Banks & Finances Romania

Here are the main banks that offer good conditions and a simple account opening procedure for foreigners:

 

Banca Transilvania

The largest bank in Romania; actively invests in digital transformation and offers a variety of online services.

Services for foreigners: Has a special section on its website for international clients where you can open an account online using a short video interview; offers a current account with a physical and digital card, support for BT Pay, Apple Pay, and Google Pay.

 

Banca Comerciala Romana (BCR)

One of the largest retail banks in Romania; part of the Erste Bank group; offers a wide range of banking services, including current accounts, debit and credit cards, savings accounts, and insurance.

Services for foreigners: 24/7 customer support via phone and web chat, the ability to open accounts online through the George platform. Special packages for young people and students.

 

ING Bank

An international bank with a strong presence in Romania.

Services for foreigners: The account opening process is simple and can be done online; offers various banking services, including current accounts, credit and debit cards, savings products, and investment services.

To open a bank account for foreigners, the following documents are required:

- Passport or residence permit.

- Proof of residence address (e.g., utility bill or rental agreement).

- Proof of tax residency.

- Employment contract or statements from previous workplaces (if required).

 

Account opening process:

Visit the bank branch in person or start the process online on the chosen bank's website.

Provide the necessary documents and fill out the account opening application.

Wait for confirmation and account activation, after which you will gain access to internet banking and other services.

Using an ATM:

ATMs are widely available in Romania, especially in large cities and tourist areas. Use ATMs located in banks or large shopping centers for added security. ATMs support Visa, MasterCard, and AmEx cards. You can find the nearest ATM using the Visa and MasterCard mobile apps and websites.

 

Cash withdrawal procedure:

- Insert the card into the ATM and select the cash withdrawal option.

- Enter the amount you want to withdraw and the PIN code to confirm the transaction.

- Take your card and cash.

 

Avoiding Dynamic Currency Conversion (DCC): Always choose to withdraw money in the local currency (LEI) to avoid additional fees for currency conversion at an unfavorable rate.

 

Cash withdrawal fees: In most cases, ATMs charge a fee for cash withdrawals from foreign cards. This fee can vary depending on the bank and the type of card. Cards like Wise and Revolut offer favorable conditions, including several free cash withdrawals per month and low currency conversion fees.

 

Cash withdrawal limits: Cash withdrawal limits can vary depending on the card and bank. For example, a Wise card allows withdrawals up to 1,000 USD per day and up to 6,000 USD per month. It is recommended to check your card limits in the bank's mobile app before traveling.

 

Recommendations

Have a backup: Always carry a second card in case your primary card is lost or blocked.

Inform your bank: Notify your bank about your planned trip to avoid having your card blocked due to suspicious activity.

Main methods and services for sending money abroad from Romania:

 

Wise

Process: Register on the website or mobile app, choose the amount and currency, provide the recipient's banking details, confirm your identity (if required), and pay for the transfer using bank transfer, debit or credit card.

Advantages: Low fees, real exchange rate without markups, transparent transfer times.

Disadvantages: The fee may vary depending on the amount and destination of the transfer.

 

Revolut

Process: Register in the app, top up your account, select the amount and currency for the transfer, provide the recipient's details, and confirm the transfer.

Advantages: Instant transfers between Revolut users, favorable exchange rates, support for over 70 currencies.

Disadvantages: Limitations on free transfers depending on the type of account.

 

Remitly

Process: Register on the website or in the app, choose the amount and currency, provide the recipient's details, select the delivery method (bank transfer, mobile wallet, cash), and pay for the transfer.

Advantages: Fast delivery, multiple options for receiving money, first transfers without commission.

Disadvantages: Fees depend on the amount and payment method, restrictions on available countries and currencies.

 

Ria Money Transfer

Process: Register on the website or in the app, choose the destination country, transfer amount, money collection method, provide recipient's details, and pay for the transfer.

Advantages: Wide network of cash pickup locations, convenient app for tracking the transfer.

Disadvantages: Fees can be higher when using a credit card, limited number of currencies.

 

Other popular services

 

Western Union: One of the oldest and most well-known money transfer services, offering services in over 200 countries and territories; many ways to send and receive money, including online transfers, mobile apps, and service points; suitable for personal and business transfers, especially for cash withdrawals.

 

PayPal: A popular payment system that allows you to send and receive money online; quick transfers between PayPal users, support for multiple currencies, ability to send to bank accounts; suitable for personal transfers, especially for online payments and purchases.

 

Bank transfers

Process: Contact your bank, provide the recipient bank's details (SWIFT/BIC code, account number), specify the transfer amount and currency.

Advantages: Reliability, ability to send large sums.

Disadvantages: High fees, lengthy processing time (up to several days).

 

Advice on selecting a service

Pay attention to security: Use only verified and licensed services to avoid fraud.

Consumer loans:

Foreigners can obtain consumer loans for various needs, such as buying a car, paying for education, or home renovations.

Major banks, such as Banca Transilvania and Banca Comerciala Romana (BCR), offer loans with competitive rates and flexible terms.

Main requirements include having a residence permit, income verification, and a good credit history in Romania.

 

Mortgage loans for foreigners

Foreigners can obtain mortgage loans for purchasing property in Romania. However, banks may impose additional requirements, such as a higher down payment (usually around 25%) and guarantees from a Romanian resident or having a company in Romania.

Mortgage interest rates vary from 4% to 6.5%, depending on whether the rate is fixed or variable. The mortgage term can be up to 35 years.

 

"Prima Casă" Program:

The government program "Prima Casă" offers favorable conditions for the first home purchase, including reduced interest rates and a smaller down payment.

Foreigners with permanent residency and employment in Romania may qualify to participate in this program.

 

Tips and recommendations

Consult with lawyers: To ensure legal protection and understanding of all aspects of the transaction, consult with lawyers specializing in real estate and banking law.

Pre-approval: Obtain pre-approval of the loan before finalizing the real estate purchase to avoid risks.

In Romania, payments for large purchases, such as cars or real estate, are regulated by law to minimize the risks of tax evasion and money laundering.

 

Limit on cash usage for individuals:

The maximum cash amount that can be used when purchasing from a legal entity (company) is 10,000 lei per day (approximately 2,000 euros).

For transactions between individuals, the limit is higher – 50,000 lei per day (about 10,000 euros).

If the amount exceeds these limits, the remaining part must be paid in a non-cash way (bank transfer, check, or through a POS terminal).

Exceptions: In some situations (for example, buying a car privately or renting accommodation), it is possible to agree on cash payments, but the established limits must be observed.

Payment methods

Bank transfer: The most common method for large purchases. It is safe, convenient, and mandatory in most cases.

Credit and debit cards: Some dealers and real estate agencies accept card payments.

Checks: Rarely used, but possible by agreement with the seller.

Financing through a bank:

For cars, you can take out a car loan.

For real estate, mortgage loans are available.

Thus, in Romania, the payment for large purchases like a car or real estate is mainly carried out by non-cash methods due to established cash usage limits. For real estate transactions, a bank transfer is mandatory, while for car purchases, partial cash payment within the limit is possible. It’s best to consult a notary or agency in advance to comply with all legal requirements.

Romania offers various ways to save and invest, which can be useful for those looking to preserve and increase their savings.

 

Savings accounts

Banks offer savings accounts with competitive interest rates. Savings accounts allow easy money management, offering constant access to funds without losing interest upon withdrawal. Opening, maintaining, and closing an account is usually free. Deposits are insured up to 100,000 euros (or the equivalent in lei).

 

Term deposits

Banks offer term deposits with fixed interest rates. Rates can vary depending on the deposit term, starting from one month to several years. Interest is paid either at the end of the term or monthly. Deposits are insured up to 100,000 euros.

 

Investment funds and stocks

Platforms: In Romania, investment platforms like IC Markets and other local brokers are popular. They offer a wide range of investment instruments, including stocks, bonds, funds, and ETFs. Many platforms provide analytical tools and investment consulting.

Tax resident status

Foreigners residing in Romania for more than 183 days during the calendar year are considered tax residents. This means they are required to declare and pay taxes on all their income, regardless of its country of origin. Non-residents, in turn, are taxed only on income earned in Romania.

 

 

Personal income tax

Romania has a flat income tax rate of 10%, which applies to all types of income, including wages, rental income, investment income, and other sources. The tax base includes income earned both in Romania and abroad for tax residents.

 

Social contributions

In addition to income tax, foreigners are required to pay social security contributions, including health insurance.

 

Tax exemptions and deductions

Some categories of income for foreign citizens may be exempt from taxation. For example, income from international transportation, income from bonds guaranteed by the Romanian government, as well as prizes and awards paid from public funds, are not taxed. Also, income of individuals with severe disabilities is exempted from taxes.

 

Tax reporting

All taxpayers are required to submit an annual tax return. The return includes all earned income and paid taxes. Tax reporting is submitted to the nearest tax office based on residence or company address.

 

These obligations can change, so it is recommended to regularly check current tax rules and consult with tax specialists.

Main stages of tax declaration

 

Determining tax residency status: Tax Resident or Non-resident.

 

Preparation and submission of the tax return: The annual tax return must be submitted by May 25 of the following year. The return includes all income received for the previous year, as well as estimated income for the current year.

Form 212 - "Unified Statement on Income Tax and Social Contributions": This form is used for reporting income received in the previous year and estimated income for the current year. It includes incomes such as rental income, income from the sale of securities, as well as income from independent activities.

 

System of preliminary advance payments: Some taxpayers can choose the system of preliminary advance payments. Advance payments are calculated as a quarter of the annual tax paid in the previous year and must be made by the 25th of the first month following the end of the quarter.

 

Features of taxation on rental income: From 2024, rental income is taxed at a rate of 10%. There is also a standard deduction of 20% of income without the need for documentation, effectively reducing the tax rate to 8%.

 

Tax exemptions and reliefs: Some categories of income may be exempt from taxation, such as income from international transport and income received from foreign employers if the work is performed outside of Romania. There are also tax treaties to avoid double taxation, which help reduce the tax burden for foreigners.

 

Recommendations

To successfully meet all tax obligations, it is recommended to consult with tax specialists and use the services of professional accounting firms. This will help avoid mistakes and ensure compliance with all local tax requirements.

Registration and Taxation of Self-employed Individuals

 

Registration of PFA (Persoană Fizică Autorizată): Self-employed individuals must register as PFA, providing necessary documents confirming their professional qualifications and lack of criminal records. Foreigners must also provide a passport and proof of Romanian residency.

 

Taxes and social contributions: Self-employed individuals are required to pay an income tax of 10% on net income. Additionally, they must pay contributions for pension and medical insurance: 25% and 10% respectively if their income exceeds 24,960 RON per year.

 

Tax declaration: The tax declaration must be filed annually by May 25 for the previous year. The declaration includes all income and deductions related to professional activities.

 

Benefits and tax advantages

Micro-enterprise taxation regime: For self-employed individuals with an annual turnover of up to 1 million euros, the micro-enterprise taxation regime may apply, with a tax rate of 1% on turnover for companies with employees and 3% for companies without employees.

 

Exemption from VAT

Self-employed individuals with an annual income of less than 300,000 RON are exempt from mandatory registration as VAT payers and from paying this tax on their services or goods.

 

Deductions and expenses:

Self-employed individuals can deduct business-related expenses from taxable income, such as rent, utilities, office supplies, and professional services. This helps reduce the overall tax burden.

 

Working in Romania as a self-employed person or freelancer offers flexibility and the opportunity to control your work schedule, but requires careful compliance with tax and administrative requirements. For additional information and assistance, it is recommended to contact professional accountants and tax consultants.