Monday, January 20, 2014

Romanian State Aid Schemes for Foreign Investors

State aid can actually represent a solid alternative for foreign investors and understating procedures related to this area becomes mandatory. Applying for these financial supports means following strict regulations and benefiting from professional help is a plus for any approach of this kind.

Foreign investments in Romania clearly focuses on several main areas such as IT, agriculture and the highly competitive domain of externalized services, still delivering plenty of alternatives in various other areas which might not be as popular as those mentioned above but deserving attention and a solid professional business approach. In order to provide a coherent support for such cases the Romanian state aid schemes for foreign investors were adjusted through the Government Decision no. 955/2013 which was included in the Official Gazette no. 764 on December 9, 2013. These stipulations come to extend the terms of the Government Decision no. 797/2012 until June 30, 2014 providing new alternatives for investing authorities willing to apply for state aid in Romania. Recent changes also operate as a budget increasing measure adding an extra financial boost of 35 million Euros. The main goal of this provision is to secure regional development for the time interval between 2013 – 2020. Beneficiaries of these funds will have to create at least 200 new jobs with a minimum rate of 20% for the IT&C component guaranteed by the investment plan.

Financial Support for Foreign Investment in Romania - conditions

As we previously mentioned in our articles, financial support for foreign investment in Romania implies the responsibility to introduce a number of new jobs and also to maintain these positions. Features such as profit tax and social security contributions are duties that must be respected since, for the next five years after implementing the project, activities shall be closely supervised. Procedures to be followed specifically sustain the importance of the letter of bank guarantee which plays a distinctive role for a repayment instance. After submitting this letter the fund will be paid out. Even if understood as an implicit detail, the incipient phase of the business approach involves a consistent financial basis to cover expenses occurring till requesting the state aid. There are particular stipulations for those projects having a bank financing backing implying a set of specific documents which must be submitted.

Legal counseling during the implementation of such a project is definitely a condition for financially securing the investment. Romanian state aid schemes for foreign investors are controlled through a highly intricate bureaucratic apparatus that requires a professional approach able to point out immediate moves and possible vulnerabilities. Romania is also a country where sudden fiscal changes might confuse and an expert up-to-date with latest legal interventions offers a substantial assistance on this point. Understanding operational costs and benefiting from the cooperation of highly skilled professionals, effectively informed in matters concerning the typical administration tools, enlarge the perspectives for these approaches.  Programs offering financial support for foreign investment in Romania may also provide alternatives for areas less explored by international investors, the presence of an expert familiar with local opportunities becoming even more predictable. Our team is strictly acquainted with the most efficient strategies to be taken into account when applying for such an aid. We are deeply concerned with any feature that might impact the normal development of the project itself and our lawyers identify best alternatives suiting the needs of any business.

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