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How to Open a Romanian Micro Company

Question: I would like to open a small company in Romania. What do laywers suggest?

Answer: Apart from most popular forms of limited liability companies and joint stock ones, business people in Romania can also choose to register a micro company, which perfectly suits the needs of a small company pattern. A micro-company is a specific type of limited liability company which distinguishes from other business entities through several particular traits. 

Question: What is the tax regime for a micro company opened in Romania?

Answer: The beginning of 2013 brought several radical changes for the Romanian microenterprises regime; these shifts altered the overall perspective and introduced new regulations which obviously called for a different approach. Up until the end of 2012, Romanian microenterprises had quite a specific fiscal status that generally provided some substantial benefits for taxpayers. Until early 2013, if anyone had been interested to open a Romanian micro company, he would have enjoyed the optional taxation regime applying to these types of companies. This functioned as an advantageous feature and guaranteed the opportunity to pick from two different fiscal alternatives, the owner of the business could either pay 3% of the income or the regular 16% of the profit, as any normal Romanian company.

Nowadays, if willing to open a Romanian micro company, everyone should be aware of the significant changes that took place at the taxation level. 

According to the draft government ordinance amending and supplementing the Law No. 571/2003 concerning the Fiscal Code, Romanian microenterprises possess a lower annual threshold of 65,000 Euros, as opposed to the previous one which was of 100,000 Euros.

The condition of having between one and nine employees was also excluded. 

The Romanian microenterprises falling within these stipulations on 31st of December 2012, would have no optional choice of tax, it will be necessary to apply taxation on income. Companies paying the profit tax must adhere to the income tax in the next fiscal year, only if qualifying for the micro-companies regime. 

The recent changes regarding the process of micro company registration in Romania, reveal that micro enterprises with incomes between 65,001 Euros and 100,000 Euros, which have already opted for the income tax dictated by the regulation in force, will keep this tax regime for 2013, until the entry into force of the new amendments to the ordinance.

Question: What are the characteristics of a Romanian microentreprise?

Answer: The former basic provisions imposed by the process of micro company registration in Romania clearly pointed several distinct aspects.

First of all, and probably the most prominent trait of this business entity regarded the annual income limit which was under 100,000 Euros. Another condition which had to be fulfilled in order to open a Romanian micro company concerned the number of employees that had to be between one and nine.

The share capital had to belong to other entities, but not the state or the local authorities. Businesses covering the banking, insurance, gambling or the capital markets field were not qualified for this scheme.

Another stipulation regarded the fact that the Romanian microenterprises could not have their social capital owned by a shareholder/associate who had over 250 employees. These were the most important particularities describing this specific class of companies until the beginning of 2013.

These continuous transformations of the Romanian legal system obviously generate confusions that might evolve into future financial insecurities. Through our expert lawyers from Bucharest, we have always tried to minimize these possibilities of business failure, by skillfully advising our clients in their best interests. Our team is able to provide all necessary help and assistance all along the process of micro company registration in Romania, indicating most appropriate financial alternatives and guiding you to safer investing. Call us now for a free consultation, we are here to help.

by Cristian Darie

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