jurisdiction

1. Are members of the armed forces permitted to hold shareholdings in private companies, including startups, provided that they do not participate in management?

The rights and obligations of military personnel are primarily governed by Law no. 80/1995 on the Status of Military Personnel ("Law 80").

Under the Law 80, active military personnel are prohibited from acting as sole shareholders or from directly participating in the administration or management of commercial companies or other organisations, subject to certain limited exceptions (e.g. where they are appointed to the boards of directors of state-owned companies in accordance with the law).

Therefore, it follows that the Law 80 does not prohibit active military personnel from holding shares in private companies, including startups, provided that such shareholding is purely passive and they do not participate in the company's administration or management. 

2. Is notification or approval required before acquiring a shareholding or establishing a company?

Law 80 does not impose any disclosure or prior approval requirements in this respect. However, we cannot exclude the possibility that certain structures within the armed forces may have internal regulations or codes of conduct establishing additional requirements or stricter procedures than those provided under the general statutory framework, particularly in relation to officers holding sensitive positions. Such internal regulations are not publicly available.

3. Are there any notable limitations, thresholds or conflict-of-interest rules?

In addition to the prohibitions mentioned at question 1 above, the Law 80 sets out certain general restrictions applicable to active military personnel. 

In particular: 

  1. the military personnel are required to refrain from carrying out activities that may be contrary to the dignity, prestige and standards of conduct arising from their status as military personnel
  2. military personnel are required to strictly preserve military, state and service secrets, as well as the confidentiality of certain activities and documents.

These restrictions may be relevant in the context of involvement in a startup, particularly where the startup’s business activity (e.g. technology, defence, cybersecurity or dual-use sectors) may involve access to information classified or otherwise protected that the military personnel may become aware of by virtue of their position, or where the startup’s activities could affect the prestige of the military status.

In addition, further obligations relating to restrictions and conflict-of-interest rules may arise from employment-related documents or other internal regulations applicable to military personnel, which are not publicly available.