Law No. 241 of 14 December 1998 for approval of Emergency Ordinance of Government No. 92/1997 concerning the direct stimulation of investments published in PARLIAMENT ISSUING the OFFICIAL GAZETTE nr. 483 of 16 December 1998, the Parliament of Romania adopts this law.
Article 1 shall approve the Emergency Ordinance of Government No. 92 of 30 December 1997 on boosting direct investment, as published in the Official Gazette of Romania, part I, no. 386 of 30 December 1997, with the following amendments and supplements: 1. Article 1 shall read as follows: Art. 1.-This emergency Ordinance establishes the general framework regarding guarantees and facilities enjoyed by direct investment in Romania. "
2. In article 2, introductory part shall read as follows: Art. 2.-for the purposes of this emergency Ordinance, the terms given below are defined as follows: "3. In article 2, points (a)), b) and d) shall read as follows:" a direct investment)-participation in setting up or extending an enterprise in any of the legal forms provided for by law, the acquisition of shares or of shares of a company, except for portfolio investments , or setting up and expanding into Romania of a branch by a foreign company, by:-the financial contribution in national currency or in convertible currency;
-intake in the nature of real estate and/or movable, tangible and intangible assets;
-participation in the growth of the assets of an undertaking, by any legal way of funding;
b) portfolio investment-the acquisition of securities on capital markets organised and regulated and which do not allow for direct participation in the management of commercial society; "." resident/non-resident d)-persons qualified in accordance with such regulations in force concerning the currency regime; "
4. In article 2, after paragraph d) Insert the letter "e") with the following content: "e) reinvested profit-profit amounts used for upgrading technology and expanding the company's commercial activity, resulting in tangible and intangible fixed assets depreciation, as well as for purchases of assets, shares or stocks with State property Fund offer."
5. Article 4 shall read as follows: Art. 4.-(1) investments in Romania, and the possession, use and disposal over a property benefit from guarantees and facilities provided for in this emergency Ordinance.
(2) investors in Romania shall benefit primarily the following guarantees and facilities: a) the possibility of investing in any area and at all the legal forms provided for by law;
b) equal treatment-just, equitable and non-discriminatory manner-for Romanian or foreign investors, residents or non-residents in Romania;
c) guarantees against expropriation or naţionalizarii, other measures of equivalent effect;
d customs and fiscal facilities);
e) administrative formalities assistance completion;
f) the right to conversion into the currency of the investment the amounts in the Lions of the investment, and the transfer of foreign currency in the country of origin, according to the regulations on foreign exchange regime;
g) right of investors to choose the courts or the competent arbitration for the resolution of possible disputes;
h) can reportarii losses during a given fiscal year on account of the taxable profit of the following financial years;
I can use accelerated depreciation);
j) can deduct expenses for advertising and advertising from the taxable profits;
k) the possibility of foreign engagement, in accordance with the legal provisions in force.
(3) the legal regime laid down in paragraph 1. (1) and (2) shall not apply to operating and investment investors operating in the free zone or the zone regulated through special laws. "
6. Article 5 shall read as follows: Art. 5.-the areas in which investments can be made only on the basis of a licence or authorization, as well as the General conditions in which they may grant licenses or permits shall be established by regulations laid down by law. "
7. Article 6 shall read as follows: Art. 6. a company, legal person or non-resident, resident can acquire any rights in rem over immovable properties, to the extent that the carrying out of its business, according to the social object, with the exception of land may be acquired by natural or legal persons. "
8. In article 8, paragraphs 1 and 2 shall read as follows: Art. 8.-(1) Investments may not be nationalized, expropriated or subjected to measures of equivalent effect, except where such a measure meets the following conditions, cumulatively: a) are needed for the public utility;
b) are non-discriminatory;
c) shall be effected in accordance with the provisions of law implied;
d) shall be made with the payment of compensation, adequate and effective.
(2) the compensation referred to in paragraph 1. (1) (a). d) will be equivalent to the fair market value of the expropriated investment at the time immediately prior to expropriation or impending expropriation before to become known in such a way as to affect the value of the investment. "
9. The title of chapter III shall read as follows: "guarantees and facilities to foreign investors, or non-residents in Romania ' 10. Article 9 shall read as follows: Art. 9.-Investors will have the same rights and obligations, whether they are residents or non-residents, Romanian or foreign, subject to the provisions of this chapter. "
11. Paragraph 2 of article 9 becomes article 9 ^ 1 with the following content: "Art. 9 ^ 1. -Where a bilateral agreement on promotion and mutual protection of investments ratified according to law or another law would extend an investor, or a foreign legal person, to a treatment more favourable than that provided for by this Ordinance in the case of emergency, the investor will benefit from that treatment. "
12. In article 10, paragraph a) shall read as follows: "the dividend or benefit) obtained from a commercial company, Romanian legal person, where are shareholders or associates;"
13. Article 11 shall read as follows: Art. 11.-disputes between foreign investors and the Romanian State on the rights and obligations resulting from the provisions of cap. II and III, as well as the head. V will be resolved, at the choice of the investor, according to the procedure established by Law: (a) administrative courts) No. 29/1990 and law No. 105/1992 on the regulation of private international law;
(b) the Convention for the settlement of disputes) relative to investments between States and individuals of other States, done at Washington on 18 March 1965 and ratified by Romania by Decree of the Council of State and no. 62/1975, published in the Official Gazette, part I, no. 56 of 7 June 1975, when the foreign investor is a national of a State party to the Convention, and the dispute is resolved through conciliation and/or arbitration. In such situations, a Romanian company in which foreign investors hold according to the Romanian law a position of control, it will be considered in accordance with art. 25 para. (2) (a). b) of the Convention as having the nationality of foreign investors;
(c) rules of arbitration) UNCITRAL; where the arbitrators shall not be appointed under the conditions of this regulation, they shall be appointed by the Secretary general of the International Centre for the settlement of Disputes relating to investments. "
14. Article 12 shall be repealed.
15. In article 13, subparagraphs) b) and (c)) shall read as follows: ' a) exemption from customs duties and from the payment of import goods T.V.A. constituting the contribution to the share capital of a company or representing the contribution to a joint venture or to a family Association required to achieve the object of activity;
b) exemption from customs duties and import T.V.A. and exemption from paying the T.V.A. market procurement internal technological equipment, machinery and equipment as depreciable assets according to law. 15/1994 concerning the depreciation of capital restrained in tangible and intangible fixed assets, as amended; the list of trade names and codes in the import customs tariff, the appropriate assets that fall under the above provisions shall be adopted by decision of the Government on the proposal of the Ministry of industry and trade and the Ministry of finance;
c) deduction from the taxable profits of the spending on the damping, even if the taxpayer has chosen to use accelerated depreciation regime. The taxpayer's option to use accelerated depreciation arrangements shall be notified to the territorial tax bodies on which he is obliged to submit the Declaration of taxation without needing prior approval, by these organs; "
16. In article 13, after the letter "e) is inserted in point f) with the following content:" f) exemption from income tax for reinvested profit. "
17. After article 13 Article 13 is inserted: ^ 1 with the following content: "Art. 13 ^ 1. -(1) For investments that will be made in the economy, in the newly created companies, which exceed 500,000 dollars or the equivalent in lei S.U.A., except for the banking sector, in addition to the facilities provided for in art. 13, be granted reductions in corporation tax provided for in the annex, corresponding to the value of the investment.
(2) where the investor stops production or liquidate the company voluntarily in a period less than twice that for benefiting from the additional facilities provided for in this article, he shall be obliged to pay taxes and duties laid down by the law for the whole period of operation of the investment. "
18. Article 14 shall read as follows: Art. 14.-in the event that the conditions for the granting of the facilities provided for in article 10. 13 shall apply to the specific sanctions, the existing tax and customs legislation in force at the time of the infringement of the norm. "
19. Article 15 shall be inserted After article 15 ^ 1 with the following content: "Art. 15 ^ 1. (1) foreign investment, made under the provisions of law No. 35/1991, as amended and supplemented, and the law. 71/1994, enjoys the facilities established by these laws until the expiry of the time limits for which they were granted, on the basis of the Foundation documents registered under the law at the trade register Office, without the need for attestation certificate of the investor. Be relied on as against third parties and State authorities and certify facilities benefiting from these certificates and investor issued by foreign investment Promotion Department of the Ministry of Privatization to foreign investment, registered under the provisions of the Emergency Ordinance of Government No. 31/1997.
(2) for contracts of sale and purchase of shares entered into during the period 19 June-29 December 1997 between the State property Fund and foreign investors and that fall under the provisions of art. 9 para. (1) of the Emergency Ordinance of Government No. 31/1997, amendments may be concluded, outlining the takeover, as obligations, on behalf of the buyer, of the conditions laid down in article 21. 9 para. (1) (a). a)-(f)). Additional acts referred to in this paragraph shall be terminated within three months from the date of entry into force of this emergency Ordinance. "
20. Article 18 shall read as follows: Art. 18.-the date of entry into force of this emergency Ordinance shall repeal the Emergency Ordinance of Government No. 31/1997 concerning the regime of foreign investments in Romania, published in the Official Gazette of Romania, part I, no. 125 of 19 June 1997, art. 2 (2). (4) of the Government Ordinance. 70/1994 income tax, republished in the Official Gazette of Romania, part I, no. 40 of 12 March 1997, as amended and supplemented, as well as any other provisions contrary to this emergency Ordinance. "
Article 2 the Government's Emergency Ordinance No. 92/1997 concerning the direct stimulation of investments, with the amendments and additions made by this Bill, will the Republic Official Gazette of Romania, part I, posing a new texts.
This law was adopted by the Senate at its meeting on 2 November 1998, in compliance with the provisions of art. 74 para. (2) of the Constitution of Romania.
p. Senate CHAIRMAN MIRCEA IONESCU-QUINTUS this law was adopted by the Chamber of deputies at its meeting on 25 November 1998, in compliance with the provisions of art. 74 para. (2) of the Constitution of Romania.
p. CHAMBER of DEPUTIES PRESIDENT, ANDREI CHILIMAN Annex 1 1 TAX BREAKS on investment Value in freely convertible currency or in lei, integral (I) reducing corporation tax against quota in force Period 0.5 million S.U.A.
10% 2 years $ 1 million S.U.A.
15% 3 years $ 5 million S.U.A.
25% 4 years $ 20 million S.U.A.
50% 5-year $ 35 million S.U.A.
75% 7 years $ 50 million > S.U.A. 100% 10 years — — — — — — — —