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.