According to Decree-Law 122/1990, foreign companies may set up representative offices in Romania. A Representative Office is not distinct from the parent company it represents, but acts in the parent company’s name and on its behalf with a specific mandate to do so. The legal status of a Representative Office prevents it from having its own turnover, its revenues representing only the amounts transferred to Romania by the parent company to cover its local expenses.
Authorizations issued by the Ministry of the Economy limit the activities of Representative Offices to the promotion and technical support of the parent company’s business activities, without their having the right to carry out these activities. Thus, in practice, a Representative Office may carry out the following activities:
- Business operations such as: issuance and receipt of offers and orders, or participation in negotiations, without being allowed to conclude contracts.
- Marketing and advertising.
- Supervision of dealers’ activities.
- Any other economic and commercial activities meant to develop international exchanges, but without having the authority to issue invoices directly.
In order to obtain an operating license, a Representative Office must pay a yearly fee of USD 1,200, in RON, according to the exchange rate of the National Bank of Romania. A tax on representative offices is payable by any foreign legal entity with a representative office authorised to operate in Romania. The tax is paid on an annual basis. The amount to be paid for a fiscal year is RON 18,000 (it was previously EUR 4,000). The representative office of a foreign legal entity is required to declare and pay the tax to the state budget by the last day of February of the tax year.