With 16 %-profit as well as the income tax rate is Rumania after the last change in 2005 in the European Union. The legal entity income tax in Rumania is the Rumanian “profit tax” and is applied also for the Rumanian personal companies.

Specific case is represented by the Rumanian branch office.It is hold as the commercial agency of foreign parent company, for which the special permit issued by Foreign Affairs Department is necessary, because it is without legal subjectivity and can only deal exclusively with mediation of business relations. However, it is taxed uniformly with flat rate of EUR 4,000.

Rumania, as the majority of European countries, recognises the basic forms of company legislative, as Ltd., JSC, LP, and others. As everywhere in Europe, S.R.L (Ltd.) is the most common form of a company, especially because of the fact, that the minimum invested capital at the formation is only approx. EUR 54 (independently of the exchange rate)

As already known in the majority of East European countries, also in Rumania there is the duty to pay 5 per cent from income tax to the reserve fund.

Tax rate for VAT in Rumania amounts 19 per cent!

Rumania is to be hold, as viewed by German companies, as the location for relocation of manufacture, considering also the research and development services, as well as the sale market, as the most attractive countries of Europe, although not globally. We will draw up the following the most essential location factors of the new EU member.

Low personal costs
The most important argument to relocate to Rumania are the minimum labour costs. Depending on the type of qualification, these can be reduced up to 80 per cent when compared with business in German-speaking territories.

Corresponding qualification, language skills
The university level education in Rumania is highly appreciated. Numerous well-educated and highly motivated professional labour forces are available to be put in operation. Many universities in the country provide the option to study completely in German or English language, and thus the potential employees dispose of excellent language knowledge. Not only in production can be achieved relatively high standard of quality in this way, but also the relocation of research and development represents an attractive alternative for many companies. Because of this, based on variety of language knowledge, Rumania is an ideal place for call centre in the East Europe.

Territorial availability
The west cities of Rumania, as Timisoara, are distant from Munich less than 1,000 km. The flight time from Germany to Rumania lasts approx. 2 hours. Many airlines offer a daily connection from German airports also to the destination other than Bucharest.

Good general conditions for investments
The legal system of Rumania is adapted to the European Union legislative from the most part. The formalities for formation of the Rumanian Ltd. or JSC are extensive, however quite quickly realised. The costs for infrastructure still move at the partially low level. Legally, the Rumanian Ltd. with majority foreign capital is the fully valuable legal entity, which enables to acquisition of real estate and land without problems.

Tax preferences
On January 1st, 2005, in Rumanian was established the unified tax rate of 16 per cent. It is applied both for the „profit tax” (responds to the German income tax of legal entities) and for the income tax. „Tax of dividends” (deduction tax) represents max. 15 per cent. No equivalent exists in Germany to the trade tax. Rumania belongs at present, thanks to tax reforms as to the fiscal aspects, to the most attractive countries in Europe.

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