When the government is late in paying, small firms pay with their existence. The good news and the bad

In 2025, almost 300 more insolvencies opened than in 2024, according to a Coface study.

Even if the document does not explicitly attribute the insolvencies to the conflict in the Near East, the study talks about their causes: the restrictive policies: “monetary and especially fiscal policy, against the background of a geopolitical situation marked by uncertainty.”

Also, in two sectors: construction and pharma, the Coface Report points the finger at the delay in payments by the State. “However, the construction sector faces major liquidity risks due to state payment delays. The cash flow map of local players has in 2025 been shaped by the erosion of the state's payment behavior in the pharma sector,” note the authors of the report.

The “Trade” sector reported the highest number of insolvencies, 1,844, down 4% compared to the previous year.

The good news

The growth rate of insolvencies is slowing: +3.84% in 2025 (7,553 cases), compared to +9.38% in 2024, even if the level is the maximum of the last 7 years.

More than 90% of the companies that entered insolvency had a turnover of less than 0.5 million euros or did not submit the balance sheet for 2024, so the direct economic and social impact is relatively small.

More and more large companies are choosing preventive composition instead of insolvency: 221 composition procedures in 2025 (vs. 96 in 2024), and 8 out of 11 companies with over 50 million euros CA went for composition, not insolvency.

The year 2025 marks the highest number of company registrations in recent years, 153,425, +23% compared to 2024, which suggests a robust entrepreneurial dynamism, especially in Bucharest, Ilfov, Cluj, Timiș.

Deletions remain steady at 83,232, basically the same level as 2024, indicating some strengthening of the business environment.

The bad news

2025 brings the highest number of insolvencies in the last 7 years (7,553), with records in November and December, which shows a sudden deterioration of the liquidity situation towards the end of the year, the Coface study also shows

The number of large insolvent companies (CA > 0.5 million euros) is at its highest in the last 7 years, with the potential to have a domino effect on employees and supplier chains.

The amount refused for payment by checks and other instruments is at the highest level in the last 7 years, a clear signal of pressure on cash flow.

Macro: economic growth of only 0.6% in 2025, technical recession in the second part of the year, ESA deficit still very high (8.2% of GDP, although down from 9.3% in 2024), inflation 9.7% and public debt above 60% of GDP (above the Maastricht threshold).

The mix of “global tariff war + war in Ukraine + conflict in the Middle East”, combined with restrictive fiscal policy (increase in VAT, excise duties, dividend tax, tougher micro rules) and energy liberalization, pushes the economy into technical recession and puts additional pressure on insolvencies, especially in large firms

“The global economy in the year 2025 was hit hard by the tariff war, a period in which there was a significant escalation of trade tensions at the global level, with the United States of America imposing aggressive tariffs not only on China, but also on its allies, including the European Union. This uncertainty led to a series of retaliations in international trade, having a major impact on supply chains and inflation,” says Tiberius ChesoiHead of Claims Coface Romania.

The first consequences of this trade war, which created an unstable economic environment, led to a rethinking of global trade relations, with an increasing emphasis on protectionism and the “repatriation” of industrial production.

In this context, the European economy was strongly affected, the main challenges of Europe being the American tariffs, Chinese exports redirected to the European market and also the war in Ukraine. The international context has also significantly impacted Romania's economy, taking into account the fact that the main destinations for Romanian exports are concentrated in the European Union, with Germany being the most important trading partner, with over 20% of total exports, followed by Italy with approximately 10% and France with approximately 6.5%.

“Additional pressure for the Romanian economy was represented by the Government's commitment to reduce the budget deficit, against the background of already high inflation. Thus, the Romanian Government implemented two sets of fiscal measures, the most important of which are:

• The standard VAT rate has increased from 19% to 21% from 1 August 2025, and the reduced rate for medicines has risen to 11%.
• The income threshold to remain in the micro-enterprise income tax regime is 250,000 euros annually in 2025, down from 500,000 euros. As of January 1, 2026, this ceiling has dropped to 100,000 euros. Exceeding these limits during the fiscal year leads to the automatic transition to corporate tax (16%). For micro-enterprises, starting from January 1, 2026, there is the obligation of at least one full-time employee (or mandate/administrator contract).
• The dividend tax rate increased from 10% to 16%.
• Measures for additional taxation of banks and gambling winnings.
• Increasing the level of excise duties, on August 1, 2025 and, respectively, on January 1, 2026, for alcohol and alcoholic beverages, gasoline and diesel.

Last but not least, the increase in inflation up to 9.9% (August 2025) represented a challenge for the business environment, an upward trend that began in July 2025, with the liberalization of energy prices and the implementation of fiscal measures from August 2025″, the quoted document also states.

Developments by sectors and counties

Sectoral developments during the year 2025 were determined in particular by the inflection point reached by the growth model of the Romanian economy (the transition from economic growth fueled by unsustainable fiscal stimulus to economic growth shaped by the rationalization of government consumption and investments), the fiscal consolidation process, the payment behavior of the Romanian State, but also by the cost of financing domestic corporations, which remains high and, in large part, conditioned by the level (the highest in the space European Union) of inflation.

“The risk of insolvency has increased significantly for those sectors where liquidity is conditioned in particular by the payment behavior of the Romanian State, and we refer here in particular to construction works, but also for those sectors that depend on private consumption behavior, a behavior negatively affected both in terms of money (see the evolution of the real salary in the second half of 2025), as well as in terms of confidence in the future.

Along with these segments that make up approximately 70% of Romania's GDP, I think it is relevant to point out the developments in Agriculture, where the benefits of the agricultural year 2025 could not compensate – for named players – the difficulties accumulated in the years 2022-2024, as well as the still negative developments in Industry, developments impacted by systemic factors such as the lethargy of the economic traction in Germany and the high cost of electricity”, declared Bogdan NichișoiuRegional (Central & Eastern Europe) Enhanced Information Manager.

The most open insolvencies in 2025 were registered in Bucharest (1,359) and in the counties of Bihor (661) and Cluj (511). Of the 7,553 insolvencies opened in 2025, Bucharest continues to concentrate the largest share (18%). The capital also attracts the most registrations (22% of the total), followed by Ilfov, Cluj and Timiș. Bucharest generates the most cessations of activity, followed by Cluj, Constanța and Bihor.

X-ray of the local business environment

The business environment in Romania remains a dynamic one, characterized by a high capacity for regeneration. Despite the increase in the number of dissolutions and suspensions in recent years, which indicates constant pressure, especially on small and medium-sized companies, a high pace of registrations is maintained, which confirms the entrepreneurial potential, note the authors of the Coface report.

Of the over 1.29 million legally active companies, approximately 100 thousand are LLCs, and 450,244 are PFAs. The number of deregistered companies in 2025 was 83,233, close to the same level as in 2024. In 2025, a 23% increase in the number of registrations was reported compared to the previous year, and a 22% increase in dissolutions.

In 2026, the growth of Romania's economy will continue to be affected by high inflation, the restrictive fiscal policy, the decrease in private consumption and last but not least by the geopolitical factor, aspects that will impact the local business environmentÎ