EU funds for Agro hostels – special condition applied to start-ups

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In sub-measures 6.2 and 6.4 respectively of the National Rural Development Program (RDP) for non-agricultural rural businesses can be obtained European funds worth between 70,000 euro and 200,000 euro. One popular business for these type of funds is the agro hostels.

For the RDP sub-measure 6.2 – “Support for the establishment of non-agricultural activities in rural areas” is provided a budget of 18.3 million euros for the projects that will finance different non-agricultural rural business.

According to the applicant’s guide in sub-measures 6.2 there are many conditions for obtaining this type of financing. However there is one special condition for start-ups that must be fulfilled for obtaining the funding: the shareholder that has the absolute majority (holding 50% + 1 / shares of the applicant) must prove that has conducted agricultural activity at the time of submission of the application.

This condition regards the previous experience of the applicant, condition that applies also to start-ups.

Business without corruption – what can we do for a healthier business environment?

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On 7th and 8th of March, Start Lawyers team attended a very interesting workshop named “Business without corruption”, hosted by the Chamber of Commerce and Industry of Romania (CCIR), General Dynamics, General Dynamics European Land Systems – Mowag and TRACE International. The project was initiated in 2016 and is focused on U.S. best practices on anti-corruption tailored to the needs of Romanian companies.

As Romania is facing serious corruption problems, this workshop came at a very good moment with practical solutions for preventing and fighting against this phenomenon. It’s well known that corruption represents a serious setback on attracting foreign investments, setting-up international joint ventures or establishing partnerships with foreign companies and leads to unfair competition.

Corporate compliance program on anti-corruption

So, after a short presentation about the American Act against Foreign Corrupt Practices (FCPA) and its main provisions, the discussions were built around the corporate compliance program on anti-corruption that can and should be implemented by companies for developing a business without corruption, consisting of following elements:

  • Top level commitment (referring to the message coming from the top, which must be clear and use effective communication channels)
  • Risk assessments (approach that identifies high risk areas)
  • Due diligence (collecting reasonable information for each category of third party for reviewing the type of that third party, services being performed, country of operation and amount and type of payment to determine risk level)
  • Training and internal communications (includes periodic training for all employees, directors and offices on the company’s policies and procedures and applicable laws)
  • Monitoring and review (include and use audit rights, regular reviews of due diligence and updates of compliance program)
  • Documentation.

Every company should develop and implement an Anti-corruption Policy and a Code of Ethics/Conducts, both committing the company to a culture of compliance and to the anti-corruption standards in its business practices.

Also, the companies should have confidential reporting policies and procedures through which the employees and third parties are able to report misconduct or allegations of bribery and corruption.

Prevention by third party due diligence

The most sensitive element of the program seemed to be the third party due diligence that companies are encouraged to do, because of the reluctance of those third parties to this type of prevention. Since business inherently rely upon third parties to achieve a wide range of business objectives, the due diligence process is very important because it can build trust between the partners and cast away any doubt regarding the corruption problems that may occur. Due diligence should be applied consistently and be responsive to changes in structure, needs, laws and regulations. It may be performed internal, by compliance team or business team, or external, by law firms or due diligence providers.

Of course, the main challenge is to explain to that third parties why is this necessary or how this procedure is not questioning their integrity, but only brings business advantages.

Aligning to the standards

Although Romania is still behind U.S. regarding the corruption and the means to prevent it, we believe that soon more Romanian companies will align themselves with these standards and we encourage them to do so, as they need to make reliable partners for others and to develop a business without corruption.

Also, we hope that next time there will be more attendants to the workshop from the public sector, since they need to implement such measures too.

 

The Start Lawyers team is actively participating at events, seminars, conferences with topics related to areas of interest of our clients because we continuously seek to be updated with the latest information, so we can offer the best advises and constantly improve our knowledge.





	Student Entrepreneurial Companies – the future of entrepreneurship in Romania				
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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				
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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?				
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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				
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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				
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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				
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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				
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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				
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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).