Romanian PFA Explained: 2025’s Complete Guide to Sole Proprietorship

If you’re a digital nomad or entrepreneur tired of excessive bureaucracy and punitive tax regimes, you’re not alone. Many globally minded professionals are searching for jurisdictions that respect individual initiative and offer straightforward, low-friction ways to operate a business. Romania’s Persoană Fizică Autorizată (PFA) status—its version of a sole proprietorship—may be the practical, data-driven solution you’ve been seeking in 2025.

Understanding the PFA: Romania’s Sole Proprietorship Status

Romania recognizes the Persoană Fizică Autorizată (PFA) as its primary sole proprietorship structure. This status is widely used by freelancers, consultants, and small business operators who want to invoice clients directly without the overhead of a separate legal entity. The PFA is accessible to both Romanian citizens and residents, and the registration process is managed by the National Trade Register Office (ONRC).

Key Features of the PFA in 2025

How to Register as a PFA in Romania: Step-by-Step

Setting up as a PFA is refreshingly straightforward compared to many EU countries. Here’s how you can do it in 2025:

1. Check Eligibility: Ensure you are a Romanian citizen or resident.
2. Prepare Documentation: Gather your ID, proof of address, and evidence of professional qualifications (if required for your activity).
3. Submit Application: File your application with the ONRC (National Trade Register Office).
4. Choose Taxation Method: Decide between real income taxation or the fixed income norm (if your profession qualifies).
5. Register for Taxes: Once approved, register with the tax authorities for income tax, social security, and health insurance as needed.

Pro Tip: Optimize Your Tax Burden

• 1. Monitor Your Income Thresholds: Social security (CAS) and health insurance (CASS) only apply if you cross specific annual income thresholds. For 2025, CAS kicks in above 12 minimum gross salaries, and CASS above 6. If you’re close to these limits, consider timing your invoicing or splitting income streams to optimize your contributions.
• 2. Deductible Expenses: Under the real income method, maximize your deductible expenses—think equipment, travel, and professional services—to reduce your taxable base.
• 3. Fixed Income Norm: If your profession qualifies, the fixed income norm can be a powerful hack, especially if your actual expenses are low. This can result in a lower effective tax rate.
• 4. Simplified Accounting: PFAs benefit from less onerous bookkeeping requirements. Use this to your advantage by focusing on your business, not paperwork.

Case Example: Freelance Consultant in Bucharest

Imagine a freelance consultant earning the equivalent of $12,000 USD per year. In 2025, they would pay:

• Income Tax: 10% on net income = $1,200 USD
• Social Security (CAS): 25% (since income exceeds 12 minimum gross salaries) = $3,000 USD
• Health Insurance (CASS): 10% (since income exceeds 6 minimum gross salaries) = $1,200 USD

Total tax and contributions: $5,400 USD, with the possibility to reduce the taxable base through legitimate expenses or by opting for the fixed income norm if eligible.

Summary: Why Romania’s PFA Status Appeals to Freedom Seekers

Romania’s PFA status in 2025 offers a rare blend of low taxes, minimal bureaucracy, and flexibility for international entrepreneurs and digital nomads. With a flat 10% income tax, clear thresholds for social and health contributions, and the option to choose your taxation method, the PFA is a practical tool for those who value autonomy and efficiency.

For more details, consult the official resources:

• ONRC: PFA Registration
• ANAF: PFA Guide (PDF)
• ANAF: Guides for Individuals
• ANAF: Electronic Register of PFAs

With the right strategy, Romania’s PFA can be a cornerstone of your global tax optimization plan in 2025.