According to the new legal provisions, investments by European investors in Romania will require prior authorization before implementation. A fee of EUR 10,000 is established for the verification of authorization applications.

The investment verification regime in Romania has undergone important changes thanks to an emergency decree published on the night of December 6, 2023. Among the main changes introduced is the extension of investment control in Romania to investments made by European investors, as well as the establishment of a fee for examination in the amount of 10,000 euros.

Target investors

Starting from April 2022, foreign investments in Romania are subject to the control of the Commission for the Verification of Foreign Direct Investments (“CEISD») before implementation. At the time of adoption, the only investments that required prior CEISD approval were those from investors outside the European Union.

After the changes, the control over investments in Romania no longer takes into account the nationality of the investor. In this sense, investments made both by investors from outside the European Union and by investors from member states (including Romania) are subject to CEISD approval.

Targeted investments

The new provisions introduce important changes, in particular, regarding the types of investments that are subject to authorization.

At the time of adoption, foreign direct investment (defined as investment that gives an investor from outside the European Union control over the administration of the local enterprise in which the investment has been made) and new investment such as greenfield.

After the changes, direct investments (regardless of the investor’s nationality) were defined as investments made with the aim of establishing or maintaining long-term and direct ties between the investor and CONTRACTORor an enterprise to which the funds are intended to carry out economic activities in Romania, including investments that allow the investor participate to the administration or control of the enterprise.

Thus, the scope of the regime appears to extend to investments that do not confer control over the local enterprise. In addition, the new provisions also bring to the fore the relationship between investors and other natural persons (entrepreneurs) who are going to carry out activities in Romania.

Type of investment greenfield remain subject to authorization.

Target sectors of the economy prior authorization procedures: (i) citizen and community security, (ii) border security, (iii) energy security, (iv) transportation security, (v) security of vital resource supply systems, (vi) critical infrastructure security, (vii) security of IT and communication systems, (viii) security of financial, fiscal, banking and insurance activities, (ix) security of production and circulation of weapons, ammunition, explosives, toxic substances, (x) security of industry, (xi) protection against disasters , (xii) protection of agriculture and the environment and (xiii) protection of privatization operations of state-owned enterprises or their management.

To obtain CEISD approval, the investment value must exceed the threshold of 2 million euros. There may be exceptions to this rule in the case of investments that may affect national security or public order.

Notification Process News – Contribution Overview

The new regulations introduce an examination fee in the amount 10,000 euros, which must be paid when applying for authorization. In the event that CEISD finds that the conditions for consideration of the authorization request have not been met, the contribution shall be refunded.

Risks of non-reporting

Foreign direct investment without obtaining prior permission from CEISD, as well as non-fulfillment or violation of obligations accepted in the case of conditional permission, are punishable by fines in the amount of up to 10% of the total world turnover from the financial year preceding the imposition of sanctions.

In addition, there may be investments made in violation of the investment control regime in Romania CANCELLED if it is later established that it affects the security or public order of Romania or may affect projects or programs of EU interest.

Article by Roxana Roșca (contributors) and Sergiu Păun (contributors)