Romania has established itself as a premier destination for foreign capital in Eastern Europe. However, for international investors, the process of incorporation is often misunderstood as a mere administrative formality. In reality, establishing a legal entity is a quasi-judicial process rooted in strict statutory compliance. It involves a rigorous legality check designed to ensure that the new corporate “person” entering the economy is valid, transparent, and compliant with national and EU directives. This article analyzes the legal framework governing Romanian company formation as we head into 2026.
The Statutory Framework: Law 31/1990 and the 2022 Reform
The bedrock of corporate existence in Romania is Law no. 31/1990 (The Companies Law). This statute dictates the types of entities available, with the Limited Liability Company (LLC) being the preferred vehicle for most foreign investors due to the distinct separation between the company’s assets and the shareholders’ personal wealth.
However, the procedural landscape underwent a paradigm shift with the enactment of Law no. 265/2022, regarding the Trade Registry. This reform modernized the registration process, transposing EU Directives on digitalization. It shifted the competence for verifying incorporation files from a delegated judge to the Trade Registry Registrar. This official performs a legality review, checking the compliance of the Articles of Association with mandatory legal provisions. This is not a clerical task; it is a legal verification that ensures the company’s constitution is void of any nullity clauses.
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The Verification of Identity and Uniqueness
Before a company can be formed, the justice system imposes strict checks on identity and intellectual property rights regarding the company name.
- Name Availability and Distinctiveness: The Ministry of Justice, through the Trade Registry, maintains a national database. A name cannot merely be available; it must be distinct. The Registrar applies specific criteria to prevent confusion with existing entities, protecting the commercial rights of established players.
- Ultimate Beneficial Owner (UBO) Transparency: In alignment with EU Anti-Money Laundering (AML) directives transposed into Romanian law (Law no. 129/2019), the anonymity of shareholders is pierced for compliance purposes. Investors must submit a sworn statement declaring the Ultimate Beneficial Owner. This connects the corporate veil directly to the natural persons behind it, ensuring full transparency before the state.
The Articles of Association: A Contract with Force of Law
The Articles of Association (Act Constitutiv) are not a template to be lightly filled. They represent the company’s supreme statute. Under Law 31/1990, this document must clearly define the company’s object of activity (using CAEN codes), the powers of the administrators, and the distribution of profits and losses.
For foreign investors, drafting this document requires legal precision. A poorly drafted clause regarding the administrator’s powers can paralyze future operations, such as opening bank accounts or signing contracts. The Registrar reviews this document for conformity with public order and mandatory legal norms before authorizing the incorporation.
Fiscal Registration: The Post-Incorporation Hurdle
While the Trade Registry bestows legal personality, the fiscal system grants operational capacity. Obtaining a VAT code is a separate procedure governed by the Fiscal Code. Romanian tax authorities perform a risk assessment to prevent tax evasion. For a company to be fully operational for cross-border trade, it often needs to prove its economic intent and capability, a process that requires specialized legal and fiscal guidance.
Incorporation as a Legal Foundation
The formation of a Romanian company is the act of creating a new subject of law. It is governed by a complex interplay of the Companies Law, the Trade Registry Law, and AML regulations. Navigating this system requires more than administrative support; it demands legal expertise to ensure that the corporate structure is built on a solid foundation, capable of withstanding future regulatory scrutiny.
Darie, Manea & Associates is a full-service law firm based in Bucharest, Romania, dedicated to providing expert legal counsel to both international and domestic clients. With a team of experienced attorneys, the firm specializes in a wide range of practice areas, including corporate and commercial law, real estate, debt recovery, intellectual property, and litigation. The firm prides itself on its deep understanding of the interplay between Romanian and European Union law, offering strategic guidance to help clients navigate a complex and dynamic legal landscape. For more information, visit rolegal.com.
