Foreign entrepreneurs who want to carry out business activities in Romania often ask a practical question: should they operate through a Romanian company, a microenterprise, or as an authorized individual?
The answer depends on several factors. Taxation is one of them, but it should not be the only criterion. The legal nature of the activity, the expected level of income, deductibility of expenses, commercial risk, liability, future investment plans and the need to work with clients or employees must also be considered.
This article offers a simplified comparison based on an annual gross income of RON 500,000 and on the tax rules relevant for 2026. It is designed as a practical starting point, not as individual tax or legal advice.
The three options compared
For this comparison, we look at three common structures:
- A Romanian company taxed as a microenterprise, where the company pays tax on revenue and distributes profits as dividends.
- A Romanian company subject to corporate income tax, where the company pays tax on profit and then distributes dividends.
- An authorized individual or individual enterprise, commonly referred to in Romania as PFA or II, taxed under the real-income system.
For ease of comparison, the scenario assumes no deductible expenses, except for the salary-related costs required in the microenterprise structure. The annual gross income used in all three cases is RON 500,000 (approx. 95,477 EUR / 109.270,65 USD).
Option 1: Romanian microenterprise
At this level of income, the microenterprise regime produces an estimated annual net amount of approximately RON 392,316, including the net salary of the sole shareholder/director.
In this simplified scenario, the total tax burden is approximately 21.5% of the gross annual income.
This structure may be attractive where the business qualifies for the microenterprise regime and where the activity can legally and commercially be organized through a Romanian company. However, foreign entrepreneurs should note that this regime is subject to eligibility conditions, including turnover limits and employment-related requirements.
Option 2: Romanian company subject to corporate income tax
A Romanian company that does not qualify for the microenterprise regime will generally be subject to corporate income tax.
Based on the same assumptions, this structure leads to an estimated annual net amount of approximately RON 343,080 after corporate income tax, dividend tax and health insurance contribution on dividends.
In the simplified scenario used here, the overall tax burden is approximately 31.4% of the gross annual income.
This does not automatically mean that the corporate income tax regime is inefficient. In real business cases, companies often have deductible expenses, employees, investments, operational costs or commercial reasons to use a company structure. These elements can significantly change the final result.
Option 3: PFA or individual enterprise taxed under the real-income system
In the same simplified scenario, a PFA or individual enterprise taxed under the real-income system leads to an estimated annual net amount of approximately RON 401,886.
This results in an overall tax burden of approximately 19.7% of the gross annual income.
From a strictly numerical perspective, this is the most efficient option in the comparison. The advantage becomes even more visible as the annual income increases, because social contributions are capped. For example, at higher income levels, the effective tax burden of a PFA may decrease, while the corporate income tax structure remains broadly more expensive under the same assumptions.
So, which structure is best from a tax perspective?
Based on the assumptions used in this comparison, the PFA or individual enterprise taxed under the real-income system provides the highest estimated net income at RON 500,000 annual gross income.
The microenterprise structure comes next and may remain attractive for eligible businesses, especially where the entrepreneur wants to operate through a company.
The corporate income tax structure is the least favourable in this simplified no-expense scenario, but it may become more appropriate where the business has significant deductible expenses, operational costs, employees, investment needs or commercial reasons to operate as a company.
Tax efficiency is not the only test
Foreign entrepreneurs should be careful not to choose a Romanian business structure based only on the lowest apparent tax burden.
A PFA or individual enterprise may be tax-efficient, but it is not suitable for every activity. Some businesses require a company structure for regulatory, commercial or risk-management reasons. A company may also be preferable where the entrepreneur wants limited liability, a clearer separation between personal and business assets, or a structure that can support future growth, employees or investors.
In practice, the right choice should be made after reviewing the nature of the activity, the expected income, the real level of expenses, the client structure, the entrepreneur’s tax residence and any cross-border implications.