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romania (micro company and tax residency)

metronic

metronic

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Dec 15, 2020
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#1
Hello,

I am currently in the process of moving to Bucharest. I read many comments online that it is a very safe place regarding crime. A few people I work with mentioned that making decent income could turn into some issues (being accused of a false crime, someone extorting a chunk of it,...). How safe are banks with data is one of my worries as I tend to not live a flashy life at all.
All my clients are foreigners outside of Romania (I thought this was a good thing to mention)
I know my worry might be meaningful but I wanted to make sure about it and hear it from some expats in Romania who have experience.
Looking forward to your answers
 
#2
metronic said:
Hello,

I am currently in the process of moving to Bucharest. I read many comments online that it is a very safe place regarding crime. A few people I work with mentioned that making decent income could turn into some issues (being accused of a false crime, someone extorting a chunk of it,...). How safe are banks with data is one of my worries as I tend to not live a flashy life at all.
All my clients are foreigners outside of Romania (I thought this was a good thing to mention)
I know my worry might be meaningful but I wanted to make sure about it and hear it from some expats in Romania who have experience.
Looking forward to your answers
Click to expand...
sorry i meant i am currently looking to move and that romania seems like a good fit tax wise for my business as i am mobile with my work
 
#3
Romania offers one of the lowest tax rates in the world with their micro company scheme. Fiscally speaking, it's one of the best options. I've looked at it before.

The problem I have with countries like Romania and Bulgaria is that they are quite underdeveloped (even compared to, say, Hungary). Just take a look in the capital cities with Google Maps. This makes you (a wealthy foreigner, alone) a prime target for criminals. Well, I guess you'd be a prime target for criminals everywhere, but you're at greater risk in poor/corrupt places.

When I think about all the people who I have to trust, the accountant and their staff, people at the bank I use, people at the tax office, people who handle my immigration, etc. All of them will know about my financial situation. I don't want to worry about some of them having links with criminals who could come knocking on my door.

Maybe a bit paranoid? But it's interesting that you've heard people say it could be risky too, so thanks for the data point. I prefer to stick to countries with a slightly higher tax rate with less risk.
 
#4
Utah said:
Romania offers one of the lowest tax rates in the world with their micro company scheme. Fiscally speaking, it's one of the best options. I've looked at it before.

The problem I have with countries like Romania and Bulgaria is that they are quite underdeveloped (even compared to, say, Hungary). Just take a look in the capital cities with Google Maps. This makes you (a wealthy foreigner, alone) a prime target for criminals. Well, I guess you'd be a prime target for criminals everywhere, but you're at greater risk in poor/corrupt places.

When I think about all the people who I have to trust, the accountant and their staff, people at the bank I use, people at the tax office, people who handle my immigration, etc. All of them will know about my financial situation. I don't want to worry about some of them having links with criminals who could come knocking on my door.

Maybe a bit paranoid? But it's interesting that you've heard people say it could be risky too, so thanks for the data point. I prefer to stick to countries with a slightly higher tax rate with less risk.
Click to expand...
yeah i am leaning to that too, one of my friends operates in cyprus and he said that he never had any issues with any crime or corruption so i will probably pick that as well and see how it goes
 
#5
I have both worked and lived in Romania for 20 years now and are from the British Isles, I own numerous companies in Romania operating in different cities in Real estate, construction, energy, consulting and agribusiness without issues for my safety or business

Yes you have challenges but all can be sorted with good locals who know the score, keep your VAT and other fillings on time and you pretty good

In Bucharest its mad the traffic and yes business is complicated at times dealing with authorities and regulations but manageable, I also lived in Timisora and Constanta and it's much the same.

You can find good people to help operate and find solutions for your day to day business in Romania, it's not as simple to run a company as in UK, also it's very possible to do business with Romanian company selling outside Romania if that's your thing I am doing it daily.

And as regards safety I have walked all over Bucharest in the middle of the night without problem, London, Birmingham Dublin, Paris or Glasgow much more unsafe for sure.

One last unrelated thing is Bucharest has it all be it nightlife, super malls, restaurants and lots to do including the sea and mountains a few hours away, you won't be bored if you mingle.
 
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#6
Macint said:
I have both worked and lived in Romania for 20 years now and are from the British Isles, I own numerous companies in Romania operating in different cities in Real estate, construction, energy, consulting and agribusiness without issues for my safety or business

Yes you have challenges but all can be sorted with good locals who know the score, keep your VAT and other fillings on time and you pretty good

In Bucharest its mad the traffic and yes business is complicated at times dealing with authorities and regulations but manageable, I also lived in Timisora and Constanta and it's much the same.

You can find good people to help operate and find solutions for your day to day business in Romania, it's not as simple to run a company as in UK, also it's very possible to do business with Romanian company selling outside Romania if that's your thing I am doing it daily.

And as regards safety I have walked all over Bucharest in the middle of the night without problem, London, Birmingham Dublin, Paris or Glasgow much more unsafe for sure.

One last unrelated thing is Bucharest has it all be it nightlife, super malls, restaurants and lots to do including the sea and mountains a few hours away, you won't be bored if you mingle.
Click to expand...
Thank you for your input. So the rates on the micro structure are actually true ? 1% + 5%?
 
#7
Macint said:
I have both worked and lived in Romania for 20 years now and are from the British Isles, I own numerous companies in Romania operating in different cities in Real estate, construction, energy, consulting and agribusiness without issues for my safety or business

Yes you have challenges but all can be sorted with good locals who know the score, keep your VAT and other fillings on time and you pretty good
Click to expand...

Thanks for your input. Could you expand on the challenges that you've experienced?

I guess after 20 years you're as Romanian as they come, so it may be a different story. You may have also entered the country being not wealthy. It's just difficult for me to accept that a wealthy foreigner coming into a poor/corrupt country is not at significant risk.
 
#8
metronic said:
Thank you for your input. So the rates on the micro structure are actually true ? 1% + 5%?
Click to expand...
If you have at least one employee (which can be yourself), then yes you only pay 1% tax on the turnover, otherwise 3%.
I assume the 5% is for dividends. But keep in mind that the salary will be taxed as any local, income tax, social securities, etc.
And last but not least, the status "Micro Company" is only for S.R.L (LLC) companies who have a turnover under 1M€.
 
#18
orangekangaroo said:
I have an EU passport, let's say I establish a micro company in Romania and apply for residency. I pay the taxes. Is anyone checking that I really live in Romania, or could I cross the Schengen border and work elsewhere? If so it would make a lovely low-cost company setup with freedoms to travel.
Click to expand...
I just realised that Romania is not part of Schengen, what a shame this could work.
 
#20
I ma
metronic said:
It would not work regardless.

your current country would ask you for proof that you actually spent a certain amount of time there.

you can play all sorts of games but personally i just like to follow the law
Click to expand...
already stateless, there is no current country. My thinking was you register a micro company in Romania, and let's say there is Schengen, how do they know you are in the country. Let's say I cross to Italy and find a cheap AirBnb to work from for 3 months.
 
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