PFA vs. SRL in Romania: which one suits you? Full comparison
In short
The PFA (sole trader) is simpler and cheaper to run, with immediate access to your money: 10% tax plus CAS and CASS above the thresholds. The SRL (limited company) separates personal assets from the business and pays 1% micro-enterprise tax (or 16% profit tax) plus 16% dividend tax when you take money out, on top of mandatory accounting. Rule of thumb: at small incomes with few expenses, the PFA wins on simplicity; the SRL becomes interesting at high incomes, for asset protection, or with growth and hiring plans.
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“PFA or SRL?” is probably the most frequent question of anyone starting out on their own in Romania — and one whose correct answer has shifted over time with the tax regime. After the dividend tax rose to 16% and the micro-enterprise regime narrowed, the balance tilted back towards the PFA for many independents; but the decision remains personal, driven by your numbers and plans.
The essential difference: how you reach your money
- PFA: the money you collect is yours. You pay the 10% tax and the contributions via the single tax return, and the rest is available immediately, no further formalities.
- SRL: the money belongs to the company. To reach you, it passes a second layer of taxation — most commonly dividends (16% tax, plus CASS above the threshold) — or a salary, with its payroll taxes.
This mechanical difference is why the naive “1% micro vs. 10% PFA” comparison misleads: for an SRL, the small revenue percentage is only the first layer of taxation.
Where each form clearly wins
The PFA wins on: administrative simplicity, near-zero fixed costs, immediate access to money, easy closure. See our PFA registration guide.
The SRL wins on: protecting personal assets, credibility in corporate contracts, hiring beyond the PFA’s 3-employee cap, bringing in partners or investors, optimisation at high incomes with significant expenses.
The trap of precise-number comparisons
Any table claiming “above X lei the SRL is better” expires at the next Fiscal Code amendment — and amendments have lately been annual. Use the table above as the structure of your calculation, check current values on anaf.ro and run your own scenario before deciding.
Steps to follow
- Estimate your annual income and expenses. The tax comparison depends first on numbers: estimated gross income, the share of deductible expenses and how much of the money you want for personal use. Run the numbers on your own figures, not generic examples.
- Weigh the risk of your activity. A PFA is liable with personal assets (softened by a dedicated business patrimony, if set up); an SRL is, as a rule, liable only with the company's assets. For activities with damage or litigation risk, the separation matters.
- Think about clients and perception. Some large companies prefer contracting with SRLs; in other fields (trades, personal services, freelancing) the PFA is the norm and nobody blinks. Check the practice in your industry.
- Assess your appetite for administration. PFA: single-entry books, one return a year, no mandatory accountant. SRL: double-entry accounting kept by a professional, monthly/quarterly filings, formal decisions for dividends.
- Decide and register at ONRC. Both forms register at the Trade Register, and registration itself is free. If you stay undecided, start with a PFA — it is easier to close or later pair with an SRL than the other way round.
Required documents
- For the comparison: your estimated annual income and expenses
- PFA: proof of professional address, qualifications where required (see our PFA registration guide)
- SRL: articles of incorporation, registered office proof, shareholder/director statements, share capital (symbolic minimum, paid at incorporation)
Costs
| What you pay | Cost | Notes |
|---|---|---|
| PFA income tax | 10% | On net income (real system) or on the income norm |
| PFA contributions (CAS + CASS) | 25% + 10% | CAS above the 12-minimum-salary threshold; CASS between 6 and 72 minimum salaries (2026) |
| SRL — micro-enterprise tax | 1% of revenue | Single rate from 2026; 100,000 euro threshold — beyond it, profit tax applies |
| SRL — profit tax | 16% of profit | Mandatory above the micro threshold or outside micro conditions |
| Dividend tax (SRL) | 16% | Raised from 10% for distributions from 2026 (Law 141/2025); CASS is added if total non-salary income exceeds 6 minimum salaries |
| Accounting | PFA: 0 lei / SRL: monthly retainer | A PFA can keep its own books; an SRL practically needs a certified accountant |
| Registration at ONRC | 0 lei (both) | Registry fees were abolished |
Fees change over time. Always check the current amounts on the official websites listed under “Official sources”.
How long it takes
Both forms register at ONRC in 1–3 working days from a complete filing. The effort difference shows afterwards: a PFA takes a few hours of administration per year, an SRL — a permanent relationship with an accountant.
Frequently asked questions
At what income level does the SRL become better tax-wise?
There is no universal threshold — it depends on deductible expenses, the PFA regime (norm or real), how much you take as dividends and the contributions owed in each scenario. Rule of thumb: at small-to-medium incomes with low expenses, the PFA is hard to beat after the dividend tax rose to 16%; run your own numbers or ask an accountant before deciding.
Can I convert my PFA into an SRL?
There is no direct conversion: you incorporate a new SRL and, if you wish, close the PFA (deregistration at ONRC). You can also keep both in parallel, with separate activities and contracts.
Can I have both a PFA and an SRL at the same time?
Yes, the law does not prohibit it. It is a common strategy: the PFA for personal services, the SRL for the activity with employees or higher risk. Just keep contracts and money flows properly separated.
What happens to debts in each case?
The PFA is liable with the owner's entire personal patrimony (unless a dedicated business patrimony partially limits exposure). In an SRL, shareholders' liability is in principle limited to their capital contribution — with exceptions for fraud or personal liability of the director.
As an SRL, can I spend company money on personal expenses?
Not directly — the SRL's money belongs to the company, not to you. You take it out legally through dividends (after the 16% tax), a director's salary or other taxable forms. Informal use of company money creates problems at audits.