Dear Stephannie,

Due to the fact that you contacted me previously and I advised you re Tunari area and Sydney development at the time, yet received no news from you, I think it is appropriate to post a for the benefit of other investors what I responded you then.

We don't find Tunari area as a real investment, but rather as a
fashion for developers and real estate agents. However since you've
already bought, here is our advice.

Re the company formation, the developer is asking you this in order to
sell you the plot of land that comes with the house. Please keep in mind
that foreigners can't privately purchase land in Romania UNLESS we are
talking the footprint and that only if you become residents.
We can tell you there are legal ways to avoid the
hassles of company formation and management, however since you've already
signed it's useless to discus these means now.
However setting up company in order to buy a flat in Romania is absurd and
can have negative consequences in terms of investment. Anyone interested should get a pen, a piece of paper and read carefully what I say below.

The formation of a company costs you about 500 EUR. To keep it running you
need to pay an accountant about 100 EUR/month to submit all the necessary
documents to the public institutions and keep the records for you.
Accountancy in Romania is not at all an easy task, as we operate under the
French system which is very different from what you are accustomed with in
Britain and Ireland.

Buying on the company means that when you resell you have to pay VAT 19%
and capital gains (aka income tax) 16%. Both taxes apply to the ENTIRE sum
on which you sell!
Example: you buy a property on the company with 100k and then resell it
for 200k. On the 200k you pay 32,000 EUR capital gains and 31,932.7 VAT.
Developers will tell you that the VAT can be claimed back. It is partially
true: whatever depreciates in between bares also VAT. That VAT can be
claimed back (you're looking into max 6000 EUR if you resell in 2 years or
so)

Due to the fact that you've already went through with the deal and paid a
quite big deposit, we suggest you go on with the deal in this form and
rent the property asap.