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Romanian Limited Liability Company (SRL)

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Romanian Limited Liability Company (SRL) Romanian Limited Liability Company (SRL) General Type of entity SRL Type of law Commercial Shelf company availability No Our time to establish a new company 7 days Minimum government fees (excluding taxation) Ron 200 (approx €60) Corporate Taxation 16% Double taxation treaty access Yes Share Capital or Equivalent Standard currency Ron Permitted currencies Any Minimum paid up Ron 200 (approx €60) Usual authorised Approx €1000 Directors Minimum number One Local required No Publicly accessible records Yes Location of meetings Anywhere Shareholders Minimum number One Publicly accessible records Yes Location of meetings Anywhere Company Secretary Required No Accounts Requirement to prepare Yes Audit requirements No Requirement to file accounts Yes Publicly accessible accounts Yes Other Requirement to file annual return Yes Change in domicile permitted Yes [81208] 2 GENERAL INFORMATION Introduction Romania is situated in south-eastern Europe just north of the Balkan Peninsula and is the second largest country in Central and Eastern Europe with an area of 237,500 sq kilometres. The country is divided into three areas the central and north- western region comprising Transylvania, Crisana and Banat and encompassing the Carpathian Mountains; the southern region comprising the Wallachian Plain with the river Danube forming the country’s southern border; lastly, the eastern region comprises the Moldavian Plain bordering Moldova and Ukraine. The Capital is Bucharest with a population of approximately two million. Population The total population of Romania is approximately twenty two million, 55% of which live in urban areas. Ethnic Romanians make up about 89% of the population, Hungarian 7% followed by Rroms, Germans, Russians and Serbs. Political Structure Romania is a Constitutional Republic. The present Constitution was adopted by the Parliament on 21st November 1991. The Legislative power is vested in a bicameral Parliament which is made up of a lower house of 345 seats (Chamber of Deputies) and an upper house of 140 seats (Senate). Parliamentary elections are held every four years whilst presidential elections are held every five years. Infrastructure and Economy Romania has an extensive road and rail network. The main Romanian providers of scheduled passenger air transport are Tarom and Carpatair, several international airlines serve Romania and there are daily flights to most European capitals. Airfreight is handled exclusively in Bucharest. Since the beginning of 1990, Romania has had a free market economy countered by a continuous government presence in the industrial sector. Romania sits at the crossroads of many traditional commercial routes that allow access to over 200 million consumers within a 1,000 km radius of Bucharest. Romania has six designated Free Trade Zones, mainly located around ports: Constanta Sud-Agigea (on the Black Sea), Sulina (at the mouth of the Danube), Braila, Galati, Giurgiu (on the Danube), and Curtici-Arad (on the Hungarian border). Language The official and spoken language is Romanian although Hungarian and German are spoken in the North West and central regions. Currency The Ron Exchange Control No Type of Law Commercial Law, the modern legal system in Romania dates back to the mid-19th century. The Romanian justice system is based on French, Belgian, Italian and German models. Principal Corporate Legislation The Companies Acts 31/1990 modified by Law 441/2006 COMPANY INFORMATION Type of Company for International Trade and Investment Limited Liability Companies (SRLs) are the most popular vehicles for carrying on business activities in Romania by local and foreign investors because of the low administrative requirements, greater flexibility and low initial capital requirements compared to other types of companies. Procedure to Incorporate This entails the deposit of the paid-up share capital into a bank account and filing of the Memorandum and Articles of Association with the Registry of Commerce. Shareholders, if corporate, are required to submit their statutory documents, [181208] 3 Certificate of Incorporation, a Bank Reference and a Decision of the Shareholder Assembly in order to incorporate the Romanian entity. If the shareholders are physical persons a copy of their passport is required together with confirmation from the local police authorities confirming their good standing or an extract from the Criminal Records Register. Restrictions on Trading Limited Liability Companies are not permitted to: . Undertake banking or insurance activities or any other activity that might suggest an association with same, without a licence. Undertake investment business other than the investment of the company's own assets without a licence. Neither solicits funds from the public nor offer their shares or membership to the public without a licence. Powers of Company A Romanian company has all the powers of a natural person. Language of Legislation and Corporate Documents Romanian. Registered Office Required Companies must maintain a registered office in Romania. Shelf Companies Available No Time to Incorporate 5 to 7 days, subject to name approval. Name Restrictions A name that is similar to or identical to an existing company. A name that is known to exist elsewhere. A name that implies illegal activities. Language of Name Names can be expressed in any language using the Latin alphabet. Names Requiring Consent or a Licence The following names or their derivatives require consent or a licence: Bank, Building Society, savings, loans, insurance, assurance, reinsurance, co-operative, council, Chamber of Commerce, trust, municipal and finance or their foreign-language equivalents. Suffixes to Denote Limited Liability SRL (Societate cu Raspundere Limitata) Disclosure of Beneficial Ownership to Authorities The identity of the beneficial owners of the Romanian Limited Liability Company is not confidential. COMPLIANCE Authorised and Issued Share Capital Limited Liability Companies have a minimum authorised share capital of Ron 200 or its currency equivalent, this being the maximum for the minimum capital duty payable upon incorporation. The minimum issued capital is one share of Ron 10 value. Classes of Shares Permitted Limited Liability Companies may have registered shares, redeemable shares and shares with or without voting rights [181208] 4 Taxation With effect from 1st January 2007 the standard tax rate of 16%. If certain conditions are met, companies may opt for the micro-company regime, under which a 2% (2.5% in 2008 and 3% in 2009) income tax rate is applied to revenues derived by the Company. The conditions to qualify for the micro company regime are as follows: . An annual turnover of less than EUR 100,000 . Employees number between 1 and 9 . More than 50% of the company’s income derives from activities other than consultancy and management. VAT Romanian companies may be registered for VAT purposes. 19% standard rate, which is applicable to supplies of goods and services not subject to VAT exemptions or to the reduced rate . 9% reduced rate, which is applicable to the supplies of certain goods/services specifically enumerated in the Fiscal Code, such as sale of medicines, hotel accommodation services, books, tickets to museums, cinemas, etc. Double Taxation Agreements Romania is a party to over 78 tax treaties. Financial Statements Required All Limited Liability Companies, SRLs, if registered in Romania, are considered as resident in Romania for tax and currency purposes and must comply with statutory requirements for book and record keeping as detailed in the Accounting Law of 2005. If a limited liability company has more than 15 shareholders, it is obliged to appoint company censors. Directors The minimum number of directors is one; they may be of any nationality or residence. Bodies corporate may be appointed as directors. Company Secretary A Company Secretary is not required. Shareholders The minimum number of shareholders is one, maximum number 50. A person, either natural or legal, cannot be the sole shareholder of more than one SRL. Disclaimer Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. OCRA Worldwide does not accept any responsibility, legal or otherwise, for any errors or omission. [181208] .
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