Accounting Entries for Closing a Romanian Company

Closing a company involves a set of mandatory procedures which in accounting terms translates into strict protocols which are legally necessary in order to avoid unwanted twists at the financial level. For most of the cases, the general scenario to be taken into account when deciding to close a company covers a sequence of highly useful procedures that we will list below. Accounting for dissolution of company in Romania might require the presence of an expert and if you feel that dealing with this process might bring into question numerous unknown features you would better ask for a professional opinion that will surely solve your issue. As mentioned above we will briefly indicate the most significant operations that should be looked into when doing the accounting entries for closing a Romanian company. First thing to start with is the inventory and a strict evaluation of liability items and assets of the establishment in question. The preparation of financial statements is to be performed in one of two manners that can be illustrated by a professional accountant. The general assembly must decide regarding the operations that are to be performed by the expert liquidator on behalf of the company. The selling of any remaining assets is essential; assets should be previously evaluated. Then the funds that are to be paid to creditors must be discharged. Any debt to the state budget has to be discharged. The next phase indicates the profit/loss evaluation. Then the calculation, withholding and payment of income tax and dividends may be taken into consideration. The balance sheet for partition according to adequate stipulations must be performed. Partition of equities must be performed according to bylaws or to contract of the society, the decision of the general meeting of shareholders and the contribution to the share capital.

Given these procedures, the accounting for dissolution of company in Romania indicates partition as a division between net assets resulting from liquidation. There are, as well, particular cases that can be effectively illustrated only by experts and accepting a professional point of view proves highly important in such situation. Some supplementary details might also be involved depending on the type of liquidation that is to be taken into consideration. Another aspect regards the type of company that you are dealing with. As we explained from the beginning it becomes extremely significant to opt for a professional approach since bookkeeping varies from a national system to another raising new and, most of the times, unexpected questions. Our lawyers are able to deliver a series of answers to controversies related to this area and we can also recommend a group of accountants that will competently assist you in such cases. 

Dissolution of a Romanian Company

Dissolution of a Romanian company may be initiated in a voluntary manner which implies the decision of the shareholders (or the verdict of the sole shareholder) or through a court order which occurs when shareholders do not agree on certain aspects or if other legal instances are applicable. In some situations the liquidation of a Romanian company is mandatory. We will explain below the differences between these two phases in closing a company pointing out the most important details in these procedures as well emphasizing key terms that are not to be disregarded. Sometimes this process may take longer than expected depending on basic factors which caused the decision to close the company. There are several situations that describe the main cases justifying the dissolution of a Romanian company. As mentioned form the start such a procedure may be determined by the decision of the general meeting of shareholders. The company may also be invalidated and it might not be able to fulfill its main objectives. At certain points a dissolution situation may be imminent since the term for which the company was registered has expired. Conflicts between shareholders are very much likely to cause the dissolution and, in this case, the decision of the court is the instrument which provides the final verdict. A bankruptcy scenario can also determine the process above mentioned.  

The dissolution phase is usually followed by the liquidation of a Romanian company excepting certain cases. And hereby we may identify several different ways of closing a company depending on its type of organization and also the causes which dictated the decision of dissolution. So, at this point we shall mention several types of procedures as it follows: dissolution of a limited liability with a unique shareholder, dissolution of an LLC with several shareholders, voluntary dissolution of SNC, SCS, SRL, SA and SCA involving the appointment of a judicial liquidator, etc. When the death of a unique shareholder or one’s of the several occurs procedures impose a specific approach. When dissolution is performed through the court order, the liquidation of a Romanian company follows for protecting shareholders’ interests. The court’s decision validating the dissolution of a Romanian company must be registered with the trade registry, must be notified to the economics and finance department of local authorities and must be published in the Official Gazette. Any individual who is interested in appealing against the court’s decision must do that within 30 days after publishing the order in the official gazette. The bureaucratic background may be a little bit too intricate depending on several agents such as the type of company, the cause explaining the dissolution decision and other legal discrepancies that might occur under certain circumstances. Our lawyers provide assistance and counseling in any matter related to this topic clearly highlighting all aspects which may distinguish as debatable for cases covering this area. We would like also to stress the importance of understanding every judicial phase in the dissolution process as future negative effects might profoundly alter any financial position.

Building regulations in Romania

According to building regulations in Romania a set of bureaucratic criteria must be met in order to initiate any project in this area. An important and highly useful document required under these circumstances is the urbanism certificate. This paper delivers several quintessential technicalities related to utilities, access, and vicinity of the land. This document also contains details concerning the accepted construction height, numbers defining the land use and land occupations. Its main purpose is to provide information regarding the legal, economic and specialized terms defining the optimal conditions for initiating any building procedure. Through this paper, the competent authorities come to deliver to any suppliant decisive features regarding the land, proximity and other aspects that might influence the construction itself. The urbanism certificate in Romania is offered through a corresponding bureau of the department of urbanism in the city hall where the structure is to be built. In order to request this certificate the suppliant needs to submit a dossier to the city hall in question containing the title deeds, cadastral maps, a standard application form and the proof for payment. Sometimes an architectural brief is required but this usually depends on other parameters. The urbanism certificate does not allow the initiation of the project. In order to start building, the suppliant needs to obtain the building permit.

Building Permit in Romania

This is a more specific document which is provided by the local authorities illustrating the conformity status of the project proposed, from technical and the legal point of view. This paper allows the beginning of the project itself as it offers the general features that secure the structure as designed. The building permit in Romania is valid for 12 month which indicates that the owner of the project is to start building within this specific period of time. In order to obtain such a paper a file has to be submitted containing the following documents: the certificate of urbanism, the title deed or any evidence of it, a technical project illustrating the structure itself, neighbors’ approval, proof for taxes which are required to be paid, any relevant studies which are usually imposed through the certificate of urbanism. Depending on the project, there might be necessary some extra documents. Suppliants must keep in mind that the difficulty of any project might bring also the requirements of more specific utility. It is highly important to understand that besides these two documents the owner of the project has other bureaucratic obligations as well. The certificate of urbanism and the building permit are one of the most stringent but other technical papers are required also. Another strongly significant detail emphasizing the dynamic character of the bureaucratic environment clearly indicates that all features related to documents might be modified for future references. As the real estate market continuously evolves implying more and more elaborate approaches we point out the importance of securing any project with a solid expert opinion. Evaluating any project of this kind right from the start guarantees continuity and financial protection.

Real estate in Romania – land use rights for foreigners

The law no. 312/2005 indicates a 7-year term restricting foreigners and other legal entities in the EU states from acquiring farming land, forests and forest land. The 7-year term concerns Romanian land ownership from its accession to EU which indicates as limit the date of 1^st January 2014. Even this detail proved of great interest through the opportunities that might bring for foreign investors, there are still some other alternatives that deserve to be brought up for discussion. Real estate in Romania, according to law provisions, indicates that real rights are to be provided through the enactment of documents and, in certain cases, there will be required an urbanism certificate. Here we refer to the right to use or the superficies right of land or other types of prerogatives with the same significance and utility. A lease agreement has the authority to bring under regulation, using a legal background, the intention of an owner of land to make available a certain area for a definite period of time. This term may be reconsidered if both the owner and the lessee agree. Registration with the Land Registry is required only if this period of time goes beyond a three-year term. This can be seen as an alternative for foreign investors intending to develop their business in Romania and involving the use of land. Up until this point we referred only to private property. If we consider the lease of land which is state property then these procedures are allowed only through a Governmental Decision or other verdicts coming from local or county councils. Non-profit organization may benefit from a special treatment since a free use right can be admitted in their favor only if they are involved in charity works.

Another perspective that might be taken into consideration by foreign investors is the concession of land. Concession of land in Romania regarding public properties is regulated through the GEO’s no. 34/2006 and no. 54/2006. Direct negotiation or a public tender shall be seen as alternatives and a fundamental condition for beneficiaries concerns the importance of developing the area in question. The maximum period of time provided is of 49 years which also implies an extending term that cannot exceed half of the firstly chosen term. For the private property regulations there are effectively developed strategies defining clear stipulations. The contract containing all terms shall be registered with the Land Registry. Even if Romanian land ownership is still restricted, for business purposes the right to use a certain land property can be seen as a solid opportunity. Our lawyers provide any necessary information related to these procedures and explain all possible risks of such an operation. It is important to fully comprehend fundamental legal terms when deciding to initiate such a procedure and as well to make a lucrative choice. Our experts will further explain the necessary bureaucratic approach indicating needed certificates and possible permits required for various activities.

Fiscal Residency Certificate in Romania

For applying the Romanian double taxation prevention treaties the non-resident payer must provide the income payer with the fiscal residency certificate. This document must be issued by competent authorities in the country of residence. A fiscal residency certificate in Romania delivers necessary information proving that the non-residents in question are residents of states involved in double prevention conventions signed with our country, for the year corresponding to the period of time during which the income was registered. There are usually mentioned, as well, details concerning the identity of the non-resident and the taxpayer identification number. The income payer is responsible for receiving the document according to legal terms. He has also the option to accept a certified copy. When another state which previously signed with Romania a double taxation prevention agreement, asks a Romanian resident to provide the fiscal residency certificate, the person in question will submit an application form to the bureau responsible with these procedures. An application form example together with the certificate sample can be reviewed in the appendices for the Order No. 724/2011 for approving the application forms contained in the Articles No. 118 and 120 in the Fiscal Code.

The non-resident natural persons who are involved in activities on the Romanian territory and are present in this perimeter for more than 183 days will have to pay taxes on income obtained in Romania or outside Romania, starting with the 1^st of January, following the year when they were registered as residents in Romania. Non-residents must register with the responsible authority which, as well, owns their fiscal domicile records. They have to do this in 30 days starting with expiring 183 – day period. For this they will have to fill in the “Questionnaire for the establishment of the fiscal residency of the individual at the arrival or departure in/from Romania” adding also the following documents: copy of the valid passport, the EU citizens must also provide the national ID card, they will also have to provide the fiscal residency certificate in Romania. The document must be issued by the responsible authority in the country of residence and can also be provided in a copy form, a notarized translation in Romanian shall be delivered also. Some papers must be added as well proving the fact that the individual has a rented or owned home. If we are referring to a case when the individual has to leave Romania then the person in question must submit the above mentioned questionnaire 30 days before the departure. Our lawyers are available for any further questions related to this topic. We would like also to point out the importance of understanding the national laws in an international approach. The optimal function of all Romanian double taxation prevention treaties depends on the utility of such documents as the fiscal residency certificate is. 

Taxation of non-residents in Romania

Latest changes in the Romanian taxation system introduced several aspects related to non-resident taxpayers conducting their business in Romania through one or more establishments which are permanent. We published all needed details in here and, in this present article, we intend to explain different circumstances related to taxation procedures applied to individuals and companies in our country. All aspects that we will bring to your attention relate to specific provisions delivering information for both singular persons and legal entities. The regime of non-resident taxpayers in Romania clearly specifies that a 16% tax generally applies to income coming from activities conducted in Romania or from other income sources located in this perimeter. Double tax treaties may imply the adjustment of certain taxes or even the cancellation. These measures apply to particular income elements such as those deriving from partnerships settled in Romania, from dependent activities or correlated to real estates in this country or from shares sold. As mentioned form the beginning here are included as well the amounts of money coming from commercial activities conducted through permanent establishments. Income originating from a liquidation process of a company which is Romanian, from other different independent professions carried out on this territory and from sports or other activities of this type performed here are subject to taxation according to laws applicable for non-residents. Members and founders of board of directors in a Romanian company, as well the administrators, are subjects to taxation through the profits obtained from their positions. These taxes apply also to dividends, interests and royalties provided by a resident person but as well for those paid by non-residents only if they own a permanent establishment in Romania and the sums related are expenditures of these establishments. A 25% rate is applied to all gains coming from gambling while capital gains are subject to the same treatment applied in the case of resident individuals.

Tax laws in Romania – taxation of non-resident companies

The taxation procedures include those entities which are indeed non-resident but the income subject to taxation is obviously obtained in Romania. There are several distinguishing ways in which a foreign company may become subject to taxation in this perimeter. Taxation of non-residents in Romania specifies that in order for a company to become subject to taxation it has to own a branch office or a representative office. We are talking here also about the case when a foreign company becomes subject of withholding taxes. Thus non-resident companies in our country which do not own permanent establishments are required to pay this withholding tax which generally derives from interests, commissions or royalties. There are types of income which are to be considered exceptions and these special cases involve non-residents from states which do not own an agreement with Romania concerning the exchange of information. EU stipulations are frequently interfering in national policies concerning the withholding tax. We also recommend the article regarding the double taxation treaties in order to properly understand the circumstances. Our expert lawyers working in the corporate and commercial department are available for future information related to corporate tax compliance in the case of non-resident companies. The team in this department has intensively assisted in numerous company creation processes being able in this manner to indicate specific aspects immediately related to taxation issues.

Requirements for marriage in Romania

For foreigners who want to get married in Romania there is a set of documents that must be prepared in order to initiate the specific procedures. As expected the file must contain a birth certificate which is translated in Romanian and legalized by a professional notary. There should be added a certificate of celibacy which is normally issued by the authority representing the state of origin of the individual in question. The document may be provided by an office in the country of origin or the corresponding embassy in Romania. For persons who have been married before, there is mandatory to add also an affidavit proving that the other marriage is no longer valid. Requirements for marriage in Romania also impose the presence of an authorized interpreter if it is strictly necessary, according to legal provisions. The country of origin, through the related authorities, must provide a certificate stating that the individual meets all demands imposed by his/her national laws regarding all conditions obligatory for getting married.  Both parts must add to the file a medical certificate, valid for 14 days, proving optimal health conditions. There is also necessary a specific document called declaration of marriage which is a standard paper available at the Register Office.

Romanian residence permit

It is highly important to take into consideration the option to request a Romanian residence permit if deciding to join your spouse in Romania. Legal provisions are constantly changing so that is why we emphasize the importance of an expert’s help. Even if all procedures might seem approachable we insist on the necessity of fully understanding the extensiveness of the bureaucratic approach. The dossier requested to obtain the residence permit shall be provided to the Romanian Immigration Department. Even if the individual already owns a Romanian residence permit, he/she should send a copy of the marriage certificate to the Romanian Immigration Department. The older permit can be kept. If the residency right is very close to the expiration date, a dossier must be submitted to the above mentioned bureau. Documents to be added to the dossier may vary so it is important to check the complete required list. It may take up to 90 days until obtaining the residence permit. There is also a set of evident restraints for performing a marriage in Romania. Here are included individuals who are already married; those who are related, individuals not having the minimum age indicated by Romanian law. There are also some specific situations that might occur and, in this case, we strongly recommend expert counseling. A lawyer may provide a clear overview of all requirements for marriage in Romania. A professional attorney can point out some important details which can be ignored under certain circumstances. There is also an important difference between desiderata for EU citizens and non-EU citizens. As mentioned above the presence of an authorized legal expert becomes mandatory and it saves some valuable time.

IT&C Investments in Romania

As the majority of countries in Central Eastern Europe Romania revealed highly challenging resources for investments in various technological domains. There are some clearly attractive aspects that cannot be ignored and these naturally relate to solid incentive programs, creative and passionate people, good IT skills and a top class broadband internet service. The technology investments in Romania cover quite a large spectrum since education continues to provide highly trained specialists able to perform according to western standards. The IT&C area particularly developed as internet came to effectively complement a self-taught generally met pattern, obviously reinforced by university education. At the beginning this area was mostly populated with outsourcing companies delivering alternatives to other corporations willing to save on production costs or other fields. Some international companies dared to explore this potential and, encouraged through consistent incentives scheme, decided to progressively extend their reach. The IT&C investments in Romania gradually revealed some local initiatives which mainly evolved on grounds of enthusiasm, hard work and great IT skills.

Technology investments in Romania rely also on state aid schemes that are guaranteed on condition that a number of jobs are made available and some legal requirements are obviously taken into consideration. The great perspective that opens in here still remains the most tempting part as the cost effective procedures for founding and running such a business in this area are balanced and even outbalanced by the overwhelming intellectual potential. The IT&C investments in Romania’s great benefit is the fact that IT engineers in here are amongst the best in the entire world. Apart from mature and already highly trained individuals this country also provides a large number of promising young professionals who can be easily spotted especially in international competitions. Such is the case of Ionut Budisteanu, a 19-year-old Romanian, who received an Intel Foundation Young Scientist Award in 2013. This case is just an example out of many others proving that education, in this area is consistently supported by genuine talent and ambitious goals.

Technology investments in Romania – specialists in a competitive market

Also of great importance for the technology investments in Romania is its people’s ability to culturally merge with various influences. Being so eager to experience at various levels but also able to ingest the newly acquired information, the IT specialists in here prove ready to cope with niche technologies or other specific perimeters that might seem difficult to grasp at first sight. Last but not least, this country provides an increasing number of startups which are both inspiring and revealing for the IT&C area. Being such a constructively malleable technological conscious, Romania gradually assimilated western patterns and adapted them to local conditions, frequently coming with astonishing original ideas sustaining and developing this specific domain. Technology investments in Romania are more and more diverse but always need a clear understanding of the financial and legal background. The European Economic Community also comes with some extra stipulations which might strongly influence certain technological fields, imposing in that respect the necessity of professional legal help. Our lawyers may provide any legal detail related to this topic trying to guide all our customers towards unequivocal success.

Draft law on the sale and purchase of Romanian agricultural land outside the built up area

The project on transactions with agricultural land outside the built up area, in Romania, was modified several times on September 3, September 17 and September 23, 2013, making visible a number of issues of immediate importance proposed to be analyzed from various perspectives. Persons in question nominated by this project who actually have the right for acquisition are Romanian citizens, EU citizens, all those who are considered stateless persons but residents in Romania or EU. Last version of this draft law also introduces a category referring to individuals who are considered stateless persons on the territory of EEA (European Economic Area). After the last update of the project the individual who can purchase land in Romania, located outside the built up areas, must meet a number of conditions. One of the most important aspects, concerning the acquisition of land in Romania, is related to the importance of proving general knowledge regarding the agricultural field and also evidence of the fact that he/she worked in this area for the past five years, at least.

Authority for Land Market Management and Regulation

The authority which shall be responsible for checking individuals is the Authority for Land Market Management and Regulation. This institution is responsible for all measures required for law enforcement whose foundation is laid through the drafts nominated above. This authority will also be the one which will handle the database that will contain information regarding agricultural lands. All buying and selling details will be published through this institution’s help also intended for supervising the exercise of preemption right.

Special circumstances are also indicated limiting the transactions with agricultural land outside the built-up areas. This includes land located within 10 kilometers from the border that may be used only with the consent of the Ministry of National Defense. Agricultural lands which can be defined as areas of archaeological potential are accessible only through approval of the Ministry of Culture. Agricultural lands with irrigation infrastructure must be preserved, at least, in the same state as purchased. The National Agency for Land Improvement (ANIF) keeps reports on the status of these lands at the time of their purchase. There are also some ​​remarks on the quality of the tenant who can purchase such lands. The new Civil Code through the Article No. 1838 indicates legal procedures to be followed by tenant to register with local authorities. There are some important stipulations introduced concerning the maximum area to be purchased which is of 100 hectares. Until the 2^nd of October 2013 the final form of this project should be subject to public debate. Our team of attorneys is available to provide further information on this topic. We are also able to offer legal assistance necessary to clarify any misunderstanding raised by this draft law regarding the acquisition of land in Romania.

How to Change the Administrator in a Romanian LLC

The decision to change the administrator of a limited liability company supposes the adjustment of the articles of association; such procedure requires the approval of the general meeting of the shareholders. The document that illustrates these procedures should include a range of information to prove decision of the sole shareholder or the general assembly’s verdict and also a number of aspects regarding the new administrator. Such documents must include details concerning the type of summon to the general meeting of shareholders, the decision proving the intent to change the administrator and the newly appointed one, as well  the signatures of those responsible. This is followed by the submission of a statuary statement made ​​by the new administrators certifying that they accept their new position and prove the fulfillment of all legal requirements. In an early stage, it is signed a statuary statement  but, there are strict conditions imposed in order to occupy this position. A sample signature must be provided by the newly appointed administrator. Articles of association must be updated with the name of the new administrator.

Documents required to change the administrator of a Romanian LLC

The file to be submitted to the Trade Register in order to announce the change of the administrator of limited liability company in Romania must contain the following documents: an application form which can be requested online, updated articles of incorporation outlining the new administrator, decision of the general meeting or the verdict of the sole shareholder, if applicable, the statuary statements that we have mentioned above, signed by the new administrators, the sample signature, identity cards of administrators. There are certain cases when it is necessary to submit a statuary statement, for natural foreign persons, proving that there are no tax debts in question. We refer here only to those who have no tax registration in Romania. When a legal person is appointed administrator of the limited liability company registration papers are required, the original accompanied by a copy. The National Agency for Fiscal Administration will provide an electronic document certifying the lack of tax debts. Along with these documents there should be a mandate for those designated to handle formalities implied by these procedures. A proof of payment should be also attached.

We emphasize the fact that the limited liability company may have one or more administrators, legal or natural persons. The decisions taken by the General Assembly or by the sole shareholder represents a fundamental basis for procedures initiated by the administrator. The reasons for changing one or more administrators may vary a lot and various circumstances may frequently introduce unexpected legal issues. For this reason, our lawyers recommend an expert’s opinion which can provide additional information about your case highlighting peculiarities and optimal approaches.

Protocol on avoidance of double taxation and prevention of fiscal evasion between Romania and Austria

The Law no. 245/2013 introduced several changes intended to sustain the various tax measures stipulated through the provisions of the Protocol amending the Double Taxation Prevention Treaty between Romania and Austria. Above mentioned document acts as an instrument optimized to avoid double taxation but also as a safety tool for prevention of tax evasion in Romania and also Austria. These conventions refer to taxes on income and on capital imposed by each country. In this category there are included all taxes on total income but also on elements of income. The amendments made ​​by Law. 245/2013 are visible in the Article No. 27 concerning the exchange of information related to taxes. Each contracting State shall supply the necessary data. The data will be subject to exchange if being relevant to the content of the Convention and only if they are related to taxes taken into account. The data obtained on this basis shall be considered as secret and any detail provided must be previously accepted by the designated authorities responsible with such duties in the state which was requested to offer the information. These data can be provided and used to conduct public court proceedings. If both states accept the use of information for purposes other than those mentioned, always on a sustained legal basis, the data can be taken into account provided that the competent authority in the State to provide the necessary details authorizes these procedures.

The provisions introduced shall not violate or infringe, in any way, the legislative integrity of both Contracting States. The newly introduced measures are not meant to influence in any way the normal course of the administration in one or both contracting states. Professional or trade secrets shall not be disclosed opposing to public policy principles. Each of the two Contracting States must provide the requested data even if details are not of national interest for the state which was required to disclose these aspects. Information held by financial institutions or similar authorities can be made available for the purposes specified by this convention. The two countries will support a diplomatic cooperation in order to assist on a reciprocal basis in order to supervise the implementation of all the provisions introduced through this Protocol. The protocol will be considered as a part of the Convention and shall remain in force as long as the Convention remains valid. Our law office is able to provide any type of information concerning the Romanian Double Taxation Prevention Treaties and all consequences implied.

New Regulations for the Romanian Bilateral Contracts Market for Green Certificates

The Romanian Energy Regulatory Authority (ANRE) adopted a new set of guidelines establishing supplementary adjustments for all participants on the green certificates market: seller, vendors and the operator itself (OPCOM). By adopting the order no. 57/2013 ANRE aims to introduce a solid framework for the functional organization of the green certificates market in Romania. Providing a transparent environment for the bilateral contracts market for green certificates translates into an effective optimization which further encourages the development of the renewable energy sector. They provide an explicit description regarding the organization of public tenders which must be notified through an announcement of OPCOM placed on the online platform. This announcement will contain information concerning the sell or buy offer. The auction session data will be updated automatically keeping the participants incessantly informed about significant aspects related to this process. In the event of dealing with two identical offers which means they share the same best price the public tender has to be resumed within 45 minutes following exclusive procedures. If the second session does not designate a winner the typical steps required for a regular session should be resumed. Any transaction completed through the indicated procedures comes with the obligation to conclude a bilateral contract for the one who is the winner of the session. Any complaint may be submitted within two business days and its solution will be provided within 24 hours of submission.

OPCOM must provide the two involved participants with final data regarding the completed session within 24 hours. Each participant is required to sign and comply with the terms of the contract. For the seller there is mentioned a new obligation specifying that copies of the contracts should be submitted to both OPCOM representatives and ANRE within five days of signing the documents. The data will be subject to verification by OPCOM that must allow a 24-hour recess to perform necessary changes. According to new regulations OPCOM has the liberty to suspend any participant provided that the designated party has not updated individual data contained in the participants register or in the green certificates register. Our law firm engages in providing any additional details about the changes occurred in this domain always pointing out the dynamic character of all legal aspects regarding the Renewable Energy Market in Romania. Being a hyperactive industrial segment the renewable energy field is subject to inevitable changes altering the evolution of the green certificates market. Our group of lawyers is committed to indicating all adjustments describing the development of this specific domain making available the necessary information able to clarify inherent ambiguities.

New Provisions for Romanian Short-stay Visa

The newly published government decision no. 530/2013 introduces a set of provisions related to procedures required to obtain a short-stay visa for specific business purposes. Facilities are granted to certain categories of foreigners who are considering carrying out activities in Romania. The foreign citizens who are included in this particular group targeted by the listed-above provisions will have the right of entry and residence for the territory of Romania, through the mechanism of short-stay visas with multiple entries. Statements taken into account for this government decision indicate that beneficiaries of this visa will be foreigners who are considering carrying out activities "on offshore installations located in waters of exclusive economic zone of the Romanian state ". This visa is to be granted for a period of less than five years taking into account stays up to 90 days (on a course of 180 days). Documents required for issuing this type of short-stay visa include: a travel ticket indicating the final destination; drivers are required to have the green card, driver's license and car ownership papers. Health insurance is required as well. There must be also a document that is able to illustrate the purpose of the stay indicating activities that will be carried out. There are as well necessary financial documents sustaining the guarantees for budgeting accommodation and all other involved expenditures.

The Romanian or foreign legal entity which is responsible for hiring the foreign citizen must provide all needed documentation proving the main purpose of this stay and it is also important to guarantee that, in the event of exceeding the visa validity terms, it must agree to assume financial responsibility for contingent expenses. These newly introduced provisions are to be understood in the context provided by all other previously established regulations regarding the visa regime in Romania. Our lawyers are able to provide the necessary assistance to clarify some details about formalities required for obtaining this type of short-stay visa. We are also interested in proposing a number of alternatives that might prove favorable for our client's interests.

Industrial Parks in Romania

Industrial parks represent a special category of large-scale investments in Romania and their relatively recent emergence on the Romanian industrial field imposed a series of completely new policies which had to be absorbed by a roughly functional market economy. Probably the most attractive aspects related to this topic refer to consistent incentives portfolios which were gradually introduced on either national level or on European one. It became clearly beneficial for investors to financially target this field as it opened a number of highly lucrative opportunities. In the same time, a ubiquitous condition which plays an important part in balancing gains for both sides regards the guarantee which is to be offered by each project initiator to increase the number of jobs. Law progressively identified key issues in establishing an optimal system frequently changing and perfecting various details. Following this pattern, authorities recently added new regulations related to precise requirements imposed for establishing industrial parks, the authorization process for granting the title of industrial park, personal liability of administrators and a list of legal incentives that both administrators and residents of the park will benefit from.

Industrial parks incentives in Romania

According to Law No. 186/2013 regarding the establishment and operation of industrial parks, the latest changes introduced a number of features indicating a series of facilities provided for both administrators and residents of industrial parks. These incentives may be granted by local authorities as well but they are generally delivered as tax exemptions allowed by the state. In this particular case we are talking about exemptions for property tax on buildings, on land and suspension of financial duties occurring when changing land use or when having to convert the land out of agricultural use.

Functioning of industrial parks in Romania

Administrators of these parks are supported in terms of maintaining a set of balanced management policies clearly mentioning the importance of following regulations established by them. Residents of these parks are bound to take into account details concerning organizational strategies and also the selection of residents’ process. The administrator is the one who will receive the title defining the industrial park as issued by the Ministry of Regional Development and Public Administration. For old industrial platforms which went through the process of privatization a different system will apply based on a government decision or specific legislative measures. The order issued by the Ministry of Regional Development and Public Administration clearly establishes the validity of the title for the park.

Through these last changes, the authorities evidently emphasized the principles which are fundamental when establishing industrial parks in Romania. The importance of introducing new job opportunities is crucial. The administrator does not have permission to encourage or initiate any activity that fails to comply with rights and liberties of residents. Park residents should be treated equally and using the same principles-based standards. The founders of the project must file the application in order to be granted the park title. References concerning the nature of the land on which the park will be built impose a number of limitations. Thus the minimum land area must be of at least five hectares and it is also important to have a unitary character (except for those which are crossed by access roads). There must be a solid guarantee concerning the access to European routes, national primary roads or ring roads. The land in question can be administrated by residents, the founders or the administrator himself. As we mentioned before, this field is constantly developing requiring various interventions at legal level. Our law office provides legal advice in order to identify best strategies to be followed in establishing an industrial park. Our lawyers are committed to propose a number of approaches that exercise effective legal regulations constantly offering, to all clients, details concerning the evolution of the project and possible alternatives that might improve perspectives.

New Amendments for Non-resident Taxpayers in Romania

The National Agency for Fiscal Administration (ANAF) enacted a set of new regulations related to non-resident taxpayers’ regime engaging in commercial activities through one or more permanent establishments on the territory of Romania. These provisions firstly clarify procedures concerning the registration process for non-resident taxpayers carrying out activities in Romania. The persons in questions are responsible for filling out the Form 013 known as ”Fiscal Registration Statement/ Mentions Statement for non-resident taxpayers carrying out activities in Romania through one or more permanent establishments”.  This document should be completed in duplicate since one version is to be kept by the non-resident taxpayer and the other one will be submitted to the designated bureau. Depending on the activities they undertake, non-resident taxpayers can request and register for VAT purposes. If the entity has already completed the direct VAT registration the code previously provided will be used, taking into account the first date of registration issued for these purposes. For those situations when there is a further statement which introduces another permanent establishment, the taxpayer is required to provide the tax authority that administers the area where the new office is located, with the form 013 which will be corroborated with another form 050 “Application for the registration of the tax residency of the taxpayer “.

Declaring the permanent establishments by non-resident taxpayers

There are also mentioned all stages describing the process of declaring the permanent establishments founded by non-resident entities interested to carry out business activities on the Romanian territory. These secondary offices must be registered within 30 days with the nominated authority which, in this case, is the National Agency for Fiscal Administration. The form "Declaration to register secondary offices" initiates the proceedings for declaring the secondary offices and the Form 060 “Tax registration statement/Registration of changes for the secondary establishments” will provide further needed information in order to guarantee compliance with regulations concerning the corporate income tax in Romania.

New aspects for non-resident taxpayers in Romania

The purpose of these regulations which amends Law No. 571/2003 is clearly emphasizing the compulsion of nominating of one single establishment, responsible for tax management, for non-resident taxpayers carrying out activities through several offices. For situations where a permanent establishment is the unique institutions designated as secondary office on the Romanian territory, according to Fiscal Code, Title II, it represents the only authority responsible with tax management. In practice, the novelties introduced through these amendments regard the occurrence of the standard form 013 in Romania which is called ”Fiscal Registration Statement/ Mentions Statement for non-resident taxpayers carrying out activities in Romania through one or more permanent establishments” (published through Order No.877/2013) and imposing clearly, for all companies, to appoint a permanent unique establishment responsible for handling tax duties. The tax environment is continuously changing proposing and imposing new features which call for an expert’s opinion that can clarify the ineluctable incongruence. Our lawyers are ready to provide professional help in order to avoid any further inconveniences that might expose your business in an undesirable manner.

De minimis Aid for SME’s in Romania

De minimis aid is a state aid proposed as a method of encouraging micro, small and medium sized enterprises and it takes the form of grants provided after a series of eligibility verifications. Road transportation companies are provided with financial aids of up to 100 000 EUR. All other business units are to benefit from finances reaching up to 200 000 EUR. There are also some specific domains considered as exceptions that we will indicate below. Among the exempted categories we mention the companies related to areas that involve activities in the coal sector, acquisition of vehicles used for transport of goods by companies providing services in this department, fishing and aquaculture, some activities directly related to export, the primary production, processing and commercializing of agricultural products. The obvious goal of granting the de minimis aids for SME’s is closely linked to the need for maintaining a strong policy of encouraging economic agents and the importance of compliance with the overall European economic climate.

Probably the most common condition that plays a highly important role in projects of this type is to guarantee the improvement of the employment sector. Thus the system provides a number of constants that require the creation of certain number of jobs up until the completion of the investment and also to introduce new employment opportunities during a three-year period after the completion of the investment. Guarantees must offer at least five positions and two of them must be provided to people who had no labor contract in the last three months , for the case you wish to obtain an aid of up to 100 000 EUR. To be offered a financial support between 100 000 EUR and 200 000 EUR, the candidate must guarantee with seven reliable positions. At least three of these must be occupied by individuals who do not have a labor contract registered during the last three months.

De minimis aid scheme in Romania – documents needed

Procedures to be followed to accomplish the de minimis aid scheme indicate several requirements. First, it is recommended to write an application form that will be submitted to the Ministry of Finance. This paper will also be accompanied by a portfolio of documents which should include: the investment plan that specifies the eligible expenditure, a valid economic analysis that proves the lastingness of the project for the next three years from the completion of the investment, guarantees concerning the employment opportunities provided by the business entity.

De minimis aid for SME’s financing – legal support

Implementation plans designed to obtain de minimis aid for SME’s financing may encounter a number of barriers that can determine a multitude of effects which might expose the investment in a more or less maleficent way. In this regard, it is recommended to seek for an expert’s help that can draw attention to specific issues describing an abnormal and not gainful business development. Our law office guarantees to secure such investments by providing legal support and also a transparent approach emphasizing the key aspects that characterize all legal procedures imposed under these circumstances.

Misleading and Comparative Advertising in Romania

Misleading and comparative advertising are legal concepts significant to conclusively draw boundaries between what is allowed while promoting a product or a service and what is a clear case of violation of the law. Comparative advertising is an alternative that eliminates applicable cases of misleading advertising and Romanian legislation introduces specific regulations which establish fundamental distinctions between the two situations. The first aspect that distinguishes the concept of misleading advertising is the lack of clarity in motivating targeted people. Such information can be of different origins but it is always influencing the economic behavior of consumers or traders causing also significant changes at competitive neutrality levels.

Main Characteristics of Comparative Advertising in Romania

From a different perspective, comparative advertising delivers an implicit or explicit discourse which refers or alludes to competitive products always within legal boundaries, as well maintaining the competitive equilibrium. In this case, any confusion is completely avoided so the consumer is never misguided, the reputation of the brand is respected as such, there is no activity to compromise the commercial designation, it does not imply an imitating phenomenon of another product, the comparison techniques are based on a number of real arguments and always apply to goods or services that serve an identical spectrum. On 3^rd of July 2013, in the Official Gazette it was published the Law No.202/2013 amending and supplementing Law No. 158/2008 concerning misleading advertising. This translates into a process of securing traders ‘position determining the avoidance of misleading advertising. This act introduces a series of stipulations indicating the exact circumstances which allow comparative advertising in Romania.

These changes are intended to solve a number of issues related to ensuring compliance with legislation and regulatory requirements, indicating the competent authorities, "determining the ordinary time limit related to complains made by consumers involving comparative advertising allegations ", creating an optimal legal framework. Thus a number of distinctions are being made between legal circumstances that aim to protect consumers’ interests. This perspective indicates the competent authority as The National Authority for Consumer Protection (NAPC). There is also introduced a definition of the concept of consumer via the Government Ordinance no. 21/1992 pointing also all situations involving consumers ‘presence. The changes made at this level specify the perimeter which controls comparative advertising for both natural and legal persons; misleading advertising in Romania is only redefined in the interactions between legal entities. In terms of the provisions introduced, the authority declared as responsible for monitoring and enhancement of law in order to combat and eliminate misleading advertising is represented by the Ministry of Public Finance and, in special cases, by the National Audiovisual Council. Our company encourages a coherent and transparent approach in all cases covering this area and our intellectual property department provides advice in all matters related to competitive and misleading advertising issues. Explaining the real legal framework is a fundamental step in understating any case related to this topic in order to identify effective solutions to protect our client's position. Our lawyers come with outspoken answers and prominent strategies always delivering the optimal resolution.

Double Taxation Treaties in Romania

The double taxation phenomenon refers to certain specific instances when the same declared income is subject to tax in two different countries. Since national tax regulations may be conceived according to different perspectives, at international level, the designated authorities established several specific standards regarding the proper functioning of the entire revenue enhancement system. On this basis, a series of effective conventions were introduced as a tool designed to handle this matter. These concluded conventions usually expose a standard structure following seven chapters. Details cover information related to explicit purpose of the act, an unambiguous definition, facts related to the taxation of income and capital, means of annulment of the double taxation process, specific stipulations which are to be followed as a state party engaging in respecting all terms.

Tax on income or capital gains

Romania has already concluded a series of about eighty treaties which are to be taken into consideration as upstanding provisions explaining all details occurred in such situations. Percentages adjusting this phenomenon vary according to different circumstances revealing a shift between 0 and 45%. These percentages exert when referring to fees and royalties, interests and dividends. The imposed percentages for tax on dividends oscillates from values of 15% stipulated in agreements concluded with Russia, Ecuador or Israel to rates of 10% in conventions concluded with China, Egypt or Switzerland. According to these documents, taxation on income and capital involves several aspects indicating the following circumstances. A first case points out the example of revenues and earnings of capital which can be subject to taxation without any limitations in the country of source and the country of residence has no tax enforcement rights. We mention here the real estate income, revenues for artists and athletes, earnings of resident natural persons. A second category indicates the example of revenues which are subject to taxation but in a restricted manner in the country of source while the country of residence must guarantee a tax deduction. Here there are to be listed the dividends, interests, fees and royalties.  A third circumstance involves the situation when the country of source cannot exercise its taxation regime but the country of residence can fully interfere in applying taxation regulations. At this point we refer to business revenues and those from international transportation, also capital gains.

Tax residency certificate

In order for these conventions to be applied accordingly the nonresident person has to provide the income payer with the tax residency certificate. The country of residence delivers these types of certificates and the original document must always be accompanied by a Romanian translation. When this document is provided the procedures for avoiding double taxation are initiated, the tax regularization process is started. This certificate is valid also for the first 60 days of the following year excepting the situations when residency circumstances are altered. This document must contain details related to specific proofs of residence in states which had concluded double taxation treaties with Romania, name, address, fiscal identification number, etc. We strongly recommend seeking for an expert’s help since legal provisions may prove difficult to be approached for those who are not familiar with Romanian law. There are also various activities which are considered as exceptions and understanding the legal background of such a fact becomes keenly important. All conventions can be verified here.

Energy Performance Certificates for Buildings in Romania

The energy performance certificate is a document that proves the energy efficiency of a building, once released it is valid for ten years except for situations when the building for which it was issued is going through a series of renovations that alters significantly the values for the energy consumption. Such buildings are subjects to evaluations determining specific rates on a scale from 1 to 100 indicating a higher value for situations when the energy efficiency is at a superior level. Another building energy rating will also be taken into consideration, thus separating edifices in seven classes from A to G, where A is a parameter indicating the most energy efficient (125 kWh / sqm / year) and the G targeting the least energy efficient items (820 kWh / sqm / year).

Buildings considered for evaluation

This document is required for certain categories of buildings such as: block of flats, family apartments buildings, residential units, building of institutions, hotels, restaurants, hospitals, including also all wings which are owned or managed by public authorities. Among the categories of spaces that do not require the existence of such a document we mention the protected monuments, places of worship, all temporary structures (which are to be used for no more than two years), independent properties which occupy a space less than 50 square meters.

Issuance of this certificate is possible after an assessment, called energy audit and is completed by an authorized person. The energy auditor is the person authorized by the Ministry of Regional Development and Public Administration to perform this type of inspection. Such assessments become mandatory starting with July 19, 2013 when it was decided to approach this matter as part of a set of policies introducing new standards in terms of energy consumption. This document is needed for concluding sale purchase and lease agreements. The absence of this type of documents may result into more serious sanctions that are established by the law. The owner of the building must register with the appropriate tax authority a copy of this document in order to be able to register the sale purchase or lease agreement.

Documents required

It is important to note that when advertising homes for sale or lease the owner should specify certain facts related to the energy certificate. Those requesting such an evaluation may contact an energy audit and also provide him with the building plans and as well some details about the changes that have occurred in the structure of the building. The file which must be submitted in order to obtain this certificate must include architectural plans, invoices illustrating the hot and cold water consumption, fuel used for the autonomous system for heating and also a comprehensive plan indicating the building in the area where is located. The costs of such assessments will vary depending on the activity and time spent for the entire process, the developed built area always considering the coefficients of localization. Authorized personnel will manage this process after which the certificate will be issued and the State Construction Inspectorate will be responsible for supervising and controlling all documents related to application of the legal provisions on buildings’ energy performance.

How to Start a Recruitment Agency in Romania

This process obviously requires the completion of a multi-step process in order to ensure that all legal conditions are being met. There are a number of matters to be taken into account regarding the optimal development of a strategy to cover all the details of setting up a recruitment agency and running the business appropriately. The company itself will be registered with the Trade Register CAEN code 7820 covering temporary staffing activity or CAEN code 7810 representing  job recruitment agencies operations. The essential legal characteristics that define most important aspects related to establishing of a recruitment company are developed and explained in HG No. 277/2002 (amended by the H.G.790/2004). The certificate for employment intermediaries is provided only if certain criteria are being met; main activities must operate within the law, there must be a solid background to sustain these activities, staff must exceed a certain percentage concerning specific education fields, they must be able to provide factual information related to labor market supply and demand.

Specific facilities required for setting up a recruitment agency

Its financial resources must be able to guarantee that there are clear means intended for self-assessment and also for offering suggestions about professional guidance. There must be a clear proof of the ability to provide and verify skills tests and also to conduct skill development training programs for all those interested in finding a job. It also undertakes to provide counseling related to appropriate techniques used to identify a job and the main strategies on how to appropriately approach the interview. Another aspect that must be taken into account refers to having all possible means of delivering, through on-line platforms, all required information on labor market connecting in this manner the supply and demand parties.

Terms related to personnel

Personnel employed in the agency must meet a number of criteria that relate to training and qualifications. Thus the percentage of employees in such an institution must reach at least 30% in terms of completion of higher education in the fields of teaching, law, psychology and counseling. Another 25% minimum percentage must guarantee the number of employees who have at least a three years experience in the field that is specified in the document requesting certification.

Documents to be submitted in order to complete the process through which the certificate is requested include papers needed for registration, the articles of incorporation, documents that prove eligibility, proof of payment for accreditation fee. If the agency in question covers recruitment for work abroad it must prove the existence of a resourceful database that has information about abroad labor market supply and demand. There must be also a proof of the existence of solid contracts signed with natural or legal persons or other foreign organizations able to intermediate the employment processes of Romanian citizens abroad. We recommend consulting a legal expert able to explain every detail common for procedures of setting up such an agency. The legal framework can often raise a number of questions that can rapidly receive an answer through professional help; our lawfirm provides all necessary details related to this topic offering also approaches to better strategies.