6 Matei Millo +40 31 432 6170

Navigating the Changes: Law no. 222/2023 and Its Impact on Romanian Businesses

This law brings amendments to the Companies Law no. 31/1990 and Law no. 265/2022 concerning the trade register in Romania. It also introduces changes to various other normative acts that influence registration in the trade register. Let’s delve deeper into the most significant amendments and their practical implications for businesses opperating in Romania.

An Overview of Law no. 222/2023

Law no. 222/2023 came into force on July 23, 2023 (published in the Official Gazette, Part I no. 667 of July 20, 2023). Its primary purpose is to revise and complete previous legal provisions related to company law and trade registration. The law brings procedural changes, especially regarding cross-border activities from the perspective of a company’s merger or division. In addition, it introduces additional procedural changes with the Trade Registry and fiscal clarifications that businesses must comply with.

The law goes further by transposing the Mobility Directive, establishing the legal framework for executing cross-border transformation operations. This includes transferring the registered office to another member state without liquidation or loss of legal personality, and cross-border division by creating new companies. Additionally, the law strengthens the legal framework applicable to cross-border mergers.

Fiscal Implications and Procedural Changes

One of the most noteworthy amendments brought by Law no. 222/2023 is the obligation of presenting the proof of payment of the relevat taxes when erasure a company from the Trade Register.

This amendment aligns with Art. 94 of the Fiscal Code that stipulates that any sums due to company participants resulting from liquidation, exceeding the share capital, represent a profit from liquidation. When the participants are natural persons, these profits are subject to income tax. To simplify this, consider a company going through the liquidation process. If the liquidation results in the participants (who are natural persons) receiving sums greater than their share capital, this excess amount is considered a profit. Consequently, this profit is taxable, with the company obliged to pay tax on it.

Currently, the applicable tax rate for this scenario is 10%. This tax is withheld at source, declared through Form 100 submitted by the 25th of the month following the one in which the tax was withheld. The tax must be paid by the mentioned date, and subsequently, it is declared through Form 205 if the natural persons are resident in Romania.

However, the complexity and bureaucracy increase when the participants are non-resident natural persons, which involves a more detailed analysis on a case-by-case basis.

Cross-Border Mergers, Transformations, and Divisions Changes

Law no. 222/2023 also significantly impacts cross-border operations. It introduces comprehensive regulations concerning cross-border mergers, transformations, and divisions. These regulations are primarily legal in nature and must be evaluated on a case-by-case basis, considering each situation’s unique circumstances.

The legislation outlines the stages, effects, and causes of nullity of these procedures, providing a robust framework for businesses to navigate cross-border operations. These stages include the elaboration of the operation project, its evaluation by an independent expert, publicity of the project, convening the general assembly of associates, and control of the operation’s legality in the Member State of departure and the destination.

The law also sets up a shareholder protection mechanism, a creditor protection mechanism, employee protection tools, and transparency measures, and it emphasizes digitization of the cross-border operation.

Moreover, the law transposes some provisions of the EU Digitization Directive, which refer to the prohibition of exercising a company’s administration or management function and ensuring the communication of this information to the competent authorities in other member states, at their request. It provides for the obligation to operationalize the infrastructure that allows preserving the documentation of natural and legal persons registered in the commercial register in a computer-readable and searchable format or structured data form.


Q1: What is the main purpose of Law no. 222/2023?

A1: The main purpose of Law no. 222/2023 is to bring amendments and completions to the Companies Law no. 31/1990 and Law no. 265/2022 regarding the trade register. It introduces changes to several other normative acts affecting registration in the trade register, thereby affecting obligations of businesses and procedures related to cross-border activities.

Q2: How does Law no. 222/2023 affect the fiscal obligations of businesses?

A2: Law no. 222/2023 introduces an additional fiscal clarification for businesses. Specifically, it states that a company can be deleted from the Trade Register only when it presents proof of payment of the tax on the liquidation income of a company. This tax is due when the liquidation of a company results in participants receiving amounts exceeding their share capital.

Q3: What changes does Law no. 222/2023 bring regarding cross-border mergers, transformations, and divisions?

A3: Law no. 222/2023 regulates cross-border mergers, transformations, and divisions, providing a detailed framework for businesses to follow during these procedures.

Q4: How does Law no. 222/2023 affect companies undergoing liquidation?

A4: Law no. 222/2023 has specific implications for companies undergoing liquidation. If the liquidation process results in participants receiving amounts exceeding their share capital, the excess is considered a profit and is subject to income tax. Companies are required to pay this tax and present proof of payment before they can be deleted from the Trade Register.

Q5: What are the key considerations for businesses in light of the amendments introduced by Law no. 222/2023?

A5: Businesses must be aware of the fiscal obligations and Trade Registry supplementary proof and the intricate procedures for cross-border activities introduced by Law no. 222/2023. They should closely monitor the implementation of these changes and seek Romanian legal and tax counsel to ensure compliance and minimize potential risks. Special attention should be given to cases involving liquidation and cross-border successions, as these areas have seen significant changes.