The advantages of starting a business in Romania as a foreign investor

Romania is a country with unmistakable natural beauty, a growing economy and a talented workforce that is strategically located to important markets because of its access to the Black Sea. There are several advantages of starting a business in Romania as a foreign investor and we present these below.

Low corporate income tax

The standard corporate income tax rate in Romania is 16%, however, the country is known to provide a very low tax of only 1% for a micro-company with at least one employee and a 3% rate for a micro-company with no employees. The micro-company is a legal entity that has an annual revenue below 1,000,000 euros at the end of the financial year. Resident companies are taxed on their worldwide income while branches in Romania are taxed on the profits they derive from the Romanian permanent establishment.

The value-added tax rate in Romania is 19%, with reduced rates of 9% and 5% for different types of services, among which we mention food and beverage, accommodation, restaurant and catering services, entertainment services, newspapers and magazines and others.

Research and development companies in Romania are offered a 50% deduction for eligible expenses. There is also a regime for the accelerated depreciation for R&D equipments and devices.

Qualified workforce

Foreign investors in Romania can find both blue-collar and white-collar workers, with a particularly large pool of highly skilled individuals in the software development industry. The fact that foreign companies can find talented engineers and software programmers when basing their businesses in Romania is an important advantage.

Low business costs

Romania has competitive business costs compared to other EU countries, most commonly West-European jurisdictions. The gas and electricity prices and availability, along with excellent services for the telecommunications industry (high-speed internet at low costs) and lower labor costs are important factors that can be taken into consideration by foreign investors.

A member of the European Union, Romania has adhered to the modernization reforms and the development required from member states, thus improving its potential as a destination for doing business in Eastern Europe.

Foreign investors in Romania find that the country has an important drive for growth, sustained by consumption and investment, by talented and well-educated employees. Business opportunities can be found in many of the country's areas and industrial parks are spread out in many regions, with twenty-two such parks in the South, fifteen in the North-West, fifteen in the Center and others in different other areas.