If you are a Romanian resident named as beneficiary of a foreign trust, or you have transferred assets into one, the answer is neither "nothing happens" nor "it is illegal". Romania does not recognise trusts automatically, yet a foreign trust can still produce effects here — assessed through private international law, tax and succession rules.
The first clarification is one of principle. Romania is not a party to the Hague Convention of 1 July 1985 on the law applicable to trusts and on their recognition — the treaty that obliges signatory states to recognise the effects of a trust validly created under a foreign law. We are not alone: France, Germany and Spain have not ratified it either. Parties include the United Kingdom, Italy, the Netherlands, Switzerland, Luxembourg, Liechtenstein, Malta and Monaco.
What does this mean in practice? Not that the trust "produces no effects" for Romanian law, but that it enjoys no automatic, uniform mechanism of recognition. Romanian law has no domestic institution into which to "translate" the trust — the fiducia (the civil-law equivalent of a trust) is not its equivalent, and the structural difference between trust and fiducia (qualified fiduciary, 33-year cap, prohibition of the indirect gift) makes assimilation impossible. Absent the Convention, the effects of a foreign trust are assessed through the general private-international-law rules in Book VII of the Civil Code (art. 2557 et seq.): the law governing the relationship is identified, and it applies in Romania subject to a single insurmountable limit — Romanian international public policy. The result is a field with scarce case law, where each situation is examined on the merits.
The first practical situation: the Romanian resident who has themselves created a foreign trust, transferring assets into it. Three distinct questions arise.
Is the transfer valid? Under the law of the trust, generally yes, if the forms of that law were observed. The validity of the settlement is judged by the law applicable to the trust, not by Romanian law.
Is it enforceable against Romanian creditors? Here domestic law intervenes. A transfer into trust does not shelter you from creditors you already had. The act can be challenged through the Paulian action (art. 1562 of the Civil Code) if made in fraud of creditors — where a claim already existed and the transfer created or increased insolvency. Timing is decisive: a trust created in the years when the estate was sound holds; one created on the eve of litigation, a tax audit or enforcement is exactly the target of these mechanisms.
Does the wealth remain "mine" for tax? It depends on the structure. A revocable trust, in which the settlor keeps the right to unwind it and reclaim the assets, brings the situation close to one where the wealth never left the estate — both for taxation and for exposure to creditors. An irrevocable, discretionary trust produces a more genuine separation, but it does not excuse you from justifying the origin of the wealth transferred; the price of separation is the loss of flexibility.
A second axis is insolvency: if, after the transfer, the settlor enters insolvency, acts concluded in the two-year suspect period before the opening may be annulled under Law no. 85/2014, with its presumptions of fraud. A trust is not a last-minute refuge; it is an instrument of advance planning whose resilience depends on the date it was created.
The second situation — the one in our example — is the resident beneficiary who receives distributions. The starting point is firm: a Romanian resident is liable to tax on worldwide income (art. 59 of the Fiscal Code). Distributions are not, by their nature, tax-exempt. The problem is characterisation, and here Romanian law offers no express rule for the foreign trust. Two plausible readings exist:
Income from other sources, taxed at 10%. This is the reading that follows by analogy with the regime of the fiducia beneficiary in the Fiscal Code, where sums received by an individual beneficiary from the fiduciary are taxed as income from other sources (unless the beneficiary is the settlor).
A gratuitous acquisition, which in Romanian law does not bear an inheritance tax as such — but this characterisation is hard to sustain for periodic distributions from a discretionary trust, which do not resemble a classic inheritance.
Honestly stated, there is no consolidated, published practice of the tax authority on this point. It is unexplored terrain, and individual rulings matter. The prudent position — the one we recommend — is to treat distributions as taxable income, declare them, and keep the documentation showing their nature and the origin of the trust wealth. We detail the full mechanism, on taxation across the three roles, in a dedicated article.
Can a foreign trust hold an apartment or land in Romania? The short answer: not "the trust", but the trustee. Because the trust has no legal personality, it cannot appear as a title-holder in the land register. The registered owner is the trustee — the individual or company holding legal title.
The land register is built around the person who is owner and records real rights in the name of title-holders — individuals or legal entities. Romanian land-register law provides no dedicated mechanism to reflect, in the entry, that the owner holds the asset in a fiduciary capacity for a trust. The practical consequence is that the trustee appears as owner in their own name, and the "trust" as such does not figure in the register. Any internal relationship between trustee and beneficiaries remains governed by the law of the trust, not by the Romanian land register.
The essential consequence is that real estate located in Romania remains governed, for property-law and succession purposes, by Romanian law (lex rei sitae, and the succession rules applicable to property in the country). The trust does not change this.
The idea that a trust ensures discretion from the Romanian tax administration belongs to the past. Under the Common Reporting Standard (CRS/DAC2), structures are classified and reported. If the trust is itself a reportable financial institution — typically when managed by a professional trustee and its income comes mainly from financial investments — the trustee reports the persons with an interest in the trust: the settlor, the beneficiaries and any person exercising effective control. Discretionary beneficiaries are reported, in principle, at the value of the distributions actually received. If the trust is a passive non-financial entity, the bank where the structure holds accounts reports the controlling persons — settlor, trustee, protector, beneficiaries.
As for thresholds, for individuals' accounts CRS sets no minimum reporting threshold — they are reportable regardless of balance. To this is added FATCA, under the Romania-US intergovernmental agreement in force since 3 November 2015, targeting US persons. The practical conclusion: a Romanian resident who is settlor or beneficiary of a foreign trust must assume that information about the structure reaches the tax authority automatically.
From the visibility above flows a duty of consistency. The Romanian resident who receives taxable distributions declares them in the annual return, under the income category matching the characterisation adopted, and pays the corresponding tax. If they hold financial accounts abroad, including through the structure, these fall within the CRS reporting logic, and during a review of their personal tax position explanations about the source may be requested. Anyone who appears in CRS data as the beneficiary of a trust but has declared nothing is a predictable candidate for a compliance notice.
Here lies the real aim of many structures. Can a trust bypass the Romanian forced-heirship reserve — the share of the estate that the law guarantees to children, the surviving spouse and, absent descendants, the parents? For assets located in Romania and for successions governed by Romanian law, the answer is no. A forced heir wronged by a transfer into trust can seek abatement of excessive liberalities (art. 1092 et seq. of the Civil Code), and assets in the country remain under Romanian law.
There is a single terrain where things become genuinely complex: choosing the applicable law under the EU Succession Regulation 650/2012 (professio juris). A Romanian citizen may choose that their entire succession be governed by the law of their nationality — but if they also hold a second nationality, from a state without forced heirship, the question arises whether the Romanian reserve can still be set aside. It is a sensitive area, treated separately. We keep the prudent conclusion: for assets in Romania and before Romanian courts, the reserve remains a limit hard to circumvent.
The most serious risk is not tax, but criminal. It arises when the origin of the wealth transferred into the trust cannot be justified. A transfer to a foreign structure, followed by repatriation of the sums as "distributions", can be seen as an operation to disguise the origin of funds — with exposure to a money-laundering charge, autonomous from the predicate offence. Add the risk of tax recharacterisation (a revocable trust treated as personal estate) and the 70% tax on income whose source cannot be identified. The golden rule is the opposite of opacity: document the origin of each asset before transferring it, and declare what must be declared.
There is currently no special form for individuals to "declare a trust". What must be declared is the taxable income received (the distributions), in the annual return, when realised. In addition, financial accounts held abroad, including through the structure, are visible via CRS and may be the subject of requests for justification during a review of your personal tax position. Prudence calls for transparency, not silence.
Timing is decisive. A trust created when the estate was sound, with no existing claims and no intent to defraud, has a real chance of holding. A transfer made when a claim, litigation or audit already existed is exposed to the Paulian action (art. 1562 of the Civil Code) and, in insolvency, to the suspect-period regime. A trust does not retroactively cleanse an estate that is already encumbered.
For assets located in Romania and for successions governed by Romanian law, not entirely: children are forced heirs and can seek abatement. A trust does not suspend the reserve for those assets. For assets in other states, the position depends on the law applicable to the succession, including any choice of law.
In practice, yes. The vast majority of jurisdictions used for trusts participate in the automatic exchange of information (CRS), and financial institutions report the settlor, trustee and beneficiaries or, as the case may be, the controlling persons. The correct planning assumption is that the information reaches the tax authority, not that it stays hidden.
Informational material, updated 18 July 2026. It does not constitute legal or tax advice; individual situations must be analysed case by case.
An initial discussion clarifies how the trust is treated here — recognition, taxation of distributions, reporting and the forced-heirship reserve on Romanian assets — before an audit frames the questions for you.