If you are a foreign national with a trust, or a Romanian resident considering one, start with this: the common-law trust and the Romanian fiducia are not two names for the same thing. They rest on different ideas of ownership, and confusing them produces structures that either fail their purpose or are void from the very start.
The trust is the product of a legal tradition — the common law — that knows something continental law does not: equity. From it comes the central idea that ownership of an asset can be divided into two simultaneous titles.
The person who carves assets out of their own estate and transfers them to the trust.
The fiduciary administrator — becomes the legal owner of the assets, but holds and manages them exclusively for someone else.
Holds the equitable title — the right, recognised by equity, to enjoy the assets, even though not registered as owner.
This dual ownership is unintelligible in continental logic, where ownership is, by definition, single and exclusive (art. 555 of the Romanian Civil Code). A trust has no legal personality: it is not a company but a relationship of confidence, enforced by courts of equity, under which the trustee answers to the beneficiary for any abuse of their title.
From this flows the strength of the trust as a succession instrument: through the trust deed the settlor can set out who receives what, when and on what conditions — including across generations, with staged distributions, age or merit thresholds, protection of a minor or vulnerable beneficiary, and discretion left to the trustee in a discretionary trust.
Since 2011 Romania has had its own continental version of this idea: the fiducia — the civil-law equivalent of a trust — governed by arts. 773-791 of the Civil Code. The definition mirrors the tripartite structure: the settlor transfers property rights to one or more fiduciaries, who exercise them for a determined purpose, for the benefit of beneficiaries, and those rights form an autonomous patrimonial mass, distinct from the fiduciary's own estate. On the surface, it is a trust. In reality, the legislator fitted three brakes onto this structure that change its very nature.
Only a qualified professional can be a fiduciary. Article 776 restricts the circle exhaustively: credit institutions, investment and investment-management firms, financial-investment services companies, insurance and reinsurance companies — and, among individuals, only public notaries and lawyers. Not the trusted relative, not the friend, not your own company.
The term is capped at 33 years from the date the contract is concluded (art. 779), on pain of absolute nullity. The trust that spans three or four generations has no equivalent here.
The contract is strictly formalised and transparent: authenticated form, registration with the tax authority within one month of conclusion (art. 780, again on pain of absolute nullity), publicity and beneficial-owner reporting. The fiducia produces genuine asset segregation — the fiduciary's personal creditors cannot reach the fiduciary mass (art. 786) — but it is, by construction, an instrument of administration and security, not a family vehicle run within a closed circle.
There is a single sentence in the Civil Code that explains, better than any comparison, why the fiducia is not the trust these families are looking for. Article 775 provides that the fiducia contract is struck by absolute nullity if it effects an indirect liberality (a gift) in favour of the beneficiary.
Translated: the fiducia cannot be a disguised donation and cannot be a masked will. It cannot transfer wealth gratuitously to a beneficiary. The rationale was to protect forced heirs — a refusal to allow the reserved portion (rezerva succesorală, Romania's forced-heirship reserve) to be circumvented through transfers that appear onerous but in reality convey value for free.
The consequence must be stated plainly: the Romanian fiducia is not an instrument for passing wealth to children. Anyone attempting this does not build a succession structure; they build a void contract, with everything that follows — the assets falling back into the estate and into the general pledge of creditors. The common-law trust is precisely a vehicle for gifting across generations; the fiducia was transposed without that component. This is the structural difference, not a nuance.
From the difference above follows, concretely, what remains the exclusive preserve of the trust — because each of these presupposes a gift, exactly what article 775 forbids.
"The child receives income at 25 and capital at 35"; "the grandchild receives only on graduating" — over a term that can far exceed 33 years.
Wealth stays professionally managed for a minor or vulnerable person, without being handed over directly and without an ad-hoc guardian.
In a discretionary trust the administrator decides, within the deed, who receives what — flexibility and a degree of protection from the beneficiaries' personal creditors.
If the trust is so useful, can it be used by a Romanian resident? Here a private-international-law problem arises that many overlook. Romania is not a party to the Hague Convention of 1 July 1985 on the law applicable to trusts and on their recognition — the instrument that obliges signatory states to recognise the effects of a foreign trust. Parties include the United Kingdom, Italy, the Netherlands, Switzerland, Luxembourg, Liechtenstein, Malta and Monaco; Romania, like France, Germany or Spain, is not among them.
The consequence is not that the trust "does not exist" for Romanian law, but that it enjoys no automatic mechanism of recognition. A foreign trust is not "translated" into a domestic institution; its effects 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, subject to the limit of Romanian international public policy. In practice, a trust validly created under a foreign law may produce effects in Romania, but its treatment remains a field with scarce case law. We have devoted a separate analysis to the recognition of a foreign trust's effects in Romanian law.
The costliest error is to assume that once wealth has entered a foreign trust it has "left the radar". It has not. First, a Romanian resident is taxed on worldwide income (art. 59 of the Fiscal Code). Distributions received by a resident beneficiary from a foreign trust are not, by their nature, tax-exempt. Their characterisation is uncertain, however: they may be treated as income from other sources (10%), by analogy with the regime of the fiducia beneficiary, or otherwise — a grey area covered in the dedicated analysis on taxation of the resident beneficiary.
Second, the structure is visible. Under the Common Reporting Standard (CRS/DAC2), a trust is either a reportable financial institution — in which case the settlor, trustee, protector and beneficiaries are reported — or a passive non-financial entity, whose controlling persons are reported by the bank where the structure holds accounts. The idea of a "secret account" no longer holds.
A trust is not a shelter. A trust properly created under a foreign law is a legitimate planning instrument. It becomes a problem in two situations: when it is used to hide assets whose origin cannot be justified — where the 70% tax on unjustified income and, at the extreme, criminal liability for money laundering come into play — and when it is presented as a way to bypass the forced-heirship reserve on Romanian assets, which does not work. The Romanian forced heir can challenge, and assets in the country remain subject to Romanian law. Transparency and documentation of the origin of wealth are not optional; they are the condition for the structure to hold.
For an estate located entirely in Romania, with no foreign element, neither institution is usually the answer: transmission is done through the classic succession tools — will, donation, ascendant partition, reserved usufruct — within the limits of the reserve. The fiducia remains useful for security, for managing an asset during litigation or incapacity, and for separating an asset from business risk, built in good time.
The trust becomes relevant for families with genuinely international wealth and a multi-generational horizon: assets in several jurisdictions, minor or vulnerable beneficiaries, a wish to stagger transmission. The reason such families reach for foreign-law structures — a trust or, in the continental variant, the family foundation — is not exoticism but the fact that Romanian law offers no equivalent vehicle: the fiducia is blocked by article 775 and its term is capped. Choosing a structure does not, however, suspend the forced-heirship reserve on Romanian assets, nor the tax and reporting obligations of a Romanian resident.
In theory a foreign trust can hold Romanian real estate through its trustee, but the operation raises serious practical problems — the land register records the trustee as owner, not the "trust", which has no legal personality — and it does not bypass the forced-heirship reserve on property located in the country. To pass on Romanian real estate to children, the correct tools remain those of domestic law.
It can reproduce the administration and asset-segregation part — a regulated professional manages a ring-fenced estate shielded from their personal creditors. It cannot reproduce the gifting part: the gratuitous transfer of wealth to beneficiaries. That is precisely what a trust is sought for, and precisely what article 775 of the Civil Code prohibits, on pain of absolute nullity.
The validity of the trust depends on the law under which it was created, not on your residence. What changes on moving is your own tax status: if you cease to be a Romanian tax resident, distributions from the trust are, in principle, no longer taxable in Romania. While you remain resident, they fall within worldwide income. Residence changes through procedure and evidence, not by simply leaving.
Yes. Being the settlor or beneficiary of a foreign trust is not, in itself, unlawful. What matters is that you declare what must be declared, can justify the origin of the wealth transferred, and do not use the structure to hide assets or circumvent the reserve or tax obligations. A transparent, documented trust is a planning tool; an opaque one is a risk.
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 a foreign structure interacts with Romanian succession, tax and reporting rules — and what remains subject to Romanian law regardless of where the structure was set up.