The recognition and enforcement of foreign arbitral judgements in Romania

The recognition and the enforcement of foreign arbitral judgements are governed by the provisions found in Book VII of the New Code of Civil Procedure of Romania, Title IV, Chapter II, entitled 'Effects of foreign arbitral judgements".

According to these provisions, foreign arbitral judgements are represented by any arbitration judgement of either domestic or international arbitration in a foreign country that are not considered national judgments in Romania. Such foreign arbitral judgements may be recognized and enforced in Romania if the dispute forming its subject thereof may be settled by arbitration in Romania and if the judgement does not contain provisions that are contrary to the public order of the Romanian Private International Law.

The request for recognition and enforcement of foreign arbitral decisions takes the form of a request addressed to the court in whose district the person in regards to whom the decision is set against is domiciled or has the headquarters. If the competent court can not be determined in this manner, the power to solve the application for recognition and enforcement of the foreign arbitral decision will belong to the Bucharest Tribunal.

The person who makes use of a foreign arbitral judgement may only require its recognition in order to invoke res judicata or, in case the decision is not executed voluntarily, the consent for a forced execution in Romania. Moreover, the recognition of foreign arbitral judgements may also be requested incidentally.

Along with the request for recognition or enforcement of the judgment, a person must also consign the arbitral judgement, along with the arbitration agreement, either in original or their copies, that are subject to the super-legalization conditions established by the Romanian law. In case these documents are not written in Romanian, the applicant will have to submit their certified translation into Romanian.

The court may suspend the application for recognition and the enforcement proceedings of the arbitral judgement if the cancellation or suspension of the decision is requested by the competent authorities in the state where it was issued or the State under whose law the judgement has been pronounced. In this case, at the applicant's request, the court may require the other party to deposit a bail.

The Romanian law provides for certain reasons that can justify the rejection of the recognition or enforcement of foreign arbitral judgements, namely:

◦ the parties do not have the ability to conclude the arbitral convention under the applicable law of each of the parties;

◦ the arbitral convention was not valid under the law to which the parties have subjected it or, failing that law, the law of the State in which the arbitral judgement has been pronounced;

◦ the party against whom the judgment is invoked was not informed about the appointment of the arbitrators or of the arbitral proceedings or was unable to capitalize on their defense in the arbitration process;

◦ the establishment of the arbitral tribunal or the arbitral procedure was not assorted with the agreement between the parties or, failing that, the law of the place where the arbitration took place;

◦ the judgment concerns an unpredicted difference in the arbitration agreement or outside the limits fixed by it or contains provisions that exceed the terms of the arbitral convention; however, if the provisions of the decision which relate to matters submitted to arbitration can be separated from those concerning matters not subject to the arbitration, the former may be recognized and declared enforceable;

◦ the arbitral judgement has not yet become binding on the parties, it has been canceled or suspended by a competent authority in the state where or under whose law the judgement was pronounced.

The decision regarding the application for recognition or enforcement may be challenged only by appeal.

A foreign arbitration decision that was rendered by a competent arbitral tribunal benefits from probative force on what concerns the facts that it ascertains.

The court can not examine the merits of the arbitral judgement.

The lawyers within the law firm Darie, Manea & associates can provide more information regarding the recognition and enforcement of foreign arbitral judgements in Romania. Do not hesitate to consult  the list of lawyers in our team which you can find on our official  website and feel free to contact us at any time.

Corporate tax law 2016

One of the most important changes brought by the New Tax Code related to the income taxes. According to the new law, income taxes are due in the percentage of 16%, which is the general share.

Taxpayers who develop activities relating to night bars, nightclubs, discos and casinos, including legal persons that carry out such income under a contract of association, and in the case that the income tax due for these activities is less than 5% of those revenues are obliged to pay tax at the rate of 5% of such recorder revenues.

Tax result is calculated as the difference between revenues and expenses in accordance with applicable accounting regulations, minus non-taxable income and the tax deductions, to which the deductible expenses are added.

Deductible expenses meet a new definition under the New Tax Code, its provisions regulating that deductible expenses are those incurred in order to achieve economic activity.

Social spending may be granted of up to 5% of the salary expenses. Moreover, long-term loans from other entities witnessed a 4% reduction in terms of interest rate when it is in currency that can be deductible, being conditioned by the level of indebtedness.

One should also note the introduction of the Tax Code of a procedure similar to the correction of accounting errors in that if in the current year, an error of calculation of income tax relating to an exercise closed is identified and the error is insignificant, the correction is made on account of the current year’s profit. If the error is significant, it requires a correction on account of the fiscal result of the year at which the error refers ro.

Regarding dividends paid by a company, the dividends paid by a Romanian legal entity to another Romanian legal entity will be taxed at a rate of 16%.

It is useful to know that the dividend tax does not apply in the case that the person who collects dividends holds more than 10% of the share capital at the affiliated company, for a period exceeding one year.

Starting with January 1st 2017, the tax on dividends will be 5%.

On what concerns micro-enterprises, the New Fiscal Code brought significant changes regarding enterprises that meet certain criteria determined by law.

Firstly, it is useful to know that the definition of a micro-enterprise refers to a corporation:

▪ not engaged in banking, insurance and reinsurance, capital market, gambling or exploration, development, exploitation of oil and natural gas deposits;

▪ obtains revenues from providing services of consulting and management that do not exceed 20% of the total revenue;

▪ that realizes revenues which exceed the equivalent in lei of 65,000 euros;

▪ owns a capital that is held by persons other than the state and territorial administrative units;

▪ which does not find itself in dissolution followed by liquidation, registered in the trade register or the Courts, according to the law.

Micro-enterprise income tax is 3%.

However, the new provisions establish that what concerns Romanian legal persons that are newly founded, that have at least one employee and are constituted for a period exceeding 48 months and whose shareholders / associates did not hold equity in other legal entities, the tax rate is 1% for the first 24 months of the date of registration of the legal entity in accordance with the Romanian law.

This provision becomes applicable only in case that, within a period of 48 months starting from the date of the registration, the micro-enterprise is not in voluntary liquidation by the decision of the General Assembly, in dissolution without liquidation, temporary inactivity, did not declare on it’s own account that it does not develop activities at the headquarters / secondary offices, does not know a capital increase through contributions made by new shareholders / associates and the shareholders / associates do not sell / assign / change their held shares.

If the company has been established for a limited period, the minimum duration of the company is 48 months.

Among the changes introduced by the new Fiscal Code regarding companies, we can also mention the situation of companies owning constructions. Thus, it is provided that companies which own a construction will lodge a special declaration of enforcement, for the existing constructions in the company’s heritage on December 31st, 2015. Legal entities that own buildings in 2016 will pay a tax on buildings as follows:

a) for the owned residential constructions, the share is between 0.08% and 0.2% of the taxable value of the building;

b) for non-residential construction, the share is between 0.2% and 1.3% of the taxable value of the building.

Although the changes brought by the New Romanian Tax Code may seem discouraging at first, the law firm Darie, Manea & associates can pride itself with an experienced team of lawyers who are set to finding optimal solutions for their customers, providing up to date and complete information on the matter. Do not hesitate to contact us for further information or legal advice regarding the corporate tax law and how to open a company in Romania!

Transnational detachment and Community-wide unification of legislative provisions

The provisions of the Emergency Ordinance no. 28/2015 amending and supplementing Law no. 344/2006 concerning the detachment of workers in the transnational services have led to the correlation of the cross-border detachment to the level of EU regulations.

This was necessary because the detachment had a different meaning at a European level from that attributed by art. 45 of Law no. 53/2003, the Labor Code.

The Emergency Ordinance mentions that the elements that caused its adoption refers to issues such as preventing situations related to significant disturbance of the activity of economic operators affected by legislation concerning the tax treatment of detached workers, as well as correcting the situations arising in practice due to different interpretations of the current legislation regarding the granting of rights of which the employees can benefit from in activities resulting from foreign detachment.

First, the changes imposed by the emergency ordinance refer to the applicability of Law no. 344/2006 concerning the detachment of workers in the transnational services, so that its applicability will refer to:

▪ companies established in a Member State of the European Union, the European Economic Area or in the territory of the Swiss Confederation, in the area of transnational services, which detach, on the Romanian territory, employees with whom they have established labor relations in the conditions of the modified law;

▪ companies set on the Romanian territory which detach on the territory of a Member State of the European Union, European Economic Area or in the territory of the Swiss Confederation, in the domain of transnational services, employees with whom they have established labor relations in accordance with the modified conditions of the mentioned law.

Secondly, changes concern certain definitions, such as those related to employee detached to / from Romania, minimum wages, allowances specific to the detachment or expenses resulting from detachment.

The employee detached in Romania is the employee of an employer established in a Member State of the European Union, the European Economic Area or in the territory of the Swiss Confederation, who normally works in another country other than Romania, but who is sent to work for a limited time in Romania, when the employer takes one of the measures provided by the amended law.

The employee detached from Romania is the employee an employer established in Romania, who normally works in Romania, but who is sent to work for a limited time on the territory of a Member State of the European Union, the European Economic Area or within the territory of the Swiss Confederation, when the employer takes one extent provided by the law modified by the emergency ordinance.

Minimum wage is considered the applicable minimum wage on the Romanian territory for employees detached in Romania, or the minimum wage applicable in the territory of a Member State of the European Union, the European Economic Area or in the territory of the Swiss Confederation for employees detached from Romanian territory.

The charges arising from the detachment refer to any transportation, accommodation and meals costs, incurred for the purpose of the detachment, while the detachment allowance is that paid to compensate the inconvenience of detachment.

Moreover, employees detached on Romanian territory within the transnational services, whatever the law applicable to the employment relation, benefit from the working conditions established by laws, administrative acts, collective agreements or arbitration judgement of universal application valid in the Member State of the European Union, the European Economic Area or the Swiss Confederation, on which territory the services are provided, in regards to the aspects established by law.

The application of more favorable conditions is another key issue in regards to which changes have occurred, since the emergency ordinance stipulates that the provisions of the amended law will not limit the application of employment conditions more favorable for employees detached by companies that are established in a Member State the European Union, the European Economic Area or within the territory of the Swiss Confederation, to companies that are established in Romania, nor any working conditions more favorable to employees detached by companies that are established in Romania to companies that are established in a Member State of the European Union, the European Economic Area or in the territory of the Swiss Confederation.

It is important to note that amendments stipulate that companies which are not established in a Member State of the European Union, the European Economic Area or in the territory of the Swiss Confederation, that detach employees in Romania, can not benefit from more favorable treatment than companies established in a Member State of the European Union, the European Economic Area or in the territory of the Swiss Confederation

The law firm Darie, Manea & Associates has a team of lawyers that present extensive experience, including within the labor law area. If you would like more information on the matter, please do not hesitate to contact our lawyers who will guarantee professional, legal assistance, as well as representation before the competent authorities when required.

Malpractice in Romania

Malpractice is regulated by the Romanian Law no. 95/2006, republished recently on August 28, 2015. Under this law, malpractice is regulated in the chapter regarding the civil liability of medical staff and is defined as " a professional error committed in the practice of medicine or medical-pharmaceutical, tortious on the patient, involving the civil liability of medical personnel and medical, health and pharmaceuticals products and services provider".

The content of art. 653 sets out the limits in which the civil liability of medical staff can be invoked, adding that the medical staff (which includes the doctor, dentist, pharmacist, nurses and midwives who provide medical services) can be held liable for damages caused by error, which include negligence, imprudence or insufficient medical knowledge in the profession through individual acts in procedures for prevention, diagnosis or treatment.

Moreover, the medical personnel will be held liable for damages arising from breaches of regulations regarding confidentiality, informed consent and mandatory medical assistance as well as for damages to the profession and when they exceed the limits of its competence, except in cases of emergency when there is no competent available medical staff.

An important factor established by Law no. 95/2006 on healthcare reform is that the civil liability regulated by this law will not exclude the criminal liability if the act that caused the damage is at the same time a crime under the law.

Regarding the form of guilt, the law states that all persons involved in the medical act will respond in proportion to the degree of fault of each of them. However, there are situations where medical staff will not be held liable for damages and losses caused in the practice, namely when:

▪ they are due to working conditions, poor endowment with equipment for diagnosis and treatment, nosocomial infections, side effects, generally accepted complications and risks of investigation and treatment methods, hidden defects of sanitary materials, equipment and medical devices, used medical and sanitary substances;

▪ acting in good faith in emergencies, respecting the granted competence.

In terms of obtaining the consent, it is provided that in order to be subjected to methods of prevention, diagnosis and treatment that hold a potential risk to the patient, after having them explained to them by a doctor, dentist, nurse / midwife, the patient is asked for his/her agreement in writing. The legal age of expressing consent is 18 years, but there is a possibility for minors to express their consent in the absence of parents or legal representative under specific conditions. In fulfilling his/her obligations regarding obtaining consent, the medical staff must present the patient information at a reasonable scientific level for the patient’s power of understanding.

Moreover, the medical staff has an obligation to provide medical / health care to a person if they have accepted the person in advance as a patient, but the medical staff has the obligation to accept the patient in emergency situations, when the lack of care could endanger in serious and irreversible ways the health or life of the patient.

Medical staff that provide healthcare in the public and / or private sectors, in a location with special destination for healthcare or when it is granted outside of this place, must conclude a malpractice insurance for the professional liability cases, for the damages caused by medical act. This insurance is an essential condition for employment.

The harm insurer offers indemnities for the damages of which the medical staff in held responsible in accordance with the law, to third parties which are found to have been subjected to an act of medical malpractice, as well as for the judgement costs of the person injured by the medical act.

Holders or their representatives are obliged to notify in writing the insurer or, where appropriate, the insurers on the existence of an action for damages, within 3 working days of the date on which they are aware of this action.

Regarding the authority which holds a supervisory role regarding cases of malpractice, in the public health county departments and Bucharest is constituted the Monitoring and Professional Competence Commission for malpractice cases, which shall, by decision, establish whether a concerned situation was, in fact, a malpractice case.

The Commission may be notified by the person or, where appropriate, legal representative, who is considered a victim of an act of malpractice committed in the exercise of activities of prevention, diagnosis and treatment or by the successors of the deceased as a result of an act of malpractice attributable to an activity of prevention, diagnosis and treatment.

It is useful to know that acts of medical malpractice in the work of prevention, diagnosis and treatment are prescribed within 3 years after the injury, except for acts that are considered crimes by the Romanian law.

For more details  regarding the law of malpractice in Romania or for competent legal representation with the authorities in such a case, please do not hesitate to contact one of the lawyers within the Darie, Manea & associates law firm who will guarantee its clients complete information.

Buy-back and lease-back in Romania

Although the buy back and leaseback operations appeared slowly on the Romanian market, more and more companies have gradually started to offer such services in the form of programs. Some companies, for example, offer their customers discount vouchers they can use in order to buy other products by the means of returning previously bought products.

But what exactly are buy-back and lease-back operations and what do they entail on the Romanian market?

The buy-back operation, in general terms, represents a way for the seller to redeem their sold property from the buyer, in a certain period of time and under certain conditions.

Regarding the application of this concept in the matter of leasing operations, the  buy-back contract takes the form of an agreement between the financier and supplier of the goods under which the latter undertakes to repurchase the assets that were subject to a lease from the financier in case the property is not transmitted by the user.

There are many reasons that may underlie said redemption, but most often these operations are motivated by the desire to acquire another good by returning the previous goods by the user before the end of the leasing contract or they represent the users’ option to return the goods to the leasing societies the moment that the contract of lease ends.

Regarding the lease-back operations, they constitute a form of financial leasing which is accomplished by selling the goods, property of the user, to a non-banking financial institution, followed by the release of the right to use said goods, by the financier, for a determined period of time.

 What is characteristic of this lease-back operation is that the user owns, based on the financial leasing contract, the right to regain ownership of the goods at the end of the contract, under the terms and conditions established by it.

Moreover, Government Ordinance no. 51/1997, republished in 2000, regarding the leasing and leasing companies refers, in its final provisions, to the applicability of its legal terms to the situation where a legal person sells its industrial equipment to a leasing company, in order to use the equipment under the leasing system leasing, under the obligation of redemption.

These provisions advert upon the lease-back operations which are made possible only regarding the financial leasing operations, given that the financial leasing operations are the only ones who provide for the possibility of redemption enshrined in art. 2 letter e) pt. 2 of the aforesaid ordinance, which states that a financial leasing operation is the operation that meets, among others, the condition that the parties have expressly provided the fact that at the expiry of the lease, the transfer of ownership of the property will be made to the user.

Seeing that the lease-back and buy-back operations are relatively new within the Romanian market, Darie, Manea & associates can provide legal advice and counseling, as well as representation with all the competent authorities in the case that you need further information regarding the matter. Please feel free to contact us whenever you see fit and our team of lawyers will offer you the optimal solution to your problems.

Engagement vs. Cohabitation. Legal provisions and application in Romania

Engagement under the provisions of the New Civil Code of Romania

 At this point, the institution of engagement is governed by the provisions of the New Civil Code, specifically by the provisions of articles 266-270 of Law no. 287/2009 on the Civil Code.

Article 266 thus states that "the engagement is the mutual promise to enter into marriage". However, all regulations related to this institution are applicable provided that the engagement was concluded after the date of entry into force of the Civil Code.

The conclusion of an engagement in Romania does not imply the observance of any formalities, the Civil Code expressly stating that its evidence can be achieved through any means of proof. Moreover, the conclusion of the engagement is not a criterion for the conclusion of marriage.

Romanian legislation does not recognize same-sex marriage or engagement. This emerges clearly from the provisions of par. (5) of art. 266 which provides that the above-mentioned possibility to conclude an engagement exists only between a man and a woman. Similarly, the provisions of art. 271 of the New Civil Code regulates marriage "between a man and a woman through free and personal consent".

Engagement is considered to be a social and moral relationship, consensual and freely consented, that offers parties a certain legal status and is also a producer of some patrimonial effects in the event of cessation. Like any social relationship, it can be broken, and the New Civil Code of Romania provides for this possibility in art. 267, stating that the fiance who breaks the engagement will not be obliged to conclude the marriage, and the establishment of any penalty clauses on breaking the engagement will be considered unwritten. Regarding the possibility of breaking the engagement, there is a manifestation of symmetry with its conclusion, being that the break of engagement is not subject to any formality and may be proved by any means of evidence.

As we mentioned the existence of certain patrimonial consequences in the event of a break of engagement, it should be mentioned that the break will result in the obligation to repay the gifts received in the consideration of engagement or throughout the engagement, as well as in the consideration of marriage, the exception being the usual gifts. The refund will be made in nature or to the extent of enrichment, if the first method of reimbursement is not feasible. The situation in which there is no obligation of restitution regards the termination of engagement by the death of either one of the fiancés.

Romanian legal drafters felt necessary to establish the liability for the abusive break of engagement, so that the person responsible for this will be obliged to pay compensation for the expenses incurred or contracted in consideration of marriage, but also for any other caused damages. In identical circumstances, the person culpable of causing the break of engagement party can be held accountable. These actions have an accountability limitation period of one year, which begins to run from the break of engagement.

Cohabitation

Cohabitation is accomplished between a man and a woman who do not make any promises regarding the conclusion of the formalities relating to marriage. We see here the first difference between cohabitation and engagement, seeing that while engagement involves a promise from both sides to enter into the marriage, cohabitation does not require such a promise, but the simple cohabitation of the parties without the consideration of the marriage. Therefore, the engagement may involve cohabitation in some degree, specifically in terms of coexistence, but cohabitation can not involve engagement.

Paramours do not conclude any form of promise between them. However, even if the parties to a cohabitation would promise each other something, they would not be penalized for failing to comply with the promise because the cohabitation is not regulated by the Romanian legislation, specifically by the New Civil Code, this being the second difference between engagement and cohabitation .

Cohabitation is not an institution regulated by law and its development is based merely on traditions and customs, not on legal provisions, while engagement is specifically regulated by the Romanian legislation regarding family law.

Darie, Manea & associates guarantee its clients professional legal consulting and representation with all the competent authorities. If you need further information regarding the engagement or the implications of cohabitation in Romania, don’t hesitate to contact one of our specialized lawyers. Family law represents an important field of our activity and we look further to offering you the information and guidance you need.

Open a business with alcoholic and tobacco products in Romania

How can I open a business regarding the production and marketing of tobacco or alcoholic products in Romania?

In Romania, these activities are regulated by the Tax Code currently in force, as well as by the subsequent amendments. Alcoholic and tobacco products represent excise products, i.e. products whose consumption are laid on special taxes levied directly or indirectly.

The authorized warehouse keeper is a natural or legal person authorized by the competent authority to produce, process, hold, receive or dispatch the excise goods mentioned above in a suspensive regime, in a tax warehouse.

We can define the tax warehouse as the place where the authorized warehouse keeper develops the activities referred to in terms of excise goods.

There are, however, excise products whose production and transformation does not involve a tax warehouse. These products are: beer, wine and fermented beverages other than beer and wine, produced in individual households for their own consumption, as well as wines made by small producers who obtain on average less than 1000 hl of wine per year.

How can I get the fiscal warehouse keeper authorization and what is the competent authority?

If you intend to get the authorization for fiscal warehouse keeper, you must submit a request to the territorial customs authority or the interior customs offices and the General Directorate of Customs, in the case of large taxpayers.

A fiscal warehouse may operate only on the basis of a valid permit issued by the competent authority - the Commission instituted by the Ministry of Finance for the licensing of excise products.

The application must contain the following information and documents concerning:

a) the location and nature of the place;

b) the types and quantity of excise goods which are estimated to be produced and / or stored in the course of one year;

c) the list of excise goods to be procured for use as feedstock in the production activity of excise goods;

d) the identity and other information concerning the person who will carry out the activity as an authorized warehouse keeper;

e) the administrative organization, operational flows, the yield of the machines and other data collection relevant to determining the excise duty, set out in a procedural manual;

f) the ability of the person to be authorized as a warehouse keeper to meet the chargeability conditions - these conditions are those in effect on the date on which the  excise become chargeable in the Member State in which the release for consumption takes place;

g) the maximum production capacity and / or storage capacity, declared by the natural person or the legal person’s director who intend to be authorized as a warehouse keeper;

h) the environmental authorization / integrated environmental authorization issued under the relevant laws, or proof that steps were taken to achieve them;

i) proof of minimum capital subscribed and paid in the amount provided in the methodological norms.

The level of minimum share capital subscribed and paid in Romania set on excise product are established on categories as follows:

▪ Beer storage - 10,000 lei;

▪ Wine storage - 2,000 lei;

▪ Storage of fermented beverages other than beer and wine - 50,000 lei;

▪ Intermediate products storage- 100,000 lei;

▪ Ethyl alcohol and / or spirits storage - 100,000 lei;

▪ Tobacco storage - 500,000 lei;

If there are being stored and / or produced more categories of excise products, the minimum share capital subscribed and paid will be that corresponding to the category of excise goods for which a higher level is provided.

Apart from the conditions regarding minimum share capital subscribed and paid, are there any other conditions that must be met in order to obtain the authorization of fiscal warehouse keeper in Romania?

Yes, the competent authority for the authorization of tax warehouse keeper will proceed to grant the authorization only if the following conditions are being met:

a) the place is to be used for the production, processing, storing, receiving and / or sending of excise goods;

b) the place is located, constructed and equipped so as not to allow the removal of excise goods from this place without excise duty;

c) the place will not be used for the retail sale of excise products;

d) a natural person who wishes to carry out the activity as an authorized warehouse keeper has not been definitively convicted for certain offenses listed in the Fiscal Code and incriminated by various laws;

e) a legal person who wants to carry out the activity as an authorized warehouse keeper or the directors of such legal person have not been definitively convicted of certain offenses established by the Tax Code;

f) the person wishing to operate as an authorized warehouse keeper must prove that they can meet the requirements of enforceability;

g) the person wishing to operate as an authorized warehouse keeper must not have any outstanding tax liabilities at the consolidated general budget, such as those managed by the National Agency for Fiscal Administration;

h) the excise duty on the finished product can not be lower than the weighted average of the rates of excise duty of the raw materials;

i) the legal entity does not find itself in the bankruptcy or liquidation proceedings.

Seeing that the authorization for fiscal warehouse keeper implies many factors and is a rather complex process, Darie, Manea & associates wishes to help its clients with proper and complete information. You can contact our law firm and consult our list of lawyers specialized in commercial and fiscal law and we will make sure that the clients’ preferences are being met with minimal effort on their side. Feel free to contact us at any given time.

The encouragement for business investors called “Romanian angel investors”

Last month, on 29^th April 2015 the Deputy Chamber has adopted a draft law, regarding the encouragement for business investors called “angel investors”. There are envisaged fiscal measures for investors, called business-angels, who want to invest in small companies as defined by Law no. 346/2004 regarding the establishment and development for small and medium enterprises, with subsequent amendments. Business angels are individuals, usually with business experience, who provide capital for start-up companies.

Legal conditions

Firstly, in order to benefit of fiscal facilities, the Romanian company that will receive the investment, must fulfill cumulative the following conditions:

 - The company must have the legal form as “limited liability”, in accordance to article 2 of the Law no. 31/1990 regarding the companies;

- The investment must be made in an autonomous company; According to the Law no. 346/2004 regarding the formation of small and middle companies, a legal entity is autonomous if it holds less than 25% of the share capital in one or several other companies or if one or more companies do not hold more than 25% of its share capital.

- The company is not facing the insolvency procedure, bankruptcy or an arrangement plan concluded with the creditors.

The legislator has the intention to help and encourage the investment in small companies, but not all companies can enjoy these legal provisions. Activities like, insurance and reinsurance, financial service, any other financial activities, gambling; steel manufacturing or steel trading; coal manufacturing or trading; maritime and fluvial shipbuilding; production or trading of weapons, ammunition, explosives, tobacco, alcohol, substances under national control, narcotic and psychotropic substances or any kind of consultancy services.

Secondly, the investor must satisfy also several conditions, and the most important one is to be an individual outside the company who do not have crimes or facts registered in the fiscal record. The investor has not been declared incapable or has not been convicted for offenses such as: corruption, dilapidation, tax offenses under the Law no. 656/2002 on preventing and sanctioning money laundering, or under the Law no. 31/1990 regarding the companies.

Regarding the investment, the draft of law has had different thresholds but the final version, proposed and approved by Deputy Chamber, establishes a mandatory investment between 3,000 Euros and 200,000 Euros. The equivalent in lei (RON) of the investment is calculated at the exchange rate provided by the National Bank of Romania from the date of the capital increase.

The investment is carried out strictly in order to fulfill the main activity of the company and the business plan.

An interesting condition is that as a result of the increase capital, the investor must not hold more than 49 % of the share capital. It will be interesting to see how such condition will be respected, because most companies have a share capital of 200 (two hundred) lei, approximately 44 Euros.

In order to fulfill this condition, requested by the law, the share-capital of the company must have a value of approximately 28.000 lei.

Fiscal facilities

The investor will benefit of fiscal facilities consisting in the exemption from tax on dividends for three years after the investment was made. The facility is granted for the dividends corresponding to the shares obtained as a result of the capital increase. The exemption is applicable only if the investor does not alienate the shares before the expiry of three years from the date of their acquisition. Besides this condition, there are also other provisions that must be respected in order to benefit of the fiscal facilities. Thus, the Article of Incorporation must contain several clauses, such as: (i) the participation to profits and losses proportional to the percentage of shares held by each associate; ii) the decisions regarding the business plan and the renouncement to share the profit obtained as a result of the investment, must be taken unanimously by all associates; iii) the investment is not distributed to the shareholders three years after the business angel investor registration at Trade Register; iv) the company has no debts to the general budget on the date of  shares sale to the individual investor.

Dental tourism in Romania

I heard a lot about dental tourism in Romania, but I’d like to know more about it. What is dental tourism?

           Dental tourism is a relatively new medical industry, a type of tourism that sums up to foreign citizens that require a certain kind of dental treatment which, for various reasons, they can’t get in their country of origins, thus they travel to another country in order to get the treatment in a different healthcare system.

           Above the reasons that prevent people to get the appropriate treatment in their own country are as follows:  the treatment is too expensive in their country, the treatment requires a higher level of expertise that can’t be found in their country etc.

Why should I choose Romania to get my medical treatment?

            According to numerous studies and experts, the dental system in Romania is strongly supported by numerous factors that make Romania one of the greatest countries in terms of dental tourism.

            One of the first arguments to consider in the process of choosing the appropriate country for your treatment is that the private clinics in Romania can offer the same high quality level of dental treatment that can be found in the Western Europe countries and even U.S. or Canada, but for only a fraction of their cost. Romania offers great costs packages.

            A second factor to take into consideration is the wide range of dental treatments and procedures, executed by experienced and well trained doctors, with the latest medical equipment.

            Romania presents foreign citizens with great accommodation offers, thus making travelling to Romania for medical treatment more affordable than the costs of the medical treatment in other countries alone.

How does the whole dental tourism system work in Romania and what are dental tourism agencies exactly?

            Dental tourism agencies are travel agencies specialized in dental tourism that collaborate through contracts with various dental clinics and present foreign citizens in search of dental treatments in our country with the best medical and accommodation offers.

            The travel agency usually requires a commission that is given by the dental clinic from the patient’s dental treatment plan. Neither the patient nor the dental clinic has to bear any additional costs.

            In Romania, the dental tourism is a rising market and more and more foreign citizens from all over the world seek dental treatment for all the reasons mentioned above. Thus opening up a dental tourism agency is an appropriate and great investment opportunity in Romania.

            For more information on how to open a travel agency, please feel free to consult our website and contact our specialized team on the subject.

Darie, Manea & associates can offer legal guidance in the process of opening up a travel agency, as well as any further information you may need concerning this subject. Our lawyers are dedicated to meet your expectations, acting with professionalism and experience in any matter.