Romanian micro-company

[Ssrn]

I'd also be very interested in recommendations about Romanian lawyers/ tax advisors. It looks like all Google searches always lead to the same one company - finding this already a bit dubious.

 

[Dexur]

I've researched the local companies and texted 5 of them. Seems like the ones from the top of the Google search are the most competent and cheapest ones.
Will initiate the incorporation with Micro-Corp and Trasferwise.

I'm in freelance software dev, if anyone's interested

 

[Mr Magoo]

Will initiate the incorporation with Micro-Corp and Trasferwise.

please let me know the company you go with. Be aware that you will need a VAT# iwhen you pass 60.000 euro turnover and therefor physical office with a lease contract.

 

[Dexur]

please let me know the company you go with. Be aware that you will need a VAT# iwhen you pass 60.000 euro turnover and therefor physical office with a lease contract.

I've picked Darie and Manea one. Already getting physical office and VAT. But thanks anyway, I've gone through all available information I could find, and your posts in this and other threads were quite helpful

 

[Mr Magoo]

do you do the accounting through one of their recommended accountants? For banking you will need an activated romanian sim card. Guess they can all do that for you. I went in person there to setup banking with them

 

[Dexur]

I'm just starting the process of incorporation Will report how it went once the company will be operational.

 

[sandypetes]

I'm just starting the process of incorporation Will report how it went once the company will be operational.

Looking forward to your results!!
thx for the info keep us posted

 

[Jocelyn]

Quite confused about a phrase I read in the DeLoitte excerpt posted previously. About Technical Service Fees.

"management and consultancy services performed by a nonresident entity for the benefit of a Romanian company are subject to a 16% withholding tax"
From https://www2.deloitte.com/content/d...ments/Tax/dttl-tax-romaniahighlights-2021.pdf

Do they mean "management" as in controlling the company, or do they mean managing as in "doing work for"?
I have a lot of expenses and salaries that I pay to virtual assistants in Asia. Does this mean that I have to pay 16% extra on those?

 

[blizz]

Quite confused about a phrase I read in the DeLoitte excerpt posted previously. About Technical Service Fees.

"management and consultancy services performed by a nonresident entity for the benefit of a Romanian company are subject to a 16% withholding tax"
From https://www2.deloitte.com/content/d...ments/Tax/dttl-tax-romaniahighlights-2021.pdf

Do they mean "management" as in controlling the company, or do they mean managing as in "doing work for"?
I have a lot of expenses and salaries that I pay to virtual assistants in Asia. Does this mean that I have to pay 16% extra on those?

you really want to discuss this with a local professional. You really want to spend some money on consultancy to get proper information from the source.

 

[Jocelyn]

you really want to discuss this with a local professional

I shall do that. Just got confused by that phrase, that is basically newspeak and means nothing on its own. I believe it is not as bad as it sounds though, because of the 16% withholding being exactly the same amount as most other taxes levied on non-resident holders of Romanian companies. Would just be good to know in advance, cause in the unlikely event I have to pay 16% extra to hire freelancers, I'll just skip Romania altogether.

 

[orangekangaroo]

I shall do that. Just got confused by that phrase, that is basically newspeak and means nothing on its own. I believe it is not as bad as it sounds though, because of the 16% withholding being exactly the same amount as most other taxes levied on non-resident holders of Romanian companies. Would just be good to know in advance, cause in the unlikely event I have to pay 16% extra to hire freelancers, I'll just skip Romania altogether.

From what I understand is that for micro companies that there is 5% dividend with holding tax for resident share holders and 16% for non resident share holders.

 

[ilpablo]

Hi guys I can confirm that for micro companies you pay 3% on revenue (not profits) up to 1M € and 16% on profits above that level.

Then there is a 5% witholding tax on dividends when you get your own money.

Anyone knows FOR SURE what's up about the personal tax residency in Romania?

I spoke with some lawyers and they all told me I don't need to stay there for 183 days, but I found different informations online.

They say it's just necessary to rent an apartment and declare an address.

Someone have a CLEAR answer to this thing?

Attached the guidelines of the Romanian Tax Office - hope someone can clarify.

I don't understand if the 3 requirements are all mandatory or comulative (so if you are good with 2 of these 3 you are okay anyway).

thanks

 

[Dexur]

Thanks for the file.
The requirements are cumulative, i.e. the more you have, the better. I'm planning to get a rented apartment and apply for residency right away (since I'll need to cancel my tax residency in my home country). Apartment + company (and minor things like driver licence, social security, phone number etc) should be enough for establishing residency.
After that you don't need to care about 183 days rule, just remember to visit Romania from time to time and don't get residency in other places

 

[ilpablo]

Thanks for the file.
The requirements are cumulative, i.e. the more you have, the better. I'm planning to get a rented apartment and apply for residency right away (since I'll need to cancel my tax residency in my home country). Apartment + company (and minor things like driver licence, social security, phone number etc) should be enough for establishing residency.
After that you don't need to care about 183 days rule, just remember to visit Romania from time to time and don't get residency in other places

Hi thanks, I think you are right.

But just to clarify, do you know this for sure or it is your own opinion?

 

[sp4retime]

I have 2 companies in Romania, I'm Romanian, I can help you transfer your funds.

 

[Jocelyn]

Hi guys I can confirm that for micro companies you pay 3% on revenue (not profits) up to 1M € and 16% on profits above that level.

Thanks for that file indeed. I do not have an answer for you, but I will read that file with interest.

I am in a similar situation to you. I am an EU citizen, but I will want to register in Romania and run a micro company. I am more concerned about my own current government than the Romanian one, and I am almost certain that my own country wants me to spend a verifiable 6 months abroad (preferably in Romania then).

I am seeing that virtual offices for the company address are available at 25-40 Euro per month. Ideally I would want to use a virtual office for my registration address too, but I doubt that is acceptable (to Romanian gov and the virtual office company) or waterproof (for my current tax authority).

Now if I rent a cheap flat for a year, I could register the company there and "live" there myself. But some sources (R&R Partners Bucharest YT channel) tell me that one needs to get permission from the neighbours if one is to run a company from a private apartment.

Of course it is one more large expense if one needs to rent an apartment AND a virtual office, and a phone line and pay electricity, yet still only spend 2-3 months there a year. One option would be to buy a cheap apartment to register in, then rent it out.

 

[orangekangaroo]

I am in Romania now, going through whole process. If I have some answers I will share.

 

[Jocelyn]

I am in Romania now, going through whole process. If I have some answers I will share.

Good to see you in the thread.

Are you rolling with a lawyer and an unknown price, or did you get some kind of prepaid package that includes everything?

 

[orangekangaroo]

Good to see you in the thread.

Are you rolling with a lawyer and an unknown price, or did you get some kind of prepaid package that includes everything?

Taking my time. I do want to spend some time In Romania initially as I want to build some substance for my business. I will use a local lawyer most probably.

 

[soomon]

Thanks for that file indeed. I do not have an answer for you, but I will read that file with interest.

I am in a similar situation to you. I am an EU citizen, but I will want to register in Romania and run a micro company. I am more concerned about my own current government than the Romanian one, and I am almost certain that my own country wants me to spend a verifiable 6 months abroad (preferably in Romania then).

I am seeing that virtual offices for the company address are available at 25-40 Euro per month. Ideally I would want to use a virtual office for my registration address too, but I doubt that is acceptable (to Romanian gov and the virtual office company) or waterproof (for my current tax authority).

Now if I rent a cheap flat for a year, I could register the company there and "live" there myself. But some sources (R&R Partners Bucharest YT channel) tell me that one needs to get permission from the neighbours if one is to run a company from a private apartment.

Of course it is one more large expense if one needs to rent an apartment AND a virtual office, and a phone line and pay electricity, yet still only spend 2-3 months there a year. One option would be to buy a cheap apartment to register in, then rent it out.

From how I read your post, I get the feeling you might not want to live in Romania, but be a tax resident there. Please keep in mind that you current tax authority (and maybe even the Romanian one, I don't know), can ask for proof that you actually live there. If they somehow find out you don't actually live there, you might become liable for income and maybe even company taxes because of CFC rules. I don't know how big the risk is, to be honest. Maybe nobody cares in the end