Fiscal Package 2: How to avoid tax inactivity in Romania through proper declaration of the fiscal domicile

Thousands of companies in Romania declared inactive at the “Ghost Nest” in Romania – What entrepreneurs must know in 2025

In the current Romanian company landscape, which is continuously evolving both fiscally and commercially, businesses face the risk of inactivity. Entrepreneurs must carefully manage their registered office, maintain a proper headquarter office, and ensure the proper operation of their romanian company.

Pavel, Margarit & Associates, specialized in fiscal lawyer, tax attorney, and lawyer for taxes services, support romanian companies in avoiding being declared inactive company by the tax authority or anaf, helping them maintain their tax law compliance, preserve their cod TVA, protect contractual relations with partners, and act legally in risk situations.

The phenomenon known as the “Ghost Nest” has led to thousands of inactive companies, creating significant challenges for the business environment. In 2025, entrepreneurs must pay close attention to how they manage their registered office and fulfill their tax updates obligations to prevent losing their tax law rights and experiencing commercial blockages.

How to Properly Declare the Fiscal Domicile of the company in Romania and the Consequences of Mistakes

It is crucial for a romanian company to declare a real and identifiable headquarter office where the tax authority or anaf can perform verifications. If the declared registered office cannot be identified or leads to inactivity or dormancy situations, it may constitute grounds for declaring the company inactive company under tax law. According to the tax updates in the tax law, Art. 92, para. (1) letters b), if the company “avoids inspections … by declaring identification data of the headquarter office that do not allow the tax authority to identify it,” it may be declared inactive company.

Incorrect declaration of the registered office can have consequences, such as loss of tax law registration (cod TVA), suspension of contracts, rejection of invoices, or administrative and fiscal sanctions. An incorrect headquarter office may also be used by the anaf as a procedural reason to start the inactivity process.

A common mistake is declaring a registered office at an apartment or address not used by the company, where no actual business activity occurs, which is frequently detected during anaf controls. Many entrepreneurs believe they can use fictitious addresses for headquarter office purposes, ignoring that the tax authority verifies the coherence and accuracy of the declared information.

A fiscal lawyer or tax attorney can assist the company in choosing a legitimate headquarter office, drafting company registration documents, setting up a registered office legally during starting up your own business or when establishing a set up new company, and avoiding common tax law mistakes related to the registered office.

It is important to comply with the cooperation obligations under tax law, Art. 10, which require the romanian company to provide accurate data and cooperate with the tax authority to determine the fiscal facts.

Tax Inactivity of the Romanian Company – Loss of VAT Code, Blocked Contracts and Risks for Shareholders in Romania

Inactivity triggers the procedure of declaring an inactive company by the anaf, according to Art. 92 of the tax law. Common causes include failing to submit tax declarations over a semester (lit. a), a registered office that is nonfunctional or unidentifiable (lit. b and c), expiry of the headquarter office contract, registration of inactivity at the trade registry (lit. d), or lack of statutory organs (lit. f).

The consequences can be severe. Loss of tax law registration means the company cannot deduct VAT, contracts may be suspended, payments delayed, and business relationships with partners can be blocked. Many romanian companies in the “Ghost Nest” phenomenon have experienced commercial blockages.

Additionally, shareholders and directors face personal liability, risk of tax record issues, difficulties participating in other set up new company projects, and loss of credibility. A contract lawyer, fiscal lawyer, or tax attorney can advise clients to anticipate risks and implement preventive measures.

When and Under What Conditions a Company Can Be Declared Inactive in Romania

According to Art. 92 of the tax law, a romanian company may be declared inactive company if at least one condition from letters a–g is met. These include: a) failure to submit tax declarations over a period, b) and c) registered office being nonfunctional or unidentifiable, d) registration of inactivity at the trade registry, f) absence of statutory bodies, and g) expiry of the headquarter office contract. Declaration must follow procedures in Ordinance 3846/2015.

Moreover, declaring a company inactive company cannot occur before legal notification periods expire. For lit. a), declaration cannot occur before 15 days after notifying the company of missed submissions; for lit. f) and g), declaration occurs only after 30 days of notification. Reactivation is possible if the company complies with obligations, settles outstanding taxes, and functions at the declared registered office.

Temporary dormancy recorded at the trade registry may also trigger inactivity.

Key Aspects When Setting Up a Company in Romania: Bank Account, Share Capital and Valid Fiscal Headquarters

When starting up your own business or planning to set up new company, the essential elements include share capital, opening a bank account, and ensuring a legal registered office. A civil law lawyer or lawyer for taxes can guide clients through company registration, inactivity prevention, or when establishing international lawyer headquarters.

The headquarter office must be a concrete address, backed by a legal contract (lease, property, etc.), compatible with the company’s CAEN code, and accessible to the tax authority or anaf. Invalid registered office or expired contracts risk declaration as inactive company under Art. 92(g).

In addition, entrepreneurs should be mindful of requirements related to company share capital, the minimum share capital needed at incorporation, and the possibility of increasing or reducing share capital depending on the evolution of the company in the capital market.

Even when starting up your own business, careful choice of headquarter office, proper documentation for anaf, and compliance with tax updates are essential to prevent dormancy and inactivity.

“In light of new regulations regarding inactivity and reporting obligations for romanian companies, all businesses must ensure correct declaration of registered office and compliance with deadlines. Noncompliance may lead to loss of tax law registration, commercial blockages, and eventual classification as inactive company by the tax authority,” stated Dr. Radu Pavel, Coordinating Lawyer, Pavel Mărgărit and Associates.

Bank accounts are opened in the company’s name to establish financial legitimacy. Minimum capital must be deposited according to the statute, and proof may be requested by the tax authority.

A contract lawyer, fiscal lawyer, or lawyer for taxes can assist not only in starting up your own business, company registration, and set up new company, but also in relocating headquarter office, updating documents with the trade registry, and notifying the anaf, reducing the risk of inactive company, sanctions, and administrative blockages.

In conclusion, fiscal risks for romanian companies are increasing. The procedure through which anaf declares inactive companies, including the “Ghost Nest” phenomenon, endangers legal operations, VAT registration, contracts, and corporate credibility. Correct declaration of registered office, establishing a valid headquarter office, and compliance with obligations are key to avoiding dormancy and inactivity.

A fiscal lawyer, tax attorney, lawyer for taxes, civil law lawyer, or contract lawyer plays a crucial role in providing consultancy, drafting procedures, assisting with company registration, relocating headquarter office, and preventing inactive company situations. Proper planning when starting up your own business in Romania ensures sustainable operations for any romanian company.

Pavel, Margarit and Associates Law Firm is one of the top law firms in Romania, providing high-quality legal services. The firm’s clients include multinational and domestic companies of great magnitude. In 2025, the law firm’s success stories brought it international recognition from the most prestigious international guides and publications in the field. As a result, Pavel, Margarit and Associates Law Firm ranked 3rd in Romania in the Legal 500’s ranking of business law firms with the most relevant expertise. The law firm is internationally recognized by the IFLR 1000 Financial and Corporate 2025 guide. Additionally, Pavel, Margarit and Associates Law Firm is the only law firm in Romania recommended by the international director of Global Law Experts in London in the Dispute Resolution practice area. All relevant information about Pavel, Margarit and Associates Law Firm can be found on the website www.avocatpavel.com.