For the moment, the Romanian law does not allow foreign citizens to own land in Romania. There is a lot of speculation on when the foreign citizens will be allowed, with the latest being that they will be allowed after 5 years from the Romanian integration in the EU.
However, there are 2 ways the foreign citizens could own their own piece of land:
Way 1
One is to put the land in the name of a Romanian citizen they trust (if necessary, with an additional contract between parties which stipulates the real ownership and does not give the right of the Romanian citizen to sell up the land and disappear!)
Way 2
The other option is to set up their own company – and we describe this option below.
Foreign citizen will need the following documents:
- ID (passport) original + 2 copies
- Proof of ownership of the headquarters (or rental contract in the name of the new company)*
* The new company has to prove it has an address where it operates from. This should not be an address where there is already another company registered, unless there is a common associate (shareholder) between the two companies. The common shareholder could have any percentage of the company (min 1% - max 99%).
Followed by
:
- Choosing the name and activity of the company (probably the easiest step!) – you have to choose at least three names, in order of preference;
- Choose the headquarters*;
- Opening of a bank account and deposit of the social capital of the company (min. 200 RON = 40 GBP)
- Choosing the type of the company in order to establish a base for taxation: either micro-company or macro-company.
In case of a micro-company the annual tax will be 3% of the turnover but there are a few conditions to fulfil: the turnover should not be greater than 100,000 euros and there must have at least one employee up to nine employees.
In case of a macro-company the annual tax will be 16% of the profit after the expenses) and do not have to prove they have employees;
Choosing whether the company will be VAT registered or not; if the company will be VAT registered then VAT will be charged to the buyer at the moment of transaction.
Then the associates will have to go to the notary in person for the:
- Authentication of the documents (in 6 copies);
- Signing of a declaration to declare the fact that they do not have a criminal record;
- Setting up of a “procura” document (authorising another party to continue and sign on their behalf for the setting up) – only if the foreign citizen will not be able to stay in the country for the next steps which would take about one week.
Theoretically, the last step would be heading back to the Commerce Register with the following documents – see below, and filling in a request form, but this step could be done by the person delegated with the "procura" document:
- Proof of opening of the bank account and social capital (money deposited);
- Authenticated documents from the notary;
- All the other authorisations necessary for the activity of the company – proof that the company would not impact on the environment.
All these steps involve various costs for the notary and Commerce Register. The total cost will be about 780 RON (156 GBP) + social capital (40 GBP which are redeemable once the company is set up) + the "procura" document (only if it is needed this will cost about 10 GBP).
On top of the setting up costs there are monthly running costs:
- The company has to have an employee – this could be the accountant;
- The company has to pay necessary taxes for that employee (health, social services, unemployment, etc.) – about 50 RON / month for a basic collaboration contract between the accountant and the company – this is the minimum cost scenario;
- The company has to file every month a declaration of zero activity to the relevant authorities, separate to the costs for the employee. An accountant could do this for about 100 – 200 RON / month = 20 – 40 GBP. Filing of various papers and paying the necessary taxes is a very time consuming activity because everything is done in person and the accountant will have to travel personally between various locations and queue at the necessary tills.