Branches and Subsidiaries of
Foreign Companies
A foreign company can
do business in Romania through a subsidiary or a branch. While a subsidiary has
a legal personality and is considered a Romanian entity, the branch is just an
extension of the parent company and therefore has no legal personality and no
independence.
Law No. 105/1992 on the
Regulation of the Private International Law Relationship adopts the accepted
international practice by which a branch is governed by the national law of its
parent company.
Legally, the branch has
no separate status from the foreign company itself. It is merely carrying on
business in Romania. The foreign company will be liable to the employees and
creditors of the branch for the actions of, and debts contracted by, its
managers and agents on behalf of the branch. On the contrary, according to the
Law
No.31/1990, a Romanian subsidiary of a foreign company is a
Romanian legal person and, consequently, it is subject to Romanian laws. It is
liable, on its own behalf, for the actions assumed. Subsidiaries and branches
can carry out only the activities to which the parent company is authorized.
In practice,
subsidiaries are commissioned following the same steps as the registration of
companies, i.e. notarizing the statutes, and registering the subsidiary with the
National Trade Register Office.
The formation of a
branch follows the same steps as that of a subsidiary, but they do not need to
establish incorporation statutes.
-
a notarized copy of
the articles of incorporation of the parent company;
-
evidence of
registration of the parent company in its country of origin;
-
documentation
indicating the company's solvency; and
-
the decision of the
parent company's Board of Directors (or similar authorized body) to establish
a foreign branch. This decision should indicate the type of activity of the
branch, the individuals appointed by the parent company to act on its behalf
and the confirmation of the parent company that the acts of its
representatives are legally binding to it.
Assuming the branch is
accepted, it must then be registered with the local office of the National Trade
Register Office. The formation of a subsidiary must comply with the minimum
capital requirements under the Romanian Company Law.
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RoDI
ISOC
IWA
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RTS
WQC 2003 
ISAQ 2005