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Buy a Shelf Company in Romania

by Vlad Cuc

There is a significant number of investors interested in purchasing an already registered company rather than incorporating a new one. This could be intended for a number of reasons, ranging from offering additional confidence to business partners or a presumed easier procedure for entering the Romanian market. Our team of Romanian lawyers can present the main benefits of buying a shelf company and can provide legal representation during the purchase of this company type. 

The procedure of purchasing shares in a Romanian company, even if this company did not have any activity in the past (a so-called “shelf company”) has its specifics when compared to the same procedure abroad, respectively: the procedure implies a larger number of paperwork, takes more time and is more expensive than incorporating a new company.

The procedure automatically implies the following changes in the company structure: change of shareholders, change of company headquarters, change of directors (administrators), issuance of a new Certificate of Registration, and it requires a Share Assignment Contract which has to be signed by both current shareholders and future ones. All changes in the company must be registered with the Trade Register in order to be considered valid.

The procedure requires the following documents: Company Resolution drafted in a certain format, a new version of the Articles of Association, a Share Assignment Agreement, Affidavits and Specimen Signatures for the future shareholders and directors and of course, the documents necessary for the new company headquarters.

There are also the following aspects to be taken into consideration when looking to purchase a Romanian ready-made company: there is no such concept as nominee directors per the Romanian legislation and there is no real method to verify in what type of transactions/operations the company has been involved in the past, therefore a diligent approach is recommended.

What does a Romanian shelf company offer?

As said above, the main advantage the shelf company has is that is has already been incorporated following the national laws, and this means that the investors will not have to spend time with the incorporation formalities. A standard shelf company will always have a set of characteristics and our team of Romanian lawyers have prepared a short list regarding this matter, so that investors will be informed if they want to purchase this company type

  • it benefits from a registered address, which represents a compulsory requirement for all company types in Romania;
  • it is incorporated based on the articles of association, which can be modified in accordance with the needs of the investors, but which cannot overpass the limits of the law;
  • it benefits from the required minimum share capital that is necessary for the respective company type (usually, shelf companies are incorporated as limited liability companies due to the fact that this business structure is very popular in Romania);
  • it is registered with the local institutions – the Trade Register and the local tax authorities;
  • it already has a value added tax number (VAT) and it can also have a corporate bank account. 

As a general rule, a shelf company has never had commercial activities and it was registered for the sole purpose of being sold to another party, such as investors who want to start their business operations here as soon as possible. However, there is also the possibility of having shelf companies that used to have commercial activities somewhere in the past. 

Considering that the latter may impose more complicated legal procedures, such as doing a background check on its financial transactions, debts and others, it is advised to select a shelf company that was registered solely for being purchased, as this option will imply fewer measures; regardless, our Romanian law firm remains at your disposal for legal representation and advice.

Why select a shelf company in Romania?

A shelf company can become a suitable vehicle for doing business in Romania in various circumstances. One of them is the easy access to owning a company in Romania and avoiding the registration procedures imposed under the local law, regardless of the business form selected. 

Due to various factors, the registration procedure can be delayed – for instance, when the investors do not have all documents that they have to submit for the registration, or when they have not properly completed various documents. Another advantage of the shelf company is that it provides credibility on the local market, due to its age. 

Although the company did not have any business operations, the years of activity will be measured from the moment when the company was registered with the Romanian institutions. Its age can also open the possibility of applying for a bank credit with more easiness, as the Romanian banks will generally prefer to enter business contracts with companies that have been registered for several years, as opposed to newly founded companies, which can obtain a credit only in certain conditions, but generally, they will have more issues in this sense.

What is the tax system applicable to a shelf company in Romania?

A shelf company in Romania will be taxed following the same tax system applicable to local companies, as there will not be any difference between shelf companies and companies incorporated following the basic incorporation system in terms of their tax obligations. Differences can appear based on the legal entity of the company. Below, our Romanian lawyers have prepared a short list of the main taxes that are charged to local companies:

  • the corporate tax in Romania is currently charged at the standard rate of 16%;
  • if you will develop gaming and gambling operations through the shelf company, you will be charged with a corporate tax of 5% of the revenue;
  • for the latter situation, the investors may have to pay a tax of 16% of the taxable profit (the tax system that will be chosen for gaming and gambling businesses will be selected based on whichever calculation yields the highest tax charge);
  • the withholding tax on dividends is charged at a standard rate of 5%;
  • other taxes charged to companies in Romania, including to shelf companies, are prescribed by the Romanian Fiscal Code, which implements the rules of the European Directive no. 2011/96/EU

For more details on the process of buying a shelf company in Romania, you can contact our Romanian law firm. You can benefit from professional consultancy services and information regarding any inquiry you may have on the process of purchasing the shelf company