This article provides an up-to-date overview of the currently existing FDI regimes in Romania.
Emergency Government Ordinance No. 46/2022 on measures to implement Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the examination of foreign direct investment in the Union, as well as for the amendment and completion of Competition Law No. 21/1996.
National Defence Council Decision No. 73/2012. Competition Law No. 21/1996; Regulation on Economic Concentrations, as approved by Order of the Romanian Competition Council Chairman No. 431/2017.
EU FDI Screening Regulation (Regulation (EU) 2019/452), OJ L 79I, 21 March 2019.
Criteria for triggering the FDI filing:
- the investment needs to be made by a non-EU investor*);
- the investment must occur in certain sectors deemed sensitive from a national security standpoint; and
- the investment must have a value exceeding EUR 2m, although screening can occur even for transactions below this value if they are likely to trigger potential risks or effects for national security or public order.
*Note: A newly tabled bill envisage to extend the scope to EU investments, i.e. EU investors will need to file their investments in sensitive sectors.
Foreign direct investments can consist in:
- changes in control in the ownership structure of a company;
- an investment of any kind made by a foreign investor for the purpose of establishing or maintaining long-lasting and direct links between the investor and an undertaking and/ or a separate unit of an undertaking, via (a) funds which are made available for carrying out an economic activity in Romania, and (b) which allow the foreign investor to exercise control over the management of the business;
- greenfield investments and/or extensions of current capacity productions, diversifying the production or otherwise making significant changes to the current production processes (i.e. "new" investments).
Exclusions from the scope:
- portfolio investments, consisting in (a) acquisitions of shares on stock exchanges which (b) do not lead to any direct involvement in the management of the
- purely EU investments.
The investment must take place in one of the following domains (deemed of strategic importance for national security):
- security of citizens and communities;
- border security;
- energy security;
- transport security;
- supply of vital resources security;
- critical infrastructure security;
- security of IT and communication systems;
- security of financial, tax, banking and insurance activities;
- security of weapons, munitions, explosives, toxic substances manufacturing and circulation;
- industrial security;
- protection against disasters;
- protection of agriculture and environment;
- protection of state-funded companies or of their management during privatisation.
The above sectors will be reviewed in conjunction with the sensitive areas defined by the EU FDI Regulation.
Investments in media companies
Transactions concerning companies (i) with audio-visual licences or that (ii) issue publications with an average of at least 5,000 printed copies per day in the last calendar year or that (iii) have a web portal with a minimum of 10,000 views per month are bound to special transparency rules. Such transactions will be subject to a public consultation process of a minimum 30 calendar days.
Process and timetable
Competent authority: FDI Screening Commission (via the Romanian Competition Council)
Mandatory filing requirement: Yes
Filing deadline: N/A (from a practical perspective, filing should occur as close as possible to the transaction signing date). The FDI regime applies to all “ongoing transactions”, including investments in relation to which the parties announced their intention to conclude an agreement (e.g. via a preliminary agreement, MoU or LoI).
Responsibility for filing: Investor(s) gaining sole or joint control, or making a "new" investment.
Standstill requirement: Yes
Sanctions: Fines of up to 10 % of the total worldwide turnover for (i) gun-jumping, (ii) providing inaccurate or misleading information, or (iii) failure to observe the commitments set in a conditional clearance decision. The new fining regime entered into force on 18 May 2022.
Length of the proceedings: Non-conditional clearance is expected in principle within 135 calendar days as of the date when filing is deemed complete (requests for information stop the clock). The timeline applicable in case of conditional clearances or rejection decisions is not transparent as these can only be made via a Government decision.
By Georgiana Badescu, Partner, and Cristiana Manea, Attorney at Law, Schoenherr