Countries of the World/COUNTRYS.BIN/dp/0303/03035.txt

Text File | 1991-06-25 | 15.4 KB | 343 lines

$Unique_ID{COW03035}
$Pretitle{360}
$Title{Romania
Foreign Investment Law}
$Subtitle{}
$Author{Romanian Embassy, Washington DC}
$Affiliation{Romanian Embassy, Washington DC}
$Subject{foreign
art
investments
investment
romanian
investor
romania
capital
investors
provisions}
$Date{1990}
$Log{Table 1.*0303501.tab
Table 2.*0303502.tab
Table 3.*0303503.tab
}
Country:     Romania
Book:        Foreign Investment in Romania
Author:      Romanian Embassy, Washington DC
Affiliation: Romanian Embassy, Washington DC
Date:        1990

Foreign Investment Law

SECTION I GENERAL PROVISIONS

     Art. 1 - In applying the provisions of this law, the term "Foreign
Investment" shall comprise:

     a) Creation of new companies, subsidiaries and branches with wholly owned
foreign capital or by partnership with Romanian legal or natural persons, in
accordance with the law on Commercial Companies;

     b) Participation to the increase of registered capital of an existing
company or purchase of capital stock thereof as well as the acquisition of
bonds and other commercial property;

     c) Concession, lease or administration location of economic activities,
public services and production subunits belonging to either autonomous state
companies or to commercial companies, with observance of legal provisions
pertaining thereto;

     d) Purchase of production facilities and other buildings as well as the
construction thereof save for the residence buildings not related to the
investment;

     e) Conclusion of exploration and production sharing agreements for the
exploitation of natural resources.

     Art. 2 - "Participation" of foreign investors in Romania may consist of:

     a) Funds in freely convertible currencies;

     b) Machinery, equipment, means of transport, components, spare parts and
other goods in Kind;

     c) Services, intellectual property rights (patents, trademarks,
copyright), management techniques, know-how;

     d) Profits lawfully obtained in freely convertible currencies or in lei
as a result of business activity in Romania.

     Art. 3 - The term "Foreign Investor" shall imply any foreign legal entity
whose place of business is abroad and any foreign natural person performing
investment activities in Romania under any of the forms set forth by this law.

     Art. 4 - Foreign investments may be effected in all sectors of industry,
exploration and production of natural resources, agriculture, infrastructure
and communications, scientific research, trade, transportation, tourism,
banking, insurance, and other services, provided that they shall not:

     a) infringe the regulations in force meant to protect the environment.

     b) affect Romania's national security and defence interests.

     c) harm the public order, health and good morals.

     Art. 5 - the minimum amount of foreign investment in Romania either in
cash or in Kind shall be of us $ 10,000.00 or its equivalent in other freely
convertible currencies calculated at the official exchange rate upon effecting
the investment.

SECTION II GUARANTEES

     Art. 6 - The foreign investments in Romania shall not be subjected to
nationalization, expropriation, confiscation, requisition or any other measure
of tantamount effects except in the public interest, under due process of law
and against compensation which shall represent the equivalent of the
investments affected.

     Such compensation shall be prompt, adequate and effective.

     Art. 7 - Compensation shall be computed in accordance with the market
value of the investment upon taking the actions set forth at Art. 6.

     Art. 8 - In case the market value cannot be ascertained as provided at
Art. 7 hereinabove, the compensation shall be determined on equitable
principles, taking into account the capital invested, depreciation,
repatriated capital and current returns.

     Art. 9 - Should such determination of the compensation as per Art. 7
and 8 herein not be satisfactory to the foreign investor, then it shall be
established through the duly vested courts of law by decision, which shall be
final and binding.

     Art. 10 - The foreign investor shall enjoy the rights to:

     a) Participate in the management of the enterprise, in keeping with the
agreed upon contracts and by-laws;

     b) Assign its contractual rights and obligations to other Romanian or
foreign investors;

     c) Transfer abroad profits achieved in freely convertible currencies as
well as the portion of the profits in lei as established by Art. 19 herein;

     d) Transfer abroad, in keeping with the provisions of the contracts
concluded, the amounts due for copyrights, leasing, technical assistance,
expertise and other services;

     e) Transfer abroad, in freely convertible currencies the amounts
resulting from total or partial liquidation or selling up of the initial
investment, as well as of the shares, bonds and other property rights;

     f) Transfer abroad in freely convertible currencies in three annual
installments the amounts obtained as a result of winding up the initial
investment.

     Art. 11 - For the whole duration of their existence the foreign
investments in Romania shall be governed by the legal provisions in force
upon the date of their establishment.

     Art. 12 - The foreign investors are granted the national regime and shall
benefit of the same incentives, irrespective of citizenship or, as the case
may be, nationality.

SECTION III INCENTIVES

     Art. 13 - Exemption from import customs duties is granted for a period
not exceeding 3 (three) years as of the date of issuing the "Certificate of
Investor" for all imported machinery, equipments, installations, means of
transport and other goods in Kind pertaining to the investment.

     Art. 14 - Imported raw materials necessary for the investment shall enjoy
a 50% reduction of the relevant customs duties for a period of 2 (two) years
as of issuing the "Certificate of Investor".

     Art. 15 - Foreign investment are exempted from tax on profits as follows:

     a) Investments in trade, tourism, banking, insurance as well as any other
services, for a period of 3 (three) years from commencing to make profits;

     b) Investments in the exploration and production of natural resources,
industry, agriculture, building sector, communications and transport, for a
period of 5 (five) years from commencing to make profits.

     Art. 16 - In addition to the tax exemptions set forth hereinabove an
annual 25% reduction of the tax on profits shall be feather granted on the
condition that:

     a) At least 50% of the profits in freely convertible currencies and 75%
of the profits in lei are reinvested in Romania;

     b) At least 50% of the necessary raw materials, energy and fuels are
provided through importation;

     c) At least 50% of the products and services are exported;

     d) More than 10% of the expenditures are invested for scientific research
and development of new technologies in Romania;

     e) At least 50 new jobs are created by new investments or expansion of
existing production capacities.

     Art. 17 - Foreign investors may transfer in freely convertible currency a
portion of the annual profits in lei equivalent to 8-15% of their paid
contribution to the registered capital through currency exchanges conducted by
the Romanian Bank for Foreign Trade or other authorized banks as follows:

     a) 15% of the paid contribution to the registered capital for investments
made in the fields of special importance for the national economy as
established by Government Decree;

     b) 12% of the paid contribution to the registered capital for investments
made in the fields of exploration and production of natural resources,
industry, agriculture, building sector, communications, transport other than
those provided for at paragraph (a) hereinabove;

     c) 10% of the paid contribution to the registered capital for investments
made in the fields of finance, banking and insurance;

     d) 8% of the paid contribution to the registered capital for investment
made in other fields of activity.

     Art. 18 - Upon suggestions prepared by the Romanian Agency for the
Promotion of Investment and Foreign Economic Assistance the fields of special
importance for the national economy shall be established through Government
decree, whereby additional incentives can be granted for projects in said
fields.

     Art. 19 - In case liquidation of foreign investments occurs during the
period of the application of the exemptions and incentives set forth at Art.
15 and 16 herein then the foreign investors shall pay the taxes and duties
imposed by the law for the whole duration of the investment.

     The taxes and duties to which the foreign investor is liable in
accordance with the provisions of the above paragraph shall be paid with
priority out of the results deriving from the liquidation of the investment or
out of the other rights due to the foreign investors.

SECTION IV REGISTRATION OF THE APPLICATIONS FOR FOREIGN INVESTMENTS

     Art. 20 - Foreign investments in Romania irrespective of their legal
status, shall be made on the basis of a preliminary application registered
with the Romanian Agency for the Promotion of Investments and Foreign Economic
Assistance. The application shall be filled by the foreign investor in
accordance with the model form shown in Appendix no. 1 hereto.

     Art. 21 - The Romanian Agency for the Promotion of Investments and
Foreign Economic Assistance shall study the reliability of the investor, the
field in which the investment shall be made, the amount of the capital to be
invested and the legal form of the investment.

     Art. 22 - The Romanian Agency for the Promotion of Investments and
Foreign Economic Assistance is entitled to request data and information from
the ministries, other central and local organizations of the state
administration as well as from the autonomous state companies and commercial
companies in the field of activity where the foreign investment shall be made.
The ministries, the other central and local organizations of the state
administration as well as the autonomous state companies and the commercial
companies shall answer within 10 days to the request of the Romanian Agency
for the Promotion of Investments and Foreign Economic Assistance.

     In case the data and information that were required are not received
within the time limit set forth hereinabove the Romanian Agency for the
Promotion of Investments and Foreign Economic Assistance may decide on
the basis of the data and information available in its files.

     Art. 23 - The Romanian Agency for the Promotion of Investments and
Foreign Economic Assistance shall answer the applications of the foreign
investors within 30 days from their registration by a confirmation related to
the proposed investment, in accordance with the provisions of Appendix no. 2
hereto.

     Art. 24 - The applications for foreign investments which may affect the
major interests of national economy shall be approved by the Government upon
advice prepared by the Romanian Agency for the Promotion of Investments and
Foreign Economic Assistance.

     Art. 25 - The foreign investors have the right to effect the investments
under the conditions set forth in the Romanian law and observing the legal
status of the forms of investment chosen and on the basis of the confirmation
issued by the Romanian Agency for the Promotion of Investments and Foreign
Economic Assistance.

     Art. 26 - The position of foreign investor in Romania is proven by the
"Certificate of Investor" issued by the Romanian Agency for the Promotion of
Investments and Foreign Economic Assistance, in accordance with the model
shown in Appendix no. 3 herewith.

     The certificate of investor shall be issued at the foreign investor's
request upon presentation of relevant documents - the contract of association
and the statutes, the commercial contracts and other legal papers drafted in
accordance with the provisions of the Romanian law and taking into
consideration the legal status of the investment.

     The application for issuing the certificate of investor shall be made by
the foreign investor within 15 days as of the date of fulfillment of Romanian
legal provisions regarding the foreign investments.

     The Romanian Agency for the Promotion of Investments and Foreign Economic
Assistance shall issue the certificate of investor within 15 days counted from
the date of registration of the foreign investor's application.

     Art. 27 - The certificate of investor shall indicate the incentives
granted to the foreign investor in accordance with the provisions of this law.

     The certificate of investor is opposable to the Romanian authorities for
the establishment of the rights and the obligations of the foreign investors.

SECTION V FOREIGN INVESTMENTS ACTIVITY

     Art. 28 - The collection and payment operations related to the foreign
investment shall be effected through lei and money transfers.

     Art. 29 - The accounts in freely convertible currency shall be fed by the
financial contribution of the investors, the foreign currency borrowings and
by the foreign currency revenues.

     Art. 30 - The foreign investors may engage loans in lei and in foreign
currencies from local financing institutions or loans in freely convertible
currency from foreign banks and financial institutions.

     Art. 31 - The activity of the foreign investors shall be carried out on
the basis of commercial contracts concluded with the observance of legal
provisions and at agreed-upon prices in lei and in foreign currency.

     Art. 32 - The payments in freely convertible currency, including the
profits due to the foreign investor, shall be effected only from the
balances of the foreign investor's bank accounts.

     Art. 33 - The profits in freely convertible currency and in lei which are
due to the foreign investors can be used in order to make new investments in
Romania or to buy Romanian goods and services.

SECTION VI FINAL PROVISIONS

     Art. 34 - In case the investments of foreign capital in Romania are made
by setting-up commercial companies in association with Romanian natural or
legal persons, the contribution of the Romanian associates to the registered
capital may consist of the equivalent of the right to use the necessary land
or building for the whole duration of the investments.

     Art. 35 - The expatriate personnel necessary to implement the foreign
investment shall be agreed upon by the contracting parties.

     Art. 36 - Upon the date this law comes into effect, the Decree no. 424 of
1972 regarding the setting up and functioning of joint-ventures in Romania,
the Decree-Law no. 96 of 1990 regarding the promotion of foreign capital
investment in Romania, as well as any other provisions contrary to this Law
are abrogated.

[See Table 1.: Brief Presentation of the Romanian Parliament]

COMMITTEES

     There are 14 Committees of the Romanian Parliament, each of them
operating separately in the Senate and House too, but two of them have members
of both Chambers (Parliament Committee for Foreign Policy, Parliament
Committee for Defense and Public Order)

[See Table 2.: Main Political Parties and Organisations in the Romanian
Parliament]

[See Table 3.: The Government of Romania]