PFA vs SRL Romania 2026: tax, CAS/CASS, liability compared

Two different legal animals

Founders arriving in Romania are routinely told the PFA (persoană fizică autorizată) is the cheap, fast way in and the SRL (societate cu răspundere limitată) is the grown-up version they can graduate to later. That framing is wrong often enough to be dangerous. The two forms are governed by different statutes, taxed on different bases, and carry different liability. Choosing between them is a structural decision, not a question of how serious you are.

A PFA is regulated by Emergency Ordinance 44/2008 (OUG /), as amended by Law /. It is not a company. It is a natural person authorised to carry on economic activity in their own name, registered at the Trade Register (Oficiul Național al Registrului Comerțului, ONRC) and taxed under the rules for independent activity in Law 227/2015, the Codul Fiscal. There are no shares, no share capital, and no separate legal personality.

An SRL is a limited-liability company under Law 31/1990, the Companies Law. It has its own legal personality, its own patrimony, share capital divided into părți sociale, and it taxes its profit at the entity level before the founder ever sees a distribution. The mechanics of forming one are covered in our complete SRL formation guide.

The PFA is not a junior SRL. It is a different instrument with a different failure mode, and the failure mode is unlimited liability.

This piece compares the two on the axes that actually decide the choice: the tax treatment of each, the social-contribution exposure that diverges sharply once income rises, personal liability, credibility with banks and clients, and the path for converting a PFA into an SRL when the sole-trader form has been outgrown.

How a PFA is taxed

A PFA pays personal income tax at % on its net income. There is no corporate tax and no dividend, because there is no company and no distribution — the person and the business are the same taxpayer. Net income is either determined in the real system (sistem real: gross receipts minus deductible business expenses) or, for eligible activities, against a fixed norm of income (normă de venit) set annually by ANAF for each activity and county.

The norm-of-income option is only available below a ceiling. Where gross income exceeds the RON equivalent of €, in the prior fiscal year, the PFA is obliged to move to the real system from the following year, under Article of the Fiscal Code. Above that line the normă disappears and the PFA is taxed on actual net profit.

On top of the % income tax sit two social contributions, and these are where the PFA arithmetic turns. Both are pegged to the minimum gross salary, which for the contribution bands is RON , — the figure in force on January under Article of the Fiscal Code. Contributions are declared and paid through the declarația unică (form D), with the settlement deadline on May of the following year.

CAS (pension), %. Due only where annual net income reaches minimum salaries (RON ,). Between and minimum salaries the base is fixed at salaries, giving CAS of RON ,; at or above minimum salaries (RON ,) the base is salaries, giving CAS of RON ,. Below RON , CAS is optional.
CASS (health), %. The floor is minimum salaries (RON ,), so the minimum CASS is RON , even for a PFA earning almost nothing. From that floor upward CASS is levied at % of actual net income, up to a cap that rises to minimum salaries (RON ,) for income — a maximum CASS of roughly RON ,.

Both contributions are deductible in arriving at the net income on which the % tax bites, CASS having become deductible from . The practical headline is this: at modest income a PFA is genuinely light — % plus a floor CASS of RON , and no CAS. As net income climbs, CASS scales linearly and CAS steps in, and the combined burden grows in a way the SRL's does not.

How an SRL is taxed by comparison

An SRL is taxed at the company level first. A qualifying microenterprise pays 1% microenterprise guide% on turnover under Title III of the Fiscal Code, provided it stays below the €,Fiscal Code turnover threshold and keeps at least one full-time employee — the mechanics are in our 1% microenterprise guide. A company that does not qualify pays % corporate income tax on profit. Since 1% microenterprise guide January the old bar on consultancy and management activities has been repealed, so advisory firms can now sit inside the micro regime — a point that changes the PFA-versus-SRL calculus for consultants specifically.

The founder then extracts profit as a dividend, and here the second layer applies. The dividend withholding tax rose to % from January (Law /), up from % in — the full stack is set out in our dividend and personal-tax guide. Dividends also draw CASS, but on a banded, fixed basis rather than the PFA's linear one: RON , at salaries, RON , at salaries, and RON , at salaries — and there the liability stops.

That contrast is the fiscal heart of the decision. PFA CASS scales with income to a RON , ceiling; SRL-dividend CASS is capped at RON ,. A PFA earning RON , net pays CASS on the whole of it; a shareholder distributing the same amount as dividends caps out at the -salary band. At high income the SRL's two-layer tax is frequently the cheaper outcome once the CASS divergence and the RON , PFA pension charge are counted in.

The PFA wins on simplicity at low income and loses on social contributions at high income. The crossover is lower than most founders expect.

The contribution divergence that decides it

Reduce the two regimes to their moving parts and the divergence is stark. A PFA at high net income faces % income tax + CAS of RON , + CASS of up to RON ,. An SRL owner at comparable profit faces % (or %) at the company level + % dividend tax + banded CASS capped at RON ,. The SRL's percentages look higher on paper; the PFA's uncapped CASS and flat pension charge close and often reverse the gap.

Three thresholds are worth committing to memory when running the comparison:

RON , ( salaries) — below this a PFA pays no CAS at all, which is the sole-trader form's genuine low-income advantage.
RON , ( salaries) — above this both CAS (RON ,) and, for an SRL owner, the top dividend-CASS band (RON ,) are fully engaged.
€, turnover — the ceiling for the SRL's % micro regime, above which the company moves to % CIT. A PFA has no equivalent turnover regime; it is always on the %-of-net basis.

None of this can be answered in the abstract. It turns on the founder's margin, whether an employee is already on the payroll, and how much profit is actually being drawn versus retained. A high-margin consultant billing €,formation cost calculator with negligible costs is a very different case from a trader running €,formation cost calculator of turnover on a % margin. Run the numbers both ways with our formation cost calculator and microenterprise calculator before committing to a form.

Liability: the patrimoniu de afectatiune trap

Tax dominates the discovery-call conversation, but liability is where the PFA quietly diverges from the SRL in a way that matters more as the business grows. An SRL confines creditor claims to the company's own assets; the shareholder's personal wealth is, absent fraud or specific director misconduct, ring-fenced. That is the entire point of răspundere limitată.

A PFA has no such wall. Under Article of OUG 44/2008 (as amended by Law /), the sole trader answers for business obligations first from the patrimoniu de afectațiune — the pool of assets formally dedicated to the activity — and, where that pool is insufficient, from the rest of their personal assets. The affectation patrimony is not a liability shield; it is a bookkeeping boundary that creditors can step past once it is exhausted.

An SRL puts a wall between the business and the founder's house. A PFA puts a line in the accounts, and creditors are allowed to cross it.

For a freelance designer with no debt, no inventory, and professional-indemnity cover, that exposure is largely theoretical. For a business that signs supplier contracts, carries stock, takes on premises, or borrows, unlimited personal liability is a live risk that no amount of tax saving offsets. This single feature is why the PFA stops being appropriate well before it stops being cheap.

Credibility with banks and clients

The third axis is softer but real. A PFA and an SRL do not present identically to a bank, a corporate client, or a lender.

Banking. Both open Romanian accounts, but a PFA account is legally the individual's account tagged to the activity, and some banks apply tighter limits and heavier scrutiny to it. The commercial-banking landscape and what each bank expects is set out in our non-resident banking guide.
Credit. A PFA seeking a startup or working-capital facility is assessed as an individual with business income, not as a company with a balance sheet. Lenders frequently prefer — and price better for — an SRL with filed financial statements, because the bilanț gives them something to underwrite against.
Client perception. Enterprise and public-sector buyers in particular are more comfortable contracting with a societate than with a persoană fizică autorizată. For BC and small-BB work this rarely bites; for enterprise sales it can quietly cost contracts.

None of these is decisive on its own. Together they explain why founders who intend to raise finance, sell to large clients, or build something transferable tend to reach the SRL sooner than the pure tax maths alone would push them.

When the PFA is genuinely the better choice

A guide that concluded "always SRL" would be selling, not advising. The PFA is the right instrument for a real set of profiles, and pretending otherwise would be dishonest.

Low, stable net income — comfortably below RON ,, where no CAS is due and the only contribution is the RON , CASS floor. The SRL's two-layer tax and mandatory accounting rarely beat this.
Solo service work with no debt and no inventory — where unlimited liability is close to theoretical and professional-indemnity insurance covers the realistic downside.
Norm-of-income activities below the €, threshold, where the fixed normă de venit can produce a very low effective rate on above-norm earnings.
Testing an idea before committing to the fixed running costs of an SRL — monthly CECCAR accounting, annual financial statements, e-Factura infrastructure. A PFA can be wound down far more cheaply than a company.

The common thread is scale and risk. While income is low, liability exposure is negligible, and the administrative overhead of a company would swamp the tax it saves, the PFA is not a compromise — it is the correct answer. The mistake is staying in it past the point where those conditions still hold.

The switching path from PFA to SRL

Outgrowing a PFA is a good problem, and the transition is well-trodden. There is no statutory "conversion" of a PFA into an SRL — a PFA has no legal personality to convert — so the move is a parallel setup and wind-down, not a merger.

Incorporate the SRL in the ordinary way: act constitutiv, minimum share capital of RON for a new company under Law /, registered office, UBO declaration, and the ONRC filing. The full sequence is in our SRL formation guide and, for founders abroad, our remote formation note.
Move the activity across — novate or re-sign client contracts to the SRL, transfer or re-register any assets, and migrate the banking relationship. Where the PFA holds equipment, sell or contribute it to the SRL at fair value with proper documentation.
Elect the tax regime for the SRL — typically the % microenterprise regime if the activity qualifies and turnover sits below €,, remembering the full-time-employee condition. Consultants should note the post- removal of the consultancy bar.
Deregister the PFA at ONRC once the activity has fully moved, file the final declarație unică, and settle the last CAS and CASS for the part-year.

Timing matters. A clean SRL is registered in – working days, but banking and contract novation stretch the real changeover, so plan the overlap rather than deregistering the PFA prematurely. The cost side of the new company is broken down in our formation cost guide; the running compliance is the same as for any Romanian SRL and should be priced in from day one.

Frequently asked questions

Is a PFA cheaper than an SRL in tax terms?

At low net income, usually yes. A PFA pays % income tax plus a CASS floor of RON , and no CAS below RON ,. As income rises, PFA CASS scales linearly to a cap near RON , and CAS of up to RON , engages, while an SRL owner's dividend CASS is capped at RON ,. The crossover point is lower than most founders expect, so the answer depends entirely on income level and margin.

Does a PFA protect my personal assets like an SRL does?

No. Under Article of OUG /, a PFA answers for business debts first from the patrimoniu de afectatiune and then, if that is insufficient, from the rest of the individual's personal assets. There is no limited liability. An SRL under Law / confines creditor claims to the company, which is the main non-tax reason to prefer it as the business grows.

Can a consultant use the % microenterprise regime now?

Yes. The old rule capping consultancy and management income at % of revenue for micro eligibility was repealed with effect from January . Advisory firms can now qualify for the % microenterprise regime, provided they meet the €, turnover ceiling and the full-time-employee condition. This materially changes the PFA-versus-SRL comparison for consultants specifically.

What is the €, PFA threshold?

Where a PFA's gross income exceeds the RON equivalent of €, in the prior fiscal year, it must determine net income in the real system from the following year under Article of the Fiscal Code, rather than against a fixed norm of income. Below that line, eligible activities can use the normă de venit, which for some profiles produces a lower effective rate on above-norm earnings.

When are PFA taxes and contributions paid?

PFA income tax, CAS, and CASS are declared and settled through the declarația unică (form D), with the settlement deadline on May of the following year. The minimum salary used for the contribution bands is RON ,, the figure in force on January. An early-payment discount applies where the return is filed and paid ahead of the deadline.

How do I convert a PFA into an SRL?

There is no direct conversion, because a PFA has no legal personality. You incorporate a new SRL, move contracts, assets, and banking across, elect the SRL's tax regime, then deregister the PFA and file its final declarație unică. A clean SRL registers in – working days, but plan an overlap because banking and contract novation take longer than the Trade Register filing itself.

Talk to us

Whether a PFA or an SRL is the right vehicle turns on your income, your margin, and how much liability you are actually exposed to — and the honest answer is genuinely different for a low-income freelancer than for a growing business. On a -minute discovery call we run the comparison on your real numbers, flag the CAS and CASS crossover, and quote any formation in writing before work begins. Book a call — no charge, no commitment — and see the three formation tiers on the pricing page.

Related guides

Romanian SRL formation: the complete 2026 guide — the full incorporation sequence if you decide the SRL is the right form
The 1% microenterprise tax: who qualifies, when it stops — the company-level regime a PFA has no equivalent of
Romania personal and dividend tax in 2026 — the % dividend layer and the banded CASS that caps at RON ,
Share capital and share transfers in a Romanian SRL — the RON minimum and Law / rules once you have a company
CAEN codes and how they shape your Romanian tax regime — the principal-code question that governs micro eligibility for either form
Shelf companies in Romania: the case against buying one — if you are tempted to buy a ready-made SRL instead of forming one

PFA vs SRL in Romania: when the sole-trader form wins, and when it is a trap