Open Micro-Company in Romania

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Open a Micro-Company in Romania

Micro-company in Romania is the most advantageous form of business from a fiscal point of view, with its tax bracket of 3%, but it must comply with certain conditions and meet certain criteria. In order to become a micro company you must comply with the following:

  • The subscribed capital must be owned by persons who are not the state or territorial-administrative unities
  • In the preceding fiscal year did not exceed 1.000.000 euro in revenue
  • It is not in dissolution, followed by liquidation, registered in the trade registry or courts

A new entity can be only micro-enterprise at the registration date at the Trade Registry. According to the Fiscal Code, in order to opt for profit taxation, the newly established company should have a subscribed capital of a minimum of 45.000 lei. Starting with 2018 the provisions that restricted the type of activities and the measure of incomes from management and consultancy were also eliminated.

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Micro-company Characteristics

Microenterprises in Romania went through several interpretations and modifications, while the general conditions for establishing a company have been frequently changed due to the predominantly shifting economic environment. In order to register a micro company in Romania, the first thing to understand is that the micro company is a subtype of the limited liability sector indicating several specific traits.

The main characteristics of the micro company are the origin of profit, annual income limits, and the owners of share capital. Romanian micro-companies are those legal entities that have revenues of up to EUR 65,000, coming from activities performed in areas different from the banking area, insurance, and reinsurance domain, capital markets field (excepting those performing intermediary activities between entities involved in this specific area), consultancy, gambling, and management. Another important trait regards the owners of the share capital which should be persons other than the state or local authorities. Even if before an extra condition had to be fulfilled, nowadays there are no limitations regarding the number of employees.


Taxation regime

One of the most generally known characteristics for microenterprises in Romania regards the tax legislation. If willing to open such a company in Romania, clients should know of the rather beneficial taxation regime which states that the micro-companies pay a 3% income tax. The taxes are to be evaluated quarterly, up until the 25th of the month following the quarter that the tax in question is to fiscally justify. The EUR 65,000 threshold shall be evaluated considering gains from various sources excepting those associated with costs for stock production, costs of developing services, gains obtained through tangible and intangible assets production, through operational subsidies, through reserves and adjustments for depreciation or value loss, through reimbursement or cancellation of interests or penalties which are to be considered non-deductible expenses, through the recovery of damages.

Micro-companies have 2 options for taxation, depending on the number of employees:

  • 1% for companies with at least one employee
  • 3% for companies with no employees

New companies, with at least one employee that has been registered for more than 48 months and their associates have no participation titles in other juridical entities, are forming an exception, applying the 1% taxation rule for the first 24 months from the registration date. In order for the company to benefit from the 1% taxation, it is mandatory to hire a full-time employee (8h per day) in 60 days from the registration date.

The micro company can have employees hired part-time if the fractions summed up will be the equivalent of a full-time norm. As well, if the employee is hired with administrative contracts or mandates, according to the law, in the case of which their remuneration is at least equal to the minimum gross salary, it can also meet the guidelines for 1% taxation.

If during the fiscal year, the number of employees changes, the taxation measures will be applied accordingly, starting with the trimester in which the change occurred. For micro-enterprises with one employee that has fallen under the 1% taxation rule, which has their contract expires, the condition regarding the number of employees is still met if in the same trimester a new employee is hired. Those who have no employee, in the case in which they hire one, in order for the taxation measurement to be changed, must hire a person full-time with a contract for at least 12 months.

In the case in which the limit of 1.000.000 euro in revenues has been exceeded, the company will become a tax profit payer starting with the trimester in which the limit was exceeded. Also, the vice versa is valid, as a tax per profit payer will become a micro company if the income is under 1.000.000 euro.

The taxes for micro-enterprises are calculated like this = total incomes x 1% or 3%. The calculation and payment of income taxes for micro-enterprises are made every three months, until the 25th of the next month after the calculation. Also, form 100 must be submitted every three months on the same date.

Contact Romania Company to Get Your New Business Live in 5 Working Days

Romania Company has been providing incorporation services for all industries for over 18 years. We have helped our clients to make the right choices, to realize their visions, to overcome obstacles, and, above all, to succeed. We offer transparency and efficiency and we are committed to always acting only in your interest.

Our experience in obtaining the companies and banking accounts differentiates us from the competition. We cover all your needs, from the incorporation of your company, the creation of fiscal and compliance structures, to obtaining the banking account and operating licenses.

We invite you to schedule a consultation with us. We like to communicate with our customers, troubleshoot their problems, and offer solutions. We invite you to contact us today to discuss this with one of our agents. Let us help you take your business to the next level.

For more information do not hesitate to contact our law firm Romania Company to assist you. We offer a free consultation. Our lawyers in Cluj Napoca have vast experience in supporting local and international companies.

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Romania Company
Calea Dorobantilor 89, Bl X3, Sc 1, Ap 2, Cluj Napoca, CJ, 400609, Romania