on the respective matter. The company must have administrators who can be only the shareholders that are liable with their own assets for the debts of the company. The company’s interests may be transmitted to other entities, but this can happen only as long as the company’s statutory document mentions the right do to so.  

The Romanian “partnership limited by shares” company – Societatea in Comandita pe Actiuni

Also, this is not a very common way to start a company in Romania. It has numerous similar characteristics with the “sleeping partnership company”, including on matters regarding shareholders, and just like in the case of the “sleeping partnership company”, the company’s shareholders have different types of liability, and this can be presented by our team of lawyers in Romania.

The difference between the two business forms is that this company type bases its capital on stocks. The liability for the company’s obligations is different for the shareholders, thus, there are shareholders that are personally liable for the obligations of the company and they are called ”comanditati”. You can address to our Romanian lawyers if you need more information on the characteristics of this company type and the obligations of the shareholders. 

The other types of shareholders, “comanditari”, are liable for the company’s debts only to the amount with which they have participated at the company’s share capital. This business form must be incorporated with a minimum share capital of RON 90,000 (or its equivalent in EUR, which is EUR 19,042). In the case of this company type, its administration has to be done by the shareholders who are personally liable for any debts the company will have. 

What are the management structures for Romanian joint stock companies?

The Romanian joint stock company can opt for one of the two management systems – the unitary management system or the dual management system. The unitary system is characterized by the fact that the management is established by one (or more) administrators. They have to be organized into a board, created by an odd number of persons. The council has the right to delegate the company’s management to the company’s directors

For those companies whose financial statements are audited, this assignment is compulsory and the minimum number of directors is three. The dualist system is composed by an executive board and a supervisory board, which must have a set of responsibilities.

The directorate ensures the activity and the management of the company and report the Supervisory Board. The Supervisory Board is required to supervise the Executive Board and then to report to the General Assembly of Shareholders. Our team of Romanian lawyers can provide more information on this matter. 

What are the advantages of a Romanian SRL? 

Besides the low value concerning the company’s capital, the Romanian SRL provides further advantages to its founders. Our Romanian law firm can provide an extensive presentation on the characteristics of a local SRL, which can be formed with 100% foreign ownership. The Romanian SRL is also characterized by the following:

  • the company can be incorporated in only few days, as it can benefit from a fast registration procedure; 
  • it can be incorporated by a single shareholder, who can be a foreigner;
  • the investors are not allowed to divide the company’s shares, nor can they sell them to the general public;
  • in the case of a Romanian SRL that has a single shareholder, the founder can only be a natural person; 
  • it is required to have a business address for the local company, this being a compulsory step for the registration of any Romanian business.  

What are the required documents for starting a Romanian SRL? 

All companies types in Romania have a similar registration procedure. The main differences that can appear are generally related to the documents investors have to submit for the company type that they have chosen for company formation in Romania. For the registration of a Romanian SRL, the following documents have to be prepared:

  • the articles of association and the certificate of incorporation, that must be deposited with the National Trade Register Office;
  • in the case in which the company has as shareholders corporate investors, it is necessary to deposit the articles of association of the respective companies;
  • documents issued by the Trade Register Office of the country where the shareholders are tax residents;  
  • a letter of creditworthiness is necessary for the application form, and this is issued by a financial institution;
  • the standard application form and copies of the company’s representatives’ identification documents. 

How many companies are in Romania?

In 2017, Romania registered a total of 525,660 companies. A large share of the businesses operating in Romania were registered in the services sector, as stated by the official data provided by the National Statistics Institute (INS). The services sector in Romania also represents the most important employer. Foreign investors should consider the following: 

  • the services sectors has the largest share of the Romanian active companies, accounting for 46.7% of the total enterprises registered here;
  • it also stands for 35.4% of the total workforce employed in Romania;
  • the total number of Romanian companies – 525,660 – marked an increase of 5% compared to the previous year;
  • the trade sector in Romania accounted for a total of 172,000 companies;
  • 79% of the employees in Bucharest, the country’s capital city, work in the services sector;
  • Bucharest had, at the level of August 2018, a total of more than 1 million employees (the city has a population of more than 2 million citizens). 

Foreign businessmen who want to set up one of the legal entities presented in this article should also know that the country has a total of 73,000 multinational groups of companies operating on the local market. Out of these, only a small percentage are represented by companies founded by Romanian businessmen; more exactly, only 5,300. 

According to the data provided by INS, most of the multinational companies operating on the local market are involved in economic fields such as: manufacturing, construction or trade; our law firm in Romania can offer an extensive presentation on the rules of law regulating these economic sectors. Businessmen can contact our team of Romanian lawyers for more information on the foreign investment legislation applicable here and also for detailed advice on how to register one of the legal entities presented above.