PFA (Sole Proprietorship) in Romania — Holding Company Formation Guide
Choose jurisdictions with extensive double taxation treaty networks, participation exemptions for dividends, and zero or low capital gains tax on the sale of shares.
Last verified: June 13, 2026
Corporate Tax
10.0%
State Tax
0.0%
Formation Cost
$50
Annual Fee
$0
Forming a PFA (Sole Proprietorship) in Romania as a Holding Company means a total tax burden of 10.0% and an official formation cost of $50. There is no minimum capital requirement. Standard formation takes 3-4 business days, or 1-2 business days expedited. No local director is required; the process can be managed remotely. This guide covers the steps, tax breakdown, banking options, and compliance requirements — all from verified data.
First-year total cost
≈ $360
Ongoing (per year)
≈ $350
Why PFA (Sole Proprietorship) for Holding Company?
A holding company is a parent entity that owns enough voting stock in another company to control its policies and management. It exists primarily to hold assets, intellectual property, or investments rather than producing goods or services itself.
Ideal for
- Serial entrepreneurs
- Families managing generational wealth
- Corporate groups with multiple subsidiaries
- Investors holding diverse asset portfolios (real estate, IP, stocks)
Challenges to watch
- Complex regulatory compliance
- Strict economic substance requirements
- Transfer pricing rules and documentation
- Higher setup and annual maintenance costs
Key decision criteria
- Participation exemption rules for tax-free dividends
- Withholding tax rates on dividends and royalties
- Controlled Foreign Corporation (CFC) rules
- Local economic substance regulations
PFA (Sole Proprietorship) formation requirements
Minimum capital
None
Standard timeline
3-4 business days
Expedited timeline
1-2 business days
Local director
Not required
Registered office
Virtual office allowed
Notarization
Required
The founder acts as the sole proprietor (authorized individual) and must have the legal right to reside and work in Romania.
Estimated breakdown (based on avg. $1,000,000 revenue)
Simulate with your own revenue →
VAT / Sales Tax
Standard rate 21%. Registration threshold: 395,000 RON. Non-resident providers of digital services to Romanian consumers must charge 21% VAT, typically registering via the EU OSS scheme.
Banking & payments for Holding Company
Opening a traditional bank account for a PFA requires a Romanian Personal Identification Number (CNP) and usually an in-person visit to a local branch. However, since a PFA founder must already have legal residency to register the entity, local banking is straightforward once the CNP is obtained. For faster, remote setups, fintechs like Revolut Business and Wise are widely used.
Supported payment gateways
Remote-friendly accounts
Revolut Business
Highly recommended for PFAs dealing with international clients. Fully remote opening and excellent multi-currency support.
Wise
Ideal for receiving payments in multiple currencies with low conversion fees. Easy online setup for Romanian PFAs.
Romania incentives & advantages
Start-Up Nation Romania
Up to 250,000 RON (approx. 50,000 EUR) covering up to 90% of eligible project expenses.
Early Payment Tax Discount
Typically a 3% to 10% discount on the total tax amount owed, depending on the annual ANAF ordinance.
PFA (Sole Proprietorship) formation steps
Obtain proof of education or professional qualification (diplomas, certificates) matching your desired CAEN codes.
Secure a registered office (headquarters) in Romania, which can be a rented apartment, owned property, or a virtual office.
Reserve your business name at the National Trade Register Office (ONRC).
Prepare the registration file, including your ID, proof of address, qualifications, and standard ONRC forms.
Submit the application to the local Trade Register either in person or via the online portal.
Receive the Registration Certificate (CUI) within 3 to 4 working days upon approval.
Register with the tax authority (ANAF) and set up the Virtual Private Space (SPV) to comply with the mandatory RO e-Factura system.
Holding Company FAQ
What is the main benefit of a holding company?
Asset protection and tax efficiency. It isolates financial risk so that if a subsidiary fails, the holding company's other assets remain protected.
Where are the best jurisdictions for holding companies?
Popular jurisdictions include the UK, Singapore, Switzerland, the Netherlands, and the UAE, due to their favorable tax exemptions on dividends and capital gains.
Do holding companies need physical offices?
Yes, increasingly so. Many jurisdictions now enforce 'economic substance' laws requiring holding companies to have local directors, physical office space, and adequate local expenditure.
Ready to form your PFA (Sole Proprietorship)?
Trusted formation partners are coming soon.
Related terms
Key concepts you'll encounter when forming a Holding Company
Related guides
Complete PFA (Sole Proprietorship) guide
Taxes, requirements, banking, compliance
PFA (Sole Proprietorship) cost calculator
One-time and annual cost breakdown
🇧🇬 Holding Company — Single-Member Limited Liability Company (EOOD)
Tax 10.0% · formation $30
🇨🇾 Holding Company — Variable Capital Investment Company (VCIC)
Tax 15.0% · formation $180
🇨🇾 Holding Company — Company Limited by Guarantee
Tax 15.0% · formation $265
🇨🇾 Holding Company — Sole Proprietorship
Tax 0.0% · formation $100
🚀 SaaS Startup — PFA (Sole Proprietorship)
Same entity, different business model guide
📦 Amazon FBA & E-Commerce — PFA (Sole Proprietorship)
Same entity, different business model guide