- branch office vs subsidiary romania
- branch vs subsidiary romania
- sucursala vs filiala romania
- foreign company romania structure
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Branch Office vs Subsidiary in Romania 2026: Which Structure Is Right?
Updated 2026. This article has been reviewed to reflect the legal framework in force in 2026.
Branch Office vs Subsidiary in Romania: Complete 2026 Guide
When expanding into Romania, foreign companies face a critical decision: should they establish a branch office (sucursală) or incorporate a subsidiary (filială/SRL)? This guide provides a comprehensive comparison to help you make the right choice.
Key Differences at a Glance
| Feature | Branch Office (Sucursală) | Subsidiary (SRL/SA) |
|---|---|---|
| Legal personality | None (extension of parent) | Separate legal entity |
| Liability | Parent fully liable | Limited to share capital |
| Taxation | 16% CIT on Romanian profits | 16% CIT (or 1% micro) |
| Micro-enterprise eligibility | ❌ Not eligible | ✅ Eligible (1% rate) |
| VAT registration | Mandatory if taxable | Based on threshold |
| Formation time | 5-7 days | 3-5 days |
| Share capital | None required | RON 500 minimum (SRL) |
| Profit repatriation | Direct (no WHT) | 16% dividend WHT |
| Local management | Representative required | At least 1 director |
| Annual accounts | Filed with parent's | Separate filing |
Branch Office (Sucursală)
What Is a Branch Office?
A branch office is a direct extension of the foreign parent company in Romania. It has no separate legal personality — the parent company bears full liability for all branch operations.
Advantages
Disadvantages
Best Suited For:
- Companies testing the Romanian market before full commitment
- Service providers with temporary projects
- Companies that need to offset Romanian losses against home country profits
- Regulated industries requiring parent company backing
Subsidiary (SRL — Societate cu Răspundere Limitată)
What Is a Subsidiary?
A subsidiary is an independent Romanian legal entity owned by the foreign parent. The most common form is the SRL (limited liability company), which provides liability protection and maximum flexibility.
Advantages
Disadvantages
Best Suited For:
- Long-term market presence in Romania
- Companies wanting liability protection
- SMEs that can benefit from the 1% micro-enterprise tax
- Businesses planning to hire local employees
- Companies building local partnerships and client relationships
Formation Process Comparison
Branch Office Registration
Subsidiary (SRL) Incorporation
Decision Framework
Choose a BRANCH if:
- ✅ You're testing the market (1-3 year horizon)
- ✅ You need to offset Romanian losses against parent profits
- ✅ Revenue will exceed €500K (no micro-enterprise benefit anyway)
- ✅ You want zero dividend withholding on profit repatriation
- ✅ The parent company is comfortable with unlimited liability
Choose a SUBSIDIARY (SRL) if:
- ✅ You plan a long-term presence in Romania
- ✅ Revenue will be under €500K (to benefit from 1% micro tax)
- ✅ You need liability protection
📖 Recommended reading: PFA vs SRL Romania for Foreigners: Which Structure to Choose in 2026
Converting Between Structures
Branch – Subsidiary
It's possible to convert a branch into a subsidiary, but the process involves:
Subsidiary – Branch
Rarely done, as it involves liquidating the SRL and opening a branch, losing the limited liability protection.
How Pantilimon Avocat Can Help
We guide foreign companies through the structure decision:
- ✅ Tax impact analysis (branch vs subsidiary scenarios)
- ✅ Company formation (SRL, SA, or branch registration)
- ✅ Transfer pricing documentation
- ✅ Ongoing compliance and governance
- ✅ Structure conversion advisory
📞 Book a consultation to determine the optimal structure for your Romanian operations.
This article is for informational purposes only and does not constitute legal or tax advice. Last updated: March 2026.