Risk Factors
A significant problem facing foreign investors is the rather difficult procedure of obtaining building permits, town-planning certificates, and the like. Of course, this problem is not unique to Romania. The legal regime pertaining to constructions involves compliance with certain administrative procedures related to the issuance of authorizations which stand in connection with the construction or renovation of buildings. Among other things, a town-planning certificate is required for any construction or demolition. This certificate contains the legal and technical elements of the land and construction in force as at the date of the application, as well as the zoning requirements that need to be met and the list of approvals and permits required for the construction/demolition.
The construction authorization is mandatory for the performance of any construction. Failure to obtain such an authorization entitles the authorities to impose fines and to demolish any unauthorized construction. Dismantling may only be performed based upon a demolition authorization. Construction, which does not affect the resistance of a structure, the initial features of the construction or related installations, or their architectural aspects, may be performed without obtaining a construction authorization.
The competent authorities are obliged to issue the town-planning certificate, as well as the construction/demolition authorization, within 30 days of the date of its application. However, in practice, this term is rarely ever observed. Most often, the system exhausts the applicant by long lines at the clerk's office, additional documentation "required" by unpublished internal regulations, and different types of additional permits sought.
Other concerns:
Ø Political
Ø EU Accession
Ø Financial Instability
Ø Property ownership
Ø Market Demand
Procedures can become time consuming. Various governmental signatures from multiple ministries are required.
The commitment of Investors for the entire period of the Ghencea Project may prove crucial to the success of the entire undertaking. While Vision Holdings is primarily looking to secure the project from an operational perspective, investors may equally contribute to the success of it by demonstrating a long term commitment to the project throughout its lifespan. Premature exits which will trigger early liquidation considerations might affect the project as a whole and might result in adverse consequences. At the same time Vision Holdings is attempting not to be too restrictive to any exiting possibilities where motivated by reasonable or serious cause. To this end, an exiting gate is provided in the event of circumstances, which constitute a serious cause for the premature exit from the project.
