Romania's 1% micro-company tax — for foreigners & nomads.

The 1% micro regime in depth: eligibility and limits

Romania's micro-company regime lets eligible small companies pay a flat 1% on turnover at company level instead of the standard 16% on profit. The headline rate is what makes it one of the most talked-about regimes in the EU, but it comes with conditions. The core ones are a turnover ceiling of €100,000 per year and the requirement to employ at least one full-time person. There are also activity and ownership restrictions: certain sectors are excluded, and shareholder structures involving multiple micro-companies can fall outside the regime. If your turnover crosses the cap during the year, the company moves to the 16% profit tax from that point.

Compared with profit tax, the micro regime is attractive precisely because it ignores costs — you pay on what you bill, not on what you keep. For a profitable, low-cost service business that stays under the cap, 1% of turnover is usually far less than 16% of profit. For a high-cost or loss-making business, profit tax can be the better deal, since 1% of a large turnover may exceed 16% of a small profit. What disqualifies you is usually breaching the cap, dropping the employee, or operating in an excluded activity.

Why foreigners use it

Can a non-resident really use it? Yes — a 100% foreign-owned Romanian SRL can use the micro regime if it meets the conditions. Your personal tax residency is a separate matter.

Will I stay eligible? Only while you meet the cap, employee and activity rules. These conditions are revised by Romanian law periodically, so confirm the current rules before incorporating and as your turnover grows.