Starting a business as a sole trader in Romania is one of the simplest and most flexible ways to operate independently. Whether you are a freelancer, consultant, or small business owner, registering as a PFA (Persoana Fizica Autorizata) allows you to legally provide services and manage your own income.
If you are wondering how to register as a sole trader in Romania, this guide will walk you through the process, legal requirements, tax obligations, and key benefits of choosing this business structure.
What Is a Sole Trader (PFA) in Romania?
A sole trader, known in Romania as Persoana Fizica Autorizata (PFA), is an individual who operates a business under their own name, assuming full responsibility for its operations. This structure is popular among freelancers, independent professionals, and small entrepreneurs because it involves less paperwork, lower costs, and simpler taxation compared to other company types like SRL (Limited Liability Company).
Benefits of Registering as a Sole Trader in Romania
Before starting the registration process, it is important to understand why many entrepreneurs choose this legal structure. Here are some of the key advantages:
- Simple registration process – Compared to an SRL, setting up a PFA requires fewer documents and less bureaucracy.
- Lower operational costs – No mandatory minimum capital is required, and administrative expenses are minimal.
- Simplified taxation – You can opt for income tax based on profit (10 percent) or a fixed tax regime for certain professions.
- Full control over the business – You make all decisions without the need for shareholders or associates.
- Easier access to social benefits – As a PFA, you contribute to the public pension and health systems.
Despite these advantages, a PFA also comes with limitations, such as full personal liability for debts and restrictions on hiring employees. If you plan to expand your business, you might want to consider switching to an SRL later on.
Step-by-Step Process to Register as a Sole Trader in Romania
If you have decided to register as a sole trader in Romania, follow these steps to complete the process smoothly:
Step 1: Choose Your Business Activity and Verify the CAEN Code
The first step is to determine your business activity and find the appropriate CAEN code (Romanian Classification of Economic Activities). Each profession or service falls under a specific code, and your registration documents must include the correct one.
You can check the CAEN codes on the website of the National Trade Register Office (ONRC) or consult with a legal expert for guidance.
Step 2: Prepare the Necessary Documents
To register as a PFA, you need to submit the following documents to the Trade Register Office:
- Copy of your ID (Carte de Identitate)
- Proof of business premises (rental contract, ownership document, or consent from the property owner)
- Specimen signature – A notarized sample of your signature
- Proof of professional qualifications – Required for regulated professions such as doctors, accountants, or engineers
- Declaration of compliance – A statement confirming that you meet all legal requirements for the business activity
Step 3: Submit the Registration File to the Trade Register Office
Once your documents are ready, you must submit them to the National Trade Register Office (ONRC) in your city or online through their platform. The registration fee for a PFA is relatively low compared to an SRL, and the process usually takes between three to five business days.
After approval, you will receive a Certificate of Incorporation, which includes your unique registration code (CUI). This document officially allows you to operate your business.
Step 4: Register for Tax Purposes
After receiving your registration certificate, you must register with the National Agency for Fiscal Administration (ANAF) to declare your income and choose your taxation method. As a PFA, you can opt for:
- Ten percent income tax on net profit
- Fixed tax regime for specific professions
Additionally, if your annual turnover exceeds 88,500 euros, you must register for VAT (Value Added Tax).
Step 5: Open a Business Bank Account (Optional)
Although it is not mandatory, opening a business bank account is recommended for managing your finances more efficiently and keeping personal and business transactions separate. Some clients and institutions may also require payments to be made through a business account.
Tax Obligations for Sole Traders in Romania
As a sole trader, you are responsible for paying the following taxes and contributions:
- Income tax of ten percent, calculated based on net profit
- Social security contribution of 25 percent for pension coverage
- Health insurance contribution of ten percent, mandatory for access to public healthcare
If your total income surpasses the threshold for VAT registration, you will also need to charge and report VAT on your invoices. Keeping accurate financial records is crucial, so many sole traders hire an accountant or work with a business consultant to ensure tax compliance.
How Buju, Stanciu & Asociatii Can Help You Register as a Sole Trader in Romania
The process of registering as a sole trader might seem simple, but legal formalities, tax registration, and compliance with Romanian regulations can be overwhelming. This is where expert legal guidance can make a difference.
Buju, Stanciu & Asociatii offers professional assistance for entrepreneurs looking to register as a sole trader in Romania. With extensive experience in corporate law and business consultancy, their team ensures a smooth and hassle-free registration process, helping you with:
- Choosing the right business structure
- Preparing and submitting all required documents
- Handling tax registration and compliance
- Offering ongoing legal and financial advice
Starting a business should be exciting, not complicated.
Contact Buju, Stanciu & Asociatii today and let their experts handle the legal aspects of your sole trader registration in Romania, so you can focus on growing your business.
