NEW GOVERNMENT ORDINANCE NO. 18/2022 PERTAINING TO THE AUTHORIZATION AND OPERATION IN ROMANIA OF REPRESENTATIVE OFFICES OF FOREIGN COMPANIES AND ECONOMIC ORGANIZATIONS
The Government Ordinance no. 18/2022 pertaining to the authorization and operation in Romania of representative offices of foreign companies and economic organizations (the “GO no. 18/2022”), was published in the Official Gazette No. 779/4 August 2022 and has entered into force on 7 August 2022.
The Government Ordinance no. 18/2022 repeals the former Decree-law no. 122/1990 dealing with the authorization and operation of such representative offices, and Government Decision no. 1222/1990 on the regime of imposts and taxes applicable to such representative offices.
The Romanian representative offices of foreign companies and economic organizations shall operate based on a permit issued via an electronic platform by the Ministry of Entrepreneurship and Tourism. The permit shall be granted for a minimum one-year validity term and can be renewed for the same term. The authorization tax is in amount of EUR 1,000/year, payable to the tax authority in lei according to the exchange rate published by the National Bank of Romania and applicable on the payment date.
The application form for the opening of the representative office and the issuing of the operating permit shall be filled in electronically and contain the following information: the name, registered office and tax registration number of the foreign entity; the business purpose of the representative office, which must comply with the foreign entity’s business purpose; the operating term; the proxy who will represent the representative office in the relation with third parties; the headquarters of the representative office.
The following documents shall accompany the application form: a document issued by the foreign competent authority, containing the identification and registration details, the business purpose and share capital, of the parent entity (and an authorized translation, bearing a qualified or advanced electronic signature); the by-laws or other documents proving the parent entity’s legal form and manner of operation (and an authorized translation, bearing a qualified or advanced electronic signature); the proxy granted to the person designated to represent the applicant foreign entity (and an authorized translation, as applicable); the proof of payment of the authorization tax; a confirmation on the solvency of the foreign entity, issued by its main bank; the proof on the existence in Romania of the headquarters of the representative office, that should be valid for a term equal to at least the validity term of the operating permit or its renewed term.
The Ministry of Entrepreneurship and Tourism shall issue the operating permit or reject the registration by stating the reason thereof, via the electronic platform, within maximum 30 days from the submission of the complete file.
The operating permit shall contain the following information: the identification details of the parent entity, the business purpose of the representative office; the proxy who will represent the representative office in relation with third parties; the validity term of the operating permit, the operating terms and the headquarters.
The representative office may conclude/perform, in the name of the parent entity, only those deeds/activities that comply with its business purpose, as set out in the operating permit. The representative office may not perform economic activities in its own name.
Information on the representative offices registered in Romania and authorized by the Ministry of Entrepreneurship and Tourism can be accessed via the electronic platform, subject to observing the data protection regulations.
The representative offices are bound to register with the Romanian tax authority for their activity performed in Romania according to the provisions of the Romanian Tax Procedure Code and pay the imposts and taxes set out by the Romanian Tax Code.
By derogation from the provisions of art 1373 of the Romanian Civil Code, the foreign companies/economic organizations are held jointly liable with the employees of their respective representative offices for any damages resulting from the unlawful deeds which are committed by such employees during the performance or in connection with the performance of their activity.
The foreign companies/economic organizations that set-up representative offices in Romania are bound to notify the Ministry of Entrepreneurship and Tourism on any amendments to the data mentioned in the operating permit and to their own legal status, business purpose, share capital or headquarters, within 30 days from the occurrence thereof and ask via the electronic platform, if the case may be, the amendment to the operating permit. The Ministry of Entrepreneurship and Tourism shall amend the operating permit within 30 days from the submission of the complete file, provided that such amendments relate to the data mentioned therein.
The representative office may request the renewal of its operating permit within minimum 30 days prior to its expiry date, by filling in an electronic application via the electronic platform, subject to providing the proof of payment of the applicable authorization tax.
The operating permits issued pursuant to GO no. 18/2022 shall be withdrawn ex officio by the Ministry of Entrepreneurship and Tourism, within 30 days as of their respective expiry date, provided that the validity term expired and no such renewal request was submitted.
The Ministry of Entrepreneurship and Tourism can withdraw the operating permit prior to the expiry of its validity term, within 30 days from the request of the competent authorities, for the following reasons: the breach by the representative office’s personnel of the Romanian legal provisions regarding the money-laundering and terrorism financing; the non-compliance with the business purpose and operating terms, as mentioned in the operating permit; the breach of the tax obligations.
The Ministry of Entrepreneurship and Tourism shall deregister the representative office upon its request further to the deregistration of its fiscal identification number from the records of the tax authority. Such deregistration request shall be filled in via the electronic platform and must be accompanied by the proof of deregistration from the records of the tax authority and by the supporting documents issued by the foreign company/economic organization, accompanied by their related authorized translation bearing a qualified or advanced electronic signature. Such deregistration request shall be settled by the Ministry of Entrepreneurship and Tourism within 30 days from the submission of the complete file.
The representative offices may perform financial-banking operations through accounts opened with banks lawfully set-up on the Romanian territory.
The operating permits that were issued prior to the entry into force of the GO no. 18/2022 (i.e. 7 August 2022) shall remain valid according to the legal instruments in force as at the issuing date.
Until the implementation of the electronic platform, the submission of the applications and the settlement thereof shall be made according to the procedure applicable prior to the entry into force of the GO no. 18/2022. The electronic platform shall become operational within maximum 180 days from the entry into force of the GO no. 18/2022.
Within 60 days from the entry into force of the GO no. 18/2022, the Minister of Entrepreneurship and Tourism shall issue the order approving the methodological norms for the application of the GO no. 18/2022.