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M&A Lawyers in Romania

M&A lawyers in Romania define the category of attorneys who are specialized in merger and acquisition (M&A) procedures. M&A is the legal procedure through which a company takes over another company through acquisition or the procedure through which two companies merge together in order to better manage their current assets.

These procedures are completed following specific regulations and they will always need the participation of a team of lawyers, able to prepare the entire set of documents for the acquisition or the merger of the two corporate entities. Of course, our team of lawyers in Romania will also present all the tax implications arising from this procedure. 

When can M&A in Romania take place? 

There are different moments when this procedure can be initiated, based on the type of procedure one is interested in. For instance, a merger (or the fusion of two legal entities), is usually started during the dissolution of companies that have not yet entered the liquidation procedure. 

This means that the company can’t still carry out commercial activities, but that the company is still recognized as a legal entity from a legal point of view and has not yet been deleted from the registers of the competent authorities. In a merger, the said company will transfer its current assets to another company, and the latter will provide, in exchange, shares belonging to the shareholders of the latter company. 

Another way through which a merger can be carried out is when more companies that are dissolved and not yet liquidated merge together for the purpose of creating a new legal entity. Here, the said companies will gather under one structure all their assets and liabilities and the shareholders of the companies entering the merger will transfer their shares to the new entity. 

Another way in which an M&A in Romania can be carried out is through the acquisition procedure, which is simply the process through which a company buys another company that is listed for sale. Please mind that the acquisition can refer to buying the entire company, with all its assets, liabilities and know-how, or to just a part of the company. With these being said, our M&A lawyers in Romania want to highlight the following aspects: 

  • the legal framework for M&A in Romania is given by the Law no. 31/1990;
  • where a merger is involved, besides the transfer of shares, one can also make a cash payment o maximum 10% of the value of the distributed shares;
  • the merger control rules are governed by the Competition Law no. 21/1996;
  • one has to submit a file with the Competition Council, which also implies the payment of a fee of approximately EUR 1,000;
  • in maximum 20 days since the file is submitted with the institution, the parties involved in a merger can be required to provide additional documents. 

What are the tax implications of a M&A in Romania? 

During this procedure, the companies involved will also have specific tax obligations, based on the type of procedure that they will participate in (merger or acquisition). Our law firm in Romania will present in this section few important matters referring to taxes, and if you need the full legal framework applicable in this case, our team remains at your service. 

The rules for the taxation of M&A in Romania is done in accordance with the tax residency of the companies involved. Thus, different tax rules can apply based on whether the entities are tax residents of the European Union (meaning, registered in the European Union – EU); in Romania, the rules of the EU Merger Directive will apply. 

Our team of M&A lawyers in Romania can present the main rules which govern this procedure, but you must know that in most cases, mergers are tax neutral, which implies that the transfer of the assets belonging to a company to the other company will not be taxed. 

However, it must be noted that the assets which are transferred to the other company will create tax liabilities for the company that owns them, once they are registered in the company’s books. The dividend tax can also apply, but this is not the case where companies entering the M&A in Romania are entities registered in the EU. 

Our M&A lawyers in Romania can present additional information on other tax obligations that can appear once the procedure has been completed and the new entity is formed. Our Romanian lawyers can help you understand the mechanism applied to mergers and acquisitions and can also present the procedures you must complete with the local competent institutions. If you have any questions about this procedure, do not hesitate to address to our Romanian law firm.