Opening a PFA in Romania (Sole Trader)

Small businesses have become increasingly profitable in recent years as a large number of entrepreneurs have started setting up businesses on their own. Among the types of companies that allow the opening of a small business quickly and with a minimum number of documents is the Authorized Individual or the PFA.

The fastest way you can set up a PFA with the help of our online platform - LaRegistru.

Below, our agents specialized in setting up companies explain the necessary steps for creating a sole trader in Romania (PFA), as well as the advantages of such a company. Those who want to set up other types of companies can rely on the help offered by our team; they can definitely help you register a company in Romania.

What is a PFA?

The Authorized Individual is the simplest type of company recognized by the legislation and the authorities in the field in Romania. This form of business is intended for individuals who want to start their own business and who want to benefit from certain tax advantages.

Among the advantages of PFA are:

- the simple way of setting up, which requires a minimum number of documents;
- reduced costs related to the company's registration with the Trade Register;
- the possibility to have a maximum number of 3 employees to carry out their activity;
Also, the types of activities that can be undertaken through a PFA is quite varied as long as it complies with the CANE Code under which the company was established. The most common type of PFA is the one that provides services in the IT field in Romania.

What to consider when opening a sole trader in Romania

The authorized natural person is suitable for the one who wants to work on his / her own in a field in which he / she is specialized, so that, as with an SRL, the authorized natural person will have to prove the training in the respective field only where a special law requires it for that activity. On the other hand, the PFA is the easiest to set up in terms of the registration procedure.

In order to set up a PFA, a smaller number of documents is needed, it does not need to use the services of a certified accountant, accounting being simplified for this type of legal form. The holder of the PFA cannot be an employee of his own PFA, but the PFA can hire up to 3 employees, and the holder can also be employed by other persons or companies.

Often, the PFA is compared to the SRL in terms of advantages, and our agents can explain both the advantages and disadvantages of each type of company, so you can make an informed decision when you decide to set up a company. . We can help you with both the registration of a PFA and an SRL.

We are also at your disposal with accounting services for PFA, to make sure that you meet all the legal requirements from this point of view. Once the PFA is registered, a few more steps are needed to be able to start the activity. Using a stamp is no longer mandatory, although some PFAs still choose to have one.

The PFA receives its tax identification code when it is registered with the Trade Register. Registration for VAT purposes is mandatory only once the annual turnover exceeds 395,000 RON (or for certain cross-border transactions) and is optional below this threshold. The PFA must keep its accounting records, such as the receipts and payments journal and the inventory register.

You can count on our agents specialized in company establishment for more information related to the procedures to start the activity in the form of a PFA.

PFA taxation in 2026

Although it benefits from simplified accounting, the PFA must be subject to well-established rules. As far as accounting is concerned, single-entry or double-entry accounting is available to the PFA, provided that it complies with the current accounting laws. The PFA can be subject to two types of taxation: the real system taxation and the income norm taxation. 

Our team summarizes below the main rules that apply to the income earned in 2026.

• The income norm: a PFA can be taxed on the basis of an income norm only for the activities included in the official list and only if its gross income in the previous year did not exceed the equivalent of EUR 25,000. A PFA whose gross income exceeds EUR 25,000 must determine its net income in the real system (revenues minus deductible expenses) starting with the following year.

For example, a PFA taxed on the basis of an income norm whose gross income in 2026 exceeds the equivalent of EUR 25,000 will determine its net income in the real system starting with 2027.

• The income tax: 10% of the net income.
• The social security contributions: the pension contribution (CAS) and the health contribution (CASS) are calculated by reference to the gross minimum wage (please see below).

CAS (pension contribution):

The CAS rate is 25%. For the income earned in 2026, the thresholds are calculated using the gross minimum wage of 4,050 RON in force on 1 January 2026. The contribution depends on the annual net income:

• When the income is less than 12 minimum gross salaries (48,600 RON): CAS is not mandatory;
• When the income is between 12 and 24 minimum gross salaries: CAS is calculated on 12 minimum wages (48,600 RON) and amounts to 12,150 RON per year;
• When the income is 24 minimum gross salaries (97,200 RON) or more: CAS is calculated on 24 minimum wages and amounts to 24,300 RON per year.

CASS (health contribution):

The CASS rate is 10% and it is calculated on the actual annual net income, with a minimum base of 6 and a maximum base of 72 minimum gross salaries. The calculations are the following:

• For net income below 6 minimum gross salaries (24,300 RON): CASS is generally calculated on 6 minimum wages and amounts to 2,430 RON per year;
• For net income between 6 and 72 minimum gross salaries: CASS is 10% of the actual net income;
• For net income above 72 minimum gross salaries (291,600 RON): CASS is capped at 29,160 RON per year.

We remind investors that the calculations above use the gross minimum wage of 4,050 RON in force on 1 January 2026. The minimum wage increased to 4,325 RON from 1 July 2026, but the thresholds for the income earned in 2026 remain those based on the value in force on 1 January.

How long does it take and how much does it cost to set up a PFA?

The time required to set up a sole proprietorship in Romania (PFA) is relatively short, requiring:

• one day for the preparation of all the documents necessary for the establishment of the PFA, including the reservation of the name;
• the registrar decides on the registration within one working day of the filing, after which the registration certificate is issued;
• the tax identification code is allocated through the registration with the Trade Register.

Regarding the costs of setting up a PFA, they are lower compared to those of an SRL or SA. Also, it is not necessary to hire an accountant to keep accounting records.
One of the steps necessary to set up a company is to choose and reserve a trade name. This requirement also applies to the creation of a PFA, but in this case, the name consists of the surname and first name of the person who registers the PFA, to which the words “persoană fizică autorizată” (authorised natural person) are added. From the moment the proof of the trade name is collected, it is valid for one month.

Our specialists in setting up companies can help you open a PFA in most major cities in the country, including Timisoara, Cluj-Napoca, Iasi and Oradea.

Headquarters for a PFA

Like any other type of company, those who want to open a PFA must meet certain conditions and follow some preparatory steps for establishment. Thus, in order to set up a PFA, the entrepreneur will have to find a registered office that corresponds in terms of health, PSI and environmental protection. It is good to know that starting with 2017, when choosing a registered office for a PFA, the consent of the owners' company and of the neighbors in the block where the registered office is located is no longer needed if the PFA will not carry out any activity there. The registered office can also be located in an office building. It must be taken into account that the person who establishes the PFA must submit the proof of the registered office in the form of a lease or loan agreement to the Trade Register.

Other requirements that must be taken into account when setting up a PFA include the preparation of the registration file that must be submitted to the National Office of the Trade Register within the county in which the company will operate. On this occasion we inform you that we provide services for setting up companies in cities such as Iasi, Timisoara, Cluj-Napoca and Bucharest.

Choosing the CAEN code when setting up a PFA

An important step in registering a PFA is to choose a CAEN code corresponding to the activity that will be carried out by the person who establishes the company. The CANE code is similar to the object of the activity when setting up an LLC, but in the case of the PFA certain rules must be taken into account. So:

• a PFA cannot have more than 5 CANE codes for the object of activity;
• The PFA must ensure that it meets all the conditions related to each requested CANE code;
• The PFA must demonstrate the necessary training or experience only for the activities for which a special law requires it;
• The PFA cannot use some CAEN codes entered in the CANE Nomenclature.
• To use a larger number of CAEN codes, the person wishing to set up a company can opt for the registration of an Individual Enterprise (II) which can have a maximum number of 10 CAEN codes.

Regarding the restrictions of CAEN codes when setting up a sole proprietorship in Romania (PFA), some activities are reserved for companies with legal personality or require special licences, so they cannot be registered for a PFA. Since 1 January 2025, the codes must be chosen from the CAEN Rev. 3 classification, in which several codes from older lists have changed, so we recommend checking the intended activities with our team before filing.

As I wrote above, for each CANE code the person who will set up the sole trader (PFA) will have to demonstrate training or experience in that field only where a special law requires it for that activity. In this sense, documents attesting its preparation will be submitted. These documents include study diplomas, diplomas obtained as a result of accredited vocational training courses. Diplomas obtained abroad can also be used, but their translated and legalized form will be required. Also, previous experience in a certain field can be proven with the help of a workbook or a certificate issued by the former employer.
 
Our agents can provide you with more information related to choosing a CAEN Code when setting up a PFA. If you face a commercial litigation, we recommend that you contact the team of lawyers experienced in commercial litigation within the law firm Darie, Manea and Associates.

If you need help when setting up a sole trader in Romania (PFA), do not hesitate to contact us. We remind you that we are at your disposal with establishment services for other types of companies, such as SRL and SA, and hosting headquarters.