Friday, January 24, 2014

Registering as a sole trader in Romania

The Romanian individual enterprise functions at a specific routine that must be explicitly illustrated. Understanding the legal apparatus behind this structure becomes an essential condition for the financial success of each business project.

Among options that the Romanian law provides for small business alternatives we would like to mention as well the sole proprietorship. Being included in a particular category and frequently raising various types of questions, this specific form of enterprise has an almost similar profile to what is known as the Romanian authorized physical person. Starting a sole proprietorship in Romania clearly implies the fact that you have chosen a small-scale economic activity which allows a more individualistic approach. Setting up a business in Romania according to this particular framework comes with certain duties that must be fulfilled. Probably one of the most important features relates to providing a document which proves the fact that you are professionally trained for the activity that you will conduct.

Setting up a Business in Romania – documents needed for establishing a sole proprietorship

Documents which must be provided in order to establish the sole proprietorship (in Romania called Intreprindere Individuala) include a copy of the identity card, papers offering information related to your professional training, a bailment contract, a document proving the fact that you are certified to use the future registered office, a specimen signature, evidences that taxes were paid. The main steps to be followed, for starting a sole proprietorship in Romania, indicate as an initial phase the reservation of the name. In order to check the name availability you will have to submit a request to the National Trade Register (ORCT). In the same day you will be provided with the result that must be added to the file which is to be submitted in order to open the sole proprietorship. The name of the company has the same structure as that imposed for PFA meaning the name and surname of the owner adding as well the collocation “intreprindere individuala”.

The sole proprietorship structure allows hiring employees and cooperation with other entrepreneurs avoiding to change the legal status of the entity itself. Starting a sole proprietorship in Romania involves a particular tax regime which applies to this unique framework. The owner must pay the state income tax and the social security contributions required by the public pension system and the health bureaucratic apparatus. If employees with individual employment contract are to be hired than all taxes connected with an optimal function of the agreements must be paid. The income tax is determined by taking in account the 16% rate. The basis for calculating the income tax is to be established according to the system chosen by the payer: the real system or at income norm. Tax returns are to be explained by a professional and that is why our experts support the approach that always involves the certified legal help. Asking an expert’s opinion completely changes the perspectives, accurately emphasizing significant details and also introducing the possibility of identifying another alternative for your business plan. Setting up a business in Romania may become an effortless approach when benefitting from the appropriate legal assistance which is able to simultaneously secure the overall investment. 

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