Page 18 - Nearshoring to Romania
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3. How to start and run a branch in Romania
3.1 Introduction
This chapter describes what you a company can expect during the setting-up process. The formalities
are ratherstraightforward and although there are for sure things to watch out for and take care of,
realistically speaking within maximum 2 months after your decision to start a branch office in Romania,
you should be able to have it fully operational.
Besides describing the legal aspects for setting up a branch office, this document will focus on the
organization of such a branch office, especially those aspects that might be new for a Dutch company
doing this for the first time in Romania.
3.2 Legal aspects
3.2.1 Branch or Company Registration
A foreign company may do business in Romania through either a Romanian company or a branch.
While a company set up in Romania has a legal status and is considered a Romanian entity, the branch is
just an extension of the parent company and therefore has no legal status and no financial independence.
Therefore, in Romania, a branch of a foreign company is subject to thenational law of the parent
company. Legally, the branch has no separate status from the foreign company itself - it merely does
business in Romania.
Unlike branches, a Romanian subsidiary of a foreign company is a Romanian legal entity and,
consequently, is subject to Romanian law.
When incorporating a company in Romania, its founders may choose between 5 (five) types of
companies, namely:
unlimited guarantee collective company (in Romanian “societate în nume colectiv”);
limited partnership (in Romanian “societate încomandita simpla”);
limited stock partnership (in Romanian “societate încomandita pe actiuni”);
joint stock company (in Romanian “societate pe actiuni”; abbreviated S.A.); and
limited liability company (in Romanian “societate cu răspundere limitată”;
abbreviated S.R.L.).
In practice, the most used types of companies are the limited liability company and the joint stock
company.
It is recommended to use a specialized company to help deal with the requirements of setting up an
office (i.e. branch or company) in Romania. They normally take care of all formalities and paperwork
for a fixed fee. Similar, but simpler, formalities will be necessary each time you decide to make changes
in your company that affect your incorporation act (e.g. change of company's registered address,
modification of shareholders' structure, etc.).
It is also important to note that Romanian Law does not differentiate between a Romanian natural-
person (persoană fizică) and a foreign-citizen natural person, for example with regard to becoming
partners or occupying management functions in a company. The rights and obligations of parties in both
circumstances are the same.
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Nearshoring to Romania, NRCC 2013
