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Law No. 241 Of 14 December 1998 Approving Government Emergency Ordinance Nr. 92/1997 Concerning The Direct Stimulation Of Investments

Original Language Title:  LEGE nr. 241 din 14 decembrie 1998 pentru aprobarea Ordonanţei de urgenţă a Guvernului nr. 92/1997 privind stimularea investiţiilor directe

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LEGE no. 241 241 of 14 December 1998 for approval Government Emergency Ordinance no. 92/1997 on stimulating direct investment
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR no. 483 483 of 16 December 1998



The Romanian Parliament adopts this law + Article 1 Approval Government Emergency Ordinance no. 92 92 of 30 December 1997 on the stimulation of direct investments, published in the Official Gazette of Romania, Part I, no. 386 of 30 December 1997, with the following amendments and additions: 1. Article 1 shall read as follows: "" Art. 1. -This emergency ordinance establishes the general framework on guarantees and facilities benefiting direct investments in Romania. " 2. In Article 2, the introductory part shall read as follows: "" Art. 2. -For the purposes of this emergency ordinance, the following terms shall be defined as follows: " 3. In Article 2, letters a), b) and d) shall read as follows: " a) direct investment-participation in the establishment or extension of an undertaking in any of the legal forms provided for by law, the acquisition of shares or shares of a company, with the exception of investments of portfolio, or the establishment and expansion in Romania of a branch by a foreign trade company, by: -financial contribution, in national currency or in convertible currency; -contribution in the nature of immovable property or/and movable, tangible and intangible goods; -participation in the growth of an enterprise's assets, by any legal means of financing; b) portfolio investment-the acquisition of securities in the organized and regulated capital markets and which do not allow direct participation in the management of the commercial company; " ................................................................................ "d) resident/non-resident-persons thus qualified according to the regulations in force on the currency regime;" 4. in Article 2, after letter d) the letter e) is inserted with the following contents: " e) reinvested profit-the amounts used from the profit achieved for the modernization of the technologies and the expansion of the business of the company, embodied in tangible and intangible assets, as well as for the acquisitions of assets, parts social or action by the offer of the State Property Fund. " 5. Article 4 shall read as follows: "" Art. 4. -(1) Investments made in Romania, as well as possession, use and provision on a property benefit from the guarantees and facilities provided by this emergency ordinance. (2) Investors in Romania mainly benefit from the following guarantees and facilities: a) the possibility of making investments in any field and in any legal forms provided by law; b) equal treatment-fair, equitable and non-discriminatory-for Romanian or foreign investors, residents or non-residents in Romania; c) guarantees against nationalisation, expropriation or other measures having equivalent effect; d) customs and tax incentives; e) assistance in carrying out administrative formalities; f) the right to the conversion in foreign currency of the amounts in lei returning from the investment, as well as to the transfer of currency in the country of origin, according to the regulations on the currency regime g) the right of investors to choose judicial or arbitral courts competent to settle any disputes; h) the possibility of carrying over the losses incurred during a financial year on account of the taxable profit of the following financial years; i) the possibility of using accelerated depreciation; j) the possibility of deducting expenses for advertising and advertising from taxable profit; k) the possibility of hiring foreign citizens, in accordance with the legal provisions in force. (3) The legal regime provided in par. ((1) and (2) shall not apply to investors operating and investments operating in free zones or in areas covered by 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 license or authorization, as well as the general conditions under which licenses or permits can be granted shall be established by normative acts with the power of law. " 7. Article 6 shall read as follows: "" Art. 6. -A commercial company, resident or non-resident legal person, may acquire any real rights to immovable property, to the extent necessary to carry out its activity, according to the social object, except the land that may be acquired of Romanian natural or legal persons. " 8. In Article 8, paragraphs 1 and 2 shall read as follows: "" Art. 8. -(1) Investments may not be nationalised, expropriated or subject to measures having equivalent effect, unless such a measure meets, cumulatively, the following conditions: a) are necessary for the cause of public utility; b) are non-discriminatory; c) is carried out in accordance with the express provisions of the law; d) are made with the payment of a prior, adequate and effective compensation. (2) The compensation provided in par. ((1) lit. d) will be equivalent to the fair market value of the expropriated investment at the time immediately prior to expropriation or before the imminent expropriation becomes known in a way that affects the value of the investment. " 9. The title of Chapter III shall read as follows: "Guarantees and facilities for foreign or non-resident investors 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, Romanians or foreigners, subject to the provisions of this chapter. " 11. Paragraph 2 of Article 9 shall become Article 9 ^ 1 with the following contents: "" Art. 9 9 ^ 1. -If a bilateral agreement to promote and mutually protect investments, ratified according to the law, or another law would entitle an investor, foreign natural or legal person, to a treatment more favorable than that provided by this emergency ordinance, the investor concerned will benefit from that treatment. " 12. In Article 10, letter a) shall read as follows: "" a) the dividend or benefit obtained from a company, the Romanian legal person, if they are shareholders or associates; " 13. Article 11 shall read as follows: "" Art. 11. -Disputes between foreign investors and the Romanian state regarding the rights and obligations resulting from the provisions of the head. II and III, as well as the head. V will be settled, at the election of the investor, according to the procedure established by: a) Law on administrative litigation no. 29/1990 29/1990 and Law no. 105/1992 on the regulation of private international law relations; b) The Convention for the Settlement of Relative Differences in Investments between States and Persons of Other States, concluded in Washington on 18 March 1965 and ratified by Romania by the Decree of the State Council no. 62/1975, published in the Official Bulletin, Part I, no. 56 of June 7, 1975, when the foreign investor is a citizen of a state-party to the convention and the dispute is resolved by conciliation and/or arbitration. In such situations, a Romanian society in which foreign investors own-according to the Romanian law-a control position, it will be considered, according to art. 25 25 para. ((2) lit. b) of the Convention, as having the nationality of foreign investors; c) UNCITRAL/CNUDCI; arbitration regulation; if the arbitrators are not appointed under this regulation, they shall be appointed by the Secretary-General of the International Centre for the Regulation of Differences relative to Investments. " 14. Article 12 shall be repealed. 15. In Article 13, points a), b) and c) shall read as follows: " a) exemption from the payment of customs duties and from the payment of the T.V.A. of the import of goods constituting the contribution in kind to the share capital of a company or representing the contribution to a joint venture or association family, necessary for the realization of the object of activity; b) exemption from the payment of customs duties and T.V.A. of import and exemption from T.V.A. payment of purchases from the domestic market of technological equipment, machinery and machinery, constituting depreciable assets according to Law no. 15/1994 on the depreciation of capital immobilized in tangible and intangible assets, as amended; the list including the trade name and the codes of the Customs Tariff of Romania, corresponding to the goods falling within the above-mentioned provisions, are adopted by Government decision, at the proposal of the Ministry of Industry and Commerce and the Ministry of Finance; c) deduction from the taxable profit of depreciation expenses, even if the taxpayer has opted for the use of the accelerated depreciation regime. The option of the taxpayer to use the accelerated depreciation regime must be communicated to the territorial fiscal bodies to which it has the obligation to submit the declaration of taxation, without the need for prior approval, given by these organs; ' 16. in Article 13, the letter f) shall be inserted after letter f) with the following contents: " f) the exemption from the payment of the reinvested profit tax. ' 17. Article 13 (1) shall be inserted after Article 13: "" Art. 13 13 ^ 1. -(1) For investments that will be made in the economy, in newly-created companies, which exceed 500,000 U.S. dollars or the equivalent in lei, except for the banking sector, outside the facilities provided in art. 13 13, the reductions in the profit tax set out in the Annex corresponding to the value of the ((. Where the investor stops production or voluntarily liquidates the company within a period of less than double that for which it benefits from the additional facilities provided for in this Article, he shall be obliged to pay taxes and fees established, according to the law, for the entire operating period of the investment. " 18. Article 14 shall read as follows: "" Art. 14. -In case of non-compliance with the conditions for granting the facilities provided 13, the specific sanctions, existing in the customs and tax legislation in force at the time of the violation of the rule, will be applied 19. Article 15 shall be inserted after Article 15 (1) with the following contents: "" Art. 15 15 ^ 1. -(1) Foreign investments, made according to the Law no. 35/1991, with subsequent amendments and completions, and Law no. 71/1994, benefit from the facilities established by these laws until the expiry of the deadlines for which they were granted, based on the constituent documents registered, according to the law, at the trade register office, without the need to Investor certificate. They are opposable to state authorities and third parties and attest to the facilities they benefit from and the investor certificates issued by the Department for Foreign Investment Promotion of the Ministry of Privatization for Investment foreign, registered under the provisions Government Emergency Ordinance no. 31/1997 . (2) For sale-purchase contracts of shares, concluded between June 19 and December 29, 1997 between the State Property Fund and foreign investors and falling within the provisions art. 9 9 para. (1) of Government Emergency Ordinance no. 31/1997 , additional acts may be concluded, highlighting the takeover, as firm obligations, on the buyer's account, of the conditions provided in art. 9 9 para. ((1) lit. a)-f). The additional acts referred to in this paragraph shall be concluded within 3 months from the date of entry into force of this emergency ordinance. " 20. Article 18 shall read as follows: "" Art. 18. -On the date of entry into force of this emergency ordinance, the Government Emergency Ordinance no. 31/1997 on the regime of foreign investments in Romania, published in the Official Gazette of Romania, Part I, no. 125 125 of 19 June 1997, art. 2 2 para. (4) of Government Ordinance no. 70/1994 on profit tax, republished in the Official Gazette of Romania, Part I, no. 40 of March 12, 1997, with subsequent amendments and completions, as well as any other provisions contrary to this emergency ordinance. " + Article 2 Government Emergency Ordinance no. 92/1997 on the stimulation of direct investments, with the amendments and completions brought by this law, will be republished in the Official Gazette of Romania, Part I, giving the texts a new numbering. This law was adopted by the Senate at the meeting of November 2, 1998, in compliance with the provisions of art 74 74 para. (2) of the Romanian Constitution. p. SENATE PRESIDENT, MIRCEA IONESCU-QUINTUS This law was adopted by the Chamber of Deputies at the meeting of November 25, 1998, in compliance with the provisions of 74 74 para. (2) of the Romanian Constitution. p. ROOM PRESIDENT DEPUTIES, ANDREI CHILIMAN + Annex 1 1 TAX INCENTIVES Value of investment in freely convertible currency or in lei, fully realized (I) Reduction of corporate tax against the share in vigorPeriod 0.5 million U.S. dollars < = I < = 1 million U.S. dollars 10%2 years 1 million U.S. dollars < I < = 5 million U.S. dollars 15%3 years 5 million U.S. dollars < I < = $20 million U.S. 25%4 years 20 million U.S. dollars < I < = 35 million U.S. dollars 50%5 years 35 million U.S. dollars < I < = 50 million U.S. dollars 75%7 years I > 50 million U.S. dollars 100% 10 years ---------