Romania has spent the last few years narrowing its own low-tax alternative for founders, and 2026 is the sharpest cut yet: the microenterprise turnover threshold dropped from 250,000 EUR to 100,000 EUR, the 3% rate disappeared entirely in favour of a flat 1%, and - the change that actually costs money - a microenterprise now has to employ at least one full-time person to keep the regime. That is exactly why Romanian founders are increasingly looking at Georgia instead. This guide works through what the fiscal residence questionnaire actually requires on departure, whether Romanian CFC rules reach a Georgian entity, and what CAS and CASS really cost a solo freelancer once the microenterprise route stops being the easy answer.
What a Romanian freelancer actually pays, here and there
Take a Romanian freelance developer registered as a PFA (persoană fizică autorizată, Romania's sole-trader form) invoicing 240,000 RON a year, roughly 48,000 EUR. Under the standard real-income system, income tax is a flat 10% on net profit - 24,000 RON on a business with minimal deductible costs.
Two mandatory social contributions sit on top. CASS, the health contribution, is 10% but capped: once annual income reaches 24 minimum gross salaries, the contribution base is capped at that figure rather than rising further, which at the 2026 minimum wage of 4,050 RON works out to a fixed 9,720 RON a year. CAS, the pension contribution, is 25% and becomes mandatory once net income passes 12 minimum gross salaries a year (48,600 RON), with a mandatory minimum contribution base at that same level - 12,150 RON a year at minimum.
| Romania (PFA: income tax + CAS + CASS) | Georgia (Small Business Status) | |
|---|---|---|
| Turnover / net income | 240,000 RON (~48,000 EUR) | Same |
| Income tax | 24,000 RON (10%) | ~2,400 RON-equivalent (1%) |
| CAS (pension, capped) | ~12,150 RON | None required by the status itself |
| CASS (health, capped) | ~9,720 RON | None required by the status itself |
| Total, all-in | ~45,870 RON (~19%) | ~2,400 RON-equivalent (~1%) |
Many Romanian founders were routing income through a microenterprise (a company, not a PFA) specifically to access 1-3% tax on turnover. For 2026, Romania cut the eligible turnover ceiling from 250,000 EUR to 100,000 EUR and scrapped the 3% band entirely, leaving a flat 1% - but a microenterprise must now employ at least one full-time worker to keep the regime, and dividend tax on money actually taken out rose from 10% to 16% at the same time. A structure that used to need nothing but a company and a low turnover now needs a real employee on payroll. Georgia's Individual Entrepreneur route asks for neither an employee nor a turnover ceiling anywhere near this tight, which is exactly why the comparison has shifted in Georgia's favour over the last two years rather than staying static.
Does Georgia's 1% actually apply to your income in the first place
None of the Romanian math above matters until the 1% genuinely applies, which is a Georgian-side question first. Small Business Status taxes Georgian-source income, and for services that generally means work physically performed in Georgia or income earned while you are actually a Georgian tax resident - not work invoiced through a Georgian registration while sitting in Bucharest or Cluj. We cover the mechanics in full in Georgia's 1% tax and the source test specifically in Georgian-source income rules, and neither test changes for a Romanian national. Consulting, legal, medical and licensed activities sit outside the regime regardless of nationality.
What Romania does when you leave
Romanian tax residency is established through domicile, centre of vital interests, or physical presence exceeding 183 days in any 12-month period, per ANAF's own published guidelines. These operate as alternative tests, not cumulative ones, so genuinely breaking Romanian residency means closing all three - no domicile retained, no centre of vital interests left behind, and a day count that stays under the threshold.
Anyone who has spent more than 183 days abroad within a 12-month period must file the fiscal residence questionnaire, the Chestionar pentru stabilirea rezidenței fiscale, within 30 days of completing that period, along with supporting documents. This is the filing that actually formalises the change on the Romanian side, and skipping it leaves your Romanian tax status ambiguous rather than resolved. Romania does not run a formal exit tax - there is no deemed disposal of unrealised gains simply for ceasing tax residency, which puts it in a materially better position than several neighbouring EU countries in this cluster.
Romanian CFC rules were introduced from 2018 under the Fiscal Code, reaching a foreign entity where a Romanian taxpayer holds more than 50% of it and its tax rate is less than half the Romanian equivalent, with an exemption for genuine economic activity and for entities whose relevant passive income falls below a third of total revenue. The provisions sit inside Title II of the Fiscal Code - the corporate income tax title, not the personal income tax title - which is the same structural placement that Czechia uses for its own CFC rule, one we confirmed explicitly excludes individuals from being a controlling entity. We could not find an equally explicit statement for Romania confirming the same carve-out, so we are not treating it as settled either way. The practical read: a Romanian PFA earning income directly has no separate foreign entity in the picture at all, so the CFC question does not arise for an IE. A Georgian LLC held personally is the structure worth checking properly before assuming either outcome, rather than assuming the Czech-style individual exemption applies here too.
Romania does not maintain a separate national blacklist the way some EU states do, relying on the EU's own non-cooperative jurisdictions list, which has never included Georgia. The treaty between Romania and Georgia has been in force since 1999, confirmed on Georgia's Ministry of Finance treaty list - see Georgia's double tax treaties for how a genuine dual-residency dispute actually gets resolved.
CAS and CASS obligations stop once you formally cease PFA activity in Romania - deregistering with ONRC and filing the corresponding cessation declarations - the same principle as the tax filing itself.
The steps, in order
- Confirm your activity qualifies for Small Business Status. Consulting, legal, medical and licensed activities are excluded outright, whatever structure you currently use in Romania.
- Choose between an IE and an LLC carefully. A Georgian IE keeps you clear of the CFC question entirely; an LLC held personally needs its Romanian CFC exposure checked before you assume it is safe.
- Register the Georgian structure. In person, an Individual Entrepreneur with Small Business Status typically takes a few days; under power of attorney through remote company registration, two to three weeks.
- Genuinely relocate your domicile and vital interests, not just your invoicing address.
- Track the 183-day threshold and file the Chestionar within 30 days of completing it.
- Deregister your PFA activity with ONRC and file the CAS/CASS cessation declarations once the move is genuine.
- File your final Romanian return (Declarația Unică) covering the period you were still resident that year.
- Set up Georgian monthly compliance, which runs independently of how the Romanian side closes out.
Timeline and cost
The Georgian side moves quickly - a few days in person, two to three weeks remotely under power of attorney. The Romanian side is procedural: the Chestionar has a fixed 30-day filing window once the 183-day threshold is crossed, and deregistering a PFA is a straightforward administrative step rather than a multi-month process. Most of the real planning time should go into the IE-versus-LLC decision given the unresolved CFC question, not into navigating Romanian bureaucracy on the way out.
We'll work through your Romanian residency position, whether an IE keeps you clear of the CFC question entirely, and what the fiscal residence questionnaire actually needs to show, before you register anything here. Written summary included.
See what it costs
The verdict for a Romanian national
Georgia is a strong fit for most Romanian freelancers and IT contractors, and the case has strengthened rather than weakened over the last two years as Romania's own microenterprise regime has been cut back. There is no exit tax, the treaty has been in force since 1999, and a Georgian IE keeps a solo freelancer clear of the CFC question that complicates the LLC route.
The honest caveat sits with anyone planning an LLC rather than an IE: Romania's CFC rules have not been confirmed to exclude individuals the explicit way Czechia's have, so that structure needs a direct check before you assume the same protection applies. For a solo freelancer using an IE, none of that ambiguity is in play.
For the closest domestic analogue to Georgia's own regime among Romania's EU neighbours, see moving from Czechia to Georgia. Our full country-by-country guide compares the treaty position and headline trap across every country we cover, and a free consultation is the fastest way to check whether your specific structure changes the conclusions above.
Key takeaways
- Romania's microenterprise turnover threshold fell to 100,000 EUR for 2026, the rate simplified to a flat 1%, but a mandatory full-time employee is now required to keep the regime - a real new cost.
- A Romanian PFA pays roughly 19% all-in once income tax, CAS and CASS are combined - a genuine gap against Georgia's 1%, though smaller than the 10% headline rate alone suggests.
- Romanian residency breaks only once domicile, centre of vital interests, and the 183-day count all fail - they are independent tests.
- The fiscal residence questionnaire (Chestionar) is due within 30 days of completing 183 days abroad. There is no Romanian exit tax.
- Romanian CFC rules sit in the corporate tax title of the Fiscal Code; a Georgian IE avoids the question entirely, while an LLC's exposure has not been confirmed either way and needs checking directly.
- The Romania-Georgia treaty has been in force since 1999, and Georgia has never appeared on the EU non-cooperative list Romania applies.
Frequently asked questions
What changed in Romania's microenterprise regime for 2026?
The eligible turnover ceiling fell from 250,000 EUR to 100,000 EUR, the old 1-3% split simplified to a flat 1%, and a microenterprise must now employ at least one full-time worker to qualify - a genuine new cost that previously did not exist. Dividend tax on money actually distributed also rose from 10% to 16%.
How much does a Romanian PFA actually pay in tax and contributions?
Roughly 19% all-in on a typical freelance income: 10% flat income tax, plus CASS (health, 10%, capped once income passes 24 minimum wages) and CAS (pension, 25%, mandatory once income passes 12 minimum wages, with a minimum contribution base at that level).
Does Georgia's 1% apply automatically once I register?
No. It applies to Georgian-source income under Small Business Status, which for most services means work performed in Georgia or income earned while you are a Georgian tax resident. Consulting, legal, medical and licensed activities are excluded from the regime regardless of nationality.
How is Romanian tax residency broken?
Through three independent tests - domicile, centre of vital interests, and 183 days of physical presence in a 12-month period. All three have to fail for residency to genuinely end; any one of them being true keeps you Romanian-resident.
What is the fiscal residence questionnaire and when is it due?
The Chestionar pentru stabilirea rezidenței fiscale must be filed within 30 days of completing 183 days of absence from Romania in a 12-month period. It is the filing that formally records your change in tax residence with ANAF.
Does Romania have an exit tax?
No. Unlike several other EU countries in this cluster, Romania does not deem unrealised gains realised simply because you cease to be tax resident. There is no capital gains charge triggered purely by departure.
Do Romanian CFC rules reach a Georgian Individual Entrepreneur?
Generally not, since a PFA-style sole trader has no separate foreign entity for the rule to attach to in the first place - the income is legally the individual's own. The rules are built to reach a controlled foreign company, not a person's direct foreign earnings.
Do Romanian CFC rules reach a Georgian LLC?
This is genuinely unresolved from public sources. The rules sit in the corporate tax title of the Fiscal Code, the same placement Czechia uses for a rule that explicitly excludes individuals - but we could not find an equally explicit Romanian confirmation, so an LLC held personally should be checked directly rather than assumed safe.
Is there a tax treaty between Romania and Georgia?
Yes, in force since 1999, confirmed on Georgia's Ministry of Finance treaty list, with a standard tie-breaker article for resolving a genuine dual-residency dispute.
Should a Romanian freelancer use a Georgian IE or an LLC?
An IE is the lower-risk choice for a solo freelancer, since it keeps the unresolved Romanian CFC question out of the picture entirely. An LLC makes sense with partners or significant reinvested profit, but its Romanian CFC exposure is worth checking properly first, given the ambiguity above.