investment cases and usefull links

1. EVD Dutch Foreign Trade Agency in Holland

2. CIBR Chamber of Commerce for Real estate Belgium Romania

7. Creating a company in Romania

9. Potential problems with land aquisition

10. Everything about structural funds for Romania

11. IRM Free information site on Romania

1. EVD Dutch Foreign Trade Agency in Holland

The Embassy provides to the Dutch Foreign Trade Agency (EVD) business leads, information concerning the trade and investment regulations in Romania and the sectors that show proof of being of particular interest to Dutch companies. This information is made available by the EVD for Dutch Companies. Website: www.evd.nl

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2. CIBR Chamber of Commerce for Real Estate Belgium Romania

The chamber of commerce in real estate between Belgium and Romania informs and puts members in contact with the right partners. They organize seminars and events to inform all the stakeholders and interest groups. They stimulate professional networking between the stakeholders. Contact at cibr@telenet.be for real estate in Belgium and Romania Website: www.cibr.be

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3. FIT agency

Flanders Investment & Trade has a worldwide network of economic and trade representatives. At another level Flanders Investment & Trade enhances Flanders' position as the gateway to Europe for inward investors. The agency identifies, informs, advises and supports overseas enterprises by establishing production and research facilities, contact centers, headquarters, logistics operations in Flanders, the northern region of Belgium. Website: www.fitagency.be

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4. AWEX

The Walloon Export and Foreign Investment agency has a twofold mission: to help businesses to export more and better and to attract foreign investors to Wallonia. Website: www.awex.be

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5. Agriflanders

Flemish agriculture and horticulture fair 11-14 January 2007. The trade show is held every 2 years at Flanders Expo in Gent in Belgium. The trade show can be compared with Indagra in Bucharest. PBS Worldwide is a participant and speaker at seminars held during this event. Website: www.agriflanders.be

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6. Taxes in Romania

The introduction of the 16% flat rate tax as of 1 January 2005 has been a courageous step taken by the Romanian Government toward maintaining and even accelerating the economic growth rate recorded in Romania. The standard rate of income tax for Romanian companies is 16%, regardless of whether the company has foreign participation.

Non-resident companies that do not have an effective place of management in Romania are taxed in Romania at the standard rate of 16% on earnings derived from their operations in Romanian carried on through branches, permanent establishments or consortia entered into with Romanian partners.

Micro-enterprises pay 2% tax on turnover in 2007 (2,5% in 2008 and 3% in 2009)(turnover lower then 100.000 Euro pe annum)

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7. Creating a company in Romania

Investors, Romanian or foreign, benefiting of an equal legal treatment, have the same possibilities for establishing business operations in Romania by incorporating separate legal entities. These entities operate in their own right and are distinct from the legal entities of their shareholders or partners. Companies have their own patrimony, assets, names, registered capital, management, registered offices and bank accounts. Ask PBS Worldwide for more details. We create several companies per month in more then 20 cities in Romania.

Companies established in Romania are legal entities subject to Romanian laws. The law allows and defines five forms of companies:

general partnerships "societate în nume colectiv" (SNC);
limited partnerships "societate în comandita simpla " (SCS);
limited liability companies "societate cu raspundere limitata" (SRL);
joint stock companies "societate pe actiuni" (SA);
limited joint stock companies "societate în comandita pe actiuni" (SCA).

The most used types of companies are limited liability companies. Besides these there is also an important number of general partnerships and joint stock companies.

All companies must be registered with the National Trade Register Office.

The fiscal registration code is to be obtained according to Government Ordinance No.82/1998 regarding the fiscal registration of taxpayers, by way of filling an application by the relevant company in order to become a taxpayer.

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8. Buying property in Romania

Find your property. Start by deciding on the type of property and location you are interested in. The team of PBS Worldwide help you to make a good profile for the search. Whether a new build apartment, a villa in a skiing resort or a city centre flat, or maybe just a plot of raw land, land for an industrial site, land for private investment with high profit in short term, long term investment, agricultural land, define your objective clearly from the start. This will help focus your efforts and the efforts of PBS Worldwide and reduce the time, energy and money spent in the process. You will have to set up a Romanian company. PBS Worldwide combines the company creation with the property search to reduce costs.
When PBS Worldwide presents a list of offers that meet your criteria, fly over to Romania, view and examine each offer thoroughly. If you see something that you like on this visit, you can start negotiating a better price and if satisfied make an offer. When your offer is accepted, proceed to step two. The first steps for the company creation are done at the same time.
Complete basic legal checks with the assisantce of PBS Worldwide and the Romanian associates and experts of PBS Worldwide. The consultants will carry out the basic checks, establishing mainly the seller’s right to sell, i.e. the authenticity of his title deeds, the contract showing when they bought the property (or land), etc.
Sign a preliminary contract (be extra careful with the terms of this contract in Romanian language as provided by law) and pay a deposit (10% as agreed with the seller). If the basic legal checks are successful, you can sign a preliminary contract and for a small deposit (10% with private sellers, higher usually with companies selling off plan) you can secure your property. Pay special attention to the terms of this contract, as in many cases it contains the specifics of how and when the rest of the payments will be made. PBS Worldwide will help you with this contract.
Perform additional checks. The full checks are now carried out by the consultants and the notary. They will now look for any charges and debt of any kind on the property or land under offer. If they don’t find anything wrong, you can proceed to the final step.
Make final payment (90%), sign the notary deed and pay stamp duty and the notary fee.With all checks successfully completed you can make the final payment and finally sign to the full contract, usually in front of a notary. In many cases, part of this step is incorporated in step three, by making the preliminary contract into a full contract. In either case, the notary would have to authorise the transaction and you’d be required to pay stamp duty and notary fees.

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9. Potential problems with land aquisition

Risk of splitting: It is important to analyze this point before taking the final decision. Pay attention to this point when you intent to buy land with clay soil or loam. They also represent a risk for inundation because the water cannot be drained from these soils. Another risk is the clay and loam soils that are on a hill. With abundant rain fall, it can start to slide.
Seismic activity: The degree of seismic activity is very important. The seismic activity will be analyzed with a map according to the prescriptions of the P100-1992. The P100-1992 regulates the measures that should be taken for constructions according to the degree of seismic activity. If the area has a great risk (ex. Vrancea), then it is good to give extra attention to this point.
Inclination of the land: A significant inclination (more then 15%) can represent a considerable cost for the future construction.
Freatic water: Another criterium that should be taken into consideration is the presence of the freatic nap especially in function of the construction of a basement, one should look at witch depth the freatic nap is positioned.
Risk of polution: The pollution risk is not immediately visible. Without knowing you can buy a polluted industrial site. Sometimes you can learn a lot by doing research on old sales transaction for the same land.
Electormagnetic fields: Electromagnetic fields can be generated due to the presence of a radio antenna for cellular phones, TV... They can present a potential risk.
Defects witch are linked to proximities: Do not forget some details about passing rights. Another important item is the density of the traffic in the area. Some inconveniences could also show up with the wind transmitting the noise from a rail road, from a street or smells from factories, a farm or water treatment plant.
Defects due to the size of the land: Small irregular plots (<1000mp) can impose an orientation of the house that is not optimal for the garden.
Public services: Another problem can be the proximity of public services such as: public transport, schools, hospitals, shops, companies, banks...
Risk for inundations:One of the problems is the risk of flooding. Do not neglect the presence of water. When there is an excess of rain fall, the land could be flooded.
Utilities: Before buying, a check should be conducted for the availability of water, sewage, electricity, internet cable, telephone and gas.
Urbanistic plan: A quick check of the urbanism plan will avoid unpleasant surprises in the future. We take a big city as an example, and we know that a highway will be constructed. Imagine a situation where the highway goes over your land or where you loose 20% from land, because of the urbanism plan's reglementations.

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10. Everything about structural funds for Romania

Romania will benefit from more then 30 billion Euro structural and cohesion funds from the EU in the period 2007-2013. From January 2007 Romania will have 9 million Euro subventions per day including saturday and sunday.

These funds should be managed in a efficient way and should be used where there is a need for development. If they are not used in a proper way there is a danger to loose this funds.

The structural funds are managed by the European Commission and the goal is to finance the structural measures from the community for helping regions with a delay in their development, for reconversion of affected area's where there is a industrial decline and to fight against long time unemployment.

There are 4 types of structural funds. Each one handles specific domains and they have specific aims. European Regional Development Fund (ERDF) - intended to reduce regional imbalance and assist less favoured regions via local development (local development, create and safeguard sustainable jobs and support SME's).

European Social Fund (ESF) - focuses mainly on training and job creation, the reintegration of the work force and the fight against unemployment. There is a specific topic: this funds finances projects for training and assistance to hire people.

The European Fishery Fund The EFF (2007-2013) will replace the present Financial Instrument for Fisheries Guidance ( FIFG ), which covers the 2000-2006 programming period. The EFF will have a financial contribution to adapt and to modernize this sector.

FEOGA = EAGGF (European Agricultural Guidance and Guarantee Fund) is the EU body responsible for paying the restitution in agriculture. FEOGA will finance the rural development measures and support agriculture (especially in the regions that are under developed).

There are some other instruments for financing next to the structural funds. The Cohesion Fund is another instrument.

The Romanian budget is more the 30 billion Euro. Agriculture and rural development - more then 11 billion Euro. Structural Instruments - more then 17 billion Euro.

The National Development Plan (NDP) is a specific concept for the European economic and social cohesion politics that provide a stable and coherent concept for the development of the member states.

The first step to access the funds for Romania is the approval of the national development plan. NDP 2007-2013 is a strategic planning and multi annual financing document approved by the Romanian Government. The primary objective of the Romanian NDP is to reduce the economical and social gap between the members states and Romania as quickly as possible.

The global objectives are based on 3 specific objectives:

To increase the competitiveness of the Romanian economy (long term)
To develop the European standards for basic infrastructure
To optimize the efficient use of the autochthon human capital

14 domains that can be financed with structural funds and cohesion funds from the EU:

Technical Research and Development
Informatization (ICT) of the society
Transport
Energy
Environmental protection and prevention of risks
Tourism
Culture
Urban and rural development
Support for SME's and entrepreneurs
Access to stable work places
Social inclusion for disfavoured persons
Development of the human capital and resources
Investments in social infrastructure including those in health and education
Promoting the development of partnerships

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11. IRM Free information site on Romania

The newest information site on romania is online. This site provides with detailed info on investment in Romania, subventions, real estate and legislation. Visit the best website: www.investmentrealestateromania.eu

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