Romania is one of the leading markets in Europe when we refer to the IT sector and other industries, which has been encouraged by the local authorities in a variety of ways, including with various tax exemptions that are generally applicable to other economic sectors.
Our law firm in Romania can present the main types of taxes that are imposed to local businesses, as well as the tax exemptions that can be applied to specific economic activities.
| Quick Facts | |
|---|---|
| Why open a startup in Romania |
– numerous IT specialists, – tax deductions for IT employees, – corporate tax below the European average, – many IT hubs (the most important are located in Bucharest and Cluj), – incentives for reaseach and development, – stategic location, – highly competitive internet connectivity |
|
Procedure to open a startup |
A Romanian startup is registered following the standard incorporation procedure (selecting a legal entity, preparing the incorporation documents, registering with the National Trade Register Office, obtaining business permits, renting an office space, opening a corporate bank account). |
|
The most suitable business form for a startup |
– the limited liability company (societate cu raspundere limitata), – the SRL-D (the limited liability company – debutant), – the joint stock company (societate pe actiuni) for those who have a large capital available and want to set up a large company. |
| Where to register the startup |
The Romanian startup must be registered with the National Trade Register Office (Oficiul National al Registrului Comertului), the National Agency for Fiscal Administration (Agentia Nationala de Administrare Fiscala) and other competent institutions. |
| Documents to submit for the registration |
– the document showing the reserved company name, – the company’s statutory documents, – evidence on a business address in Romania, – the application form, – the list with the company’s activities, – the list with the company’s members and their capital participation, – identity documents of the shareholders, etc. |
| Requirement to have a registered office (yes/no) | Yes |
| Best locations to open a startup in Romania | Bucharest and Cluj Napoca |
| Why select Cluj for opening a startup |
1 in 11 people in Cluj work in the IT industry, the city provides numerous IT hubs and accelerators and it is the home of 1,300 IT related companies. |
| Why open a startup in Bucharest |
Bucharest provides access to the largest talent pool in the country, it has very good internet speed and internet penetration, highly developed IT sector with a growing startup community, and it is also one of the top capitals in the Eastern Europe region for IT. |
| Startup programs in Romania |
– Startup Nation, – Romania Startup Plus |
| Options for a registered office in Romania | A local business can purchase or rent an office space or select the services of a virtual office. |
| Basic tax incentives for startup companies |
– 1% or 3% corporate income tax for companies qualifying as micro-companies, – tax exemption on the salaries of IT employees, – tax deduction on the corporate income tax for eligible expenses invested in research and development |
| Taxes charged to startup companies |
Startup companies must pay the same taxes as regular companies (with the exemption of applicable tax deductions/exemptions), such as the VAT, social security contributions, tax on income, etc. |
| Number of tech talents in Romania | Romania has more than 100,000 IT specialists |
| Legal services after completing the process of company formation in Romania |
A Romanian startup can address to our team for drafting and signing employment contracts, business agreements and contracts, for tax consultancy, accounting and assistance on any other aspect of the commercial law. |
Considering the benefits, numerous entrepreneurs were encouraged to open a startup in Romania, which is a type of company incorporated following the standard registration procedure, but which has as a particularity the fact that it invests in developing a high-tech product or service that can be used in the financial, medical, banking sectors and basically, in any other sector that can benefit from the usage of technology.
It must be noted that those who want to open a startup in Romania can participate in various programs created by the local authorities with the purpose of accelerating the development of the respective startups. For advice on the steps one should take in order to open a startup in Romania, you may address to our team of Romanian lawyers.
Table of Contents
How can an investor open a startup in Romania?
In order to open a startup in Romania, a local or foreign investor must follow the basic incorporation steps that are prescribed by the Romanian commercial law. For this purpose, one must select a company type and our Romanian lawyers can help you select a suitable business form.
In Romania, there are several types of legal entities available for incorporation, company types that one can incorporate in other European countries as well.
However, in most cases, investors will prefer to register a limited liability company or a private limited company-debutant (SRL-D). The latter resembles the standard limited liability company and it was created with the purpose of helping young persons enter the business environment. Our team of lawyers in Romania can present the advantages of the SRL-D.
Regardless of the company type selected for incorporation, one will need to register it with the local institutions, such as the National Trade Register Office and the National Agency for Fiscal Administration. Some of the basic steps applicable for those who want to open a startup in Romania are presented below:
- complete the application for incorporation and the application form for the fiscal registration;
- provide a document stating that the applicants have reserved a suitable company name;
- prepare the company’s statutory documents – the articles of association;
- have a registered office, as well as evidence on the fact that the company’s representatives have the right of using the respective office;
- present evidence that the company’s founders have paid their contributions to the company’s capital.
The above mentioned documents represent only a part of the papers one should prepare when opening a startup in Romania. Investors should present their personal identity documents and the identity documents of the company’s administrators, the specimen signatures of the company’s representatives and others.
For a complete list of the documents that must be presented upon the incorporation of a local company, you can address our Romanian law firm. You can watch below a short presentation on how to set up a startup in Romania:
Documentation attesting the company’s office
Concerning the company’s office, it is legally required to add to the registration file various documents that attest that the business has the right to use the respective office space. This obligation is imposed to all types of businesses, including IT companies, irrespective of their location in Romania. For instance, Cluj startups need to comply with the same requirements available for startups located in Iasi or Bucharest.
Below, our attorneys in Romania have listed some of the documents that are accepted as proof of having an office space:
- an excerpt issued by the land record register (please mind that its validity date is important – the document should not be older than 30 days at the moment when it is added to the registration file);
- a purchase agreement;
- a donation contract (the original document is required);
- a lease agreement;
- a sub-lease agreement;
- an usufruct agreement;
- a Legal Agreement with a Romanian lawyer proving their address could be used as registered office (can be supplied by our Law Office).
For a complete list, as well as for full assistance on other aspects that should be taken into consideration by those who open a startup in Romania, our Romanian lawyers remain at your disposal.
What are the characteristics of a limited liability company in Romania?
Most businesses in Romania are incorporated as limited liability companies, as this company type is ideally suited for the needs of small and medium-sized enterprises, which represent the majority of companies incorporated here.
The same is true for the IT industry and this is why, in the list below, we have gathered some of the traits of this legal entity, known in Romanian as societate cu răspundere limitată (SRL):
- the investors do not have to subscribe a minimum share capital, as there aren’t any requirements in place;
- one major advantage of the structure, and a reason for which investors prefer this business form, is that the shareholders aren’t personally liable for the debts of the company (their liability is limited to their capital participation);
- the process of company formation in Romania can be completed by a single shareholder;
- however, there is a limit to the number of founders that can associate in a SRL (or LLC), which is 50.
Provided that the investors plan to open a startup in Romania that needs the association of more than 50 founders, they will need to incorporate a joint stock company.
Why open a startup in Romania?
Although Romania is not as developed as the Western European countries are, it has become one of the most attractive countries in its region for investing in the startup market and the IT sector.
Currently, Bucharest and Cluj Napoca are the cities with the highest number of startups, startup events, business accelerators and other advantages. Below, you can find some of the top reasons for opening a startup in Romania:
- Romania has 11th best broadband internet speed at a global level;
- Cluj Napoca is the home of approximately 15,000 IT specialists and it has approximately 1,300 IT businesses, many of which are registered as Cluj startups;
- Bucharest has more than 260 startup businesses;
- Bucharest ranks as the 10th IT hub at a European level and the 4th in the Eastern Europe;
- another reason to open a startup in Romania is given by the fact that the country has approximately 250,000 tech talent, a number which is similar with several Western countries that have a much larger population.
Our Romanian lawyers can provide step-to-step legal representation in the registration of a startup business. Of course, you can rely on our team for legal representation if you want to open a business in Romania in other sectors.
Although the incorporation procedure is the same for all business sectors, there can appear minor differences based on the business activity or the company type.
For instance, the company set up in Romania can be different in the case of the registration of a sole trader and the registration of a joint stock company, as the first one needs only basic formalities, compared to the latter, which is the most complex business form available here.
Then, depending on the industry, our Romanian lawyers will need to address different institutions for obtaining approvals and business permits. We invite you to address our lawyers for any other legal services, such as immigration for business purposes, signing contracts with other companies, registering for VAT as an international seller, etc.
Our law firm can also assist foreigners who want to buy land in Romania, a procedure which is now limited to foreigners, as per the latest applicable law on buying/selling land.
We invite you to contact our law firm in Romania for advice on the business licenses and permits one may need when opening a startup. Our Romanian lawyers can present any additional information related to this subject and can help investors with professional legal assistance on any procedures that may be imposed to those who set up a startup in Romania.