Romanian regulations allow individuals to operate businesses under the status known as “Persoană Fizică Autorizată” (PFA), the country’s form of sole proprietorship. This overview covers the key availability conditions, registration requirements, and tax obligations relevant to PFAs in Romania as of 2025.
PFA Status Availability in Romania
The Persoană Fizică Autorizată (PFA) is an established and widely used individual business status accessible to both Romanian citizens and residents. This mechanism enables individuals to offer goods or services and invoice clients directly, without the necessity of registering a separate legal entity such as an SRL (limited liability company). PFAs are especially popular among freelancers, consultants, independent professionals, and small-scale operators who value the program’s streamlined compliance framework.
Key Features and Conditions of PFA Registration
- Eligibility: Open to Romanian citizens and resident individuals.
- Administration: Registration and oversight are provided by the National Trade Register Office (ONRC).
- Legal Form: The PFA does not constitute a separate legal entity—business income and personal income are unified for tax purposes.
- Accounting: PFAs maintain simplified accounting records in comparison to companies, supporting easier ongoing compliance.
Registration Process
The process is centralized through the National Trade Register Office (ONRC), making PFA status readily accessible for those meeting the eligibility requirements.
Taxation & Social Security for PFAs (2025)
PFA status in Romania brings specific tax and social contribution requirements. The table below summarizes the principal obligations:
| Obligation | Threshold/Condition (RON) | Rate (%) |
|---|---|---|
| Income Tax | All net income | 10% |
| Social Security (CAS) | If annual net income > 12 x gross minimum salary | 25% |
| Health Insurance (CASS) | If annual net income > 6 x gross minimum salary | 10% |
Income tax is applied as a flat 10% rate on net income. Social contributions for health and pension (CAS and CASS) become mandatory only once the specified minimum income thresholds, tied to Romania’s gross minimum salary, are surpassed within the year.
Tax Base Options
- Real Income Basis: Taxed on actual income minus deductible business expenses.
- Fixed Income Norm: For designated professions, a simplified flat-rate regime is available.
Administrative and Operational Considerations
PFAs benefit from simplified reporting compared to companies. Essential features include the ability to issue invoices directly and less complex accounting requirements. However, PFAs should be aware that liability for business obligations extends to the proprietor’s personal assets, as there is no legal separation.
Sources for Official Guidance
Pro Tips for PFA Setup and Compliance
- Review your projected earnings to determine whether social contributions (CAS, CASS) will apply, as these depend strictly on annual net income relative to the current minimum salary.
- Consider the fixed income norm option if your profession is eligible, as this can reduce both administrative overhead and tax liability.
- Maintain clear and up-to-date accounting records—even with simplified requirements, this will streamline annual tax filings and potential audits.
- Plan ahead for the impact of switching to a PFA structure on your personal liability, as you are fully responsible for business debts and obligations.
In summary, Romania’s PFA status provides a practical and relatively accessible approach for individuals to operate businesses without incorporating a company. The framework is straightforward, tax rates are flat with clear thresholds, and the accounting obligations remain manageable for most. For internationally minded professionals, understanding the real versus fixed-norm taxation options and monitoring income levels for social contributions are essential practical considerations in 2025.