The statutory basis
Romania's microenterprise tax regime is codified in Title III of Law 227/2015 — the Fiscal Code — specifically Articles 47 to 57. It was introduced in 2017 as a deliberate policy to encourage small business formation, and it has survived every government since. It is not a workaround, a loophole, or a transitional measure scheduled for removal.
The regime applies at the entity level. A qualifying SRL pays corporate income tax on its turnover, not its profit, at a rate of 1% if it has at least one full-time employee, or 3% without one. The alternative is the standard 16% CIT on net profit, which applies automatically to non-qualifying entities.
Founders who describe the 1% rate as aggressive planning are typically unfamiliar with the Romanian Fiscal Code. It is a statutory default rate.
This piece is part of our pillar on Romanian SRL formation. It covers who qualifies, how the €100,000 threshold actually works, the employee rule, voluntary and threshold exits, and the forward-planning question every founder should ask in their first fiscal year.
Who qualifies
To elect the microenterprise regime, a Romanian SRL must satisfy all of the following at the start of the tax year — or at the moment of incorporation if the company is newly formed:
- Annual turnover does not exceed the RON equivalent of €100,000, at the exchange rate published by BNR on 31 December of the preceding year.
- The company is not engaged in banking, insurance, capital markets, gambling, or consultancy and management (the latter two subject to a separate definition in Article 47 of the Fiscal Code).
- Shareholders holding more than 25% of shares or voting rights must not hold the same interest in more than three other microenterprise companies.
- The company has not previously opted out of the microenterprise regime during the same year.
The consultancy and management exclusion is the condition most commonly misapplied. It refers to the principal activity code (CAEN code) of the company, not to incidental consulting revenues. A technology company that invoices some advisory work is not automatically excluded; a company incorporated with a principal CAEN of management consulting is. The principal CAEN distinction is detailed in our SRL formation guide.
The €100,000 threshold
The threshold is assessed on an annual basis, calculated in RON at the year-end exchange rate. For a company formed mid-year the threshold is prorated to the months remaining in the tax year from incorporation. Founders who incorporate in October and assume the full €100K applies are wrong: only roughly €25,000 (three months out of twelve) is available for that fiscal year.
The threshold is crossed at the moment turnover exceeds the RON equivalent. From the quarter in which the threshold is crossed, the company transitions to the standard 16% CIT on profit. It does not apply retroactively to earlier quarters. Cross the threshold in Q4, and three quarters of the year were taxed at 1% on turnover; only Q4 onwards at 16% on profit.
The employee rule
The distinction between 1% (with employee) and 3% (without) is the single most practically important feature of the regime. Adding one full-time employee — even at the Romanian minimum wage — reduces the effective tax rate by two percentage points on all turnover.
The employee must be on a standard contract individual de muncă with a minimum of eight hours per day, five days per week. Part-time contracts do not qualify. The employee cannot be the company's sole shareholder unless the act constitutiv explicitly contemplates this.
Employing someone at minimum wage costs approximately €750 per month including employer contributions (rates published quarterly by ANAF). At 1% on €60,000 turnover, the saving relative to 3% is €1,200 per year. The economics typically justify the hire even where the role is administrative — but the calculation tightens at low turnover.
Transitioning out of the regime
There are two ways to leave the microenterprise regime: voluntarily, or by exceeding the revenue threshold.
Voluntary exit is permitted once per fiscal year, provided the company has paid share capital of at least RON 45,000 (≈ €9,000) and at least two employees. It takes effect from the following quarter.
Threshold exit — crossing €100,000 in turnover — is automatic. It takes effect from the quarter in which the threshold is exceeded. The company calculates profit and pays 16% CIT from that quarter forward. The microenterprise tax already paid for earlier quarters is not retroactively adjusted.
For most founders, the transition from 1% turnover tax to 16% profit tax is favourable. By then, margins have grown enough that the effective tax rate on profits remains well below what they paid at home.
Worked examples: the tax stack at three turnover levels
Spreadsheet modelling beats abstract reasoning. Three concrete scenarios, all assuming a single-shareholder Romanian SRL with one full-time minimum-wage employee qualifying for the 1% rate, distribute all post-employment profit as dividends, and the founder is Romanian tax-resident:
Scenario A: €30,000 annual turnover
Microenterprise CIT at 1% on turnover = €300. Minimum-wage employment cost = approximately €11,000/year (gross + employer CAS + CASS contributions, rates published quarterly by ANAF). Distributable profit ≈ €18,700. Dividend tax at 8% = €1,496. Founder receives net dividend ≈ €17,200. CASS on dividends does not apply because total non-wage income falls below the 6-minimum-wage threshold (≈ €4,500). All-in effective tax: ~42% of turnover, dominated by the employment cost. Verdict: at this turnover, the 3% rate without an employee is often more efficient — €900 CIT, no €11,000 employment burden, €29,100 distributable.
Scenario B: €60,000 annual turnover
Microenterprise CIT at 1% = €600. Employment cost = €11,000. Distributable profit ≈ €48,400. 8% dividend tax = €3,872. CASS on dividends applies above €4,500 cumulatively, capped at 24 minimum wages (~€18,000) — at this scenario, CASS on the €48K dividend stream above the threshold ≈ €1,800. Founder net = €42,728. All-in effective rate: ~28% of turnover — meaningfully below most Western European equivalents.
Scenario C: €90,000 annual turnover
Microenterprise CIT at 1% = €900. Employment cost = €11,000. Distributable profit ≈ €78,100. 8% dividend tax = €6,248. CASS capped at the 24-minimum-wage ceiling = ~€1,800. Founder net = €70,052. All-in effective rate: ~22% of turnover. Crossing the €100,000 threshold mid-year would shift the balance from this point: the standard 16% CIT on profit would apply from the quarter the threshold is crossed, and the comparison flips on the margin profile of the underlying business — covered in detail in the Romanian SRL formation guide.
The headline number that founders should commit to memory: between €60K and €100K turnover, a single-employee Romanian SRL retains roughly 70–78% of revenue as net dividend in the founder's hands. That stack is among the lowest in the EU for owner-managed businesses, and it is what makes the 1% microenterprise rate the deciding factor in most relocator scenarios — covered comparatively in our SRL vs UK Ltd, GmbH, Dutch BV piece.
A short history: the regime since 2017
Founders new to Romania often ask whether the microenterprise regime is politically stable. The longer answer requires reviewing eight years of legislative motion. The regime in something like its current form was introduced by Law 227/2015 entering into force on 1 January 2016, with the 1% rate stabilising in 2017. Successive OUG (Ordonanță de Urgență) emergency ordinances have moved parameters since:
- 2017 — Microenterprise threshold raised to €500,000 turnover; rate set at 1% with employee / 3% without.
- 2018 — Threshold raised to €1,000,000 under OUG 79/2017, expanding the regime's reach significantly.
- 2023 — OUG 31/2023 lowered the threshold to €500,000 and tightened the qualifying-activity exclusions, removing consultancy and management activities from microenterprise eligibility under the principal-CAEN test (the CAEN trap detailed in our CAEN codes piece).
- 2024 — Law 296/2023 lowered the threshold to €500,000 initially, then to €100,000 for activities relying primarily on consulting income, with further reductions to the universal €100,000 threshold taking effect from 1 January 2025.
- 2025–2026 — Stabilisation around the €100,000 threshold with the employee-based 1%/3% dichotomy and 8% dividend tax structure intact. Successive draft tightenings have surfaced (proposed exclusions for e-commerce, passive-income SRLs, shareholder-concentration limits) — most have not survived to enactment.
The trajectory shows a regime that has survived every Romanian government since 2017 but has been narrowed substantially. The threshold ceiling has fallen from €1M to €100K in seven years, and the qualifying-activity definition has tightened. What has not changed: the 1% headline rate, the employee-based qualification, and the basic structural availability of the regime to small, owner-managed SRLs. Founders treating the regime as a perpetual feature should note the directional pressure; founders treating it as a mid-term planning tool over 5–10 years can rely on it with reasonable confidence — and the Forward planning section below covers how to model the eventual exit.
Forward planning
If you expect to reach the €100,000 threshold within your first year, model both regimes from inception. For some business models — particularly those with high margins and low cost bases — the standard CIT may be more favourable even below the threshold, because 16% of profit can be less than 1–3% of turnover when margins are slim.
There is also a structural question around whether a single SRL is the right vehicle or whether multiple entities are warranted. Romanian law does not prohibit owning multiple SRLs — but the shareholder concentration rule (no more than 25% in more than three micro entities) limits how far this architecture can be taken. For relocators worried about exit-tax substance, the Germany exit-taxation playbook covers when more than one entity helps and when it just multiplies risk.
We cover the regime in every discovery call. If you are planning your first Romanian structure, or restructuring an existing one, the microenterprise question is typically resolved in the first fifteen minutes. Book a call.
Frequently asked questions
Is the 1% rate temporary or scheduled to be removed?
No. The microenterprise regime is codified in Title III of Law 227/2015 (Articles 47–57) and has been in continuous force since 2017. It has survived every Romanian government since. Successive draft tightenings — the threshold has moved between €500K and €100K, the employee rule has shifted — but the regime itself is structural, not transitional.
How is the €100,000 threshold actually calculated?
On an annual basis, in RON, at the BNR exchange rate published on 31 December of the preceding year. For a company formed mid-year the threshold is prorated to the months remaining in the tax year from incorporation. Cross the threshold mid-quarter and the standard 16% CIT applies from the start of that quarter forward — not retroactively.
Can I pay dividends out of a microenterprise SRL?
Yes. Dividends are a separate tax stream from the microenterprise CIT. The 1% (or 3%) applies to the SRL's turnover; distributed dividends are then taxed at 8% withholding plus, in some cases, social contributions. The headline effective tax rate on owner-managed micro income is typically below 12% all-in.
What happens the moment I cross the €100,000 threshold?
From the quarter the threshold is crossed, the SRL transitions to the standard 16% CIT on net profit. The transition is not retroactive — earlier quarters remain taxed at 1% on turnover. The shift is automatic; no separate election is filed.
Does part-time employment qualify the company for the 1% rate?
No. The Fiscal Code requires a full-time contract individual de muncă with a minimum of eight hours per day, five days per week. Part-time, casual, or service contracts do not qualify the SRL for the 1% rate — only the 3% rate applies.
Can I switch from 3% to 1% mid-year by hiring an employee?
Yes. The 1% rate becomes available from the month in which the qualifying employment contract starts, provided the contract meets the 8h × 5d full-time requirement. This is one of the cleanest tax savings in the Romanian Fiscal Code — the calculation favours the hire even when the employee's output is administrative.
Talk to us
The microenterprise question is typically resolved in the first fifteen minutes of a discovery call. We model both regimes against your projected turnover, confirm whether your principal CAEN code (guide) qualifies you for the 1% rate, and outline the employment economics if you are weighing the employee requirement. Book a 30-minute call — written quote, no commitment, response within one business day.
Related guides
- Romanian SRL formation: the complete 2026 guide — the formation pillar — statutory basis, dossier, timeline
- CAEN codes: the principal-code question and the consultancy trap — why your CAEN choice gates microenterprise eligibility
- Romania's 10% personal income tax and 8% dividend tax — the owner-manager arithmetic — salary vs dividends
- Cost breakdown: what you actually pay to form an SRL — all-in cost in year one and beyond
- Exit taxation from Germany to Romania — the §6 AStG sequence for relocators