Did you open a Romanian company? Or are you planning on opening a company in Romania, but have no idea how you can actually access the money from your new business?
Find out more from our lawyers, below!
1. Dividends
From a tax perspective, dividends are the distribution of company profit to the company shareholders, proportionally to their share capital. Dividends are awarded according the annual financial statements, more precisely the difference between profit and loss.
However, in Romania, dividends cannot be withdrawn at any time. There are set moments when the company can distribute its profit to shareholders. According to the law, dividends can be awarded four times per year at most, every three months. They cannot be granted at other intervals because there is a possibility that the company’s profits and available reserves may not be sufficient. In other words, if you want to get dividends from your company, your accountant must finish the financial situation of your firm for that period
Companies may have different policies regarding dividend distribution, including regular payments, special payments based on company performance or retaining dividends for reinvestment in business. In Romania, the Fiscal Code imposes an 8% tax on dividends, is paid to the state budget by the business on behalf of its shareholders.
Therefore, a shareholder actually receives only 92% of the company’s profits.
2. Reimburse the loans you made to the company
When you set up your company, there are good chances that you as a shareholder (either together or with other associates) paid a certain amount for registration and related formalities. For example, you paid trade registry taxes, insurance policies, lawyers and accountant fees. Because you as an individual paid these in the beginning (as the company does not have any revenue yet), you can actually request that money back at any time.
Moreover, if shareholders actually lend money to the company during its operations (for example, if business is not going well), this amount can be returned plus a certain amount of interest.
3. Selling personal assets to the firm
In certain cases, the company uses the shareholder’s assets to conduct its daily activities. If the company has just been established, it may not have all the necessary resources to carry out its operations without the help of its founder.
A company may do business using the founder’s mobile phone, personal laptop, even furniture in some cases. These goods can be sold to the company at market value, so the company would also benefit, being able to carry out its activities with its own assets.
4. Renting personal goods to the company
If the company headquarters are at the founder’s address, you cand sign a lease agreement between the founder and the business. However, the property owner will have to pay taxes for the income they receive from this lease contract.
Starting from 2024, in Romania, these taxes are actually calculated and paid by the company if they rent a place from an individual (not from another company). In other words, the property owner is the one who has the obligation to ‘cut’ these taxes from the lease amount, by law, but the actual payment is taken care of by the tenant.
5. Becoming an employee of your business
In order to get money from their company on a monthly basis, many founders decide to also become employees in their own companies. In Romania, it is not mandatory to have employees in your company, you can simply set up a SRL or PFA as founder without employing yourself. But you do have some tax advantages if you do, especially for SRL micro-companies.
However, there are also some downsides. An employee pays approximately 16% tax on their salary, along with Social Security Contribution (25%) and Health Insurance Contribution (10%). So workers pay around 50% of their salary to the Romanian state in taxes and contributions.
The company actually takes care of the payment itself, so the employees receive just their net salaries in their bank account. On the other side, the advantage for paying these taxes is that the person will be enrolled in the public health system and they will also receive a pension when they are older.
If you would like to address more questions or if you need a legal consultation, you can contact us at office@rrpb.ro or by accessing our site www.rrpb.ro for more information.
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