BUYING AN APARTMENT THROUGH A COMPANY IN BUCHAREST

BUYING AN APARTMENT THROUGH A COMPANY IN BUCHAREST: FULL LEGAL AND TAX ASPECTS

Acquiring real estate in Romania through a legal entity is not just an alternative way to structure a transaction, but a strategic tool for structuring long-term investments. In the current realities of Bucharest and Romania, this model is most often applied in the primary market. It is oriented both toward personal residence of the owner and commercial purposes: renting out, asset management, or subsequent resale for profit.

It is important to understand that purchasing through a company is not a “simplified path.” On the contrary, it imposes additional obligations on the investor in terms of tax accounting and requires flawless preparation of documentation, especially in terms of compliance and confirmation of the origin of funds.

PREPARATION FOR THE TRANSACTION: FINANCIAL MONITORING AND COMPLIANCE

The investor’s primary task is not to search for the perfect property, but to build a solid evidence base confirming the legality of funds. In Romania, financial monitoring (AML) procedures are applied extremely strictly. Any real estate transaction is accompanied by a thorough verification of the source of income.

The buyer is required to document the origin of the entire transaction amount. The following are accepted for consideration:

• Official income from business activities;
• Accrued salaries and bonuses;
• Dividends received from ownership stakes in other companies;
• Proceeds from the sale of previously owned assets (real estate, shares, vehicles).

It should be taken into account that formal schemes without real economic justification (for example, gift transfers from individuals who themselves cannot confirm their income) are rejected by Romanian banks and notaries. This stage often becomes a “bottleneck,” causing delays or refusals in processing payments. A systematic approach to document preparation before paying a deposit is the key to transaction security.

FINANCIAL MODEL: WHAT THE TOTAL COST CONSISTS OF

The actual purchase budget significantly exceeds the market price of the property itself. The investor must take into account a range of associated and operational expenses that affect the overall profitability of the project.

In the conditions of the Bucharest capital market, the total burden during the transaction can reach up to 12% of the property value. This figure includes:

• Taxes and fees: state duties and mandatory payments.
• Processing: notary services (fees depend on the transaction amount), registration of ownership rights in the real estate register (Cadastru).
• Support: services of lawyers specializing in commercial real estate, and bank commissions for cross-border or domestic transfers.
• Administration: purchasing through a legal entity obliges the investor to bear regular expenses for licensed accounting services and maintaining the company’s registered address.

ADVANTAGES OF THE PRIMARY MARKET AND WORKING WITH DEVELOPERS

The model of purchasing apartments directly from developers has gained the greatest popularity among corporate investors. This is обусловлено not only by the novelty of the housing stock and its liquidity, but also by the transparency of financial flows.

Developers often offer flexible payment terms, such as interest-free installment plans or staged payments as construction progresses. This model is ideal for legal entities, allowing efficient management of the company’s cash flow. However, the main argument in favor of working with the primary market remains the specific tax regime.

TVA INVERSE: A TAX OPTIMIZATION MECHANISM

The key advantage of purchasing through a company lies in the application of the reverse VAT charge mechanism — TVA inverse. When a transaction is carried out between two VAT payers in Romania, the tax is effectively not paid by the buyer at the moment of the transaction.

Considering that the standard VAT rate on new real estate is about 21%, the investor gains the opportunity to save a significant amount of working capital at the start. It is precisely this “discount” that makes purchasing through a legal entity максимально attractive for large-scale investments in Romania. It is important to understand: this is not a full tax exemption, but a deferral. Upon the subsequent sale of the property, the company will be required to charge VAT on the full value of the asset.

POST-PURCHASE OBLIGATIONS: ECONOMIC JUSTIFICATION

Ownership of real estate on a company’s balance sheet imposes strict rules of use. The asset cannot simply “be held” as property — it must participate in the company’s business activities.

In practice, this is implemented through two main scenarios:

• Lease: concluding official agreements and generating regular income.
• Use as an office: размещение staff or company management.

Ignoring this rule and using the apartment for the owner’s free personal residence without proper formalization is considered a violation of tax legislation. This may lead to additional tax assessments based on market rental value and penalties from the controlling authorities (ANAF).

COMPANY STATUS AND TAX REPORTING

There is a common misconception that after the purchase, the company can be “frozen” until the asset is resold. Under the current legal conditions in Romania, this scenario is ineffective.

If the investment amount exceeds 100,000 euros, the company automatically falls into the category of VAT payers. This obliges the legal entity to submit tax declarations on a monthly basis, even if there were no active account movements during the reporting period. Failure to submit reports on time leads to account blocking and loss of VAT payer status, which eliminates all tax advantages of the transaction.

EXIT SCENARIOS: TAXES UPON RESALE

The evaluation of investment efficiency must include the exit stage from the asset. When selling a property owned by a company, the standard taxation model is applied with VAT charged on the current market value.

As a result, the benefit obtained when purchasing through TVA inverse is partially offset at the stage of sale. The investor must calculate in advance whether rental income and asset appreciation will cover future tax payments.

CHOICE OF OWNERSHIP MODEL: INDIVIDUAL VS COMPANY

The choice of the form of ownership of real estate in Romania is determined by the purpose of acquisition, the tax status of the buyer, and the intended model of using the asset.

For personal use

Acquiring real estate as an individual is characterized by a simplified transaction process and the absence of obligations related to administering a legal entity. At the same time, this model has a number of significant limitations:

• expenses related to maintaining the property (repairs, furnishing, maintenance) are not deductible for the purpose of reducing the taxable base;
• rental income is taxed under the standard scheme without the application of tax optimization mechanisms available to legal entities;
• for non-EU residents, there are restrictions on the acquisition of land plots, including when purchasing properties with adjacent land or when (when purchasing an apartment, you own only the square meters on the floor but not the land under the building, which must be assigned to you (as a result, such an apartment without land under the building is practically impossible to resell later);
• there is no mechanism for separating personal and investment assets, which increases the level of property risks;
• limited opportunities for structuring ownership and scaling investments when acquiring multiple properties.

For business and investment

Acquiring real estate through a company is associated with additional administrative and accounting obligations, however, it provides broader tools for asset management:

• the ability to account for operating and capital expenses for the purpose of tax optimization;
• flexibility in managing assets, including their sale, transfer, or restructuring;
• simplification of scaling an investment portfolio;
• the possibility of using a corporate structure to bypass certain restrictions applicable to non-resident individuals (in particular, regarding ownership of land plots).

RISK MANAGEMENT

The main risks in Bucharest, Romania today are concentrated not in the technical condition of buildings, but in the legal and financial sphere. The critical points include:

• Banking compliance: the risk of funds being blocked in the absence of a confirmed source.
• Tax administration: the risk of penalties for improper use of the asset.
• Registration nuances: verification of clear ownership rights in the land register.

INHERITANCE AND TRANSFER OF RIGHTS

Structuring ownership through a company significantly simplifies the transfer of assets. In case of the need to transfer real estate (inheritance or sale to a partner), the subject of the transaction is not square meters, but corporate rights — shares in the company. This allows maintaining continuity of asset ownership without re-registering property rights in the state register each time, saving months of time and thousands of euros in notary fees.

PROFESSIONAL SUPPORT FOR YOUR INVESTMENT

Our company specializes in accounting support and registration of legal entities in Romania. We take on the full administration of your investment project: from company registration and VAT registration to monthly reporting and tax planning.

We are ready to handle all related matters, minimize banking compliance risks, and ensure the legal purity of ownership of your asset.

Submit a request for a consultation right now so that your entry into the Romanian real estate market is safe and effective.

FREQUENTLY ASKED QUESTIONS (FAQ)

Can an apartment be purchased through a company anonymously?

No. Current KYC (Know Your Customer) rules require disclosure of information about the ultimate beneficial owner of the company.

Is it necessary to hire an accountant if the company is not active?

Yes, filing even “zero” reports in Romania is mandatory to maintain the company’s active status.

Can a foreign company purchase an apartment in Bucharest?

Theoretically yes, but for tax optimization and simplification of registration (especially land), a local legal entity is almost always established.

How long does the property registration process take?

The standard period for recording in the Land Register is from 14 to 30 days after signing the final agreement.

Does VAT payer status affect the purchase of secondary housing?

In the secondary market, VAT is most often not applied, therefore purchasing through a company there lacks the main advantage — the TVA inverse mechanism.