Company Types in Romania | 12 Business Structures Compared

Introduction to Entity Types in RomaniaCopy link to section

Romania sits in southeastern Europe, bordered by Bulgaria, Serbia, Hungary, Ukraine, and Moldova, with Black Sea coastline to the east. It is an independent nation and a European Union member state, which means company formation and ongoing compliance operate within both domestic law and applicable EU regulatory frameworks. Business registration falls under the authority of the Oficiul Național al Registrului Comerțului (ONRC), the National Trade Register Office, which processes incorporations, maintains the commercial register, and handles structural changes for all registered entities.

Romania applies a standard corporate income tax rate, with a micro-enterprise regime available to qualifying smaller firms — making its tax posture relevant to both local operators and foreign investors structuring regional operations.

The types of business entities in Romania span several distinct legal forms. These include the Societate pe Acțiuni (SA), Societate cu Răspundere Limitată (SRL), Societate cu Răspundere Limitată Debutant (SRL-D), Societate în Nume Colectiv (SNC), Societate în Comandită Simplă (SCS), Societate în Comandită pe Acțiuni (SCA), Branch Office, Representative Office, Subsidiary, and the individual-based structures PFA, II, and IF. Each form carries distinct liability, governance, and compliance obligations under Romanian company law, primarily governed by Law No. 31/1990 on companies.

An Overview of Business Structures in RomaniaCopy link to section

Romanian company law recognises several distinct entity types, each governed primarily by Law No. 31/1990 on Companies, as subsequently amended and republished. The Civil Code and specific sector regulations supplement this framework in certain cases. Each structure carries different implications for liability, governance, and tax treatment.

Each of these structures is examined in full in the sections below.

Societate pe Acțiuni (SA) — Joint Stock CompanyCopy link to section

The Societate pe Acțiuni (SA) is governed by Law No. 31/1990 on companies, as subsequently amended, and represents the most structurally complex corporate form available under Romanian law. It carries separate legal personality, meaning the entity holds rights and obligations independently of its shareholders.

Liability is limited to each shareholder's capital contribution. The SA is the required form for regulated activities such as banking, insurance, and public offerings of securities, making it the standard vehicle for larger commercial operations.

Key CharacteristicsCopy link to section

Focus PointsCopy link to section

• Taxation: Corporate income tax at 19% applies (with a micro-enterprise alternative regime for qualifying entities); VAT registration required once turnover exceeds the statutory threshold; dividend withholding tax at 8% applies to distributions, subject to reduction under applicable EU directives or double tax treaties; no stamp duty on share transfers in standard form.
• Annual Compliance: Annual financial statements must be filed with the Trade Register; statutory audit is mandatory for SA entities regardless of size thresholds that apply to other forms.
• Economic Substance: No specific economic substance legislation applies to domestic SAs, but corporate tax residency rules require effective management to be exercised in Romania.
• Treaty Access: As a Romanian tax resident entity, an SA has full access to Romania's network of double tax treaties and benefits under EU Parent-Subsidiary and Interest-Royalties Directives.
• Conversion: An SA may be converted into another legal form (including SRL) by shareholder resolution, subject to creditor protection procedures under Law No. 31/1990.

Sub-TypesCopy link to section

Closed (Nelistată) SA

Shares are not publicly traded and are transferred subject to restrictions set out in the articles of association. This structure is used for private holding arrangements or large family-owned businesses that require the corporate governance framework of an SA without public market exposure.

Listed (Listată) SA

Shares are admitted to trading on a regulated market or multilateral trading facility, primarily the Bucharest Stock Exchange (Bursa de Valori București). Listed SAs are subject to additional obligations under Law No. 24/2017 on issuers of financial instruments and market operations, including continuous disclosure requirements and oversight by the Financial Supervisory Authority (ASF).

An SA suits large-scale commercial operations, regulated businesses, and entities planning public capital raises or institutional investment. The mandatory statutory audit and higher minimum capital make it less practical for small or early-stage ventures.

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Societate cu Răspundere Limitată (SRL) — Limited Liability CompanyCopy link to section

The Societate cu Răspundere Limitată SRL Romania is governed primarily by Law No. 31/1990 on Companies, as subsequently amended. It carries separate legal personality, meaning the entity's assets and liabilities are legally distinct from those of its shareholders.

Structurally, the SRL functions as a hybrid: it combines the limited liability protections associated with a joint stock company with the operational simplicity typical of a partnership. Shareholders are liable only to the extent of their capital contributions.

Key CharacteristicsCopy link to section

Focus PointsCopy link to section

• Taxation: Subject to 16% corporate income tax; micro-enterprise revenue tax (1% or 3%) may apply if turnover is below RON 500,000; standard VAT rate of 19%; withholding tax applies to dividends paid to non-residents at 8% (subject to EU directives or applicable tax treaties).
• Annual Compliance: Financial statements must be filed with the Ministry of Finance annually; statutory audit is not mandatory below certain size thresholds.
• Economic Substance: No formal substance regime, but tax residency and management-and-control tests apply under Romanian fiscal law.
• Treaty Access: As a tax-resident entity, the SRL can access Romania's network of double taxation treaties.
• Conversion: An SRL may be converted into an SA or other company form through a general meeting resolution, subject to Trade Register procedures.

ClosingCopy link to section

The SRL suits trading operations, holding structures, and service businesses where a small number of principals wish to retain close control. Its low capital threshold reduces the initial financial commitment, though the 50-associate ceiling limits its use as a vehicle for broad equity participation.

Societate cu Răspundere Limitată Debutant (SRL-D) — Starter Limited Liability CompanyCopy link to section

The SRL-D starter company Romania introduced through Government Emergency Ordinance no. 6/2011 (subsequently amended) is a time-limited variant of the standard SRL, designed specifically for first-time entrepreneurs. It carries separate legal personality and limits member liability to the value of their subscribed share capital.

Eligibility criteria distinguish this structure from the base SRL. Each founding associate must not have previously held shares in another Romanian commercial company, and the total number of associates cannot exceed five.

Key CharacteristicsCopy link to section

Focus PointsCopy link to section

• Taxation: Subject to standard Romanian corporate income tax (16%), microenterprise revenue tax (1% or 3% depending on conditions), VAT registration thresholds apply at RON 300,000 annual turnover, and standard withholding tax rates apply to dividends.
• Social contributions: The SRL-D may qualify for partial exemption from certain employer social contributions during the debutant period, subject to meeting headcount and activity conditions under GEO 6/2011.
• Annual compliance: Must file annual financial statements with the Trade Register and maintain accounting records in accordance with Romanian OMFP accounting regulations.
• Conversion obligation: Upon expiry of the 3-year debutant period, the entity must convert to a standard SRL or dissolve; continuation as an SRL-D is not permitted.
• Restrictions: Associates cannot simultaneously hold shares in any other Romanian commercial company during the debutant period.

ClosingCopy link to section

The SRL-D suits early-stage domestic trading or service businesses where founders have no prior share ownership history in Romanian entities and want a structured entry point with a defined transition to standard operations. The primary limitation is the 3-year ceiling on debutant status, which imposes a mandatory restructuring obligation regardless of business readiness.

Partnerships in Romania (Societate în Nume Colectiv, Societate în Comandită Simplă, Societate în Comandită pe Acțiuni)Copy link to section

Partnerships in Romania — SNC, SCS, and SCA — are governed by Law No. 31/1990 on companies, the same foundational legislation that regulates most Romanian business structures. All three forms carry separate legal personality once registered with the Trade Register (Oficiul Național al Registrului Comerțului, or ONRC), which distinguishes them from informal arrangements under civil law.

Liability treatment varies significantly across these three forms. In a Societate în Nume Colectiv (SNC), all partners bear unlimited joint liability for company obligations. The two comandită variants introduce a split between general partners (asociați comanditați), who hold unlimited liability, and limited partners (asociați comanditari), whose exposure is capped at their capital contribution.

Key CharacteristicsCopy link to section

Focus PointsCopy link to section

• Taxation: Partnerships are generally treated as corporate taxpayers subject to 16% corporate income tax; VAT registration thresholds and obligations apply as with other Romanian entities; dividend withholding tax of 8% applies on distributions to non-resident partners absent treaty relief.
• Annual Compliance: Entities must file annual financial statements with ONRC and submit corporate tax returns to ANAF (Agenția Națională de Administrare Fiscală).
• Treaty Access: Romanian tax treaties apply, though access depends on the entity's tax residency classification and the treaty partner's treatment of the specific partnership form.
• Restrictions: General partners in SNC and SCS cannot limit their personal liability by contract; this structural feature cannot be modified through the constitutive act.
• Conversion: Romanian law permits conversion between company forms through a shareholder/partner resolution and re-registration with ONRC, subject to applicable capital requirements of the target form.

Sub-TypesCopy link to section

Societate în Nume Colectiv (SNC)

All partners hold unlimited, joint, and several liability. This structure is used primarily in professional services or family-operated businesses where partners accept mutual exposure and require no minimum capital.

Societate în Comandită Simplă (SCS)

The SCS separates active management (general partners) from passive investors (limited partners). Limited partners may not engage in management acts without forfeiting their liability protection under Romanian law.

Societate în Comandită pe Acțiuni (SCA)

The SCA mirrors the SCS liability split but issues shares to its limited partners, making it the closest Romanian equivalent to a limited partnership with transferable interests. Its RON 90,000 capital requirement and five-shareholder minimum make it structurally heavier than the SCS.

These partnership forms are most commonly used in family businesses, professional practices, or structures requiring tiered investor involvement. The liability protection available to limited partners in the SCS and SCA offers a clear structural advantage, though unlimited personal exposure for general partners remains a significant drawback across all three forms.

Foreign Business Presence in Romania (Branch Office, Representative Office, Subsidiary)Copy link to section

Establishing a foreign company presence in Romania is governed primarily by Law No. 31/1990 on Companies, alongside Government Ordinance No. 44/2016 for certain procedural aspects of branch registration. The structure you choose determines whether your foreign parent carries direct liability or operates through a legally separate entity.

Registration for all three forms is handled through the Romanian Trade Registry (Registrul Comerțului), under the National Trade Register Office (ONRC).

Key CharacteristicsCopy link to section

Focus PointsCopy link to section

• Taxation: Branch offices are taxed as permanent establishments at the standard 16% corporate rate; representative offices pay a flat annual tax (fixed-sum tax regime); subsidiaries are subject to full Romanian corporate tax, VAT (19% standard rate), and applicable withholding taxes on dividends remitted to the parent.
• Substance obligations: Branch offices must maintain a local registered address and appoint a designated representative authorised to act on behalf of the parent.
• Annual compliance: All three forms must file annual financial statements with ONRC; branches and subsidiaries additionally file corporate tax returns with ANAF (Agenția Națională de Administrare Fiscală).
• Treaty access: Only subsidiaries, as separate legal entities, can access Romania's network of double taxation treaties in their own right; branches typically rely on the parent's treaty position.
• Restrictions: Representative offices cannot invoice clients, generate revenue, or enter into commercial contracts in their own name.

Sub-TypesCopy link to section

Branch Office (Sucursală)

A branch has no independent legal personality and operates as a direct extension of the foreign parent, which remains fully liable for all branch obligations. It suits foreign firms that want operational presence without incorporating a separate entity.

Representative Office (Birou de Reprezentanță)

Restricted to non-commercial activities such as market research, promotion, and liaison, a representative office cannot conduct revenue-generating transactions. It is typically used during a market-entry assessment phase before committing to a fuller structure.

Subsidiary

Incorporated as an SRL or SA under Romanian law, a subsidiary is a legally distinct entity with its own rights and obligations, entirely separate from the foreign parent's balance sheet.

When to Use This StructureCopy link to section

Branch and representative offices suit foreign businesses testing or supporting existing operations, while a subsidiary is the standard choice for sustained commercial activity requiring liability separation. The principal limitation of a branch is the parent's unlimited exposure to Romanian liabilities.

Sole Proprietorship and Individual-Based Structures (PFA, II, IF)Copy link to section

Romanian law recognises three individual-based business forms under Government Emergency Ordinance no. 44/2008: the Persoană Fizică Autorizată (PFA), the Întreprindere Individuală (II), and the Întreprindere Familială (IF). None of these carry separate legal personality — the individual remains personally liable for all obligations incurred.

A PFA sole proprietorship Romania registers directly with the Trade Registry and is linked to a specific CAEN activity code. The PFA cannot be transferred or inherited as a going concern, which distinguishes it structurally from the II, which may employ up to three staff outside the family unit.

Key CharacteristicsCopy link to section

Focus PointsCopy link to section

• Taxation: PFA income is taxed as personal income under the Fiscal Code; a 10% flat income tax applies, along with CAS (25%) and CASS (10%) social contributions subject to income ceilings; VAT registration is mandatory above the RON 300,000 threshold.
• Annual Compliance: Annual income declarations must be filed with ANAF; accounting obligations are lighter than for corporate entities, with single-entry bookkeeping permitted under certain conditions.
• Activity Restrictions: Each form is bound to the CAEN codes declared at registration; commercial activities of a corporate nature are not permitted under OUG 44/2008.
• Conversion: A PFA or II may be converted into an SRL without dissolving the underlying activity, though the process requires a new incorporation procedure at the Trade Registry.
• Treaty Access: These structures do not qualify as corporate residents for purposes of Romania's double tax treaty network; treaty benefits available to companies do not extend to individual-based forms.

Sub-TypesCopy link to section

Persoană Fizică Autorizată (PFA)

The PFA is the simplest form, suited to freelancers and independent professionals. The individual operates under their own name and bears unlimited personal liability, with no employees permitted beyond the proprietor themselves.

Întreprindere Individuală (II)

The II extends the PFA model by allowing the proprietor to hire up to three employees who are not family members, making it appropriate for micro-businesses requiring a small workforce without corporate overhead.

Întreprindere Familială (IF)

The IF is established by a family agreement rather than a registration deed and requires between two and five family members as defined under the Civil Code. Management authority rests with a designated family representative, and profit distribution follows the terms of the family agreement.

These structures suit Romanian-resident individuals operating service-based or trade activities at a small scale, with the main advantage being minimal administrative burden relative to a corporate entity. The principal limitation is unlimited personal liability, which exposes the individual's private assets to business creditors with no structural separation.

How to Choose the Right Entity Type in RomaniaCopy link to section

Selecting how to choose a company type in Romania is not a procedural formality — the structure you register determines your tax exposure, liability, reporting obligations, and operational capacity from day one.

Why Your Entity Choice MattersCopy link to section

Registering the wrong structure carries concrete consequences:

• An SRL-D that exceeds the statutory thresholds — 1 million RON in share capital contributions or five years of operation — automatically loses its preferential status, creating unexpected compliance costs if the business has not planned for the transition.
• Choosing a representative office when you intend to conclude contracts locally places you in breach of Romanian law, since representative offices are prohibited from conducting direct commercial activity.
• Selecting a partnership form where partners bear unlimited personal liability, when the business carries financial or legal risk, exposes individual assets with no statutory cap.
• Forming an SA when your firm is a single-owner consultancy subjects you to mandatory audit thresholds and a minimum share capital of 90,000 RON, adding costs disproportionate to the business scale.

Key Factors to ConsiderCopy link to section

• Business Activity: Active trading, passive asset-holding, and regulated sectors each point toward different structures under Law No. 31/1990 on Companies.
• Ownership Structure: A sole founder with no plans for external investors fits an SRL; multi-party arrangements requiring share transferability suit an SA.
• Tax Objectives: Your eligibility for the micro-enterprise income tax regime (currently 1% or 3%) depends on the entity type and revenue thresholds set by the Fiscal Code.
• Liability Exposure: The degree of personal liability you can accept directly narrows or expands which structures are viable.
• Substance Capacity: If you cannot maintain a genuine operational presence — staff, office, decision-making — certain structures carry higher regulatory scrutiny from ANAF.
• Exit Strategy: Not all Romanian entities permit redomiciliation or conversion; verifying these options before formation avoids structural lock-in.

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ConclusionCopy link to section

Romania's company law, governed primarily by Law No. 31/1990, provides a defined set of structures suited to different operational scales and ownership profiles. For those incorporating a business in Romania, the SRL remains the most registered entity type, favoured for its low capital threshold and single-member eligibility. The SA suits larger ventures requiring share capital structures or public listings. Young entrepreneurs within the EU may find the SRL-D a practical entry point, given its specific fiscal concessions. Partnerships carry unlimited liability and tend to serve closely held, professional arrangements. Branch offices and representative offices serve foreign firms testing the market before committing to a local subsidiary.

Ongoing reforms by the National Trade Register Office have progressively digitised registration procedures, and Romania's expanding tax treaty network continues to broaden its appeal for cross-border structures. Professional guidance remains relevant when aligning the chosen entity with your specific ownership, tax, and operational requirements.

How Expanship Can Assist YouCopy link to section

Expanship's Romania company formation services cover the full registration process, from choosing between an SRL, SA, or SRL-D to filing with the Oficiul Național al Registrului Comerțului (ONRC). Every structure discussed in this guide carries distinct incorporation steps and ongoing compliance obligations — Expanship prepares your documentation and manages each stage accordingly.

Our corporate services Romania incorporation support includes:

• Preparation and legalization of constitutional documents
• Registered address and local agent provision
• Filing with the ONRC and coordination with relevant authorities
• Post-incorporation compliance management, including annual reporting obligations
• Business banking introduction assistance

Reach out to Expanship Romania to discuss the right structure for your business.

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Frequently Asked Questions (FAQ)Copy link to section