All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Romania: The newly expanded concept of fiducia

The Romanian law has not yet adopted the concept of trust as it is used in the common law jurisdictions.

However, the recent overhaul of the Romanian Civil Code has included certain steps in that direction, even though the result is not quite the institution of trust in its common law meaning. Accordingly, the new Civil Code has extensively developed the concept of fiducia, which allows any individual or legal entity (the settler), to place real rights, receivables, securities or a collection of such assets, under the management of a third party (the trustee) to the benefit of one or several beneficiaries. The settler can also be the beneficiary. Only credit institutions, asset management and financial services companies, notaries public or lawyers are allowed to act as trustees. A settler can appoint a third party to represent its interest and exercise the rights reserved to the settler, provided that no provision to the contrary has been stipulated in fiducia contract. There are several important features of the fiducia contract:

  • The fiducia relationship has to be created either by law or by a notarised contract;

  • It is mandatory for the fiducia contract (comparable to a trust deed under English law) to include a number of stipulations, under the sanction of absolute nullity, for example, which assets are being transferred, the duration of the transfer (limited to a maximum of 33 years), the identity of the settler, trustees and beneficiaries;

  • Once the fiducia contract is accepted by the beneficiary, it cannot be amended or revoked without the beneficiary’s agreement or a court order;

  • Fiducia contract becomes binding on third parties only after its registration with the Electronic Archive for Real Movable Guarantees. If real estate properties are transferred, the fiducia contract will also need to be registered in the Land Register of the territorial unit where the properties are located;

  • Importantly, fiducia assets are ring-fenced from bankruptcy proceedings or any forced sale by a settlor’s creditors after the establishment and registration of the fiducia contract; and

  • Trustees can borrow and mortgage/encumber any assets which the settler has put into fiduciary management of the trustee.

Notably, specific tax rules in respect of fiducia arrangements have been introduced recently in the fiscal legislation. This aims at align the tax regulations with the legal concept introduced in the Civil Code. Therefore, the fiscal legislation includes rules referring to the corporate/individual income tax and local tax treatment of fiducia arrangements. Now it remains to be seen how extensively fiducia will be used in practice and especially in commercial transactions involving Romanian parties.

Dan Ciupala (

Ernst & Young


more across site & bottom lb ros

More from across our site

The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.
An OECD report reveals multinationals have continued to shift profits to low-tax jurisdictions, reinforcing the case for strong multilateral action in response.
The UK government announced plans to increase taxes on oil and gas profits, while the Irish government considers its next move on tax reform.
War and COVID have highlighted companies’ unpreparedness to deal with sudden geo-political changes, say TP specialists.
A source who has seen the draft law said it brings clarity on intangibles and other areas of TP including tax planning.
Tax consultants say companies must not ignore financial transactions in their TP policies as authorities, particularly in the UK, become more demanding.