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How to Set up a Company Branch in Romania

Question: What is the legal status of a branch set up in Romania?

Answer: The branch functions as a division of a parent company and, according to Law no. 105/1992 on the Regulation of the Private International Law Relationship, it is governed by the national law in the country of origin. 

The branch opened in Romania has no legal personality or independence, it has no individual prerogatives. It represents a secondary office which performs a set of actions dictated by the mother company.

If willing to open company branch Romania, you should be aware of the fact that the main company is always responsible and liable for employees and creditors. A branch works as an instrument through which a certain business can extend its actions.

Question: I am interested in extanding my company in Romania, what are the required steps in order to open a branch in your country?

Answer: In order to set up Romanian branch, you have to follow the same steps as those mentioned for the subsidiary but, there is no need to establish incorporation statutes. The documents required to incorporate branch Romania include:

• a certified copy of the articles of incorporation of the parent company;
• evidence of registration of the parent company in its country of origin;
• documentation indicating the company's solvency;

The next step to open a company branch in Romania is the registration with the local bureau of the National Trade Register Office.

Question: We are a farmaceutical company from Israel looking forward to entering the Romanian market. Yet, we do not know whether to start a branch or a subsidiary. Can you explain the main differences, please?

Answer: When deciding to incorporate a branch in Romania,you may also consider the main differences between a subsidiary and a branch:

• While a subsidiary has a legal personality and is considered a Romanian entity, the branch is just an extension of the parent company and therefore has no legal personality and no independence.
• The branch has no separate status from the foreign company itself but, a Romanian subsidiary of a foreign company is a Romanian legal person and, consequently, it is subject to Romanian laws.

Please do not let any legal matters stand in the way of opening or expanding your business. Our lawyers in Bucharest are here to help and make the incorporation process of a branch hassle-free. Call us now for free consultation!

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