How to Register a Branch Office of a Foreign Company in Romania

Expanding into Romania often begins with a branch office. A branch is a simple way for a foreign company to operate locally without creating a separate legal entity. It is an extension of the parent company, not an independent firm, and it must register with the Romanian Trade Register before doing business.

What is a branch office?

A branch office is a business presence set up by a foreign company to carry out some or all of its activities in Romania. It is not a separate legal person; the parent company remains fully liable for the branch's obligations. The branch can sign contracts, employ staff and issue invoices, but its legal identity is tied to the foreign company.

Registration process

To register a branch, you must apply to the Trade Register Office in the county where the branch will have its registered office. The application is usually filed online or in person. The following documents are typically required:

• A copy of the parent company's certificate of incorporation and articles of association, translated into Romanian and notarised.
• A decision of the parent company's governing body authorising the establishment of the branch.
• Proof of the branch's registered office address in Romania, such as a rental agreement or a letter from the owner.
• A statement from the parent company confirming that it is not in liquidation or bankruptcy.
• Details of the branch's legal representative in Romania, including their identification and a notarised specimen signature.

Once approved, the branch receives a unique registration number and is entered in the Trade Register. It must also register for tax purposes with the National Agency for Fiscal Administration (ANAF) and obtain a VAT number if its turnover exceeds the threshold or if it carries out taxable activities from the start.

Tax and accounting obligations

A branch is subject to Romanian corporate income tax on its Romanian-source income. The standard rate is 16%, but micro-enterprises may qualify for a lower rate under certain conditions. The branch must keep Romanian accounting records and file annual financial statements. If the branch has employees, it must also register as an employer and pay social contributions.

Ongoing compliance

After registration, the branch must comply with Romanian company law and tax regulations. This includes filing annual returns, keeping books available for inspection and updating the Trade Register if key details change, such as the legal representative or office address. The branch is also subject to Romanian labour law if it hires staff, including rules on contracts, working hours and health and safety.

Advantages and disadvantages

A branch offers a lighter setup than a subsidiary because no share capital is required and the parent company retains full control. However, the parent is directly liable for all branch debts and obligations, which can be a disadvantage. It is best for companies that want to test the market or carry out limited activities without creating a separate Romanian entity.

For many foreign companies, a branch office is the first step into Romania. Understanding the registration and compliance requirements is essential to avoid delays and penalties.