Subsidiary, Branch, Representation Office, or Tax Representative in Romania?

1. Filiala SUBSIDIARY

• a foreign company may setup this entity in Romania, Filiala, as a 100% Romanian company:

  • Limited Liability Company = ro. Societate cu Raspundere Limitata, SRL - or

  • Joint Stock Company = ro. Societate pe Actiuni

• Filiala is free to trade without restrictions: it can have clients and suppliers, it can employ personnel

• the registration of Filiala is at both the Romanian Trade Registry and the Romanian Tax Agency

• Filiala can benefit of reduced tax rate as micro-company (=ro. microintreprindere)

• Tax risk: under certain conditions, Subsidiaries may be reclassified as Branches and taxed as such

2. Sucursala BRANCH

• Sucursala is an entity which pays taxes in the name of the foreign company

• Sucursala is mandatorily a profit tax payer

• the registration of Sucursala is also both at the Romanian Trade Registry as well as at the Romanian Tax Agency

3. Reprezentanta REPRESENTATION OFFICE

• a way of registering a foreign company at the Romanian Tax Agency when the foreign company does not trade in Romania. As an example, a Reprezentanta only promotes its mother company in Romania

• the main tax it has to pay is RON 18 000 a year

• it may employ personnel

• but it cannot sign any contracts with clients

• the registration of this Reprezentanta is only at the Romanian Tax Agency, without the Romanian Trade Registry

4. Reprezentant fiscal TAX REPRESENTATIVE

• the foreign company does not want to setup a full presence in Romania. Instead, it uses an intermediary (the Reprezentant fiscal), which it appoints with a Power of Attorney

• the Reprezentant fiscal goes to the Romanian Tax Agency and obtains a dedicated Romanian tax code

• the registration of this Reprezentant fiscal is only at the Romanian Tax Agency, without the Romanian Trade Registry