Measures for the Business Environment
Romanian deputies have adopted a draft law regulating insolvency prevention procedures and insolvency procedures for legal bodies.
Mihai Pelin, 16.04.2014, 13:48
In 2013, Romania ranked second in Central and South-eastern Europe in terms of the number of insolvencies, after Serbia, a recently conducted survey shows. Of a total of 600,000 active companies registered at the Trade Register Office in Bucharest, the percentage of insolvencies stood at 6.4% last year. The phenomenon grew in magnitude, particularly at local level, in the post–crisis period, that is over the last five years.
Against this backdrop, the Chamber of Deputies has recently adopted a draft law regulating insolvency prevention procedures and insolvency procedures for legal bodies. The provisions of the document are applicable to debtors facing a difficult financial situation and set at some 8,800 Euros, the minimum value of the debt for which a request for starting insolvency procedures can be filed.
The parliamentary groups of the National Liberal Party and Liberal Democratic Party, in opposition, have voted against the draft law and have made public their intention to notify the Constitutional Court. The Liberals deem the law incomplete and unfair. A double standard is being introduced as natural persons are being discriminated against, for not being included in the provisions of the law. Alina Gorghiu has further details:
Alina Ghorghiu: “Apart from Hungary, Romania is the only EU member state which does not have insolvency procedures for natural persons! And there are over 1 million Romanians who need this, they need to start afresh!”
On the other hand, representatives of the ruling power contradict those in opposition. An MP of the Social Democratic Party, Ioan Adam, says the law allows for the accurate unfolding of insolvency procedures. Ioan Adam:
Ioana Adam: “By means of this legal mechanism, we have created the possibility for a liquidator to have all necessary tools to speed up the procedure in order to avoid years-long trials which often ended up with the entrepreneur going bankrupt.”
Attending the debates, justice minister Robert Cazanciuc has underlined the insolvency law comes to support the business environment, as it provides more efficient tools to recover receivables. In turn, Prime Minister Victor Ponta says the law is extremely important to a fair and honest business environment. Furthermore, he has announced that a tax exemption on reinvested profit will be implemented as of July.
Victor Ponta: “This is an older request made by the business environment, a measure that we will implement as of July 1st. All companies which reinvest their profit receive a well-deserved support, which will inevitably materialise in new jobs, new taxes and new advantages for our society.”
The Romanian Prime Minister made this announcement upon signing an agreement on creating a platform of consultation between the Government and the Coalition for Romania’s Development, which brings together 20 business associations. Thus, all fiscal measures to be taken by the Government will be preceded by rounds of consultations with the business environment.
