How to Register as a Sole Trader (PFA) in Romania

Becoming a sole trader, known in Romania as a PFA (Persoană Fizică Autorizată), is a popular choice for freelancers, consultants and independent professionals. It offers a simple way to run a business without setting up a limited company. This guide walks you through the key steps and obligations.

What is a PFA?

A PFA is a natural person authorised to carry out economic activities independently. It is not a separate legal entity, meaning you are personally liable for business debts. This structure suits individuals offering services such as IT, design, consulting, tutoring or crafts.

Step 1: Choose your activity code

Before registering, you must identify the appropriate CAEN code (Clasificarea Activităților din Economia Națională) for your business activity. The CAEN code determines your eligibility for certain tax regimes and may influence required authorisations. You can find the full list on the website of the National Institute of Statistics.

Step 2: Prepare your documents

To register a PFA, you typically need:

• Valid ID or passport
• Proof of address
• A declaration of your chosen CAEN code(s)
• A statement that you meet the legal conditions for carrying out the activity

Some activities, such as those in healthcare or education, may require additional qualifications or permits.

Step 3: Register with the Trade Register

Submit your application to the National Trade Register Office (ONRC). You can do this in person, by post or online through the dedicated portal. The registration process usually takes a few working days. Once approved, you will receive a certificate of registration and a unique registration code.

Step 4: Tax registration and social contributions

After registration, you are automatically registered for tax purposes with ANAF (the National Agency for Fiscal Administration). As a PFA, you must pay:

• Income tax at a flat rate on your net income
• Social health insurance contributions based on your chosen income level
• Pension contributions if you are not otherwise insured

If your annual turnover exceeds the VAT threshold, you must also register for VAT.

Record keeping and annual filing

You are required to keep simple accounting records, usually in a ledger of income and expenses. Each year, you must submit a unique declaration to ANAF by the deadline, reporting your income and calculating your final tax and contributions. Late filing can result in penalties.

Common pitfalls to avoid

• Choosing the wrong CAEN code, which can lead to tax or legal issues
• Not paying social contributions on time, which affects your health coverage and pension rights
• Mixing personal and business finances, making accounting messy
• Failing to register for VAT when you exceed the threshold

Setting up a PFA is relatively straightforward, but understanding the tax and contribution rules is essential for smooth operation. If in doubt, consult a local accountant familiar with Romanian sole trader regulations.