Doing business in Romania
Romania is a country located in Southeast Europe, known for its natural resources, low costs of doing business, and improving business environment. The country has a diverse economy, with industries such as agriculture, manufacturing, and services making it an attractive location for businesses looking to expand their operations.
One of the key advantages of doing business in Romania is its natural resources, including oil, gas, and minerals. These resources, combined with the country's strategic location and access to major transportation links, make it an attractive location for businesses in the energy and manufacturing sectors.
Romania also offers a favorable tax system, with a flat corporate tax rate of 16%, which is relatively low compared to other European countries. The country has a well-developed infrastructure, with modern facilities and a reliable power grid.
In recent years, Romania has taken steps to improve its business environment, with a range of reforms designed to encourage entrepreneurship and foreign investment. The country has simplified its procedures for starting a business, reduced bureaucracy, and improved its legal and regulatory environment.
Moreover, Romania is a member of the European Union and has access to the EU single market, which provides businesses with access to a large customer base and a range of economic benefits.
However, it's important to note that Romania also faces some challenges for businesses looking to operate there. Corruption and political instability remain concerns in the country, and the country's education system can be a challenge for businesses looking to recruit highly skilled workers.
Overall, doing business in Romania offers a range of opportunities for businesses looking to expand into Southeast Europe, with natural resources, low costs of doing business, and an improving business environment. However, businesses should also be prepared to navigate the country's unique challenges and carefully evaluate the risks and opportunities associated with operating in Romania.
Advantages of Doing Business in Romania
✔ Natural resources: Romania has a range of natural resources, including oil, gas, and minerals, which can be attractive to businesses in the energy and manufacturing sectors.
✔ Favorable tax system: Romania has a flat corporate tax rate of 16%, which is relatively low compared to other European countries, making it an attractive location for businesses looking to reduce their operating costs.
✔ Well-developed infrastructure: Romania has a well-developed infrastructure, with modern facilities, a reliable power grid, and access to major transportation links, making it an attractive location for businesses looking to establish operations in the country.
✔ Access to the EU single market: Romania is a member of the European Union and has access to the EU single market, providing businesses with access to a large customer base and a range of economic benefits.
✔ Improving business environment: In recent years, Romania has taken steps to improve its business environment, with a range of reforms designed to encourage entrepreneurship and foreign investment. This includes simplifying procedures for starting a business, reducing bureaucracy, and improving the legal and regulatory environment.
Disadvantages of Doing Business in Romania
✖ Corruption: Corruption is a concern in Romania, particularly in the public sector. Businesses may face challenges in dealing with government officials or obtaining necessary permits or licenses.
✖ Political instability: Romania has experienced political instability in recent years, which can create uncertainty for businesses operating in the country.
✖ Education system: Romania's education system can be a challenge for businesses looking to recruit highly skilled workers. The country has a high school dropout rate, and graduates may not have the necessary skills to meet the demands of businesses.
✖ Cultural differences: Romania has a unique cultural and business environment that may be different from what businesses are used to in other parts of Europe or the world. This can create challenges in building relationships and understanding local business practices.
✖ Low GDP per capita: Romania has a relatively low GDP per capita compared to other European countries, which can limit the potential customer base for businesses operating solely within Romania.
There are several types of business organizations in Romania, each with its own advantages and disadvantages. Some of the most common types of business organizations in Romania include:
► Sole proprietorship: A sole proprietorship is a business owned and operated by a single person. The owner is personally liable for all the debts and obligations of the business.
► Limited liability company (LLC): A limited liability company is the most common type of company in Romania. It requires a minimum of one shareholder and has a minimum share capital of RON 200, but there is no maximum limit. The shareholders are liable only to the extent of their contributions.
► Joint-stock company (JSC): A joint-stock company is a public limited liability company that can issue shares to the public. It requires a minimum of two shareholders and has a minimum share capital of RON 90,000. The shareholders are liable only to the extent of their contributions.
► Partnership: A partnership is a business owned and operated by two or more individuals who share profits and losses. There are two types of partnerships in Romania: general partnership and limited partnership.
► Branch office: A branch office is a type of business organization that allows a foreign company to establish a presence in Romania without incorporating a new legal entity. The branch office must be registered with the Romanian Trade Register and is subject to Romanian tax and legal requirements.