Last month, on 29th
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.
