Business Establishment in Romania
|August 26, 2011||Posted by admin under Business & Corporate, Legal Publications & Articles||
Business development in the North-Eastern region of Romania is growing faster and has a tremendous potential in terms of profitability. We recommend the city of Iasi as the first choice for any serious investor that wishes to conduct business in this geographical area. An excellent labour market of highly educated professionals, one of the best industrial and commercial infrastructures, the network of quality business services in fierce competition and the vivid cultural and entertainment life render the city of Iasi as a premier choice in terms of business establishment for the whole Romanian region of Moldavia.
As with the civil law, understanding business laws in Romania involves a continental historical perspective. We know that the French Commercial Code of 1807 recognized the general partnership company (société générale), the dormant partner company and the joint-stock company with its two forms: the joint-stock and the limited liability joint-stock company. Forms of these companies are taken by the Romanian Commercial Code of 1887 through the Italian 1882 Code that served as a model. Currently, Law 31 / 1990, republished in 2005, is the sole authority in this matter and recognizes five (5) types of companies under the criteria of partners’ liability:
- The General Partnership Company (s.n.c.), with unlimited liability for all partners,
- The Simple Dormant Partner Company (s.c.s.), with unlimited liability for the active partner and limited liability for the sleeping partner,
- The Joint-Stock Company (s.a.), with limited liability for all shareholders
- The Limited Liability Joint-Stock Company (s.c.a.), with limited liability for the dormant shareholders and unlimited for the active shareholders
- The Limited Liability Company (s.r.l.), with limited liability for all partners.
By far, the most used in practice is the Limited Liability Company. You may either create within these forms a Romanian legal person with local and / or foreign capital, a joint-venture company or choose to establish only a Romanian subsidiary of your parent company.
The first thing that you need to know before you start the activity is related to the administrative formalities for business registration and authorization. Emergency Ordinance 76 / 2001, republished in 2002, institutes a relatively simple and unified procedure for business registration and authorization. The institution that is responsible for this procedure is the Trade Registry, currently under the authority of the Ministry of Justice.
While the registration procedure is an administrative one, it involves knowing your company’s future rights and obligation in the Romanian legal system. Therefore, we recommend that you contact a lawyer. You may mandate the lawyer and entrust him or her with legal consultancy and drafting the bye-laws, firm’s name reservation, the application form and the obtainment of the necessary six avises and authorizations from the Administrative Authorities, the Fire Squads, the Public Health Department, the Veterinaries, the Environmental Department and the Workers’ Protection Inspectorate. In case you choose to establish either a joint-stock or a limited liability company, there is no need to endorse the bye-laws with a notary public. For the other three forms or in case of land contribution to capital, you need to endorse the bye-laws with a notary. Lawyers are authorized to certify the date and contents of your company’s bye-laws. Within 20 days from the application date, you will receive the registration certificate, the Single Registration Code and the annexes with avises and authorizations. We recommend that you maintain contact with your legal consultant for the entire duration of your commercial activities.