What now as Brexit looms?
Many people are now beginning to think in detail about the impact of Brexit. For most people in Romania, it is a still a theoretical adventure that will happen next year. However, some thought should now be given as to how it will impact on UK investments in Romania and the people who now live and work in Romania.
The picture is not black and as someone said the other day those of us who have been here a long time will only see it as a continuance of having to cope with another set of problems.
During a recent visit to England, it became clear to me that even in England people are only beginning to realise that the effect of Brexit will have to be dealt with sooner rather than later.
So, let us look from the Romanian perspective of a company or individual in Romania. What will be the visa regulations? Prior to 2007 entry was easy – tourist visa or a Romanian temporary residence permit. For many this will not be a problem if they are already present, but what of those who want to come and work in Romania after 2019. If there is a hard Brexit, then the United Kingdom will have to negotiate a separate treaty with each country; this will take time. Under existing Romanian legislation there are only a limited number of work permits for Non-EU citizens. If there is no treaty agreement, then how will people from the UK come and work in Romania. In the past we as a Romanian International Law Firm have had to deal with applications from many countries and whilst it takes the time it is not difficult. If you are an English firm who intend to invest in Romania and send a management team to Romania, then you should be looking at the issues now.
Succession and land ownership are another issues. Whilst land ownership after 2012 was allowed for EU citizens what will happen in the future. It seems to me that we will go back to the device of setting up a registered company in Romania. Whilst this is not difficult it does put an additional cost on the purchase of property for those who want to buy property in Romania.
The rules of succession Romanian inheritance are complicated enough at the moment. Whilst an English testator may already have a will if they live and are domiciled in Romania they should review their wills now in the light of any proposed changes which will happen on Brexit. If they die without a will covering their UK Estate, then there could be problems concerning inheritance in the United Kingdom.
Personal and business taxation is another area which will need to be re-examined. Whilst the United Kingdom is a member of the European Union certain rules will apply. There is also in place a Treaty Against double Taxation between Romania and the United Kingdom. This will have to be dusted and reviewed in the light of the new circumstances. There will also be the question of tariffs. Many Romanian companies produce goods for United Kingdom companies which are then sold forward to third parties. This will put up the cost of such items and will cause unemployment in Romania if an agreement cannot be reached.
The Enforcement of Foreign judgements has always been difficult. The European Union has tried with some success to make the enforcement of Foreign Judgements easier and cheaper. However, if no agreement is reached then it will be necessary to revert to the old law and practice. This was not the most efficient and will have to be reviewed at a local Treaty level if no agreement with the European Union is reached. Already there have been articles the European Arrest Warrant procedure will no longer have an effect. New extradition procedures will need to be put in place.
These are only some of the initial issues which come to mind. Our advice to our clients is thinking ahead. Try and see the problems. Face them now and put in place steps to make the Brexit as painless as possible and it will not then affect your business.