Set up a Company and need a Mortgage????????

Discussion in 'Romania property' started by David howe, Jun 21, 2008.

  1. David howe

    David howe New Member

    If you were innocently or maliciously deceived in to being told you must set up a company to buy/own property in Romania you currently have problems. These must be addressed as a matter of urgency if you are seeking to get finance on your purchase.

    Finance to companies for purchase is only available where the company has been in existance for 1-2 years and can show income that will substantiate the loan sought. This is not applicable to shelf companies and potential purchasors must now take remedial action as time is of the essence.

    David Howe LLB. LLM.


    INVESTMENT ROMANIA - Investment in Romanaia, Property management, Due diligence, Renting in Romania
     
  2. Agree

    Fully agree with you David and it is quite normal to be so. Who would give credit to a company that started its activity yesterday?
    The company must prove that it had economic activity and has profit. Banks simply can't waste their money on unperformant credits, therefore your company must prove performance. Actually banks give loans of over 150k only to companies with a 5 years plus of activity and excellent accounting records. Also when you ask the bank to lend you money, you have to prove that if you put those money into a property, the company will benefit from it.
    The credits for companies have a different regime than those for private persons.

     
  3. Alderwi

    Alderwi New Member

    Dear David,

    I just joined the forum, which looks quite informative. I much appreciate your various critical comments on the site. Two of these made me quite worried. Firstly, you seem to say that a non-Romanian EU-citizen does not have to establish a Romanian company in order to buy land for construction, this despite all the reading I have done and advise received from various knowledgeable sources (I have just set up my own one-man Romanian company (SC...SRL) and am in the process of buying land). Secondly, you write that in any case a Romanian company owned by a foreigner must be a subsidiary of a company established in the home-country of the owner, since otherwise there will be big negative tax-effects. Again, you may be right, but it is the first time I have heard about it.

    I therefore would be very grateful if you could clarify these two points for me. I am sure that many other people interested in the Romanian market would much appreciate this information.

    With many thanks,

    Alderwi
     
  4. David howe

    David howe New Member

    Firstly, you seem to say that a non-Romanian EU-citizen does not have to establish a Romanian company in order to buy land for construction, this despite all the reading I have done and advise received from various knowledgeable sources

    This is correct, you do not need to set up a company and further due dilligence will actually tell you that many of the professional knowledgeable sources lack a lot of knowledge. When Land registry are willing to register the land in a foreigners name we can have no better endorsement than this. However, you will find few lawyers & Notaries are up to speed, especially lawyers who this creates i nice little earner for





    you write that in any case a Romanian company owned by a foreigner must be a subsidiary of a company established in the home-country

    This is not something I have ever stated and is not the case

    David Howe LLB. LLM

    INVESTMENT ROMANIA - Investment in Romanaia, Property management, Due diligence, Renting in Romania
     
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