The good practice refers to a new legal framework aimed to stimulate investments by introducing tax incentives for business angels.
The Romanian law on Angel Investing allows any individual to become an angel investor in relation to a micro or small-size company, irrespective of the company’s net worth or certification. For an investment to qualify for the benefits granted by the Law, the following conditions must be met:
(i) the target company should be a limited liability company (societate cu raspundere limitata), which is statistically the most common form of incorporation for start-up companies (over 80% of existing companies);
(ii) the business angel should not be “connected” with the company;
(iii) the value of the investment should range between Euro 3,000 and Euro 200,000; and
(iv) the shareholding of the business angel should not exceed 49% of the share capital of the target company.
Tax relief for business angels
Investments in start-up companies – and generally in non-listed companies – often carry high risks, and tax relief has been introduced to compensate to a certain extent for them. The current tax scheme offers relief for both income tax and capital gains tax which have generally been welcomed by the business community.
In particular, the Law on Angel Investing offers the following tax breaks:
(i) Business angels are exempt from the tax on dividends for a period of three years from the investment.
(ii) Business angels are further exempt from capital gains tax for share disposals initiated at least three years after the investment.

Resources needed

The total value of the de minimis aid scheme for the support of companies through investments made by individual investors under the conditions of Law no. 120/2015 on stimulating individual investors - business angels is EUR 53,6 millions.

Evidence of success

The Coalition for Romania’s development considers that the adoption of the Business Angels Law is an important step for developing the legislative framework for financing Romanian start-ups. [].
Among the benefits : increase the no. of business angels, of investment, of financed startups. Issues: the need to clarify the definition of business angels and to focus on investments, not on loans [].

Difficulties encountered

• There are not yet well developed, active and professional business angels networks.
• The incentive applies on returns on exits which happen many years after the investment and not up front as a tax deduction on the amount invested.
• The connection between research and the market is not strong.

Potential for learning or transfer

This Good Practice is not specifically focused on Nanotechnology and new materials. It is relevant for the innovation delivery process as a whole because it provides support for innovation finance from the private sector to foster start-ups and gazelles with high growth potential.
Concerning the innovation delivery of NMPs, the law is particulary relevant when coupled with the focus of business angels towards projects and early stage companies activating in innovative sectors as nanotechnologies and new materials. In this context, the Business Angels Law has the potential to support the innovation delivery of NMPs because it will contribute in increasing the funding provided to NMP developments that are investor-ready . In this context, as the business angels financing will be a more available funding source, the researchers will be more interested and focused on developing NMP products with market potential to attract investors.
Main institution
Romanian Parliament
Bucureşti - Ilfov, Romania (România)
Start Date
June 2015
End Date


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