Corporate law novelties
The Companies Law No. 31/1990 and Law No. 265/2022 on the Romanian Trade Registry are always changing to streamline the corporate governance of Romanian companies and the registration process. Registration formalities, including company incorporation, have been simplified by digitalisation through the online portal of the National Trade Register Office and the electronic transmission of all required documents. Incorporating a company now takes three working days on average.
The Companies Law was again amended in July 2023 concerning the transposition of the Mobility Directive into national legislation. Although the original 31 January 2023 deadline for implementing the Mobility Directive was exceeded, the joint effort to harmonise the legislation of the Member States led to changes to the Companies Law on cross-border mergers, supplementing it with new provisions on cross-border conversions and divisions involving the incorporation of new companies. In addition, an abuse control mechanism has been introduced for cross-border reorganisations.
What's new in the Romanian tax system?
2023 was a turbulent year for the country's tax legislation. Following discussions between the Romanian Government and EU representatives, Romania had to implement measures to reduce its considerable budget deficit. Business leaders and policymakers had a hot summer and early autumn negotiating a series of legislative changes. These targeted the increase of the state budget revenues and tax evasion as well as the reduction of budgetary expenditure. Introduced in Q4 2023, these measures translate into a significant increase of corporate taxes, directly impacting the costs of operational and tax compliance.
Romania is a land of contradictions. It takes active measures to streamline the market entry of new investors on the one hand, while introducing new taxes or increasing existing ones on the other. In a changing legislative and fiscal climate, investors must create flexible business plans that can absorb the extra costs generated by the need to comply with the new tax rules.