|
A new investor in Romania
has a number of options available when considering the legal form
its investment may take. The allowed types of business presence
range from limited liability companies and joint stock companies to
partnerships, as well as branches and representative offices.
The establishment, functioning, dissolution, merge, division and
liquidation of the commercial companies are regulated mainly by
Company Law No.31/1990, recently republished, and Government
Emergency Ordinance no. 76/2001 regarding the simplification of
certain administrative formalities for the registration and
authorization of business operations, republished, as further
amended, whereby a unified procedure for registration and
authorizing of businesses was established.
Forms of Business
Organization
The commercial companies may be established in one of the following
forms:
1. Limited Liability Company (SRL) - are the most popular
vehicles for carrying on business activities in Romania by local and
foreign investors, because:
2. Of the low administrative requirements;
3. The greater flexibility compared to other types of
companies;
4. Low initial capital requirements.
DESCRIPTION: MINIMUM EQUITY CAPITAL: is currently ROL 2,000,000
(about USD 60). The maximum number of shareholders in such a company
is 50. An SRL is managed by one / more administrators which may have
full / limited powers and which may be Romanian / Foreign Nationals.
Please note that there is no distinction in Romania between
companies operating with / without foreign share capital.
Joint-stock company (SA) - the number of joint stock companies (SAs)
and their attractiveness to investors is increasing in Romania.
DESCRIPTION: MINIMUM EQUITY CAPITAL: is currently ROL 25,000,000
(about USD 700). There is no maximum number of associates. However,
such a company should have at least 5 shareholders.
When an SA is established, at least 30% of the subscribed share
capital, or 100% in respect of contributions in kind, must be
immediately contributed upon formation of the company and all
subscribed share capital must be fully paid in within 12 months of
formation.
One or more "Board of Directors" members, who may or may not be
shareholders of the company, govern the daily operations of the SA.
a. Limited partnership - the partnerships' liabilities are
guaranteed by the capital and by the unlimited joint liability of
all unlimited partners; limited partners are liable only up to the
value of their share contribution
b. General partnership - the partnerships' liabilities are
guaranteed by the capital and by the unlimited joint liability or
all partners
For both partnership types, taxes are applied at entity level, not
at the individual level.
Registration Procedure
Company registration procedure was simplified and amended in August
2001 and thereafter in October 2004.
The registration procedures for limited liability companies and
joint stock companies requite similar and consist of the following
main steps:
1. The constitutive documents (by-laws) must be prepared, approved,
and signed by the shareholders;
2. The subscribed capital must be paid upon registration of the
company. In the case of a joint stock company (SA), each shareholder
must pay at least 30% of its subscribed capital. The registered
capital may be subscribed and paid in by the shareholders by
contributions in cash, in kind and/or in receivables;
3. The company is registered with the Trade Register by issuance of
a Registration Certificate. This provides registration Code valid
for both the Trade Register and the tax authorities. The
Registration Certificate also includes in a certificate of
acknowledgement stating that all conditions for carrying out
commercial activities are fulfilled. The company legally exists and
has the right to start and run its activities from the date of its
registration with the Trade Register.
According to Law no. 359/2004 regarding the simplification of the
registration procedure with the Trade Registry of individuals,
family associations and legal entities, as well as the authorization
of the functioning of legal entities, as further amended and
supplemented, the Trade Registry shall issue the registration
certificate and the mention registration certificate based on the
statement on own liability given by the associate/director
regarding:
a. The legal entity does not perform operations at the
head/secondary office;
b. The legal person fulfilling the operating conditions provided by
the legislation regarding the fire prevention and extinction,
sanitary and sanitary-veterinary field, environment and labor
protection for the activities specified in the statement forms.
Pursuant to the Government Ordinance no.75/2001 on the Organization
and Operation of the Fiscal Record (“Fiscal Record Ordinance”), as
amended and supplemented, for incorporation and registration
purposes, the company shareholders and its legal representatives are
required to produce a fiscal record certificate. Foreign legal
entities and individuals not fiscally registered in Romania have no
obligation to produce the fiscal record. In this case, a mere fiscal
statement given before the notary public stating that they have no
fiscal debts towards the Romanian budgets replaces the requirement
of such certificate.
A subsidiary’s registration procedure is essentially similar to the
one described above.
Branches
Branches are corporate entities with no legal status, set up by
Romanian or foreign companies subject to registration with the
relevant trade registry. The legal status of the branch applies to
any other secondary office (agency, working points, etc.)
established as branch by the foreign parent company.
Branches must be registered using the same procedures for SRLs and
SAs. The setting-up of a branch requires the following
documentation:
- Record of the existence of the parent company (i.e. company
memorandum and articles of association, setting-up certificate of
foundation, trustworthiness letter from bank);
- Decision of the Board of Directors to establish a branch in
Romania, listing the activities of the branch and appointing a
General Manager.
Branches must have a General Manager appointed by the Board of
Directors of the parent company, who will represent the branch in
dealings with third parties in Romania. The General Manager can be a
foreign citizen. Branches can only operate in the same field of
activity as their parent companies.
Representative Offices
Representative Offices are established and operate in accordance
with the provisions of the Law-Decree no. 122/1990 on the
Authorization and Functioning in Romania of Foreign Companies’
Representative Offices and of Foreign Economic Entities, as further
amended and supplemented.
Foreign companies and economic entities may open Representative
Offices in Romania, subject to authorization by the Ministry of
Economy and Commerce. Upon registration, an operation authorization
is issued, stipulating, inter alia, the activity object, the terms
and conditions for carrying out the activity, the duration and
headquarters of the Representative Office.
Representative Offices are often established as a first step. The
Representative Office may undertake on behalf of the parent company
only transactions that are consistent with its object of activity
and set forth in the authorization. A Representative Office cannot
commit to any contractual engagements in its own name but can
perform the following activities without being considered a
permanent establishment for profit tax purposes:
- Using facilities only for the purpose of storage or
display of goods or merchandise belonging to a nonresident;
- Maintenance of a stock of goods or merchandise belonging
to a non-resident only for the purpose of storage or display;
- Maintenance of a stock of goods or merchandise belonging
to a non-resident only for the purpose of being processed by a third
party;
- The sale of goods or merchandise belonging to a
nonresident displayed at exhibitions or trade fairs which are not
permanent or are occasional, if the merchandise or goods are sold
not later than within a month after the closing of the trade fair or
exhibition;
- Maintenance of a fixed place of business solely for the
purpose of acquisition of products or goods or collecting
information for a non-resident;
- Maintenance of a fixed place of business solely for the
purpose of carrying out activities of a preparatory or auxiliary
nature by a non-resident;
- Maintenance of a fixed place of business solely for a
combination of the activities mentioned above, under the condition
that the whole activity carried out through the fixed place of
business is of a preparatory or auxiliary nature.
|
