Frequently Asked Questions (FAQs)
Why should I invest on the Bucharest Stock Exchange?
Over the last couple of years, BVB has followed a clear growth path. The ongoing successful program of privatization, the wide market reform, and the efforts to upgrade to emerging status, as well as growing domestic potential may boost the attractiveness of the Romanian capital market in the long run. In terms of investment opportunities, there are several defensive stocks traded on BVB with a good track record as dividend payers. The local capital market has a substantial development potential and the chance to become a recognized international investment case and trading venue.
What are the financial instruments traded at BVB?
At the BVB can be traded shares, including rights, debt instruments (corporate, municipal and government bonds), fund units, and certificates can be traded at BVB. Find additional details about each asset type on their dedicated web pages or find their last trading prices.
What companies are traded at BVB?
Some of Romania’s highest-profile companies are being traded at BVB. At present, the largest companies by market capitalization are: Erste Group Bank AG, OMV Petrom S.A., S.N.G.N. Romgaz S.A., Fondul Proprietatea, New Europe Property Investments PLC, BRD – Groupe Societe Generale S.A, Banca Transilvania, Electrica and Transgaz. See the full list of companies traded at BVB or find their last trading prices.
How do I trade at BVB?
Transactions on a stock exchange must be carried through an intermediary. In order to trade at BVB, investors should set up a trading account at one of the intermediaries authorized by the Financial Supervisory Authority (FSA).
How can I find a broker?
In order to find a broker, investors can search for an intermediary by its trading activity or by its location.
How much money do I need in order to be able to start investing at BVB?
There is no minimum amount of money for trading at the BVB, except for cases when brokerage companies require a minimum starting balance. The amount invested will depend on the type, amount and price of the shares to be acquired.
What are the trading fees?
The intermediary charges a fee for the services provided for each transaction. Fees charged by intermediaries depend on the customer, his/her portfolio, the value and the frequency of trades performed. In most of the cases the fee is calculated as a percentage of the transaction value.
The fee charged by the intermediary includes the fees and commissions due to other market institutions such as the BVB (BVB), the Central Depository and the Financial Supervisory Authority (FSA).
How risky is the equity investment?
Each investment bears certain risks. The higher the risk assumed by the investors, the higher the possible return is. Equity investments offer higher potential returns than government securities or bank deposits but at the same time, the risks associated with these assets are higher.
Investors must identify the financial instruments that fit them best – especially in terms of associated risks and the tolerated level of possible losses resulting thereof.
What is BET Index?
BET stands for Bucharest Exchange Trading. BET tracks the price changes of the 10 most liquid shares listed on BVB. Investments in BET component shares can be made directly or via the first Exchange Traded Fund (ETF), listed on BVB, which is an investment fund tracking the BET index.
What are the capital gains and dividend tax in Romania?
Starting 2016, dividends are taxed at a 5% rate, compared to a previous rate of 16%.. Romanian legal entities paying dividends have an obligation to withhold tax.
Capital gains resulting from the transfer of securities are taxed at a 16% rate.
Regarding the health tax contribution (CASS), in 2016 there are no changes, as the health tax contribution (CASS) on income from investments and dividends are not due if the person obtains other income already subject to this contribution, such as salaries or pensions.
This rule will change starting in 2017 when the health tax contribution (CASS) will be due on income from investments, regardless of the existence of other income subject to CASS.
Setting CASS will be made by the tax authority based on tax declaration, by issuing a tax decision. The tax authority will determine the amount payable based on the information received from the taxpayers as annual statements or from entities paying dividends, based on withholding tax statements.
Individuals investing on the capital market are required to report their gains or losses annually. The capital gain tax is due by the end of May 25th of the following year when the transactions were made.
Legal entities investing on the capital market are required to report their gains or losses on a quarterly basis. The capital gain tax is due by the 25th day of the month following the end of the quarter.
Double taxation treaties govern the non-resident fiscal regime in Romania, upon providing the Fiscal Registration Certificate. Otherwise, capital gains and dividends are taxed at rates applicable to resident investors.