When starting a business in Romania, a common question among new entrepreneurs is “when can a new Romanian company pay dividends?”. It is understandable for entrepreneurs to want to know how quickly they can withdraw money from their company’s profits in the form of dividends. Shareholders want to get company profits into their pockets as soon as possible.
From a Romanian company law perspective, the answer is: relatively fast, assuming there is profit available for distribution in your company. Let’s see what this means in practice, as some shareholders may want their Romanian company distribute dividends to their accounts even faster than this.
When can a Romanian company pay dividends – applicable rules as per the Romanian law
According to the Romanian legislation currently in force, a Romanian company is allowed to pay dividends either annually, following the approval of the company’s financial statements for the previous year, or quarterly, throughout the year. The rules governing the distribution of profits under the form of dividends are specified in Law No. 31/1990, in Law No. 82/1991, and in the implementing Orders issued by the Ministry of Finance.
Whether a Romanian company is established at the end or at start of a year, or at any other time during the year, it is in principle possible to distribute dividends relatively quickly after its establishment. Of course, assuming there is profit in the company that can be distributed to its shareholders. Otherwise, dividends cannot be paid if the company has not generated any profits and is on a loss position.
More exactly, as per the applicable legislation, companies have the flexibility to pay dividends on a quarterly basis during the year. Therefore, if the necessary financial and accounting requirements are met at the company level, it is possible to withdraw funds from the company before the end of the calendar year.
A Romanian company can pay dividends on a quarterly basis
For example, if a company is established at the beginning of the year and generates a profit during the January – March period, it may consider an interim dividend distribution after the end of March. However, the dividends do not become automatically available for distribution on the last day of the quarter.
Before any dividend payment can be made, the company must close the relevant accounting period, complete the necessary accounting and inventory procedures, prepare interim financial statements and determine the amount of profit that is legally available for distribution. The interim financial statements and the proposed dividend distribution must then be approved by the shareholders or by the sole shareholder, as applicable.
In practice, this means that a company cannot distribute dividends based only on an estimate of its revenue or on the amount of cash available in its bank account. The distribution can take place only after the profit has been confirmed through the company’s accounting records and the required corporate documents have been properly approved.
The interim financial statements must also be filed with the competent fiscal authorities within the statutory deadline, generally within 30 days from their approval.
The dividend distribution must be formally approved
The distribution of dividends must be formally approved by the company’s shareholders. In the case of a company with several shareholders, the approval must be normally documented through a resolution of the general meeting of shareholders. Where the company has a sole shareholder, a written decision of the sole shareholder must be prepared and signed.
The resolution or decision of the shareholders should identify the financial statements on which the distribution is based, the total amount approved for distribution, the amount allocated to each shareholder, the applicable withholding tax and, where relevant, the payment date or payment procedure.
The company’s Articles of Association normally establish each shareholder’s participation in profits and losses. However, a separate amendment to the Articles of Association is not required each time dividends are distributed. Each specific dividend distribution is approved through the relevant shareholder resolution or sole shareholder decision. This is in accordance with the law and the company’s existing constitutional documents.
Generally, dividends are distributed proportionally to each shareholder’s participation in the company’s paid-up share capital, unless the Articles of Association validly provide for a different allocation.
What is the earliest point at which a Romanian company can pay quarterly dividends?
As already explained, a Romanian company may prepare interim financial statements after each financial quarter. The relevant financial information must be determined cumulatively from the beginning of the financial year up to the end of the quarter concerned.
The following table illustrates the earliest practical point at which a dividend distribution may be considered by shareholders:
| Profit covered by the interim accounts | Earliest point at which the distribution may be considered |
|---|---|
| January – March | After 31 March, once the interim financial statements have been prepared and approved |
| January–June | After 30 June, once the interim financial statements have been prepared and approved |
| January–September | After 30 September, once the interim financial statements have been prepared and approved |
| Full financial year | After the annual financial statements have been prepared and approved |
The dates in the table do not represent automatic payment dates. The company must first complete the required accounting work, establish the distributable profit and obtain the necessary shareholder approval.
For example, the interim financial statements prepared as of 30 June will reflect the company’s cumulative financial position and results for the January–June period, rather than only the activity carried out during the second quarter.
Current profit may have to cover previous accounting losses first
The fact that a company records a profit for the current quarter or financial year does not necessarily mean that the entire profit can be distributed to its shareholders.
According to the rules applicable from December 2025, a company that records a profit for the current reporting period, but also had accounting losses carried forward from previous periods, has certain obligations. More precisely, it may distribute dividends only after completing the legally required profit allocations. In particular, the company must first constitute the legal reserve, cover the accounting losses carried forward and constitute any additional reserves required under its Articles of Association.
Only the amount remaining after these operations may be considered for distribution as dividends.
For example, let’s assume that a company records a current accounting profit of RON 100,000 but has an accounting loss of RON 35,000 carried forward from the previous financial year. The company cannot treat the entire amount of RON 100,000 as distributable profit. It must first cover the carried-forward loss and make any required allocations to the legal or statutory reserves. The remaining amount may then be considered for distribution, subject to the other conditions imposed by law.
This restriction is relevant even if the company has sufficient cash in its bank account. The legal capacity to distribute dividends depends on the company’s accounting and financial position, not only on the availability of cash.
The company must also pass the net asset test
Before approving a dividend distribution, the company must also verify its net asset position. This assessment is essential when determining when can a Romanian company pay dividends. In broad terms, the company’s net assets represent the difference between its total assets and its total liabilities, determined on the basis of the relevant financial statements.
If the company’s net assets have fallen below half of its subscribed share capital, the company may not distribute dividends until its net assets have been restored to at least the minimum level required by law.
This means that a company may record a profit for the current period and may even have money available in its bank account but still be prevented from distributing dividends because its overall financial position does not satisfy the net asset test.
The test should be performed on the basis of the financial statements used for the proposed distribution. It is particularly important whether the company has accumulated losses, significant liabilities or accounting adjustments that have reduced its equity.
For a newly established business, the question of when can a Romanian company pay dividends cannot be answered solely by looking at its revenue or short-term profit. Before approving the dividend, the accountant and the company’s management should confirm both the amount of distributable profit and compliance with the statutory net asset requirement.
Dividend income is taxable in Romania
Dividends distributed by a Romanian company are subject to Romanian dividend tax. Starting from 1 January 2026, the standard Romanian dividend tax rate is 16% of the gross dividend, increased from the 10% rate applicable in 2025.
The Romanian company distributing the dividends is responsible for calculating, withholding and paying the dividend tax to the Romanian tax authorities. Consequently, the shareholder normally receives the net dividend, after the applicable tax has been withheld at source.
For example, if a Romanian company distributes a gross dividend of RON 100,000 to an individual shareholder in 2026, the company will withhold dividend tax of RON 16,000 and will pay a net dividend of RON 84,000 to the shareholder.
Specific exemptions or reduced rates may apply where dividends are paid to qualifying Romanian or non-resident corporate shareholders. In the case of a non-resident recipient, a reduced rate under an applicable double tax treaty or an exemption under Romanian or European Union legislation may be available. Of course, this applies if all the relevant conditions are met and the required tax residence documentation is provided. The tax treatment should therefore be checked before the dividend is paid.
