If you are looking to set up a micro company in Romania, it can be a good idea for a smaller scale business set up. Romania offers a corporation tax rate of 16%, but there are certain features which make micro company business in Romania to be one of the most propitious form of business. Western European Countries offer higher rate than this but some other countries offer a lower corporate tax, in eastern europe .
To set up a small company in Romania, you must have deeper details about corporation tax enactment in other countries. Romania has made an agreement with 87 countries on avoidance of double taxation.
The cost of company registration in Romania varies from 2 100 EUR up to 5000 EUR. If you will pay the office yearly rent in advance, you will be able to get the best price. It’s cost will be 3,960 euros per year. So the total cost will be the sum of company registration package plus yearly office advance rent i.e; 2 100 EUR + 3 960 EUR = 6060 EUR. Accounting services’ cost depends on the amount of work. They cost 220 EUR monthly on average for a micro company, plus VAT is included.
Some companies have more cost-effective but still all-inclusive offer for micor-company formation in romania. For example Company Romania offers micro-company registration in Romania from 1500 euro while other registration companies attract cleints with a low price starting from 600 euro per company registration. The latter charge extra an array of necessary services to company registration like virtual office, tax registrations, tax ceritificates, legal advice etc.
Micro company in Romania fact sheet
|Micro company in Romania – income tax rates|
|Corporation tax for micro company in Romania with yearly turn over of less than 1 million euros||1 to 3%|
|Profit tax corporation rate in Romania||16%|
|Dividend tax in Romania||5%|
|Additional costs after micro company registration|
|Cost of registration for VAT||350 euros|
|Romania’s Non-resident tax id||350 euros|
Requirements for opening a micro company in Romania
The procedure that is followed for opening a Romanian micro company is the same as followed for opening a limited liability society. Local and foreign businessmen can get advice from a team of lawyers concerning the company registration in Romania and also the set of documents that are needed during company incorporation in Romania. Setting up a micro company in Romania might be a good idea for the investors who want to start their business at a smaller scale. If a company is registered without any employe, then the conditions are applied to micro company and it’s tax rate is 3%, the tax rate is 1% for company having one employee. The maximum turnover for a micro company is 500 000 euros.
Businessmen who are looking for company incorporation in Romania, can get many benefits. The enactment concerning the tax requirements which are available for a Romanian micro company, is continually adjusted, this type of initiative might prove to be an ideal way to set up a small business company in Romania. The minimum share capital which is required for a Romania micro company is RON 200.
Tax regulations applied for setting up a micro company in Romania
If you want to get benefit from the taxation regulations of micro company in Romania, then you should follow a series of conditions. First, your income should not be more than 500.000 euros per year. Secondly, you can get only 20% of revenue from management and consulting. You will get the rest of 80% from other activities. Thirdly, as a shareholder, you don’t have any local or public authorities in the company. You will have to pay profit tax, if you get more than 20% revenues from management or consultation or if your yearly income exceeds 500.000 euros. About 16% of profit tax is measured from your earnings and expenditures from the beginning of every fiscal year and you will pay it quarterly just like the income tax.
Micro company offers small tax thresholds and it is one of the most tempting system in Europe. Those who want to set up a micro company in Romania, must be well aware of Fiscal code’s latest version which has a set of alterations and it aims to eliminate a set of disadvantages. You cannot perform certain categories of activities if you want to set up a micro company in Romania, such as gambling, casino, banking, captial market, betting or insurance. Concerning other activities, if you will pay 3% income tax then it is more proficient and affordable for the growth of your business, rather than paying profit tax.
Hence, over all it is a good idea to set up a micro company scheme in Romania, as Romania offers lowest tax rates than other countries in the world. If we look from the fiscal point of view, we will find micro company set up, as a propitious form of business. Foreign investors can set up as many micro companies in Romania, as they want. Romania is a politically stable country. It has a well developed banking sector, so more entrepreneurs can get avenue to international banks easily.