Enescu & Cuc Law Firm is a law firm located in Bucharest, Romania specialized in granting legal assistance to foreign investors in the real estate and agricultural sectors. With this reason in mind we have approached the subject of starting or buying a Romanian farm and the legal procedures related to this matter.
It’s well known that Romania is one of the top European countries when it comes to the total amount of agricultural land that can be used . According to the information provided by the Ministry of Agriculture and Rural Development Romania holds a total of 13,3 million hectares of agricultural land, of witch 8,3 million hectares in arable land.
This huge agricultural potential gives room to the development of different types of farms specialized in the cultivation of cereals, vegetables, fodder etc. but also of the livestock farms.
This area should be of interest to foreign investors because beginning 2014 the citizens of a Member State of the EU, stateless persons domiciled in a Member State of the EU or in Romania, as well as the legal entity formed under the laws of a Member State of the EU may acquire ownership of agricultural land, forests and forestry land in Romania. Foreign citizens belonging to states that are not members of the European Union can also acquire ownership of agricultural land, forests and forestry land in Romania as regulated by the international treaties on reciprocal basis.
It is also important to know that The Romanian Government in collaboration with the European Union supports the development of the agriculture by granting nonrefundable founds to farmers that operate in Romania.
These are different types of farms that operate in Romania
- Family farms
- Forestry farms
- Rural farms
- Agricultural farms
- Agro-tourism farms
I.In order to set up a farm in Romania multiple steps need to be taken. The first step in order to set up a farm is the authorization of the legal form of association. Romanian law regulates different forms of association in order toconduct economical activities:
- Individual enterprise
- Family enterprise
- Sole trader
- Legal economic entities (as they are defined and regulated by the Law nr. 31/1991 regarding commercial entities) .
It’s important to choose the legal entity best suited for the means and objectives of the shareholders or shareholder. Another thing that must be taken into consideration is the fact that in order to register your company as a farm the Constitutive Act of the legal entity must include, when defining the objects of activity, agricultural activities as they are established by de CAEN Codes in Section A. This section is composed of three divisions:
1. Agriculture hunting and annex services .
This division of the CAEN Cods refers to two main activities: crop production livestock production.It includes activities regarding organic agriculture, but also the production of genetically modified crops and animals. It is not mandatory that a farm should have a sole activity, so a farm can have activities regarding the production of crops and also of livestock. Agricultural activity excludes any subsequent processing of agricultural productsfor their primary sale.
2. Forestry and forest exploitations
This division includes production of logs and the collection of non-wood products and fruits of wild flora of forests. Besides the production of wood products and forestry activities refers to products that subsequently undergo minimal processing like firewood, wood chips, wood charcoal. Further activities in processing the wood are excluded beginning withsplitting and planning of wood.
3. Fishing and aquaculture
This division refers to the exploitation of fishery resources in marine water and freshwater
II.The next step in setting up a farm, after the registration of the economic entity at the Trade Registry,is obtaining anenvironmental authorization from the National Environmental Protection Agency. According to the ordinance of the Minister of Environment and Sustainable Development no.1798/2007 the necessary documents for the obtaining theenvironmental authorization are the following :
a) application for environmental authorization;
b) sheet and statement presentation, according to Annex no. 2 to the ordinanceno.1798/2007 ;
c) proof that the request has published in at least one of the methods of information provided in annex. 3to the ordinanceno.1798/2007 ;
d)The Admission Plan in the target area;
e) the written statement of compliance with all conditions imposed by environmental agreement drawn up according to the ordinance no. 135/2010 regarding the methodology for the application of environmental impact assessment for public and private projects;
In order to obtain the environmental authorization, the economic operator must obtain from the county environmental agencies an environmental approval according to Order no. 135/2010- approving the Methodology for the implementation of environmental impact assessment for public and private projects.
Obtaining environmental approval represents the initial evaluation stage in obtaining environmentalauthorization and is made by filing a notice of intention by the project manager, accompanied by a certificate issued under planning law authorizing the construction works, the sketch of the project(farm) and the evidence of payment of the fee for this step.
III. The third step in setting up a farm in Romania is obtaining for the certain activities described in the CAEN Codes an approval from the Sanitary Veterinary Directorate according to the Ministers ordinance nr.216/2013.
The activities for witch this approval is necessary are the following (0141 cattle breeding, 0145 sheep raising goats,0143 raising horses asses,0146 raising pigs,0147 Poultry 0149 Raising of other animals bees, rabbits ,fur animals(production of honey and of leather ), 0150 Mixed farming activities of crops combined with farming of animals.
The necessary documents for obtaining this approval are the following
- application form;
- copy of the certificate of registration at the Trade Registry;
- a certificate of acknowledgement by the Trade Registry;
- Identification of the technological flux and utilities;
- The environmental authorization obtained for the activities developed in the farm;
- Property act;
- A General and detailed sketch of the space in use;
- The technical statement;
- Urban Area Plan;
- A service contract signed by the operator and a veterinarian for the provision of veterinary services for the animals of the farm.
IV. And finally if the farm owner wants to access subventions for the livestock and the land he owns from the Romanian Government or nonrefundable funds from the European Union he needs to register his farm in the Unique identification Registry (RUI) that is being kept by the Agency for Payments and Intervention in Agriculture, following a special procedure that we will elaborate in a further article.