· Updated · Marcela Manea · Law · 7 min read
Open a Trust in Romania
In Romania a trust is set up as a fiducia. Learn about the parties, the trust deed, its registration and the legal requirements. Our lawyers can assist.
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.
| Quick Facts | |
|---|---|
| Trust recognized under law in Romania | Under the Civil Code, articles 773 to 791, along with other relevant laws and regulations. |
| Number of trust settlors | One or more |
| Number of fiduciaries (trustees) | One, but the trust deed can provide for more |
| Number of beneficiaries | One or more |
| Trust deed format | Authentic, notarised agreement |
| Mandatory signatures provided on the trust deed | Original signatures from all involved parties are required |
| Electronic signature allowed | Yes, subject to conditions |
| Conditions for the fiduciary | Only credit institutions, investment and investment management companies, financial investment services companies, insurance and reinsurance companies, public notaries and lawyers |
| Conditions for the settlor | Be sound of mind. Other conditions can apply. |
| Conditions for the beneficiary | No mandatory provisions |
| Trust deed registration with the authorities | With the National Agency for Fiscal Administration |
| Trust deed registration requirements | Provide the documents that identify the parties, along with the deed |
| Trust deed registration deadline | One month after the deed's date of conclusion |
| Modifications possible after registration | Yes, subject to proper notification to the authorities |
| Trust deed registry name | The Central Registry of Trusts |
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, the law limits who can act as trustee (fiduciary): only credit institutions, investment and investment management companies, financial investment services companies, legally established insurance and reinsurance companies, as well as public notaries and lawyers, regardless of the form in which they practise.
The trustee is entitled to proper remuneration according to the agreement concluded between the parties. Our experts in company formation in Romania can give you more details on this matter.
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 are 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.
Trust deed registration in Romania
The trust deed must be registered with the competent tax authority. The trustee is the one liable for this registration. Upon request, our team can offer details about the registration procedure approved by Order no. 1193/2021 of the President of the National Agency for Fiscal Administration, which also sets out the Declaration for the registration of trust agreements.
The trust deed and any amendments thereof must be registered at the request of the trustee, by way of submission to the tax authority in whose fiscal records the trustee is registered as a taxpayer. This is the competent central tax authority, and our experts in company formation in Romania can assist during this registration.
For the trust deed registration with the tax authorities, it is important to keep in mind that the deadline is one month from the trust deed’s conclusion (and/or of its amendments, whichever applies).
The trustee submits the Declaration for the registration of the trust agreement electronically, through the Virtual Private Space (SPV) of the National Agency for Fiscal Administration, together with a copy of the trust agreement. Our team that can help you register a company in Romania can also assist with the tax registration of the trust deed.
The modification or termination of the trust agreement is registered by the trustee within one month from the date of its occurrence, by submitting the declaration, having checked the "Modification" or "Termination" box in the required form, as the case may be, accompanied by the supporting documents.
Trust agreements are stored by the tax authority in the Central Register of Trusts, which is an electronic one. Registration in the Central Register of Trusts is carried out within a maximum of 5 days from the date of filing the declaration.
The legal basis on which trust deeds are processed by the Romanian tax authorities includes:
- Law 287/2009 on the Civil Code – Book III, Title IV “Fiducia”;
- Order no. 1193/2021 of the President of the National Agency for Fiscal Administration approving the procedure for the registration of trust agreements and similar legal arrangements and the organisation and functioning of the Central Register of Trusts;
- Law 129/2019 for the prevention and combating of money laundering and the financing of terrorism.
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%
- Tax on gains from securities: 3% (held for at least 365 days) or 6% (held for less than 365 days) when withheld by Romanian-resident intermediaries, and 16% in other cases; gains from crypto-assets: 16%;
- Tax on the transfer of real estate from personal assets: 3% (owned for up to 3 years) or 1% (owned for more than 3 years) of the transaction value;
- For the purpose of taxation, an individual is generally a Romanian tax resident when present in the country for more than 183 days during any 12-month period ending in the calendar year concerned.
Understanding the trust and/or fiduciary regime in Romania before entering into such an agreement is essential for those who are looking to open a trust in Romania. Our team can provide more details about the conditions for registration and the practical applications of the trust.
Contact us if you want to know more about the applicable regime to open a trust in Romania.