US Company Formation from Romania (2026): Microîntreprindere vs US LLC, 16% Dividend Tax, PFA, CASS, the US–Romania Treaty and Delaware Subsidiaries for SRLs

Romania's IT sector grew up on generous tax rules: a salary tax exemption for programmers, a cheap micro-enterprise regime, and low dividend tax. Over 2023–2026 most of that was scaled back. The IT income tax exemption ended. The micro-enterprise threshold fell to €100,000. And from 1 January 2026, dividend tax rose to 16%, up from 8% in 2024 and 10% in 2025.

So Romanian developers, agencies and founders are once again asking whether a US LLC could do better. This guide sets out the Romanian rules as they stand in 2026, explains how Romania treats a US company and when it becomes Romanian-resident, and compares US LLC formation with US C-Corp formation, with the US–Romania treaty as the backdrop.

In short: Romanians can own 100% of a US LLC or C-Corporation, formed remotely. In 2026 a Romanian microîntreprindere pays 1% of revenue up to €100,000, a normal SRL pays 16% corporate tax, and dividends to individuals are taxed at 16%, plus CASS (10% health contribution) on dividend income above set thresholds. A US company managed from Romania can be a Romanian tax resident. The US–Romania treaty limits US withholding on dividends to 10%, on interest to 10% and on most royalties to 10%. With UCB, a Wyoming LLC with EIN is $249 and a Delaware corporation with EIN is $358, all-in.

Romania's rules in 2026

Micro-enterprise rules also limit how many micro-enterprises one shareholder holding more than 25% can own. Check your position with your contabil.

What this means for a typical IT freelancer

For a developer billing €90,000 a year through a micro SRL with one employee, the total burden is roughly: 1% on revenue, payroll costs for the employee, 16% on dividends, and CASS on the dividends up to the cap. That is still competitive in Europe. A US company has to beat that, after paying for compliance in two countries, to be worth it.

How Romania treats a US company

Classification

The IRS disregards a single-member LLC. Romania does not follow the US label automatically. A US LLC is a legal person under its state law, with limited liability, and Romanian practice generally treats it as a foreign legal person, not as transparent. Distributions to a Romanian individual are then foreign dividends, taxed at 16% in Romania, plus CASS. The US withholds nothing on a disregarded LLC's distributions, so there is no US tax to credit.

Place of effective management

Since 2016, a foreign company with its place of effective management (sediul conducerii efective) in Romania is a Romanian tax resident. A single-member LLC run by its owner from Cluj is managed from Romania. ANAF can then treat it as a Romanian company:

• 16% profit tax on its worldwide profits (the micro regime is for Romanian legal persons and would not normally apply);
• Romanian bookkeeping and filings;
• 16% dividend tax plus CASS on distributions.

That is worse than a micro SRL and similar to a normal SRL, with extra cost.

CFC rules

Romania's CFC rules apply to Romanian companies that control low-taxed foreign entities with mainly passive income. An SRL that owns a US LLC paying no US tax should keep the LLC's role active and document its transfer pricing.

The US–Romania treaty

The 1973 treaty, one of the older US treaties, limits US withholding on payments to Romanian residents:

It also limits US tax on business profits to a US permanent establishment. Claim it on Form W-8BEN or W-8BEN-E (see W-8BEN-E vs W-8BEN explained).

US LLC formation from Romania

US tax position

A single-member LLC with a non-resident owner pays no US income tax if the owner works from Romania and the LLC has no US office, employees or dependent agents (see effectively connected income explained). The LLC files Form 5472 with a pro forma Form 1120 every year, and the penalty for missing it is $25,000 (see Form 5472 explained).

Example: three ways to bill a US client

These are illustrative figures, not a client case, at RON 4.4 to the dollar.

Andrei is a mobile developer in Iași with US$100,000 (about RON 440,000, or roughly €87,000) of annual revenue from a US fintech start-up.

• Micro SRL with one employee: 1% on revenue, payroll for the employee (often Andrei himself on a minimum salary), then 16% dividend tax and capped CASS on what he takes out.
• PFA: 10% income tax on net income, with CAS and CASS on capped bases.
• US LLC run from Iași: likely a Romanian-resident company at 16% profit tax, then 16% dividend tax and CASS. He also pays for US compliance and a Romanian accountant who knows foreign companies.

The micro SRL wins, and the LLC loses on tax. Andrei's client asks for a US vendor, so his SRL forms a small Wyoming LLC as a subsidiary. The LLC signs with the client and pays the SRL for development at an arm's-length rate, keeping only a small margin for its own costs. The revenue stays in Romania, under the micro regime while it is under €100,000.

When revenue passes €100,000, the SRL leaves the micro regime and pays 16% profit tax, but the structure stays the same.

US C-Corp formation from Romania

US tax position

A US corporation pays 21% federal tax on its profits plus state tax, and files Form 1120 and Form 5472 every year (see the 21% corporate tax explained and the C-Corp guide for non-residents). Its dividends to a Romanian SRL are withheld at 10% under the treaty, and Romanian participation exemption rules generally exempt dividends received by an SRL holding at least 10% for one year.

Start-ups raising US money

Romanian founders, from Bucharest and Cluj to Timișoara, have built companies that raised from US investors and went on to large exits. The standard structure is a Delaware C-Corporation at the top, with the Romanian SRL as its development subsidiary:

• Investors buy preferred shares in the Delaware company.
• The Romanian SRL invoices the Delaware company for development at cost plus a margin, taxed in Romania at 16%.
• The founders hold Delaware shares. When they sell, the gain is generally taxed in Romania as a capital gain, not in the USA.
• The flip, exchanging SRL shares for Delaware shares, should be planned with Romanian tax advice.

See raising US investment as a foreign founder.

Example: a Timișoara automotive software firm

Take an illustrative case: a Timișoara company that writes embedded software for car makers opens a US office near Detroit with three engineers to support US customers. It forms a Delaware corporation that employs them and registers in Michigan. The US company pays US tax on its own margin, and dividends to the SRL carry 10% US withholding. See US subsidiary for a foreign company and hiring in the USA as a non-resident company.

Which state

• Wyoming or New Mexico for a small LLC owned by an SRL.
• Delaware for a start-up or subsidiary.
• The state where US staff work.

See best state for non-residents and the state selector.

What it costs

UCB's prices include state fees and the first year of registered agent service:

• Wyoming LLC with EIN: $249, or $348 with a US bank account application.
• Delaware corporation with EIN: $358.

A Wyoming LLC costs $121 a year to keep active, or $421 with the annual federal return. A Delaware corporation costs $578 a year. A US business address with your own suite number is $60 a year. See what a US LLC costs every year.

Documents and banking

For an individual, a Romanian passport or ID card and proof of address. For an SRL, a certificat constatator from the ONRC, translated into English, and a shareholder decision approving the US company. US fintech banks accept Romanian owners readily. See US business bank accounts for non-residents and Stripe for non-residents.

Mistakes to avoid

• Expecting a US LLC to beat a micro SRL for work done in Romania.
• Running a US LLC from Romania and forgetting that it may be Romanian-resident.
• Not declaring LLC distributions at 16% plus CASS because no US tax was withheld.
• Moving revenue out of a micro SRL into a US LLC to stay under the €100,000 threshold. ANAF looks at substance.
• Missing Form 5472 in a year when no US tax was due.

Frequently asked questions

How does Romania treat a US LLC? Generally as a foreign legal person, not as transparent. Distributions are dividends taxed at 16% plus CASS.

Can my US LLC become a Romanian tax resident? Yes, if its place of effective management is in Romania. It is then taxed at 16% on its profits.

Is there a US–Romania tax treaty? Yes. Dividends, interest and most royalties are limited to 10% US withholding.

Is a micro SRL better than a US LLC? For work done in Romania with revenue under €100,000, almost always.

Does my US LLC pay US tax? Not if it has no US office, staff or agents. It files Form 5472 and a pro forma 1120 every year.

How UCB can help

We form US companies for Romanian owners and SRLs remotely: the state filing, EIN, registered agent, US business address and bank application. We prepare W-8BEN-E treaty forms, and each year we file the US returns through our US tax filing service. Your contabil handles ANAF filings, and we give them the US records they need. See our formation, EIN and bank account package and the Bulgaria guide for comparison.

Setting up a US company from Romania? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.