Types of Companies in Romania

Romania, a nation renowned for its scenic landscapes, rich history, and vibrant culture, also harbors an increasingly attractive business environment. Nestled in Southeastern Europe, this country has undergone significant economic transformation since joining the European Union in 2007. The Romanian business landscape encompasses a diverse range of company types, each with its own set of legal characteristics and operational protocols. For entrepreneurs looking to establish a presence in Romania, understanding these various company structures is crucial.

Limited Liability Company (SRL – Societate cu Răspundere Limitată)

The Limited Liability Company, abbreviated as SRL, is the most common form of business entity in Romania. This structure is suitable for small to medium-sized businesses and offers the advantage of limiting the shareholders’ liability to the capital they have invested. An SRL requires a minimum share capital of 200 RON (approximately EUR 45) and may be formed by a single shareholder or up to a maximum of 50 shareholders. The simplified process of incorporation and relatively low administrative burden make this a preferred choice for many entrepreneurs.

Joint Stock Company (SA – Societate pe Acțiuni)

The Joint Stock Company, or SA, is generally opted for by larger businesses that require substantial capital investments and plan to operate on a large scale. The minimum share capital required for an SA is 90,000 RON (approximately EUR 18,000). Additionally, these types of entities must have at least two shareholders. The SA structure is best suited for companies looking to issue shares publicly and engage in major corporate activities. The regulatory requirements are more stringent, but they offer increased credibility and easier access to financial markets.

General Partnership (SNC – Societate în Nume Colectiv)

A General Partnership, known as SNC, is established by two or more partners who share unlimited liability for the company’s obligations. These entities are relatively straightforward to set up and operate, making them suitable for small business ventures where the partners have a high degree of trust in each other. However, the unlimited liability can be a significant drawback, as each partner is personally liable for the debts and obligations of the business.

Limited Partnership (SCS – Societate în Comandită Simplă)

A Limited Partnership, or SCS, involves both general partners, who bear unlimited liability, and limited partners, whose liability is confined to their capital contributions. This structure provides greater flexibility and allows for the raising of capital without requiring all partners to assume full liability. It’s a favored choice for projects that combine both active management and passive investment.

Branch (Sucursala)

Foreign companies looking to establish a presence in Romania without forming a new legal entity may opt to create a branch. A branch functions as an extension of the parent company and is not considered a separate legal entity. This structure permits the foreign company to engage in commercial activities while staying under the umbrella of the parent company’s legal and fiscal framework.

Representative Office (Reprezentanță)

A Representative Office is used by foreign companies looking to explore the Romanian market or manage liaison activities without engaging in direct commercial operations. These offices are not allowed to generate revenue or perform sales transactions and are primarily used for market research, promotional activities, and networking.

Freelancers and Sole Traders (PFA – Persoană Fizică Autorizată)

For individuals looking to conduct business activities independently, registering as a Freelancer or Sole Trader under a PFA is a viable option. This structure is less complex and easier to maintain. However, it also comes with unlimited liability, meaning that personal assets are not shielded from business liabilities.

As Romania continues to develop its economic landscape and integrate further with European and global markets, understanding the array of company types available is pivotal for any aspiring entrepreneur. Each structure offers unique benefits and challenges, making it essential to carefully consider which format aligns best with one’s business objectives and operational needs.

Romania’s regulatory framework and the business ecosystem have evolved to support a variety of business models. Entrepreneurs are advised to consult legal and financial experts to navigate the complexities of Romanian business law effectively and to maximize the opportunities this dynamic country offers.

Here are some suggested related links about Types of Companies in Romania:

Romania Insider

Welcome to Romania

World Bank

Invest Romania

EU Business

National Bank of Romania