Business Incubators: Legal regime and financial aids

Thu | 23.06.2016

Legal

A business incubator is a structure whose purpose is to help young entrepreneurs develop, by providing them with the necessary logistic support and management resources. Tens of incubators already exist in Romania. Some are destined, for example, to the IT sector (Cluj) or to the production of goods/service supply (Timispara). Law no. 102/2016 (published in Official Journal no. 393 of May 23rd, 2016, in force since June 23rd) establishes the legal regime applicable to business incubators and provides that the founders of such structures can receive certain tax facilities. These provisions are briefly presented to you hereinafter.

NOTION AND ELIGIBILITY

In accordance with Law no. 102/2016, business incubators are those structures aimed at helping entrepreneurs. They are organized as an infrastructure, in an appropriate space, where the incubator’s residents are located. It offers to its residents joint facilities and the necessary management support in order to increase their development potential and viability. As per Law no. 102/2016, any newly-created Romanian and/or foreign SME that carries out an economic activity within the incubator can become a resident thereof. This statute can be obtained for a maximum period of 3 years.

In order to become residents, companies must meet the following conditions:
- they must be legal persons no older than 3 years;
- they must be autonomous SMEs (as defined by Law no. 346/2004);
- their business activities must be included in the incubator’s specific sector (e.g.: technological incubators, agricultural incubators – for agricultural companies, mixed incubators);
- they must not be subject to spin-off, judicial reorganization, liquidation, insolvency, bankruptcy proceedings or to a temporary suspension of their activities;
- they must not be in difficulty.

Residents can use the incubator’s infrastructure and benefit from its services, as well as from the funding obtained by the incubator’s manager. In exchange, residents must pay the amount provided in the incubation agreement (concluded between the resident and the incubator’s manager, which establishes the rights of the parties). Furthermore, residents must create at least one job within 6 months from their admission to the incubator and keep the said job during the entire duration of their membership. Residents must comply with the incubator’s Internal Regulations and use its infrastructure just like a good owner.

FACILITIES GRANTED TO FOUNDERS

A business incubator can be founded, among others, by any legal person, public local administration authority, institution or consortium of authorized universities, research centers or chambers of commerce.

Business incubator founders can benefit from the following facilities:

- Exemption from the tax on the land corresponding to the incubator infrastructure;
- Exemption from the tax on buildings belonging to the incubator infrastructure;
- Exemption from any other tax due to the local budget for the deliverance of urban planning certificates, building permits for the incubator’s lands and buildings.

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We hope you found this information useful!

GRUIA DUFAUT Law Office
www.gruiadufaut.com

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