Licesing and Regulatory
Prior to 1990, most land in Romania
was owned by the State, by State-owned entities or by the so-called "agricultural cooperatives". Individuals owned only a limited amount of farmland and residential land. After 1990, specific regulations governing the restitution of property taken over by the State either legally or abusively during the socialist regime, back to their former owners, were passed. Thus, the main regulations are Land Law no. 18/1991, Law no. 54/1998 on the “Transfer of Titles on Land”. Law no. 1/2000 on the “Restitution of Agricultural and
Land ” and Law no. 10/2001 on the “Legal Regime of Immovable Properties Abusively Taken from their Legal Owners between 6 March 1945 and December 1989”, as subsequently amended. Romanian individuals and legal entities (regardless of the citizenship or nationality of their shareholders) are free to acquire title to the land.
In accordance with the provisions of the Romanian Constitution, as amended in 2003, foreign citizens and stateless individuals will be entitled to acquire ownership title over land in Romania only with the observance of the conditions resulting from the accession of Romania into the European Union and from other international treaties Romania is a party to, on the basis of reciprocity and in accordance with the provisions of a special type of law ("lege organica", in Romanian) to be passed in this respect, as well as by legal inheritance. As per the provisions of the draft law regulating the conditions on the foreign citizens' and stateless individuals' right to acquire ownership title over land, initiated by the Romanian Ministry of Justice, foreign citizens of EU member states shall be entitled to acquire title to land only after 5 years from the accession of Romania into the European Union.
Currently, foreign individuals and companies may own buildings and/or obtain the right to use the land (based on lease agreements, concession agreements, etc). Also, Romanian or foreign entities and individuals are allowed to rent land and/or buildings. Authentication by a notary public is compulsory for the land transfer to be valid. Validity of transfer of title to the land against third parties is to be ensured by the registration of such with the relevant Land Registry. When purchasing real estate property, one should take into account that there are certain regions in
where the registration of ownership in the Land Register has been implemented only recently, and therefore a proper review of ownership history when purchasing real estate is quite difficult to assess. It is therefore advisable for legal title checks to be conducted in respect of any property, before acquiring it. Furthermore, the National Cadastre and Land Registration Agency has recently been established (through the reorganization of the former National Cadastre Office), with its remit to include real estate property registration in
, a role taken over from the Ministry of Justice. This Agency also coordinates and oversees the performance of cadastral work at the national level.
Under the new legal provisions, ownership right and other rights on immovable property are to be recorded with the real estate information register (i.e. Land Registry) solely on the basis of transfer deeds, which must be concluded in authentic (notarized) form. The public notary having prepared the deed of conveyance, which alters, establishes or extinguishes an interest in real estate, shall apply for the registration with the Real Estate Registry of such deeds, no later than the day after their conclusion.
Mortgages are created under authentic deeds and in order to have effect towards third parties, they must be recorded in the Land Registry. Also the intent to create a mortgage for land/building can be recorded in the Land Registry. Recording of the intent to mortgage expires after two months as of the registration in the Land Registry. In order to enforce the mortgage, the creditor (e.g. a bank) must resort to an enforcement agent to start the enforcement procedures. Commencement of this procedure is registered in the Land Book. Objections can be filed against the enforcement procedure, which could suspend such procedure. In case of bankruptcy, the creditor submits its claim with the liquidator and has priority to the sale proceeds of the asset mortgaged, over any other receivables, except for the taxes and liquidation costs related to the sale of the asset.
The following major pieces of legislation (in addition to taxation law) regulate foreign investment in
Ø The Commercial Code
Ø The Company Law
Ø The Competition Law
Ø The Law on Direct Investment
Ø The Law regarding the promotion of direct investments with a significant impact on economy
Ø The Law on Banking Activities
Ø The Securities Law
Ø The Commercial Companies Privatization Law
Ø The Trade Register Law.
Ø State Monopolies;
Ø National Security.
Foreign investments are not to be subject to nationalization, expropriation, requisition, or any other measure of similar effect, except when this happen motivated by reasons of public interest and even then only after 'appropriate compensation'.
is party to a number of bilateral investment guarantees and is a member of the Multilateral Investment Guarantee Agency (MIGA). There are, however, no government guarantees available to compensate for inconvertibility.
Restrictions on Foreign Investment
No restrictions are imposed on foreign ownership or participation in joint ventures and in Romanian companies. It is possible for a foreign entity to own 100% of any type (SA, SRL) of a Romanian-registered Company.
Currently, the main industrial sectors in which additional governmental approval is necessary for investors are: