Accace: comparative advantages of Romania compared to other countries in Eastern Europe, regarding the period of establishment of a company, registration fees, taxes, VAT

By RBJ
Accace, one of the leading business consulting and service outsourcing companies in Central and Eastern Europe, analyzed several aspects of the business environment in Bulgaria, the Czech Republic, Poland, Hungary or Slovakia, compared to Romania.
According to Accace consultants, when carefully planned, entering new markets can not only increase profits, but also reduce risks, facilitating the company’s growth on a global scale.
Thus, the most common legal form when setting up a company is the Limited Liability Company (SRL), in all six analyzed countries. The time required to set up the company differs from one day to 15 days in Hungary, from one day to two months in Bulgaria, three working days in Romania, a maximum of two weeks in Slovakia and between two and three weeks in the Czech Republic and Poland .
In the top of the countries with the lowest value of the company registration tax, Hungary is in first place, which does not register any tax, but this depends on the nature of the legal form of the company, followed by Romania with a minimum capital of 1 RON (0 ,20 euros), Bulgaria with 51 euros, Poland with 123.5 euros, Slovakia with 150 euros and the Czech Republic with 800 euros.
From the data presented by Accace, the lowest profit tax is applied in Hungary (9%), followed by Bulgaria (10%), Romania (16%), Poland and the Czech Republic (19%) and Slovakia (21%). At the same time, the Czech Republic applies a reduced tax of 9% for small taxpayers, and Slovakia a tax of 15% on annual taxable income of less than 49,790 euros.
In terms of VAT rates, Romania registers the lowest VAT in the region – 19%, with a reduction of up to 9% or 5% for certain categories, followed by Bulgaria with 20% (9% reduced VAT and 0 % for the export of goods and services) and Slovakia also with 20% (10% reduced VAT tax and 0% for the export of goods and services), the Czech Republic with 21% (reduction of 15% and 10% respectively), Poland with 23% VAT (reduction of 8% and 5%) and Hungary with 27% VAT (reduction of 18% and 5% respectively).
What are the industries with the strongest labor force in the countries analyzed?
According to the analysis made by Accace specialists, the industries with the strongest labor force in Bulgaria are telecommunications, the logistics sector, retail, the manufacturing industry, but also the creation and distribution of information and creative products. In the Czech Republic, the construction industry, automotive, nanotechnologies and consumer goods stand out.
As for Hungary, 63% of workers are employed in the service sector and 22% in manufacturing. The business sector, the automotive industry, pharmaceutical and medical products, information and communication technology, the food industry, logistics and transport are also highlighted.
In Poland, the industries with the largest workforce are: wholesale and retail trade, manufacturing, agriculture, logistics and transport, but also the IT industry. Slovakia stands out for its automotive and logistics industry, while Romania stands out for its pharmaceutical and medical, engineering and IT industries.
What investment incentives do countries in the region offer and what are the favored industries?
Among the industries favored by incentives in Bulgaria are retail, real estate, production and distribution of electricity, heat and gaseous fuels, as well as the production of rubber, plastics and other non-metallic mineral raw materials.
In the case of the manufacturing industry and the production of special medical consumable products, in the Czech Republic a subsidy for job creation of a maximum of 200,000 CZK and 300,000 CZK respectively, a subsidy for personnel training of up to 70% of the necessary training costs, as well as a cash grant for investment capital of up to 20% of eligible costs.
Hungary grants a number of tax incentives such as tax deductions and exemptions for research and development, capital gains from shares and intellectual rights, as well as intellectual property.
Poland grants a number of investment incentives such as: tax exemptions, investment loans on preferential terms or preferential taxation for business development. The favored industries for such incentives are: IT, renewable energy, automotive, manufacturing and logistics.
The Slovak authorities can grant subsidies for the purchase of tangible and intangible assets, income tax exemptions, transfer or exchange of real estate at a lower price than the general price. The Slovak state also grants subsidies between 15,000 and 50,000 euros for starting a commercial activity in the agricultural sector or subsidies of 100,000 to 3,000,000 euros for sustainable transport solutions.
The Romanian state grants 0% profit tax for employees working in IT&C companies in accordance with the provisions of Romanian legislation in force. At the same time, investors who establish production units or offices in an industrial zone, industrial, scientific or technological park benefit from some local tax exemptions. In addition, the Romanian authorities grant tax incentives for employees who earn wage income in the agricultural and food industry.
Accace Romania has been present on the local market since 2007 and offers accounting, reporting, payroll, personnel administration, as well as tax, corporate and legal consulting services through an affiliated law firm. In addition, Accace provides customers with new technological solutions to support and improve these services, solutions developed globally and adapted according to the specifics of local customers.