THE ROMANIAN BUSINESS

ENVIRONMENT
Ciorik Vlad & Dumitru Ovidiu, Group 8212
Faculty Of Management, engineering And
Management In Public Food And
Agritourism , UASVM
Coordinator: Lecturer Andreea Constantin,
PhD
business
Romania

Summary/ Main ideas/

Presentation outline
1.
2.
3.
4.
5.
6.

Introduction in Romanian
Business Culture
Romanian Corporate Entities
What does S.R.L and S.A.
means?
Fiscal environment in Romania
Value Added Tax
Micro-Enterprise company

Introduction
Romania

business culture
Romania has a long, challenging and interesting history. Its language
originates from Latin. Romanians have often been labelled as one of
the greatest survivors in history. Modest attitudes and behaviors
coupled with orthodox Christian beliefs reflect their simple-minded and
down to earth mentality that has been shaped by years of hardship.
Romanians may appear abrupt or unreceptive initially; however, they
are considered to be among the friendliest and hospitable people in
Europe. Romanians are large-hearted with a unique sense of humor
and a strong cultural heritage.
Work culture
Romanian business culture is quite formal and hierarchical; it places
great importance on courtesy and respect for older or more senior
people.
Summertime is not good for business as many companies wind
down their operations then. Easter and Christmas are also difficult as
companies and shops close for an indefinite period. Normal business
hours are 09001700.

Romanian Corporate Entities

I would like to begin saying company Law no. 31/1990,

which has been modified several times since it came into
force, allows and defines five forms of companies:This section
outlines the various business organizations that exist in
Romania and will provide you with the main characteristics of
each of these forms of companies.
Limited liability company (Romanian: "Societate cu
raspundere limitata", or abbreviated "S.R.L.");
Joint stock company (Romanian: "Societate pe actiuni", or
abbreviated "S.A.");
General partnership (Romanian: "Societate in nume
colectiv", or abbreviated "S.N.C.");

Limited partnership (Romanian: "Societate in

comandita simpla", or abbreviated "S.C.S.");
Limited partnership by shares (Romanian: "Societate
in comandita pe actiuni", or abbreviated "S.C.A.").

What does S.R.L and S.A. mean?

1. What does S.R.L mean?
A limited liability company may be established
by one or more entities, either individual or
legal. Restrictions exist with respect to the
number of shareholders of a limited liability
company (no more than 50), as well as the
number of limited liability companies one can
establish by himself (an entity may be the sole
shareholder of only one limited liability
company; also, the shares of a limited liability
company cannot be owned entirely by another
limited liability company who has, in its own
turn, a sole shareholder).

2. What does S.A. mean?

A joint stock company can be formed by
at least 5 shareholders (there is no maximum
number of shareholders stipulated in the
Company Law).
Shares should have a nominal value of no
less than ROL 1,000 (RON 0.1) and at least
30% of their value should be paid upon the
companys registration (50% for companies
incorporated by public subscription); the shares
value should be fully paid within 12 months
from the companys registration with the Trade
Register Office. In case of a share capital
increase, the maximum period for paying the
newly issued shares is 36 months.

Fiscal environment in Romania

This section covers recent tax
developments in the region, as
Romania has made significant changes
in its fiscal legislation over the last few
years. As a part of Romanias efforts to
adoptthe EU taxation standards, the
entire fiscal legislation of Romania was
recently put together inone common
law The Fiscal Code of Romania, in
force asfrom 1 January 2004

Value Added Tax

Standard and reduced VAT rates

Standard VAT rate is 19%. A lower rate of 9% is

applied to daily newspapers,magazines, books,
medicines, hotel accommodation, etc, while several
services ofpublic interest are VAT exempted.

Exports from Romania are also VAT exempted, while

for imports VAT should be paid outfront to the custom
authorities, prior to the goods entering Romania. In
case certain criteriaare met, VAT due to imports may
be registered as both input and out put, without
beingpaid to the custom authorities.Registration for
VAT purposes.

Companies with an annual turnover below

ROL 2 billions are not required to registerfor
VAT purposes; however they do have the
possibility to request VAT registration,but once
registered as VAT payers, entities cannot be VAT
exempted even if afterregistration their taxable
transactions fall below ROL 2 billions.Nonresident entities rendering a service or supplying
a product, subject to VAT shouldalso register for
VAT purposes in order to charge VAT, by
appointing a fiscalrepresentative. Failure to
comply with this obligation will bring about
impossibilityto charge VAT, which will be
withheld and paid by the beneficiary.

Micro-enterprise company
A micro-enterprise is a company that complies with the following
requirements:
Has 100% private capital
Produces goods, renders services or carries out commercial activities
Has 1 to 9 employees
Has an annual turnover up to EUR 100,000.
A company that qualifies for the micro-enterprise regime will not pay
profit tax, but anincome tax of 3%, levied on its total revenues.
In case the company fails/is enable to comply with one of the above
conditions, it becomesa profit tax payer, starting from the following
year.
Choosing between the income tax regime and the profit tax regime is the
investors option,upon the companys registration with the Trade
Register Office.
The tax is paid on a quarterly basis and it is due on 25th of the first
month following thereporting quarter.
One should take into consideration that the micro-enterprise regime will
disappear onceRomania joins the EU.

Conclusion(s)

References/
Bibliography
www.ccibrc.ro
www.rumaenien.um.dk

Photos/

charts/ drawings
Thank you/ Do you have any
questions?