How to incorporate a branch in Romania?
According to the Romanian Companies Law no. 31/1990, the branch in Romania is an entity without legal personality, being a dismemberment of a company in Romania. It is necessary that before starting the economic activity in Romania, the branch is registered with the Romanian Trade Register of the county in which it will operate. Since the branch in Romania does not have legal personality, it does not have its own assets, the company to which the branch in Romania belongs benefiting from the profits obtained by it. Pavel, Margarit and Associates Romanian Law Firm recommends contacting a lawyer specialized in commercial law, incorporating branches and any other operations by the Romanian Trade Register that can assist you in the procedure of registering a branch in Romania, either belonging to a company in Romania, or to a foreign company.
Characteristics of a branch in Romania
More and more entrepreneurs are incorporating branches in Romania in order to expand their business to a wider range of customers. The branch in Romania is characterized by its dependence on the company in Romania (also called in practice the parent company), which is the one that collects the profit. Thus, the branch in Romania does not have its own patrimony, and its rights and obligations are actually of the company, as it does not have legal personality.
Difference between branch and subsidiary in Romania
The main difference between the branch in Romania and the subsidiary in Romania is the status of legal personality. As previously mentioned, the branch is devoid of this attribute, while the subsidiary has legal personality. The subsidiary in Romania has a separate patrimony and the branch in Romania is part of the patrimony of the company (the parent company). The parent company allocates only some goods necessary for the economic activity of the branch in Romania. In relations with third parties, the branch in Romania acts on behalf of and in the interest of the company in Romania, as opposed to the subsidiary in Romania which acts on its own behalf.
A lawyer specialized in commercial law, incorporating branches and any other operations of the Romanian Trade Register can provide you with legal assistance in the procedure of registering a branch in Romania, so that the operations at the Romanian Trade Register are carried out easily and without impediments.
Incorporating a branch in Romania
Comparing the procedure of incorporating a company in Romania with the procedure of registering a branch in Romania, one of the differences is the fact that at the time of registration of the branch in Romania, the name reservation is no longer necessary, as the branch name consists of the name of the company to which it belongs, the name of the city where the head office is located and the word „branch”.
Regarding the documentation to be fulfilled for registering the branch in Romania, it is necessary to submit several documents imposed by the Romanian Trade Register, respectively the registration application, the affidavit on the fulfillment of the operating conditions, the decision of the Company Shareholders’ General Assembly, the proof of headquarters, as well as other documents necessary for the approval of incorporating the branch in Romania.
In conclusion, in order for the necessary documentation to be complete and correctly compiled, Pavel, Margarit and Associates Romanian Law Firm recommends contacting a lawyer specialized in commercial law, incorporating branches and any other operations of the Romanian Trade Register, which can provide you with tailored and high-quality legal assistance.
Pavel, Margarit and Associates Law Firm is one of the top law firms in Romania, providing high-quality legal services. The firm’s clients include multinational and domestic companies of great magnitude. In 2023, the law firm’s success stories brought it international recognition from the most prestigious international guides and publications in the field. As a result, Pavel, Margarit and Associates Law Firm ranked 3rd in Romania in the Legal 500’s ranking of business law firms with the most relevant expertise. The law firm is internationally recognized by the IFLR 1000 Financial and Corporate 2023 guide. Additionally, Pavel, Margarit and Associates Law Firm is the only law firm in Romania recommended by the international director of Global Law Experts in London in the Dispute Resolution practice area. All relevant information about Pavel, Margarit and Associates Law Firm can be found on the website www.avocatpavel.com.