Converting a PFA into an SRL in Romania: how it actually works
In short
In Romania there is no procedure for directly converting a PFA (sole trader) into an SRL (limited company) — they are different legal forms, and a law that would have allowed it was ruled unconstitutional. The switch happens in two stages: you set up the SRL, make it operational (contracts moved, invoicing started), and only then deregister the PFA at the Trade Register. Order matters: closing the PFA first leaves you with no entity to invoice from.
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“I want to convert my PFA into an SRL” is one of the most frequent questions from growing entrepreneurs in Romania — and the correct answer surprises people: direct conversion does not exist. A law that would have allowed it was ruled unconstitutional, so the switch works differently: you set up a new company and close the PFA.
It sounds complicated, but it is not. What matters is the order — and that is where most people go wrong.
The golden rule: SRL first, PFA last
The temptation is to “close what was” and then open what comes next. That is exactly backwards. If you deregister the PFA first, you spend weeks with no legal entity to invoice from — with clients waiting and invoices that cannot be issued.
The correct order:
- Set up the SRL and make it operational (bank account, SPV, e-invoicing);
- Move the contracts and start invoicing from the SRL;
- Collect everything invoiced through the PFA;
- Only then deregister the PFA;
- File the final single tax return for the PFA.
What does not transfer automatically
Three things people wrongly assume:
- Contracts do not move by themselves. Each client needs an addendum or a new contract with the SRL.
- Assets (equipment, stock, a car) stay with the PFA until you transfer them formally, through a sale or a contribution to share capital.
- The name and tax code are not preserved. The SRL is a new legal entity.
What you do not lose: contributions paid as a PFA remain under your personal code and count towards your pension.
You are not forced to choose
Many people do not realise you can keep both in parallel. It is perfectly legal and sometimes smart: the PFA for services you perform personally, the SRL for activity with employees, higher risk, or corporate clients who prefer contracts with companies.
If you are unsure the move is worth it, read the detailed comparison first: PFA vs. SRL — especially after the dividend tax increase, the calculation is no longer obvious. For the incorporation procedure, see how to set up an SRL.
Steps to follow
- Check whether the switch makes sense for you. An SRL becomes interesting at high income, when you need to protect personal assets, when hiring beyond the PFA's 3-employee cap, or for contracts with companies that prefer working with legal entities. If none of these apply, the PFA remains simpler and cheaper.
- Set up the SRL. It is registered at the Trade Register, with articles of incorporation, proof of registered office, statements and share capital. You can choose the same CAEN activity codes as your PFA. Do not wait to close the PFA first — the SRL must be operational before that.
- Open the bank account and enrol the company in SPV. The SRL needs its own bank account (company money is separate from yours) and access to ANAF's Virtual Private Space, mandatory for tax filings and for e-invoicing.
- Move the contracts to the SRL. Existing contracts are concluded with your PFA. For each client you sign either an addendum changing the contracting party, or a new contract with the SRL. Notify clients in advance and set the date from which the SRL invoices.
- Transfer the assets, if you have any. Equipment, stock or a car bought under the PFA do not pass automatically to the SRL. The transfer is formal: either a sale from the PFA to the SRL (with an invoice), or a contribution in kind to the share capital, with valuation. Consult an accountant — there are tax implications.
- Start invoicing from the SRL. From the agreed date, you issue invoices only from the SRL, through e-Factura. Invoices previously issued by the PFA remain perfectly valid — they do not need to be redone, cancelled or corrected.
- Deregister the PFA. Once the SRL is running and you have no more income through the PFA, file the deregistration request at the Trade Register. Careful: do not deregister before collecting all invoices issued by the PFA.
- File the final tax return for the PFA. For the year in which you deregistered the PFA, you still owe a final single tax return to ANAF, covering the income and contributions for the period the PFA was active. This is the step most people forget.
Required documents
- For the SRL: articles of incorporation, proof of registered office, sworn statements, shareholders' documents, proof of share capital
- For moving contracts: addenda or new contracts, signed with each client
- For asset transfer: a sale invoice from the PFA to the SRL, or contribution-in-kind documentation with valuation
- For PFA deregistration: the deregistration request and the documents required by the Trade Register
- The final single tax return for the PFA, filed through SPV
Costs
| What you pay | Cost | Notes |
|---|---|---|
| Setting up the SRL | See the dedicated guide | Registry fees were abolished; possible costs: electronic signature, filing services |
| Deregistering the PFA | No registry fee | Check onrc.ro for any related costs |
| Accounting for the SRL | Monthly retainer | The most important recurring cost — an SRL needs a certified accountant, unlike a PFA |
| Asset transfer | Variable | May generate tax obligations for the PFA (income from the sale); assess with an accountant |
Fees change over time. Always check the current amounts on the official websites listed under “Official sources”.
How long it takes
Setting up the SRL usually takes 1–3 working days from a complete filing. Moving contracts depends on your clients — plan for 2–4 weeks. The PFA is deregistered after everything is closed on the old side, so realistically the whole transition takes between one and three months.
Frequently asked questions
Is there really no direct conversion?
No. A PFA and an SRL are completely different legal forms, and the law that would have allowed direct conversion was ruled unconstitutional. Any service promising you a 'conversion' does exactly what is described here: sets up a new SRL and deregisters the PFA.
Do I have to close the PFA at all?
No. You can keep both in parallel — perfectly legal and sometimes useful: the PFA for personal services, the SRL for activity with employees or higher risk. Close the PFA only if it no longer serves you, so you do not pay contributions for nothing.
Can I keep the same name and tax code?
No. The SRL receives a new tax code (CUI) and a new name, checked at the Trade Register. The commercial name can be similar to the one you were known by, if available, but the legal entity is different.
What happens to invoices already issued by the PFA?
They remain valid. They do not need to be cancelled, redone or reissued by the SRL. Just collect them before deregistering the PFA, otherwise you complicate matters needlessly.
Do I lose the seniority or contributions paid as a PFA?
No. Pension and health contributions paid as a PFA remain recorded under your personal numeric code and count towards your contribution record. Changing the legal form erases nothing you have paid.
When is the best time to switch?
Usually at the start of a fiscal year, so you do not have to manage two regimes in the same period and your filings stay simpler. But if you have an urgent reason — a large contract requiring an SRL — do not wait artificially; it can be done any time.