How to register as a self-employed person (PFA) in Romania

How can I legally become self-employed in Romania?

Answer: A self employed in Romania is registered as a PFA which stands for ”Persoana Fizica Autorizata”, phrase also commonly translated as a Romanian authorized physical person. This is actually a highly preferred alternative for perfectly qualified individuals who choose to set up their own business. This proved quite a convenient option for Romanians and it is still perfectly functioning for all natural persons seeking for a more approachable way to turn their experience and qualifications into real profit. From the legal point of view, there are certain conditions to be fulfilled in order to qualify for the status of PFA Romania.

If you are interested in this opportunity and feel confident in the knowledge and experience you have acquired up until the present moment, then you can start a sole trader in Romania (PFA). Our lawyers in Romania can assist you from the very beginning. 

What conditions must I meet to register as an Authorized Physical Person (PFA)?

Answer: The first thing that should be handled in this respect is the registration procedure which means that you will be listed by the Trade Register Office as an authorised natural person. Here are some essential features which briefly illustrate the most important stages in the PFA Romania registration process and that have to be understood as essential conditions:

1. you have to be over 18 years old;
2. you either have to be qualified or trained, or you need the professional experience required to conduct the economic activity for which the authorization is requested (depending on specific circumstances);
3. like any business, you must have a registered (professional) office, even though a PFA is not a legal entity;
4. last, but not least, you must never have been convicted by a final court decision for committing the offenses punished by financial or customs laws, or for those involving financial and fiscal discipline as those that are enrolled in the tax record certificate.

Feel free to reach out to our Romanian lawyers for more information about these conditions for operating as a sole trader in Romania.

Are you looking to purchase property in Romania? Whether it is for residential or commercial purposes, if you plan on starting and running a business in a Romanian city, our team is also able to assist you if you want to purchase a property. We provide services to EU and non-EU citizens, and we can give you details on the current requirements that apply in your case, according to nationality and status (resident/non-resident).

How and when do I register for VAT with a PFA in Romania?

Answer: The Romanian Authorized Physical Person can register for VAT in two situations: either when incomes exceed certain limits or when the individual voluntarily applies for VAT registration.

On the national level, self-employed persons with incomes of up to to 395,000 lei/year are exempted from VAT.  But, even if this limit is not surpassed, a self employed in Romania should register for VAT since certain instances may require this registration. 

A Romanian self-employed person who is not registered for VAT under the general rules must obtain a special VAT registration (Fiscal Code art. 317) before providing intra-Community services. We are referring here to the situation when a Romanian authorized physical person provides intra-Community services. In this case, the individual must register for VAT in order to report the operations performed. This particular registration would not turn the person in question into a regular VAT payer.

The VAT registration code received for intra-Community services cannot be used to issue invoices for economic operation carried out on the Romanian territory and intended for recipients established in this very same country. If you have questions on this procedure, please reach out to our attorneys in Romania.

A highly important aspect of the Romanian VAT regime concerns the legal possibility to regain the non-taxable privileges. Individuals have the chance to return to VAT-exempt status for the following year, on condition that the annual turnover does not exceed the provided limits. So, at the beginning of the calendar year, a self-employed may request to be removed from the VAT registered person’s record. 

Our lawyers in Romania can provide complete details on the taxation regime and the VAT registration process.

What kind of activities can I perform as a Romanian PFA?

Answer: If you want to be registered as a Romanian authorized physical person, you should know that a PFA (which has no legal personality) can obtain approval to perform all kinds of economic activities that are mentioned in the CAEN Code, of course excepting those that are governed by special laws and that are reserved for a certain category of entrepreneurs. Assistance for obtaining special permits and licenses is provided by our Romanian law firm.

As you can see, under certain circumstances, the PFA Romania regime can become a little bit confusing. That is why our skilled experts are prepared to assist you concerning a wide range of issues regarding this topic. We come to your aid and we offer you permanent guidance throughout the entire process, representing you before the Romanian authorities. We can help you start your own business by authorising you as a natural person able to carry out independent economic activities. 

What is the current PFA taxation system in Romania?

Due to the big differences between social contributions paid by employees and those who are authorized self-employed persons (PFA), the Ministry of Finances suggested a change in the tax system for PFA.

An employee pays social contributions based on their income, while sole traders (PFA) who usually make a lot more money, can pay them according to the minimum gross salary of 4,050 RON/month in force on 1 January 2026 (4,325 RON/month from 1 July 2026).

According to the law in place, at the moment, for an employee that earns 5.000 RON per month gross salary, the employee will pay contributions of 1,750 RON per month (25% CAS and 10% CASS), plus 10% income tax, and the employer will pay 113 RON per month (2.25% CAM) for the 5,000 RON gross monthly salary. At the same time, a PFA with the same earnings can pay less per month.

Our Romanian lawyers can give you more updated information and assist you with this calculation.

Despite the fact that the Romanian state wants to encourage entrepreneurship, applying this system of taxes can lead to significant differences between the income of a PFA that opted for the minimum limit of contributions payment and an employee.

Working with our Romanian law firm is reccomended for those professionals who are just starting out as well as those who wish to be up to date with these changes.

2026 PFA taxes

There are two types of taxation for a PFA in Romania: as per the real system or according to the income norm.

An important difference between the two regimes is observed in the case of fees and taxes. In the real system, the CAS and CASS owed by a PFA are not deductible expenses under art. 68 of the Fiscal Code; they are deducted from the annual net income when the taxable annual net income is determined (art. 118(2)(b) of the Fiscal Code).

For the payment of the Social Health Insurance Contribution (CASS) for the PFA in 2026, it is advisable to consider the following:

• the share for CASS payment is 10%;
• the calculation base is between 6 and 72 minimum wages;
  • this means that the minimum value is 6 x 4,050 lei = 24,300 lei, of which CASS = 2,430 lei, and the maximum value is 72 x 4,050 lei = 291,600 lei, of which CASS = 29,160 lei.

If the sole trader derives income from other sources, it will pay CASS separately for this income.

For the Social Security Contribution (CAS), which is the contribution to the pension fund, a rate of 25% of the net annual income applies, capped at 12 and 24 minimum wages:

• for incomes lower than 12 minimum wages, CAS payment is not mandatory;
• for incomes between 12 and 24 minimum wages, the contribution is calculated relative to the ceiling of 12 wages;
• for incomes greater than 24 salaries, CAS is calculated relative to the ceiling of 24 salaries;
  • the calculation for an entrepreneur who exceeds 12 minimum gross salaries is 4,050 x 12 = 48,600 lei x 25% = 12,150 lei, the minimum amount for the social contribution due.

Starting with 2023, the ceiling for the income norm was reduced to EUR 25,000, and sole traders whose gross annual income exceeds this limit must determine their net income in the real system starting with the following fiscal year.

For example, if your sole trader business recorded a gross annual income above the EUR 25,000 limit in 2025, starting with 2026 you must determine your net annual income in the real system.

A PFA subject to taxation in the real system will record the income and expenses for carrying out the activity in the accounting. Since they are deductible, they are subtracted from gross income.

Once chosen, the real tax system cannot be changed for two years. The income tax for the sole trader remains 10% of net income.

You can contact our tax lawyers in Romania for more information about these changes and how they will influence your sole trader in Romania.

Are there advantages to a sole trader (PFA) over an SRL in Romania?

Based on these modifications, taking into account the taxes paid by a PFA and those paid by an SRL, most small entrepreneurs are wondering which is the most suitable option.

When it comes to income taxes, microenterprises pay a single rate of 1% of their revenue (since 1 January 2026; at least one employee is required), while a PFA pays 10% x income + CASS + CAS.

Still, after we draw the line, a PFA is the one with more fiscal advantages compared to the SRL:

• The money they earn can be spent any time
• The fiscal debt is smaller than in the case of the owner being employed at his own microenterprise

The experts at our Romanian law firm can provide more details as needed.

Our team of lawyers can answer additional questions depending on the activity you will undertake using the sole proprietorship in Romania (PFA).

The team of experts at our law firm in Romania can give you more details on the taxation and reporting requirements for the PFA. Contact us for more details.

When starting any type of business, one might need a team of professionals who can lead him or her through the intricate legal provisions. This is where our team of lawyers in Romania makes the difference. We are at your service anytime and ready to help you open a sole trader in Romania (PFA) or just to offer you the necessary legal information for your business. Call our law firm anytime for a free consultation.

by Cristian Darie