Setting Up a Company in Romania: What Indian Entrepreneurs Need to Know Before Entering the European Market

For an Indian entrepreneur entering Europe, where you establish a business can affect taxation, hiring, banking, compliance, and long-term expansion. Setting up a company in Romania can be worth considering for businesses that want an EU presence while operating in technology, engineering, manufacturing, logistics or business services.

Romania is part of the European Union and therefore operates within the EU single market, where goods, services, capital and people can move under a common framework. The single market represents about 450 million consumers and 34 million businesses. For Indian businesses, this creates potential access to a much wider European market, although Romania should be evaluated based on the company’s customers, industry, and expansion strategy rather than treated as a universal solution.

Why Romania May Interest Indian Entrepreneurs

The case for setting up a company in Romania is primarily strategic. Romania’s position in south-eastern Europe can be useful for companies serving European customers or building regional supply and delivery operations.

The country also has established capabilities in information technology, engineering and automotive services. Tata Consultancy Services (TCS), for example, entered the Romanian market in 2019 and expanded its presence in Bucharest in 2025 with a digital-engineering facility. TCS said more than 95% of the employees at the new facility were Romanian nationals and highlighted an engineering hub supporting software-defined vehicles.

Infosys also has a Romanian presence. Its financial statements identify Infosys Romania S.R.L. as a wholly owned subsidiary providing professional management consulting services, while its corporate disclosures identify Romanian operations in IT and IT-enabled services.

These examples show how Indian companies can integrate Romanian operations into broader European strategies, rather than treating Romania as an isolated market.

Setting Up a Company in Romania: Choosing the Right Business Structure

For many foreign entrepreneurs, setting up a company in Romania means considering a Societate cu Răspundere Limitată, commonly called an SRL. It is a Romanian limited liability company that generally has a separate legal identity from its shareholders.

An SRL can be appropriate for small and medium-sized businesses because its structure is generally simpler than a Romanian SA, or joint stock company. Founders need to determine ownership, management, business activities, share capital and the company’s registered address.

Always check the applicable share capital requirements with the National Trade Register Office (ONRC) at the time of incorporation rather than relying on older company-formation websites. The same applies to filing procedures, documents and administrative requirements.

The Company Formation Process

Practically speaking, setting up a company in Romania begins with choosing an appropriate company name and completing the Name Reservation procedure. The founders then define the company’s activities using the relevant NACE code and prepare the Articles of Association, also known as the Act Constitutiv or Constitutive Act.

The main steps generally include:

1. Choosing and reserving the company name.
2. Defining business activities and relevant NACE codes.
3. Preparing the Articles of Association and other incorporation documents.
4. Establishing a registered address.
5. Identifying shareholders and directors.
6. Submitting the application to the Romanian Trade Register.
7. Completing tax registration requirements.
8. Obtaining the company’s Certificate of Registration.
9. Arranging a corporate bank account.
10. Completing beneficial-owner and other compliance requirements.
11. Obtaining sector-specific licences where necessary.

Romania handles company registration through the Oficiul Național al Registrului Comerțului (ONRC), commonly referred to in English as the National Trade Register Office. Exact documentation can vary depending on the ownership structure, business activity, and whether shareholders are foreign companies or individuals.

Taxation and Ongoing Compliance

Before setting up a company in Romania, entrepreneurs should understand that incorporation is only the beginning of their Romanian tax obligations.

Romania’s standard corporate income tax rate is 16%. A qualifying micro company can instead fall under the microenterprise income-tax regime, but eligibility depends on conditions under the current Fiscal Code. Entrepreneurs should therefore establish the company’s expected tax treatment with a Romanian tax advisor rather than assuming that every small Romanian company automatically qualifies for the micro regime.

VAT is another major consideration. Romania’s standard VAT rate is currently 21%, meaning businesses should assess whether and when VAT registration is required based on their activities and turnover.

A Romanian company must also manage accounting, invoicing, tax filings and annual reporting. Businesses with related-party transactions may face transfer-pricing obligations, while employers have additional payroll and social-security responsibilities.

For an Indian owner, Romanian tax should also be considered alongside Indian tax rules and the applicable India–Romania double taxation agreement. Cross-border dividends, royalties, management fees and other payments can have different tax consequences depending on the circumstances.

Banking, Capital and Financial Planning

The practical reality of setting up a company in Romania includes opening and maintaining a business bank account.

Romanian banks may require information on shareholders, beneficial owners, the business model, and the source of funds as part of KYC and anti-money-laundering procedures. Foreign entrepreneurs should therefore prepare corporate documents and evidence explaining the origin of investment capital.

Financial planning should cover much more than initial company-formation costs. Accounting, registered-address services, banking, legal assistance, payroll, software, insurance and licences can all become recurring expenses.

Indian entrepreneurs should also consider currency exposure when moving money between India, Romania and other European markets. A Romanian business may receive revenue in euros or Romanian lei while its parent company funds operations from India.

Hiring Employees and Immigration

One of the most important points about setting up a company in Romania is understanding the difference between owning a company and having permission to live or work there.

Company formation does not automatically give an Indian entrepreneur Romanian residence or work authorization. Immigration status is governed separately under Romanian laws, and the appropriate route depends on the individual’s circumstances and intended activities.

Romania’s General Inspectorate for Immigration provides specific information for foreign shareholders and associates seeking residence for commercial activities, with requirements that can depend on factors such as investment, management responsibilities and supporting documentation.

Hiring Romanian or EU employees is also different from hiring Indian or other non-EU workers. Employment contracts, Romanian labour law, payroll, social-security obligations, health and safety requirements and applicable work-authorisation rules all need to be considered.

For businesses that do not initially want to establish their own employment infrastructure, an Employer of Record may be an option, depending on the intended operating model.

Challenges Indian Entrepreneurs Should Expect

Setting up a company in Romania can involve administrative complexity that may be unfamiliar to an entrepreneur operating from India.

Romanian-language documentation, accounting procedures, banking checks and employment regulations can make local professional support useful. A company may also need to comply with EU regulations in areas such as data protection, consumer rights, product standards and cross-border trade.

The European Commission recognises that regulatory complexity can create barriers for businesses, particularly smaller companies, and has pursued measures to simplify the single market.

Remote management from India creates another practical challenge. Someone must handle Romanian tax deadlines, accounting, banking communication, employee administration and interactions with local authorities. A Romanian tax advisor and experienced local accountant can therefore be valuable from the beginning.

Is Romania the Right Fit for Every Indian Business?

Setting up a company in Romania may make sense for Indian businesses with European customers or plans involving information technology, software development, engineering, manufacturing, logistics, automotive supply chains or business services.

The country’s existing Indian corporate presence provides useful real-world context. TCS has expanded its Romanian engineering capabilities as part of its European delivery network, while Infosys maintains Romanian entities within its wider corporate structure.

However, setting up a company in Romania should follow a commercial assessment, not precede it. Entrepreneurs should assess customer demand, staffing, taxation, compliance, financing, infrastructure, and Romania’s role in their European market-entry strategy.

For an Indian entrepreneur, setting up a company in Romania is ultimately more than completing company registration. It means building a Romanian company that can operate under Romanian law while also meeting broader European market requirements. When the country’s location, workforce, regulatory environment and market access align with the business model, Romania can become a practical component of a broader European expansion plan.

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