Romania has approved the Business Angel Law, which allows individual investors to put money in startups and early projects and gives them certain tax benefits. The Chamber of Deputies, which had the final say on this law, recently approved it.

Any person can become a business angel, by the new law, should they comply with several conditions at the same time. The business angel should not already be involved in the company they want to invest in. The person will become an associate in the firm by contributing cash or in-kind. The investment can stay between EUR 3,000 and EUR 200,000, and should be paid via the local banking system. The investment should also be registered in the company’s accounting. The new law limits the business angel to 49% of the company via their investment, controlled either directly or through intermediaries.

Business angels are exempt from dividend tax for three years after the investment, for all the dividends they get from the company they invested in. Should they decide to sell their stake in the startup after at least three years, they will also be exempt from tax on the profit after the sale.

editor@romania-insider.com