The Romanian micro-company regime is the most frequently misdescribed tax measure in the region. It is presented to foreign investors as a low rate on turnover for small companies, which it is, and the description usually stops there. What it also is, and what almost nobody mentions until the assessment arrives, is a regime that measures eligibility across every enterprise linked to the Romanian company rather than across the Romanian company alone.
That distinction decides whether a group can use it. A single Romanian company with modest revenue qualifies easily. The same company, acquired by a European group or placed alongside a sister company under common ownership, may cease to qualify on the day of the acquisition, on facts that have nothing to do with its own trading. Two recent changes have made the point sharper, because the threshold has fallen and the rate structure has been simplified.
What the regime now is
The tax administration’s published position sets out the conditions in article 47(1) of the Fiscal Code, tested cumulatively at 31 December of the preceding fiscal year. The company must have realized revenue not exceeding the leu equivalent of 250.000 euro, and not exceeding 100.000 euro from 1 January 2026. Its share capital must be held by persons other than the state and the administrative-territorial units. It must not be in dissolution followed by liquidation. It must have at least one employee. It must have filed its annual financial statements where it is required by law to do so. And its shareholders holding, directly or indirectly, more than 25 per cent of the value or number of participations or of the voting rights must have designated it as the only legal person applying the micro-company regime.
The rate was simplified with effect from 1 January 2026. Emergency Ordinance 89/2025 replaced article 51(1) with a single sentence: the rate of tax on the income of micro-companies is 1 per cent. The earlier structure, under which 1 per cent applied below a 60.000 euro revenue level and 3 per cent applied above it or to companies carrying on listed activities, was removed, together with the associated paragraphs governing movement between the two rates. The list of activity codes that forced a company on to the higher rate went with them.
The result is a cleaner regime with a much narrower entrance. A 1 per cent rate is more attractive than the previous 3 per cent for anything above the old sub-threshold. A 100.000 euro ceiling admits a far smaller population of companies than a 250.000 euro one.
The threshold is measured across linked enterprises
The condition that catches groups is not in the list of conditions. It is in the way the first of them is computed. The revenue limit is verified by taking the revenue of the Romanian legal person cumulated with the revenue of the enterprises linked to it. The revenue counted for this purpose is the same revenue that forms the taxable base under article 53.
The Fiscal Code then defines linkage in four limbs. Two are worth setting out because they are the ones that operate inside a corporate group. A Romanian legal person is linked to another Romanian legal person where a person holds, directly or indirectly, more than 25 per cent of the value or number of participations or of the voting rights, or has the right to appoint or remove the administrator or the majority of the members of the board of administration, management or supervision, in both companies. Where the person holding those rights is itself a Romanian legal person, the company running the test must also add that person’s revenue.
The fourth limb reaches outside the corporate form. Where the Romanian company has one or more shareholders holding, directly or indirectly, more than 25 per cent, and those shareholders also carry on economic activity through an authorized natural person, an individual enterprise, a family enterprise or another unincorporated organized form, the revenue of that activity is cumulated as well.
How indirect holdings are computed
The administration’s guidance works the indirect test through an arithmetic that surprises people who expect a group to be delimited by control. A Romanian company holds 80 per cent of a second company, which holds 60 per cent of a third. The indirect holding in the third is the product, 48 per cent, which exceeds the threshold. Where the third company then holds 50 per cent of a fourth, the first company’s total holding in the fourth is 54 per cent, composed of a direct holding of 30 per cent and an indirect holding of 24 per cent computed as 80 per cent of 60 per cent of 50 per cent.
The consequence stated in the same guidance is that where the first company is the one designated by the shareholders to apply the micro-company regime, the revenue threshold is tested on the sum of the revenue of all four companies. A company with 40.000 euro of its own revenue is outside the regime because three companies it is linked to have revenue of their own.
That is the entire trap in one sentence. Nothing about the candidate company changed. The perimeter around it did.
The single designation rule
Alongside the aggregation there is a separate and equally decisive condition. Where shareholders hold, directly or indirectly, more than 25 per cent of the value or number of participations or of the voting rights, only one legal person established by those shareholders may apply the micro-company regime, and that company must be the one they designated.
For a family group with several Romanian companies this is a straightforward allocation exercise, and it should be revisited each year rather than settled once. For a European group acquiring a Romanian target it is a different matter. If the acquirer already holds another Romanian company through the same chain above the 25 per cent line, the acquisition itself may exhaust the single designation, and one of the two companies moves to the ordinary corporate regime.
Nobody warns of this at the point of acquisition, because it is not a feature of the target and it is not a feature of the buyer. It is a feature of the combination, and it appears only when both sides are looked at together. In one mandate we identified the exposure during a review of the buyer’s existing Romanian holdings rather than during the review of the target, which is where it will usually be found.
What the employee condition actually requires
The employee condition is more flexible than its wording suggests, and it is the condition most often failed by accident. The requirement is at least one employee, subject to the exception in article 48(3) for a newly established legal person opting into the regime.
An employee for this purpose is a person engaged under an individual employment contract on a full-time basis under the Labour Code. The condition is also treated as satisfied where the company has part-time employment contracts whose fractions of a full norm, added together, represent the equivalent of one full-time norm, and where the company has concluded administration or mandate contracts under the law and the remuneration under them is at least at the level of the guaranteed gross national minimum wage.
The third route is the one that suits a holding-adjacent Romanian company with a resident administrator and no staff. It requires the remuneration actually to be set at the minimum level and actually to be paid, and the contract to be in place rather than contemplated. Where the employment condition ceases to be met, the company moves to corporate income tax from the quarter in which that happens, and the change is not deferred to the following year.
Leaving the regime, and what leaving costs
Exit is quarterly, not annual. The company applies corporate income tax from the quarter in which it exceeds the revenue ceiling, ceases to satisfy the employee condition, fails to file the required financial statements, begins an excluded activity, or a shareholder comes to hold more than 25 per cent in another micro-company. The revenue limits are checked on revenue recorded cumulatively from the start of the fiscal year, and the exchange rate used to convert to euro is the one in force at the close of the preceding financial year.
The administration’s worked examples make the timing concrete. A company with cumulative revenue of 890.000 lei at 30 June, whose linked authorized natural person recorded 395.000 lei, reaches a total of 1.285.000 lei, which exceeds the leu equivalent of the threshold, and the company owes corporate income tax from the second quarter of that year. The test was applied at the half year, and the change of regime took effect from that quarter.
On exit the ordinary rules apply. Corporate income tax is charged at 16 per cent of the fiscal result, and the minimum turnover tax under article 18^1 applies, at a rate within its formula of 0,5 per cent for the 2026 fiscal year. A company that leaves the micro regime because the group perimeter grew therefore moves from 1 per cent of revenue to 16 per cent of profit with a turnover-based floor underneath it. On thin margins that is a substantial change, and it arrives mid-year.
How to hold it in a European structure
The regime is not incompatible with a Dutch holding company or with any other European parent. What it is incompatible with is inattention. A parent that holds a single Romanian company, keeps its revenue below the ceiling, keeps one qualifying employment or mandate relationship in place, files the accounts and does not acquire a second Romanian company through the same chain, will keep the regime.
The design decisions that follow are practical rather than clever. Where a group needs two Romanian companies, it should decide in advance which one is designated and price the other on the ordinary regime, rather than discovering the allocation after both have filed. Where a Romanian company is approaching the ceiling, the calculation should be run on the linked perimeter monthly, because the exit is quarterly and there is no relief for finding out late. And where an acquisition is contemplated, the buyer’s own Romanian holdings belong in the tax due diligence alongside the target’s.
The wider point is that this is a small company regime that behaves like a group regime. Every threshold in it is expressed per company and computed per perimeter. Any analysis that reads the thresholds without reading the perimeter will produce the right arithmetic on the wrong figures, and it will do so confidently, which is the reason the mistake survives all the way to the assessment.