Romanian Companies Law under the influence of New Tax Reform Legislation

Article by Mihaela Ciocîrlea, Alexandru Pruteanu and Ecaterina Negru, Glodeanu & Partners

This second part of the series focuses on three interlinked pressure points: restrictions on granting and repaying shareholder and affiliate loans, the impact of net asset erosion on dividend distributions and the limits imposed on distributing current-year profits in the presence of accumulated losses. While the legislative objectives are clear, the wording leaves room for uncertainty, forcing companies to navigate a narrow path between compliance and cash-flow flexibility.

Taken together, these developments signal a decisive shift toward protection of companies’ cash holdings over shareholder liquidity, with material legal and tax exposure for companies that misjudge the timing or structure of dividends and intra-group financing.

Context

The Romanian Parliament adopted last December Law no. 239/2025 on establishing measures for the recovery and efficiency of public resources and for the amendment and supplementation of certain normative acts (the “Law”).

The Law, which entered into force on 18 December 2025, amends numerous pieces of legislation, and was implemented at the initiative of the Romanian Government in its effort to mitigate the deficit in the gross domestic product (“GDP”), since in 2024 the deficit was 9.3% of the GDP, and for 2025 the deficit is expected to decrease to 8.4% of the GDP¹.

Below we will address the changes brought to the legal regime of loans concluded between companies and their shareholders/affiliates, applicable to the all types of companies regulated by the Companies Law, while other topics of interest from the Law will be addressed in subsequent separate articles, to keep the information concise and to better highlight the particularities of each amendment.

Loans granted by companies distributing dividends quarterly

Companies that distribute dividends quarterly may NOT grant loans to shareholders or affiliates until the settlement of the differences resulting from the distribution of dividends during the year through the annual financial statements.

The legislation does not expressly clarify the meaning of “settlement” in this context. In particular, it remains unclear whether the mere recording of the settlement through the annual financial statements is sufficient in all cases, or whether the actual payment of dividends or reimbursement of overpaid amounts must also occur before the company may grant loans to shareholders or affiliates.

This ambiguity arises because the legislation refers separately to (i) the settlement reflected in the annual financial statements and (ii) the payment of dividends or reimbursement of amounts, which must be completed within 60 days from the approval of the annual financial statements. In the absence of explicit guidance, a prudent risk-management approach would be for companies to grant new loans only after the dividends have been effectively paid or the relevant reimbursements have been received, as applicable.

Conversely, the legislation does not appear to prohibit the quarterly distribution of dividends where loans to shareholders or affiliates already exist. Nevertheless, this scenario may be considered sensitive in practice and arguments could be raised to support the view that interim dividends should not be distributed where such loans are outstanding.

Failure to observe the prohibition on granting loans in the above circumstances triggers significant sanctions. The shareholder benefiting from the interim dividends and the company will be held jointly and severally liable, including towards the central tax authority (ANAF) for an amount equal to the loans granted to shareholders and/or affiliates. In addition, administrative fines ranging from RON 10,000 (approximately EUR 2,000) to RON 200,000 (approximately EUR 40,000) may be imposed.

Repayment of loans granted by the shareholders or affiliates

Companies whose net asset value, as reflected in the annual financial statements, is lower than half of the subscribed share capital may NOT repay loans to shareholders or affiliates.

A first issue concerns the reference point for assessing the net asset value. The legislation expressly refers to the annual financial statements, raising the question of whether a reassessment may be made on the basis of interim financial statements. In practice, this may lead to situations where the net asset value falls below the statutory threshold during a given financial year (e.g., 2025) but is remedied shortly thereafter (e.g., January 2026), while new annual financial statements become available only in 2027. In such cases, the literal interpretation of the law results in an implicit prohibition on loan repayments until the approval of the subsequent annual financial statements.

Although it remains to be seen whether authorities would accept interim financial statements certifying the remediation of the net asset value, the current wording of the legislation provides limited comfort in this regard.

A further sensitive issue arises in connection with share capital increases implemented through the set-off of shareholder loans, intended to remedy a net asset deficit. In principle, such an operation should not be equated with a prohibited loan repayment as provided under the Law. Even if it could be characterized as an objective novation, as previously suggested by the High Court of Justice, the original loan obligation is extinguished and replaced with equity without any cash outflow or extraction of value from the company. On the contrary, the company’s assets are strengthened through the reduction of debt and the increase of equity.

If the operation is instead characterized as a set-off between the loan repayment claim and the obligation to pay for the newly issued shares, the conclusion is even clearer, as no repayment occurs in the form of a new obligation. In our view, there are strong arguments to support the position that the set-off of shareholder loans into share capital should not be prohibited under this provision.

This conclusion is further supported by the newly amended Article 153²⁴ of the Companies Law², which expressly requires shareholders holding loans against their own companies to increase the share capital by setting off such loans against newly issued shares, within 2 years from the financial year in which the net asset value has fallen below half of the subscribed share capital.

The sanction for not observing such prohibition is the same as above, namely that the shareholder which was repaid loans and the company will be held jointly and severally liable, including towards the central tax authority (ANAF) for an amount equal to the loans repaid to the shareholder. In addition, administrative fines ranging from RON 10,000 (approximately EUR 2,000) to RON 200,000 (approximately EUR 40,000) may be imposed.

Payment of dividends in general

Companies that report a profit for the current financial year but have accumulated accounting losses may distribute dividends from the profit correspondent to the current-year only subject to the fulfilment of cumulative conditions. These include: (i) the creation of the legal reserves, (ii) the coverage of the accumulated losses and (iii) the creation of the reserves in compliance with any additional statutory requirements.

Furthermore, where a company’s net assets, as reflected in the approved annual financial statements, are lower than half of the subscribed share capital, dividends may be distributed from the current-year profit only after the net assets have been restored at least to the statutory minimum level.

The same capital maintenance principle applies to interim dividend distributions. Accordingly, companies whose net assets fall below half of the subscribed share capital based on interim financial statements may not distribute interim dividends until the net assets have been duly restored in accordance with the law.