How to Close a Romanian Subsidiary (SRL): Legal and Tax Considerations
If you own a Romanian subsidiary (SRL) and are considering closing it, whether due to restructuring, business challenges, or strategic reorientation, it's important to understand the legal and tax implications involved in the dissolution process. The procedure is regulated by Romanian law and involves several steps, which need to be carefully followed to ensure proper closure and compliance with Romanian regulations.
This guide outlines the key steps and considerations for closing a Romanian SRL in 2025.
1. Types of Liquidation
There are two main types of liquidation for a Romanian subsidiary (SRL):
1. Voluntary Liquidation (Company with No Debts)
2. Liquidation with a Liquidator (Company with Debts)
1. Voluntary Liquidation (without debts)
• This type of liquidation is applicable when the company has no debts and the shareholders decide to dissolve the company.
• In this case, the company does not need a liquidator. It is a straightforward process of closing the company when it is fully solvent.
2. Liquidation with a Liquidator (with debts)
• This process applies when the company has outstanding debts, and a liquidator is appointed to manage the liquidation process and pay off creditors.
2. Voluntary Liquidation Procedure (for a debt-free company)
Key Steps:
• Shareholder decision: The shareholders must approve the liquidation during a general meeting.
• No debts or liabilities: The company is considered fully solvent and no liquidator is necessary.
• Deregistration: The company’s dissolution must be registered with the Romanian Trade Registry (ONRC).
• Final tax filing: The company must file its final tax returns to ensure that all tax obligations are settled.
Once these steps are completed, the company is officially closed when there are no outstanding liabilities.
3. Liquidation with a Liquidator (Company with Debts)
If the company has outstanding debts, a liquidator is appointed to manage the liquidation process:
• The liquidator is responsible for selling company assets to pay off creditors.
• The company is still required to settle any existing debts (including employee salaries, VAT, taxes, supplier invoices, etc.).
Steps for Liquidation with a Liquidator
1. Shareholder Decision: Shareholders decide to liquidate, and a liquidator is appointed.
2. Inventory of Assets and Liabilities: The liquidator prepares a list of all assets, liabilities, debts, and creditors.
3. Settling Debts: The liquidator must pay off the company's debts, either through selling assets or negotiating settlements with creditors.
4. Notify Creditors: Creditors must be informed and given time to submit claims.
5. Register Liquidation: The liquidation decision must be filed with the Romanian Trade Registry.
6. Final Financial Report: Once all debts are settled, the liquidator submits a final report to the Trade Registry.
7. Deregister the Company: The company is officially deregistered after completion of the liquidation process.
4. Settling the Company’s Debts
During liquidation with a liquidator, all debts must be paid before the company is officially closed, including:
• Employee salaries and social security contributions
• Supplier invoices
• Tax liabilities (VAT, income tax, social security contributions)
If the company does not have sufficient assets to cover its debts, the company may enter judicial liquidation, and the court will oversee the process.
5. Notifying Creditors and the Authorities
• Creditors notification: The liquidator must inform all creditors of the liquidation process. Creditors have a period of 30 days to file any claims.
• Tax authorities: Ensure the company is in good standing with the ANAF and that all tax obligations are fulfilled. This includes filing final tax returns for VAT, corporate income tax, and social security contributions.
• Trade Registry: After all debts are settled, the liquidator must submit an application to the ONRC for the final dissolution of the company.
6. Tax Implications and Final Considerations
• Tax clearance: Make sure to obtain the tax clearance certificate from ANAF. Without this, the company cannot be officially dissolved.
• Final tax filing: Even though the company is closing, final tax returns must be filed with ANAF to report any final business activities.
• VAT deregistration: If the company was registered for VAT purposes, it must also file a VAT de-registrationapplication with ANAF.
Potential Tax Issues:
• If the company is liquidated and there are any outstanding VAT or income tax liabilities, the liquidator is responsible for paying those before distributing any remaining funds to shareholders.
• Asset disposals may lead to capital gains tax if the company is liquidating assets at a profit.
7. Timeline for Closing an SRL
• Voluntary liquidation: Usually completed in 1–3 months, depending on the simplicity of the process (no debts).
• Liquidation with liquidator: The process can take 6 months to 1 year depending on the company’s debts and asset complexity.
Our Expertise in Closing Romanian Subsidiaries
At Epure & Lohmann SCA, we help DACH-region companies navigate the complexities of closing a Romanian subsidiary, ensuring compliance with legal and tax obligations and minimizing any risks during the liquidation process.
Contact us today for tailored legal support and strategic advice on dissolving your Romanian subsidiary.
