Romanian micro-company

[OTR365]

Perhaps even better, Georgian Republic's Virtual Zone has zero tax for stuff sold outside Georgia. Only products sold to Georgians are taxed.

Information about this zone is relatively sparse, but there's e.g. this link.

"Tax Benefits With The Status Of The Virtual Zone
Taxation of virtual zone persons complies with the rules and standards meted out by the Tax Code of Georgia. Any company or individual with this status are exempted from:

• Taxes on the revenue earned by supplying their products beyond Georgian borders
• VAT or Value-Added Tax on the products delivered outside the borders of Georgia
• Export duties or taxes on products exported from the customs territory of Georgia

All the expenses with respect to the income earned by supplying information technology products outside or within the borders of the Georgian territory shall be deducted from the gross income according to the share of the earnings by supplying within its territory.

Furthermore, the Virtual Zone persons will also be exempted from any special regulation and they will not require licenses, permits or any other regulatory document to carry out business activities on the Georgian soil.

...

The Virtual Trade Zone (VTZ) permits Georgian companies that sell software or other technology outside Georgia to exclude the external revenue from the company's taxable revenue. This is very attractive for software companies, since software companies will likely get most or all of their revenue from abroad, and can exclude it from their Georgian corporate taxable revenue."​

 

[Potter Keno]

Hello,
I am from Romania.

The birocracy here is very high and there are a lot of rules and regulation. The micro-enterprise as I know it is max EUR 500,000 per year. If you sell any stuff, after a certain amount (I think 20k eur) you'll need to also collect VAT.
The 3% is on all income - not just profit.

I don't know a lot about this because making a company here was never an attractive choice for me. I'm on this site looking to open a company in the US.

If you really want to, you'll probably need a good accountant to consult with and keep your monthly books. Until you get everything up and running, it really is a hassle.

 

[Suzy Emerald]

@Potter Keno I am considering to start a Micro company in Romannia since I have almost zero costs and there are several law firms in Bucarest that can do the burocratic part and bring you in contact with bookkeeping services. 3% on income annd 5% on dividends doesnt seem bad to me. But have to check on CRS implications. Do you have other suggestions for starting a micro company?

 

[Potter Keno]

I don't really, unless you have some specific questions that I'd know the answer to. The politics here are unstable, dividends were 16% until a short while ago. It's great they lowered, but they also raised other employment taxes. So if you were to hire someone, about 50% of their salary goes to taxes and healthcare. Really unfair for the working class and things change so often that there isn't too much stability.
You might also need an administrator (manager?) or else if you are the administrator of the company, you will be exposed to personal liability I think. All of this I could be wrong since things change so damn often here. So talk to your lawyers.
I have just read that as of August they implement CRS.
It's great that you want to invest, but make sure that you have a good team behind you that will keep track of all these changes.
Just know that these lower taxes are relatively new and might change whenever the corrupt government decides they need more money to buy themselves yachts.

 

[blizz]

Isn't corruption normal in Romania? As I hear from some "friends" in Romania it's possible to pay a flat fee to some tax staff and you will never hear a word or worry about to pay more tax?

 

[Potter Keno]

There is corruption, but there is also a lot of crack-down on corruption. In the long-term if you're doing anything sketchy, they'll eventually find out.

 

[blizz]

There is corruption, but there is also a lot of crack-down on corruption. In the long-term if you're doing anything sketchy, they'll eventually find out.

yeah maybe in 10 years or never they will get down to that. But to be honest the black money needs to flow and with all the bulls**t they put on Europe they need places where it still can float. The financial kings need it, the mafia and evene the US government!

 

[Suzy Emerald]

@Potter Keno What are your thoughs about Unicredit bank in Romania? The lawyer offices offering the service of opening the company can do a bank introduction with Unicredit (part of the huge Unicredit Group). Apparently one of the better banks in Romania.

 

[Inyoshintai]

Hello,
I am from Romania.

The birocracy here is very high and there are a lot of rules and regulation. The micro-enterprise as I know it is max EUR 500,000 per year. If you sell any stuff, after a certain amount (I think 20k eur) you'll need to also collect VAT.
The 3% is on all income - not just profit.

I don't know a lot about this because making a company here was never an attractive choice for me. I'm on this site looking to open a company in the US.

If you really want to, you'll probably need a good accountant to consult with and keep your monthly books. Until you get everything up and running, it really is a hassle.

Please let's not give "random" informations if you you're not sure about your knowledge (you said).

I'm italian, but i live in Romania since a lot of years. Yes the bureaucracy is not optimal, but it's a lot better than others countries (es Italy).

The micro enterprise threshold IS NOT 500.000 euro, but 1 million euro. Companies are exempt to pay VAT till a turnover of 300.000 ron/aprox 64.000 euro (not 20k).

The income tax is 3%, but if you have at least one employee it reduces to 1%. The minimum salary in Romania now is gross 1900 ron (starting from December or January will be 2080 or 2350, depending of the seniority), so it could be worth it to have an employees. From those 1900 ron 1162 is the net salary.

If you make invoice abroad (inside the EU) you can avoid to pay VAT, the EU VAT code is very easy to obtain.

Hope that the informations will be useful..

 

[hofo]

I would like to know more information about Romanian Micro Company too! Can you explain how difficult it is and if there is really a tax benefit by setting up a company in Romania?

 

[Mr Magoo]

my research is that there are several lawyer offices (Manea, Enescu) who run multiple websites it seems and set up your company for around 800 - 1000 euro. EU VAT code is not difficult to obtain (500 euro) but then you must rent a physical office space. Add monthly accounting fee to that (80 euro). Still thinking about setting up a micro company but not sure how to solve the office space renting.

 

[negon]

Add monthly accounting fee to that (80 euro). Still thinking about setting up a micro company but not sure how to solve the office space renting.

Have you made some research on how expensive it is to rent office space in Romania? I can't imagaine that it is expensive at all.

 

[Mr Magoo]

yes i did do research on that . Check the Regus site and its really cheap. Contacted them but they didnt come back to me with quotes.

 

[busdriver]

Anybody tried this Romanian system for digital business? Tax 3% (from all incomes) sounds too good to me What's the catch?

WITHHOLDING TAX

read more at https://www2.deloitte.com/content/d...ments/Tax/dttl-tax-romaniahighlights-2018.pdf

 

[Mr Magoo]

wanted to add to my previous comments that the lawyers office I contacted can offer full service: establishing the company (700 Euro), get a VAT# if needed (500 euro), arrange physical office space (250 euro/month), arrange virtual office space (720 euro/year, all apostille services, accounting services (80 euro/month). You can save maybe on arranging the physical office space yourself but all paperwork etc etc you also have to do and probably need to go there to sign etc.

 

[kevino]

Is there any feedbacks about people who register companies in Romania?

For those who are lazy to know the incorporation cost, I saw website with 3 kind of price:
- 150 euros for romanian resident
- 1800 euros for non resident
- 2600 euros for a private package

I wonder about the private package...

I get quote for ready made company at 3500 euros. I don't give name, just for information about the kind of price.

Important sum up :
- Corporate tax in Romania is 3% tax on a maximum turnover of 1 million euro.
- 16% on the net profit if > 1 million euro.
- VAT in Romania is 19%, registration only when turnover > 60.000 euro.

 

[Suzy Emerald]

Plus dividend tax 5% and you need to have phyical office. What does the private package include? Sounds expensive compared what i have seen.

 

[kevino]

Right for 5% dividend tax.
According quote I got, we can have virtual office to get mails for 150 euros/year.

Did you read somewhere we need a real office?

 

[cosmo]

Right for 5% dividend tax.
According quote I got, we can have virtual office to get mails for 150 euros/year.

Did you read somewhere we need a real office?

sounds good, what's the total costs to setup and second year / ongoing costs?

What tax do you pay, corporate tax I mean in Romania?

 

[Suzy Emerald]

If you have Vat number you cannot have vittual office