Micro-enterprise

Micro-enterprises have long been an important option for small business owners, because their tax regime gives a real advantage to small investments.

A micro-enterprise is a limited liability company with a special tax status: it historically allowed a 3% tax on revenue instead of 16% tax on profit. The system particularly benefits companies with significant revenue but low costs.

Besides the choice between the two types of tax, micro-enterprise status comes with a set of strict conditions.

One of the main conditions concerns the revenue ceiling, which was the RON equivalent of €500,000. The revenue also had to come from sources other than banking, capital markets, insurance, gambling, consultancy or management.

The number of employees was limited to between one and nine; the state or local authorities could not hold share capital, nor could a legal person with more than 250 employees.

2024 brought changes to the regime, including new rules on taxation and the revenue ceiling. The draft ordinance amending the Fiscal Code set the ceiling at the RON equivalent of €500,000 and made micro-enterprise tax mandatory for entities that met all the conditions on 31 December of the previous year.

The condition of having between one and nine employees was dropped.

All companies that paid profit tax in 2023 and had revenue under €500,000 that year could become micro-enterprise taxpayers from 1 January 2024.

Switching from profit tax to the micro-enterprise regime requires filing a notification with the tax authority; for 2024 the deadline was 31 January 2024.

Changes like these can be confusing when choosing the best option in today’s business environment. Knowing the latest rules in detail, and anticipating likely legislative changes, is essential to choosing the right structure for your investment.