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Romania

Paul Hastings in collaboration withKinstellar
Liquidity Measures
Tax Reliefs
Insolvency

Liquidity Measures

COVID-19 Support scheme for SMEs

Government Measure

Eligible businesses may apply for loans with a value of up to RON 10 m (approx. €2m).

Successful applicants will also benefit from a grant of up to €800k covering the corresponding risk, administration and interest fees.

The Romanian Government guarantees up to 80% of loans for medium enterprises1 and up to 90% of loans for micro-enterprises2 and small-sized companies3.

No interest or product fees until at least 31 December 2020 (possibility of extension is provided).

Finance terms of up to 72 months for investments loans and up to 36 months for working capital loans (the latter can be extended up to an additional 36 months).

Collateral and guarantees decided on a case by case basis, but note that the Government guarantee sits behind the borrower, and the primary recourse for the lender remains against the borrower itself (i.e. the government guarantee applies once the lender has exhausted recovery options against the borrower).

The financing is made available through accredited third-party lenders.

1All other SMEs not qualifying as micro-enterprises or small-sized companies.

2Companies which have up to 9 employees and an annual net turnover or total assets of up to €2m.

3Companies which have between 10 and 49 employees and an annual net turnover or total assets of up to €10m.

 
Eligibility

Romanian based companies which: 

  • have an annual net turnover below €50m or hold total assets below €43m;
  • have an annual employee average number below 250; (together “SMEs”) and
  • operate in any sector (excluding gambling and betting activities; production or sale of ammunition, explosives, tobacco, alcohol, substances under national control, plants, narcotic drugs and psychotropic substances; and protection and investigation activities).

For more information about eligibility please see here (Romanian language only).

 
Supervising Authority

The Romanian Ministry of Finance acts as granting authority.

The mandated administrator of the support scheme is the State-owned National Credit Guarantee Fund for SMEs (“FNGCIMM”).

Applications to be made through an online platform.

 
Availability

From 17 April 2020 until 31 December 2020.

Moratorium on loan payments 

Government Measure

Payment deferral period between 1 and 9 months at the borrower’s option but no later than 31 December 2020.

The interest on the debt accrued over the grace period is capitalised.

Deferral is applicable to loans that: (i) have been granted no later than 30 March 2020; (ii) have not reached maturity; (iii) are not under anticipated default as at 30 March 2020; and (iv) have no outstanding amounts under such loans as at 16 March 2020 or borrowers have paid such amounts before filing the deferral request

Lenders must analyse the request made by the borrower versus the applicable legal criteria and communicate their approval/rejection decision regarding the loan payment deferral within 15 calendar days.

 
Eligibility

Companies which:

  • are not subject to insolvency proceedings as at the date of their payment deferral request; and
  • hold a state of emergency certificate issued by the Ministry of Economy, Energy and Business Environment ascertaining: (i) a decrease in revenues of at least 25% in March, April and May 2020 compared to the January-February 2020 average; or (ii) that their activity was completely or partially interrupted as a result of the decisions taken by the public authorities during the state of emergency.

The state of emergency certificate is electronically issued based on a sworn declaration on the effects of the pandemic upon the company’s activity, uploaded by the beneficiary here.

 
Supervising Authority

Overall supervision of the National Bank of Romania.

FNGCIMM only with regards to mortgage loans to natural persons.

The Ministry of Economy, Energy and Business Environment is responsible for issuing the relevant state of emergency certificates.

More information on the measure is available here (Romanian language only).

 
Availability

Borrowers must send a deferral request to their lenders by 15 June 2020.

Tax relief for all taxpayers covering interest, penalties and other additional charges of outstanding debts

Government Measure

All types of taxpayers can benefit from a tax exemption covering all accessory obligations of debts outstanding as of 30 March 2020 provided that they: (i) file an annulment request by 15 December 2020; (ii) have paid all principal budgetary obligations before filing the annulment request; and (iii) have submitted all tax returns before filing the annulment request.

 
Eligibility

All businesses registered in Romania.

 
Supervising Authority

Supervising authority: National Agency for Fiscal Administration (ANAF).

 
Availability

From 14 May 2020 until 15 December 2020

Tax Reliefs

Extension of first payment term for property taxes (i.e. buildings, land and vehicles)

Government Measure

31 March 2020 deadline for paying the property tax was extended until 30 June 2020.

The advance payment bonus remains applicable.

 
Eligibility

All businesses registered in Romania that own buildings, land and/or vehicles.

 
Supervising Authority

Relevant tax divisions under local authorities where the company buildings and land are located and where the company vehicles are registered.

 
Availability

31 March 2020 deadline extended until 30 June 2020.

Due date postponed for tax liabilities

Government Measure

Tax liabilities that become outstanding as at 21 March 2020 do not incur interest or penalties until the end of the tax relief measures (i.e. 30 days following the end of the state of emergency).

Moreover, ongoing tax enforcement measures are suspended and new enforcement measures are not commenced, with the exception of enforcement measures regarding state budget claims set by court decisions in criminal proceedings.

 
Eligibility

All businesses registered in Romania.

 
Supervising Authority

ANAF

 
Availability

From 21 March 2020 until at least 13 June 2020.

In customs VAT payment deferral for certain goods 

Government Measure

VAT payments at customs authorities have been temporarily suspended for imports of medicines, medical protection equipment and other devices or medical equipment and sanitary materials that can be used in the prevention, confinement, treatment and control of COVID-19.

 
Eligibility

Businesses registered for VAT in Romania importing the relevant types of products and equipment.

 
Supervising Authority

ANAF

Further information is available here (Romanian language only).

 
Availability

From 16 March 2020 until at least 13 June 2020

Incentives for the timely payment of corporate income tax

Government Measure

10% bonus of the due amount for all taxpayers, subject to corporate income tax and micro-enterprises.

 
Eligibility

Relevant businesses registered in Romania

 
Supervising Authority

ANAF

 
Availability

For corporate income tax payments made by 25 July 2020 and 25 October 2020, as applicable.

Insolvency

Temporary suspension of the obligation to file for insolvency

Government Measure

During the state of alert (replacing the state of emergency starting with 15 May 2020) declared due to the COVID-19 pandemic, the debtor’s obligation to file an insolvency request with the relevant court within 30 days from becoming insolvent is suspended. The 30 days term stars to run only after the end of the state of alert.

The debtor can nonetheless choose to file for insolvency during the state of alert.

 
Eligibility

Businesses registered in Romania that become insolvent.

 
Supervising Authority

N/A

 
Availability

From 15 May 2020 until at least 13 June 2020.