Romanian Government eliminates obligation for foreign investors to have local fiscal representative

Romanian authorities have removed the obligation of having a fiscal representative for non-residents who make investments and who have to declare their profits in Romania. The Government recently approved the Emergency Ordinance amending and supplementing the Fiscal Procedural Code, which eliminates this obligation for foreigners. This measure is aimed at reducing the bureaucracy that foreign institutional investors are currently facing when investing on the local capital market. The changes to the Fiscal Procedural Code also give the possibility of electronic communication between the taxpayers and the tax authorities for various procedural acts or requirements. The changes are part of a joint initiative of the Bucharest Stock Exchange (BVB), the Financial Supervisory Authority (ASF) and the Romanian Government to eliminate eight barriers that make it harder and costlier for local and foreign investors to investor on the local capital market. The ASF also announced last week that it will reduce fees for share trades on the Bucharest Stock Exchange by a quarter, starting September this year. “ASF took the first steps for diminishing the capital market barriers. This includes changes in legislation and a significant cut in the transaction fees. This shows an irreversible decision towards making the market not just more competitive, but very competitive, and we hope that other parties involved will act accordingly. This process is going to be a gradual one, but a permanent one, in order to smooth the access to the Romanian stock market, so investors won’t have to think twice before placing their money here,” said Misu Negritoiu, president of the ASF. The two measures taken by ASF and the Government represent a first concrete step towards the common goal to eliminate the 8 barriers, according to Ludwik Sobolewski, CEO of the Bucharest Stock Exchange (BVB). “The reduction of commissions by ASF is a measure requested by the market and is welcomed by the capital market participants, as it brings Romania closer to the more developed markets as of the cost of trading. The Government decision related to the ease of the fiscal registration process of a non-resident in Romania reduces significantly the time to set-up a trading account in Romania, perceived as a burden investing locally,” Sobolewski explained. He added: “There is still a long way to go for removing all the barriers and improving the whole regulatory framework related to the capital markets. On its side, BVB already operated changes in the Rulebook and proposed new changes to be made in connection to this project, awaiting ASF approval. Following ASF decision, BVB is currently analyzing the reduction of its own trading fees.” Updates on the activity of Great Barriers Shift working group and the steps taken in eliminating the barriers are available on the dedicated website