The past 12 months have been defined by several global and domestic fluctuations, which may drive future transactional activity in Romania in both the short and medium terms.

In the context of Romania’s commitments under the National Plan for Recovery and Resilience and its overall tax collection objectives, several key changes have been implemented with a practical impact on future transaction structuring, among which are the following:

• the tax on dividends was increased from 10% to 16% for dividends distributed as of 1 January 2026, following the earlier increase from 8% to 10% applicable to distributions made from 1 January 2025;
• the tax on capital gains from securities executed through intermediaries was increased from 1% to 3% for assets held more than 365 days, and from 3% to 6% for assets held less than 365 days, and the tax on capital gains from securities executed without intermediaries was increased from 10% to 16%, in each case for transactions carried out from 1 January 2026;
• the standard value-added tax (VAT) rate was increased from 19% to 21% as of August 2025, while the previously applicable reduced VAT rates of 9% and 5% were consolidated into a single reduced rate of 11%; and
• the inclusion of minimum share capital thresholds for limited liability companies and a tax notification and guarantee mechanism on transfers of shares in such companies, both of which are addressed in 4.1 Notable Recent Decisions or Statutory Developments.

The war in Ukraine, together with the EU’s energy transition commitments, have given more importance to domestic energy production in an already expanding energy market. In this context, transaction activity in the energy market has accelerated, showing the expanding appetite of both domestic and foreign players across the full spectrum of greenfield investments, acquisitions and reorganisations. Renewable energy and energy storage have been particularly active segments of the market.

The energy sector – and particularly, renewable energy – has been one of the most active areas for joint venture (JV) activity in Romania.

The digital infrastructure sector has been following the upward trajectory of the renewable energy sector, emerging as a recently highly active area, particularly for data centres and cloud services which are attracting investors’ interest.

The growing use of artificial intelligence (AI), together with other highly digitalised processes, is reshaping the regulatory landscape and consequently the course of JV vehicles (eg, AI regulation and cybersecurity legislation require parties to address their responsibilities in the event of potential incidents).

From a foreign investment perspective, certain active sectors (energy, transport, data processing and storage, etc) remain subject to the screening process, thus shaping the timeline and structure of JV deals.

Romanian law does not provide a dedicated “joint venture” legal form. Instead, parties choose from among existing legal structures depending on the size of the venture, the number of participants, governance preferences and capital requirements.

Romanian law offers two fundamentally different paths: contractual JVs and corporate JVs.

Contractual JVs are known under Romanian law as “asocieri în participatie” and are governed by Law No 287/2009 regarding the Civil Code (the “Civil Code”).

A contractual JV does not acquire legal personality (ie, the associates do not establish a new legal entity as a result of the agreement) and does not constitute, vis-à-vis third parties, a person distinct from the person of the associates. Accordingly, rights and obligations vis-à-vis third parties arise solely through the associate acting in its own name. A third party is bound only vis-à-vis the associate with whom it has contracted. The contractual allocation of liability between the associates under the JV agreement governs their internal relationship but does not, of itself, affect the rights of third parties. Each associate retains ownership of the assets it contributes unless otherwise agreed, written form is required only for evidentiary purposes rather than validity, and the arrangement is fiscally transparent, with each associate taxed individually on its share of the result.

Corporate JVs are typically implemented through two types of entity, namely:

• Limited liability company (SRL) – The share capital of an SRL is divided into equal social parts (shares). This type of corporate JV is highly flexible, with a low minimum required share capital at incorporation of RON500 (approximately EUR96.15 on the basis of an exchange rate of EUR1 = RON5.2 at the time of writing), subject to a higher capital requirement applicable to companies meeting the statutory turnover criterion, with the applicable statutory timing and transitional rules. The shareholders are liable only up to the amount of their subscribed share capital. For corporate JVs with a limited number of shareholders that do not require access to capital markets, these advantages make the SRL the more suitable and cost-effective choice.
• Joint stock company (SA) – In contrast to an SRL, an SA is the preferred vehicle for larger-scale corporate JVs, particularly where capital-raising, listing, complex share structures (eg, multiple classes of shares or preference shares) or the ability to issue bonds are anticipated. The SA’s convening process is considerably more formalistic and time-consuming than the SRL’s. This structure comes with a heavier governance and reporting framework, alongside a higher minimum required share capital and less flexibility regarding the procedures for convening a general meeting of shareholders (GMS).

In practice, corporate JVs are in their majority incorporated as SRLs (rather than SAs), considering their simpler incorporation requirements and more flexible corporate governance rules, for instance:

• The minimum required share capital for an SRL is RON500 (approximately EUR96.15), and RON5,000 (approximately EUR962) for an SRL with a net annual turnover exceeding RON400,000 (approximately EUR77,000). The minimum share capital for an SA is RON90,000 (approximately EUR17,310).
• SRLs may be incorporated by and operate with a sole shareholder, whereas SAs require a minimum of two shareholders. If an SA operates in breach of the minimum number of shareholders for a period exceeding nine months, any interested party may request the dissolution of the company. This is particularly relevant in view of regulating the exit mechanisms by means of a shareholders’ agreement (SHA).
• In terms of convening a GMS, for an SRL, the convening formalities are left to be regulated by its articles of association. If no rule is provided in its articles of association, then the director/board of directors must convene the GMS at least ten days prior to the meeting, by registered letter. Under Companies Law No. 31/1990 (the “Companies Law”), a GMS of an SA may be convened by the board of directors at least 30 days prior to the meeting, by publication of the convening notice in the Official Gazette and in one of the widely circulated newspapers in the locality where the company’s registered office is situated, or in the nearest locality.

Notwithstanding the above, choosing the legal form of the JV vehicle also depends on the industry sector. Certain regulated activities – eg, banking, insurance or investment fund management – are subject to specific requirements, including:

• companies must be incorporated as SAs; and

• higher share capital requirements are imposed under the regulations and/or supervisory standards imposed by National Bank of Romania (BNR) or the Financial Supervisory Authority (ASF). For instance, non-bank financial institutions are required to keep a minimum share capital of EUR200,000, or EUR3 million for non-bank financial institutions that grant mortgage credit.

In such cases, the choice of vehicle is no longer a commercial decision, but a legal requirement for carrying out the activity at all.

Both types of entity (SRL and SA) allow flexible profit-sharing arrangements via SHAs and/or the articles of association. SAs are preferred when (i) the investors anticipate raising external investment by pursuing an eventual IPO or listing on the Bucharest Stock Exchange (BVB) or (ii) the JV partners require a more sophisticated profit allocation mechanism, due to the complexity of share classes.

The general framework of contractual and corporate JVs includes the Civil Code and the Companies Law.

Establishing a JV may trigger, if all statutory requisites are met, the foreign direct investment (FDI) screening framework. In Romania, the FDI regime was established by Emergency Ordinance No. 46/2022 on the measures for the implementation of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union, as well as for the amendment and supplementation of Competition Law No. 21/1996 (the “FDI Law”). The FDI Law was substantially adjusted in March 2026, including:

• the FDI notification threshold was raised from EUR2 million to EUR5 million; and
• restructuring or reorganisation operations were exempted from the FDI notification requirement, if carried out by an EU investor, or by an investor from a state that has adhered to the OECD Codes of Liberalisation of Capital Movements and of Current Invisible Operations (the “OECD Codes”), and provided that: (i) the operation does not generate any change in effective control or in the ultimate beneficial owner (UBO); and (ii) the source of financing is intra-group or comes exclusively from the EU or from states that have adhered to the OECD Codes.

Regulatory oversight comes from a number of authorities:

• the Competition Council (RCC) and the Commission for the Examination of Foreign Direct Investments (CEISD) – regulatory bodies relevant for merger control and foreign direct investments, if relevant in the context of the transaction relating to the JV; and
• depending on the sector in which the JV vehicle operates, a regulatory body such as the Financial Supervisory Authority (ASF), the National Bank of Romania (BNR) or the National Energy Regulatory Authority (ANRE). Other regulated sectors (eg, telecommunications, insurance) may similarly trigger their own sector-specific regulators, and this list should not be treated as exhaustive.

The authority relevant for incorporation of a corporate JV is the National Trade Register Office (ONRC), which also administers the Register of Beneficial Owners. If the JV structure raises money-laundering risks, this must be reported to the National Office for the Prevention and Control of Money Laundering (ONPCSB), Romania’s financial intelligence unit.

The key anti-money laundering (AML) legislation applicable in Romania is Law No. 129/2019 on preventing and combating money laundering and terrorist financing (the “AML Law”).

Under the AML Law, the main obligations incumbent upon a “reporting entity”, if qualified as such, encompass:

• implementing customer due diligence measures, including identification and verification of the client and of the client’s UBO; and

• reporting suspicious transactions to the ONPCSB.

All Romanian legal entities are required to obtain, hold and maintain up-to-date information on their UBO, and to declare it to the competent authority to be registered in the Register of Beneficial Owners, regardless of reporting-entity status.

As of May 2025, public access to the Register of Beneficial Owners is restricted. An interested party may obtain information as to the UBO of a company only if it can demonstrate a “legitimate interest”.

The applicable framework is Emergency Ordinance No 202/2008 on the implementation of international sanctions, which governs the national implementation of international sanctions established by UN Security Council resolutions and EU legal instruments. As a consequence, designated persons and entities are subject to a freeze of funds – a term expressly defined to include securities, shares, and equity interests in funds or economic resources – meaning that any restrictive measure set by the UN or EU preventing the circulation of such assets, their transfer, their use, access to such assets, or transactions involving such assets is mandatory.

Under the FDI Law, the Romanian regime is broader than those in many EU member states, because it applies to Romanian, other EU and non-EU investors alike. Screening is triggered where the investment:

• falls within a sensitive sector (eg, critical infrastructure, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, etc); and
• has a value exceeding EUR5 million.

Investments below that figure may still be examined where they could affect national security, public order or projects of EU interest, and interdependent transactions between the same parties within a one-year period may be aggregated to reach that figure.

Following the 2026 revision, the regime also expressly covers acquisitions of tangible or intangible assets in sensitive sectors, not only acquisitions of shares or control, subject to the conditions and thresholds set out in the FDI Ordinance as amended. The examination fee was reduced from EUR10,000 to EUR5,000, and the statutory review period was shortened. Clearance is a suspensive condition: the investment may not be implemented before such clearance is obtained (standstill obligation), and closing without clearance exposes the parties to administrative sanctions, including fines, and to the risk that the transaction will be unwound by order of CEISD.

Romanian law does not impose any special restriction on foreign investors setting up a new business in Romania or acquiring shares in a Romanian entity, beyond the prior approval requirements, as they may be applicable depending on the specific details of each transaction. However, there are restrictions in terms of acquiring ownership rights over land in Romania that are applicable to third-country nationals, stateless persons and legal entities belonging to non-EU/non-EEA states.

Romanian competition law (ie, Competition Law No 21/1996, hereinafter referred to as the “Competition Law”) is triggered where establishing a JV meets the statutory requirements of an economic concentration.

Under the Competition Law, the following operations fall under the concept of economic concentration:

• the creation of a JV that sustainably performs all the functions of an autonomous economic entity (or full-function operation). Such criterion is deemed to be fulfilled where the JV operates in a market and performs the functions that would normally be carried out by any other undertaking in the same market – eg, the JV has a management dedicated to day-to-day operations, sufficient assets, personnel and financial resources. A JV that simply takes specific functions to the benefit of the parent company will not be deemed a full-function entity; and
• the acquisition of joint control over an existing undertaking (thus creating a JV), irrespective of whether the said undertaking fulfils the full-function operation criterion described above.

Where the transaction falls under the concept of economic concentration, the parties must notify the RCC in advance and may not implement the concentration before obtaining clearance (standstill obligation), provided that:

• the combined turnover of the undertakings involved in the concentration exceeds EUR10 million; and
• at least two of the undertakings involved have each individually achieved, in Romania, a turnover exceeding EUR4 million.

When determining whether the relevant threshold is met: (i) the turnover of each involved party includes the turnover generated by its entire group; and (ii) the target turnover includes solely the turnover generated by the target undertaking/target assets.

The approval procedure under the Competition Law is subject to separate rules and, as a matter of principle, is independent from the FDI screening procedure. However, such procedures may be interconnected – for instance, if CEISD notifies the RCC that an economic concentration (also notified under the FDI procedure) poses a national security risk, the screening procedure before the RCC is suspended until CEISD issues its opinion.

Only an SA may be admitted to trading on a regulated market. This should not, however, be construed as an absolute impediment to a public listing for a JV vehicle incorporated as an SRL, since the shareholders may decide to change the legal form of the company into an SA, prior to initiating the listing procedure.

Romanian listed companies must comply with the ongoing disclosure obligations under Law No. 24/2017 on issuers of financial instruments and market operations and with different regulations established by the BVB and ASF. These obligations include reporting of related-party transactions and significant transactions above defined thresholds, disclosure of inside information, and notification of major shareholding changes to the market and to the ASF.

This framework is designed to protect market integrity and minority shareholders. Therefore, a listed JV structure requires closer co-ordination between the corporate and capital markets teams and involves a longer process for different approvals and public announcements than non-listed JVs.

Once a JV vehicle is incorporated in Romania, it falls under Law No. 129/2019 on preventing money laundering and terrorist financing, which requires disclosure of the UBO. Romanian law does not have a separate “persons with significant control” concept, just that of UBO.

Key aspects include:

• In principle, a UBO is any natural person who ultimately owns or controls the company, directly or indirectly, through shares, voting rights or other means. The ownership threshold is 25% of shares plus one share, or over 25% of equity. If no such person can be identified, senior management may be declared as the UBO.
• The legal representative of the company is required to register a UBO-related statement upon incorporation with ONRC. Any change to the UBO’s details must be reported within 15 days, as required under the AML Law. Failure to comply with such obligations entitles ONRC to apply before the court for dissolution of the company; such failure is curable up until final judgment of the court.

Key legal developments impacting JVs have been adopted in Romania, in the context of strengthening financial stability, via Law No. 239/2025 on establishing measures for the recovery and optimisation of public resources, and for amending and supplementing certain normative acts (the “Fiscal Package II Law”), as further amended by Emergency Ordinance No. 13/2026 on amending and supplementing certain normative acts in fiscal and budgetary matters.

Under the Fiscal Package II Law:

• any share transfer in a company incorporated as an SRL is subject to notification to the fiscal authority (ANAF) within 15 days of such transfer. In case of failure to comply with the notification obligations, ONRC will not admit registration of the share transfer with the trade register; thus, the respective transfer will not be opposable to third parties;
• if the net assets of a company fall below the statutory threshold (half of the subscribed share capital), the company is prohibited from repayment of shareholder loans and from distributing dividends. If no remedial measures to restore the ratio of net assets to share capital are implemented within two years after the end of the financial year in which the insufficient net assets were identified, the shareholders are obliged to convert any shareholder loans into equity; and

• the minimum required share capital of a newly incorporated SRL is RON500 (approximately EUR96.15), and companies reporting net turnover above RON400,000 (approximately EUR77,000) in their annual financial statements must hold a minimum share capital of RON5,000 (approximately EUR962).

Before committing to the full legal and commercial framework of the venture, the parties typically negotiate and execute a series of preliminary instruments designed to record their mutual intentions, allocate negotiating risk and provide a roadmap for the definitive documentation.

The most common documents used at the negotiation stage are the following:

• non-disclosure agreements: these remain the market-standard starting point even though the Civil Code already imposes a default statutory duty of confidentiality on both sides during negotiations, whether or not the negotiations lead to a contract, breach of which gives rise to civil liability independently of any signed document;
• due diligence reports; and
• term sheets/memorandum of understanding: parties usually use term sheets in order to set out the key commercial aspects, the structure and the operational guidelines.

Market practice in Romania also expects preliminary agreements to address regulatory compliance, and to set out a framework for resolving disagreements during the negotiation itself. Preliminary agreements usually flag allocated responsibility (and cost) for preparing the filing, and address what happens to the parties’ obligations if the review is escalated to an in-depth investigation or results in a prohibition. Where either party is a non-EU investor, or the JV’s activities touch a sensitive sector, a preliminary agreement should separately flag the FDI screening carried out by CEISD.

During the negotiation stages, no filing or public disclosure obligation is triggered. However, if the parties involved in negotiation are competitors, exchanging sensitive information (pricing, output, customer terms) during this stage can itself constitute a standalone infringement of the prohibition on anti-competitive agreements under the Competition Law – independent of, and prior to, any merger control question.

At the term sheet stage, no filings are mandatory as a matter of principle. However, in the interest of time, partners may sometimes choose to file for FDI/merger control screening based on the term sheet (if binding).

At the signing of the transaction documentation (and the SHA), the parties are usually required – if they have not done so already – to apply for FDI screening, merger clearance and any other regulatory approvals. Details on FDI and merger approvals are further detailed in 3.3 Sanctions, National Security and Foreign Investment Controls and 3.4 Competition Law and Antitrust. Sector-specific regulatory approvals are typically triggered at signing of the transaction documentation – eg, BNR for the banking sector, ASF for insurance/financial services.

At closing, corporate formalities generate certain disclosure events, such as:

• the JV vehicle must be registered with the trade registry; respectively, where the JV is formed by an investor acquiring shares in the company, the resulting changes of shareholding structure must be registered with ONRC; and
• UBO information must be declared to ONRC. As a rule, UBO information must be declared at incorporation of the company and thereafter updated where applicable.

Typically, in Romania, the JV agreement includes a set of conditions precedent which are tailored to the nature of the project around which the JV is structured.

A particularly relevant condition precedent in the current Romanian legal context is FDI screening clearance. Investors are required to obtain CEISD approval before acquiring control or a significant stake in a Romanian JV operating in regulated sensitive sectors.

Besides the regulatory approvals, the JV agreement usually includes conditions precedent that are tied to the specifics of the project or business that must be fulfilled prior to closing. For instance, in the renewable energy sector, a potential investor may specify in the SHA that the project must reach the ready-to-build stage from the permitting, regulatory and technical perspectives.

Other commonly used conditions precedent include the completion of satisfactory due diligence or the obtaining of different third-party consents (eg, approvals from the financing banks).

We should also mention two drafting points that are particular to civil-law jurisdictions, including Romania. First, a condition whose satisfaction depends purely on the will of the party that owes the obligation is void, so conditions precedent should be framed by reference to objectively verifiable events rather than to a party’s unilateral satisfaction. Second, as material adverse change (MAC) is not a statutory concept, under Romanian law, the closest domestic analogue is hardship, which allows a court to adapt or terminate a contract where performance becomes excessively onerous due to an exceptional change of circumstances. MAC clauses therefore need to be drafted as self-contained, objectively measurable triggers if they are to operate as intended.

Force majeure provisions may also sometimes be included in JV agreements, but in general, partners wish to exclude such provisions. Force majeure is defined in the Civil Code as “an external, absolutely unforeseeable and insurmountable event”; thus, the triggering event must be entirely beyond the parties’ control, wholly unforeseeable and impossible to overcome through any reasonable means. The COVID-19 pandemic and the military conflict in Ukraine have brought force majeure clauses into sharp focus in negotiations, given Romania’s geographic proximity to the conflict zone. In practice, a party invoking force majeure will usually seek a certificate from the Chamber of Commerce and Industry of Romania, which constitutes persuasive but not conclusive evidence before the courts.

Both types of corporate JV (SRL/SA) must be registered with ONRC.

The minimum capital for an SRL is RON500 (approximately EUR96.15) for a newly incorporated company, rising to a mandatory RON5,000 (approximately EUR962) once the net turnover exceeds RON400,000 (approximately EUR77,000). The share capital must be subscribed as follows:

• 30% of the subscribed capital must be paid within three months of registration and before the company begins operations; and
• the remaining balance is due within 12 months for cash contributions or two years for in-kind contributions.

For an SRL, the number of shareholders must not exceed 50, but it may be validly incorporated and operate with a sole shareholder.

As for an SA, the minimum capital is RON90,000 (approximately EUR17,310). The number of shareholders must not be fewer than two for a period exceeding nine months; otherwise, any interested party may request before the court dissolution of the company.

The JV documentation is determined by the commercial decisions of the parties, whether they have decided to collaborate solely contractually (contractual JVs) or to set up or enter into a company (corporate JVs).

Contractual JVs are a commonly used tool for existing independent entities undertaking a specific task or activity by combining their resources, without the intention to create a separate legal entity. In this context, the JV agreement is used as an instrument to define the relationship of the parties, the scope of the venture, and allocation of risks and profits. Under the general regime governed by the Civil Code, the JV agreement should specify, at a minimum:

• the participation of each associated entity in the profits and losses of the operations undertaken under the JV agreement;
• in terms of assets contributed by the associated entities for the envisaged task, whether those contributed assets become common property of the associates or a right in rem (usufruct, superficies) is granted to the other associates over the contributed asset; and
• the associate authorised to act, in its own name, vis-à-vis third parties (sometimes referred to as the “principal associate” or “managing associate”). A provision to this extent is a requirement under the JV agreement as the resulting venture does not acquire legal personality and therefore cannot assume rights and obligations in its own name. In the course of the venture’s operations, the designated associate will represent the venture vis-à-vis third parties, with the rights and obligations assumed thereof being shared between the associates of the venture, in the quotas established by the JV agreement.

Considering the associates’ full exposure to liability due to the lack of a separate legal entity, the contractual JV is less commonly used in practice than the corporate JV.

By contrast, corporate JVs tend to be used as an instrument in the context of raising financing or expanding an already existing business of an established company (SRL/SA). In this context, the shareholders (either existing or brought in for expansion purposes) conclude an agreement (SHA) to establish a set of rules for managing the company and conduct the business thereof. SHAs typically address matters such as the appointment and removal of directors, deadlock resolution mechanisms, rules of protection for minority shareholders (eg, reserved matters) and share transfer restrictions (eg, right of first refusal, right of first offer).

In terms of SHA governing law, parties may choose laws pertaining to other jurisdictions than Romania (English law tends to be one of the most, if not the most, frequently used governing laws in cross-border JVs), provided that the rules of the foreign governing law do not contravene public order provisions.

Corporate JVs generate two interlocking layers of documentation:

• the SHA, concluded between all or part of the company’s shareholders, binding only upon its signatories; and
• the articles of association, governing the organisation of the company, binding upon all shareholders and opposable to third parties.

Given this double-layered documentation structure, entering into an SHA in respect of a Romanian company often raises the question of which SHA provisions should be transposed into the articles of association, in an effort to reach a balance between having the SHA provisions binding upon all shareholders and not disclosing certain provisions to the public.

One of the most challenging aspects in establishing a JV is designing the decision-making process, tailored for (i) the balance of control between the JV participants and (ii) their desired level of day-to-day involvement.

Under the Companies Law, significant corporate matters are decided by the GMS (and, for an SA, in certain cases, the extraordinary meeting of shareholders) – eg, the legal form of the company (SRL/SA), its object of activity, capital increases and decreases, mergers and divisions, etc. Day-to-day management and third-party representation are entrusted to the board of directors, elected by the GMS.

SHAs typically include arrangements deviating from the common regime under the Companies Law, such as:

• Structure of the board of directors – the SHA commonly provides that each JV partner may appoint a specified number of directors – eg, one director for a shareholding of up to 20%. The SHA may provide different categories of directors (eg, classes A and B) with distinct powers and/or an obligation to act jointly.
• Reserved matter clauses – a catalogue of reserved matters is typically included in the SHA to protect the minority shareholder(s).

In terms of funding corporate JVs, both equity and debt instruments are used, as follows:

• At incorporation, each JV partner is obliged to subscribe an equity contribution, at least to reach the minimum share capital requirements under the Companies Law. The initial equity contribution may consist of cash (mandatory at incorporation), in-kind contributions and, subject to certain restrictions depending on the company form, contributions in receivables.
• After incorporation, the most frequent type of funding is through shareholder loans, as they offer a greater level of flexibility in terms of repayment and are considered a more tax-efficient way of funding the company versus equity contributions.
• Debt financing is preferred over equity contributions after incorporation, considering the GMS approval requirements for share capital increases – ie, two-thirds majority for an SA or a double absolute majority of both the number of shareholders and the shares in an SRL, unless the articles of association provide otherwise for the SRL, or unless higher thresholds are provided by the SHA/articles of association.
• From a transaction structuring perspective, debt instruments are used as a mechanism for the potential investor to condition its investment on certain milestones being reached by the company. If the conditions precedent/interim obligations are not met, the investor is entitled to loan repayment plus accrued interest. If all conditions precedent and interim obligations have been met, a debt-to-equity swap is performed whereby the investor becomes a shareholder in the company.

Equity contributions may also become mandatory after incorporation. Where net assets fall below half of the subscribed share capital and no remedial measure is implemented within two years of the end of the financial year in which the shortfall was identified, shareholder loans must be converted into share capital. Related restrictions on repaying shareholder loans and distributing dividends in that situation are described in 4.1 Notable Recent Decisions or Statutory Developments.

Romanian law does not provide statutory mechanisms for resolving deadlocks.

Exceptionally, the Companies Law requires, for SRLs, that the articles of association provide a solution for deadlock – ie, the articles are required to specify the regime of adopting the shareholders’ decision where an absolute majority cannot be established due to equal participation in the share capital.

While a unitary approach has not been established in the Romanian market in terms of deadlock mechanism, JV partners typically agree upon deadlock resolution mechanisms via the SHA and/or the articles of association, usually in the following order:

• escalation – the deadlock is referred to the senior management of the shareholders, who are required to negotiate and use their best efforts in reaching a mutual solution;
• mediation – if the deadlock remains unsolved after escalation, the shareholders submit the deadlocked matter to a mediation process before a mediator; and
• buyout – if the deadlock remains unsolved after mediation, either party may trigger a buyout mechanism by serving the other a notice stating a valuation price per share at which it will sell its shares and exit the company. Within a specified period, the notified party may either (i) acquire the shares at the price offered by the notifying party or (ii) sell its shares at the same price.

Beyond the SHA governing the relation of the JV partners, ancillary documentation is frequently required for establishing a corporate JV, such as:

• articles of association – articles of association are commonly negotiated and annexed to the SHA, allowing the JV partners to determine ex ante which SHA provisions will be reflected therein. This is particularly relevant as the articles of association are binding upon all shareholders and registered with ONRC and published in the Official Gazette, being opposable to third parties;
• loan agreements and related documentation – where the company is funded via debt rather than equity, loan agreements are required to set out the terms of draw-down (if the case), interest rate, maturity, pledges and repayment. If a debt-to-equity swap is envisaged in the transaction structure, ancillary documents pertaining to the loan are negotiated beforehand – eg, conversion notice;
• services agreements – for instance, where the pre-existing shareholder of the company contributes services for the venture;
• a business plan; and
• an intellectual property licence agreement.

In terms of profit and loss allocation, the general rule under the Civil Code and the Companies Law (and generally reflected in market-standard SHAs) is that each JV partner participates in profits and losses pro rata to its contribution to the share capital. Parties may deviate from said general rule. However, a clause providing that a shareholder is entirely excluded from profits or exempted from losses (leonine clause) is deemed “unwritten” (nescrisă), ie, void under the law, and would therefore be unenforceable against the SHA signatories.

While the Companies Law grants a standard set of rights and obligations to shareholders, they are typically extended and/or tailored in the context of the SHA:

• Information rights – SHAs usually expand the statutory information rights to expressly cover access to financial statements, management reports, company contracts, etc.
• Voting-related provisions – rights to convene the GMS and to be given minimum notice for board meetings or the GMS are expressly provided for in the SHA, considering convening terms and methods suitable for the shareholders (eg, convening notice via email, board meetings to be held electronically). SHAs may require shareholders to vote in the GMS and instruct their nominated directors to vote in the board meetings in accordance with the scope of the SHA.

• Non-compete, non-solicitation and confidentiality obligations – these do not arise automatically under the law and must be expressly agreed under the SHA. For such clauses to be valid and enforceable, the scope of the “business” and time period must be clearly defined.

The most frequently used mechanisms for securing protection of the minority JV partner are the following:

• right to information, inspection and audit – provisions granting certain express and extended information rights are typically included to enhance the oversight of the minority shareholder(s). In practice, they may materialise as (i) an obligation for the company to periodically communicate basic financial information, (ii) a management obligation to provide periodic reports on the company’s operation, or (iii) an obligation to prepare annual audited accounts, even where the company would not be required to do so;

• reserved matter clauses – depending on the parties’ negotiation and the intention of the minority shareholder(s) to take part in day-to-day operation, the catalogue of reserved matters may range from issuance of new shares or share capital operations to execution of material contracts by the company;

• tag-along rights are not regulated by Romanian law and must be expressly agreed upon in the SHA/articles of association, to allow a minority shareholder to transfer its shares together with the majority shareholder, in the event that the latter receives an offer to sell its shares; and
• right to appoint a board member/observer.

Parties to SHAs enjoy the freedom to choose the governing law of the agreement and related ancillary documents. However, where the JV vehicle is incorporated as a Romanian company, the company incorporation documents (including the articles of association) will be governed by Romanian law. This is particularly relevant as the articles of association typically mirror the SHA provisions. Where parties choose a foreign law as the governing law of the SHA, they should consider:

• any mandatory provisions of Romanian law that will continue to apply regardless of the chosen law; and
• potential conflicts between the SHA and the articles of association arising from the interplay of two distinct legal systems – usually mitigated by including a supremacy clause in the SHA whereby the SHA prevails over the articles of association in case of inconsistencies or conflicts.

In general, where the JV vehicle is a Romanian entity, parties tend to opt for:

• arbitration, with disputes being referred to the ICC International Court of Arbitration, the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania, etc;
• a foreign court jurisdiction; or
• in domestic cases, a specific seat of the Romanian courts.

If parties do not agree via the SHA on a jurisdiction of choice, any disputes will default to the jurisdiction of the Romanian courts, which will apply the Romanian procedural laws.

In terms of international treaties/rules applicable in Romania, the applicable framework includes:

• Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations;
• Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters;
• the Convention for Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), ratified by Romania by Decree No 62/30.05.1975; and
• the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), ratified by Romania by Decree No 186/24.07.1961.

As described in 6.2 Governance and Decision-Making, in the case of corporate JVs, partners are entitled to appoint a director in the company. Under Romanian law, the statutory structure of the management depends on the legal form of the company:

• Companies incorporated as SRLs are managed by one or more directors appointed in accordance with the Companies Law and the articles of association. While the Companies Law does not expressly provide for a board of directors in the case of an SRL, additional governance arrangements (such as the allocation of responsibilities among multiple directors or the specification of matters requiring joint action) may be reflected in the articles of association and/or contractually agreed among the shareholders, to the extent permitted by law.
• Companies incorporated as SAs may be governed under one of two models:
1. a one-tier system – the company is managed by one director or a board of directors with at least three members. If the company meets the criteria for having its financial statements audited, having a board of directors is mandatory under the Companies Law. Day-to-day management may be delegated to one or more managers; or
2. a two-tier system – the governance is separated between:
1. the supervisory board, with three to 11 members, appointed by the GMS. The supervisory board exercises oversight over the management board and does not participate in the actual management of the company; and
2. the management board, with one or more members (always of odd number), appointed by the supervisory board. The management board deals with the day-to-day management of the company and has representation powers before third parties.

The SHA may provide that the directors/the members of the board of directors are divided into (i) executive and non-executive directors or (ii) different classes of directors (eg, class A, class B), with specific powers for each class.

Weighted voting is not available at board level: each director carries one vote. At shareholder level, the general rule is likewise one share, one vote; preference shares carrying a preferential dividend but no voting rights may be issued.

There are no restrictions on foreign citizens acting as directors.

Under the Companies Law, directors have full representation powers, within the restrictions set forth by the articles of association, the decisions of the shareholder(s) and the powers of the sole shareholder/GMS.

In the context of corporate JVs, the responsibilities and powers of the board of directors may be extended via the SHA, for example:

• discussing and approving accounting policies and the financial control system;
• appointment and dismissal of managers and control of their activity;
• discussing and approving the catalogue of reserved matters (as negotiated and defined under the SHA); and
• exercising the company’s rights as shareholder in any subsidiaries.

Although a director may be nominated by a certain shareholder as per the SHA, under Romanian law, the director’s duties are owed exclusively to the company, not to the appointing shareholder. This is a direct consequence of the directors being obliged to act in the interest of the company.

The primary source of directors’ duties is the Companies Law, under which a director must act with the prudence and diligence of a good administrator, in the informed and good-faith belief that the decision is in the company’s interest, and must act loyally, keeping confidential the information received in that capacity. The general rules on mandate in the Civil Code apply as a supplementary regime: a director appointed under a remunerated mandate is assessed against the standard of a diligent owner, which is stricter than the standard applicable to an unremunerated mandate.

Under the Companies Law, if a director has, in a given transaction, an interest contrary to that of the company, that director may not participate in any deliberation or decision regarding such transaction. Breach of such obligation may give rise to the director’s liability towards the company, including the obligation to fully indemnify the company for any loss.

Further to the statutory provisions, the SHA may provide:

• that directors are in breach of essential duties in case of failure to fulfil the obligation to act in the company’s best interest and/or avoid conflicts of interest;
• the most sensitive matters to be included as reserved matters for the GMS, rather than for the board of directors; and
• a board of directors’ structure including one independent member that is not affiliated with any of the JV partners.

Specific rules should be provided where any of the shareholders holds intellectual property (IP) rights or where the company may develop IP in the course of its business.

For instance, the SHA should regulate (i) the transfer or licensing of the pre-existing IP rights, (ii) ownership of the IP developed by the company, and (iii) confidentiality obligations. Confidentiality obligations are, as a rule, applicable during the term of the SHA, but survive a period post-termination.

Under Romanian law, IP assignment/transfer is limited to the patrimonial rights, as moral rights are inalienable. Should the partner contribute its IP to the company, the assignment agreement should expressly specify the transferred rights, permitted methods of use, term, territorial scope and remuneration.

As referred to in 8.1 Ownership and Use of IP, assignment is limited to the patrimonial rights.

Assignment may be exclusive (in which case the assignor cannot use or further transfer the work during the term of the assignment) or non-exclusive. Assignment of all future works is null under Romanian law.

Licensing allows the JV partner to retain ownership while granting the company defined usage rights. Non-exclusive licensees may not sub-license without the licensor’s express consent. This is particularly relevant in case the company intends to sub-license contributed IP to subsidiaries or commercial partners.

Environmental, social and governance (ESG) information has experienced increasing demand from investors, especially for foreign investors and financial institutions. ESG compliance is one of the material aspects in recent transactions, particularly where the ESG aspects depend on fulfilment of statutory environmental and employment obligations. When the JV vehicle is a public listed company, compliance with ESG becomes a requirement under the regulations of the BVB.

Companies in Romania are subject to ESG reporting requirements under Order of the Ministry of Finance No. 85/2024 regulating certain aspects of sustainability reporting (“OMF 85/2024”), transposing into national legislation the EU’s Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting).

The number and type of entities included in the scope of reporting obligations under OMF 85/2024 are phased, as follows:

• As of 1 January 2025, medium-sized and large entities (as defined in OMF 85/2024) are subject to reporting obligations. For this purpose, medium-sized and large entities are companies exceeding (i) total assets of RON17.5 million (approximately EUR3.36 million), net turnover of RON35 million (approximately EUR6.7 million) or an average of 50 employees during the financial year. The EUR equivalents in this paragraph are approximate values calculated at the exchange rate applicable at the time of writing.
• As of 1 January 2026, entities listed on regulated markets that do not meet the criteria of medium-sized and large entities are also subject to reporting obligations, subject to the applicable transitional provisions.
• As of 1 January 2028, Romanian branches or subsidiaries of third-country parent companies will be subject to reporting obligations, subject to fulfilment of size criteria.

Contractual JVs are concluded for a specific activity and typically have a definite duration. Corporate JVs are generally concluded for longer or indefinite durations (except, for instance, for temporary JV structures envisaged for multiple-closing transactions). Besides reaching the agreed term, corporate JVs may terminate:

• due to unresolved deadlock;
• due to breach of JV partners’ undertakings under the SHA, resulting in exercise of the call option rights by the non-defaulting shareholder(s) – eg, material breach, insolvency, bankruptcy or failure to meet funding obligations; or
• by mutual consent of the JV partners.

In the context of termination, SHAs should regulate all consequences thereof, including settlement of liabilities, asset allocation, and survival of key obligations such as confidentiality and non-compete provisions.

Transfer of assets from the company to JV partners should observe certain requirements, irrespective of the origins of the assets. As a rule, once the asset is contributed to the share capital of the company, it becomes the company’s property. Consequently, the below requirements do not depend on whether the assets were contributed by the partner or originated from the company:

• Under Romanian law, related-party transactions (such as a transfer between the company and a shareholder) should comply with the transfer pricing rule.
• For companies incorporated as SAs, transfer of assets requires prior approval of an extraordinary meeting of shareholders, where the value of the assets concerned will exceed 50% of the book value of the company’s total assets on the date of the transaction.
• Transfer of certain assets (eg, immovable properties) requires certain formalities for validity (eg, the agreement must be concluded in authentic form) or for opposability to third parties (eg, transfer agreement is opposable only upon registration with the Land Book).

The position differs in a contractual JV. There, each associate remains the owner of the assets it contributed unless the agreement provides that they become common property or that a right in rem is granted, so on termination those assets simply revert to the contributing associate. Assets acquired in the course of the venture are allocated according to the quotas agreed in the JV agreement, which is why that allocation should be expressly regulated at the outset.

Romanian law contains no dedicated regime for JV exits, but several statutory provisions constrain how an exit can be implemented, and some create exit rights that the agreement cannot displace:

• for companies incorporated as SRLs, transfer of shares to third parties requires approval of shareholders holding at least 75% of the share capital, if the articles of association do not provide otherwise;
• for companies incorporated as SAs, the shares are transferred upon registration of the transfer with the shareholders’ registry;
• a shareholder of an SRL may withdraw in the cases provided by the articles of association, with the agreement of all other shareholders, or for good cause with court approval, and may be excluded by the court in the cases set out in the Companies Law; and
• a shareholder of an SA that votes against certain fundamental resolutions, including a change of the company’s object of activity, legal form or seat abroad, or a merger or division, has a statutory right to withdraw and to be bought out.

Except for specific rules relating to share transfer, exit strategy is otherwise subject to free negotiation between the JV partners. Exit mechanisms may include buyouts, IPOs and recapitalisation.

In the case of a JV structured as a joint-lead investment (ie, one equally held by the partners), any exit would require the consent of both parties (irrespective of statutory provisions), consent that must not be unreasonably withheld after a certain period. Collaboration obligations should be included for the non-selling shareholder – eg, co-operation to provide the relevant information for the antitrust filing(s).

Where the JV is led by the majority shareholder, the SHA typically entitles such leading partner to trigger the exit alone and to drag the minority participant’s share via the drag-along mechanism.