What is a PFA in Romania?
A PFA (Persoană Fizică Autorizată) in Romania is the legal form of a sole proprietorship, which allows one individual to carry out business activities as a self-employed professional. PFAs are commonly used by freelancers, consultants, IT specialists, creatives, healthcare providers, and other service professionals who want flexibility, independence, and lower administrative costs compared to running a company.
Other similar legal forms include:
- Întreprindere Individuală (II) – an individual enterprise
- Întreprindere Familială (IF) – a family enterprise
All of these are alternatives for small-scale entrepreneurs who don’t want to set up a limited liability company (SRL) but still want to legally invoice clients and operate as a business.
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Why Choose a PFA?
The main advantages of a PFA in Romania are:
- Flexibility – choose your own clients, projects, and working hours
- Lower costs – no minimum capital required, fewer administrative expenses compared to SRL
- Simplified taxation – flat 10% income tax and options for different tax regimes
- Full ownership of profit – all income belongs to you, no shareholders involved
- Formal legitimacy – ability to issue invoices, access public healthcare and pension systems, and build official credit history
However, the disadvantages of a PFA include:
- Unlimited liability – personal assets are not protected in case of debt
- Social security contributions – CAS (25%) and CASS (10%) can add up, depending on income level
- Limited growth potential – not ideal for scaling into a larger company with employees
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Tax Systems for PFAs in Romania
When registering as a PFA, you can choose between two taxation systems:
- Real System
- Taxed 10% on actual profit (income – expenses)
- Allows deduction of expenses such as office rent, travel, equipment, utilities
- Requires detailed bookkeeping
- Income Norm System (Norma de venit)
- Taxed 10% on a fixed “normative income” set by tax authorities based on CAEN code and region
- Less paperwork, no need to record every expense
- Better for predictable income, but if you earn much more than the norm, you may overpay
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PFA vs SRL (Limited Liability Company)
| Feature | PFA (Persoană Fizică Autorizată) | SRL (Limited Liability Company) |
|---|---|---|
| Liability | Unlimited personal liability | Limited to company assets |
| Setup cost | Low, no minimum capital | Higher, with legal fees & accounting |
| Taxes | 10% income tax, CAS & CASS contributions | 16% corporate tax (or 1% for micro), plus dividend tax |
| Administration | Simple, fewer reports | More complex, requires accountant |
| Best for | Freelancers, consultants, small-scale services | Businesses with employees & growth plans |
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Step-by-Step: How to Register a PFA in Romania
- Check eligibility – Must be 18+, legally capable, Romanian or EU resident (non-EU may need extra permits).
- Choose your business activity (CAEN code) – Select the appropriate code that matches your profession. Some activities require proof of qualifications.
- Reserve your business name – Must include your full personal name + “PFA” (e.g., Ana Popescu PFA). Do this via ONRC (Oficiul Național al Registrului Comerțului).
- Prepare documents:
- ID/passport
- Proof of residence/business address
- Qualifications (if needed for regulated professions)
- Application form for ONRC
- Register with ONRC – Submit documents online or in-person. Registration usually takes 3 working days.
- Register for taxes with ANAF – Submit declaration, register for income tax, CAS (25%), CASS (10%), and VAT (if applicable).
- Start operations – Issue invoices, keep records, and file annual declarations.
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Financial Obligations of PFAs
- Income Tax: Flat 10% on taxable income (real or norm system).
- CAS (Pension): 25% of taxable income, mandatory if income exceeds 12–24 minimum salaries/year.
- CASS (Health): 10% of taxable income, also mandatory above thresholds.
- VAT: Required if turnover exceeds RON 395,000. Optional registration below threshold.
- Accounting: Keep income & expense records (real system) or comply with fixed norm obligations.
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How Token Talent Helps Freelancers & PFAs in Romania
Running a PFA in Romania gives you independence—but it also means managing invoices, taxes, social contributions, and compliance. Many freelancers struggle with paperwork and staying up to date with tax law changes. This is where Token Talent comes in.
With Token Talent, you can:
Automate invoices & expense tracking – Generate compliant invoices instantly, track payments, and manage expenses.
Simplify contracts – Create, sign, and store localized agreements for clients.
Stay compliant – Keep records ready for ANAF declarations, avoid missed deadlines, and get notified about updates.
Manage payroll-like contributions – Track CAS and CASS obligations just like an employee’s payroll system.
Get paid easily – Multiple payment methods, with the ability to withdraw earnings in your preferred way.
Grow with confidence – Transition smoothly from PFA to SRL when your business expands.
