When entering the Romanian market, foreign investors have the option of incorporating a new legal entity with a Romanian legal personality, or setting up a unit of a foreign parent company, which will not have a Romanian legal personality.

Under Romanian law, companies with a Romanian legal personality may have the following forms:

  • Limited liability companies (societati cu raspundere limitata);
  • Joint stock companies (societati pe actiuni);
  • Limited partnerships (societati in comandita simpla);
  • Limited partnership by shares (societati in comandita pe actiuni);
  • Partnerships (societatea in nume colectiv).

Foreign investors also have the option of incorporating a European company (Societas Europaea), with its headquarters in Romania.

The most common types of companies under Romanian law are: limited liability companies (societati cu raspundere limitata) and joint stock companies (societati pe actiuni)

Irrespective of the corporate form chosen (limited liability company or joint stock company), the following formalities need to be complied with in order to set up a company:

  • reserving the corporate name at the Trade Registry (which is granted instantly, either online or in hard-copy);
  • drafting the constitutive act;
  • signature of the constitutive act;
  • registration with the Trade Registry;
  • incorporation;
  • issuing of an incorporation certificate which shall mention the assigned Trade Registry number and the sole registration code.

The incorporation and the granting of the certificate regarding the authorization of the activities declared by the company shall be effective within 3 days from the date the application was filed with the Trade Registry, if the complete required documentation is submitted.

Foreign parent companies may establish units without a legal personality in Romania, such as:

  • Branches (sucursale);

In order to set up a branch of a foreign legal entity in Romania, no corporate name reservation from the Romanian Trade Registry and no constitutive act of the branch are necessary. The decision of the corporate body of the foreign legal entity competent to set up secondary units, according to the relevant foreign legislation or the constitutive act, the power-of-attorney granted to the head of the branch, together with relevant documentation, are submitted to the Trade Registry.

The registration of the branch is granted within three business days as of the submission of the full documentation.

  • Representative offices (reprezentante).

The setting up of representative offices in Romania is performed by registration with the Ministry for Entrepreneurship and Tourism, for the time being.

A standard request which will contain information regarding the registered seat, the business purpose of the representative office, its duration, the number and positions of the persons envisaged to be hired by the representative office and the power of attorney granted to the person mandated to represent the company in Romania, together with other documents are submitted to the Ministry for Entrepreneurship and Tourism.

The functioning authorization is issued within 30 days as of the day the relevant complete documentation is submitted.

To be taken into account!

Greenfield investments, i.e. investment to create a new company, may fall under the scope of FDI legislation as regulated by Government Emergency Ordinance no. 46/2022 (“GEO 46/2022”), for the implementation of EU Regulation 2019/452(“EU FDI Regulation”).

Moreover, certain corporate operations within a company may also fall under the scope of FDI legislation, such as:

  • Direct or indirect changes in ownership control when control is acquired by an entity or individual qualifying as a foreign/EU investor, even if the change occurs outside Romania.
  • Internal reorganizations within a corporate group, such as mergers, spin-offs, or other restructuring processes, if they result in a change of control and the restructured entity qualifies as a foreign/EU investor.
  • Acquisition of tangible and/or intangible assets in sensitive sectors for the purpose of conducting economic activities.

If any of the above corporate operations exceed €5 million and qualifies under GEO 46/2022, as a foreign direct investment, EU investment made by a foreign investor or EU investor in sectors relevant from a national security perspective, as mentioned in the Decision no. 73/2012 of the National Defense Supreme Council (“CSAT Decision”) in conjunction with the sensitive areas as defined by the EU FDI Regulation, such as security of Romanian citizens and the community, security of borders, supply systems with vital resources, critical infrastructure, information systems and communications systems; financial, fiscal, banking and insurance activity, the obligation to obtain prior FDI clearance is triggered. Even lower-value transactions may be subject to review if they pose potential risks to security or public order.

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