The option to open a trust in Romania is to set up a fiducia, which is a recognized legal instrument through which one or more parties transfer rights to one or more trustees who administer these for one or more beneficiaries.
Our team that can help you open a Romanian company can also help you with the formation of a fiducia. For the purpose of this article, our team shall herein refer to the fiducia as a trust. Read below to find out more about how to open a trust in Romania.
The parties to a trust in Romania
A trust, or a fiducia as it is called in Romania, must have three parties to it:
- The settlor: the one who owns the rights, assets or property and chooses to transfer them;
- The trustee: the one who is assigned (entrusted) to manage the assets or property;
- The beneficiary: the party who is entitled to the assets or property, as it will be managed by the trustee, and per the terms indicated by the settlor.
The settlor or grantor can also be the beneficiary, just as the trustee can also be the beneficiary of the trust.
There are no legal limitations as to who can open a trust in Romania. Any natural or legal person can be a settlor. However, only specialised companies or individuals can act as trustees as this is a role that is subject to specific requirements, qualifications, and competence.
The trustee is entitled to proper remuneration according to the agreement concluded between the parties.
The trust deed
To open a trust in Romania, the settlor must draw up the trust agreement. This step is mandatory as the fiducia cannot exist without this founding document.
The law that governs the creation of trusts in Romania and, implicitly, that offers guidance and regulations for their creation, is an integral part of Law 287/2009, namely Title IV “Trust”.
The deed must include the following information, otherwise it is considered null:
- The identity of the settlor, the trustee, and the beneficiary;
- The duration of the trust deed. This cannot exceed 33 years from the date it is concluded;
- The purpose of the trust and the trustee’s administrative powers;
- The rights, assets, guarantees, patrimony, property that is being placed in the trust and transferred.
The trust deed can be drawn up with the assistance of a lawyer or a notary. These two parties can also act as fiduciaries, if needed. For investors who are interested in these services, according to the packages offered by our team who can also help you with company formation in Romania.
The trust deed must be registered with the competent regional authority. The trustee is the one liable for this registration. Upon request, our team can offer details about the registration procedure as per the National Agency for Fiscal Administration, Order no. 1.985/2012, which provides information on the Declaration of registration of trust agreement.
In Romania, the Trustees Association is a legal body set up with the purpose of creating and implementing standards in the work carried out by those who act as fiduciaries, in the context of and for the purposes of those who open a trust in Romania.
Trust requirements in Romania
Trust asset transfers are subject to taxation in Romania, depending on how this transfer is performed (first from the settlor to the trustee, then from the trustee to the beneficiary).
The profits tax is one of the main taxes to take into account in this case, and our team specializing in company formation in Romania lists the main personal income tax rates below:
- Individual income tax rate: 10%
- Capital gains tax rates applicable to individuals: 1%, 3%, 10%;
- Fo the purpose of taxation, an individual is a Romanian tax resident when present in the country for 183 days during any consecutive 12-month period.
Contact us if you want to know more about the applicable regime to open a trust in Romania.