Branch vs Subsidiary in Romania: Which Structure Should Foreign Investors Choose in 2026
A subsidiary gives you a Romanian legal shield. A branch gives you speed and consolidation. The wrong choice can cost you hundreds of thousands in tax, liability, and exit friction.
Foreign investors entering the Romanian market in 2026 typically consider three structures: a limited liability subsidiary (SRL), a branch office (sucursală), or a representative office. Each carries materially different consequences for taxation, liability, capital requirements, profit repatriation, and exit. This guide sets out the full decision framework under the law as it stands after Law 239/2025 and the 2026 fiscal package, including the specific scenarios in which each structure is optimal and the traps that cost parent companies real money.
- The three structures at a glance→
- Subsidiary (SRL): legal shield and tax optimisation→
- Branch office (sucursală): speed, simplicity, full parent liability→
- Representative office: marketing presence, no trading→
- Side-by-side comparison: the full variables→
- Tax treatment in 2026 — detailed analysis→
- Setup timeline and cost→
- Compliance obligations after incorporation→
- Decision matrix: when to choose which→
- Common mistakes foreign investors make→
- Frequently asked questions→
The three structures at a glance
Romanian law recognises three vehicles through which a foreign company can operate in the country without acquiring an existing Romanian entity. They differ fundamentally in legal personality, tax footprint, liability exposure, and commercial flexibility. Before comparing them in detail, the table below isolates the five variables that drive most structuring decisions in practice.
| Factor | Subsidiary (SRL) | Branch (Sucursală) | Representative Office |
|---|---|---|---|
| Legal personality | Separate Romanian entity | Extension of parent | Extension of parent |
| Parent liability | Limited to share capital | Unlimited, worldwide | N/A (no trading) |
| Can trade and invoice | Yes | Yes | No |
| Corporate income tax | 16% or 1% micro | 16% on Romanian profits | Fixed €18,000/year |
| Minimum capital | RON 500 (≈ €100) | None | None |
| Setup time | 7–10 working days | 10–20 working days | 30–45 days |
| Setup cost (total) | €600 – €1,650 | €930 – €2,230 | €21,000 – €23,300 |
| Profit repatriation | Dividend (16% WHT, often 0% in EU) | Free transfer to head office | Not applicable |
| Exit complexity | Sale or dissolution (6–8 weeks) | De-registration | Simple |
| Best for | ~85% of foreign investors | EU passporting, tax consolidation | Market entry testing |
The detailed analysis that follows explains why each of these differences matters and how they translate into euros gained or lost over a three-to-five-year operating horizon.
Subsidiary (SRL): legal shield and tax optimisation
The limited liability company, or SRL, is the structure chosen by approximately 90% of foreign investors establishing a presence in Romania. It is a Romanian legal person distinct from the parent, with its own balance sheet, tax file, and legal standing before Romanian courts and authorities.
Legal personality and liability
An SRL is a separate legal entity under Romanian law. The parent company's liability is legally capped at the value of its contribution to the share capital. A commercial claim, tax liability, or court judgment against the Romanian SRL cannot, in ordinary circumstances, be enforced against the parent company's assets abroad. This principle is the single most important reason to prefer a subsidiary over a branch for any activity that carries meaningful operational, regulatory, or contractual risk.
Piercing the corporate veil is possible under Romanian law in cases of fraud, undercapitalisation, or commingling of assets, but the threshold is high and judicial practice remains restrained compared to common-law jurisdictions. For parents concerned about counterparty risk before contracting with a Romanian entity, a Trade Register verification is the standard first step.
Share capital after Law 239/2025
Since 18 December 2025, newly incorporated SRLs must have a minimum share capital of RON 500 (approximately €100). Existing SRLs whose net turnover exceeded RON 400,000 in the previous financial year must increase their capital to at least RON 5,000 by 25 September 2026. The mechanics of compliance with the new thresholds, including the shareholder resolution, ONRC filing, and capital deposit procedure, are covered in our guide on how to increase the share capital of a Romanian SRL in 2026, and the underlying rationale behind the RON 5,000 threshold is set out separately here.
Tax treatment
An SRL is subject to standard Romanian corporate income tax of 16% on worldwide profits, or the micro-enterprise regime of 1% on turnover if three conditions are met: turnover below EUR 250,000 (reducing to EUR 100,000 from 2027), at least one employee, and no activity in the financial, consulting (above 20% of turnover), or HORECA sectors under the updated 2026 criteria. Dividends distributed to the foreign parent are subject to 16% withholding tax, reduced to 0% under the EU Parent-Subsidiary Directive where the parent holds at least 10% of the share capital for at least one year, or reduced to 5%–10% under most of Romania's double tax treaties. The full incorporation process, including tax regime election at registration, is detailed in our Romanian company incorporation guide for 2026.
Ideal use cases
The SRL is the correct structure when the investor plans to generate meaningful Romanian revenue (above EUR 500,000 annually), to sign Romanian law-governed commercial contracts with counterparties who require a local entity, to hire Romanian employees at scale, to acquire real estate or regulated assets, or to eventually sell or spin off the Romanian operation. If you anticipate any of these within five years, the subsidiary is almost certainly the right choice.
For founders comparing the SRL against other Romanian legal forms, see our companion analysis on Types of Companies in Romania in 2026: SRL, SA, PFA, Branch.
Branch office (sucursală): speed, simplicity, full parent liability
A branch is not a separate legal entity. It is the Romanian operational extension of the foreign parent, registered with the Romanian Trade Register and taxed on the profits it generates within Romanian territory, but without independent legal personality.
The defining characteristic: unlimited parent liability
Every contract signed by the branch binds the parent company directly. Every judgment against the branch is enforceable against the parent's assets worldwide, subject to cross-border recognition mechanisms. This is the defining commercial characteristic of a branch, and it is the reason risk-aware investors avoid branches for any activity more complex than services billed to existing multinational clients.
Same scope of activity as parent
A Romanian branch can only conduct activities that fall within the scope of the parent company's authorised activities. If the parent's statutes limit it to, say, industrial machinery trade, the branch cannot add unrelated consulting or real estate activities. This constraint is often discovered only after incorporation and can require a parallel amendment at the parent's home-country register, mirrored by a corresponding update at the Romanian Trade Register.
Tax treatment
A Romanian branch is treated as a permanent establishment (PE) for Romanian tax purposes. It is subject to 16% corporate income tax on profits attributable to Romanian activity, calculated according to the arm's-length principle as applied between the branch and the head office. The branch cannot access the 1% micro-enterprise regime under any circumstances, because that regime is reserved for Romanian tax-resident legal persons.
Crucially, profits transferred from a Romanian branch to the head office are not treated as dividends under Romanian domestic law and are therefore not subject to withholding tax on transfer. This is one of the few genuine advantages of the branch over the subsidiary for profit repatriation, though it is often overstated in practice because the Parent-Subsidiary Directive typically eliminates WHT on subsidiary dividends as well.
Registration requirements
Branch registration at the Trade Register requires a set of parent-company documents including the articles of association, certificate of good standing, resolution of the competent corporate body authorising the branch, and proof of the branch's Romanian address. These parent-company documents must be apostilled (or legalised for non-Hague Convention countries) and accompanied by certified Romanian translations — the requirement applies to the corporate documents themselves, regardless of who represents the parent at the Trade Register.
Representation at the filing itself is handled most efficiently through an împuternicire avocațială issued under a legal assistance contract with a Romanian lawyer: no apostille, no notarisation, no translation of the mandate required. Where a non-lawyer is engaged to represent the parent, a separate power of attorney notarised and apostilled in the home country is required. The branch must also secure a Romanian registered address before the file can be submitted, subject to the same substantive requirements as an SRL.
Ideal use cases
A branch makes strategic sense in three narrow scenarios. First, where tax consolidation at the parent level is strategically important (branch losses reduce parent-country taxable profits in some jurisdictions, subject to the home-country rules). Second, where the Romanian activity is a natural extension of the parent's main business, with moderate risk and moderate revenue (EUR 100,000–EUR 1 million annually). Third, where regulatory licensing in the parent's home country cannot be duplicated in Romania and must instead be extended via the branch — most commonly in insurance, banking, and investment services operating under EU passporting.
For all other scenarios, the subsidiary is better. Readers weighing the two options side-by-side may also find our analysis of the types of companies available in Romania in 2026 useful, which positions the branch within the full spectrum of available legal forms.
Representative office: marketing presence, no trading
The representative office is the most restricted of the three structures and the least chosen in practice. It exists for one purpose: non-commercial presence for market research, liaison, and contract preparation.
What a representative office can and cannot do
A representative office can conduct market research, promote the parent's products and services, prepare contracts for the parent to sign directly, and maintain a Romanian address and phone line. It cannot issue invoices, conclude contracts in its own name, hold inventory for sale, or generate commercial revenue of any kind. Any activity beyond the permitted scope risks reclassification as a permanent establishment with retroactive tax consequences and penalties.
Registration, tax, and cost
A representative office is authorised by the Romanian Ministry of Economy (not the Trade Register) under Decree-Law 122/1990. It is subject to a fixed annual tax of EUR 18,000 regardless of activity, plus payroll taxes on any local employees. Setup takes 30–45 days. The authorisation is valid for one year and must be renewed annually.
When it actually makes sense
Representative offices are appropriate in precisely one situation: a foreign company wants a Romanian-language commercial presence for customer support, relationship management, or market intelligence, without yet committing to trading operations. They are common in the initial entry phase of large industrial groups exploring the market before deciding between branch and subsidiary. For most SMEs, the representative office is not cost-effective relative to either alternative — the EUR 18,000 fixed tax is a significant burden if no revenue is generated.
Side-by-side comparison: the full variables
The first table in this guide presented the five variables that drive most decisions. The expanded table below covers the 15 variables that drive the rest.
| Variable | Subsidiary (SRL) | Branch | Representative Office |
|---|---|---|---|
| Legal & Liability | |||
| Legal personality | Separate Romanian person | None (extension of parent) | None |
| Parent liability | Limited to capital contribution | Unlimited, worldwide | No trading → no contractual liability |
| Authorised activities | Any lawful activity | Must match parent's scope | Market research, liaison only |
| Capital & Tax | |||
| Minimum capital | RON 500 (new SRLs) | None | None |
| Capital threshold for existing | RON 5,000 if turnover > RON 400,000 | Not applicable | Not applicable |
| Corporate income tax | 16% standard or 1% micro | 16% on PE profits | Fixed €18,000/year |
| 1% micro regime access | Yes, if eligibility met | No | No |
| VAT registration | Mandatory above RON 395,000 | Mandatory above RON 395,000 | Not applicable |
| Dividend WHT on repatriation | 16%, often 0% under EU directive or DTT | No WHT on transfers to head office | Not applicable |
| Setup & Registration | |||
| Registration authority | Trade Register (ONRC) | Trade Register (ONRC) | Ministry of Economy |
| Setup timeline | 7–10 working days | 10–20 working days | 30–45 days |
| Typical legal fees | €500 – €1,400 | €500 – €1,400 | €2,500 – €3,500 |
| Operations & Exit | |||
| Accounting complexity | Standalone Romanian statutory accounts | Branch accounts + PE allocation | Simple annual declaration |
| Annual financial statements | Filed publicly at ONRC | Filed publicly at ONRC | No public filing |
| Exit mechanism | Sale of shares, liquidation, merger | De-registration at Trade Register | Expiry or cancellation |
Tax treatment in 2026 — detailed analysis
Tax is the variable most often misunderstood in branch-versus-subsidiary decisions. The prevailing rumour that "branches pay less tax" or "subsidiaries get the 1% rate so they always win" is misleading. The correct analysis depends on the specific revenue model, the parent's home jurisdiction, and the planned exit path.
Corporate income tax comparison
Both SRLs and branches pay 16% corporate income tax on profits. The SRL additionally has access to the 1% micro-enterprise regime on turnover (not profit) if eligibility conditions are met. Under the 2026 fiscal package, micro-enterprise eligibility requires: turnover below EUR 250,000 in the prior year (dropping to EUR 100,000 from 2027), at least one full-time employee, and non-disqualifying activity (finance, over-20%-of-turnover consulting, certain HORECA, gambling, and others are excluded).
For a subsidiary generating EUR 200,000 turnover with EUR 40,000 net profit, the 1% micro regime produces a tax bill of EUR 2,000, compared to EUR 6,400 at 16% standard. For a subsidiary generating EUR 200,000 turnover with EUR 120,000 net profit, the micro regime produces the same EUR 2,000, against EUR 19,200 at the standard rate. The micro regime is therefore disproportionately attractive to high-margin service businesses — and unavailable to branches.
Dividend withholding tax and profit repatriation
The 2026 dividend withholding tax rate was increased from 10% to 16% effective 1 January 2026 for distributions to both individuals and non-EU corporate shareholders. This headline rate is eliminated entirely under the EU Parent-Subsidiary Directive where an EU parent holds at least 10% of the Romanian SRL for at least one uninterrupted year. Non-EU parents rely on double tax treaties, which typically reduce the rate to 5% (e.g., Germany, Netherlands, France, Austria) or 10% (e.g., US, UK post-Brexit).
Branch transfers to head office are not dividends under Romanian law and carry no withholding tax. In theory, this is a branch advantage. In practice, where the parent qualifies for the EU directive, the subsidiary's effective repatriation cost is also zero, and the advantage disappears.
VAT treatment
Both SRLs and branches must register for VAT once annual turnover exceeds RON 395,000 (approximately EUR 80,000). Foreign companies with no Romanian establishment but taxable Romanian transactions must register for VAT from the first transaction, with no threshold — a common trap for e-commerce and digital service providers that can be avoided by structuring through a subsidiary.
Transfer pricing
Both SRLs and branches are subject to Romanian transfer pricing rules when transacting with affiliated parties abroad. The OECD arm's-length principle applies. Transfer pricing documentation requirements are triggered at specific revenue thresholds (EUR 200,000 for services, EUR 100,000 for interest, EUR 250,000 for goods). The analytical complexity is similar for both structures; the practical difference is that a branch's "transactions" with its own head office are deemed dealings under Romanian law and still require arm's-length pricing and documentation.
Setup timeline and cost
Setup cost and timeline are often the variables that push indecisive founders toward one structure or the other. The numbers below reflect typical figures for a Bucharest-based registration handled remotely, excluding extraordinary circumstances.
| Cost component | Subsidiary (SRL) | Branch | Rep. Office |
|---|---|---|---|
| Trade Register / Gazette fees | €30 | €30 | N/A |
| Government application fees | — | — | €1,200 |
| Legal & professional fees | €500 – €1,400 | €500 – €1,400 | €2,500 – €3,500 |
| Apostille & certified translation | €80 – €200 | €400 – €800 | €300 – €600 |
| First-year fixed tax | — | — | €18,000 |
| Notarisation required | No (private signature under Law 265/2022) | Only for non-lawyer POA | Only for non-lawyer POA |
| Timeline to operational | 7–10 working days | 10–20 working days | 30–45 days |
| Total all-in (year 1) | €600 – €1,650 | €930 – €2,230 | €21,000 – €23,300 |
Subsidiary (SRL)
Typical timeline: 7–10 working days from receipt of complete documents to issuance of the CUI (tax identification number) and Certificate of Registration. Under Law 265/2022, a Romanian SRL is incorporated entirely under private signature — no notarial authentication is required for the articles of association or the shareholders' decisions. Typical cost breakdown: Trade Register and Official Gazette fees approximately EUR 30, legal and professional fees EUR 500–1,400 depending on complexity, certified translation of foreign shareholder documents EUR 80–200 where applicable. Total all-in: EUR 600–1,650.
A detailed walkthrough of the incorporation process, including ANAF tax registration, CAEN Rev. 3 code selection, and the 60-day bank account opening deadline, is available in our full-length guide on Company Incorporation Romania: Cost, Timeline & Process. Subsidiary setups where a Romanian address is not already in place should begin with obtaining a registered office, which is the single most common source of pre-filing delay.
Branch office
Typical timeline: 10–20 working days. The longer timeline reflects the requirement to apostille and translate a larger set of parent-company documents (articles of association, commercial register extract, certificate of good standing, board or shareholders' resolution authorising the branch). Typical cost breakdown: Trade Register fees approximately EUR 30, legal and professional fees EUR 500–1,400, apostille and translation costs EUR 400–800. Total all-in: EUR 930–2,230.
Representative office
Typical timeline: 30–45 days, driven by Ministry of Economy review. Typical cost breakdown: government application fees approximately EUR 1,200, legal and professional fees EUR 2,500–3,500, translation and apostille EUR 300–600. First-year fixed tax EUR 18,000 payable regardless of activity. Total first-year cost: EUR 21,000–23,300.
Compliance obligations after incorporation
Ongoing compliance is where many foreign investors underestimate the true cost of a Romanian presence. The table below maps the annual calendar for each structure.
| Obligation | Subsidiary (SRL) | Branch | Rep. Office |
|---|---|---|---|
| Bank account60 days | Mandatory from 2026 | Mandatory | Not required |
| UBO declarationAnnual | Yes, annually | Yes, annually | Not applicable |
| Annual financial statementsBy 30 May | Filed publicly at ONRC | Filed publicly at ONRC | Simplified declaration |
| Corporate income tax returnBy 25 March | Yes (16% or 1% micro) | Yes (16% on PE profits) | Fixed €18,000 annually |
| SAF-T (D406) filing | Large & medium taxpayers | Yes | No |
| E-invoicing (RO e-Factura) | Yes, B2B and B2G | Yes, B2B and B2G | Not applicable |
| Monthly payroll returns (D112) | If employees | If employees | If employees |
| VAT returns | If registered (above €80K turnover) | If registered (above €80K turnover) | Not applicable |
| Annual compliance cost (typical) | €4,000 – €10,000 | €4,000 – €10,000 | €1,500 – €3,000 |
Failure to open a mandatory bank account within 60 business days of incorporation, or to file annual financial statements within five months of the deadline, can now trigger fiscal inactivity — a development examined in depth in our analysis of Fiscal Inactivity in Romania 2026.
- You expect to generate over €500,000 in Romanian revenue within three years.
- You will sign contracts with Romanian counterparties — landlords, suppliers, distributors, or government entities.
- You will hire Romanian staff beyond a small back-office team.
- Your activity carries operational, product, or regulatory liability risk you do not want flowing to the parent.
- You may sell, spin off, or joint-venture the Romanian operation in the future.
- You want access to the 1% micro-enterprise regime in the early years.
- Your parent is in the EU and qualifies for the Parent-Subsidiary Directive (0% dividend WHT).
Decision matrix: when to choose which
The correct structure is the one that aligns with the investor's answers to six specific questions. The matrix below shortcuts the analysis for the most common foreign-investor scenarios.
Choose a subsidiary (SRL) when at least one of the following applies
You plan to generate Romanian revenue above EUR 500,000 annually within three years. You will sign local commercial contracts with Romanian counterparties (landlords, suppliers, distributors, government entities). You will employ Romanian staff beyond a small back-office team. Your activity carries meaningful operational, product, or regulatory liability risk that you do not want to pass through to the parent. You anticipate a future exit through sale or joint venture. You want optionality on the 1% micro-enterprise regime for the early years. Your parent is based in an EU member state and can benefit from the Parent-Subsidiary Directive. Investors in this category can move directly to our Romanian company incorporation guide for the complete setup process.
Choose a branch when all of the following apply
The Romanian activity is fully aligned with the parent's existing business scope. The risk profile is low and unlikely to generate claims that would threaten the parent. The parent benefits from consolidating Romanian profit or loss at the home-country level. You operate in a regulated sector (banking, insurance, investment services) where EU passporting makes branch registration structurally simpler than local licensing. Revenue is expected to remain below EUR 500,000–1,000,000 annually. You value the absence of dividend-related repatriation complexity.
Choose a representative office when all of the following apply
You are exploring the Romanian market without yet committing to operations. The initial phase will involve no commercial revenue for 12–24 months. You can absorb a EUR 18,000 annual fixed tax without revenue to offset it. You plan to upgrade to a branch or subsidiary once the market test is complete.
When it is genuinely a close call
In practice, the decision is close in two situations. First, when a small services business (EUR 100,000–300,000 turnover) is deciding between a branch and a micro-eligible subsidiary — the subsidiary usually wins on tax flexibility and liability, but the branch wins on consolidation. Second, when a regulated EU financial services firm is passporting into Romania and weighing operational simplicity of the branch against the commercial preference of Romanian counterparties for a local subsidiary. These cases benefit from a structuring opinion that factors in the parent's home-country tax position, which a public guide cannot substitute. Request a 30-minute structuring call to discuss the specifics of your parent jurisdiction and Romanian activity.
Common mistakes foreign investors make
Choosing a branch to "save on setup" and regretting it when the first serious claim arrives
The branch's unlimited parent liability is not a theoretical concern. A Romanian labour court judgment, a contract dispute, an ANAF reassessment, or a product liability claim all flow directly to the parent's balance sheet. Most sophisticated investors who have experienced this conversion regret the branch choice. A branch rarely costs less than a subsidiary at setup — and the marginal savings, if any, are dwarfed by the open-ended liability exposure.
Assuming the 1% micro regime is automatic
The micro regime requires active eligibility verification and has become progressively more restrictive with each fiscal package. Exit from the regime is automatic and unforgiving when thresholds are breached — and the re-entry rules are strict. Relying on the 1% rate in the financial model without building standard 16% scenarios is one of the most common foreign-investor planning errors.
Under-capitalising the subsidiary
Setting share capital at the new statutory minimum of RON 500 saves nothing meaningful and exposes the structure to two real risks: reclassification by a hostile court as a sham entity for veil-piercing purposes, and reduced commercial credibility with Romanian banks and counterparties. Most well-advised foreign-owned SRLs are capitalised at RON 5,000–45,000, even when the statutory minimum is far lower.
Ignoring the distinction between legal mandates
Not every filing requires an apostilled power of attorney. In practice, two distinct mechanisms operate in parallel and are frequently confused.
The first is the împuternicire avocațială — the attorney's mandate issued under a legal assistance contract signed with a Romanian lawyer. Under Article 126 of the Statute of the Legal Profession and Law 51/1995, the empowerment is effective upon signing of the legal assistance contract and requires no notarisation, no apostille, and no certified translation. A non-resident shareholder can sign the legal assistance contract electronically, and the lawyer can then file with the Trade Register, ANAF, or any other authority on the client's behalf. This is the mechanism used for the overwhelming majority of corporate filings handled by foreign-owned SRLs.
The second is the general or special power of attorney given to a non-lawyer — a trusted individual, a corporate service provider, or an employee — to act on behalf of a non-resident shareholder. This document must be notarised in the shareholder's home country, apostilled under the Hague Convention (or legalised for non-Hague countries), and accompanied by a certified Romanian translation. Investors who engage a corporate service provider rather than a lawyer for their initial setup frequently discover this requirement two days before a signing deadline, adding weeks of delay and hundreds of euros in expedited processing.
A third category deserves mention: the Romanian administrator, once validly appointed, is the legal representative of the company under Article 70 of Law 31/1990. The administrator files routine corporate documents in the company's name without any further mandate from the shareholders — no POA, no empowerment, no notarisation.
The practical takeaway is that the choice of counsel at market entry often determines how cumbersome every subsequent corporate action will be. Engaging a Romanian lawyer from the outset eliminates the apostille chain for virtually every filing during the company's operational life.
Choosing a branch when the activity falls outside the parent's scope
A branch is bound by the parent's own authorised activities. If the parent's statutes cover industrial equipment trade but not consulting services, a Romanian branch cannot legally provide consulting services. This is discovered only when the Trade Register rejects the registration or when a subsequent invoice triggers an ANAF reclassification.
Frequently asked questions
Can a Romanian branch be converted into a subsidiary later?
Yes. The typical path is to incorporate a new SRL, transfer the branch's assets, contracts, and employees to the SRL, and then de-register the branch. The transfer is not automatic and triggers tax and employment-law formalities. Budget 2–4 months and EUR 4,000–8,000 in professional fees for a clean conversion, more if material assets, real estate, or regulated licences are involved.
Is a branch cheaper to run than a subsidiary?
Not materially. Both require statutory accounting, annual financial statement filings, VAT returns if registered, payroll filings if employing staff, SAF-T filings, and e-invoicing compliance. The only meaningful savings are the absence of UBO refiling in some interpretations (disputed) and the absence of separate dividend distribution formalities. In practice, annual compliance cost for either structure is EUR 4,000–10,000 for a small operation.
Does the EU Parent-Subsidiary Directive eliminate all withholding tax?
For a qualifying EU parent (at least 10% shareholding for at least one uninterrupted year), dividends paid by a Romanian SRL are exempt from Romanian withholding tax. The parent must provide a certificate of tax residence and a declaration of beneficial ownership. Non-EU parents fall back on double tax treaties, where available, which typically cap the rate at 5% or 10%.
Can a foreign individual (rather than a company) open a branch in Romania?
No. A branch is by definition the extension of a foreign legal person. A foreign individual who wants to trade in Romania should incorporate an SRL, register as a PFA (Persoană Fizică Autorizată) for certain regulated activities, or use a more specialised vehicle. Our analysis of Types of Companies in Romania 2026 compares the options available to individuals.
What is the minimum number of shareholders for a Romanian SRL?
One. A single-shareholder SRL is fully permitted and extremely common for foreign-owned subsidiaries. The maximum is 50 shareholders; above that, the structure must convert to a joint-stock company (SA).
Do Romanian banks treat branches differently from subsidiaries in KYC?
Yes, and this is often the most practically disruptive difference. KYC on a branch requires full documentation of the foreign parent, including its own beneficial owners, audited accounts, and sanctions screening. The process takes 6–12 weeks for most banks. An SRL with transparent Romanian ownership can open an account in 2–4 weeks. See our full analysis in How to Open a Bank Account for Your Romanian SRL.
Can a subsidiary be wound up remotely?
Yes, for a subsidiary with no debts, the simplified dissolution procedure under Article 235 of Law 31/1990 takes 6–8 weeks and can be handled entirely from abroad. See our full guide on How to Close a Romanian Company (SRL) in 2026.
Do branches pay the same dividend tax as subsidiaries?
No. Branches do not pay dividend withholding tax on transfers to head office. Subsidiaries pay 16% WHT on distributed dividends, reduced or eliminated under the EU Parent-Subsidiary Directive or applicable tax treaty.
Which structure do most foreign investors choose?
Approximately 85% of foreign-owned entities in the Romanian market use an SRL subsidiary. Roughly 10% use a branch, typically for regulated EU passporting or deliberate tax consolidation at the parent level. Representative offices account for under 5%, usually during an initial market-entry phase.
The branch-versus-subsidiary question is rarely a standalone issue. It intersects with the parent's home-country tax position, the operational model, the expected revenue trajectory, and the planned exit. At the end of a 30-minute call you will have a clear written recommendation on structure, capital level, and timeline — whether or not you choose to engage us for the setup.
- Structure recommendation (SRL / Branch / Rep.)Written
- Capital level & funding mechanicsWritten
- Tax regime & micro-enterprise eligibilityAssessed
- Dividend repatriation & treaty analysisAssessed
- Incorporation timeline & document checklistProvided
- Fixed or capped fee proposal for setup1 business day
