(P) Tax Flash: Human capital alert- Legislation regarding foreign citizens regime in Romania

Law 157/2011 amending and completing the legislation regarding foreign citizens regime in Romania, (published in the Official Gazette no. 533/28 July 2011) The Law entered into force on 31 July 2011, amending the following acts: - GEO 194/2002 on the status of foreign citizens in Romania, - GEO 56/2007 on the employment and posting of foreign citizens on the Romanian territory, - GEO 55/2007 on the set-up of the Romanian Office for Immigration, Reorganization of the Authority for Foreigners and of the National Office for Refugees, - GEO 105/2001 on the Romanian State Borders. These changes affect the right of stay and work in Romania of individuals who are not citizens of EU/EEA member states and Switzerland The Long Term Residence Visa for secondees If, in the past, the secondees formalized their stay in Romania based on the long term residence visa for ”other purposes”, the law introduces a new distinct type of long term residence visa for this category of foreigners. New requirements concerning immigration documents The law introduces additional requirements for the issuance of immigration papers for secondees (e.g. acknowledgement of educational qualifications by the Ministry of Education, Research, Youth and Sport). The simplified procedure applicable to local employment upon the expiration of the first year of assignment has been eliminated. These changes lead to additional time necessary to fulfill the immigration formalities, either because additional steps must be undertaken or because obtaining such documents from the country of origin might prove difficult. The EU Blue Card The law implements the provisions of the Council Directive 2009/50/EC introducing the EU Blue Card in Romania as well. The EU Blue Card is a residence permit for work purposes designated to encourage the employment of high-skilled non-EU citizens and to facilitate their movement within EU. Long term right of residence The “permanent right of residence” is replaced by the “long term right of residence”. The most important changes refer to: introduction of the conditions when the holders of EU Blue Card are entitled to apply for the long term right of residence in Romania; foreign citizens, family members of Romanian citizens, shall benefit from a residence right valid for a period of 10 years with the possibility of renewal (as compared to 5 years as previously provided by the law). New and increased penalties The law implements the provisions of the Directive 2009/52/EC introducing higher penalties for the Romanian employers that do not observe the legislative obligations with respect to the employment of non-EU citizens (i.e., employment of foreign citizens without a work authorization, residence permit or whose documents expired). In addition, the law introduces a fine between RON 700 and RON 1.000 for employers who fail to comply with the obligation to hold legalized copies of the work authorization or residence permit for local employment purposes of their non-EU employees. In their turn, according to the new law, the State authorities are under the obligation to carry out more frequent inspections at the head offices of the companies that employ foreign citizens. To keep records of and monitor the foreign citizens’ presence in Romania, the Romanian Office for Immigration, will organize the National System of Records concerning Foreign citizens (NSRA).