Areas of Foreign Investment in Romania for 2014

There are quite a few predictions available in the media for the main areas of investment in Romania by foreign investors, however mostly all specialists agree that agriculture, IT and outsourcing will be the main areas of interest for foreign investors in Romania next year. As a law firm with the vast part our clientele being foreign investors in Romania, Enescu & Cuc Law Firm has assisted over the last 10 years business people expanding into all mentioned areas with the purchase of Romanian agricultural land, IT and Communication as well as outsourcing companies setting up base in the country.

"The main argument for the interest in agriculture is the intention of foreign investment funds to purchase land and farms, but also for the cultivation. Romanian land offers major advantages to investors, because there are large areas of land that can be assigned organic crop area, which raises the price of the final product, "said in a statement Bogdan Badea, managing director Accace in Romania, in accordance to Mediafax.

Among the areas of interest next year, agriculture will attract the largest part of investment, but the percentage can not be estimated.

IT is also an area of ​​interest due to increasing demand for applications and software development, where Romania is regarded as one of the most mature markets for outsourcing.

One of the factors that attracted foreign companies lately, but that often goes unnoticed, is outsourcing. The reason for this is simple: the great ratio price - quality of services provided , simplified internal processes and increasing investor confidence in the local market by reducing the negative impact of fiscal unpredictability and taking administrative burden.

Analyzing the preparedness of Romania regarding foreign investment, the company shows the benefits to the countries in the region remain labor and operational costs low , while weaknesses are the bureaucracy that investors perceive as excessive taxation and lack of predictability.

NOTE: Enescu & Cuc is a law firm that maintains good professional relations to a multitude of European lawyers. One of these law firms is located in Belgium.

Plans to Modernize Romanian Danube Ports

The Romanian Minister of Transports has recently made declarations related to plans of the Romanian Government to modernize the Romanian Danube Ports. This would mean a very important boost to the local cities and important developments in the country. Lastly it would definitely also mean some additional points of interest for foreign investors in Romania.

"There are many infrastructure projects that I would like to go down in history, but one of them, which I hope it can carry out is the one that refers to the corridor Danube - Main - Rhine, for example, the draft integrated that not only do the Danube waterway and the huge potential of economically , but we can modernize all the ports that are the Danube, to modernize in the sense that we multimodal centers , intermodal logistics , "said the Romanian Minister of Transports in the Romanian press.

" This project will be conducted in the Connecting Europe Facility, we have allocated 750 million euros to this project is an integrated project: rebuilding ports and logistics centers, " said the minister.

The Romaian Ministry of Transport announced in October that it had 1.3 billion euros, European money which will be used to rehabilitate railway Craiova-Calafat, an investment of 400 million euros, and to modernize the 16 Danube ports and sea.

Note: E&C Law Firm has provided in the past assistance to foreign investors activating in the infrastructure development in the country and foreign companies participating in auctions organized by the Romanian State.

Chinese Investments in Romania

Finally it seems that Romania is trying to make the most of its geographical position in Eastern Europe bordering the Black Sea. As we are a law firm that deals mostly with foreign investors we salute the ideas launched during the latest Chinese official visit to the country.

Romania is targeted by China for inclusion on the strategic map of the new Silk Road , Beijing- London axis. This explains the Chinese official interest accords Romanian infrastructure projects such as a high speed train between Arad and Constanta and a mammoth industrial park on the Black Sea .

The Chinese prime-minister's visit to Bucharest is not accidental and Chinese investors send an important political message in the context in which Romania applying for inclusion on the map of the new Silk Road . It is a large project thought to facilitate trade between Beijing and the EU, in the context in which China wants to redirect to the community about 5 % of total exports.

The Romanian authorities have discussed with the Chinese on several infrastructure projects , including a high-speed train linking Constanta and Bucharest to Vienna , and an industrial park in the port area Agigea balance, the Danube - Black Sea Black Sea respectively .

The new park is expected to host the 2000 Romanian-Chinese joint ventures that facilitate trade between the two countries , especially in terms of agricultural products and electronics .

"China is the largest developer in the moment and it is important to generate projects that create jobs and wealth. These jobs generate some income taxes , social taxes , a share of which come from local authorities and develop budgets localities . solve social problem is unemployment, which is very important for any family , there are many factors which are very beneficial if we , the global economic crisis situation , to bring billion investment . example , this park Agigea is estimated at $ 10 billion by the Chinese and only 1% for construction authorization think of how much , "said Nicu Constantinescu .

Another project that is in question is the first high -speed train that would reduce from 15 to 4 hours distance between Arad and Constanta .

Why would the Chinese invest tens of billions in Romania

Infrastructure projects that Chinese investors discuss them these days in Bucharest with Romanian authorities are of strategic importance to Beijing , said Ionel Blanculescu , honorary advisor of Prime Minister . High speed train Arad , Constanta and industrial park on the Black Sea is key pieces in a comprehensive plan to achieve a new " Silk Road " that would cross our country .

Romanian-Chinese Trade will increase with over 5 billion

The Romanian Law Firm Enescu & Cuc is oriented towards foreign investors in the Romania therefore have to mention one of the most important international events in Bucharest in the last year: the Eastern-European - Chinese Summit. During this event  the Chinese Prime Minister Li Keqiang said that the amount of investment contracts that Chinese companies will sign with Romania, during his visit to Bucharest, is "huge" and will exceed the initial value estimated by the two parties.

The Chinese Prime Minister said: "Regarding the amount, I want to assure you that is huge. Tonight, the Work Group will discuss the projects and these will exceed the amount that is initially set contracts. I don't want to mention the amount, because I want to be a surprise, "he further added.

The amounts unofficially representing the value of contracts signed during the visit of Chinese Premier in Bucharest is between 5 and 8 billion.

Romania and China on Monday signed cooperation agreements for the establishment of a joint technology park and resumption of cattle breeding and pork to China, and several cooperation documents on energy, including nuclear and thermoelectric.

Romania: Strongest Economical Growth in the EU for 2013

Romania has very attractive macro-economical results for 2013 when compared with other EU States. Romania recorded in the third quarter the strong growth in the EU, at 1.6% , followed by Latvia , 1.2 % , while the euro zone economy slowed to a rate of expansion of only 0.1 % , after it came out in the second quarter from a prolonged recession.The Eurozone economy grew by 0.1% in the third quarter from April to June , but fell by 0.4 % on the corresponding period last year, according to data presented Thursday by Eurostat.EU GDP rose by 0.2 % from the previous quarter , while the annualized growth rate was 0.1 % .In the second quarter , growth was 0.3 % in the EU and the euro area , which came as a prolonged period of recession a year and a half.In addition 1.6% from the second quarter and an expansion rate of 4.1 % on the quarter treiela 2012 , Romania recorded for the third quarter of the strongest growth rates in the EU.

No Restrictions for Foreigners Purchasing Romanian Farmland

Since Enescu & Cuc is a law firm specialized in Real Estate transactions we keep a close watch on the latest developments related to the limitations for foreigners intending to purchase Romanian farmland. The latest news in Romania shows that the state will remove restrictions currently imposed foreigners who want to buy agricultural land after January 1, including the requirement to have experience in agriculture, but keep the provision for pre-emptive right of Romanian citizens, according to a legislative bill .

The government had recently showed its intention to limit to 100 hectares agricultural land that a person can hold, Romanian or from another EU country but maintained the purchase conditions on agricultural knowledge and minimum of five years activity in this sector." And these restrictions have been removed , but maintaining the right of first refusal to purchase the land of individuals co-owners , tenants , neighbors, individuals and young people aged up to 40 who were farming in the locality in which the respective agricultural land ,"said sources in the Ministry of Agriculture agency AFP .The measures are contained in a draft law regulating the sale and purchase of agricultural land by individuals. According to sources quoted , the project will be discussed in the Government meeting on Wednesday.
When you receive an offer from a foreign national , the seller is obliged to go to town hall with a petition seeking notification and display preemptorilor offer for sale of agricultural land. The application shall be accompanied by the offer of sale of agricultural land , which will include , in addition to the asking price for the land , the name seller, address of the place of residence , location of land area , land use category and document.

If you intend to purchase Romanian farmland please contact our law firm for the latest information on this matter.

Opening of Publishing House in Romania

Publishing is a special type of economic activity an in order to start up a company that specializes in these field special regulations established by the law need to be met. 

The first step in order to register a company specialized in publishing activities is registering the company at the Trade Registry. In order to develop this type of economic activity the Articles of Incorporation need to include when defining the object of activity the following NACE CODES depending on the type of publishing activity that the company will have 5811 publishing activities of books, 5812 publishing activities of guides, lists and similar ASRE, 5813 Publishing activities of newspapers, 5814 Publishing activities of journals and periodicals, 5819 Other publishing activities.

One of the most important things that you need to take into consideration when it comes to publishing activities is the fact that books and articles of any kind are the subject of copyright.

According to the Romanian legislation regulating copyright literary and journalistic writings, lectures, sermons, pleadings, addresses and any other written or oral works, scientific works, written or oral, such as communications, education, university courses, textbooks, scientific projects and documentation are subject of copyright. This means that these types of original works can be made public only if the author decides to do so. Also the author is the one to decide the name under which the creation will be made public, or whether the original creation can be altered. The author of the original creation is the one who will be compensated in case his rights are violated.Copyright gives the author financial rights that arise from his/hers original work. So the reproduction, distribution, renting, elaboration of derivative works give financial rights to the author of the original work.

If you’re planning on opening a publishing company in Romania you need to obtain ISBN Codes from the National Library of Romania.ISBN is international code identification for books.

So after registering the company at the Trade Registry you need to register your publishing company at the National Center of ISBN. This National center is organized in the Romanian National Library. The necessary documents for the registration at the National Center of ISBN are the following:

a)      The articles of incorporation of the company;

b)      The certificate from the Trade Registry;

c)       The standardized form that the Romanian Library provides;

d)      The company’s stamp;

e)      The editorial plan.

At registration the new publishing company will receive a total of 10 ISBN codes. The registration of the Publishing Company will take place only in the presence of the director or of the person designated to handle the editorial activity.

Obtaining the ISBN for a book title confers no right of exclusivity for the name and / or title of the book and the publishing company’s name.

To protect the publisher's company name / title of the book is necessary to register them with OSIM (State Office for Inventions and Trademarks).

Another formality that needs to be taken into consideration is the fact that publishing companies need to print the CIP Description provided by the National Library of Romania on every book they publish. In order to obtain the CIP description from the Romanian National Library the Publishing Company needs to submit a standardized application.

The purpose of the CIP Program is to promote Romanian editorial production and provide the necessary information for the selection, acquisition and processing of new editorial to the beneficiaries.

The CIP Program beneficiaries are publishers, bookstores, libraries, book broadcasters, so by doing so all the interested parties have the all the necessary information regarding editorial appearances on the Romanian book market. The CIP standardized application is filled by the publisher for each book title that is on the prepublication faze.

                The main source for obtaining the necessaryinformation in order to fill the standardized CIP application is the title page of the book. The bibliographic data necessary to identify publications are: the author, title, publisher, and place of publication, year of publication, ISBN, genre or topic briefly summarized.

Another imperative obligation for the publishing company is the procurement of literary stamps. The literary stamp is worth 2% of the selling price of a book and is added to that price. The Literary stamp is applied to each copy of books sold by units of any kind, regardless if the book is edited or not in Romania.

The national authority that issues the literary stamps is the Romanian Office for Copyright. In order to obtain literary stamps for different books the publishing company needs to place an order at the Romanian Office for Copyright for the necessary number of literary stamps.

The sums paid by the publishing companies for the literary stamps are used for certain activities established by the law such as: supporting cultural projects of national interest, participation in contests of interpretation and creation in the country and abroad, promoting actions involving Romanians abroad, support and protection of film, theater and music, adding funds to support the work of young creators, performers etc.

Setup of Production, Media, Film, Video/Audio Recording Company in Romania

Setting up a Romanian company specialized in the distribution of recorded media needs to follow a couple of different steps.

The first step is registering your company at the Trade Registry. In order to develop this type of activity the company’s object of activity needs to incorporate the following NACE Codes: 591 Production activities regarding Motion pictures, video and television programs, 5911 Post-production activities regarding Motion Pictures, video and television programs, 5912 Activities of distribution of cinematographic films, video and television programs, 5913 Motion pictures projection, 5914Audio recording and music publishing activities.

One of the most important things that need to be taken into consideration when starting a company in this domain is that these types of productions are protected by the law regulating copyright. According to Romanian legislation original cinematographic productions and musical creations of any kind are subject of copyright. This means that the author of these creations is the one to decide whether the creation can be made public, if the creation can be altered, the name under which the original creation will be made public, and also the author of the original creation is the one who will be compensated in case his rights are violated.

Copyright gives the author financial rights that arise from his/hers original work. So the reproduction, distribution, renting, elaboration of derivative works give financial rights to the author of the original work.

When it comes to the production and distribution of motion pictures there are special regulations to be taken into account.  Any person or legal entity that operates in the industry needs to be registered in a special Register held by the National Centre for Cinematography. Here are some of the documents needed for the registration – for private persons that operate in this industry:

a) Permit of residence issued by the mayor in accordance with the law regulating organization of economic activities by individuals, coded according to NACE codes;

b) Certificate of registration at the Trade Register;

c) Proof of payment of legal fee for registration in the Register of cinema and for the release the certificate of registration;

- For Companies operating in this industry;

a)           Articles of incorporation incorporating the correspondent NACE Codes and any legal documents showing that cinema activities are to be undertaken by the legal entity ;

b)            certificate of registration at the Trade Register and certificates of references;

c)            Proof of  payment of legal fee for registration in the Register of cinema and for the release the certificate of registration;

The legal entities and persons operating in the motion picture industry need to follow the following rule: each film projection which is operated for public sale or rental in Romania is to be classified according to the law prior to its first communication to the public.This is necessary in order to protect the viewing public, especially minors.

 Movies of any kind, recorded on any medium which will be communicated to the public by sale or public projection, rentalin Romania will be classified into the following categories:

a) General audience films, indicated by the marking AG;

b) Films can be viewed by children under 12 years, only with the parents’consent, indicated by the marking AP -12;

c) Moviesthat are not recommended for young people under 15, indicated by the marking N -15;

d)banned  films for minors , indicated by the marking IM-18;

e) Banned movies for minors and public screenings, indicated by the marking IM -18-XXX;

f) Banned films for communication, indicated by the marking IC

The category in which the film is placed by the Motion Picture Classification Commission will be brought to the attention of the general public by a distinctive inscription indicating the category in the appropriate size and format provided by the law, as follows:

a)In the credits the movie for at least 4 seconds, in static form;

b) On the movie poster and theater programs;

c), applying on the cover of thetape, DVD, CD, labels issued by Service of Classification of the Registry of Cinema if they are to commercialized or rented.

d) On the ticket of entrance into the cinema.

When it comes to the distribution of movies and music the provision of the law regulating copyright need to be followed. In order to do so the company that wants to distribute movies and musical products needs to obtain approval from the Romanian Office of Copyright. This governmental organization has the role of regulating, keeping a correct evidence of the persons that are protected by copyright by elaborating  national registries, surveillance, licensing, arbitration in the technical-scientific field of copyright and related rights in Romania.

The Romanian Office of Copyright authorizes different associations ofcollective management of copyright among which the Union of Composers and Musicologists of Romania, an organization specialized in the protection of the rights of composers and musicologists in Romania.  The Romanian Office of Copyright is the one to establish the fees that need to be paid for the use and distribution of musical products.

Opening a Textile Factory in Romania - a Legal Perspective

According to the data provided by the Romanian Ministry of European Integration the clothing textile sector is one of the dynamic sectors of the Romanian industry, mainly the clothing industry that managed to keep largely a high degree of competitiveness. This made the Romanian products represent 4.4% of EU imports (mainly in Germany and Italy).

In terms of competitiveness, there are differences between sub-sectors of the clothing and textile industry. Textile related products and stockings are competitive on the international and EU market, the production of knitwear has approx. 75% of competitive products, especially cotton, wool and silk with high complexity of processing. The production of woolen fabrics and silk for clothing has over 80% of competitive products.

A company thato perates in the textile industry, is a company that inserted in the Constitutive Act one of the following NACE Codes that define the its activity: 1310 Preparation and spinning of textile fibers, 1320 Production of fabrics, 1330 Finishing of textiles, 1391 Manufacture of knitted and corsetry, 1392 Manufacture of carpets and rugs, 1399 Manufacture of other textiles, 1411 Manufacture of leather clothes, 1413 Manufacture of wearing apparel, 1420 manufacture of articles of fur.

A company specialized in textile and clothing production is to obtain authorization for operation in terms of safety and health at work. This authorization is necessary in order to ensure the health and safety conditions at work and the prevention of accidents and occupational diseases; therefor employers are required to obtain it before the starting of any work.

For authorization in terms of safety and health at work, the employer shall submit an application to the Territorial Labor Inspectorate within whose jurisdiction they operate. This is necessary because when it comes to the activities developed in this domain there are certain special regulations to be followed.

These are a couple of obligations established by the laws regulating this particular domain:   Every type of machine will work on only by qualified and trained personnel on the functioning of the machine in question.Before commissioning the machine dangerous areas specific to each machine will be verified. Any technical work it is forbidden when protective devices are missing or when they are out of service or when flaws intervene. Any intervention to the machinery during its utilization is forbidden.  In case of technical equipment malfunctions or disturbances, the machine will be stopped and the head job will be announced. When it comes to tailoring while working to control the mechanical ramp it is prohibited for employeesto stay in range of the device for folding and / or the conveyor.  It is prohibited to crowd the clutter table with auxiliary devices.

Another step in order to start the actual activity of the company specialized in textile and clothing activity is obtaining an environmental authorization from the National Environmental Protection Agency.  According to the laws that regulate this domain these are some of the necessary documents for the obtaining the environmental authorization

a) Application for environmental authorization;

b) Sheet and statement presentation

c) Proof that the request has published in at least one of the methods of information approved by the law;

d) The Admission Plan in the target area;

e) the written statement of compliance with all conditions imposed by environmental agreement;

It’s important to take into consideration the fact that when it comes to the composition,labeling and marking of the fiber composition of textile products a producer needs to take into consideration the provisions of the relevant legislation. These are a couple of rules that need to be followed:

Only textile products exclusively composed of the same fiber may be labeled or marked as "100%" , "pure " or "all " .

A textile product containing 2% by weight of foreign fibers may also be treated as being composed of the same fiber, provided that this quantity is justified as being technically unavoidable in good practices production and is not added as a matter of routine.

A textile product which has undergone a carding process can also be treated as being composed of the same fiber if it contains less than 5% by weight of foreign fibers , provided this quantity is justified as the unavoidable technically in good manufacturing practice and it’s not added as a matter of routine .

A textile product shall be labeled or marked with the name and percentage by weight of all constituent fibers in descending order.

For textile products whose composition is difficult to specify the time of manufacture, labeling or marking may use the term "mixed fibers" or the term ' unspecified textile composition'.

The fibers that are not yet listed in may be designated by the term 'other fibers', immediately preceded or followed by the total percentage by weight.

Just like in the case of other industries the technical innovations made in the textile industry are protected by the Romanian law if registered at the State Office for Inventions and Trademarks.An invention is considered new if it does not fit in the prior technical evolution.

Starting a Tobacco Company in Romania

The tobacco industry is one of the most powerful industries in the world.  Romania exported raw and processed tobacco worth 155, 4 millions of Euros in the first 4 months of the year, an increased number compared to the same period of time last year. And these are only the values of exports this year.

For a Romanian company to operate in the tobacco industry it needs to have as object of activity the following NACE Code 1200 “manufacture of tobacco products”.

For the cultivation and marketing of raw tobacco, tobacco manufacturers can organize in producer groups. The producer group should include a number of members, individuals and legal entities, which can produce a minimum quantity of 25 tons of raw tobacco quota certificate, and in isolated regions a culture of a minimum amount representing 10 tons of raw tobacco quota certificates.

The state authority that recognizes producer groups is the Ministry of Agriculture Food and Forestry. This same authority is the one to authorize the first processors of raw tobacco. In order to obtain the authorization from the Ministry of Agriculture Food and Forestry the first processors of raw tobacco need to submit a number of documents including: request for authorization, copy of the certificate of registration at the Trade Registry, the estimate of contracts signed with tobacco growers farmers on different varieties and regions etc.

Once authorized the first processor of raw tobacco has number of obligations among witch: directly notify the authorities regarding tobacco policies on any change in the documentation submitted for authorization in within 15 days after the change, use the authorization only under the conditions and for the purposes for which it was issued and that the period of validity; respond to requests from the competent authority regarding the communication of information on tobacco to the European Commission; to comply with the conditions existing at the time of the granting of first processing, to allow access authority to perform official controls etc.

It is important to obtain the authorization because the sale of raw tobacco can only be made to authorized first processing units, based on a type of contract approved by the Ministry of Agriculture Food and Forestry.

The production of cigarettes is strictly regulated by Romanian law so: Cigarettes marketed or manufactured in Romania will have a content of 10 mgof tar / cigarette, 1 mg ofnicotine / cigarette, 10 mgof carbon monoxide / cigarette.

Manufacturers or importers of tobacco products shall compile a dossier of the product contains the following: a list of all ingredients used in the manufacture of tobacco products and their quantities, the list will be drawn up in order of decreasing amount of each ingredient in the product, statement as to why the use of ingredients in the  tobacco products listed with indication of the category and function, the manufacturer or importer available toxicological data on ingredients, and with special reference to their effect on health noting any effect of inducing addiction, the content of tar, nicotine and carbon monoxide, in the case of cigarettes.

Another thing that must be taken into consideration when it comes to the marketing of tobacco products is that all forms of advertising on tobacco products must carry warning inscriptions in Romanian;  the general warning will be  : "Tobacco seriously damages health".

When advertising tobacco products by advertisement the warning must meet the following conditions:

1. The text of the general warning will have to cover 50% of the screen and be written black, bold on a white background;

2.  The warning will have to appear on the screen for two seconds;

3. The warning will have to appear on the display at the end of the advertisement.

Any tobacco product imported from a Member State of the European Union in Romania is accepted if the product has been lawfully produced or marketed in the Member State of origin and provides an equivalent level of protection.

Starting a beverage business in Romania - Legal Issues

The production distribution and commercialization of alcoholic drinks constitutes an important industry all over the world and Romania is no exception. Romania is one of the most important producers and exporters of quality wine in Europe; the unusual grape varieties and very low prices seem to be the key to the success of Romanian wine varieties.

In order to start up a business in the beverages industry the first step is to register a company specialized in the production of beverages. In order to do so the company’s Constitutive Act must contain when defining the company’s activities the following NACE Codes: 1101 refining distillation blending of spirits, 1102 Manufacture of wine from grapes, 1103 Manufacture of cider and other fruit wines, 1104 Manufacture of other non-distilled fermented beverages, 1105 Brewing.
The Romanian legislation treats this industry in a stricter manner so producers, importers, retailers of alcoholicbeverage can operate only on the basis of the marketing authorization.
This marketing authorization is issued – only by the Ministry of Finances when it comes to         production of alcohol in Romania
-    By the territorial directorates of public finance and financial control of State County, for the commercialization alcoholic beverages.

Romanian fiscal code establishes special supervision system when it comes to the production of alcohol.This Surveillance system applies to all authorized producers of beverages and it consists of the surveillance execrated by the special representatives of the fiscal authority called financial supervisors.

In order to properly record the entire production of alcohol and distillates obtained each producer of alcohol and distillates must provide instruments referred to as counters, approved by the Romanian Legal Metrology Bureau necessary to determine the amount of ethyl alcohol anddistillates, as well as legal measuring means for determining the alcoholic strength for each type of alcohol anddistillates. Measuring instruments and measurements made with are the subject of state’s metrological control according to the law.

Alcohol, distillates and spirits can only be imported in bulk based on direct contracts with the foreign manufacturers or their representatives and only by the authorized producers of alcohol and beverages in Romania.
It’s important to keep in mind that when it comes to the production, distribution and commercialization of beverages the Romanian fiscal system applies special taxes named excises.
Economic operators wishing to distribute and sell alcoholic are required to register with the competent authority and meet the following conditions:
a) they need to have  an  adequate storage space detained  on the basis of a property act and  , loan agreement or any legal title ;
b)one of the objects of activity of the company are the ones comprised in the section 3 division 11 of the NACE Codes approved by the Government.
c) to equip itself with the means to detect forged or counterfeit marks in trade of goods that are subject of marking under this chapter.
 Alcoholic beverages supplied by the economic operators manufacturers distributors or will be accompanied by a copy of the manufacturer's brand, showing that the trademark belongs.
Selling in bulk and the use of raw ethyl alcohol and distilled alcoholic with a strength of 96.0% in volume is prohibited. Rubbing alcohol production by other producers than those authorized production of alcohol is also prohibited.

These are some of the  documents needed in order to obtain the marketing authorization: registration certificate issued by the Trade Register, tax registration certificate, certificate issued by the territorial fiscal authority  showing that applicants for licenses have no tax obligations to the state budget,  the applicant's statement declaring , the head office, branches , subsidiaries, workstations , desks , storage stations , shops and other places where activity of the company is being developed and their addresses, a statement on the provision of means for measuring the output ,approved by the  fiscal supervisor etc.

The next step in starting up a company in Romania that specializes in the production and/or distribution of alcoholic beverages is getting the permit from the competent Sanitary- Veterinary Authority.

It is important to know that the production and distribution of beer and wine are regulated differently by the Romanian law and this because these are considered food products.

When it comes to wine a Romanian producer and/or merchant must meet certain conditions imposed by the law such as: Practices and treatments applied in the production of musts, wines and other wine products must meet the exigency laid down in the rules for the application of the special law regulating this domain. It is forbidden to forge these type of products it’s considered a forgery : diluting wine with water, masking defects or alterations of wines or wine -based drinks, changing  flavor and composition of the natural product. It is also forbidden to present a wine under a false identity.

Samsung became biggest investor in a Romanian photovoltaic project

South Korean giant Samsung, a business of around 247 billion dollars, became the most powerful investor in solar parks in Romania after completing an investment of 100 million euros in the village freed from Giurgiu.

According to data published by Transelectrica, on 1/10/2013 largest photovoltaic project in Romania has a functional capacity of 45 MW, its management the company LJG Green Energy Source Alpha.

On average, for every megawatt solar park in required between 2.3 and 2.5 hectares, so the whole project covers an area of ​​approximately 112.5 hectares. A football field, for example, has about one hectare.

Buying a Forest in Romania and Conduct Forestry Activities

Since one of the most valuable resources of Romania are its woods our Law Firm located in Bucharest considered of importance to list some of the main legal requirements in order to buy a forest and conduct forestry activities in the country, including logging for instance.

It is not necessary to acquire ownership of forests and forestry land in order to set up a company that specializes in forestry activities but it is mandatory to undergo several steps in order for the company to function in accordance to the law.

The first step is to set up a company and register it at the Trade Registry; So when drawing up the company’s Constitutive Act these are the NACE Codes must be contained when defining the objects of activity of the company:0210 Silviculture and other forestry activities, 0220 forestry harness, 0230 collection of non-timber forest products from the spontaneous flora, 0240 forestry activities and other related services.

After the registration of the company at the Trade Registry in order to start the actual activity of the company, the company needs to be certified as an economic operator in the forestry harness activity by the Commission created for the certification of economic operators in the forestry harness activity.

According to the Ordinance no. 223/2008 in order to obtain the certification from this Commission the company needs to meet the following criteria:

a)      The economic operator is legal entity with activity in logging;

b)      The economic operator must employ the following technical staff depending on the mass volume of wood that will be harvested:

-         A forestry engineer for an operating capacity of 30,000 cubic meters of wood/year.

-         A master in forestry or forestry technician for an operating capacity of 10,000 cubic meters /year;

c)       The economic operator needs to have ensured specific equipment needed for  logging activities depending on the capacity:

a) An articulated forestry tractor for 6,000 cubic meters;

b) A universal tractor - 5,000cubic meters;

c) A multifunction machine - according to technical data;

d) A funicular - according to technical data;

                d) For the specific equipment capacity is calculated as follows:

a) when it comes to driving machinery (articulated forestry tractors,  universal tractors, multifunctional machines and funiculars)  in which the degree of wear exceeds 50%, the operating  capacity is determined by reducing 50% of the capacity provided in section c ;

b)when it comes to driving machinery (articulated forestry tractors,  universal tractors, multifunctional machines and funiculars), where the degree wear is between 1 and 50%, the operating  capacity is determined by diminishing the capacity percentage provided in section c with the percentage of  depreciation;

In order to obtain registration certificate / recertification, the companies are required to submit the following documentation:

a) The application for certification / recertification,as presented in annex. 1 to the Ordinance 223/2008

B) The Constitutive Act copy;

c)The act of registration of the company at the Trade Registry (decision of the designee of the Trade Registry) copy;

d)Thecertificate of registration with the Trade Register copy;

e) proof of ensuring specialized personnel employed on the duration of the registration certificate for the activity logging , signed by the director of the company revised  by the Territorial Labor Inspectorate, according to the model shown in Annex . 2 or copy individual employment contract revised by the Territorial Labor Inspectorate;

f)Copies of diplomas / degrees for the specialized personnel with secondary and higher education.

g ) proof of owning the necessary equipment to ensure the specific activity of logging for example multipurpose machines , saws , tractors, articulated forestry tractors, universal tractors, funiculars , according  to the  model set out in Annex . 3 to the Ordinance 223/2008, accompanied by certificate issued by the tax office, or sale documents authenticated , these are necessary for the economic operator to prove possession of equipment in order  to operate a minimum annual volume of 5,000 cubic meters /year;

I) the calculation of the annual capacity of logging;

The final step in order to start the actual activity of the company specialized in forestry activity is obtaining an environmental 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 the environmental authorization are the following:

a) Application for environmental authorization;

b) Sheet and statement presentation, according to Annex no. 2 to the ordinance no.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 environmental authorization 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 and the evidence of payment of the fee for this step.

Start a Farm in Romania and/or buy agricultural land

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.

Buying of Romanian Agricultural Land by Foreigners

There has been a lot of debate lately on the law that regulates the rights of EU residents to purchase Romanian agricultural land that is why our Law Firm has decided to make some clarifications on this issue. If you do not find our post sufficient please do not hesitate to contact our lawyers in Bucharest.

Law no. 312 of 10 November 2005 regulates the acquisition of private property by foreign nationals and by foreign legal entities .
According to the law above stated citizen of a Member State, stateless persons domiciled in a Member State or in Romania , as well as the legal entity formed under the laws of a Member State may acquire ownership of agricultural land, forests and forestry land in fulfillment a period of seven years from the date of accession to the European Union.
Before the deadline of 7 years foreigners can only join the local firms and thus exploit the Romanian lands .
However it seems that until the term limitation of 7 years, Romanian authorities are preparing a series of measures that will hinder foreign access to Romanian agricultural land.
Thus, a bill that will be debated in the fall of 2013 , to discuss the possibility of introducing measures that may consist in making the people who want to buy farmland prove to have experience in agriculture (in the State of origin), of 3-5 years.
Authorities are also going to introduce the bill and option to limit the sale to foreigners of areas of maximum 500 hectares . Moreover they show that there is a variable, namely granting the right of pre-emption to the Romanian state, as well as local and existing farmers to purchase land at the expense of foreigners who want to buy land in Romania .
Until a law is emitted in this sense by the Romanian authorities a stateless persons domiciled in a Member State or in Romania , as well as the legal entity formed under the laws of a Member State may acquire the right to ownership of agricultural land , forests and forestry land in Romania.

Foreign Investment in Romania on the Rise

As Enescu & Cuc is an international law firm with over 90% of the clients being foreign investors in Romania, we are keeping an eye out for news related to the level of foreign investment in the country. It seems that for the first time since 2008 foreigners have an increased interest in Romania, an article published in the Romanian press.

Net foreign direct investment in Romania last year rose for the first time since the crisis began, the advance was 18.7% to 2.138 billion euros, according to final data released by the central bank and the INS, while initial estimates showed a decrease of 11% compared to 2011.

Foreign direct investment reached late last year to 59.126 billion euros, of which 39.3 billion euros equity, including reinvested earnings (66.4%) and EUR 19.86 billion net credit received from investors foreign (33.6%).

The top activity which has attracted the funds was the industry sector. In addition to industry activities that have attracted foreign investments are financial intermediation and insurance (18.5% of total), retail and wholesale (11.4%), construction and real estate (9.2%), technology information and communications (4.8%).

The top four countries by the share of total investment are the Netherlands (22.4%), Austria (18.5%), Germany (11%) and France (8.9%), hierarchy unchanged from 2009.

Rising Number of Tourists in Bucharest - Might be Good for Business

The tour operator Neckermann Thomas Cook intends to promote Bucharest in several countries, including Germany, Britain and France as a destination for city break during the summer. Throughout this period the hotel rates are lower than the rest of the year, and tourists pay for a package under 350 euros (reported by Adevarul). Tens of thousands of tourists are expected in the following years.


We appreciate that this might have in the near future some very good effects on local businesses, including some rising interest in the local real estate market and rising profits for Romanian hotels and restaurants. This has happened to some other places in Eastern Europe, such as Prague, Krakow etc.

"The conjuncture is favorable right now. Prices of hotels are very low in summer, because it is low season. Bucharest has more business travelers, who come in summer, and hotels are empty. We must compare it with capitals in the area, Sofia , Prague, Budapest and Bucharest hotels rates are lower than 25-30% in summer, " said Mediafax, George Mărginean owner Karpaten Tourism representative in Romania of concern Neckermann Thomas Cook. Also, summer flies with small occupancy can get tickets at low prices. Also Mărginean said tourists coming to city breaks are aged up to 50 years and are willing to spend more money in the city than tourists circuits.

"Having greater flexibility for city break tourists use and other services to travelers to not use them in an organized manner, for example bus floor.

In addition, everyone will spend money in the historic center and buy souvenirs, "said Representative Neckermann. Price that you will have to pay a foreign tourist who comes for a city break in Bucharest, from Thursday to Sunday, will be included between 300 and 350 euros, and include air transportation, three nights' accommodation at the four star breakfast. first year, thousands of tourists Neckermann had a pilot project last year, which brought in Bucharest city break more than 600 tourists.

Mărginean estimated that with the start of the promotion, the company will bring in the first year thousands of tourists in the capital, their number will grow every year. "Neckermann was satisfied with the outcome of the pilot project and wants to promote on a much larger scale Bucharest. In addition to catalogs, aims to promote capital and outdoor and online in all countries where it has branches, including Germany, Belgium, Netherlands, France, UK, Austria, Switzerland, Poland, Czech Republic and Hungary, "he told Mărginean. He said that this promotion is to liaise with the Romanian state, claims news agency Tuesday. He said that foreigners are interested to come to Bucharest because it is a new destination and cheap.

In 2010-2012, for the creation and promotion of Romania's tourism brand have spent over £ 56 million (13 million), money from European funds. Creating and promoting tourism brand, financed from European funds are part of a project to promote tourism potential of Romania, which are allocated 75 million euros by the end of 2014. Tourism Karpaten annual service charge on the Romanian territory around 200,000 foreign tourists arrived on cruises, tours, trips to the mountains, the sea and the Delta. Thomas Cook, one of the largest travel groups in the world, started again in 2012 to bring foreign tourists in Romania through Neckermann brand, in 2006 after he retired Romanian market. The group last year brought over 5,500 tourists on the coast, and this year is estimated that number will exceed 7,200.

50% Tax for Artificial Transactions in Romania

Ordinance 8/2013 establish the terms and conditions in which the tax authorities are to determine, when establishing the amount of a tax or duty, which transactionmay be disregarded as one that has no economic purpose or can reclassify the form of a transaction so that it reflectsthe economic substance of that particular transaction.

Where transactions or series of transactions are classified as artificial, they will not be considered part of the scope of the avoidance of double taxation conventions. An artificial transaction isthe transaction or series of transactions that have no economic content that can‘tnormallybe used within ordinary business practices, their main purpose being to avoid taxation or to obtain tax advantagesthatotherwise could not be granted.

The new Ordinance 8/2013 emitted by the Romanian authorities lists and sets the new revenues that shall be considered as wholly obtained in Romania, whether they’re received in Romania or abroad. These are: earnings from services performed in Romania and outside Romania if the services are one of the following: management services, consultancy in any field, marketing, technical assistance, research and design in any field of advertising and publicity in any form in which they are made,  and the services provided by lawyers, engineers, architects, notaries, accountants, auditors;it isn’t taxable income in Romania international transport revenues and services that are accessories to that type of transport.

Ordinance 8/2013 regulates the measures regarding tax losses registered until the 30th of June 2013 by the permanent offices belonging to the same foreign entity, namely the recovery of losses depending on the period in which they were registered.

In terms of international tax issues, namely issues related to the income of a permanent office of a foreign legal person, Ordinance 8/2013 stipulates that in case the foreign legal entity operates in Romania through a permanent office, this permanent office is designated to fulfill the obligations of foreign legal person in Romania.

The ordinance also 8/2013 regulates the situation where the taxable profits of the foreign legal entity come from activities of multiple offices in Romania. Thus, starting from 1 July 2013, the foreign legal person that carries on its business through multiple permanent offices in Romania is required to establish one of these locations as designated permanent office for the fulfillment of its obligations. 

The permanent office set to accumulate the income and expenses of all the other offices belonging to the same foreign entity. It calculates declares and pays all the obligations under the income and expenses of all the other offices belonging to the same foreign entity.

Ordinance 8/2013 establishes a series of changes when it comes to withholding tax from income obtained from Romania, regardless if revenues are received in Romania or abroad.

The tax payable is thus calculated by applying a rate of 50% for incomes provided in art. 115 para. (1). a)-g), k) and l) - on dividends from a resident,interests from a resident , interests from a non-resident that has a permanent establishment in Romania if the interests is an expense of the permanent office/ the office permanently appointed, to  resident fees, royalties from a non-resident that has a permanent establishment in Romania, where the fee is an expense of the permanent office / permanent office appointed a resident fees, commissions from a resident who has a permanent establishment in Romania, where the commission is an expense of the permanent establishment / permanent establishment designated if revenues are paid into a state with which Romania has no  signed treaty under which to carry out the exchange of information. These provisions apply only when the kind of income of mentioned above is paid as a result of transactions classified as artificial as defined above, in this report legal.

British Investments in Romania

Enescu & Cuc Law Firm has been a member of the British Romanian Chamber of Commerce and has had in the past 10 years a growing number of British investors as clients. Romania still seems to attract lots of investors from the UK, according to the Romanian press (Mediafax). The British government hopes that the next four years exports to Romania will grow by 60% by creating a business center facility which will give British companies better access and exposure on the Romanian market.




The Romanian-British Business Centre was established by the British Embassy and the British-Romanian Chamber of Commerce. The project will give the British Embassy Bilateral Chamber of Commerce a grant of 200,000 euros.

"This is a step forward in the support we give economic relations between Romania and the UK. This is part of a project that includes 20 priority markets around the world. This provides support  to UK companies in markets like Mexico, Russia, India, Brazil and in Europe we selected two priority countries to support trade, namely Poland and Romania. Hopefully we will see a strong increase in both British investment in Romania and bilateral relations between the two countries, "said British Ambassador in Romania, Martin Harris.

He added that this measure also aims at facilitating access to British companies wishing to invest or have trade relations in Romania.

"The goal is to establish a British Romanian business center funded by a grant from the British Government for the British-Romanian Chamber of Commerce and through this we hope that by 2017 we see an increase of 60% of British exports in Romania " added Harris.

Opening a Logistics or Transportation Company in Romania

Opening a Logistics or Transportation Company in Romania could prove to be a very profitable idea since it seems that Romania is in the top 10 destinations for such a purpose. Indeed Enescu & Cuc Law Firm has lately received increasing requests from logistics companies looking to activate from Romania because of smaller activity costs and better taxation.

It must be taken into consideration that setting up a Romanian logistics or road transportation company does imply the requirement of obtaining a certain license. For your more information you can contact us; we will be happy to provide some in-depth information.

Romania is the only country in Central and Eastern Europe present a top ten of the most attractive destinations for logistics activities this year, dominated by Western European countries  (the figures were put together by Prologis, one the biggest companies activating in this field).

To achieve interviewed top storage users from different sectors, from retail, pharmaceuticals auto industry. They were asked to make a ranking of the 100 most important locations based on 13 criterias, the first being the most important access routes, proximity to customers, real estate costs, flexibility and availability of labor.

Bucharest and the Western part of Romania were placed in the 8th place among the most "desirable" destination for logistics activities this year and five in 2018, the best scores were obtained in terms of real estate costs and flexibility and availability workforce. As expected, the lowest score was found for Romania's infrastructure and availability of locations for the activity.

The top ten most attractive destinations for 2013 are also found in order, Venlo (Netherlands), Antwerp (Brussels), Rotterdam (Netherlands), Rhein-Ruhr (Germany), Madrid, Liege and central Germany, Ile de France and Dusseldorf.

The first remains Venlo (Netherlands), followed by Rotterdam, Antwerp and Rhein-Ruhr.

Romania managed to outperform markets like Frankfurt, Prague, Munich, Hamburg, Barcelona and West of England.

For additional information on how to expand to Romania or found your Romanian company please contact our Law Firm.