Investors who open an SPV company in Romania will incorporate a distinct legal entity. The Special Purpose Vehicle (SPV) is a legal entity created by a foreign company interested in using it for a special business need in Romania, such as financing a particular project or isolating financial risk.
Foreign companies can easily open an SPV company in Romania or engage in other business operations in the country with the help of a local team of business and company formation experts, such as our lawyers in Romania. Our team provides complete incorporation solutions and can assist in the structuring of a legal entity used for a particular purpose.
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How is the SPV used and structured?
The special purpose vehicle is commonly used to meet certain investment strategies that foreign companies have for doing business in Romania. To this end, it can be used for securitization purposes, risk mitigation, financing certain operations or projects in Romania, or raising capital. In some cases, the SPV can be used for real estate purposes, such as when it is needed to buy property in Romania.
How can investors open an SPV in Romania?
The SPV in Romania is usually a private limited liability company (which, in Romania, is the SRL company). This is a preferred business form because it is a separate legal entity from its founders who can be either individuals or other corporations.
The general process for company formation in Romania is observed when opening a special purpose vehicle. We list the most important steps below:
- Selecting the business name: this needs to be unique and reserved before company registration;
- Preparing the documents: the Articles of Association and the Memorandum for the LLC can be drafted with the help of our Romania lawyers;
- Registering the business: the company needs to be registered with the National Trade Register Office;
- Following up with other registrations: these can include obtaining special permits and licenses, following the procedures for hiring employees in Romania, and others.
What are the SPV compliance requirements?
Some aspects investors are advised to keep in mind in terms of company compliance if they open an SPV company in Romania:
- The standard corporate income tax is 16%; a special micro-company regime applies in which small companies are taxed on their revenue and the percentage of the tax is either 1% pr 3% for qualifying businesses; mandatory conditions apply, and these can be detailed by the experts at our law firm in Romania;
- The value-added tax in Romania (for companies that provide goods or services that are subject to this tax) is 19%, with two reduced rates of 9% and 5%;
- The dividend withholding tax payable to a non-resident company is 8% unless reduced under a double tax treaty;
- Romania has signed approximately 90 double tax treaties with countries worldwide.
Romanian companies observe the IFRS accounting standards, as well as certain EU directives. Corporate tax is calculated and paid on a quarterly basis and returns are due by the 25th day of the month following the one for which the filing is made. Non-resident companies that engage in business activities in Romania through multiple permanent establishments are required to designate one of these entities to fulfill the filing requirements.
Discussing the tax obligations according to the activities of the special purpose vehicle can be advisable before investors open an SPV in Romania. Our tax lawyers can give you complete information on the latest fiscal changes, so that you can understand the current regulations, and how these apply to the special purpose vehicle.
Our lawyers provide a wide range of legal services to companies and individuals alike. We can assist you not only with company creation, but also with matters related to divorce in Romania.
If you want to know more about how to open an SPV in Romania, please contact us.