Romania operates within a civil law framework, mostly with codified statutes that serve as the primary source of law. Thus, businesses operating in Romania are primarily subject to a trio of legislative pillars: the Civil Code, the Companies Law, and sector‑specific regulations.

The court system is organised around a hierarchy of courts: First Instance Courts (Judecătoriile), County Courts (Tribunalele), Courts of Appeal (Curțile de Apel) and the High Court of Cassation and Justice (Înalta Curte de Casație și Justiție). Along with these courts, the Constitutional Court of Romania shall be the guarantor for the supremacy of the Constitution.

Within this structure, courts include specialised sections for disputes involving professionals, as well as dedicated insolvency, employment and administrative sections, providing focused expertise in areas directly relevant to commercial, corporate, and restructuring matters.

Furthermore, as a Member State, Romania’s legal landscape is guided by European standards, with directly applicable EU legislation and European Court of Justice (ECJ) guidance shaping the local approach to competition, financial oversight, and cross-border structuring.

Overview of the FDI Screening Framework in Romania

Romania overhauled its foreign direct investment (FDI) screening regime in 2022, with subsequent amendments further broadening its scope and strengthening enforcement mechanisms. Under the current framework, a filing is generally required where an investor acquires control or effective management participation over a Romanian target that is active in a broadly defined sensitive sector and where the value of the investment exceeds the EUR5 million threshold.

The regime also captures greenfield investments. This includes investments in tangible or intangible assets relating to the establishment of a new enterprise, the expansion of an existing operation, the diversification of production into new products, or a fundamental change in the overall production process of an existing business.

Several authorities are involved and have different attributions during the FDI screening process. The Commission for the Examination of Foreign Direct Investments (Comisia pentru Examinarea Investițiilor Străine Directe – CEISD) is responsible for the review of notified investments. Formal clearance is then issued by the Prime Minister’s Chancellery. For sensitive investments which require an in-depth analysis (Phase II), the Supreme Council for Defence (Consiliul Suprem de Apărare a Țării – CSAT) and, eventually, the Romanian Government also generally become involved in the proceedings. Also, a dedicated unit within the Romanian Competition Council acts as the secretariat of the CEISD.

Extensive List of Sectors Under Scrutiny

An investment requires notification if it falls under a list of sensitive sectors defined by the CSAT Decision No 73/2012, while also considering the criteria under Article 4 of the EU FDI Screening Regulation. The list refers to activities connected to:

• the security of citizens and communities (sometimes used as a form of "catch-all" by the authorities);
• border security;
• energy and transport security;
• the security of vital resource supply systems and critical infrastructure;
• the security of information and communications systems;
• the security of financial, fiscal, banking and insurance activities;
• the security of the production and circulation of weapons, ammunition, explosives and toxic substances;
• industrial security, protection against disasters;
• protection of agriculture and the environment; and
• the protection of operations through which state-owned enterprises are privatised and protection of their management.

As for the acquisition of tangible or intangible assets, such transactions are subject to screening where the assets relate to the following more narrowly defined sectors:

• critical and advanced technologies (including AI, robotics, cybersecurity, biotechnologies, etc);
• critical infrastructure (including energy or transport infrastructure, electoral or financial infrastructure, aerospace infrastructures, as well as land and real estate essential for the operation of such infrastructure);
• pharmaceutical sector (including research, development, manufacturing, distribution, and supply of medicines, medical devices, and active pharmaceutical ingredients);
• defence sector (including production and development, maintenance, repair, integration, testing, or supply of equipment, technologies, systems, components, etc, for military or dual-use purposes); and
• agri-food sector (including domestic production and processing facilities, agricultural land, irrigation infrastructure, gene banks, and fertiliser production technologies, etc).

Based on the authorities’ practice to date, certain sectors appear to attract heightened scrutiny due to their strategic importance and potential impact on national security. These include, in particular, the energy and transport security sectors, industrial security and the security of information and communications systems. Moreover, specifically for the media sector, the rules also provide for public consultation formalities for transactions involving media companies.

Against this background, the CEISD has been handling a large number of cases, issuing hundreds of clearances annually since the adoption of the current FDI screening regime, making Romania one of the most active EU jurisdictions when it comes to investment screening.

Romania is gradually repositioning its economic strategy toward high-tech and other key strategic industries, while the government simultaneously pursues fiscal consolidation. Investors should anticipate a more demanding tax environment, as the authorities intensify VAT audits and corporate tax inspections as part of a broader effort to stabilise public finances.

Politically, Romania remains firmly anchored in the EU and the North Atlantic Treaty Organization (NATO). However, in line with broader European trends, the authorities have adopted a more protective stance towards “strategic sovereignty”, particularly in sectors considered critical for security and economic resilience. This policy direction is reflected in the evolution of the Romanian FDI screening regime.

Since the introduction of the new FDI screening regime in 2022, it has been amended several times to broaden its scope and enhance enforcement powers. Most notably, the regime evolved from an initially foreign-only model into a catch-all screening mechanism that also covers EU investors, including Romanian nationals.

In July 2025, the authorities published their first FDI screening guidelines, providing much-needed clarity on key aspects of the review process. These include detailed guidance on calculating the investment threshold across various transaction structures, as well as the introduction of certain filing exemptions and procedural clarifications.

More recently, in March 2026, a number of further amendments were introduced through a Government Emergency Ordinance, including changes to the filing threshold (increased to EUR5 million), treatment of asset deals, exemptions for certain intragroup restructurings and procedural timing of the screening process.

Looking ahead, the authorities have signalled a greater openness to conditional approvals, suggesting a maturing practice and a more nuanced risk-assessment approach. Although only two conditional clearances have been issued so far and no gun-jumping fines have yet been announced, public statements indicate that enforcement is likely to become more assertive as the regime consolidates.

A prominent illustration of the regime’s strategic dimension was the proposed acquisition of E.ON Romania by the Hungarian group MVM. Following an in-depth review, the Supreme Council of National Defence (CSAT) issued a negative opinion, citing national security concerns.

In Romania, most of the transactions can be structured as share deals or asset deals. In the case of public companies, stricter requirements are applied, such as the involvement of a regulated intermediary and observance of the relevant securities regulation (see 5.2 Securities Regulation).

Share Deals: The Market Standard

Share deals are the standard choice for most private transactions because they ensure business continuity. Since the company’s contracts, permits, and licences stay with the company, investors avoid the time-consuming process of re-applying for new authorisations. However, because the transaction implies the entire company – including its historical liabilities – a thorough due diligence process must be performed to evaluate and mitigate any potential risks upon closing.

Asset Deals: The “Cherry-Picking” Alternative

Asset deals act as a surgical de-risking tool, allowing buyers to acquire specific business lines or productive elements while isolating the target entity’s broader corporate liabilities. While this offers protection from historical liabilities, it is balanced against a heavy administrative burden; the re-titling of individual assets – such as real estate, equipment, and intellectual property – requires meticulous legal formalities and complex registration processes.

Acquisitions and Minority Investments

Transaction structures differ based on the degree of control involved. Most often, minority investments rely on Shareholders’ Agreements (SHA) to bypass rigid statutory voting rules put in place. For instance, in a limited liability company, unless stated otherwise in the Articles of Association, a share transfer to third parties can be performed only if approved by shareholders representing three quarters of the share capital.

Recent legislative shifts, specifically the enactment of Law 239/2025, have introduced a significant layer of complexity to the transfer of shares in Romanian limited liability companies. Under this new mechanism, the Romanian Tax Authority gains a de facto role in corporate registrations, as the Trade Registry must now be notified of all transactions for fiscal oversight purposes. Under these new rules, if the target entity carries outstanding tax liabilities, the finalisation of the ownership transfer is contingent upon either the settlement of those debts or the provision of specific financial guarantees. For the market participants, this change transforms the post-signing phase into a more rigorous bureaucratic process, imposing the need for exhaustive pre-closing fiscal clean-ups to prevent the transaction from encountering procedural delays during the mandatory registration period.

Investors considering transactions in Romania should also assess whether a merger control filing is required. A notification is mandatory where the transaction qualifies as an economic concentration under the law and the applicable turnover thresholds are met. For further details, see 6. Antitrust/Competition. Additionally, transactions in regulated sectors such as banking or insurance require prior clearance from the National Bank of Romania or, where applicable, from the Financial Supervisory Authority (as briefly outlined in 8.1 Other Regimes). This regulatory overlap requires careful co-ordination of conditions precedent to ensure post-acquisition continuity.

Public Companies

Publicly listed entities in Romania, or large-scale enterprises seeking to attract institutional capital, typically adopt the legal form of a joint-stock company.

Romanian Public companies operate under a regulatory framework (see 5.2Securities Regulation) that emphasises transparency, strong corporate governance, and rigorous financial and compliance obligations.

Joint-stock companies

The joint-stock is the most heavily regulated corporate structure in Romania, offering a choice between two distinct governance models:

• One-tier system: The company is managed by a Board of Directors. While the board may delegate day-to-day management to executive directors, it retains ultimate oversight.
• Two-tier system: This system consists of a Management Board, which handles operations, and a Supervisory Board, which oversees the Management Board and is elected by shareholders. To ensure effective and independent oversight of the company’s management, the members of the Management Board cannot be members of the Supervisory Board at the same time. For companies whose financial statements are subject to mandatory audit, the law requires a minimum of three board members, ensuring a baseline of corporate oversight. As for the Supervisory Board, the number of its members cannot be fewer than three nor more than eleven.

Private Companies

In Romania, private companies are typically structured as limited liability companies, joint-stock companies or partnerships (although these are less commonly used). These legal forms provide varying levels of liability protection and flexibility, depending on the needs of the business.

Limited liability companies (LLC)

The LLC is the most frequent legal form for private companies and the preferred vehicle for foreign investors establishing subsidiaries.

• Governance: The management set-up is flexible, usually consisting of one or more directors who can be natural persons or legal entities, and who do not need to be Romanian residents.
• Flexibility: It lacks the rigid board requirements of a joint-stock company, making it ideal for acquisition structures where the investor seeks direct control over the subsidiary without formal board meetings and specialised committees.

Partnerships

Limited partnership is occasionally used for specialised investment structures. This form distinguishes between "general partners" (asociați comanditati), who manage the business and bear unlimited liability, and "limited partners" (asociați comanditari), whose liability is restricted to their capital contribution, without getting involved in the active management of the company.

From an investment screening perspective, the choice of corporate form (eg, limited liability company versus joint-stock company) is generally irrelevant, as screening focuses on the target’s activity and ownership/control structure rather than its legal form. In practice, however, more complex shareholding structures, particularly in joint-stock companies or fund-controlled entities, may lead to longer reviews in the case of potential information requests.

Joint-Stock Companies

For listed and private joint-stock companies, protections are often triggered by specific ownership thresholds:

• 5% Threshold: Shareholders may convene a General Meeting (GMS), propose new items on the agenda, or initiate claims against directors for mismanagement.
• 10% Threshold: Shareholders may request a specialised expert audit into specific management operations.
• Fundamental Rights: Shareholders have the right to participate in profit-sharing (dividends), be provided with annual financial statements 15 days before the GMS, and challenge resolutions in court if they are unlawful or represent an "abuse of majority”.

Limited Liability Companies

In an LLC, the relationship is more contractual, but statutory protections remain lawfully in place for the protection of the Shareholders:

• Voting: As a general rule, resolutions of the general meeting of shareholders are passed by the majority of shareholders and of the votes attached to the shares, unless otherwise provided in the articles of association.
• Withdrawal Rights: Unlike in a joint-stock company, an LLC shareholder may petition the court to withdraw from the company for "solid grounds" (eg, serious disagreement), receiving the fair value of their shares.
• Information Rights: Any shareholder not serving as a manager may personally inspect company records or appoint an expert to do so at any time.

The Romanian FDI filing form is generally aligned with the initial version of the Directorate General for Trade (DG Trade)’s request for information to foreign investors.

The framework requires disclosures from both the investor and the target. The filing must include, inter alia:

• the investor’s ownership structure, including the ultimate beneficial owner;
• the estimated value of the transaction;
• a description of the business activities and products/services of both parties;
• the EU Member States in which they operate;
• details of the transaction, including financing sources;
• the anticipated transaction timeline;
• information on any applicable EU restrictive measures;
• confirmation of whether the target has benefited from EU-funded programmes or projects;
• information on turnover and number of employees, etc.

The authorities may also issue requests for information during the review phase, most commonly relating to ownership/control, funding sources or sanctions-related aspects. Such requests generally restart the clock, extending the statutory clearance timeline.

The primary sources of financing in Romania are bank loans and access to capital markets, with the latter being less frequently utilised compared to bank financing. The banking and capital markets sectors are regulated and supervised by the National Bank of Romania and, respectively, by the Financial Supervisory Authority, which act as the main regulating authorities on these market sectors.

Bank Financing

Referring to the bank financings, these represent the dominant method of financing in the Romanian market, especially within the small and medium enterprises (SME) sector, which is a key contributor to the national economy. Romanian banks offer a wide range of financing products and are the most common point of contact for Romanian businesses seeking to finance their operations, expansion, or investment projects. Romania's banking sector is well-established, with a strong presence of both domestic and foreign banks and the regulatory framework is largely aligned with the EU legislation (although certain gold-plated regulations might apply on a case-by-case basis). To put this in context, the total balance of corporate loans, in RON and foreign currency, increased in 2025 by EUR1.4 billion compared to 2024, with this type of financing reaching approximately EUR41 billion at the end of 2025, as per the official data published by the National Bank of Romania.

Access to the Capital Markets

The Bucharest Stock Exchange (BVB) is the central venue for public securities trading. Companies can raise capital through initial public offerings (IPOs), secondary offerings, and bond issues. While the stock exchange is well-regulated and has a diverse range of financial products, the number of companies listed on the BVB remains limited, and liquidity can be lower than in other European markets.

Trading on the BVB is governed by a comprehensive legal framework, which includes the Financial Instruments Markets Law No 126/2018, and the Issuers of Financial Instruments and Market Operations Law No 24/2017, alongside the Markets in Financial Instruments Regulation (MiFIR) Regulation No 600/2014 and the EU Prospectus Regulation. Romania offers a robust legislative environment for the listing process on the BVB, with supplementary regulations issued by the Romanian Financial Supervisory Authority and the BVB Code, which provide detailed requirements for market operations and listing procedures.

Reporting Requirements for Significant Shareholdings

Should an investor acquire shares in a company listed on the BVB, it must comply with certain conditions established by both national and European legislation regarding capital markets. One of the key requirements is that, if a shareholder (including as a foreign investor) acquires shares of an issuer listed on a regulated market that carry voting rights, the shareholder is required to notify the issuer (as well as the Financial Supervisory Authority) of the percentage of voting rights they hold following the acquisition, or when that percentage reaches or exceeds one of the following thresholds: 5%, 10%, 15%, 20%, 25%, 33%, 50%, or 75%.

Non-compliance with the above-described action constitutes an offence and is punishable by fines. Furthermore, failure to comply with the notification obligation when exceeding a certain voting-rights threshold may result in the suspension of voting rights associated with the shares.

No specific rules apply to foreign investors structured as investment funds. Accordingly, where an EU or non-EU investment fund carries out a transaction that meets the notification thresholds under the Romanian FDI framework, the investment must be notified under the standard procedure (see 7.1 Foreign Investment/National Security).

In practice, however, transactions involving investment funds may sometimes lead to requests for information from the authorities in order to clarify the control structure and ultimate beneficial ownership fully, as fund structures often entail complex ownership and control chains.

In practice, once the authorities become familiar with a particular fund and its governance structure, the review process tends to become more streamlined in subsequent filings.

Overview of the Merger Control System

Romania has a mandatory merger control regime under Competition Law No 21/1996. The Romanian Competition Council (RCC) is the competent authority, with full supervisory and sanctioning powers.

A transaction must be notified if it qualifies as an economic concentration (ie, a lasting change of control) and the applicable turnover thresholds are met. The concept of concentration is interpreted consistently with the European Commission’s practice under the EU Merger Regulation.

A filing is required where:

• the combined worldwide turnover of the undertakings concerned exceeds EUR10 million, and
• at least two undertakings concerned each generated more than EUR4 million turnover in Romania in the preceding financial year.

The regime applies irrespective of the nationality of the parties, and foreign-to-foreign transactions are notifiable if the thresholds are met. Certain transactions are exempt, including:

• acquisitions by court-appointed liquidators or public authorities in insolvency proceedings;
• temporary holdings by financial institutions or insurers;
• transactions by pure financial holding companies; and
• purely intra-group restructurings.

The acquirer(s)/parties acquiring control are responsible for filing. There is no statutory deadline for submission. However, implementation is prohibited until clearance is obtained (standstill obligation). Notifications must be submitted using the standard forms annexed to the Merger Control Regulation, either a long form (for cases potentially raising competition concerns) or a short form under the simplified procedure.

Timing and Procedure

Following submission, the RCC has 20 calendar days to assess completeness and may request additional information. The review period formally begins once the notification is declared complete.

In Phase I, the RCC must issue a decision within 45 calendar days from the effective date (in practice, often 60-80 days overall), either clearing the transaction (with or without conditions) or opening an in-depth investigation (Phase II). If no decision is issued within this period, the concentration is deemed cleared. In practice, at least one request for information is common, effectively restarting the review timeline.

Phase II investigations may extend the review period up to approximately five months from the effective date.

A filing fee of approximately EUR1,000 is payable upon submission. If clearance is granted in Phase I, an authorisation fee ranging between EUR10,000 and EUR25,000 applies (depending on turnover). For Phase II cases, the authorisation fee ranges between EUR25,001 and EUR50,000.

Romania’s merger control regime involves a substantive competition assessment for transactions qualifying as economic concentrations and meeting the turnover thresholds.

The RCC applies a test aligned with the EU Merger Regulation, examining whether the transaction would significantly impede effective competition, in particular through the creation or strengthening of a dominant position. The assessment typically covers market definition, market shares, competitive constraints, barriers to entry and potential vertical or conglomerate effects.

Unproblematic cases are cleared in Phase I, while transactions raising concerns may proceed to an in-depth Phase II review and, where necessary, be subject to commitments.

The RCC may clear a transaction subject to commitments designed to address identified competition concerns. Remedies may be structural or behavioural, with or without time limitations.

Where concerns arise, the notifying parties are expected to submit commitments within the applicable procedural timeframe. In Phase I, remedies may be proposed before the notification is declared complete or within two weeks from the effective date. In Phase II, commitments are generally due within 30 days of the opening of the in-depth investigation, with a possible 15-day extension. The RCC assesses whether the proposed measures fully resolve the competition issues and will typically conduct a market test by publishing the commitments for third-party feedback.

In practice, structural remedies (such as divestitures) are most common, particularly in sectors such as retail, as they restore competitive market structures directly. Behavioural remedies may also be accepted but usually require ongoing monitoring.

A concentration will be prohibited if it significantly impedes effective competition on the Romanian market or a substantial part thereof, in particular through the creation or strengthening of a dominant position.

Prohibition is a last-resort measure, applied where no adequate remedies are available. In assessing dominance, the RCC examines market shares, barriers to entry, buyer power and other market characteristics. A combined market share exceeding 40% creates a rebuttable presumption of dominance under Romanian law.

RCC merger decisions are subject to judicial review and may be challenged before the Bucharest Court of Appeal within 30 days of communication of the decision or, respectively, its publication on the authority’s website.

Implementation without prior clearance (gun-jumping) may result in fines of up to 10% of the infringer’s turnover in the preceding financial year, as well as interim measures or unwinding orders. For non-resident undertakings, the fine is generally calculated by reference to the turnover generated in Romania.

FDI Screening Overview

Romania’s FDI screening regime is mandatory for investments in sensitive sectors as defined by the CSAT Decision and Article 4 of the EU FDI Regulation, where the value exceeds the EUR5 million threshold. Sub-threshold transactions may also be called in if they raise concerns relating to national security or public order. The regime applies to both EU (including Romanian) and non-EU investors and also captures greenfield investments. Pure portfolio investments fall outside its scope. Also, purely internal restructurings by EU investors or investors from a state adhering to the Organisation for Economic Co-operation and Development (OECD) Codes of Liberalisation of Capital Movements and Current Invisible Operations are generally exempted, provided that no change of effective control or ultimate beneficial ownership occurs and the financing is intra-group or originates exclusively from EU or OECD Code-adhering states.

The filing obligation rests with the investor and must be submitted prior to implementation, once the key transaction terms have been agreed. A filing fee of EUR5,000 (reduced from EUR10,000) is payable upon submission and is reimbursed if the investment is ultimately found not to fall within the regime’s scope.

Notifications are filed using a standard form and must include detailed information on the investor and the target, including:

• ownership, up to the ultimate beneficial owner;
• the estimated transaction value and financing sources;
• the anticipated completion date;
• a description of the parties’ activities;
• the EU Member States in which they operate;
• any applicable sanctions or restrictive measures;
• whether the target has benefited from EU-funded programmes or projects; and
• turnover and number of employees data, etc.

The review process is carried out by the Commission for the Examination of Foreign Direct Investments (CEISD), which conducts the substantive assessment. The CEISD is a multi-ministerial body, with participation from the intelligence services as permanent observers. In certain cases, the CEISD may notify the Supreme Council of National Defence (CSAT) and initiate an in-depth review. Where the CEISD proposes conditional approval or rejection, a formal opinion from the CSAT is required. Conditional clearances and prohibitions are currently adopted by way of a Government Decision.

Timing and Gun-Jumping

The statutory timeline for a Phase I (no-issues) review by the CEISD is up to 45 calendar days from the date the filing is deemed complete. Moreover, the Prime Minister’s Chancellery will then have another ten calendar days from receiving the CEISD’s opinion on the case to issue the authorisation order.

For Phase II, the investigation must be completed within a maximum of 90 calendar days from the date it is initiated by the CEISD, with the possibility of a single extension, for well-founded reasons, by a maximum of 45 calendar days. Upon completion of the detailed investigation, if the CEISD proposes conditional authorisation or rejection of the filing, it will request an opinion from the CSAT, which must be communicated within 90 days of the request. If the case is ultimately deemed non-problematic, the CSAT forwards it to the Prime Minister’s Chancellery to issue the authorisation order within ten days. Requests for information restart the review timeline.

In practice, for non-problematic Phase I cases, clearance generally used to take about two to three months from submission. However, as per the latest legislative amendments, the review period for non-problematic cases could be shortened to under two months.

The regime is suspensory and implementation prior to clearance is prohibited. Gun-jumping may result in fines of up to 10% of the investor’s worldwide annual turnover, while the transaction documents bringing about a non-notified investment are rendered null and void.

In line with Article 4 of the EU FDI Regulation, the assessment focuses on whether the investment may affect security or public order, particularly in sensitive sectors. Accordingly, joint ventures and partnership arrangements fall within scope where the proposed activity concerns such sectors, and the applicable value threshold is met.

Even in the absence of the acquisition of formal control, minority shareholdings may be notifiable if they confer effective participation in management, such as through board representation or veto rights.

Investments involving foreign governments, state-owned enterprises or entities directly or indirectly controlled by third-country authorities typically attract heightened scrutiny, especially where linked to higher-risk or sanctioned jurisdictions. The authorities place particular emphasis on the investor’s ownership structure, the source of the funds for the investment and the degree of State influence post-transaction. Where concerns arise, additional information may be requested, commitments may be required or, if risks cannot be adequately mitigated, the transaction may be prohibited (noting that, to date, no formal prohibition has been publicly announced).

Under the Romanian FDI regime, the authorities may approve transactions subject to structural or behavioural commitments aimed at safeguarding national security and public order. Conditional approvals are currently adopted by Government Decision, following the CEISD’s opinion.

To date, only two conditional clearances have been publicly reported (in February 2024 and September 2025). While the Government Decisions are published, the annexes containing the commitments and details about the parties and the transaction are generally classified.

In practice, commitments typically address governance arrangements, data protection and operational continuity and may also include structural measures. Compliance is monitored by designated public authorities and breaches may trigger sanctions under the FDI screening framework, including fines of up to 10% of the investor’s worldwide annual turnover or, in exceptional cases, unwinding measures.

Notifiable investments are subject to a standstill obligation and may not be implemented until clearance is granted.

The CEISD also has broad call-in powers and may assert jurisdiction over any transaction, regardless of value, if it considers that it may affect national security or public order.

Clearance decisions may be challenged before the Bucharest Court of Appeal within 30 days of notification or, respectively, publication on the authority’s website. Government Decisions adopted in the FDI process qualify as administrative acts and may be challenged before the administrative courts.

Failure to notify or gun-jumping may result in fines of up to 10% of the investor’s worldwide annual turnover. In serious cases, the Government may order the unwinding of the investment and transaction documents implementing a notifiable investment without prior clearance are null and void.

In addition to the general FDI screening framework applicable in Romania (see 1.2 Regulatory Framework for FDI), foreign investors must consider sector-specific regulatory regimes that may impose prior approval requirements, particularly in cases involving the acquisition of certain participations in regulated entities. Some of the most relevant examples concern entities supervised by the National Bank of Romania (NBR) and the Financial Supervisory Authority (FSA).

Entities Supervised by the NBR

The NBR supervises credit institutions, payment institutions, e-money institutions and other financial entities. Where a foreign investor intends to acquire certain participations in such an entity, the contemplated transaction may be subject to the prior approval of the NBR.

Depending on the actual participations acquired, the investor must notify the NBR in advance and obtain its approval before completing the transaction. The NBR will assess, among other things, the reputation of the proposed acquirer, the source of funds, the suitability of proposed management, etc. In most cases, the transaction cannot be legally finalised until NBR approval has been granted. Failure to comply may result in sanctions, including invalidation of the acquisition.

Entities Supervised by the FSA

The FSA regulates and supervises non-banking financial markets such as insurance and reinsurance companies, insurance brokers, alternative investment fund managers, etc. Similarly to the NBR regime, prior approval may be required for the acquisition of certain participation in regulated entities.

Investors intending to acquire such an entity must notify the FSA and obtain its prior approval. The FSA usually evaluates, among others, the acquirer’s integrity and financial capacity and the transparency of the ownership structure. As in the case of NBR-supervised entities, completion of the transaction prior to obtaining approval is, in certain cases, prohibited.

Corporate Income Tax Versus Micro-Enterprise Regime

Companies operating in Romania are generally subject to the corporate income tax system or, where statutory criteria are met, to the micro-enterprise regime. Corporate income tax is imposed at a standard rate of 16% on the taxable profit of Romanian tax-resident companies and of foreign companies that generate taxable income in Romania (including via a permanent establishment (PE)).

The micro-enterprise regime applies to very small entities that remain below a turnover threshold of EUR100,000; in such cases, a 1% tax is levied on revenue rather than profit.

Permanent Establishment

Foreign companies carrying out activities in Romania may create a PE. Once a PE exists – generally by virtue of having a fixed place of business or dependent agent – the foreign enterprise becomes taxable in Romania on the profits attributable to that establishment, which are determined following arm’s-length and profit-allocation principles, similar to those applied to domestic companies. In practice, this means that the foreign company is effectively taxed in Romania on locally derived profits in the same manner as a Romanian corporate taxpayer.

General Taxation Framework for Residents and Non-Residents

The general framework applies broadly to both domestic and foreign companies: residents are taxed on worldwide income, while non-residents are taxed on Romanian source income or on profit attributable to a Romanian PE. The same deductibility rules, transfer-pricing obligations and compliance requirements apply irrespective of the company’s origin, ensuring a largely uniform tax treatment once a company – domestic or foreign – operates in Romania.

Tax-Transparent Entities

Romanian law recognises a very limited number of tax-transparent partnerships (eg, certain professional service providers, contractual joint ventures), where partners are taxed individually as per the foregoing.

General Withholding Tax Rules

Companies making outbound payments of dividends and interest from Romania are generally required to apply withholding tax under domestic law. Romania typically imposes a standard 16% withholding tax on income paid to non‑resident investors, unless a more favourable regime applies. Romania also provides for a 50% withholding tax on payments for management and consultancy services made to recipients who are tax‑resident in jurisdictions with which Romania does not have a double tax treaty (DTT). The latter is a domestic anti‑avoidance measure where treaty protection is not available.

In practice, Romania follows a “most-favourable rule” approach: the payer applies the lowest available withholding tax rate among those provided by domestic legislation, the relevant DTT, or the applicable EU directives (such as the Parent-Subsidiary Directive or the Interest and Royalties Directive), provided that all eligibility conditions are satisfied.

Treaty Network and Beneficial Ownership Requirements

Romania’s domestic law is supplemented by an extensive network of DTTs (90), many of which reduce withholding tax rates on dividends and interest (often to ranges between 5% and 10%, and in some treaties even 0%). Most treaties require the foreign recipient to hold a minimum participation for a minimum holding period in the Romanian payee to benefit from reduced withholding tax rates.

The availability of the treaty rate is conditioned on meeting the requirements for beneficial ownership, and the Romanian tax authorities rely increasingly on this standard when assessing whether treaty benefits may be granted. In practice, this means the foreign investor must be the real owner of the income and not act as a mere intermediary.

EU Directive-Based Exemptions

0% withholding tax may be applied based on EU directives:

• Parent-Subsidiary Directive: dividends paid to an EU parent company are exempt from Romanian withholding tax when the parent holds at least 10% of the subsidiary for an uninterrupted minimum period of one year and qualifies as the beneficial owner of the income.
• Interest and Royalties Directive: interest payments may be exempt from withholding tax where the recipient has direct ownership of 25% for a minimum holding period of two years, subject again to beneficial ownership.

In addition, the application of the above‑mentioned EU Directives requires the fulfilment of several specific conditions (such as qualifying legal form, tax residency). The payer must also obtain appropriate supporting documentation prior to applying the exemption, including a tax-residency certificate valid at the payment date, together with an affidavit confirming beneficial ownership and the cumulative satisfaction of all required conditions.

Practical Considerations

Overall, while Romania offers a competitive withholding-tax environment for foreign direct investors, especially through EU directives and treaty reductions, access to these benefits depends on meeting ownership thresholds, holding periods, and beneficial ownership standards. Careful structuring and documentation remain essential to secure reduced or zero withholding tax rates.

Tax-planning opportunities available to companies operating in Romania are generally case‑specific and cannot be easily standardised. In practice, tax optimisation tends to depend on the particular facts of each business, its industry, and the chosen investment structure.

Romania does allow certain mechanisms that can mitigate the overall tax burden in appropriate circumstances. Tax losses may be carried forward for a statutory period of five years and used to offset up to 70% of the annual taxable profits. Romania also provides a form of fiscal consolidation for corporate income tax, permitting members of a qualifying group to offset profits and losses within the group under specific conditions. In the indirect tax area, companies may form a VAT group, which can improve cash flow and compliance efficiency.

Romania also offers several targeted tax incentives aimed at stimulating investment and innovation. A 10% tax credit is available for research and development (R&D) expenses, which may be deducted directly from the tax due or offset/refunded if the credit exceeds the tax liability. This incentive applies for both corporate income tax and the minimum turnover tax. In addition, a 150% deduction is available for expenses incurred by taxpayers in connection with admission to trading on a regulated market, as well as for expenses related to maintaining the listing during the first year.

Romanian tax planning operates within a relatively strict anti‑avoidance framework. Any structure or arrangement used to optimise tax outcomes must be assessed in light of the Council Directive (EU) 2018/822 of 25 May 2018 (DAC6) mandatory disclosure rules, which require reporting of certain cross‑border arrangements that meet hallmarks associated with tax advantages. As a result, companies undertaking planning in Romania must evaluate not only the technical validity of the strategy but also its transparency and disclosure implications.

Capital Gains Taxation for Foreign Corporate Investors

Romania generally taxes capital gains derived by foreign investors from the sale of shares or other equity interests. However, Romanian corporate income tax law provides for a domestic participation‑exemption regime under which capital gains from the sale of shares are exempt if the foreign corporate investor holds at least 10% of the shares for an uninterrupted minimum period of one year. This exemption applies to gains derived from the sale of shares in Romanian companies, provided the statutory conditions are satisfied. Where the exemption does not apply, capital gains realised by foreign corporate investors are generally subject to 16% corporate income tax.

Capital Gains Taxation for Foreign Individual Investors

For foreign individual investors, capital gains derived from the sale of shares are taxable in Romania. Such capital gains are generally subject to a 16% income tax, unless a DTT provides otherwise.

In most cases, Romania’s DTTs allocate the taxing rights to the state of residence of the seller, meaning that the capital gain will not be taxable in Romania.

Treaty Real Estate Clauses

Foreign investors should also consider the real estate clause included in some of Romania’s DTTs, under which Romania may tax gains derived from the disposal of shares in companies whose value consists mainly of Romanian real estate.

Capital gain from the direct disposal of real estate properties located in Romania is subject to profit tax and the seller is required to register for corporate income tax purposes in Romania.

Practical Considerations

Although Romania provides an attractive capital‑gains exemption for corporate investors meeting the statutory minimum holding and ownership conditions, individual investors remain taxable, and treaty real‑estate clauses may override exemption possibilities. Careful structuring – particularly around holding periods and ownership thresholds – is required to determine whether capital‑gains relief is available.

General Anti-Avoidance Framework

Romania does not impose FDI‑specific anti‑avoidance rules. However, foreign investors remain fully subject to the general anti‑avoidance framework implemented mainly through EU Anti-Tax Avoidance Directive (ATAD) provisions and domestic legislation. These rules apply equally to Romanian and foreign investors and are designed to deter artificial arrangements, base erosion, and profit-shifting.

Romania applies a general anti‑avoidance rule (GAAR), which allows the tax authorities to disregard transactions that lack economic substance and to reclassify them based on their real economic purpose. In addition, several EU anti‑avoidance mechanisms are in place, including rules on controlled foreign companies, anti‑hybrid mismatch rules (covering hybrid entities, hybrid instruments, reverse hybrids, and tax-residency mismatches), and interest deduction limitations.

Transfer Pricing and Intra-Group Transactions

Transactions between a foreign investor and its Romanian subsidiary must comply with the arm’s‑length principle. Transfer-pricing documentation (local file and, where applicable, master file) is required when certain materiality thresholds are met. Taxpayers may also obtain advance pricing agreements, and Romanian tax authorities focus significantly on cross‑border financing, intra‑group services, and intangible property arrangements.

Interest Deductibility Limitations

Interest deductibility is restricted under domestic rules. As a general principle, net borrowing costs are deductible up to EUR1,000,000 per year. For excess borrowing costs arising from transactions with affiliated parties and not related to the financing of assets under construction, the applicable annual threshold is EUR500,000. Amounts above these limits remain deductible only up to 30% of the taxpayer’s fiscal earnings before interest, taxes, depreciation, and amortisation (EBITDA). Any non-deductible amount may be carried forward indefinitely and deducted in future years, subject to the same limitations.

Minimum Profit Tax and Global Minimum Tax

Romania has also introduced a domestic minimum level of profit tax applicable to taxpayers with annual turnover exceeding EUR50 million that report recurrent losses or low profitability. The minimum tax is generally 0.5% of total income, subject to certain adjustments, and is expected to be phased out by the end of the 2026 tax year.

In parallel, Romania has implemented the global minimum tax (Pillar II), which imposes a top‑up tax to ensure a minimum effective tax rate of 15% for large multinational and domestic groups.

Practical Considerations

Although these measures are not anti‑avoidance rules in the strict sense, they operate as backstop mechanisms that limit base erosion and may influence the structuring of FDI projects.

Romania's employment and labour law framework is primarily governed by Law No 53/2003 (the Labour Code), which regulates individual employment relationships, working conditions, employee rights, and employer obligations. The legal regime is supplemented by specific legislation on social dialogue, occupational health and safety, equality and non-discrimination, data protection and immigration. The legal framework is relatively rigid and employee-protective, with mandatory rules that cannot be waived by contract, even with employee consent.

Employment relationships are generally formalistic. Individual employment agreements must be concluded in writing prior to commencement of work and registered with the general registry of employees. Amendments and terminations are subject to strict procedural and substantive requirements.

Collective bargaining exists, but is less prevalent at company level compared to some Western European jurisdictions. Trade unions are present mainly in traditional or heavily regulated sectors. Works councils as a standalone concept do not exist under Romanian law. However, employee representatives may be elected in companies with at least ten employees where no representative trade union exists, primarily for information and consultation purposes.

Collective bargaining at company level is mandatory only in companies with at least ten employees, but the obligation is limited to initiating negotiations rather than reaching an agreement. Sector-level collective agreements are relatively rare and currently have limited practical impact.

Foreign investors should be aware of the strong role of labour authorities, particularly in areas such as termination, working time, health and safety and employee classification. Non-compliance may trigger administrative fines and, in some cases, criminal liability.

Employee compensation in Romania is typically structured around fixed salary supplemented by variable components such as bonuses or incentives. Compensation must comply with statutory minimum wage requirements and equal pay principles.

Equity-based compensation is increasingly used for senior management or key employees, particularly in multinational groups, though it is usually implemented via group-level incentive plans rather than local employment agreements. Pension and retirement benefits are largely statutory, based on mandatory social security contributions, with optional private pension schemes used as supplementary benefits.

Common fringe benefits include meal vouchers, holiday vouchers, private medical insurance, additional paid leave and flexible work arrangements. Most benefits are subject to specific tax and social contribution rules.

In the context of acquisitions or change-of-control transactions, employee compensation does not automatically change. Employment terms and benefits generally transfer by operation of law where a transfer of undertaking applies. Any harmonisation of compensation post-transaction is possible only prospectively and subject to employee consent and statutory protections.

Transaction-related retention or incentive schemes are typically implemented outside the employment agreement to preserve flexibility and mitigate labour law risks.

Romanian law provides strong employment protection in the context of acquisitions and change-of-control transactions. Where a transaction qualifies as a transfer of undertaking, employees assigned to the transferred business automatically transfer to the transferee by operation of law, together with all rights and obligations arising from their employment agreements.

Employees do not have a statutory right to object to the transfer, and the transfer itself cannot constitute grounds for dismissal. Seniority, salary, benefits and other employment conditions must be preserved. Any dismissal connected to the transfer is presumed unlawful unless justified by genuine economic, technical or organisational reasons unrelated to the transfer.

There is no statutory severance entitlement triggered solely by a change of control. Notice and severance obligations arise only in the event of termination, subject to the applicable legal grounds and procedures.

Information and consultation obligations apply where a transfer of undertaking is contemplated. Employers must inform and consult trade unions or employee representatives prior to completion of the transaction. While employee approval is not required, failure to comply with these obligations may result in administrative sanctions and increased litigation risk.

Romania’s FDI screening rules do not list intellectual property (IP) as a standalone sensitive sector and do not explicitly flag IP ownership as a separate trigger. However, it may have an indirect impact whenever the protected IP assets relate to critical technologies, research & development, or strategic sectors – especially in heavily technologised areas driven by AI or cybersecurity.

Romania provides formal IP protections consistent with EU standards, and its legislation is aligned with EU directives and international treaties. Currently, AI‑generated works without human creative input are generally not eligible for protection.

In particular, in the case of copyright protection, no registration requirement applies. Under Romanian law, the protection of computer programs covers any form of expression of a program, including application programs and operating systems, expressed in any programming language, whether in source code or object code, as well as preparatory design material and manuals.

With regard to the employment context, in the absence of a contrary clause, the economic copyright in computer programs created by one or more employees in the course of their employment duties or following the instructions of the employer shall belong to the employer. As a matter of common practice, and in order to avoid any potential inconsistencies regarding copyright in software created by employees, employers typically include in the employment agreement an express, full and permanent assignment of such rights from their employees.

With regard to works created by third-party software developers (eg, freelancers), it must be clearly agreed in the relevant agreement that an express, full and permanent assignment of such rights is granted by the contractor. Romanian law provides specific requirements for IP assignment clauses, in the absence of which such clauses may be deemed null and void.

Romania’s data protection regime is built on several key legal instruments, all of which supplement or implement the EU’s General Data Protection Regulation (GDPR).

In particular, Law No 190/2018 introduces additional requirements to the GDPR:

• Firstly, regarding the processing of national identification numbers, where such processing is based on the legitimate interests of the controller or of a third party, within the meaning of Article 6(1)(f) of the GDPR, the controller is required to put in place additional safeguards aimed at mitigating the risks associated with the processing of particularly sensitive identifiers;
• Secondly, another national requirement refers to processing of genetic data, biometric data, or data concerning health for the purposes of automated decision-making or profiling. Such processing is permitted only where the explicit consent of the data subject has been obtained or where such processing is carried out on the basis of explicit legal provisions, subject to the implementation of appropriate measures to safeguard the rights, freedoms, and legitimate interests of the data subject.

The Romanian Data Protection Authority adopts a formal but often reactive approach, opening investigations mainly following complaints or clear non‑compliance signals. So far, the largest administrative fine amounts to approximately EUR150,000 and was applied to a banking institution. However, this level of enforcement may increase over time, in line with developments observed in other member states.