Look closely at Romania if you’re searching for an emerging European Union nation that attracts the attention of investors. It is a country with a good image and a favourable tax system, which will be a good place to start commercial activities.
Romanian businesses can conduct unrestricted commerce with any member state of the EU as a result of their membership in the EU and the Single European Market.
The principal advantages of business participation in the EU are:
Since Romania joined the EU in 2007, starting a business there gives you unrestricted access to the huge customer market in other EU member states. At the same time, Romania has one of the lowest costs for skilled labour in all of Europe.
One of the lowest in Europe, and significantly lower than the EU, is the normal corporate income tax rate of 16%. Additionally, Romania has signed several agreements to prevent double taxation, protecting businesses and their revenues. As a result, taxes will only need to be paid once, in the nation where the profits are reported.
The Institute of micro-enterprise, a class of limited liability companies that is eligible for advantageous corporation tax rates, was created at the legislative level to entice international investors. This kind of business experienced several changes before taking on its present form. If a newly established business’s annual revenue is less than one million euros and it does not engage in activities that need a license on Romanian soil, it must now register as a micro-enterprise and use a simplified taxation system.
If the business has no workers, the preferential rate of income tax is 3%; if it has at least one, it is 1%. (at least €200). Additionally, the business must make social contributions and serve as a “tax agent” for its employees (withholding their income tax).
Other expenses include a 9% dividend tax and a 19% VAT (or a 9% reduction for specified operations) in Romania.
For the two most often used organizational and legal structures in Romania:
Participants in limited liability companies may be either Romanian nationals or foreigners in numbers ranging from 1 to 50; there are minimal administrative and reporting requirements for this type of company structure. For LLCs, a minimum permitted capital of 60 euros must be deposited.
With a joint stock company, it is a bit more challenging because the required deposit into the account is at least 30% of the minimum permitted capital of 25,000 euros. Only if the business engages in specialized activities, such as banking, insurance, etc., are you obliged to register with SA. In addition, there must be at least 5 shareholders, 1 director, and 3 independent auditors overseeing the financial accounts.
The possibility of highly skilled labour at reasonable pricing is another benefit of conducting business in Romania. This indicates that a firm that incorporates here will experience cheap operating costs.
Additionally, Romania’s economic situation offers a lot of advantages for businesses looking to launch or expand there. Romania is the ideal location for beginning or relocating a business from overseas because of the cheap corporation taxes, reduced costs for office rent, salaries, and accountant bills, and a significant number of double taxation avoidance treaties.
Romania has a workforce that is well-educated and fluent in foreign languages, despite the lower cost of labour. English is the most studied foreign language in Romania, where it is taught as a second language in almost 80% of the schools. Also widely spoken in Romania are German, French, Italian, Spanish, and Hungarian.
In addition, there are many highly qualified professionals and driven recent grads. The nation is home to an increasing number of R&D facilities, shared services, and highly skilled IT specialists. Romania ranks sixth globally in terms of the number of IT professionals who have earned certification.
As a NATO member, Romania acts as a stronghold for preserving the region’s security and stability. For the sake of transportation and import/export, its geographic position might be regarded as strategic. It provides simple access to other markets in the European Union as well as the Middle East. The biggest and deepest port in the Black Sea, Constanta Port, is located in Romania, which also holds a third of the Danube River and serves as the most important entryway to the Black Sea.
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