Wise Investments in Romania
Foreign direct investment (FDI)
Foreign direct investment (FDI)
Prunaru & Associates are a powerhouse of foreign investment knowledge and services. Our foreign investment lawyers in Romania deliver solid investment legal advice and all the required documents our clients need to enter the Romanian business market at any investment scale.
Why invest in Romania?
Romania is one of the fastest growing, competitive and dynamic economies in the CEE (Central & Eastern Europe) and has made major changes to make foreign investment attractive. Since it’s accession into the EU in 2007, Romania has made provident monetary changes to gain confidence with foreign investors, boosting international relations and economic growth.
Moreover, in the late years there were additional tax cuts, making Romania one of the lowest tax jurisdictions in the EU. This low tax scheme encourages a wide range of foreign investments in Romania, from industrial investment to smaller start-up initiatives, making thus investment in Romania equally attractive at any scale.
How are taxes in Romania?
Overall, Romania has one of the lowest flat tax, VAT and income tax systems in the EU, with tax exemption on reinvested profit and further income tax exemptions.
New tax regulations
New tax code in 2015 introduced numerous tax adjustments in favour of the liberalisation of the economy.Reduction of the VAT rate from 24% to 19% in 2017.
Dividend tax reduction from 16% to 8% in 2023.
Startup, serviced based, non-VAT small business, now benefit from a flat tax rate of only 3% on turnover.
Personal Income Tax
Personal income tax in Romania is a flat rate of 16%, one of the lowest individual tax rates in the EU, with the EU average being 38%.Corporate Tax
Standard corporate income tax in Romania is 16%, also one of the lowest in Europe, under the average of 21% within the EU and dividend income distributed after 1 January 2023 is subject to only 8% income tax.Fiscal Incentives
New fiscal incentives have been put in place and taxes reduced to attract foreign investments in Romania. Starting with 1 January 2017, the VAT rate was lowered to 19%. Furthermore, the VAT rates on food items are 9% and on some forms of entertainment a mere 5%. As of 1 March 2017, 0% VAT has been extended for housing sales, advertising and agricultural investments, in certain conditions.
Romania has some excellent fiscal incentives, including a 10% income tax exemption for employees working in the IT and R&D sectors, and a 10% profit tax exemption for reinvestment in new business purpose tech equipment, in certain conditions.
Is Investment growth rising?
The answer is yes. Investment growth in Romania has continuously risen since it’s accession into the EU in 2007, with a predicted future climate of sustained growth.
With Romania offering some of the lowest labour costs in the EU, low cost real estate and construction, a booming industrial market, strong agricultural industry, and ever-increasing telecommunication & IT market, now is the best time to invest in Romania.
How can we help?
Prunaru & Associates are a powerhouse of foreign investment knowledge and services, our foreign investment lawyers in Romania delivering solid investment legal advice and all the required documents our clients need to enter the Romanian business market.
Our innovative and experienced foreign investment lawyers in Romania are the bridge needed to simplify every investment legal process. Prunaru & Associates discuss our clients investment interests in detail, ensuring an efficient, legally sturdy move into the Romanian marketplace.
Teamwork is our core focus within our foreign investment legal services. We combine our specialised legal expertise and resources to provide every client with a bespoke and complete long-term investment strategy.
Our specialist investment lawyers in Brasov pool our investment, banking, financial, real estate and corporate law expertise to ensure every step of the process has been scrutinized, ensuring our clients the opportunity for maximum financial growth and longevity of their investment in Romania.
Advantages of Romania
Market & Location
Market & Location
One of the largest markets in Central and Eastern Europe (over 19 million inhabitants).
A growing market, increasing business opportunities, while the entry barriers remain low.
Attractive location: allowing an easy access to the countries of the former CIS, Balkans, the Middle East and Northern Africa.
Attractive location: at the junction of three prospective European transportation corridors no. 4, 7 & 9.
Resources
Skilled labor force with solid knowledge in technology, IT and engineering.
Rich natural resources, including fertile agricultural land, oil and gas.
Ever increasing cultural and eco-tourism.
Political Advantages
Stable executive power.
Government - more responsive to the dialogue and suggestions of the business community.
Stability factor in the Area - NATO member.
Stability Guarantee in South Eastern Europe.
EU membership since January 2007.
International Relations
Bilateral agreements between Romania and other countries for investments promotion and protection.
Bilateral diplomatic relations with 177 out of 191 countries.
Member of the UN and other international organizations, including: OSCE, Council of Europe and International Organization of La Francophonie.
Free trade agreements with EU, EFTA and CEFTA countries.
WTO member since January 1995.
Economic Advantages
Sustainable economic growth.
Functional Market Economy status.
Decreasing inflation.
Permanent financial assistan ce for SME's Development.
Increasing rate of foreign investors.
Privatization program still including some very interesting companies.
Commitment of investment funds present in the country to develop their business and the association of the government with international financial institutions, such as IMF, EBRD, World Bank, and the EU Commission.
Infrastructure
Well-developed networks of mobile telecommunications in GSM systems.
A highly developed industrial infrastructure, including oil and petrochemicals.
The presence of branch offices and representatives of various well-known international banks.
Newly developed highway infrastructure with commitment of improvement to EU standards.
Extensive maritime and river navigation facilities.
Social & Education
Agreement between Government and Major Unions.
No major Union Movements.
Permanent dialogue with the employee’s associations.
Stable labor relations, regulated by the Labor Code.
Many foreign languages largely spoken in the main cities.
Good housing, schooling, shopping, etc.
Legislation
Good law and order, very low crime rate.
Legislation compatible with Acquis Communautaire.
Similar legal provisions as in UE.
Healthy fiscal policy regulated by the Fiscal Code.
Competitive tax policies including a 16% flat tax.