Expanding your business into Romania can open up significant opportunities, especially for companies looking to export goods and services within the European Union. However, to successfully enter the Romanian market, businesses must consider establishing a local presence. This not only ensures smoother operations but also helps in building trust with local partners, complying with regulations, and optimizing costs.
If you are planning to export to Romania, setting up a local presence can be a game-changer. Whether through company formation in Romania, opening a representative office, or partnering with a local distributor, this step will facilitate a seamless market entry and long-term growth.
Why Establish a Local Presence in Romania?
Many foreign businesses attempt to sell in Romania without a local entity, but this approach comes with limitations. Establishing a presence in the country offers several advantages:
- Easier access to the market – Having a local business makes it easier to deal with Romanian authorities, distributors, and clients.
- Legal and tax benefits – A properly structured local entity can help optimize taxes and benefit from EU trade regulations.
- Improved brand reputation – Romanian customers and partners tend to trust businesses that have a registered local presence.
- Better logistics and operations – A local office or warehouse streamlines import procedures and reduces shipping costs.
- Compliance with regulations – Some industries require businesses to have a local presence to meet Romanian and EU legal requirements.
Without a local entity, companies might face restrictions in contracts, payments, and partnerships, making it harder to scale their operations.
Options for Establishing a Local Presence in Romania
Depending on your business goals and operational needs, there are several ways to set up a presence in Romania:
- Registering a Local Company (SRL or SA)
The most effective way to enter the Romanian market is by forming a local company. The most common structures are:
- SRL (Limited Liability Company) – Ideal for small and medium-sized businesses, requiring minimal share capital and allowing full foreign ownership.
- SA (Joint Stock Company) – Suitable for larger enterprises looking to raise capital through investors.
Forming a company in Romania gives businesses full operational freedom, legal recognition, and better control over financial transactions. The process involves company registration, tax registration, and compliance with Romanian corporate laws.
- Opening a Representative Office
For companies not yet ready to fully establish a business entity, a representative office can be a good starting point. This allows businesses to:
- Conduct market research
- Build relationships with local clients and suppliers
- Promote their brand without engaging in direct commercial activities
A representative office cannot issue invoices or sign contracts, but it is a strategic option for businesses planning a gradual expansion into Romania.
- Partnering with a Local Distributor or Agent
If setting up a company is not an immediate goal, working with a local distributor or sales agent can be an effective alternative. This approach allows businesses to:
- Leverage local expertise
- Reduce operational costs
- Test the market before committing to full-scale operations
However, this strategy requires carefully drafted contracts to ensure legal protection and fair business terms.
- Establishing a Branch or Subsidiary
For companies already operating in the EU or internationally, opening a branch or subsidiary in Romania can be a viable option.
- A branch is an extension of the parent company and is not a separate legal entity.
- A subsidiary is an independent company owned by the parent company, benefiting from legal separation and liability protection.
This approach works well for larger corporations looking to maintain full control over their operations while benefiting from local market advantages.
Legal and Tax Considerations for Foreign Businesses in Romania
When setting up a local presence, businesses must comply with Romanian legal and tax regulations. Some key aspects to consider include:
- Company registration – Businesses must register with the National Trade Register Office (ONRC) and obtain a tax identification number.
- VAT registration – If annual turnover exceeds 88,500 EUR, companies must register for Value Added Tax (VAT).
- Corporate taxation – Standard corporate tax in Romania is 16 percent, while micro-enterprises may qualify for a lower tax rate.
- Employment laws – Hiring local employees requires compliance with Romanian labor laws, payroll taxes, and social contributions.
A strong legal foundation is essential for avoiding compliance risks and ensuring smooth business operations. Consulting with legal professionals experienced in company formation in Romania can help navigate these complexities.
How to Choose the Best Market Entry Strategy
Each business has different needs, so choosing the right approach depends on several factors:
- Long-term goals – If you plan to expand significantly, forming a local company is the best option.
- Industry requirements – Some sectors require local registration, while others allow operating through distributors.
- Budget and resources – Setting up an SRL involves administrative costs, while partnering with a local agent may be a lower-cost alternative.
- Market conditions – Conducting initial market research through a representative office can provide valuable insights before full-scale operations.
A customized strategy tailored to your specific business needs will maximize efficiency and minimize risks.
How Buju, Stanciu & Asociatii Can Help
Navigating the legal and regulatory requirements of setting up a local presence in Romania can be complex. Buju, Stanciu & Asociatii offers expert legal support to foreign businesses looking to expand into the Romanian market.
Our services include:
- Company registration and legal structuring – Helping you choose and set up the best legal entity for your business.
- Tax and compliance advisory – Ensuring your business meets all Romanian and EU tax requirements.
- Contract negotiation and business agreements – Drafting and reviewing contracts with local partners and suppliers.
- Regulatory and licensing support – Handling permits, industry regulations, and ongoing compliance.
- Dispute resolution and legal representation – Providing support in case of business disputes or regulatory challenges.
With extensive experience in company formation in Romania, our team ensures a smooth and legally compliant market entry for foreign investors and exporters.
