Romania Info
Joined: 20 Apr 2007
Posts: 17
Home Country: romania
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 Posted: Mon May 28, 2007 10:21 am Post subject: DOING BUSINESS IN ROMANIA / ROMANIA BUSINESS GUIDE |
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DOING BUSINESS IN ROMANIA
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Societate cu rãspundere limitatã - Limited Liability Company
Minimum Capital Requirement: 2,000,000
City: Bucharest
Registration Requirements:
Procedure 1. Obtain a certificate from the Trade Registry proving the availability of the proposed company name and make a reservation of the name.
Time to complete: 1 day
Cost to complete: RON 44
Comment: The certificate obtained is valid for a period of 3 months.
Procedure 2. Deposit funds in a bank; obtain a document confirming bank deposit of sufficient funds.
Time to complete: 1 day
Cost to complete: bank commission ranges from zero to 0.5% of capital.
Procedure 3. Obtain a certificate of fiscal record from the company associates and the legal representatives from the public finance department of municipality.
Time to complete: 5 days
Cost to complete: RON 50 for standard process, 20 for expedite process
Comment: Companies are required to apply for the certificate from general department for public finances of the respective county or Bucharest municipality, in which the tax payer has its domicile, residence or registered office. The certificate is only valid for 15 days. The procedure takes from 10 working days for the standard process and 5 working days for emergency
Procedure 4. Register with the Unique Office (Biroul Unic) of trade registry Registrul Comertului (BASC), Bucharest Tribunal. Also obtain court registration, publication of notice, and registration for statistical purposes and social security.
Time to complete: 3 days
Cost to complete: RON36.6 (stamp duty) + RON120 (registration fee) + RON 30 for each mandatory element of the basic information of the company to be registered, such as social capital, firm, associates, administrators, headquarters, main object of activity + RON 85/32 lines publication fee in the Romanian Official Gazette + RON 30 for filing with the Trade Registry + RON 39.,5 liquidation fund fee + RON 10 for obtaining the Single Registration Code.
Comment: The registration certificate also comprises the unique code of fiscal registration, granted by the Ministry of Public Finances The issuing of the code of fiscal registration attests if that the respective commercial company is recorded as payer of the value added tax, corporate tax and income tax. To obtain the unique code of registration, the data contained in the registration request are transmitted per officio to the Ministry of Public Finances; based on the data mentioned above, the Ministry of Public Finances grants the unique code of registration within 8 hours. According to the law, together with the performance of the registration, an excerpt of the certificate of the appointed judge is sent, per officio, to the Regie autonome (Official Gazette) for publication in the Official Gazette, part IV.
New time limits that expedite the incorporation process have recently been put in place through Law 359/2004 regarding the registration procedures with the Trade Registry and for tax purposes of individuals, family partnerships and legal entities and the authorisation procedure for legal entities (in force starting October 12, 2004) and its subsequent amendment through Government Emergency Ordinance 75/2004. The registration certificate of registration is issued within 3 days.
With respect to the process of authorising the company's activities, only an affidavit form (Rom. "Declaratie-tip pe propria raspundere") duly signed by the shareholders/associates or directors, stating, as the case may be, that the company: (i) will not carry out any of its declared activities at its main or secondary headquarters for a period of maximum 3 years; or (ii) is in conformity with the legal operating requirements prescribed by the specific legislation for its contemplated object of activity, will have to be submitted. Based on the affidavit form, the Trade Registry Single Office (Rom. "Biroul Unic din cadrul Registrului Comertului"), issues a certificate of status (Rom. "Certificat constatator"), accompanying the certificate of registration or, in case of a change in the declared object of activity, the certificate of entries (Rom. "Certificat de mentiuni"). This certificate of status replaces the appendix to the certificate of registration that used to list all the required operating permits.
The affidavit forms mentioned above are transmitted by the Trade Registry to the competent public authorities within 3 days as from the company registration, in order for the said authorities to verify the conformity of the affidavit forms content. Should the competent authorities acknowledge that the legal operating requirements are not accomplished, they grant to the company a period within which the company is compelled to remedy the respective irregularities.
Prior to registration, companies are required to obtain the approval of neighbours to use a leased office or apartment as a registered headquarters for a company -- even if the company is merely a holding company that conducts no active business.
Guidelines of legal documents concerning the registration and authorisation of commercial companies and the registration of the amendments brought to their constitutive acts are available at http://www.onrc.ro/romana/formalitati.php.
Procedure 5. Register the employees contracts with the Territorial Labour Inspectorate (TLI).
Time to complete: 1 day
Cost to complete: no charge
Comment: Each individual work contract must be registered with the Territorial Labour Inspectorate within 20 days from its conclusion. Labour booklets (Rom. Carnet de Munca) are still used as the main employee's official document which indicates the duration of employment, seniority with one employer, seniority in the same position/specialty, base salary history and other relevant information of each employee. It is kept and filled by the Territorial Labour Inspectorate, which will charge the employer a fee of 0.75% of the monthly salaries fund (the total aggregate amount of employees' gross salaries).
FORMS OF BUSINESS ORGANISATION
1. Limited liability company
2. Joint stock company
The limited liability company (SRL) is the most frequently used form of entity primarily because it is the easiest to operate and can have a single shareholder. Other forms of business organisation are the general partnership, limited partnership, limited partnership with shares, silent partnership, sole proprietorship, family association and branch of a foreign company.
Family associations and sole proprietorships are not available to foreign investors and it is difficult for foreigners to operate in partnerships in Romania.
TAXATION
Corporate tax
Taxation rate: 16%
Resident companies are taxed on their worldwide income; non-resident companies are taxed only on Romanian-source income. A company is resident if incorporated under Romanian law or if its place of effective management is in Romania. Small companies, defined as companies with between one and nine employees and a turnover under €100,000, are taxed at a 3% rate on income, with the exception of companies that derive more than 50% of their income from consultancy and management services.
General partnerships, limited partnerships and partnerships limited by shares are considered legal persons in Romania and corporate tax is charged at the entity level.
Dividends paid to resident corporate and individual shareholders are subject to a final 10% withholding tax.
Individual tax
Taxation rate: 16%
Resident individuals are taxed on their worldwide income; non-residents are taxed only on Romanian-source income. A taxpayer whose domicile or centre of vital interests is in Romania, or who is present in Romania for 183 days in a 12-month period, is considered to be resident. The income of individuals is taxed at a rate of 16%. Dividends and interest paid to resident individuals are subject to a 10% final withholding tax.
Capital gains
Taxed as income
Capital gains are generally taxed as income.
Indirect tax
VAT standard rate: 19%
Value-added tax (VAT) applies to most transactions. The standard rate of VAT is 19% and a reduced rate of 9% applies to books, newspapers, medicines and hotel services. Exports are zero-rated. Exemptions include medical, educational, social, financial and banking services.
Registration is compulsory for businesses with an annual taxable turnover above RON 120,000, but voluntary registration is possible below this level. Non-EU suppliers must appoint a VAT representative in Romania and the EU suppliers should register for VAT purposes, unless the reverse-charge mechanism applies to the transaction.
The Romanian VAT legislation has been harmonised with the provision of the EU VAT Directive starting January 2007.
Tax administration and compliance
Tax year: Calendar year
Companies must submit quarterly tax returns and a final return at the time of filing the financial statements. Quarterly payments of tax are due based on current results, and a final payment of tax is due at the time the financial statements are filed.
Employment income is taxed by withholding. Individual taxpayers with income other than employment income must submit a tax return by May 15th following the end of the tax year. The final return is payable within 60 days of the issue of an assessment notice.
Additional tax information
Withholding taxes: Dividends, Interest and Royalties 16% (10% on interest on savings). Rates may be reduced under the provisions of an applicable tax treaty or under an EC Directive.
Tax treaties: Romania has concluded more than 70 double-tax treaties.
Dividends: Dividends paid to resident companies and individuals are subject to a 10% final withholding tax.
Revenue protection: There is transfer-pricing and thin-capitalisation legislation.
Groups: VAT grouping.
Incentives: Qualifying direct investments.
Other taxes: Customs duties, Inheritance tax, Oil tax, Real estate tax. |
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