Q & A

1. Is there a specific license we should acquire before actually doing such business in Romania? If yes, what is it and what are the requirements to get such a license?

Yes, there are special formalities for this type of activity. The field of granting microcredits and other types of activities that can be carried out by entities other than banks is strictly regulated in Romania. The companies that carry out financing activities (and not only) are called non-banking financial companies and for carrying out the activities it is necessary that within 30 days from the establishment to notify the National Bank of Romania in order to be registered in the General Register of Records. In order to obtain this registration, it is necessary to meet several conditions of admissibility, including the form of the company – it must be registered as a joint stock company and the condition of share capital which can not be less than the national currency equivalent of 200,000 euros, respectively 3,000,000 euros in the case of non-bank financial institutions that have included in the object of activity the granting of mortgage loans. The share capital must be subscribed and paid on the date of registration of the company.

2. Are foreign investors allowed to invest in microfinance (i.e.: providing micro loans) in Romania?

Yes, foreign investors can carry out IFN-type activities in Romania, by setting up a company with this object of activity or by setting up a Branch of such a company from abroad.

3. How long will it take to set up a new company in Romania and what is the requirement on the registered capital?

The term of registration in the Trade Register is 5 days from the moment we have all the necessary documents, in the form required by law. The share capital is mentioned in point 1 above.

Regarding opening bank account

In Romania, according to the banking legislation, the associate/administrator is obliged to go personally to the bank in order to open the bank account; therefore, we do not charge a fee for opening a bank account, but additional costs may arise for the client in the event that it is necessary to hire a translator for the relationship with the bank or if it is necessary for us, as legal consultants, to have a correspondence with the bank for the benefit of the client, for opening the bank account.

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The main management structure of the company in Romania is the general meeting of associates / shareholders. The constitutive act establishes the rules for convening and adopting decisions and whether the exercise of the vote can be delegated by special mandate by the associate / shareholder who cannot take part in the meeting. In the limited liability company, each shareholder entitles the holder to one vote in the respective meeting. The general meeting of associates has the following main obligations: ✓ to approve the annual financial statement and to establish the distribution of the net profit. ✓ to appoint the administrators and the censors, to revoke / dismiss them and to discharge them, as well as to decide to contract the financial audit, when it is not obligatory, according to the law; ✓ to decide the pursuit of the administrators and censors for the damages caused to the company, designating also the person in charge to exercise it; ✓ to modify the constitutive act.
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The limited liability company is the most common form of company in Romania, being the legal entity that best serves the interests of investors both from the point of view of the reliability of the activity, and from the perspective of its management. The limited liability company is abbreviated "SRL" in Romania and is the equivalent of the American limited liability company Limited Liability Company (abbreviated to LLC) or the German economic structure "Gesellschaft mit beschränkter Haftung" (abbreviated to GmbH), or the structure called "limited" , the structure used in most Latin American states.
The limited liability company is characterized by:
✓ the character intuitu personae, which means that this economic structure is based on the trust between the associates;
✓ the division of the share capital into fractions called shares, which cannot be negotiable securities;
✓ the liability of the associates is limited to their contribution to the share capital.
The limited liability company may also have a single partner, natural or legal person, of Romanian or foreign nationality, who will be the owner of all shares. Instead, the maximum number of associates is 50 people.
At present, the Romanian law no longer conditions the subscription and payment of a certain amount as share capital.
Through registration, the company acquires legal personality, becoming, under the law, a collective subject of law. The conclusion given by the judge is sent, ex officio, to the Official Gazette of Romania for publication at the expense of the company and to the Financial Administration in whose territorial area is the main headquarters of the company for fiscal registration, mentioning the registration number in the Trade Register .

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