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Subsidiary, Branch, Representation Office, or Tax Representative in Romania?


Tax optimisation opportunities from understanding the differences between Subsidiary, Branch Representative Office, and Tax Representative


1. Filiala SUBSIDIARY

  • a foreign company may setup this entity in Romania, Filiala, as a 100% Romanian company:

    • Limited Liability Company = ro. Societate cu Raspundere Limitata, SRL - or

    • Joint Stock Company = ro. Societate pe Actiuni

  • Filiala is free to trade without restrictions: it can have clients and suppliers, it can employ personnel

  • the registration of Filiala is at both the Romanian Trade Registry and the Romanian Tax Agency

  • Filiala can benefit of reduced tax rate as micro-company (=ro. microintreprindere)

  • Tax risk: under certain conditions, Subsidiaries may be reclassified as Branches and taxed as such


2. Sucursala BRANCH

  • is equal, from the point of view of the Romanian Tax Code, to the Sediu Permanent (Permanent Establishment) - https://www.piroi.com/post/permanent-establishment-pe-in-romania-what-you-need-to-know

  • the Sucursala is mandatory, according to the Tax Code, when a foreign company has a contract in Romania with a Romanian client, contract which exceeds 183 days duration

  • Sucursala is an entity which pays taxes in the name of the foreign company

  • Sucursala is mandatorily a profit tax payer

  • the registration of Sucursala is also both at the Romanian Trade Registry as well as at the Romanian Tax Agency


3. Reprezentanta REPRESENTATION OFFICE

  • a way of registering a foreign company at the Romanian Tax Agency when the foreign company does not trade in Romania. As an example, a Reprezentanta only promotes its mother company in Romania

  • the main tax it has to pay is RON 18 000 a year

  • it may employ personnel

  • but it cannot sign any contracts with clients

  • the registration of this Reprezentanta is only at the Romanian Tax Agency, without the Romanian Trade Registry


4. Reprezentant fiscal TAX REPRESENTATIVE

  • the foreign company does not want to setup a full presence in Romania. Instead, it uses an intermediary (the Reprezentant fiscal), which it appoints with a Power of Attorney

  • the Reprezentant fiscal goes to the Romanian Tax Agency and obtains a dedicated Romanian tax code

  • the registration of this Reprezentant fiscal is only at the Romanian Tax Agency, without the Romanian Trade Registry



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