Romania Payroll Services
Romania’s membership of the European Union (EU) and European Economic Area (EEA) make it a prime location for international companies planning to open a gateway for further expansion into Europe’s economies.
The attractions for making the move are clear. Romania’s steadily-evolving economy showed strong growth of 6.3% post-pandemic in 2021, having been one of the EU’s least affected members. Romania’s nominal Gross Domestic Product was 287.3 billion US dollars in 2021, ranked 47th in the world, with per capita GDP of US$14,864, ranking 57th globally. The EU predicts growth of 4.2% for 2022 and 4.5% in 2023.
A member of the EU and EEA since 2007, as part of the EEA Enlargement Agreement, Romania was expected to be integrated into the Schengen Area by the end of 2022 and the European Travel Information and Authorization System (ETIAS).
Foreign companies planning to hire staff and operate payroll in Romania must establish a subsidiary in the country. However, this is not a trouble-free undertaking and it is essential that foreign companies make the right moves from day one.
What Romanian Payroll Options are available for Companies?
Remote payroll: This option allows businesses to operate under a single payroll system, by adding employees in Romania to the parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
Internal payroll: You may operate payroll for your subsidiary, especially if you are committed to increasing your company’s presence in Romania. However, this does require hiring dedicated HR staff who understand Romania’s employment and compliance laws.
Romania payroll processing company: If you are considering outsourcing, then working with a Romanian payroll company will help in processing your payroll – but not when it comes to compliance.
Romania payroll outsourcing: However, there is another option available that solves both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in Romania. We lift the administrative stress from your shoulders so you can focus on what you do best.
International companies moving into the growing economy of Romania as their base for further expansion throughout the European Union, open the door to a wealth of opportunities.
Challenges come alongside the potential benefits, however. Payroll management is among those challenges, whether your company is considering moving employees abroad or hiring new staff in-country. You cannot afford stumbling into mistakes in Romania’s employment, payroll and income tax landscape – as that will cost you time and money.
To legally hire staff and operate their payroll, foreign companies must establish a legal entity in Romania. There are several options, including joint stock companies and limited liability companies, with the latter usually the preferred choice operating under Romania’s Companies Law.
Taking this step before running payroll in Romania requires detailed practical knowledge of company, tax, and employment law, and staying up to date with taxation rates.
However, there is an alternative and simpler route. Bradford Jacobs’ will navigate around these potential pitfalls effectively and efficiently. We recruit the staff in-country and then put into action our comprehensive knowledge of tax and payroll regulations. As part of our service, Bradford Jacobs files returns, and remits associated payments for tax and social security contributions directly from our payroll system to the relevant authorities.
Outsourcing your payroll in Romania will streamline your operations by dealing with the following for your staff:
- Obtain personal tax identification number (TIN) where required for foreign nationals, using Form 030 with the individual’s passport, copy of contract, their lease agreement or deed of ownership and submitting to the local tax office where they are domiciled
- Verifying the CNP (Codul Numeric Personal) of local employees, which is assigned at birth and doubles as their TIN
- Filing social insurance and tax reports and returns for local employees on Form D112
- Filing social insurance reports and returns for non-resident foreign employees on Form D112
- Filing tax reports and returns for non-resident foreign employees on Form D224
- Submitting Form D222 for non-resident foreign employees at the beginning and end of employment
- Computing and remitting all employees contributions by the 25th of the following month to the National Agency of Fiscal Administration (ANAF)
- Submitting annual tax returns by May 25 of the following year
- Registering new employees with the Labor Inspectorate on the Revisal online software at the latest one day before they commence work
- Ensuring all new employees receive a contract before starting work
What is required to set up Romanian Payroll?
For foreign corporations to run payroll for their staff in Romania they must establish a legal entity subsidiary, with the typical choice being a private limited liability company (LLC). This is considered an ideal subsidiary type for setting up a small and medium enterprise as a first step into the Romanian market.
All companies operate under Romania’s Companies Law, which covers incorporation and regulations dealing with shares, directors and officers, accounts, and other provisions. Registration procedures and requirements include:
- Reserve company name and prepare company information before submitting application to the Trade Registry, which can be done electronically through the Registry website
- Founder can be either an individual or a legal entity
- There is no requirement for minimum share capital of an LLC
- Between one and 50 shareholders
- Provide Articles of Incorporation for new subsidiary; extracts from Trade Register where shareholders are incorporated verifying their financial status, plus passport and ID of future directors
Once incorporated, obtain the company fiscal registration number from the National Agency for Fiscal Administration (ANAF). Other registrations may be required for VAT and social insurance contributions