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 enterprise, 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.
The legal framework of Romanian micro enterprises has been updated in the beginning of 2017, so the tax regime of this type of companies is different from last year. For instance, all private-owned companies that had incomes up to EUR 500,000 in 2016 now must pay the income tax specific to micro enterprises. According to legislation that came into effect on January 6th 2017, Romanian micro enterprises now must have an annual threshold of 500,000 Euros, as opposed to the previous one which was of 100,000 Euros. However, there is no such obligation for the companies with a share capital under RON 45,000, which may now choose the profit tax instead. Under the provisions of Government Emergency Ordinance 3/2017, joint-stock companies that had incomes up to EUR 500,000 in 2016 are now being taxed as micro enterprises.
The same Ordinance also brings into effect a 1% tax for the micro enterprises that have at least one employee working with a legal labor contract, down from the 2% tax that was in effect last year. The tax on micro enterprises without any employee stays unchanged at 3%
Answer: Ordinance 3/2017 also brings some changes to the capital needed to open a micro enterprise, i.e. to opt for the tax regime of such an economic entity. Starting this year, the share capital needed to open a micro enterprise has been lowered from EUR 25,000 (approximately the equivalent of RON 112,000) to RON 45000 (about EUR 10,000). This is the limit of the share capital which allows an investor to opt for paying profit tax, instead of the tax on the incomes of micro enterprises.
Answer: Art. 47 of the Fiscal Code clearly stipulates that in 2017, a microenterprise is a legal entity which cumulatively met several conditions at the end of 2016: it had incomes from other sectors than banking, insurance, and reinsurance, capital market, gambling, or oil and gas; its incomes (other than those from consulting and management), accounted for over 80% from its total incomes; its incomes were under the new ceiling brought up by the Ordinance, which is EUR 500,000; it did not have either the state, or local authorities among its stockholders; it did not enter the procedure of dissolution followed by liquidation.
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.
Same as in the new legislation, the share capital had to belong to other entities than 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 micro enterprises 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.