Business Guide to Romania* - Bayern - Europa

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Chapter 4 - Banking, Finance and Insurance accounting norms and procedures specific to insurance activity; ■ to authorise insurance companies and insurance brokers and to apply penalties for non-compliance. Starting from September 2001, the ISC has been accepted as a member of the International Association of Insurance Supervisors. The insurance legislation is continuously being improved. Numerous amendments to the existing regulations have been issued to fill in the legislative gap and to harmonise the domestic insurance legislation with EU Directives. This process is expected to continue in the coming period. The main rules refer to classes of insurance, insurers and insurance broker authorisation procedure, minimum solvency margins, insurers' insolvency, technical reserve calculation methods, life insurance funds administration, investments and asset valuation. Insurers have to set up specific technical reserves for their insurance activity, which are tax deductible. There are 45 insurance companies and 270 insurance brokers currently operating in Romania. Among them, foreign insurance companies hold a large slice of the 24 PricewaterhouseCoopers - Business Guide to Romania 2005 market and their share is increasing, especially in the life insurance business (i.e. AIG, ING Nederlanden, Generali, Allianz-Tiriac, Interamerican, Grawe, Aviva, etc). The insurance market saw a significant growth in 2004 in quantitative terms. The volume of gross written premiums in 2004 was ROL 35,000 billion (EUR 863 million), three times higher than in 2001. The gross written premiums represented 1.4% of GDP in 2004 as compared to 0.9% in 2001. Currently, non-life insurance represents more than 70% of insurance activity in Romania, of which compulsory thirdparty liability car insurance has the main share. The life insurance market, despite its significant increase during previous years, is still undeveloped. In 2004 the Parliament approved the law on occupation pensions and universal pension funds (Pillar II). From 1 January 2002, insurance companies have applied IAS rules for accounting and reporting purposes.
Chapter 5 Corporate and Business Law Provided by David & Baias, correspondent law firm of PricewaterhouseCoopers in Romania ■ Legislation allows for the establishment of a wide range of business entities, including wholly foreign owned subsidiaries and branches ■ The most common type of company is the limited liability company (SRL), largely because it is easiest to operate and can have a sole shareholder ■ Many foreign businesses initially establish representative offices ■ Expert legal and tax advice should be sought in the early stages of operation, as legislation varies according to interpretation and changes regularly 5.1 Legal Framework Romanian legislation governing domestic and foreign investment has undergone radical changes since the 1989 Revolution, particularly with the introduction of the Company Law in 1990 (re-issued in 1998, modified again in May 2001 and April 2003, and republished in November 2004). The current legislative bases for investment and business operations in Romania are described below. Company Law Company Law governs certain forms of business organisation. The Law covers registration procedures and documentation, capital and shares, administration and shareholders, mergers and liquidation. Commercial Register Law The Commercial Register Law regulates the organisation and functioning of the Trade Register, stipulates the obligation of business entities to register their entry into operation and any subsequent changes in status, (e.g. management, shareholding structure) operation, or nature of business, and details the registration procedure. Competition Law The Competition Law aims at maintaining a competitive market. Its provisions should be observed by all companies when establishing their business terms or acquiring other businesses. Clearance requirements, depending mainly on the parties' turnover, are set for mergers and acquisitions, as well as for certain agreements (e.g. agreements including exclusivity clauses). Direct Investment Legislation The only legislation in force that stipulates certain incentives for investors in Romania is the Law on the Promotion of Direct Investments with Major Economic Impact (Law no. 332/2001). This law was passed in July 2001 and prescribes the procedures and conditions for the performance of large-scale investments in Romania (investments over USD 1 million). Investments that qualify as significant investments can benefit from a number of incentives as provided by the Fiscal Code (see Chapter 8 - Taxation of Corporations, for details). 5.2 Forms of Business Organisation Romanian legislation lists the following types of business organisation: 1. Limited liability company (societate cu raspundere limitata - SRL); 2. Joint stock company (societate pe actiuni - SA); 3. General partnership (societate în nume colectiv - SNC); 4. Limited partnership (societate în comandita simpla); 5. Limited partnership on shares (societate în comandita pe actiuni); 6. Branch of a foreign company; PricewaterhouseCoopers - Business Guide to Romania 2005 25
Page 1 and 2: Business Guide to Romania* 2005 Edi
Page 3 and 4: Contents Chapter Page 1. Romania: a
Page 5 and 6: ■ Unions 30 6.2 Working Condition
Page 7 and 8: ■ VAT Compliance 48 10.2 Customs
Page 9 and 10: Chapter 1 Romania: a Profile ■ Ro
Page 11 and 12: upgrades made by Moody's and Fitch
Page 13 and 14: All visitors to Romania require pas
Page 15 and 16: nearly one-third of Romania's banki
Page 17 and 18: Mortgages are created under authent
Page 19 and 20: allowance of 20% of the value of th
Page 21 and 22: Chapter 4 Banking, Finance and Insu
Page 23 and 24: ■ Taking deposits; ■ Making loa
Page 25: tried to bring more transparency an
Page 29 and 30: EUR 25,000 by 31 December 2005). Pa
Page 31 and 32: Chapter 6 Labour Relations and Soci
Page 33 and 34: employment contract with an occupat
Page 35 and 36: Chapter 7 Accounting and Audit Requ
Page 37 and 38: Chapter 8 Taxation of Corporations
Page 39 and 40: exempt from paying profit tax throu
Page 41 and 42: ■ Other salary and/or similar exp
Page 43 and 44: - revenues obtained from management
Page 45 and 46: Income Subject to 16% Flat Tax Rate
Page 47 and 48: ■ Income from sale of movable and
Page 49 and 50: similar function, cinema tickets, a
Page 51 and 52: guarantee import duties could be ob
Page 53 and 54: are transported between tax warehou
Page 55 and 56: also stipulates the elements that s
Page 57 and 58: elationships with key contacts, inc
Page 59: Appendices
Page 62 and 63: Appendix II Appendix II Major Banks
Page 64 and 65: Appendix III Restaurants Phone ■
Page 66 and 67: Appendix IV 481- 482 Internal Settl
Page 68 and 69: Appendix VI Appendix VI Accountants
Page 70 and 71: Appendix VII (b) Appendix VII (b) W
Page 72 and 73: Appendix IX Appendix IX Customs Dut
Page 74: Appendix XI Appendix XI Excise Tax

Business Guide to Romania* - Bayern - Europa

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