EXCLUSIVE: Second Quarter 2025 Reveals Disturbing Trend of Business Failures Outpacing New Ventures

The Illusion of Growth: Registrations Mask Deeper Economic Woes

BUCHAREST - Romania’s business landscape is showing troubling signs of underlying weakness despite what appears to be strong registration numbers in the second quarter of 2025. While new business registrations showed year-over-year growth in two of the three months, the more alarming story lies in the business lifecycle data revealing a net contraction of the business ecosystem.

The quarter saw a staggering 36,125 companies exit the market through suspensions, dissolutions,, creating a net loss of **5,235.

Quarterly Breakdown: A Story of Volatility and Decline

April 2025 started the quarter with a concerning -1.41% decline in registrations compared to April 2024, setting a negative tone for the quarter. The month recorded 11,481 new registrations but saw 13,922 business exits, creating a net loss of 2,441, but this masked the reality that business closures accelerated even faster. The month saw 12,879 new registrations overwhelmed by 14,837 exits, resulting in a net loss of 1,958 but still ended with a net loss of 836 companies as 12,601 businesses exited the market.

Entity Type Shifts: The PFA Explosion Hides Structural Weakness

The most dramatic change in the business landscape has been the explosive growth of PFA (Authorized Physical Person) registrations,. This trend suggests a shift toward more precarious, individual entrepreneurship rather than stable corporate structures.

Meanwhile,

• Cooperatives (CA) plummeted by **89.86
• Joint Stock Companies (SA) dropped by **70.83

This structural shift toward individual entrepreneurship rather than corporate investment raises serious questions about the sustainability of Romania’s business environment.

Industry Concentration: Dangerous Overreliance on Few Sectors

The data reveals a worrying concentration in just two sectors that accounted for over 20,000 registrations each in June alone:

• Wholesale and Retail Trade: 11,942
• Transport and Storage: 11,855

This represents a dangerous overreliance on trade and logistics sectors, leaving the economy vulnerable to supply chain disruptions and market fluctuations. Meanwhile, critical sectors like manufacturing showed weakness,.

Regional Disparities: Capital Dominance Hides Rural Decline

Bucharest continued to dominate the business landscape with 2,682, representing nearly 23% of all national registrations. While some counties like Dolj showed impressive growth (149.2% increase), this masks the reality that economic activity remains heavily concentrated in urban centers, leaving rural areas increasingly marginalized.

The Churn Crisis: Business Mortality Rate Reaches Alarming Levels

The most concerning metric from the quarter is the business churn rate,

• May: 115.20
• June: 107.11

This means that for every 100 new businesses registered, between 107 and 121 businesses exited the market. Such high churn rates indicate an unstable business environment where companies struggle to survive beyond their initial registration.

Conclusion: A Quarter of False Optimism

While headline registration numbers might suggest economic vitality, the second quarter of 2025 reveals a Romanian business environment in distress. The combination of net business contraction, structural shifts toward precarious individual entrepreneurship, sectoral concentration, and persistently high business mortality rates paints a picture of an economy facing significant headwinds.

The data suggests that Romania’s business ecosystem is becoming increasingly fragile, with new registrations failing to compensate for the alarming rate of business failures. Without intervention to address these underlying weaknesses, the country risks entering a period of sustained economic contraction despite superficial growth indicators.

This analysis is based on official business registration and lifecycle data from Romania’s National Trade Register Office for the period April-June 2025.