Why should I open a business in Romania in 2023?

All investors have the same question: why should i open a business in Romania in 2023? Romania Company is ready to provide the answer and explain the reasons why Romania is one of the best countries to invest in 2023.

Why should i open a business in Romania in 2023?

Romania is a country located in southeastern Europe, bordered by Ukraine, Moldova, Bulgaria, Serbia, and Hungary. It has a population of approximately 19.5 million people and its capital and largest city is Bucharest. Romania is known for its rich history, stunning landscapes, and vibrant culture.

The country’s economy is the seventh largest in the European Union, with a focus on manufacturing, agriculture, and services. Romania has a well-educated workforce, with a high level of technical and language skills, making it an attractive location for foreign investment. The country is also home to a number of historic and cultural landmarks, including medieval castles, fortified churches, and painted monasteries.

Despite its many strengths, Romania faces some challenges, including corruption, bureaucracy, and a lack of infrastructure in certain regions. However, the government is working to address these issues and improve the business climate.

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Romania Company has worked in the consulting business for over 18 years. Contact us today to find out how we can assist you with the incorporation of your Romanian company, right through the business, fiscal, and licensing matters.

What are the main reasons to incorporate in Romania?

There are several reasons why you might consider opening a business in Romania:

Favorable business environment: Romania has made significant improvements in its business environment in recent years, including simplifying its tax system, reducing bureaucracy, and promoting entrepreneurship.
Strategic location: The country is strategically located in Southeastern Europe, with access to the EU market, the Balkans, and the Middle East.
Skilled workforce: Romania has a well-educated and skilled workforce, particularly in areas such as IT, engineering, and manufacturing.
Low labor costs: Labor costs are lower than in many other EU countries, making it an attractive destination for businesses looking to reduce their labor costs.
Strong economic growth: In recent year, Romania has experienced a steady strong economic growth, with a growing middle class and an expanding consumer market.
EU membership: Romania is a member of the European Union, which provides access to the EU market, as well as EU funding and support for businesses.
Support for entrepreneurship: The Romanian government offers various incentives and support programs for entrepreneurs and small businesses, including tax incentives, grants, and access to financing.

Overall, Romania can be a good destination for starting a business due to its favorable business environment, strategic location, skilled workforce, low labor costs, strong economic growth, EU membership, and support for entrepreneurship.

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What is the Corporate tax regime in Romania?

In Romania, the corporate tax rate is 16%. This rate applies to the taxable profit of companies, which is calculated as the difference between their revenues and deductible expenses.

In addition to the standard corporate tax rate, there is also a tax on micro-enterprises, which applies to companies with an annual turnover of up to 500,000 Euro. Starting with January 2023, Micro-enterprises can choose to pay either a flat tax of 1% on their turnover or a profit tax of 16% on their taxable profit.

There are also several tax incentives and deductions available to businesses in Romania. For example, companies can deduct the cost of research and development activities, as well as the cost of investments in certain types of equipment and machinery.

It’s worth noting that Romania has a Value Added Tax (VAT) system, which is set at a standard rate of 19%. Businesses must register for VAT if their annual turnover exceeds a certain threshold, which is currently set at 250,000 RON.

Overall, Romania’s corporate tax regime is relatively simple and competitive, with a low corporate tax rate and a number of tax incentives and deductions available to businesses. However, like any tax system, it can be complex and businesses should seek professional advice to ensure compliance with local regulations.

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What is the best city to incorporate in Romania?

The best city to incorporate a company in Romania depends on several factors, including the type of business, industry, and location preferences. Here are some of the top cities for incorporating a company in Romania:

Bucharest: As the capital city of Romania, Bucharest is the country’s largest and most important economic center. It is home to a range of industries, including finance, IT, and manufacturing, making it an attractive location for businesses. Bucharest also has a well-developed infrastructure and a large pool of skilled labor.
Cluj-Napoca: Cluj-Napoca is located in the northwestern part of Romania and is known as the country’s IT hub. It has a thriving tech industry and is home to a number of universities, providing access to a highly educated workforce.
Timisoara: Timisoara is located in western Romania, near the border with Hungary and Serbia. It is known for its strong manufacturing industry, particularly in the automotive sector. Timisoara also has a well-developed infrastructure and a highly skilled workforce.
Iasi: Iasi is located in northeastern Romania and is home to a range of industries, including IT, manufacturing, and services. It is also home to a number of universities, providing access to a highly educated workforce.
Constanta: Constanta is located on the Black Sea coast and is Romania’s largest seaport. It is an important hub for shipping and logistics, and is also home to a range of industries, including manufacturing and services.

We recommend to conduct thorough research and seek professional advice before making a decision.

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What is the best activity to start in Romania?

While selecting the best activity to start in Romania depends on several factors, including market demand, available resources, and personal interests, we suggest some of the most promising sectors for investment and incorporation in Romania:

Information technology: Romania has a growing IT sector and is home to a number of startups and established companies, particularly in software development, e-commerce, and mobile applications.
Manufacturing: Romania has a strong manufacturing industry, particularly in the automotive, machinery, and textiles sectors. The country’s low labor costs and skilled workforce make it an attractive location for manufacturing businesses.
Agriculture: Romania has a fertile agricultural sector, with a wide range of crops and livestock. The country also has a growing organic farming sector, with increasing demand for organic products both domestically and internationally.
Tourism: Romania has a rich cultural and natural heritage, including medieval castles, fortified churches, and stunning landscapes. The country’s tourism industry has been growing in recent years, particularly in rural areas, and there are opportunities for investment in hospitality, tourism services, and transportation.
Renewable energy: Romania has made significant progress in developing its renewable energy sector, particularly in wind and solar power. The country’s abundant natural resources and government incentives make it an attractive location for investment in renewable energy projects.

Before you start, we suggest running a market research and seek professional consulting before making a decision.

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What is the easiest and fastest incorporation process in Romania?

The process of incorporating a company in Romania involves the following steps:

Choose a legal form: The first step in incorporating a company in Romania is to choose the legal form of the company. The most common legal forms are a limited liability company (SRL), joint-stock company (SA), and sole proprietorship.
Name reservation: The next step is to reserve a name for the company. The name must be unique and not already in use by another company in Romania.
Draft the Articles of Incorporation: The Articles of Incorporation are the legal document that sets out the company’s name, legal form, registered office, share capital, and management structure.
Deposit the share capital: The share capital of the company must be deposited in a bank account and a certificate of deposit must be obtained.
Register with the Trade Register: The company must be registered with the Trade Register in the jurisdiction where it will have its registered office. The registration must be accompanied by the Articles of Incorporation, the certificate of share capital deposit, and other supporting documents.
Obtain tax registration: The company must obtain tax registration with the relevant tax authorities. This includes registering for VAT if the company’s turnover exceeds the threshold.
Obtain other necessary permits and licenses: Depending on the nature of the business, the company may need to obtain additional permits and licenses from various authorities.

The process of incorporating a company in Romania is relatively straightforward and can be completed within a week. However, it’s recommended to seek professional advice to ensure compliance with local regulations and requirements.

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What is the incorporation Cost in Romania?

The cost of incorporating a company in Romania can depend on several factors, such as the legal form of the company, the amount of share capital required, and the services required from professionals, such as lawyers or accountants. Here are some of the main costs to consider:

Legal fees: Legal fees can vary depending on the complexity of the Articles of Incorporation and the level of service required from a lawyer. Generally, legal fees can range from 500-1,500 EUR.
Share capital: The share capital required to incorporate a company in Romania varies depending on the legal form of the company. For a limited liability company (SRL), the minimum share capital required was 200 RON (approximately 40 EUR). Since january, there is minimum share capital required. For a joint-stock company (SA), the minimum share capital required is 25,000 EUR).
Trade Register fees: The Trade Register charges a fee for the registration of a company, which varies depending on the legal form of the company and the jurisdiction where the company is registered. The fee can range from 200-400 EUR.
Notary fees: Notary fees may be required for certain aspects of the incorporation process, such as certifying the Articles of Incorporation. Notary fees can range from 50-200 EUR.
Other fees: Other fees may be required for obtaining tax registration, permits, and licenses, depending on the nature of the business. These fees can vary depending on the specific requirements of the business.

The cost of incorporating a company in Romania can range from a few hundred euros to several thousand euros, depending on the factors mentioned above. We recommend to seek professional advice to get an accurate estimate of the costs involved.

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Why should I open a business in Romania in 2023?