Business

Attention! In Romanian legislation, policies and other official communications, the LLC is commonly referred to as a “SRL”.

Before establishing an LLC, you should know what this legal entity is and what it entails. An LLC, or Limited Liability Company, is a legal form of organization consisting of one or more associates, whether individuals or legal entities.

As the name suggests, an LLC has the advantage of limiting the liability of its founders to the invested social capital. In this regard, the founder and the LLC are two separate entities, meaning that the obligations of an LLC are paid only from the company's funds (social capital).

The structure of an LLC can vary depending on the number of associates.

Although the most common form of legal organization is the LLC, it's important to note that there is a variation created to stimulate the business environment in Romania and encourage novice entrepreneurs to get involved actively for the first time in economic activities. This variation is known as LLC-D (“SRL-D”, D standing for Debutant).

Decision-making is simplified in the case of a Single-Member Limited Liability Company (in Romanian, “SRL cu asociat unic”), consisting of decisions made by the single associate.

The administrator of the LLC is responsible for managing and representing the company. The administrator is appointed by the decision of the single associate and can be either a natural or legal person. It can even be the single associate or another person from outside the company. If the administrator is someone from outside the company, an individual employment contract or a company management contract can be concluded with them. You can choose whether the administrator's position is paid or unpaid, depending on which type of contract you decide to conclude.

The number of associates cannot exceed 50.

The General Meeting of Associates (GMA) consists of all the associates of the LLC. GMA is responsible for making decisions on all important aspects related to the company's activities.

The administrator of the LLC is responsible for managing and representing the company. The administrator is appointed by the decision of GMA and can be either a natural or legal person. It can even be one of the associates or another person from outside the company. If the administrator is someone from outside the company, an individual employment contract or a company management contract can be concluded with them. You can choose whether the administrator's position is paid or unpaid, depending on which type of contract you decide to conclude.

If the LLC has more than 15 associates, the appointment of an auditor is mandatory. The role of the auditor is to monitor and report on the management and financial situation of the company, including from a legal perspective. Auditors are remunerated with a fixed allowance, determined by the articles of incorporation or the general meeting that appointed them.

Attention! In Romanian language the National Trade Register Office (NTRO) is translated into the Oficiul Național al Registrului Comerțului (ONRC).

An LLC is established at the National Trade Register Office (NTRO) by submitting a file. Once you have gathered all the necessary documents for establishment, you have two options: either you can handle the submission of the establishment file yourself, or you can use the services of a specialized company in this field, which can complete the entire process for you.

As for the opening procedure, there are two stages: the pre-submission stage of the establishment file to the NTRO and the post-submission stage. Thus, in the period before going to the NTRO, you will need to prepare a series of documents and make important decisions regarding the activities of your LLC.

In regard to beneficiaries with temporary protection from Ukraine, the registration process is the same as that of Romanian citizens.

Attention! For some beneficiaries of temporary protection, forming limited liability companies (LLCs) appears to be more common due to the legal challenges associated with starting a PFA. The complexity arises from legislation such as OUG 44/2008, which regulates the economic activities of authorized individuals, sole proprietors and family businesses, which states that EU citizenship is mandatory for the creation of a PFA. In addition, Law No. 122/2006 on the rights of asylum and the rights of persons enjoying temporary protection recognizes the right to be self-employed. However, practical problems often arise as non-EU nationals may face barriers to legal registration. To cope with this task, it is recommended to seek legal assistance in registration procedures.

For beneficiaries of international protection, including those with subsidiary protection or refugee status, the registration process is the same like Romanian citizens. Challenges may arise in the translation and recognition of educational diplomas. To solve this problem, use the designated recognition of studies website.

In the period before going to the National Trade Register Office (NTRO), you will need to:

• Draft the articles of incorporation;

• Establish the registered office;

• Choose the NACE code;

• Opt for a name;

• Choose a bank.

The articles of incorporation, as specified by the NTRO, are the documents that present information about administrators, associates, registered office, share capital, and other data of the LLC. You don't have to worry; NTRO provides a standardized model, and if you handle the establishment of the LLC on your own, you can download it by accessing the following link:

• Standard model of the articles of incorporation for an LLC

The registered office is the official address of the LLC and can be established at your own address, in a rented space, or at the office of a lawyer.

The NACE code, the classification of activities in the national economy, represents the classification of the LLC's activity in a certain field. To make an appropriate selection of CAEN codes, you will need to choose codes for both the main activity of the company and secondary activities. In choosing the codes, the NTRO has assisted those who want to establish an LLC by compiling and publishing a list: NACE codes.

To choose and reserve the name of your LLC, you will initially need to submit a request for verification of availability and reservation of the chosen name. The NTRO has assisted those interested by publishing a standardized form.

An LLC must also have share capital, which is currently 1 leu for each associate and can be deposited into the LLC's bank account after establishment.

Once you have completed these steps, you can proceed to gather the documents for the file that will be submitted to the NTRO for the registration and establishment of your LLC:

1. Registration request, which, unless the law provides otherwise, is submitted within 15 days from the date of concluding the articles of incorporation or the amending act, in the case of legal entities. This request can be submitted in person or by mail/courier services or electronically to the trade registry office;

2. Annex regarding fiscal registration. Don't worry; the NTRO has provided instructions for completing this annex;

3. Declaration of responsibility regarding the registered office;

4. Proof of availability check and name reservation;

5. Authenticated articles of incorporation (original);

6. Document attesting the right to use the designated registered office, and if applicable, the document attesting the right to use another space as a secondary office in the original or, if applicable, in a certified copy or legalized copy;

7. Copies of the identity documents of the founders, administrators, censors, or auditors who are natural entities;

8. Fiscal records of the founders (obtained by the NTRO, ex officio, from the National Agency for Fiscal Administration - ANAF), in the original;

9. Declaration regarding the real beneficiary of the legal entity;

10. Proof of payment of the legal fee, which can be paid into the following accounts: NTRO accounts;

11. Signature specimen.

For this stage, although there are instructions provided by the NTRO for completing the forms, we suggest seeking the services of an accountant or lawyer. As stated by the NTRO, the absence of a mandatory element in the registration request or one of the mandatory supporting documents results in the rejection of the registration request.

You will need to open a company bank account both to streamline transactions and to deposit the share capital. Subsequently, after this step and upon registering the LLC, you will need to pick up the company's registration certificate from the National Trade Register Office (ONRC), which includes all its details.

It is also advisable, if you haven't already done so, to find an accountant who will monitor the proper conduct of your operations as an entrepreneur and maintain contact with the National Agency for Fiscal Administration (ANAF).

To keep a clear, transparent, and legal record of the control actions carried out by specialized control authorities, you will need to obtain the Single Control Register (in Romanian, “Registrul Unic de Control”) from ANAF.

And now, with everything in order, you can perform your first operations as an entrepreneur. Of course, you can also use the invoicing services of a provider to streamline the invoicing process.

❗Attention: Starting from January 1st, 2024, e-invoicing (e-factura) becomes mandatory for all deliveries of goods and services performed between taxable persons established in Romania (B2B - business to business), and sanctions for non-compliance will be applied starting from April 1st, 2024. Currently, this means that you must report (upload invoices) to the Ministry of Finance and ANAF through the e-invoicing system within 5 days of issuing them.

📌Income tax

Income tax applies only to micro-enterprises, and to qualify for this category, an LLC must cumulatively meet the following requirements:

• They have generated revenues that do not exceed the equivalent in RON of 500,000 EUR;

• They must have at least one full-time employee (with salary contributions paid at least at the gross minimum wage) or an administrator with a mandate contract (with salary contributions paid at least at the gross minimum wage);

• They must not derive more than 20% of their turnover from consultancy and management activities;

• They must not engage in activities in the banking sector, insurance and reinsurance, capital market, including intermediary activities in these fields, gambling, exploration, development, exploitation of oil and natural gas deposits.

By meeting these conditions, micro-enterprises will pay:

• 1% income tax if the micro-enterprise generates revenues less than 60,000 EUR / year and does not carry out, as main or secondary activities, IT, Horeca, legal, medical, and health-related activities;

• 3% income tax if the micro-enterprise generates revenues between 60,000 and 500,000 EUR or engages in activities (main or secondary) in IT, Horeca (Hotel, Restaurant, and Café/Catering), legal, medical, and health-related fields.

❗Attention: Starting this year, you can only own one micro-enterprise as a partner/owner! Other companies you own will switch to profit tax (16%).

📌 Profit tax
In the event that an LLC does not meet the conditions specified above and exceeds the threshold of 500,000 euros, then a profit tax of 16% will be applied. The tax is levied on the profit generated by the company, not on the turnover.

You should know that even though "VAT" is a widely circulated concept, an LLC at the beginning of its journey will not pay it. Value Added Tax (VAT) is an indirect tax owed to the state budget that is applied to goods and services, directly proportional to their price, regardless of the number of transactions that occur in the production and distribution process prior to the stage where the tax is levied.

In our country, there is a standard rate of 19% that applies generally, but there are certain derogations of 5% and 9%, depending on the field of activity.
To become a VAT taxpayer, an LLC must check one of the two available options: either exceed the threshold of 300,000 lei, in which case within 10 days from the end of the month in which it exceeded or reached the legal threshold, the LLC must be registered as a VAT payer, or submit a request expressing this preference, after the registration of the company, to the National Agency for Fiscal Administration (ANAF). If you opt for the second option, ANAF provides you with a standardized form, called declaration 010.

In addition to these taxes, there is also the dividend tax. A dividend, as defined by the Fiscal Code, is a cash or in-kind distribution made by a legal entity to a participant, as a result of holding participation titles in that legal entity. In practice, dividends represent the distribution of a company's profit among its shareholders, legally and under certain cumulative conditions:

• It should take place quarterly or annually;

• An 8% dividend tax on the gross value of dividends must be paid.

You should also consider social contributions. These are paid when the LLC has employees, and in this case, the company is obliged to withhold the social security contributions owed by individuals earning income from salaries. In this regard, the following social contributions must be paid:

• 2.25% of the gross salary, which represents the employer's social contributions. This percentage is called the social insurance contribution;

• 25% - social insurance (CAS);

• 10% - health insurance (CASS);

• 10% - income tax.

Learn more about the social contributions you owe on the ANAF website.

Although the most common legal form of organization is the Limited Liability Company (LLC), you should know that there is a variation of it created to stimulate the business environment in Romania and encourage debutant entrepreneurs to actively engage in economic activities for the first time. This variation is called LLC-D (SRL-D with "D" standing for Debutant).

This form of limited liability company is part of the "Program for Stimulating the Establishment and Development of Microenterprises by Debutant Entrepreneurs in Business" and is dedicated to individuals over 18 years old,  who cumulatively meet the following conditions:

• Have full legal capacity, meaning individuals are capable of assuming rights and obligations through the conclusion of legal acts and contracts;

• Prior to the registration date of the company in the trade register, have not held and do not hold the status of shareholder or associate in an enterprise established in the European Economic Area;

• Establish a limited liability company for the first time;

• Submit a statement on their own responsibility, under the penalty of criminal law, stating that they have not held and do not hold the status of shareholder or associate in an enterprise established in the European Economic Area, which they submit to the trade register along with the application for the registration of the company.

SRL-D is a microenterprise that, to qualify for the program, must meet certain requirements:

• It is a limited liability company operating indefinitely;

• Falls within the category of microenterprises;

• Is established by a debutant entrepreneur as a sole associate or with a maximum of 5 debutant entrepreneurs as associates;

• Is managed by the sole associate or by one or more administrators among the associates;

• Has in its object of activity a maximum of 5 groups of activities provided by the National Economy Activities Classification (NACE) codes, excluding financial intermediation and insurance, real estate transactions, gambling and betting activities, production or sale of weapons, ammunition, explosives, tobacco, alcohol, substances under national control, plants, substances, and preparations subject to national control, as well as activities excluded from European standards for which state aid can be granted.

Being part of this program, microenterprises have certain benefits that support the purpose of establishing such an LLC. These, as indicated by the National Trade Register Office (NTRO/ONRC), include the following:

• Exemption from paying the fee for registration operations performed at the trade register offices for the registration of the microenterprise, as well as from paying the fee for publication in the Official Gazette of Romania, Part IV;

• Granting a non-reimbursable financial allowance, within the limits of the amounts approved for this purpose, representing a maximum of 50%, but not exceeding 10,000 euros or the equivalent in lei from the value of the project related to the business plan, for which proof of co-financing sources is provided;

• Exemption from paying employer social security contributions for 4 employees (indefinite period);

• Guaranteeing up to 80% of a loan of up to 80,000 euros or the equivalent in lei, contracted by the beneficiary for the purpose of implementing business plans accepted by A.I.P.P.I.M.M. (Agency for the Implementation of Projects and Programs for Small and Medium Enterprises).

Given all these conditions, but also the granted benefits, there is strictness regarding the moment when an LLC-D (SRL-D) loses its status as a limited liability company for debutant entrepreneurs. This status can be lost:

• On December 31 of the year in which 3 years have passed since the registration date;

• On the date on which any of the competent authorities find that the company no longer meets one of the conditions mentioned above;

• On the date when the activity of the microenterprise belonging to the debutant entrepreneur has ceased voluntarily or when the insolvency procedure has been initiated;

• Upon the expiration of 45 working days from the due date of an unfulfilled tax obligation;

• On the date of submitting the semi-annual or annual financial statements, if the turnover for the current year has reached the lei equivalent of 500,000 euros.

Attention! In Romanian legislation, policies and other official communications, the Authorized Natural Person (ANP) is commonly referred to as a “PFA”.

Authorized Natural Person (ANP) represents a legal form of organization in which the founder relies on their own labor to conduct economic activities, and if needed, may employ up to 3 individuals. Unlike a Limited Liability Company (LLC) where liability is limited to the company's share capital, an Authorized Natural Person is personally responsible before state institutions and third parties with their entire assets.

An Authorized Natural Person can be engaged in a maximum of 5 areas of activity, certified by NACE codes.

First of all, you need to consider the field of activity for your ANP. An ANP can have a maximum of 5 fields of activity, certified by NACE Codes. The NACE Code, which stands for the classification of economic activities, represents the categorization of the company's activity in a specific field. To make an appropriate selection of NACE codes, you will need to choose codes for both the main and secondary activities. In assisting those looking to establish an ANP, the National Trade Register Office (NTRO) has compiled and published a list of NACE codes.

Before registering the ANP with the NTRO, there is a preliminary step, namely the Request for verification of availability and reservation of the company name. Considering that it is an ANP, the company name will coincide with the name of the owner. NTRO specifies that if there is another trader with the same name, the initial of the father's first name will be added. NTRO has provided a standardized model for the request for checking and reserving the company name, which can be submitted online through the verification and reservation platform, by email, fax, mail, or in person at the counter.

After reserving the name, the name of the ANP will be formed, as specified by the Trade Register, from the full name of the professional, followed by the phrase "persoană fizică autorizată" or PFA.

After completing the preliminary steps, you can proceed to gather the necessary documents for registration:

1. Registration Application: The original application,  with a holographic (handwritten) or qualified electronic signature, accompanied by the required registration documents, is submitted at the counter or through postal/courier services or electronically to the trade register office in whose territorial area the professional office is located, either in person or through a representative;

2. Tax Registration Annex: NTRO provides instructions for completion to assist you;

3. Affidavit: your declaration regarding the fulfillment of operating/activity conditions for the professional office and/or secondary offices, or, if applicable, for third parties;

4. Proof of Name Availability and Reservation;

5. ID of the ANP Holder: A certified copy of the ANP holder's ID, attesting to conformity with the original;

6. Proof of Right to Use the Professional Office: Evidence of the right to use the professional office and, if applicable, the document attesting to the right to use the space designated as a branch (lease agreement or commodatum contract).

7. Uniqueness Verification: Verification of the uniqueness of the status of a natural person authorized/sole proprietorship holder/representative of the family enterprise, obtained through the care of the NTRO staff;

8. Information from the Fiscal Record, in original;

9. Additional Documents If Applicable:

   • Approval of the homeowners' association regarding the change of destination of collective immovables with a housing regime, as provided by Law no. 196/2018;

   • Declaration of the natural person who is the ANP holder, stating that the spouse regularly participates in the activities conducted by the natural person authorized, in original;

   • Self-declaration regarding the patrimony of affectation, in original;

   • Certified copies of documents attesting to professional qualification, if required by specific legal provisions;

   • Proof of authorization of the person designated to perform the formalities.

10. If the registration application is signed by the authorized representative, the affidavit, given under private signature by the holder of the ANP, must also be submitted. This affidavit should confirm that the holder meets the legal requirements regarding the possession and exercise of this capacity.

Once this dossier submission process is completed, the ANP can open a bank account to streamline transactions, although it is not mandatory. Similarly, an ANP is not legally obliged to have an accountant.

The advantages of establishing an ANP include zero opening costs and the possibility for the entire creation process to be undertaken without the assistance of a specialist, as it is much more straightforward compared to an LLC.

📌 Income tax

As an ANP, you have the option to choose between two types of taxation – the actual income system or the flat-rate income system. 

ANPs opting for the actual income taxation system record both their income and expenses in accounting for the purpose of conducting their business activities. These expenses are deductible (i.e., subtracted from gross income). Thus, the amount subject to tax payment is reduced.

ANPs that, in the fiscal year 2023, recorded an annual gross income exceeding the equivalent in lei of 25,000 euros at the BNR exchange rate, are obligated to calculate their annual net income using the actual system, starting from the fiscal year 2024.

If you have opted for the actual income taxation system, you will pay a 10% income tax, calculated on the annual net income.

On the other hand, you can choose to be taxed based on standard income  if you conduct your activity in certain fields specified by law. You can find the complete list of domains eligible for standard income taxation, as well as other information s on the ANAF website.

The contribution to social insurance (called CAS in Romanian) for ANP depends on the income levels they record:

• Less than 12 times the minimum wage (39,600 RON): No CAS owed;

• Between 12 and 24 times the minimum wage (less than 79,200 RON): what you owe CAS is 25%, applied to 12 minimum wages;

• More than 24 times the minimum wage: what you owe CAS is 25%, applied to 24 minimum wages.

Starting from January 1, 2024, the health insurance contribution (called CASS in Romanian) for sole proprietors must be:

• 10% of 6 minimum wages if your income is equal to or less than 6 minimum gross wages (3300 RON each). Therefore, you will have to pay 1,980 RON for health insurance;

• 10% of the net income for incomes between 6 and 60 minimum gross wages;

• 10% of 60 minimum gross wages for incomes exceeding 60 minimum wages.

To contribute to the budget with these taxes, the ANP must complete and submit a single return form, determining the tax amounts.

❗Attention: Starting from January 1, 2024, e-invoicing (called e-factura  in Romanian) becomes mandatory for all deliveries of goods and services between taxable persons established in Romania (B2B - business to business), and sanctions for non-compliance will be enforced starting from April 1, 2024. Currently, this means you must report (upload invoices) to the Ministry of Finance and ANAF through the e-invoicing system within 5 days of issuance.

Attention! In Romanian legislation, policies and other official communications, the Joint Stock Company (JSC) is commonly referred to as a “SA”.

A joint stock company represents a form of legal organization that brings together a minimum of 2 shareholders, meaning at least two individuals or legal entities who contribute to the share capital of the joint stock company. The share capital is subject to a minimum requirement of 90,000 RON, and in terms of shareholder liability, each of them is liable up to the limit of their contribution to the share capital.

The joint stock company is established through a memorandum of association and articles of association, with both elements combined in the form of an article of incorporation.

The General Meeting of Shareholders (also known as an Annual General Meeting - AGM) is the supreme consultative and decision-making body within joint stock companies. All individuals holding the status of shareholders at the time of the meeting are eligible to participate in the AGM. Joint stock companies are obliged to hold at least one annual general meeting.

Decisions within a joint stock company are made through the deliberations of the Ordinary General Meeting. For the validity of the deliberations of the ordinary general meeting, the presence of shareholders holding at least one-third of the total voting rights is required, and resolutions are adopted by a majority of the votes cast.

However, the incorporating document may specify higher quorum and majority requirements.

When a person contributes to the share capital of a joint stock company, they become a shareholder. As a shareholder, you have a series of rights and obligations.

Among the rights are the following:

• The right to participate in the General Meeting of Shareholders (AGM);

• The right of ownership over the shares;

• The right to receive dividends;

• The right to exercise your vote proportionally to the number of shares you own;

• The right to sell your shares;

• The right to appoint and dismiss members of the governing and representation bodies.

As for obligations, these primarily consist of:

• The obligation to make the payments you owe;

• The obligation to exercise your rights in good faith;

• The obligation not to undermine the share capital of the company.

Decisions within a joint stock company are made through the deliberations of the Ordinary General Meeting. For the validity of the deliberations of the ordinary general meeting, the presence of shareholders holding at least one-third of the total voting rights is required, and resolutions are adopted by a majority of the votes cast.

However, the incorporating document may specify higher quorum and majority requirements.

Before diving into business, it's beneficial to know that you can access certain types of financial support, especially as a novice entrepreneur.

We will list some funding programs below. We don't claim that this list is exhaustive, so we encourage you to research the opportunities that may arise.

Start-up Nation is a funding program designed to stimulate the establishment of small and medium-sized enterprises. This program provides certain Non-Reimbursable Financial Allocations (NRFAs), which can represent up to 95% of the eligible project expenses. Micro-enterprises, beginner micro-enterprises, and small and medium-sized enterprises that cumulatively meet specific rigorous requirements, mainly related to registration and economic status, can benefit from this program.

Among the eligible expenses are technological equipment, the purchase of systems, installations, and equipment specifically for achieving energy savings, energy from renewable sources, acquisition of workspaces, production spaces, service and trade spaces, means of transportation, etc.

The measure will be structured into components of Start-up Nation funding – the 3rd edition - financing 10,000 projects with a sum of 200,000 lei per project, aiming to stimulate entrepreneurship and create new jobs, with a focus on education, training, mentoring, and will include mandatory eligible expenses such as digitalization vouchers. The measure will provide additional scoring for Romanian citizens returning from the Diaspora to open a business in Romania.

The multi-year national program for the development of entrepreneurship among women in the small and medium-sized enterprises sector will be implemented according to the Romania Tech Nation Economic Stimulus Package for supporting and boosting the digitization of the economy – the "Woman in Tech" Component of the Governance Program. The purpose of this program is to stimulate and support private economic structures established by women, promote entrepreneurship among women in the small and medium-sized enterprises sector, and increase the level of technology and digitization in companies led by women entrepreneurs. The program aims to achieve its goal through the development and implementation of a de minimis aid scheme for SMEs with majority female-owned social shares/actions, providing grants with a maximum value of 200,000 lei per SME to an estimated number of 1000 beneficiaries.

The Small and Medium-sized Enterprises Development Acceleration Program aims to stimulate the credit component of small and medium-sized enterprises by providing subsidized loans and interest rates for investment loans. This will be achieved through the provision of subsidized interest loans, with a maximum value of 50,000 lei, to an estimated number of 80 small and medium-sized enterprises.

The multi-year national program for the establishment and development of technological and business incubators will be implemented according to the Economic Stimulus Package for SMEs in the Governance Program. It will support the establishment of business incubators for students in universities, in collaboration with local partners (public authorities, companies operating in the local market). The main objective of the measure is to establish and develop 10 business incubators for students in partnership with universities and local public authorities, hosting Romanian startups founded by students in the fields of university training. These incubators will provide various services and facilities to enterprises at reduced costs. The program will be managed through the development and implementation of a support measure by providing financial assistance of 500,000 lei to an estimated number of 10 projects submitted in partnership by universities with local public authorities.

📌 What are stocks? 

Stocks - capital investments, represent a portion of a company. By selling stocks, i.e., parts of companies, shareholders benefit from financial resources that they allocate to the development of new projects or distribute certain funds in the implementation of new growth strategies. Well, stocks come in two types, and depending on the type of stock you hold, you have different rights. There are common or ordinary shares and preferred shares.

📌 What types of stocks are there?

Common (ordinary) shares give you voting rights, but dividends and the percentage resulting from liquidation are variable.

On the other hand, there are preferred shares that offer fixed dividends. However, holding preferred shares does not grant you voting rights.

📌 How do you acquire stocks?
The process of obtaining stocks can be easier than it seems, and you have several options. The classic method is to turn to a broker who, based on your preferences and by exposing the risks of investing in stocks listed on the stock exchange, will invest the capital you provide, analyze the market, and hopefully generate a profit for you.

The other method is to study the market using various tools and online applications and to invest directly in stocks through an online platform. Usually, the interfaces of such platforms allow you to view, in real-time, the evolution of company stocks. The advantage when you manage this process is that you can sell whenever and as much as you want to generate a profit.

A bond represents a loan from a firm/company, debtor, in need of financing. To secure this, they turn to a creditor who holds the respective bond. A bond comes with a fixed interest and an annual amount to be paid by the debtor.

It's important to note that a limited liability company cannot issue bonds, only a joint-stock company can. By holding bonds, you do not possess voting rights; instead, you have a right to a claim, meaning to receive your money back with added interest.

However, convertible bonds can be converted into shares of the issuing company under the conditions specified in the public offering prospectus.

The face value of a bond cannot be less than 2.5 lei, and bonds from the same issue must be of equal value and provide equal rights to their holders. Bonds can be issued in physical form, on paper, or in dematerialized form, through registration in an account.

Bonds are redeemed by the issuing company at maturity, and before maturity, bonds from the same issue and with the same value can be redeemed through a lottery, at a value higher than their nominal value, set by the company and publicly announced at least 15 days before the lottery date.

📌 Dividend taxes

If you are a shareholder in a company or an investment fund in Romania, you should know that your dividends are subject to taxation. Starting from January 1, 2023, your dividends are taxed at a rate of 8%, which is withheld at the source (meaning by the company/fund from which you obtained them).

For shares in companies/funds from other countries, the taxation rules depend on the laws of the respective country. The value of taxes, method of payment, etc., may vary. The Romanian state has concluded double taxation avoidance agreements with numerous other countries (which means you are not taxed twice).

📌 Tax on Capital Gains from Securities Transactions
If your broker is a resident in Romania, according to the law, as of January 1, for securities held for more than 1 year, you will have to pay a 1% tax on each gain, and for securities held for less than 1 year, a 3% tax on each gain.

If your broker is not a resident in Romania, you will need to pay a 10% tax on the profit made from the transfer of securities.

Additionally, you are required to pay the contribution to health insurance (CASS) based on the income derived from dividends or the transfer of securities. This is valued at 10% and is calculated based on your earnings. Thus:

• If your earnings are equal to or less than 6 times the gross minimum wage in the country, you are exempt from paying CASS;

• If your earnings fall between 6 and 12 times the gross minimum wage in the country, the CASS calculation base is set at the level of 6 times the gross minimum wage;

• If your earnings range between 12 and 24 times the gross minimum wage in the country, the CASS calculation base is set at the level of 12 times the gross minimum wage;

• If your earnings exceed 24 times the gross minimum wage in the country, the CASS calculation base is set at the level of 24 times the gross minimum wage.

You can fill out the single return form here.