Investments in the Romanian Pharmaceutical Industry

Investments in the pharmaceutical industry are generally intricate and exhaustive processes, especially when referring to the legal background which must advocate for the overall approach. This particular sector requires a much more fastidious business development plan since this specific field comes with various risks in the financial area and as well with vast implications in the health care industry. As a foreign investor in Romania it becomes highly important to benefit from best legal counseling as laws are continuously modified. These changes are explained through multiple means, either understood in the European context or interpreted as a needed improvement, able to adapt the national climate to international standards. Most important steps in approaching a solid investment in the pharmaceutical industry in Romania concern the practical due diligence audit and the conversion of local opportunities in real profits. Evaluating opportunities on certain niches always involves an expert’s opinion which points out, in an accurate manner, all gains and losses. Despite the troublesome experience of the claw-back tax evolution, the pharma sector in Romania provides several advantages that deserve to be nominated. An extended perspective indicates that during a harsh period as that covering the interval from 2005 to 2012, the market essentially doubled and an estimated 5% growth is expected for each of the following years. Analysts’ forecasts indicate that Romania has real chances of becoming a highly important and as well influential market for the Central and Eastern Europe area. Even if the current dynamics seems to put pressure on most active participants, constant solutions are identified and professionally approached. Important companies such as Pfizer, Sanofi or Hoffman La Roche focus on strong strategies able to compensate the bureaucratic barriers and an ineffective law apparatus. 

Apart from the specific measures which are to be taken into consideration, the national authorities frequently declared their support for the generic medicine industry. Understanding the high level of qualification as a particular trait for this industry is quintessential. There are certain types of drugs which specifically increased profits on specific sectors. Here are mentioned substances related to muscle or bone disorders, cardiovascular diseases, metabolism and the digestive system. Accurately analyzing the market and identifying possible areas for investments in the pharmaceutical industry calls for a complex evaluation as it requires the close monitoring of a domain which is always changing and continuously imposing new regulations. We shall provide all necessary documentation required by such an instance explaining the functions of the licenses, IP laws to be considered when introducing new products on the market, legal features related to general company formation aspects and specific matters related to regulatory compliance. Our team delivers alternatives by identifying most appropriate strategies adjusted for investors’ intentions, market’s tendencies and trends and active competition.

Contributions to the Environment Fund in Romania

Certain types of business activities come with specific obligations concerning taxes to be paid to the Environment Fund understood as financial contributions able to cover a series of eco-friendly policies. According to Order No. 192/2014 which was published in the Official Gazette on 21st of February, 2014, details concern explicit practices used for determining contributions according to industries involved. These newly introduced regulations are of great interest for three main areas related to oils, packaging waste and used car tires policies. Contributions to the Environment Fund in Romania regarding oil control procedures refer to taxes imposed to operators coming with this type of products on our market. This tax must be specified on all invoices proving the commercial activity. The 0.3 RON/kg contributions involve oils of synthetic or semi-synthetic provenience and also adjacent substances having or not having additional elements. The packaging domain is mentioned with regard to operators whose activity involves reusable packaging. They have to take into account the deposit system and also stipulate the real packaging value in all accounting logs. Procedures described offer necessary information concerning packaging waste management understood in terms of recycling norms. Used tires management provides important features indicating the appropriate recycling means adapted to eco-friendly strategies. Details mentioned concern as well important features referring to other substances introduced on the market and being labeled as dangerous. The sale of wood and other implicit materials is also nominated with a contribution of 2%. Hunting funds are as well included with a 3% payment. Another area which is referred to through this newly published order concern the failure of administrative units to register a 15% decrease in terms of waste disposed. The sale of various products such as metallic waste involves a 3% contribution. 

These changes come to amend the Order no. 578/2006 and they provide an effective framework able to handle matters concerning regulations of contribution through taxes which are to be paid to the Environment Fund. Understanding the obligations of each industry area, concerning these taxes, relate to an optimal function of the business itself. The statements which are to be submitted regarding the Environment Fund contributions are subject to constant changes imposing a regular monitoring of novelties in the legal field. Our team is able to provide counseling in this domain, pointing out as well other financial duties that are to be met under Romanian regulations. The lawyers in our office will deliver a complete report evaluating your business approach and conceived as a valid tool for adapting to our local taxes apparatus.

VAT on electronic services in Romania

The GEO No. 8/2014 indicating latest operations regarding Tax Code changes provides details related to future VAT regime on supply of electronic services which will modify from 1^st of January, 2015.

Starting with the next year, the present VAT regime for supply of electronic services provided by non-EU taxable persons will be extended to telecommunications, radio and television broadcasting services fields as well.  The newly introduced stipulations add important details concerning the location of the supplier and as well the place of the consumption. According to these terms, the taxable person in question is someone who is not a resident of EU area and who does not owe a business establishment within these borders, as well not having the obligation to be registered for VAT purposes for other operations but those included in the special regime. The registration member state is defined as the EU state chosen by the taxable person to declare the initiation of business operations, within EU borders. The member state of consumption is nominated as the EU member state where services are supplied. These services refer only to telecommunications, radio and television broadcasting. According to new stipulations valid starting with the 1^st of January 2015, any non-EU taxable person may benefit from a special taxation regime applying for telecommunications, radio and television broadcasting services provided to non-taxable persons, residents in an EU state. This special regime allows the registration in one single member state of the taxable person delivering these services to non-taxable individuals within EU borders. The specific regime will also apply to taxable persons, resident in an EU state, but another member state, different from the member state of consumption.

According to GEO No.8/2014, the taxable person in question, not a resident in the member state of consumption, refers to someone who possesses an establishment, headquarter for business activities on EU territory but does not owe such an establishment on the territory of the member state of consumption. The registration member state refers to either the EU location where is established the headquarter handling the business activity or the EU location where the person in question holds a secondary office. If the taxable person has several secondary offices allover EU territory, the registration member state is the state where the taxable person declared to apply the specific VAT regime. This is valid for the present year and for the two following years as well. The member state of consumption is the state where these services are supplied. New regulations explain that any taxable person that possesses an establishment handling business operations in Romania, or for the situation when the person in question does not owe a registered office on EU territory but it has an office in Romania, there is the chance to apply this special VAT service. The services in question are provided to non-taxable persons in EU member states provided that the supplier does not owe the office in the same member state. For any additional details feel free to contact our lawyers.

Financial support for SMEs in the Romanian brewery industry

The Law no. 88/2010 was republished in the Official Gazette (no.121) on February, the 18^th providing several financial stipulations concerning the small and medium enterprises involved in the brewery industry in Romania.

The newly introduced regulations concern the financial measures allowed for SMEs active in Romania in the brewery industry. These stipulations refer to a specific group of companies which declared until the 15^th of January 2009 an output less than 500 hl/year. They were not entering the bankruptcy procedures up until the moment when this law went into force. They can be labeled as small and medium companies according to law stipulations valid in Romania. They are SMEs which can be considered firms in difficulty, following current regulations. The restructuring plans for long-term viability were established according to provided legal background. They are legally aware of all financial responsibilities which must be achieved within these restructuring measures as it follows: medium companies must compensate at least 40% of expenses and small ones must compensate at least 25 %. These restructuring plans shall be approved and verified by the Ministry of Agriculture and Rural Development within 15 days after the file was submitted. The Ministry of Agriculture and Rural Development has the authority to nominate a legal or natural person, a specialist in this field, to evaluate conditions and fulfillment of all regulations. The nominated person must be certified in this area of expertise. These expenses shall be covered my companies in question. The restructuring plan may refer to a time interval of a maximum of three years.

All guaranteed facilities are no longer valid if, during the application of the restructuring plan, the beneficiary party proceeds to increasing output, fails to follow all measures stipulated in the restructuring procedures, does not assume and does not execute fiscal responsibilities on time. If the fiscal responsibilities are not fulfilled within limits they do have the alternative of paying taxes for a period of 90 days, including other adjacent payments. Up until 29^th of December of each fiscal year, all taxes must be paid. The benefits will also be suspended when the majority of shareholders controlling activities changes, without providing a notice to fiscal authorities in the area. Managers of these small and medium companies are not allowed to have committed crimes related to taxation for which the competent courts had pronounced a final judgment. Another detail that cancels benefits is represented by the alienation of any type of fixed assets, without noticing the tax authorities. At this point, an exception must be identified and that is the sale of assets which is stipulated within restructuring plans. Another condition obviously concerns the importance of making proof of all characteristics, particular for SME’s structures.  The Ministry of Agriculture and Rural Development shall provide a report for each year concerning the accessibility to this state aid scheme, according to legal stipulations. For any other additional details, our team may provide all necessary answers explaining how this scheme suits your type of business and circumstances imposed.