The Limited Liability Company (S.R.L.) is the most common type of legal entity in Romania.
Once the decision to set up a company in Romania has been taken the first step is checking the availability and reserving the company’s name.
A certain set of documents will be then necessary for the company formation in Romania. SRL companies are registered through the local Trade Register Office and will require a series of papers from the shareholders and administrators such as: Articles of Association (required to contain certain information), Affidavits and Specimen Signatures. In case the future shareholders are foreign companies, then the Romanian Trade Register will also require their registration documents for proof of their existence.
If you don’t have the necessary time to come to Romania, the registration of the company can be made online, through a Power of Attorney.
Also, it is required to open a bank account for the subscription of the minimum share capital (around 50 EUR). This, as well, can be set up without your personal presence in Romania.
Moreover, you will need to provide a company office for registration purposes only (virtual office provided by TAS Registration for 6 or 12 months).
The company is considered legal and operational once these steps are complete and the registration documents are issued, including a company registration certificate.
There are some special requirements for foreign citizens who do not have a fiscal or a tax record in Romania. The legislation stipulates the necessity of an Affidavit which certifies that the person is not registered in our country and fulfills all the requirements for being a shareholder or administrator/director. Those requirements are focused on the criminal record and other tax debts to the state budget.
Don’t forget that an individual or another company can be the sole shareholder only in one limited liability company. Of course, they can be associated in several limited liability companies, holding shares together with other associates. Last but not least, it is not possible for a sole shareholder in a limited liability company to be the sole shareholder in another limited liability company.
The major advantage of setting up a SRL is the fact that the shareholders will be liable in case of insolvency only within the limits of the company’s assets and the share capital. The number of associates is limited to 50, which is more than necessary, because most of the limited liability companies don’t have more than 5 shareholders.
Moreover, the versatility of this type of legal form implies a very profitable tax regime, considering that most SRLs benefit from a 16% profit tax replacement with a 3% income tax.
Contact us if you are ready to make the first steps to starting a business in Romania.
