Why Choose to Set Up a Business In Romania?

Romania is one of eastern Europe’s most colorful and exciting destinations – but what kind of business advantages does the country offer?

Since it emerged from the communist bloc in the late 1980s, Romania has shaken off a period of economic instability and taken dramatic leaps forward on the world stage.

Today, Romania has a reputation as an international business hub, and the government is taking further steps to encourage and develop investment and growth –  steps which have translated to a GDP of $186.7 billion, and an impressive growth rate of 8.8%.

In 2017, Romania was confirmed as the fastest-growing economy in the EU – a status which exceeded financial forecasts, and drew plenty of global investment attention.

If you’re an entrepreneur looking for business opportunities, you may well be considering Romania as a set-up location – of course, it’s well worth becoming familiar with the shape of the commercial landscape before you make your move…

With that in mind, take a look at some of the best reasons to choose Romania for your business set-up destination…

Corporate Benefits

Most Romanian businesses are set up as Limited Liability Companies (LLC) – which, from a tax perspective, pay the same flat, 16% corporate rate as all other business structures.

This means owners setting up in Romania benefit from certain structural advantages including the possibility of 100% foreign ownership, relatively low starting capital requirements (RON 200/ 45 EURO), and of course the assurance that shareholder liabilities are limited to only their capital contributions.

Tax Incentives

The Romanian government has introduced a range of tax incentives for businesses operating in the country. These incentives include:

Foreign tax credits: Credits are available for taxes paid to a foreign state, or member-state of the EEA – and may be claimed with appropriate documentation.
Exemption for reinvested profits: Tax exemption is available for profits reinvested in technological, electronic, or peripheral equipment (including cash registers, software, invoicing machinery and more).
Local tax exemption: Businesses which are located within industrial parks are exempt from paying property tax.

R&D Incentives

The Romanian government has placed a special focus on stimulating research and development projects and other science and technology-related business ventures. To this end, a range of incentives exist for businesses engaged in R&D activities:

– A tax deduction of 50% is possible for businesses incurring R&D expenses. The deduction must be applied to eligible R&D activities, which include research and tech-development – and those activities must have been performed in Romania or other EU (or EEA) member-states.

– Further to the possible 50% deduction, businesses which exclusively perform R&D on scientific or tech-development are exempt from tax for their first 10 years of activity.

– Expenses incurred for any kind of professional and technical training are – per specific Romanian education legislation – tax deductible.

Strategic Location

Located at on the western shore of the Black Sea, and, bordered by Bulgaria, Ukraine, Hungary, Serbia, and Moldova, starting a business in Romania offers geographic advantages for businesses wishing to gain foothold in eastern Europe and beyond.

Romania’s trade connections stretch out into central Europe, the Commonwealth of Independent States (CIS), Russia, and the Middle East – collectively representing a market of tens of millions of consumers.

Romania’s transport infrastructure is benefitting from a 1 billion EURO EU investment, and includes rail and road routes into continental Europe, and three international airports.

Skilled Workforce

The Romanian labour force is young educated, literate, and embodies a culture of commitment and integrity. Enrollment in university education has been increasing across Romania since 2011, with the most popular educational disciplines being business, administration and law, construction, and engineering.

The Romanian workforce offers employers a highly cost-efficient salary average of around RON 1,250 (275 EURO), and a range of industry specializations, including IT, oil and gas, retail and trade, heavy industry, and financial services.

Living Standards

Romania offers expats a high standard of living, especially in comparison to neighboring nations.

While standards in Romania’s rural areas are predictably variable, in the capital city, Bucharest, and other urban centers, living costs are around 50% less than similar European cities, while amenities, schools, and luxuries are plentiful.

Employees in Romania live amidst bustling, multicultural urban environments, and in proximity to a variety of breathtaking natural beauty spots – including the stunning Carpathian Mountains – which evoke the country’s history and culture.

Communication Networks

Organizations doing business in Romania benefit from a well-developed communication infrastructure, which includes both a reliable telephone network, and country-wide high-speed fiber internet connections.

Romania’s internet speed is the best in the region (around 85.Mbps) – facilitated by a range of providers, and a healthy level of competition. 3G and 4G internet connection penetration in Romania reached of 87% in 2016.

Business Processes & Culture

Romania was ranked 45 on the World Bank’s Ease of Doing Business Survey 2018 – out of a possible 190.

Incorporation in the country follows a standard and straightforward process: specifically, this means your business must deposit capital in a Romanian bank account, reserve a company name, register with the commercial authority, and set-up payroll and other essential internal services.

While the country’s business-language is English, the wider environment accommodates a wide range of eastern and western social and professional influences, and the cultural landscape is welcoming to outsiders and expats alike.

Follow me

Share if you liked this!

11 thoughts on “Why Choose to Set Up a Business In Romania?”

  1. Hello Calin:
    Of course this fine article begs the question for us poor
    older folk who’d like to move to your country and obtain
    permanent residence. (Still hoping you’ll find a lawyer who
    will ghost write an article addressing this. Of course this has
    been addressed before by the fine man in Brasov, but “we” are
    still hoping for some Romanian legal experts to gualify the “business”
    route for us older, non-entrepreneurs.;-)
    Calin, did you have a “white” Christmas? Did you and your family
    go out and carol? Did you put on any pounds after eating your yummy
    Christmas cuisine?
    Do Romanians celebrate the New Year any differently than others? Does
    Bucharest (I know you don’t live there) drop a big, multi-colored, lighted ball
    from the tallest building. Do cities go crazy with partying? Do the bands play
    “Auld Lang Syne”? Enquiring minds want to know. (Have you heard of the
    American tabloid, “The National Enquirer”–that’s their catch-phrase.)
    Thanks for the thought-provoking article!
    Your enquiring follower, Teil, from the “Good(?) ol’ USA”

    • Hello Teil,

      I am definitely looking at options other than the business set up, but none of them are easier or straightforward. One can only hope that these things will become easier in the next few years.

      The weather this Christmas was similar to what we’d expect in March – sunny and decent, but we were still pretty much out with a cold this whole time and still recovering.

      Regarding the New Year, there are big celebrations here for sure. No balls dropped from buildings yet, but there are huge parties and concerts and everybody is trying to have a good time. Never heard before of “Auld Lang Syne,” but we have our own winter holiday singers that always appear out of nowhere during this period of time – Stefan Hrusca being a sort of a Romanian Chuck Norris of Christmas carols.

  2. I also like The NY Post, The Sun, and The Daily Mail Online. Can’t get enough of that tabloid trash. I bet there’s something similar in Calin’s world, too.;-) Calin–we love ya!

  3. Excuse me C., you mention all these positive things about Bucharest. How will you feel after everyone discovers it and it becomes another Dubrovnik where the prices become insane? Haha! Federico would move in a second, maybe a minute. I just can’t handle the cold..no..no..no. Otherwise l would seriously consider it even more like you know. The one thing l do know is that we will definitely visit Bucharest and some other parts of Romania again at some point. We really enjoyed it. I started writing about our week there and it brought back really nice memories. Maybe the fact that you were there holding our hands made it better :-). Feliz Ano Nuevo!

    • Haha, that’s a risk I am willing to take 🙂 The country does need an influx of good people to give it a boost 🙂

      I am happy to hear that the memories are still really nice and that you guys are considering more visits here. There are indeed a lot of nice things the country has to offer.

      Happy New Year to you too!

  4. Good to read this post. Any suggestions for IT startup from location and resource perspective? Much appreciated some guidance.

  5. Hi I’m md sheemanto Ahmad from Dhaka Bangladesh I like to open a company in Romania so please tall me about time and cost L L c


Leave a Comment