A European technology company decides to establish a Romanian subsidiary as its gateway into Central and Eastern Europe. Within weeks, it discovers that Romanian corporate legislation imposes procedural requirements. for articolele de asociere (articles of association). Registered office documentation. Additionally, shareholder resolution formats. that differ materially from both its home jurisdiction and from other EU member states it has entered before.
Corporate law in Romania governs the formation, governance, and restructuring of commercial entities through a body of legislation rooted in the civil law tradition. International businesses typically establish a societate cu raspundere limitata (private limited liability company, equivalent to an SRL) or a societate pe actiuni (joint-stock company. Equivalent to an SA), with registration completed through the Oficiul National al Registrului Comertului (National Trade Register Office, ONRC). The process from document preparation to active registration ordinarily takes between two and four weeks, provided all documentary requirements are met at the outset.
This page covers the legal instruments available under Romanian corporate law, the procedural steps and their typical timelines, the most common pitfalls for international clients. The cross-border dimension including EU and Portuguese perspectives. Additionally, a practical self-assessment checklist to guide your decision-making.
The Romanian corporate law environment and why it matters for international investors
Romania is an EU member state operating under a civil law tradition strongly influenced by French and Italian models. Its corporate legislation draws on this heritage while incorporating EU harmonisation directives on company law, shareholder rights, and capital requirements. For investors accustomed to common law systems – or to more flexible civil law jurisdictions such as the Netherlands or Luxembourg – Romania presents a rules-based environment in which procedural compliance is strictly enforced.
The primary branch of law governing commercial entities in Romania is the corporate legislation applicable to commercial companies. Complementary rules arise under civil legislation, tax legislation, and the regulatory regime of sector-specific authorities. The Registrul Comertului (Trade Register) is both the registration authority and the primary public repository of corporate documents. Decisions of the board of directors, amendments to the articles of association, and changes in shareholding structure must all be registered to be enforceable against third parties.
A non-obvious risk for international clients is the consequence of delayed registration. Under Romanian corporate legislation, acts performed in the name of a company before its registration can be attributed personally to the founders. This risk is concrete and immediate. A business that begins operations – even informally – before the ONRC issues the registration certificate exposes its founders to personal liability for obligations incurred in that period.
A second structural feature that distinguishes Romania from Western European peers is the mandatory involvement of a Romanian notary public – a notar public – in a range of corporate acts. Amendments to the articles of association, transfers of shares in certain company types, and specific shareholder resolutions must be executed before a notary. Clients who attempt to replicate a process used in Germany or Portugal, where notarisation requirements differ, frequently encounter delays that push their timeline well beyond initial estimates.
Core instruments, procedures, and timelines under Romanian corporate legislation
Romanian corporate law provides several principal vehicles for structuring international investment. The choice of instrument determines governance rules, liability exposure, minimum capital requirements, and exit mechanics.
The SRL (private limited liability company) is by far the most common vehicle for foreign direct investment in Romania. It requires a minimum share capital of RON 200 (approximately EUR 40), which is among the lowest in the EU. The liability of shareholders is limited to their capital contribution. Governance is exercised through one or more administrators rather than a board of directors in the SA sense. Additionally. Shareholder resolutions are passed by a majority of shares unless the articles of association specify a higher threshold. The SRL cannot have more than 50 shareholders, which makes it suitable for closely held operations but unsuitable for structures contemplating broad investor participation.
The SA (joint-stock company) requires a minimum share capital of RON 90,000 (approximately EUR 18,000) and is the appropriate vehicle for operations requiring access to capital markets, complex governance structures, or a supervisory board. The SA may adopt either a unitary governance model – with a board of directors – or a dual model with a directorate and a supervisory board. International groups with listed parent companies frequently prefer the SA structure for Romanian subsidiaries to ensure alignment with group governance standards.
The registration process for both vehicles follows a common sequence. First, the founders or their legal representative draft and notarise the articles of association. Second, the registered office address is established and supporting documentation – typically a lease or a right-of-use agreement – is prepared. Third, the share capital is deposited in a dedicated bank account and a bank confirmation is obtained. Fourth, the registration application is filed with the ONRC, together with identification documents of shareholders and administrators, declarations of non-conviction, and proof of any professional qualifications required for regulated activities. The ONRC processes standard applications within three to five business days of receiving a complete file. In practice, clients who submit incomplete files can expect a request for supplementary documents, which restarts the clock and typically adds one to two weeks.
Once registered, ongoing corporate governance obligations include filing annual financial statements, maintaining updated registration data, and adopting shareholder resolutions for material decisions. A failure to file financial statements for two consecutive years triggers a procedure under which the ONRC may initiate dissolution of the company.
For clients exploring acquisition structures, the interaction between corporate and tax legislation is critical. Transfers of shares in an SRL require a notarised act and registration with the ONRC to be enforceable against third parties. Transfers of shares in an SA listed on a regulated market follow a different regime under capital markets legislation. In either case, pre-acquisition due diligence must cover the registered corporate history at the ONRC, any pledges over shares, and any pending dissolution or insolvency proceedings. Our analysis of mergers and acquisitions in Romania addresses the transactional layer in greater depth.
To receive an expert assessment of your corporate structure options in Romania, contact us at info@ferrazwhitmore.com.
Practical pitfalls and what international clients consistently underestimate
Practitioners advising international clients in Romania consistently identify a cluster of errors that arise not from ignorance of the law but from assumptions carried over from other jurisdictions.
Registered office requirements are strictly enforced. Romanian corporate legislation requires that the registered office correspond to a real premises at which the company can receive official correspondence. A virtual office arrangement acceptable in the UK or the Netherlands may not satisfy the Romanian requirement if the landlord cannot provide documentation proving the lawful use of the premises as a registered office. Clients who rely on low-cost virtual office providers without legal verification frequently receive rejection notices from the ONRC.
Administrator declarations carry personal criminal liability implications. Each administrator of a Romanian company must submit a declaration confirming that they have not been convicted of certain offences. This is a standard procedural requirement, but international clients sometimes treat it as a formality. Under Romanian legislation, a false declaration constitutes a criminal offence. An administrator who holds a prior conviction in a foreign jurisdiction that was not disclosed may face criminal exposure in Romania.
Shareholder resolutions must follow mandatory formalities. Romanian corporate legislation specifies the quorum and majority requirements for different categories of shareholder resolution. Amendments to the articles of association, approval of significant transactions, and capital increases each require specific procedures. An international group that attempts to apply its home jurisdiction's procedural shorthand. such as a written shareholders' resolution without a formal meeting. may find that the resolution is invalid under Romanian law. Particularly where the articles of association do not expressly permit such a procedure.
Branch vs. subsidiary: a decision with lasting consequences. Some international clients consider establishing a branch – sucursala (branch office) – rather than an incorporated subsidiary. A branch is not a separate legal entity; the parent company bears unlimited liability for branch obligations. The branch must also register with the ONRC and maintain its own accounts. Tax treatment differs depending on whether the parent has its residence in an EU member state or a third country. Clients who choose the branch form for cost-saving reasons and later seek to convert to a subsidiary face a complex and costly transition.
Timing mismatches in group restructurings. When a Romanian company is involved in a cross-border merger or division under EU harmonisation rules, the procedure involves parallel filings in multiple jurisdictions. The Romanian ONRC and the courts – tribunalul (the first-instance court with commercial jurisdiction) – both play a role. Experience shows that the Romanian procedural steps frequently take longer than equivalent steps in Western European jurisdictions. Groups that plan a restructuring on a tight timeline without accounting for Romanian procedural timelines risk breaching board obligations or third-party contractual deadlines.
Cross-border and strategic considerations: EU dimension and the Portugal connection
Romania is fully integrated into the EU single market, and Romanian corporate law reflects the body of EU harmonisation directives on company law. This has practical consequences for international structuring.
A Romanian company can take advantage of EU freedom of establishment rules to open branches or subsidiaries in other EU member states without additional incorporation requirements at the EU level. Conversely, EU-based shareholders benefit from the EU parent-subsidiary regime and the EU interest and royalties regime under tax legislation, subject to the domestic conditions applicable in each state. These rules affect how dividends, interest, and royalty payments between a Romanian operating company and a holding company in another EU state are structured and taxed.
The Portugal-Romania axis is a recurring structuring consideration for clients of Ferraz & Whitmore. Portuguese holding companies have been used to hold Romanian operating subsidiaries in structures designed to benefit from the EU participation exemption regime and the Portugal-Romania double taxation treaty. The two jurisdictions share a civil law heritage. This means that the fundamental logic of corporate governance instruments. the articles of association. The general meeting, the board of directors. operates on recognisable principles even if procedural details differ significantly.
Our team advises on both jurisdictions. Clients building parallel structures in Portugal and Romania benefit from unified strategic advice rather than piecemeal coordination between separate local advisers. For the Portuguese corporate dimension, our service page on corporate law in Portugal sets out the equivalent instruments and procedures in detail.
For clients considering Romania as part of a broader EU market entry, the choice between Romania and alternative Central and Eastern European jurisdictions. such as Poland. The Czech Republic. Alternatively, Hungary. involves a comparative assessment across tax legislation, insolvency legislation, judicial enforcement culture, and operational infrastructure. Romania offers a large domestic market and a strategic geographic position linking Western Europe with the Black Sea region, the Western Balkans, and the South Caucasus. These advantages are most fully captured through a structure that anticipates regulatory compliance requirements from the outset rather than retrofitting governance after operations begin.
A further consideration for non-EU clients is the foreign investment screening regime applicable in Romania. Romanian legislation implementing the EU Foreign Direct Investment Screening Regulation imposes notification and review obligations for investments in sectors designated as strategically sensitive. Clients in technology, energy, transport, and media sectors must assess whether a proposed acquisition or greenfield investment triggers the notification threshold. Failure to notify when required can result in the investment being unwound.
For a tailored strategy on corporate structuring in Romania, reach out to info@ferrazwhitmore.com.
Self-assessment checklist before initiating corporate action in Romania
Before committing to a structure or initiating a registration or governance procedure in Romania, consider the following questions. Honest answers to each will clarify which instrument is appropriate and where professional guidance is most critical.
Applicable conditions for establishing an SRL in Romania: you have up to 50 shareholders. you do not anticipate needing access to Romanian capital markets in the short term. your governance needs can be met through an administrator structure rather than a multi-tier board. and your activity does not fall within a sector requiring a minimum capital above the SRL threshold.
Applicable conditions for establishing an SA: you require a board of directors or a supervisory board structure aligned with group governance standards. you anticipate third-party institutional investors or employee share ownership. you operate in a sector where the SA form is mandatory or customary. or your capitalisation requirements exceed the SRL threshold.
Before filing the registration application, verify:
- The registered office documentation is complete and the landlord has confirmed authorisation for use as a corporate registered office.
- All administrators have prepared valid declarations of non-conviction, apostilled where they are foreign nationals.
- The articles of association have been reviewed by Romanian legal counsel and notarised by a Romanian notar public.
- The share capital deposit confirmation has been obtained from a Romanian bank account.
- Any regulated activity licences required for the proposed business have been identified and timelines for obtaining them have been confirmed.
Triggers for escalating to a more complex procedure: if the proposed transaction involves a transfer of shares in an existing Romanian company. The matter shifts from a registration procedure to a transactional procedure requiring due diligence, a share purchase agreement. Additionally, ONRC filing of the transfer. If the target company has pledged shares, pending litigation, or an unresolved tax assessment, the matter may require engagement with insolvency legislation or administrative law before the corporate transaction can proceed. A detailed pre-transaction guide is available in our guide to company formation in Romania, which covers the formation process step by step.
Decision point for branch vs. subsidiary: if the parent company's risk appetite for direct liability in Romania is limited, the subsidiary structure is almost always preferable. A branch may be appropriate only where the parent intends to test the Romanian market for a defined short period and does not wish to bear the administrative cost of maintaining a separate legal entity. Even then, the branch must comply with local registration, accounting, and tax obligations – the administrative savings are frequently smaller than clients expect.
Frequently asked questions
- How long does it take to register a company in Romania, and what can delay the process?
- The ONRC processes a complete registration application within three to five business days. In practice, the full process – including preparation and notarisation of the articles of association, bank account opening, and document gathering – typically takes two to four weeks from instruction. The most common sources of delay are incomplete registered office documentation, errors in administrator declarations, and missing apostilles on documents issued by foreign authorities. Engaging a Romanian lawyer from the outset to coordinate document preparation is the most reliable way to avoid supplementary requests that restart the clock.
- Can a foreign national be the sole shareholder and administrator of a Romanian company?
- Yes. Romanian corporate legislation does not require a Romanian national among the shareholders or administrators. A foreign national can be the sole shareholder and sole administrator of an SRL or SA. However, the administrator must submit a declaration of non-conviction and, depending on nationality, may require an apostille or legalisation of foreign identity documents. There is a common misconception that Romanian residency is required – it is not, but the company must nonetheless have a genuine registered office in Romania.
- What are the ongoing compliance obligations for a Romanian company after registration?
- A lawyer in Romania advising on corporate compliance will typically highlight three primary obligations. First, annual financial statements must be filed with the relevant public authority within the statutory deadline. Second, any change in shareholders, administrators, registered office, or share capital must be registered with the ONRC promptly to remain enforceable against third parties. Third, shareholder resolutions on reserved matters – including approval of annual accounts, amendment of the articles of association, and appointment or removal of administrators – must follow the mandatory procedures under corporate legislation. Failure to maintain compliance triggers dissolution risk and can create personal liability for administrators.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in corporate law, including company formation, governance, restructuring, and compliance in Romania and across the EU. We work with international entrepreneurs, institutional investors, and in-house legal teams who require results-oriented counsel from a law firm in Romania and across Europe. As an international law firm operating across civil law and common law systems. We are well placed to advise clients managing corporate structures that span multiple jurisdictions. including the Portugal-Romania axis that features frequently in CEE investment strategies. The firm's corporate law practice covers jurisdictions across Europe, the Americas, and Asia-Pacific, supported by a network of local counsel. Our attorneys have advised on company formation, M&A, and governance matters across both civil law and common law systems. To discuss how Romanian corporate law applies to your structure or transaction, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.