Romanian Connection Membership	Banner Exchange Service

On the grounds of Art. 114 par. (4) in the Romanian Constitution, the government issues the following emergency ordinance:

Art. 1. – The current emergency ordinance sets up the legal framework regarding guarantees and facilities granted to foreign investors and direct investments in Romania.

Art. 2. – The current emergency ordinance defines the following terms and phrases as shown below:

• direct investment – participation to the establishment or extension of a company according to one of the legal modalities stipulated in the law, acquisition of company shares or social parts, except for portfolio investments, and establishment and extension of a foreign company branch in Romania, by means of:
• financial contribution in national or hard currency;
• contribution in kind with tangible and/or intangible assets;
• contribution to increase of company assets, by any legal method of financing;
• portfolio investment – acquiring securities on the organized and regulated capital markets, aiming to obtain equity gains from dividends and the due interests – resulting from the activity of third parties directly involved in administration of the issuer – and the favorable difference of the sales price.
• investor – legal entity or individual, with a permanent head office or residence in Romania or abroad, investing in Romania by any of the methods mentioned in a) and b);
• resident/non-resident – individuals complying with the regulations of the currency legislation.

Art. 4- - (1) Investment in Romania and ownership of property are guaranteed and cannot be subject to any discriminatory decision. At the same time, administration, maintenance, turning to good account, extension or liquidation of an investment cannot be subject to discrimination.

(2) In Romania investors can primarily benefit from:

• possibility to invest in any field according to any legal method stipulated in the law;
• equal treatment - fair and impartial - to Romanian and foreign investors, residents or non-residents in Romania;
• guarantees against nationalization and expropriation, or other equivalent decisions;
• custom and fiscal facilities;
• assistance to follow the administrative procedure;
• right to exchange in hard currency the yield in ROL resulting from their investment, as well as the transfer of hard currency to their country of origin, in compliance with the currency regulations in force;
• investors’ right to chose the courts of law or the arbitrary bodies to settle the potential litigation;
• possibility to carry forward the losses incurred over the financial year on the account of the taxable profit of the following financial year;
• possibility to use accelerated depreciation;
• possibility to incur advertising expenses from the taxable profit;
• possibility to hire foreign citizens in compliance with legal provisions in force.

(4) The legal framework provided by par. (1) – (3) is not applicable to investors and investments operating in free areas or areas regulated by special legislation.

Art. 5. – The legislation sets up the fields where investments can be made, license or authorization requested, and the general requirements to issue licenses and authorizations.

Art. 6. – Any investor, legal entity, resident or non-resident in Romania can acquire any real right over tangible and intangible assets.

Art. 7. – Investors can exchange money in Romania under the provisions set up by the regulations of the Romanian National Bank, published in the Romanian Official Gazette, Part I.

Art. 8. – (1) Investments cannot undergo nationalization, expropriation or any other equivalent decision, except for circumstances when the decision meets the following requirements:

• for public use;
• not discriminatory;
• complying with specific legal provisions;
• prior real and appropriate payment of damages.

(3) At the investor’s request, the exact market value of the investment can be computed in hard currency, according to the exchange rate on the date of the evaluation.

(4) The respective investor is entitled to prompt examination of his case, evaluation of his investment or payment of damages in accordance with the Romanian legislation, as the case may be; the examination is conducted by the court of law or another independent and competent authority, in compliance with international treaties where Romania is one of the parties involved.
GO TOP
 

Art. 9 – (1) Non-resident investors shall have the same rights and duties as Romanian investors, except for the provisions in the current chapter.

(2) In case a bilateral agreement of mutual promotion and protection of investments, ratified in compliance with legal provisions, or another law entitles an investor – non-resident individual or legal entity – to undergo a more favorable procedure than stipulated in the current emergency ordinance, the respective investor shall benefit from the above procedure.

Art. 10. – The non-resident investors in Romania are entitled to transfer abroad without restrictions, after payment of taxes and charges, the following revenues in hard currency:

• dividend or profit from a company, if the investors are shareholders or partners or the profit comes from a company branch;
• profit obtained by a partnership association, as well as revenues from the sale of shares or social parts;
• sums resulting from liquidation of a company, in compliance with Law 31/1990 Corporations Law with subsequent modifications and additions, or liquidation of a company in compliance with bankruptcy legislation, regulated by Law 64/1995 regarding the procedure of judicial reorganization and bankruptcy, with subsequent adjustments;
• sums obtained as damages, as a result of expropriation or enforcement of an equivalent decision;
• other revenues, in compliance with the procedure of conducting the investment.

• Litigation Law 29/1990 and Law 105/1992 regarding the regulation of relations pertaining to private international law;
• Convention regulating the settlement of disagreements related to investments, between states and individuals from other states concluded in Washington on March 18, 1965 and ratified in Romania by the Decree of the State Council, no. 62/1975 published in the Romanian Official Gazette, Part I, no. 56 on June 7, 1975, in case the foreign investor is citizen of a state party in the convention and the disagreements concern an investment in accordance with Art. 25 par. (1) in the convention; under these circumstances, a Romanian company where the foreign investors hold - in compliance with the Romanian legislation – a controlling position, shall be considered as having the same nationality as its foreign investors, in compliance with Art. 25 par. (2) letter b) in the convention;
• The arbitration regulations UNCITRAL/CNUDCI; in case the arbitrators are not appointed under the provisions of Art. 6 or 7 in the above regulations, they shall be appointed by the Secretary General of the International Center for Settling Disagreements related to Investments.

Art. 12. – (1) Any investment made in compliance with the current emergency ordinance benefits from custom and fiscal facilities stipulated in the current chapter.

(2) The enforcement of measures stipulated in the current chapter and the observance of legal provisions granting the measures shall be conducted by fiscal and custom institutions.

Art. 13 – The investors benefit from the following facilities:

• import of securities, tangible or/and intangible assets that make up a contribution in kind to the social capital of a company, or it is a contribution to a partnership association or a family association needed to complete the object of activity and it is exempted from payment of custom duties and taxes on added value;
• import of technological equipment – machines and plant – that make up the capital goods, in compliance with Law 15/1994 pertaining to the depreciation of the fixed capital as tangible and/or intangible assets, with subsequent adjustments, incurred by investors making direct investments, is exempted from custom duties; the list of company names and the codes in the Romanian Customs List of Duties on Imports referring to goods that come under the above provisions is approved by government Decision at the proposal of the Ministry of Industries and Trades and the Finance Ministry;
• the possibility to chose, when new investments occur, one of the two types of fiscal incentives, without cumulating them:
• deducting from the taxable profit expenses pertaining to depreciation, even if the taxpayer choses to use the accelerated system of depreciation. The taxpayer’s choice to use the system of accelerated depreciation shall be submitted to the local fiscal institutions where the taxpayer is obligated to file the tax return petition, prior approval of the above institutions not needed;
• deducting from the taxable profit for the respective financial year a portion of 20 percent of the purchasing price of the technological equipment – machines and plant – that are capital goods purchased over the respective financial year; in case the taxable profit is not sufficient to allow full deduction of the amount due to the above portion of 20 percent portion, the remainder is deducted from the due profit of the following financial years up to competing with the deductible amount, within at most 5 years;
• entire deduction of expenses on advertisement from the taxable profit;
• full return of annual losses reported by the taxpayers in the Income Tax Statement from taxable profits obtained within the following 5 consecutive years. Compensation of losses shall be made on every term of payment of the tax income, in compliance with the legal provisions in force.

Art. 14 – The import of goods stipulated in Art. 13 letter a) is not subject to the special control of the National Agency for Control of Strategic Exports and Prohibition of Chemical Weapons, in compliance with the Emergency Ordinance 31/1994 regarding imports and exports of strategic products, approved by Law 93/1994 except for cases when imports are made with business partners from countries that do not enforce similar regulations regarding imports and exports of strategic products.

Art. 15 – The current facilities set up in compliance with Law 35/1991 regarding foreign investments, with subsequent modifications and additions, in compliance with Law 71/1994 regarding the grant of related facilities, compared to Law 35/1991 as re-published, and aimed at attracting foreign investors to industry, and in compliance with Emergency Ordinance 31/1997 regarding foreign investments in Romania, continue to be granted until the due terms expire.

Art. 16. – Facilities granted in accordance with the current emergency ordinance shall not be adjusted for 5 years.

Art. 17. – Within 30 days after the date when the current emergency ordinance comes into force, the Council for Reform and the Finance Ministry shall draft and submit for governmental approval Methodological Norms to enforce the emergency ordinance.

Art. 18. – On the date when the emergency ordinance comes into force, abrogation of the following articles occurs: Art. 1-10 and Art. 16-33 in the Emergency Ordinance 31/1997 regarding foreign investments in Romania, published in the Romanian Official Gazette, Part I, no. 125 on June 19, 1997, Art. 2 par. (4) in the Emergency Ordinance 70/1994 regarding income tax, as republished in the Romanian Official Gazette, Part I, no. 40 on March 12, 1997, with subsequent modifications and additions, as well as other contrary provisions.

GO TOP