Setting up a PFA

1What is a PFA

A PFA means you work in your own name, with your name followed by "PFA". It is governed by Government Emergency Ordinance no. 44/2008. You have no share capital and no partners, and the accounting is simple: you record what comes in and goes out, and once a year you file the single tax return. Many people do it themselves or with minimal help from an accountant.

On the other hand, for business debts you are liable first with the assets assigned to the business and, if those are not enough, with the rest of your assets.

2Who it suits

• Trades and services: electrician, plumber, tailor, photographer, programmer, consultant.
• People who work alone or with very few others.
• People who want to start quickly and with low costs.

3Conditions and limits

• Age: you must be at least 18 years old.
• Activities: at most 5 classes of the CAEN code.
• Employees: you can work alone or with at most 3 employees.
• The professional address can be your home, with the document for the premises.
• Qualification: for some trades you need a diploma or a certificate.
• You can have a PFA and an employment contract at the same time.

4What we need from you

• ID card
• For the professional address: the title deed or, where applicable, the lease. We draw up the loan-for-use agreement ourselves.
• What you want to do, so we can choose the up to 5 CAEN codes
• Your diploma or certificate, only if the activity requires a qualification

We prepare the registration application and the statements ourselves.

5The steps

1. Free consultationWe check whether a PFA is the right choice or whether another form suits you better.
2. The nameWe check and reserve the name at the Trade Register.
3. The documentsWe prepare the application and the statements, you sign.
4. FilingWe file the application with the Trade Register.
5. The certificateYou receive the registration certificate and can start trading.

6Taxes, in short

• Income tax: 10% of net income, that is, receipts minus deductible expenses.
• Income norm: for some activities you can pay tax on a fixed amount set per county, as long as receipts stay below 25,000 euros a year.
• CASS (health): 10%, usually calculated on at least 6 minimum wages a year, with exceptions for those who already pay health contributions from other income.
• CAS (pension): 25%, due if net income reaches at least 12 minimum wages a year.
• Returns are filed with ANAF through the single tax return.

The thresholds change almost every year. At the consultation we tell you what applies in your case.

7Frequently asked questions