Professional Documents
Culture Documents
a Market Entry
Strategy for Romania
kpmg.ro
KPMG in Romania
2 | Developing a market entry strategy for Romania
CONTENTS
Introduction 3
Economic background 4
Opportunities and challenges on the Romanian market 5
Market entry 6
Developing a market entry strategy for Romania 7
Romania: Facts and figures 10
Brief overview of Romanias economic environment 11
Tax environment 14
VAT and customs 14
Excise Duties 16
Local taxes and fees 18
Income tax 19
Tax incentives 21
State aid in Romania 22
Section or Brochure name | 3
Its large domestic market, together with a skilled and relatively cheap labour force have stimulated
Romania to become one of the leading countries in Europe in terms of investment attractiveness.
Introduction
Economic background
O
ver the past two in those eurozone countries
decades, Romania which have faced difficulties in
has received a steady recent years. However, they are
inflow of foreign capital, which relatively exposed to Romanian
peaked around the time of sovereign debt, which could
EU accession. Although the present a problem if there were
subsequent recession has hit to be contagion from any future
Romania hard, in common with eurozone troubles, causing
other countries in the region, a the Romanian government
renewal of economic growth difficulties in meeting its
has been under way, and obligations. For the moment,
recently a World Bank report though, that prospect looks
suggested that the country unlikely.
is expected to see growth of
2.2 percent in 2014, placing Romanias infrastructure is
Romania fourth for estimated relatively undeveloped, with
GDP growth in Central and significant improvements
Eastern Europe. Investors needed in the road and rail
continue to be attracted by networks to bring them up to
Romanias skilled and relatively European standards, and so
cheap labour force. far modernization has been
slow. However, there are large
Romania is not burdened by amounts available in EU funding
excessive debt (the sovereign to support infrastructure
debt level in 2012 as a proportion projects, and, with the right
of GDP stood at around 34 approach by government,
per cent compared to an EU a national infrastructure
average of 85 percent and a development program could
eurozone average of 90 percent, bring opportunities for the
according to the EU statistics private sector.
office Eurostat). Consumer
price inflation, at 3.4% in 2012, Romania has a large domestic
is projected to remain high, at market, which has grown in
around 4.3% in 2013 on average. recent years due to greater
The Romanian banking system affluence and the emergence of
proved relatively robust to the a stronger middle class. While
global financial crisis, as it did domestic consumer demand fell
not have the same levels of sharply when the recession hit,
exposure to toxic assets as did it can be expected to improve
banks in the U.S. and Western once the recovery takes hold
Europe. Moreover, Romanian and confidence returns.
banks do not have significant
exposures to sovereign debt
Section or Brochure name | 5
Romania is one of the largest countries in CEE, with over 21 million inhabitants. The work force is
considered relatively highly qualified, while labour markets are gaining flexibility.
M
any economic sectors are still relatively fragmented The government offers a number of investment incentives
and undergoing restructuring. In addition, the to attract FDI, including real estate tax exemptions, as well
government has recently shown interest in further as preferential tax deductions for the purchase of new
privatization, which could provide opportunities for investors. technology and R&D centers. Grants are also available,
Recently there have been changes to the Labour Code which from both national and EU sources, which can support new
have brought greater flexibility to the labour market. investments and job creation.
There are currently a substantial number of Business Process Nevertheless, investors need to be aware of a number of
Outsourcing and Shared Services Centres entities operating challenges that are common to most transition economies
in Romania, and there is still tremendous potential for growth in the region, including Romania. Institutional risks still exist,
in this sector. albeit mostly at the local level. Although EU membership is
slowly bringing stability, legislation is still changing relatively
Recently, SSCs and BPOs located in Romania set up a rapidly, may at times be self-contradictory and is sometimes
professional association called the Association of Business inconsistently applied. Legal procedures can be inefficient
Service Leaders in Romania (ABSL). Core members of and the administrative requirements for setting up a business
ABSL are major service providers on the Romanian market: remain complex. The distribution environment in Romania
Genpact, HP, Luxoft, Microsoft, Office Depot, Stefanini, typically poses challenges to foreign entrants.
Wipro and WNS. KPMG is one of ABSLs strategic partners.
ABSL Romania defines its goal as being: to support the A major share of retailing is still accounted for by a highly
long-term development and dynamic growth of the business fragmented and unsophisticated system of traditional trade,
services sector and increase investment attractiveness and logistics can prove to be unreliable.
of Romania as a leading localization for outsourcing and
offshoring projects.(Source: http://www.absl.ro/absl/
about-absl.aspx) For 2013, ABSL estimated the Romanian
outsourcing market to be approximately EUR 500 mil.
6 | Section or Brochure name
R I
omania presents doing business can be n Romania, KPMG aims When carried out well, a
many possibilities for complicated. Moreover, it to assist international new market entry is often
investors and there is can be hard to find accurate and domestic the most controllable way
still considerable untapped financial, tax, commercial investors in developing for managers to drive
potential. However, any and operational information an understanding of what corporate growth.
successful market entry about target companies. it takes to succeed in a
requires research and Market information and market. We help define Whether choosing a
planning. Whatever type competitive intelligence may your expansion strategy and location, selecting a
of investment you are be inconsistent, inaccurate we study in-depth the company form, devising a
considering, you need to out of date or simply market size and growth market entry strategy or
understand clearly the nonexistent. Investors often potential, key demand identifying specific risks,
opportunities and the underestimate the cost drivers and relevant the decisions you make
potential risks. Knowing the of entry and the strain on trends, the regulatory and at the beginning can have
market, and especially what management resources. competitive environment, a decisive impact on your
any competitors are doing, as well as the tax, legal and future success. At
is also essential. The key to success is to
labor aspects which could KPMG in Romania, we
be well informed and well
be critical in the evaluation have witnessed that
Romania is a market prepared.
of an industry. Using a successful companies use
where conditions can
structured, quantitative a methodical, factdriven
change rapidly and where
and practical approach, we process for market entry.
assess the attractiveness
of the industry and evaluate
whether the opportunity
is realistic, as the client
builds a strategy to enter or
expand into the market.
Section or Brochure name | 7
I
n considering the first steps into a new market, Decide on the form of investment and control:
organizations have many issues to think about. Joint venture, local partner, or acquisition?
Our team helps investors to identify which steps Determine how to operate in Romania from a
are the most critical, where the most significant tax perspective: What are the most efficient
risks could be, and how to implement a plan to take legal structures, the key potential taxes, the
advantage of market opportunities while mitigating risks and opportunities involved, and the
potential risks. Prospective investors need to take existing benefits and incentives?
the following steps before going ahead with their
Identify and approach local partners: Which
project:
companies can be approached, how attractive
and dependable are these partners, how
Identify and assess the market: Which
should you reach a deal with them?
markets, which segments, how should the
investor position itself, how should marketing Build or validate a business plan: How is the
efforts be managed and implemented, business likely to perform in the forthcoming
which entry method should be chosen years? How will the key commercial and
(through intermediaries or directly), and using operational drivers, external and internal
which information? What is the scale of the factors impact the business?
opportunity?
Evaluate where to establish the business
Develop sourcing opportunities: Should (location assessment, site identification):
products be made or bought? Where can key Which locations (regions, cities) are the most
inputs be sourced? attractive? Within the selected locations, what
are the sites (properties, land, buildings) that
best fit the businesss needs?
8 | Developing a market entry strategy for Romania
T
o answer these questions, specialist expertise. KPMG
our team leverages a high has industry specialists across
level of local expertise, all industries and sectors. We
resources and networking gather hard-to-find information
capabilities in Romania along from primary and secondary
with a broad range of external sources to present a fact-based
information resources to develop and independent view. Nothing
a comprehensive market entry is considered in isolation but
plan. in terms of how it will promote
overall corporate well-being.
Our talent pool of highly qualified
professionals has always been For clients, this means that
our greatest strength. As a KPMG staff give you the broad
multidisciplinary advisory firm, picture. They take time to truly
instead of just being specialists in understand your business and
one discipline, we encourage our are plugged into the issues that
people to cross into other matter.
functions to bring a more
rounded and comprehensive Multidisciplinary by essence,
approach to every assignment. in the context of a market entry
exercise, KPMG can provide
This means, for instance, that market intelligence, feasibility
our Market Entry teams not only studies, due diligence assistance,
think about strategy and deal tax structuring, integration and
resolution, but also about the separation advice, M&A advisory,
post-integration of systems and business modelling, valuation
cultures, tax, legal and labour services and accounting advisory
aspects. They consider how services.
an internal audit will operate
across a wider group; how risk Clients using our full range of
can be effectively managed advisory services benefit from
and reputations maintained and improved efficiency of data
enhanced. gathering and communication
as well as cross-fertilisation
Our teams have the know-how between the teams, which
and experience to consider allows us to offer you a better
the big picture and, where deal in relation to cost.
appropriate, to call in more
Developing a market entry strategy for Romania | 9
factSheet
Romania:
Fact and Figures
Developing a market entry strategy for Romania | 11
A highly trained labour force, abundant natural resources, and geographical advantages are
among the attributes that attract investors to Romania.
T
he recent development of the two year ago are considered to be Providing assistance to help
Romanian economy has followed the main factors that will determine young Romanian citizens access
the trend of the Central and East economic recovery, along with the the labor market more easily.
European region, registering a 0.7% expected improvement in absorption
increase in GDP in 2012, followed by of EU funds, which can be used to Introducing fiscal policies to
a 2.4% increase in 2013 and 2.8% finance eligible investment from the stimulate internal demand.
in 2014. the current account deficit state budget. Romania is a member of major
is estimated at 1.3% of GDP in international organizations: the
2013 and forecasted at -0.9 in 2014 Exports grew 6.2% while imports
contracted by 2.4% in 2013. Inflation European Union, the United Nations,
(BMI report). Fiscal consolidation the World Trade Organisation
measures have been introduced in is expected to increase compared
to the previous year, to reach 4.5%, (WTO), NATO, the Council of
recent years in response to declining Europe, the European Bank for
budget revenue and in line with while gradually decreasing in 2014
and reaching the targeted value of Reconstruction and Development
Romanias agreements with the EU (EBRD), the International Monetary
and IMF. The most recent agreement, around 3.2% by the end of the year.
Fund (IMF), the Organisation for
signed in September 2013, provided The main expected government Security and Cooperation in Europe
Romania with a EUR 4 billion loan, for priorities for 2014-2015 are: (OSCE), the Central European Free
a two year period. Trade Area (CEFTA), the United
Promoting investment and Nations Conference on Trade and
The macroeconomic environment improvement of services
in Romania for 2014 is expected Development (UNCTAD) etc.
provided in the energy and
to be more stable, while growth transportation sectors.
perspectives are more promising
than for other countries in the region. Launching of 5 IPOs for main
energy companies owned by the
Robust exports and a moderate state.
recovery in private consumption
12 | Developing a market entry strategy for Romania
Source: National Bank of Romania, The Economist Intelligence Unit, National Commission for Prognosis,
Ministry of Finance (www.mfinante.ro), IMF Stand-By Agreement September 2013, BMI Forecasts.
Romania became a very popular FDI destination in the years immediately before and
after EU accession on 1 January 2007. This was the result of large-scale privatizations
and increased confidence, but there was also a large amount of speculative investment,
particularly in real estate, which dried up when the global economic downturn began
in the second half of 2008. FDI fell significantly in the period up to 2011, but increased
slightly in 2012 and 2013. The trend has been similar to that in other Central and Eastern
European countries, and there are signs that confidence is returning.
The local currency has depreciated slightly since 2011, with an annual average of RON
4.46/ EUR in 2012, and an average of RON 4.42/EUR in 2013.
0,6%
1,5% 0,4%
2,4%
4,7%
4,8%
9,2%
46,5%
11,4%
18,5%
Industry
Financial services
Trade
Real estate&construction
IT&C
Professional, scientific, technical, administrative and support services
Agriculture, forestry and fisheries
Transport
Hotels and restaurants
Other
TheTop 10 FDI
top three in Romania
countries by ofcountry
of origin in terms of origin
Foreign Direct (2012)
Investment* are: the Netherlands, Austria and
Germany.
The top three countries of origin in terms Top countries investing in Romania %
of Foreign Direct Investment* are: the
Netherlands, Austria and Germany. 1,70%
1,70% 1,60%
1,80%
7,70%
1,80%
2,30% 22,40%
3,10%
3,70%
4,30%
Top 10 FDI in Romania by country of origin (2012)
4,50% 18,50%
5,00%
8,90% 11,00%
Tax environment
The VAT law is harmonized with the EU VAT Directive.
VAT and customs
VAT basics Transfer of going concern
T
he Romanian general VAT rate The VAT law is harmonized with the During downturn periods, companies
is 24%. The following types EU VAT Directive. The VAT reverse are looking to restructure their
of goods and services have a charge mechanism is generally businesses to reduce their costs.
reduced VAT rate of 9 percent: recognized for B2B service Some companies may be considering
transactions and intra-Community mergers, acquisitions or disposals of all
Entrance fees for visits trade with goods. or part of their businesses. Romanian
to castles, museums, VAT law provides for specific provisions
memorial houses, historical Romanian entities carrying out allowing for businesses to be
monuments, architectural and economic activities in excess of transferred as a going concern, which
archaeological monuments, the small undertakings threshold could allow for a VAT free transfer
zoos, botanical gardens, fairs, of EUR 65,000 (RON 220,000) (under specific conditions).
exhibitions, cultural events, per year are required to register
and cinemas. and account for Romanian VAT. If Import VAT
the annual turnover is below EUR
Textbooks, books, 65,000, the entity is not required to Import VAT is payable by importers of
newspapers, and magazines, register for VAT. However, a taxable goods to the customs authorities upon
except for those destined person may opt for the application entry into the EU. However, there are
exclusively or mostly for of the general VAT regime. cases when no VAT needs be paid to the
advertising purposes. customs authorities, subject to specific
Any foreign entity that is neither conditions:
Any type of prosthesis, except VAT established nor VAT registered
for dental prostheses. in Romania, and performs For goods imported into Romania
operations giving rise to VAT which are intended to be shipped
Orthopaedic products.
deduction right, except for certain by the importer to a different EU
Medicines for human and operations such as those when Member State.
veterinarian use. the customer is liable to settle
For taxable persons performing
the VAT liability, must register for
Accommodation in hotels or imports exceeding the threshold
VAT purposes in Romania before
similar facilities, including the of RON 100 million in the last 12
performing these operations. This
letting of sites for camping. months or in the previous calendar
type of foreign entity may either
year and which have obtained a
Bread, bakery products, wheat, appoint a VAT representative with
certificate for the deferment of VAT
rye, and other similar products joint and several liability to the tax
payment.
(starting 1 September 2013). authorities (compulsory for non-EU
entities), or register directly with Entities (either established in
A reduced VAT rate of 5% the Romanian authorities (option Romania or abroad) registered
is applicable, under certain available only for entities from for VAT purposes in Romania
conditions, for the sale of other EU countries). and holding Auhorized Economic
residential real estate. Operator (ACO) authorization
or on site customs clearance
procedure authorization or on-site
customs clearance procedure
authorization.
Developing a market entry strategy for Romania | 15
Excise Duties
P
roducts subject to excise duties: beer; wines;
fermented beverages other than beer and wines;
intermediate products; ethyl alcohol; tobacco
products; energy goods and electrical energy; green,
roasted and soluble coffee; luxury products (e.g. gold
and/or platinum jewellery, natural fur garments; cars of
3,000 cc or over; weapons and ammunition; yachts and
other pleasure craft, with or without an engine).
G
enerally, companies resident in Romania, non- Transactions between Romanian entities and their related
resident entities doing business in Romania parties (both Romanian and non-resident) must follow the
through a permanent establishment located in arms length principle. Romanian transfer pricing rules follow
the country and legal entities incorporated according the OECD guidelines. Romanian companies are required to
to European legislation, with a registered office in maintain documentation to demonstrate that their transfer
Romania, are liable to corporate income tax in Romania. pricing policy is arms length.
Thin capitalization
However, dividend payments made by a Romanian The following rules apply to the deductibility of interest
legal entity are exempt if the beneficiary of the expenses and net foreign exchange losses:
dividends is a legal entity/PE of a legal entity which
is a resident of another EU Member State, holding Interest expenses and net foreign exchange losses
at least 10% of the share capital of the Romanian recorded in relation to loans obtained from financial
entity paying the dividends, for an uninterrupted institutions / non-banking financial institutions (e.g.
period of at least 2 years, which ends when the bank loans) are fully deductible.
payment is realized, (one year starting 1 January Deductibility of interest expenses recorded in relation
2014). to loans obtained from institutions other than the above
Payments of interest and royalties made by (e.g. shareholder loans) is subject to the following
Romanian companies to companies resident in an limits:
EU or EFTA member state, which hold at least 25% i. i. Interest rate limitation: deductibility of interest
of the share capital of the Romanian company for expenses may be claimed only up to a certain
a continuous period of at least 2 years prior to the threshold (6% for loans denominated in foreign
date of payment of interest/ royalties, have also currency; National Bank of Romania reference
been exempt from Romanian withholding tax since interest rate for RON denominated loans). Any
1 January 2011. interest in excess of this threshold is permanently
non-deductible for CIT purposes.
Double taxation relief
ii. ii. Debt to equity limitation: if the companys
Relief from double-taxation for resident taxpayers debt to equity ratio is negative or higher than 3:1,
may be provided by way of a tax treaty/EU Directive. interest expenses and net foreign exchange losses
The withholding tax rates under the Double Tax can be carried forward until the ratio becomes
Treaties concluded between Romania and the positive and lower than 3:1.
country of residence of the payment beneficiary
or under EU legislation may be applied if the Reporting and payment
nonresident makes its tax residency certificate
available to the Romanian payer of income. To apply Companies declare corporate income tax on a quarterly
EU legislation, the beneficiary has to additionally basis and in addition submit an annual corporate income
provide an affidavit attesting that the conditions for tax return. The annual tax return must be filed by 25
exemption have been fulfilled. March of the following year, except for taxpayers in the
agriculture sector, which are required to submit their tax
To benefit from treaty protection, the tax residency return and pay tax by 25 February of the following year.
certificate must be made available by the non-
resident at the time of payment. Otherwise, Since 1 January 2013, most taxpayers have been able to
domestic withholding taxes apply upon payment of opt for an advance payment system, i.e. paying corporate
the income and a refund can be requested if the tax tax advances on a quarterly basis, based on the previous
residence certificate is made available within the years results rather than current year results. For banks,
five year statute of limitations period. the advance payment system is compulsory.
Romania has concluded Double Taxation Treaties As a general rule, refunds are available only to the extent
with more than 80 countries around the world. Most that no other tax may be offset against the amount of tax
of these treaties are based on the OECD Model Tax paid in excess.
Convention on Income and Capital. If an individual
qualifies as a resident of one of the two states, the
relevant treaty can be applied. The method provided
under domestic tax legislation for double taxation
avoidance is the tax credit.
18 | Developing a market entry strategy for Romania
The tax for legal entities can range between 0.25% and 1.5% of the book
value of the building and is set by the tax office in whose jurisdiction the
building is located. Individuals pay 0.1% of the taxable value or the building
as defined in law. Additional taxes are payable by those who own more than
one building for residential purposes, which are not rented to other people.
A higher rate, of between 10% and 20%, applies to buildings which have
not been revalued in the past three years prior to the fiscal year for which
the tax is due. This rises to between 30% and 40% for buildings which have
not been revalued in the past five years. For fully depreciated buildings the
taxable value for building tax purposes is reduced by 15%.
Land tax
This tax is due by every individual or legal entity which owns land in Romania
and is calculated per square meter. It varies depending on location, status
of the locality (urban, rural etc.) and the type of land (if it is designated for
construction or agricultural purposes). Land and building taxes are paid twice
a year in equal instalments (by 31 March and 30 September respectively).
However, if the tax due for the entire year is paid in advance no later than 31
March, a reduction of up to 10% by the local council may be granted.
Vehicles tax
The vehicle tax is calculated based on each vehicles cubic capacity by
multiplying each 200 cm3, or part thereof by the appropriate value from a
specific table. Here are two examples:
For cars with cubic capacity between 1601 cc and 2000 cc inclusive, the
tax is 18 RON/ 200 cc;
For cars with a cubic capacity of 3001 cc or over, the tax is 290 RON/cc
Transfer tax
Transfer tax is levied upon the transfer of real estate.
When the transfer is recorded in the Land Registry, it is taxed at 0.5% of the
value of the immovable property which has been transferred. In addition, notary
fees are payable, which are normally around 0.5%, depending on the notary
involved. Therefore, the total tax payable, including notary fees, is approximately
1% of the value of the property transferred. Building tax is due by every individual or legal
entity owning buildings in Romania unless
specific exemptions apply.
Tax on constructions
Starting 1 January 2014, Romanian companies and foreign legal entities which
have a permanent establishment in Romania are liable to a tax on constructions
(other than those subject to building tax). The tax rate of 1.5% is applied to
the inventory value of buildings owned by taxpayers on 31 December of the
previous year. The tax is required to be calculated and declared no later than 25
May for the year to which it relates and must be paid in two equal instalments,
no later than 25 May and 25 September
Section or Brochure name | 19
P
rocedures for EU/EEA and EU/EEA individuals working in
Under Romanian domestic legislation, Swiss nationals are quite Romania (either as secondees or
non-resident individuals deriving income straightforward. However, for local employees). One of the most
from dependent activities in Romania are individuals who are not citizens of important requirements is that the
liable to Romanian income tax as from EU/EEA countries or Switzerland, company must show that it has
the first day of activity in the country. completing immigration procedures been unable to find appropriate
However, to the extent that the individual can be a very bureaucratic and time- candidates who are Romanian
qualifies for relief in terms of the consuming process, which can take nationals.
dependent personal services article of an from a few weeks to a few months.
applicable double tax treaty, there will be Various conditions have to be met
no tax liability. Long-term visas are generally valid by the foreign individual (such
for stays of up to 90 days within a as education requirements and
Net taxable income is taxed at a flat rate 6-month period and can be used professional experience) as well
of 16% for residents and non-residents. to apply for Romanian residence as by the Romanian entity where
A deduction is generally available for permits. Romanian residence the person performs work. Non-
compulsory employee social security permits are generally issued for Swiss and non- EU/EEA individuals
contributions. 1 year and can be extended for employed in positions which
successive 1-year periods. EU/ require high qualifications may be
EEA/Swiss nationals are normally eligible to obtain an EU Blue Card,
issued with 5-year permits (called which is a special type of residence
certificates of registration). permit for employment purposes
issued to highly-skilled qualified
Work authorizations are generally foreign workers.
required for non-Swiss and non-
20 | Developing a market entry strategy for Romania
Social contributions
The main Romanian social contributions are:
The base for applying the individual social security contribution (10.5%)
is capped at 5 times the average gross salary (estimated at RON 2,298
for 2014), while the base for applying the employer social security
contribution (20.8%) is capped at the lower base between the number
of insured persons multiplied by 5 times the average national salary
and the salary fund. The medical leave and allowances contribution
is capped at 12 times the minimum gross salary multiplied by the
number of insured persons. Generally, full social security contributions
(employee and employer) are due for foreign individuals who have
residence in Romania (who obtain a Romanian residence permit) and
perform activity in Romania. Exemptions from Romanian social security
contributions may be available where there is a totalization agreement
between Romania and the home country or where EC Regulation
883/04 is applicable.
Compliance obligations
Generally, annual tax returns are due by 25 May following the tax year-
end, which is 31 December.
The Romanian entity where the individual carries out activity has certain
reporting obligations to the local tax, labour and immigration authorities
at the commencement and at the end of the assignment / business trip.
Generally, annual personal income tax returns are due by
25 May following the tax year-end, which is 31 December
Developing a market entry strategy for Romania | 21
Tax incentives
Research and development
Romanian legislation provides for two main tax
incentives for research and development (R&D)
costs:
The ELI Nuclear Physics project, to be constructed in the Magurele area, will consist
of the most powerful laser beams and the most advanced gamma beams in the world
Employment incentives
Employers who hire recent a monthly incentive of 50% of the
graduates may apply for a monthly reference social indicator for each
Accelerated depreciation grant. This is calculated by student/scholar. The incentive is
multiplying the reference social granted for a maximum of 60 days.
indicator (currently RON 500) by
According to Romanian fiscal legislation, 1.2 - 1.5 for each new graduate Employment incentives are also
accelerated depreciation can be used by (depending on the education level granted to companies which hire
companies for machinery and equipment, of the employees), for a period of unemployed persons aged over
computers and their peripherals. 12 months. 45, as well as for employment
Consequently, taxpayers may apply of an individual who is the sole
accelerated depreciation to fixed assets Additional incentives are granted supporter of his or her family. The
which fall within the above mentioned for the employment of recent employers receive a monthly
categories, even if they do not qualify for the graduates with disabilities. In grant equal to the reference social
fiscal incentive in relation to R&D costs. this case, the monthly grants, as indicator for each such person and
well as the exemption from the are also exempt from paying the
Under this depreciation method, a maximum contribution to the unemployment unemployment contribution due
of 50% of the assets fiscal value may be fund, are offered for 18 months. for the amounts paid to them. The
deducted during the first year of usage, employment relationship must be
while the rest of the assets value can be In addition, companies hiring maintained for at least 18 months.
depreciated using the linear method over the scholars and students during
remaining useful life. summer vacations, benefit from
22 | Developing a market entry strategy for Romania
Dividends reinvested for the purpose of Building land and land used within industrial
creating new work places or for the purpose parks are exempt from building and land tax.
of developing the activities of Romanian
legal entities distributing their dividends, are Local councils may grant building or local tax
dividend tax exempt. exemptions to legal entities which benefit
from state aid schemes.
In addition, dividends reinvested in the share
capital of another Romanian legal entity, for the Other tax incentives
same purposes as the above mentioned ones
Other fiscal incentives are provided for
are also dividend tax exempt.
renewable energy producers, such as
exemption from excise duties for energy
produced from renewable sources.
The government grant scheme is available for five years (2009-2013) and
consists of grants of up to 50% of the eligible costs of the investment.
The scheme is also expected to continue during the first half of 2014.
The maximum level of the grant an economic operator can receive is the
RON equivalent of EUR 28.125 million (for investments outside the Ilfov
Bucharest region) or EUR 22.5 million (for investments in the Bucharest
Ilfov region).
SectionororBrochure
Section Brochure name
name | 23
Ground-breaking
thinking
Infrastructure: one of the biggest and most
complex challenges of the 21st century.
An estimated US$40 trillion of investment will
be needed by 2030 to sustain global growth.
Our Global Infrastructure practitioners, on
site in 150 countries, advise governments,
developers and investors across the lifecycle
of projects- from strategy and financing to
delivery and hand-back.
Serban Toader
Senior Partner
T: +40 (372) 377 800
E: stoader@kpmg.com
Ramona Jurubita
Partner,
Deputy Head of Taxation Services
T: +40 (372) 377 795
E: rjurubita@kpmg.com
Ori Efraim
Partner, Head of China Practice
T: +40 (372) 377 790
E: oefraim@kpmg.com
Richard Perrin
Partner, Advisory, Head of Markets
T: +40 (372) 377 792
E: rperrin@kpmg.com
www.kpmg.ro
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2014 KPMG Romania S.R.L., a Romanian limited liability company and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights
reserved. Printed in Romania.