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Romanian Joint Stock Company (SA)

A Romanian Joint Stock Company (SA) is a limited liability company with a minimum registered capital of $25,000 Euro and at least two shareholders. Foreigners can own 100% of the shares. Bearer shares are permitted. Romanian law treats its citizens and foreigner investors equally with the same opportunities to establish businesses and creating legal entities.
Romanian law which governs a joint stock company called a “Societate pe Actiuni” (SA) allows foreigners to own 100% of the company’s shares. A joint stock company may be listed on the stock exchange.

Background
Romania is located in South East Europe on the Black Sea. It is a sovereign state with a political system described as a unitary semi-presidential republic with an elected two house parliament. It is also a member of the European Union (EU).

Benefits

A Romanian Joint Stock Company (SA) can have these types of benefits:
Complete Foreign Ownership: Foreigners may own 100% of the shares.
Limited Liability: A shareholder’s liability is limited to his/her total subscribed capital contribution.
Privacy: Bearer shares are permitted for shareholders’ privacy.
Fast Registration: The SA can be registered within three business days.
Two Shareholders: A minimum of two shareholders are required to form a SA.
One Director: Only a minimum of one director is required for a SA.
European Union Member: Romania is a full member of the European Union (EU).

Joint Stock Company (SA) Name
The name of a SA cannot be one already used by a Romanian company. A name can be reserved with the Trade Register Office prior to registering.
The type of company’s abbreviation must be included at the end of the company name. Therefore, a joint stock company must use “SA” at the end of its name which means “Societate pe Actiuni”.
Certain words and geographic locations must obtain prior approval from the Trade Register Office. The word “Romania” requires permission from the government.

Registration
Registering a new joint stock company in Romania requires the following to be filed with the National Trade Register Office:
• Personal information of the shareholders including full name, date and place of birth, current residency, and nationality;
• Company name and registered office address;
• Description of the type of business activities and management;
• Director’s personal information including full name, nationality, residence, rights, powers, and responsibilities;
• Shares nominal value, types, and number to be issued;
• Paid share and subscribed share capital where the minimum subscribed share capital by each shareholder being at least 30% upon registration. The remaining 70% must be allocated within 12 months from registration.
Upon approval, the Trade Register issues a Registration Certificate with a registration code to be used by the tax authorities and the Trade Register.

Public Subscription
Joint stock companies with shares allocated through public subscription requires a “Prospect de Emisiune” (“Issue of Prospectus”) document. This document must be signed by all the founders and submitted to the local Trade Register who will authorize it for publication. In addition, the entire register capital of the company must be subscribed and at least 50% paid in cash before publication. Said funds will be deposited in either a commercial bank or with the Savings and Consignment Office. Then, an official public notice in the Official Gazette announcing a meeting to set up the process for subscription which will be held within 15 days of the subscription closing date.

Limited Liability
The shareholders’ liabilities are limited up to their subscribed capital contributions.

Shares
A minimum of two shareholders is required to form a SA. Shareholders can all be foreigners residing outside of Romania. Shareholders can be natural persons or companies.
Bearer shares are allowed.

Directors
The Board of Directors has executive power to manage the company. However, a minimum of one manager can be appointed to run the daily operations. At least 50% of the management structure must consist of Romanian citizens except when the company regulations and the corporate laws stipulate otherwise.
Directors do not have to be shareholders. They are elected during the shareholders’ general meeting for a maximum four year term but can be re-elected when their term expires.
Prior to assuming their duties, directors must provide a guarantee representing at least the value of 10 shares or twice their annual salary.

Minimum Share Capital
The required minimum share capital is 25,000 Euro. While the law allows like-kind contributions, the initial capital must be subscribed and paid in cash.
Share capital is divided into shares of equal value. The minimum share value is 10 RON. Thus, a 300 RON company may only issue 30 shares.
Only one share capital is required to be issued and paid. Shares can be issued in any currency.

Registered Office Address
A local registered office address is required where authorities may send official notices, claims, for tax control and process service. All required corporate documents must be maintained at the registered office. P.O. addresses are prohibited.
Proof of the registered address is required which includes the rental contract. The contract must include a copy of the landlord’s property title.

Taxes
The standard corporate tax rate is 16%.
The VAT (Sales Tax) rate is 19%.

Accounting
At least three auditors and three deputy auditors must be appointed where the majority are Romanian nationals. One auditor must be recommended by the Ministry of Finance if at least 20% of the capital is owned by the State.

Annual General Meetings
Joint stock companies are required to hold annual general meetings. The minimum quorum is 75% of the shareholders. Resolutions are passed by majority vote where each share equals one vote.

Public Records
Initial shareholders’ names will appear in the public records. However, bearer shares are permitted to afford privacy to later shareholders. Directors’ names are also included in the public records accessible to the public.

Time for Registration
SA’s can be registered and approved within three business days from the time all documents are filed.

Shelf Companies
Shelf companies can be purchased in Romania.

Conclusion

A Romanian Joint Stock Company (SA) can have these types of benefits: total ownership, two shareholders, one director, limited liability, fast registration, privacy, and a member of the European Union.