Is it worth opening a company in Romania? Pros, cons and risks
Is it worth opening a company in Romania? Yes, if the company has substance: clients, a real activity and someone who decides in Romania rather than in Milan or Munich. No, if the only reason is paying 1% instead of tax at home: your tax authority can then treat the company as resident where you live. Below: pros, risks, real first-year costs and three cases with a verdict.
The short answer: worth it if there is substance
It is worth it when the Romanian company actually does something in Romania: it has clients, an activity that takes place there and a person who takes the decisions on Romanian soil, whether that is you after relocating or a director who lives there. In those cases the tax regime, the low fixed costs and online formation in 3–7 working days are real advantages that add up.
It is not worth it when tax is the only reason. If you stay in Italy or Germany, your clients are there and you take every decision from your desk there, the company is Romanian only on paper: your home tax authority treats it as resident at home and taxes it like a local company, with penalties on top. In that case the 1% does not exist, and the formation and the accountant were money spent for nothing.
The rest of this article helps you see which side you are on. These are general rules, not personal advice: you close your own case with an accountant in your country and one in Romania, not with an article.
Why it is worth it: 1%, dividends at 16% and low costs
The most quoted advantage is the micro-company: 1% on revenue up to €100,000 a year, provided you have at least one full-time employee or a director on a mandate contract. Above the ceiling, or without an employee, you move to 16% profit tax. Dividends are taxed at 16% from 2026 and personal income tax is 10%. The conditions are in our guide to Romanian micro-company tax in 2026.
The second advantage is that everything costs little: minimum share capital of 500 lei, ONRC fee of 152 lei, a registered office at €130 a year, accounting from €99 a month. Formation is done online in 3–7 working days, by power of attorney, without a trip to Romania and without an electronic signature of your own; and nobody asks for residency, as shareholder or as director.
The third is the European Union: a Romanian SRL is an EU company in every respect. It invoices Italy or Germany without customs, with an intra-community VAT number; VAT is 21% (11% reduced) and becomes compulsory above 395,000 lei of revenue. The steps, in order, are in our guide to opening a company in Romania.
Why it may not be worth it: effective management
Effective management is the concept to know before you sign. A company registered in Romania but actually run from another country can be treated as tax resident in that country. Your home tax authority looks at where decisions are taken and where the day-to-day work happens, not at the address printed on the registration certificate.
The signals that foreign tax authorities look for are concrete:
- the director lives in that country and decides from there;
- the clients are all, or almost all, from that country;
- there is no office, staff or activity in Romania;
- the company bank account is operated from abroad;
- contracts, emails and meetings originate there.
The consequence: the company is taxed in that country on its entire income, like a local company, with penalties and interest for the years challenged. The 1% paid in Romania does not save you; at best you recover part of it as a tax credit. One signal alone is not enough; three or four together are.
Your residency and the company's residency are two different things
Opening a company in Romania does not make you resident in Romania. The company has its own tax residency, you have yours, and the rules are separate. Italy, for instance, treats you as resident if you spend more than 183 days a year there or if your domicile or registered residence is there; anyone who really moves abroad registers with AIRE, the register of Italians living abroad.
If you stay resident in Italy, the dividends of the Romanian SRL are taxed by Italy: 26% for individuals, with a credit for the tax already paid in Romania under the double taxation treaty. In practice you pay 16% in Romania on the dividend and Italy takes the difference up to its own level: the 1% advantage stays on the company's profit, but on the money that reaches your pocket the gain shrinks.
If instead you move to Romania and become resident there, dividends are taxed by Romania at 16% and your home country drops out of the picture, provided the move is real: a home, days spent there, everyday life. The rules for individuals are in our guide to tax residency in Romania.
The real costs of the first year
The cost paid to the state is minimal: the ONRC fee of 152 lei and the 500 lei share capital, which is not a cost but money that stays in the company. The rest is formation, the office and accounting, which a company pays from its first month.
| Item | How much | Notes |
|---|---|---|
| Formation Start4 · Start | €399 | You already have an office; ONRC fee of 152 lei included |
| Formation Start4 · Business | €699 | Office 12 months, NIF, bank, tax regime, VAT, e-Factura, call with the accountant |
| Minimum share capital | 500 lei | Stays in the company, not a cost |
| Registered office from year two | €130 a year | The first year is included in Business |
| Accounting | €99–249 a month | Compulsory from the first month |
| Full-time employee | Minimum wage plus contributions | Condition for the 1% micro regime |
Add the employee the micro regime requires: a minimum-wage salary, with contributions, twelve months a year. It is not a cost to hide: it is the condition for the 1%, and it weighs in the comparison with tax at home. The full calculation, with examples, is in our guide to the cost of opening a company in Romania.
Three typical profiles, with a verdict
The consultant who relocates. A freelancer or consultant working remotely for clients in Germany, France, Italy, who genuinely moves to Romania: a home, deregistration at home, days spent there. Worth it. The company has substance because the person who decides lives in Romania; it pays 1% on revenue, 16% on dividends and that is all; it invoices across the EU without customs. The compulsory employee can be the consultant, on a mandate contract.
The e-commerce business with a warehouse in Romania. It sells online across Europe, keeps stock in a depot near Bucharest or Timișoara, has two people packing orders. Worth it, even if the owner stays abroad: the office, the staff, the activity and the operational decisions are in Romania, and labour costs are lower. Distance-selling VAT needs care, but that is the accountant's job, not an obstacle.
The entrepreneur who stays at home. Lives in Italy, clients are Italian, does the work from Italy and would simply like to invoice through a Romanian SRL to pay 1%. Not worth it. It is the textbook case of effective management abroad: no substance in Romania, decisions in Italy. He risks Italian tax on everything plus penalties and, in the meantime, pays an accountant, an office and an employee in Romania. Better not to open it, or to change the plan first: relocate, or bring real activity to Romania.
The things nobody tells you
The employee is not optional. Without at least one full-time contract, or a mandate contract for the director, the company pays 16% on profit, not 1%. The hire has to happen within the legal deadline, with a Romanian contract, contributions and a payslip every month.
Accounting is monthly and compulsory from the first month, even at zero revenue: a Romanian accountant, trial balances, returns. Invoices go through ANAF's e-Factura system, so you need invoicing software connected to it, not a Word file.
The bank asks for documents: registration certificate, articles of association, the director's papers, often an explanation of the activity and a visit to the branch. A foreign director without a NIF opens nothing. And the language: the accountant, the bank and ANAF work in Romanian. We assist you in English, Italian and Romanian, and the accountant call in the Business package is held in your language.
How to start without getting it wrong
Before forming the company, clear your case with two professionals: an accountant in the country where you live, who tells you whether and how you remain resident there and what happens to the dividends, and one in Romania, who confirms the tax regime and the company's obligations. An hour with each costs less than a wrong year.
Then form the company with Start4: you enter the details online, sign the deeds and a power of attorney, and our lawyer files with the Trade Registry; no electronic signature, no trip, tax number in 3–7 working days. The Business package, €699, includes a registered office for 12 months, the NIF, the choice of tax regime, VAT, e-Factura and a 30-minute call with the accountant: it is the right one for anyone starting from abroad. After the first year the registered office continues at €130 a year.
Start from open an SRL in Romania, or from Start4 to see every service.
Frequently asked
Is it worth opening a company in Romania to pay less tax?
Only if the company has substance in Romania: activity, clients, someone who decides from there. If you stay in your own country and run everything from there, your tax authority treats the company as resident at home and taxes it like a local company, with penalties. The 1% alone is not a sufficient reason.
Can I own a Romanian company and live in another country?
Yes, Romanian law does not require residency. But if you live and decide from another country, effective management is there and the company risks being taxed there. It works if there is real activity in Romania: an office, staff, a local director who takes decisions.
What does effective management mean?
It is the place where the company's decisions are actually taken. If the director lives and decides in Italy, the clients are Italian and there is no structure in Romania, the Italian tax authority can treat the company as resident in Italy and tax its entire income, with penalties, whatever the registered address.
How much tax do I pay on dividends if I remain resident in Italy?
Romania withholds 16%. Italy taxes foreign dividends of individuals at 26%, with a credit for the tax paid in Romania under the double taxation treaty. Other countries apply their own rate and credit. The exact figure comes from your accountant at home, on your situation.
How much does the first year of a Romanian SRL cost?
Formation from €399 (Start) or €699 (Business, with office for 12 months, NIF, bank, VAT, e-Factura), ONRC fee of 152 lei included, 500 lei of share capital that stays in the company, accounting at €99–249 a month, plus one minimum-wage employee if you want the 1% micro regime.