Estonian Company Run from Romania: Tax Rules

Many Romanian entrepreneurs form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from Romania. The Romanian Fiscal Code looks closely at where a foreign company is managed: a foreign legal person with its place of effective management in Romania is a Romanian resident, and the Code counts the place of effective management as Romania when the strategic decisions are taken there or when at least half of the directors are Romanian residents. The controlled foreign company rule applies to Romanian profit-tax payers. And the Estonia–Romania tax treaty leaves a company resident in both countries to an agreement between the two tax authorities. This guide sets out these rules with the official texts, and what we do on the Estonian side.

The guide is general information, not tax advice. How your company and you are taxed depends on the facts of your case; ask a Romanian tax adviser (consultant fiscal) before you form or buy the company. We read the consolidated Fiscal Code (Legea nr. 227/2015 privind Codul fiscal) on the official legislation portal of the Romanian Ministry of Justice, legislatie.just.ro, and the Estonia–Romania tax treaty in Riigi Teataja, on 22 October 2026; the English wording of the Code below is our translation.

In Estonia: an Estonian company is Estonian

A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.

In Romania: the company side

Resident. A resident is, among others, any foreign legal person that has its place of effective management in Romania; a resident has full tax liability in Romania (Fiscal Code, Article 7, point 37).
Place of effective management. It is the place where, unless shown otherwise, the foreign legal person carries out operations that correspond to economic, real and substantial purposes and where at least one of two conditions is met: the economic and strategic decisions needed to manage its activity as a whole are taken in Romania by its executive directors or board members, or at least 50% of its executive directors or board members are residents (Article 7, point 18).
The treaty decides first, and the tax office decides the facts. If a foreign legal person is resident both in Romania and in a treaty country, its residence is set by the treaty; the central tax authority establishes on the basis of a questionnaire and documents whether its place of effective management is in Romania and notifies the company (Article 8^1(1)–(3)). A company that becomes resident must register within 30 days of that notice (Article 8^1(4)).

An Estonian OÜ is a foreign legal person for Romania. If you live in Romania and are its only director, the 50% condition is met — and then Romania can treat the company as a Romanian resident, unless the treaty settles its residence for Estonia. Your Romanian tax adviser answers that with the facts of your case.

In Romania: the owner side

Controlled foreign company. An entity is a controlled foreign company when the taxpayer, alone or with its associated enterprises, holds more than 50% of its voting rights or capital or is entitled to more than 50% of its profits, and the profit tax the entity actually pays is lower than the difference between the profit tax computed under the Code and that tax (Fiscal Code, Article 40^5(1)).
Who includes the income. The profit-tax payer that controls it includes in its tax base the entity's undistributed income from interest, royalties, dividends and share disposals, financial leasing, insurance, banking and other financial activities, and certain low-value-added sales to associated enterprises (Article 40^5(3)). This does not apply where the entity is resident in an EU or EEA state and carries on a substantive economic activity supported by staff, equipment, assets and premises (Article 40^5(4)).

The rule is written for profit-tax payers — companies. How an individual owner living in Romania is taxed on dividends from the company is a question for your Romanian tax adviser.

The Estonia–Romania tax treaty

A company resident in both countries. The competent authorities shall endeavour to settle the question by mutual agreement and determine how the Convention applies to it (Convention signed in Bucharest on 23 October 2003, Article 4(3)).
Dividends. The country of the paying company may tax dividends at no more than 10 per cent of the gross amount when the beneficial owner is resident in the other country (Article 10(2)).
Directors' fees. Fees for a member of the board of a company resident in the other country may be taxed in that country (Article 17).

Whether the Multilateral Instrument changes these articles is a question for your Romanian tax adviser. We do not give that ruling.

What to decide before you form or buy the company

Who sits on the management board, and where they live. A board with half or more Romanian residents meets one of the two conditions of Article 7, point 18.
Where the strategic decisions are taken. That is the other condition.
Who owns the company. A Romanian company holding more than 50% brings in the controlled foreign company rule.

What we do on the Estonian side

online formation for an e-resident — €950 Registered address and contact person service for one year are included., or formation by power of attorney — €1,250;
a ready-made company bought remotely — €1,200 Registered address and contact person service for one year are included.;
accounting — from €150 / month and the annual report — from €450;
the registered address and contact person after the first 12 months — €350 / year.

Our accounting covers the Estonian company's Estonian obligations. Romanian tax returns and Romanian tax advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.

Prices exclude VAT. All communication takes place by email.

Ready to start? A new Estonian company — online for e-residents or by power of attorney; Romanian tax advice is not included. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Frequently asked questions

Is my Estonian company taxed in Romania if I run it from Romania?

It can be. Romania counts a foreign company as resident when its place of effective management is in Romania: it carries on real operations and either its strategic decisions are taken in Romania by its directors or at least 50% of its directors or board members are Romanian residents (Fiscal Code, Article 7, points 18 and 37). In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6). When a company is resident in both, the Estonia–Romania tax treaty applies and the two tax authorities try to settle its residence by mutual agreement (Fiscal Code, Article 8^1; treaty Article 4(3)). Ask a Romanian tax adviser before you form or buy the company; we handle the Estonian side.

Estonian company run from Romania: what is taxed where