Student Entrepreneurial Companies – the future of entrepreneurship in Romania

Starting with 23 February a new Order issued by Ministry of Education is regulating the Student Entrepreneurial Companies, a new-formed type of company designed to help young students and graduates in their first 3 years of graduation to develop their entrepreneurial skills.

According to it, these companies will be established by each university in Romania, being run by an executive board formed by teaching staff, tutors, local business people and students. Their main goal is to support, develop and encourage entrepreneurship in the universities, especially among students and graduates of higher education in order to increase competitiveness of universities in Romania, particularly by drafting guides related to business plans and/or project financing, mentoring, organizing events and competitions for start-ups and business ideas.

Furthermore, these companies will receive funding from the budget of the university, but the universities may also apply for grants and get other extra-budgetary resources.

The universities have a 6 months period to draft and adopt the inside rules and regulations for the companies’ activity.

Second update on Prevention Law

According to Ionuţ Mişa, State Secretary in the Ministry of Finance, the Prevention Law will be postponed for the second trimester of the year. This delay is explained by the fact that is better for the prevention law to be included in the project regarding the Economic Code.

Uber and Airbnb – are they legal or not?

As happened in many other countries, companies like Uber and Airbnb are in Romania subject to many discussions regarding the legality of their activity.

Lately, a draft law was submitted to the Romanian Parliament in an attempt to tax the transactions that are being made through these sites.

Basically, the document defines these transactions made through a tech platform as being part of a so-called “access economy”, a term that is also giving the name of the law. As it tries to define some terms like “tech platform”, “supplier” and “customer” and the relations between the suppliers, the draft law talks about an auto-regulating and taxation of the suppliers’ incomes according to the Fiscal Code, where they are legal entities, or according to the regulations regarding the incomes coming from the independent activities, but without being necessary to establish a company, where they are natural persons.

Furthermore, the owner of the tech platform must issue a document stating the transaction which has the value of an invoice and the supplier is obliged to make sure that this happens.

At the end, the law provides the facts that represents offences and the fines for their committing.

The explanatory memorandum of the draft law states that the document comes as a covering for the legislative gap in the “access economy” area by defining this type of economy, clarifying some elementary terms and regulating the rights and obligations of the participants in this type of economy, as well as the rules of taxing the profit. Moreover, this memorandum specify explicitly that this law is meant to regulate transactions that are being made through platforms like Uber, Airbnb and other sites like these ones.

The document was tacitly adopted by the Senate and is now under procedure in the Chamber of Deputies, where it received a favorable appraisal from the Legislative Council, but with some amendments, and a favorable one from the Judicial Commission.

Not only that this law makes it all more confusing, but it does not set procedures for the obligations it regulates and creates a hybrid way of taxation by making some incomes subject to taxation without being necessary for them to be collected by a legal entity and, therefore, to be indicated in an accountancy.

The draft law can be found here .

Romania wins a trial against European Commission

Romania gets an important victory in trial case no. T-145/15 before the Tribunal of European Union against European Commission.

The action was submitted on the basis of Article 263 TFEU seeking the annulment in part of Commission Implementing Decision (EU) 2015/103 of 16 January 2015 excluding from European Union financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD).

Through this Decision the Commission applied to Romania a correction amounting of about 128 million euros, which was contested in principal for lack of motivation.

Although Romania does not dispute the failures in monitoring alleged against it, it does dispute the financial consequences drawn in the contested decision of the deficiencies found.

The Tribunal held that the complaint alleging insufficient reasons for the rejection of the method of individual assessment of the various deficiencies and the complaint alleging a failure to state reasons in so far as it defines the correction rates applied, are well founded.

The decision may be appealed before the European Court of Justice.

Entire decision can be found here.

Romania – the highest annual economic growth in the EU in the fourth quarter 2016

According to Eurostat (European Statistics Office) Romania registered an economic growth of 4.8% in the fourth quarter 2016 compared to the same period in 2015, which is the highest growth rate in the European Union.

At the end of 2016, the Romania’s economy grew from 4.4% in the third quarter to 4.8% in the forth one.

In comparison, the eurozone economy grew by 1.7% in the fourth quarter 2016 compared to the same period of 2015, while the European Union has recorded annual economic growth of 1.8%, in both cases a smaller increase than the one recorded in the third quarter.

Projects for fishing and maritime business- 2017 calendar

If you are interested in developing a business in areas such as fishing or other maritime activities, the POPAM Management Authority (Operational Program for Fishing and Maritime Business) has launched the plan for the year 2017, where you will find the calendar for submitting the projects.

This year there will be 30 calls for projects and 14 of their guides will be published in February.

You can find the calendar here.

Update on the Prevention Law

As some of you may know, according to the project of Prevention Law the fiscal authorities will no longer be able to impose a punitive measure to a company before applying some “preventive measures”, consisting in a conformity plan which must be put into effect by the company within a fixed term.

Because the relationship between authorities and entrepreneurs should take the form of a partnership based on trust, the Ministry for Business, Trade and Entrepreneurship aims to put the Law on prevention on the agenda of the Government meeting as of 23.02.2017 for approval.

Although for some of the politicians this term seems too short, we could only hope that we will finally have a law that stops the abusive practice of the fiscal authorities.

European Commission project: The Once-Only Principle — TOOP

The European Commission (EC) has launched an 8 million euro project to interconnect the public administrations from 21 EU countries in order for the transmission of information by cross-border companies to be made only once.

The project named “The Once-Only Principle — TOOP” is part of the EU Action Plan for e-Governance 2016-2020 and will contribute to a more efficient digital market. This way the information will be delivered to the public administrations only once, regardless of the origin country of the company, and will be eliminated the unnecessary obstacles for european companies that are forced to repeatedly submit the same data and documents.

The authorities who represent Romania in this project are National Institute of Research and Development in Computer Science (who is the national manager) and National Trade Register Office (partner).

Two new calls for projects in the cooperation field

The first call for projects under the Joint Operational Program “Black Sea” 2014 – 2020 has been opened since 31 January 2017 and has the closing date on May 31, 2017. This call addresses to projects that contribute to all thematic objectives and priorities of the above mentioned Program, such as:

  • promote business and entrepreneurship in the Black Sea Area (in fields like tourism, culture, agriculture),
  • promote a coordinated environment policy and reduction of marine debris through joint actions in the Black Sea Area.

The budget for the two thematic objectives of the first call for projects is over 19.6 million euros.

Also, between March 1, 2017 and 30th of June 2017 will be opened the third call for projects under the Europe Interreg Program 2014-2020. Here are welcomed projects who contribute to all priority axes of the Program, such as:

  • research, technological development and innovation,
  • competitiveness of small and medium enterprises,
  • supporting the transition to an economy with a low emission of carbon dioxide in all sectors,
  • environment and efficient use of resources.