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Since 2017, the Romanian legislation regarding micro enterprises has changed again, but in the benefit of those opening such companies.

For instance, those companies that have under 500,000 euro turnover will pay lower taxes:
3% (for those companies with no employees) or 1%  (with minimum 3 employees) corporate tax and 5% dividend tax.

These being said, it is a very good idea to open with a micro company if you want to start a small business. In addition, the conditions regarding the number of employees were eliminated and the procedure to open a micro company is the same as opening a SRL company in Romania.
Image result for micro entrepreneurship

Still, the good taxing benefits are available for a micro company in certain conditions:

  • It must not obtain revenue from banking, gambling or insurance
  • Over 80% of the total revenue does not come from management and consulting (only 20% of the revenue can be from consulting and management)
  • The income has not exceed 500,000 euro
  • The shareholders are not public or local authorities or the state
After the company have exceeded 500,000 euro in one fiscal year, or has over 20% revenues from management and consultation will become profit tax payers, meaning 16% of the profit.

This tax is calculated and paid from quarter, taking into consideration expenditures and revenues from the beginning of the fiscal year.

The tax that will need to be pay is the difference between the tax that was calculated at the start of the fiscal year to the end of the reporting period and the income tax that the enterprise must pay in the year.

Another new change in the micro company legislation is the fact that the tax base has expanded, since in the old legislation only exploitation was mentioned, and now income for grants become taxable, as well as the subsequent billing of trade discounts and exchange rate differences.

If all conditions mentioned above are met, a new micro company is obliged to pay the level of taxation starting with the first fiscal year.

When the conditions are not met any longer, they will apply the new level of taxation starting from the next fiscal year after the one during which the company exceeds the limits.

Companies that have the main activity one of the following:

  • betting,
  • casino,
  • gambling,
  • banking,
  • insurance or
  • capital market (except those that activate as intermediaries) CANNOT be registered as micro companies according to the Romanian law.
Still, for the other areas of activities it is much more convenient to start as a micro enterprise and pay 3% taxes per income, instead of 16% per profit.
For more information do not hesitate to contact our lawyers from Darie, Manea and Associates. We offer free consultation for opening a micro company in Romania.


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