As a European Union (EU) member, Romania offers a favorable environment for businesses looking to expand or outsource in Eastern Europe. With its strong legal framework, competitive costs, and skilled workforce, Romania is an attractive destination for businesses in the accounting, IT, and software development sectors.

Regulatory Compliance: Accounting and Auditing

Romania follows EU-mandated accounting regulations, with the Ministry of Public Finances (MFP) setting national standards. Companies listed on the stock exchange must apply International Financial Reporting Standards (IFRS) endorsed by the EU, while other companies can choose between IFRS and Romanian Accounting Standards (RAS) depending on their size. Smaller companies benefit from simplified standards, while micro-entities enjoy further exemptions.

Auditing requirements are set under Law No. 162/2017, which mandates audits for medium and large companies using International Standards on Auditing (ISA). Small companies that fall below-set thresholds are not required to prepare audited financial statements.

Why Romania?

1. Lower Costs: Romania offers significantly lower costs for office space, utilities, and general operations compared to Western Europe, making it ideal for businesses aiming to reduce overheads.

2. Advanced IT Infrastructure: With some of the fastest internet speeds in the world, Romania is a top destination for tech-driven companies.

3. Favorable Tax Environment:

• Dividends between Romanian legal entities are taxed at just 8%.
• Competitive Corporate Income Tax (CIT) of 16%, with reduced rates for smaller companies.
• VAT rates are 5% or 19%, depending on the service or product.

4. Skilled Workforce: Romania has a highly educated talent pool, especially in IT, engineering, and R&D, with strong English skills. Competitive salary levels make it a cost-effective option for businesses seeking high-quality work.

5. Tax Incentives for R&D: Companies investing in research and development benefit from accelerated depreciation and various tax exemptions, particularly in the tech sector.

Conclusion

Romania provides a compelling combination of affordability, skilled professionals, and a stable legal framework. Whether you’re looking to relocate, expand, or outsource, Romania offers a unique opportunity to optimize your operations in 2024. With its business-friendly environment and access to the EU market, Romania is the ideal destination for growth and innovation.