The new provisions of the Fiscal Code, which the Romanian Parliament has passed on June 24, give more opportunities for investors, according to the Bucharest Stock Exchange (BVB). For example, intermediaries will be able to offer new types of transactions to their clients and fund managers will be able to manage the assets more effectively.

However, the Romanian economy loses investments of millions of euros because of the lack of electronic fiscal registration of foreign investors, said BVB CEO Ludwik Sobolewski.

“This problem must be solved by the public administration. The reduced flows of capital have a negative impact on the savings of Romanian citizens who already invest in the capital market. We also expect the new regulations on short selling and lending and borrowing of securities to be assorted with the new secondary legislation. This is one of the most urgent problems to be finally solved,” he added.

In the capital market and investment area, the new Fiscal Code stipulates a dividend tax reduced to 5% and recognizes lending and borrowing of securities, as well as short selling transactions, reads the BVB statement.

The strategic objective of the Bucharest Stock Exchange is to develop the local capital market, to be upgraded from Frontier to Emerging Market status. To achieve this goal, the Romanian authorities worked with a group led by BVB on implementing a comprehensive programme to improve the functioning of the local capital market, enhance liquidity and increase the availability of capital market products. It includes measures to streamline regulatory processes and increase efficiency within the pre-trade, trade and post-trade environments.

“The lower tax rate on dividends increases the attractiveness of the investments for all groups of investors. However, important market regulations must evolve at a faster pace and become effective simultaneously, to strengthen the positive impact,” said Sobolewski.

Romanian Businessmen’s Association: New Fiscal Code’s pluses and minuses.  

Romania’s Chamber of Deputies approves VAT rate cut to 19%. 

Irina Popescu, irina.popescu@romania-insider.com