Do I Need a Local Entity to Hire in Romania?

In Romania, a "local entity" refers to a recognized legal presence, such as a subsidiary or branch office, that allows you to act as an employer. This setup is essential for fulfilling local payroll and employment obligations, ensuring compliance with Romanian labor laws.

Without a local entity, you generally can't manage payroll, register as an employer, or issue compliant employment contracts. An alternative is using an Employer of Record (EOR), which can hire employees on your behalf while you avoid the complexities of establishing a local entity.

What is Required to Employ Someone in Romania?

• Local employing entity required to directly employ? Yes (required for direct employment and payroll registration)
• Payroll registration required? Yes (must register with ANAF for payroll compliance)
• Withholding/tax remittance required? Yes (employers must withhold income tax and social contributions)
• Social contributions required? Yes (mandatory contributions to social security and health insurance)
• Local employment agreement required? Yes (written contracts are mandatory under Romanian law)
• Mandatory benefits to budget? Yes (statutory leave, health insurance, and pension contributions)
• Works council/collective agreements considerations? Often (many sectors have collective agreements affecting employment terms)

Best Options If You're Hiring in Romania

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should be cautious about misclassification risks.

Hiring contractors in Romania can be a flexible option, but it’s essential to ensure that the contractor operates independently and isn’t performing tasks that resemble employment. Misclassification can lead to legal issues, especially if the contractor is integrated into your business operations.

• Ensure the contractor has multiple clients and isn’t dependent on your company.
• Keep the contractor's work scope limited to specific projects to avoid employment-like relationships.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Romania, depending on the required registrations and documentation.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 1,500–3,500 RON per month ($320–$740)
• Payroll provider: Estimated 300–800 RON per employee per month ($64–$170)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated 2,000–5,000 RON per year ($425–$1,060)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 p/month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions, mandatory benefits administration)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Romania

Hiring in Romania can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Romania quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.