CASE STUDY: “The 10‑Day Notice” That Woke Up a Regional CFO. How One Call to Piroi™ Romania Internal Audit Saved 16% of EBITDA
This case study outlines the legal necessity and strategic value of internal auditing for multinational subsidiaries operating in Romania. It explains that companies meeting specific financial thresholds are legally required to maintain an internal audit function under Law 162/2017, with non-compliance risking significant fines and reputational damage. The episode highlights how proper auditing serves as a critical defense against tax deductibility caps on intercompany management fees. By establishing a substance-driven evidence file, firms can protect their profit margins from aggressive fiscal scrutiny. Ultimately, the source advocates for proactive measures like Advance Pricing Agreements to ensure long-term regulatory certainty and financial stability.
INTRO
Thursday, 8:45 AM. Canary Wharf, London. Emma, Regional CFO for Central & Eastern Europe, is on her second coffee, scrolling through overnight emails. The 2025 close looks strong, and the Romanian subsidiary, a "star performer" in the group with a turnover that just crossed €10 million, seems stable.
Then a red subject line hits her inbox from the local team.
In Romania, internal audit can be legally mandatory when the entity is subject to statutory audit (Law 162/2017). And in 2026, HQ management fees face a new deductibility pressure point under Fiscal Code Art. 25¹. Emma doesn’t know it yet, but she’s about to learn how fast these two threads can merge into one crisis...
26 Feb 2024
Permanent Establishment (PE) in Romania
Understanding the concept of Permanent Establishment, or Permanent Headquarters, or Permanent Office (=ro. Sediu Permanent) and its implications for foreign businesses is crucial for tax compliance and operational efficiency in Romania.
10 Jun 2023
A solution for shareholders who fight over access to company documents
One of the most debated subjects when shareholders start having arguments is the right of access to company documents.
There are times when communication problems between the shareholders of a company turn into disagreements, then escalate into conflict. Reasoning doesn’t help anymore, egos get over-inflated, and the conflict becomes disruptive for the company as a whole. Everything gets amplified, court cases follow, and a business that started with the best intentions ends up at risk.
And here is where the Romanian Companies Law 31/1990 steps in to help: close to the end of the law, in its final provisions, article 283(3) states “La societăţile existente, asociaţii pot modifica actul constitutiv, prevăzând în el documentele la care aceştia urmează să aibă acces [...[”.
This means that the shareholders have a very good instrument at their disposal, to prevent arguments: from the very beginning of the company, they can agree in the Articles of Association the extent and the mutual limits of access to company data and documents. For instance
“offers in 30 days information regarding bank statements”,
or
“in case one shareholder starts another company with the same object of activity, without the approval of the other shareholder(s), then access to information about clients is limited to [...]”.
Call it a safeguard for mutual protection.
Establishing the rules early on, when the company is new, helps prevent disagreements in the future. Also for existing companies, updating their Articles of Association taking into consideration article 283(3) of the Companies Law is recommended.
Therefore, the best way to prevent shareholders from fighting is rooted in an old Romanian saying:
“Socoteala curata, prietenie adevarata”
Transparency and pre-agreed rules between shareholders help navigating the meanders of temporary disagreements before actually reaching a critical point for failure in inter-personal communication.
https://www.piroi.org/post/a-solution-for-shareholders-who-fight-over-access-to-company-documents
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