Types of Companies in Romania in 2026: SRL, SA, PFA, Branch — Which One Should You Choose?

Romania offers several legal structures for doing business, each with different implications for liability, taxation, capital requirements, and operational flexibility. Choosing the right one is arguably the most important decision a foreign entrepreneur will make before entering the Romanian market — and it is also the most common source of costly mistakes.

This guide covers every legal entity type available in Romania as of 2026, updated to reflect the changes introduced by Law 239/2025 (the so-called "Fiscal Package 2"), the new microenterprise tax regime, and the revised share capital thresholds. By the end, you will know exactly which structure fits your business.

The SRL (Societate cu Răspundere Limitată) — Limited Liability Company

The SRL is Romania's equivalent of the LLC and is by far the most popular vehicle for both domestic and foreign entrepreneurs. Over 90% of companies registered in Romania are SRLs, and for good reason.

An SRL can be incorporated by a single shareholder or by up to 50 shareholders. Since 1 January 2026, the minimum share capital for new SRLs is RON 500 (approximately €100). If the company's net turnover exceeds RON 400,000 in any financial year, the share capital must be increased to at least RON 5,000 (approximately €1,000) by the end of the following financial year. There is no requirement for a Romanian resident director — foreign nationals can serve as sole administrator without restrictions.

From a tax perspective, the SRL is the most attractive structure in Romania. Companies with annual revenue below €100,000 qualify for the microenterprise tax regime: a flat 1% tax on revenue (not profit), provided the company has at least one full-time employee. This is among the lowest effective tax rates in the European Union. Companies that exceed the €100,000 threshold, or that do not meet the microenterprise conditions, are subject to the standard 16% corporate income tax on profit. Dividends distributed to shareholders are taxed at 16% (increased from 10% as of 1 January 2026), and CASS (health insurance contribution) applies to dividend income above certain thresholds based on multiples of the minimum gross wage.

The SRL requires a registered office address in Romania, registration with the Trade Register (ONRC), fiscal registration with ANAF, and a Romanian bank account (mandatory within 60 business days of incorporation under Law 239/2025). Annual obligations include filing financial statements by 31 May, submitting the UBO (ultimate beneficial owner) declaration within 15 days of approving the annual accounts, and maintaining CAEN Rev 3 activity codes (deadline: 25 September 2026).

The SRL is the right choice for the vast majority of foreign entrepreneurs, freelancers with clients in multiple countries, small and medium businesses, e-commerce operations, IT service providers, consulting firms, and any business that wants limited liability combined with the lowest possible tax rate.

The SA (Societate pe Acțiuni) — Joint Stock Company

The SA is Romania's equivalent of the corporation or AG (Aktiengesellschaft). It is designed for larger operations, capital-intensive businesses, and companies planning to raise investment or list on a stock exchange.

An SA requires a minimum of two shareholders (there is no maximum) and a minimum share capital of RON 90,000 (approximately €18,000). The capital is divided into shares with a minimum nominal value of RON 0.10 each. At least 30% of the subscribed share capital must be paid up at incorporation, with the remainder due within 12 months. An SA must have a board of directors (or a dual-tier management and supervisory board structure) and appoint at least one statutory auditor or audit firm.

The SA is subject to the same 16% corporate income tax on profit as an SRL. However, the SA cannot benefit from the 1% microenterprise regime — this is reserved for SRLs only. Dividend taxation follows the same 16% withholding rate.

The SA is the right choice for companies seeking external investment (venture capital, private equity), businesses planning an eventual IPO or listing on the Bucharest Stock Exchange (BVB), regulated activities requiring an SA structure (banking, insurance, investment funds), and joint ventures between multiple corporate shareholders.

For most small and medium businesses entering Romania, the SA is unnecessarily complex and expensive. If you do not have a specific regulatory or investment-related reason to choose an SA, the SRL is almost always the better option.

The PFA (Persoană Fizică Autorizată) — Authorised Physical Person

The PFA is Romania's sole trader or freelancer structure. It is not a separate legal entity — the PFA operates under the natural person's identity, meaning the individual bears unlimited personal liability for all business debts and obligations.

A PFA can be registered by any natural person who is at least 18 years old and has a registered office (which can be a residential address) in Romania. Importantly, non-EU citizens need a valid Romanian residence permit to register a PFA. EU citizens can register based on their passport or national identity card, but they still need a Romanian address.

A PFA can employ up to 3 people (not including the PFA holder). It can operate under the "real system" (actual income minus actual expenses) or the "income norms" system (taxation based on pre-set income norms published by ANAF for specific activities and locations). The PFA pays 10% income tax on net income, plus mandatory social contributions: CAS (pension) at 25% applies if annual net income exceeds 12 minimum gross wages (RON 48,600 in the first half of 2026); CASS (health insurance) at 10% applies if annual net income exceeds 6 minimum gross wages (RON 24,300). Since 2024, CASS paid is deductible from the income tax base.

The PFA is the right choice for individual freelancers and consultants working primarily in Romania, professionals using income norms (where norms are significantly lower than actual income), and individuals with low operational complexity who want minimal administrative burden. The PFA is not appropriate for foreign entrepreneurs who do not reside in Romania, businesses with more than 3 employees, activities requiring multiple CAEN codes beyond the PFA's scope, or anyone who wants liability protection.

The II (Întreprindere Individuală) — Sole Proprietorship

The II is very similar to the PFA but with a slightly broader scope: it can employ up to 8 people and can conduct a wider range of activities. Like the PFA, it is not a separate legal entity, and the owner bears unlimited personal liability. The tax treatment is identical to the PFA. The II is governed by OUG 44/2008 and is rarely used by foreign entrepreneurs. Since October 2024, a law allows PFAs, IIs, and IFs to convert into SRLs — a useful option if the business outgrows the sole-trader structure.

The IF (Întreprindere Familială) — Family Enterprise

The IF is a business structure operated by members of the same family (spouses and relatives up to the fourth degree). It can have between 2 and unlimited family members, is not a legal entity, and its members bear joint and several unlimited liability. The IF is taxed identically to the PFA (each family member declares their share of income). This structure is almost never relevant for foreign investors and is included here for completeness.

Branch Office (Sucursală)

A branch office is not a separate legal entity. It is an extension of the foreign parent company into Romania, operating under the parent's name and liability. The parent company is fully liable for all the branch's obligations.

Registering a branch requires submission to the Trade Register of the parent company's incorporation documents (apostilled and translated into Romanian), a board resolution authorising the opening of the branch, the appointment of a representative for the branch in Romania, and proof of a registered office in Romania. The branch is subject to 16% corporate income tax on the profit attributable to its Romanian operations. It cannot benefit from the microenterprise 1% regime. It must maintain accounting records separately and file annual financial statements in Romania.

The branch is the right choice for multinational companies that want to test the Romanian market without creating a separate entity, companies that need to attribute costs and revenues directly to the parent company's accounts, and construction or infrastructure companies with temporary projects in Romania. It is not appropriate as a long-term structure for most businesses, as it does not provide liability separation and cannot benefit from Romania's microenterprise tax regime.

How They Compare — At a Glance

The SRL is the most versatile structure: separate legal personality, limited liability, minimum capital of RON 500, no restrictions on foreign ownership, unlimited employees, eligibility for the 1% microenterprise tax, and setup in 1-2 weeks. It is the default choice for over 90% of foreign entrepreneurs.

The SA offers the same legal personality and limited liability, but requires minimum capital of RON 90,000, at least two shareholders, mandatory statutory audit, and does not qualify for the 1% micro tax. Setup takes 2-4 weeks. It is designed for large-scale operations and capital-raising.

The PFA has no minimum capital and is the simplest to set up (1-2 weeks), but provides no liability protection, limits hiring to 3 employees, and is taxed under the personal income tax regime (10% plus CAS and CASS contributions). Non-EU citizens need a Romanian residence permit.

The branch office operates under the parent company's name and liability, has no minimum capital, can hire without restriction, but cannot benefit from the 1% micro tax and is subject to 16% corporate income tax on Romanian profits. Setup takes 2-4 weeks.

Which Structure Is Right for You?

If you are a foreign entrepreneur starting a business in Romania, choose an SRL. It offers the best combination of liability protection, tax efficiency (1% micro tax), operational flexibility, and credibility. The vast majority of our clients — from solo IT freelancers to multinational subsidiaries — operate through SRLs.

If you are a large corporation entering Romania and need direct consolidation with your parent entity, consider a branch office for the initial phase, with a potential conversion to an SRL once operations stabilise.

If you are an individual who already lives in Romania and provides personal services to a small number of clients, a PFA may be simpler and administratively lighter — but be aware of the unlimited liability and the 3-employee cap.

If you need to raise external capital, plan an IPO, or operate in a sector that legally requires a joint stock structure, the SA is your only option.

Frequently Asked Questions

Can a foreigner open an SRL in Romania without living there? Yes. There are no residency or citizenship requirements for SRL shareholders or administrators. The entire process can be completed remotely with a notarised power of attorney.

Can I convert a PFA into an SRL later? Yes. Since October 2024, Romanian law explicitly allows PFAs, IIs, and IFs to convert into SRLs through a formal procedure at the Trade Register.

Do I need a Romanian bank account for all entity types? For SRLs, yes — a bank account is mandatory within 60 business days of incorporation (Law 239/2025). For PFAs and branches, a bank account is strongly recommended but the 60-day mandatory requirement applies specifically to SRLs.

Which structure has the lowest taxes? The SRL under the microenterprise regime: 1% tax on revenue for companies with turnover below €100,000 and at least one employee. After distributing dividends, the total effective tax rate is approximately 17% — still among the lowest in the EU.

Can a branch office later become an SRL? Not directly. The branch must be closed and a new SRL incorporated. However, assets, contracts, and employees can be transferred to the new entity with proper planning.

Need help choosing the right structure or incorporating your company? Schedule a free consultation — we respond within 12 hours.

Use our free tax calculator to compare the actual tax burden across SRL Micro, SRL Profit, and PFA.

Already decided? See our company incorporation service — remote setup from €500.