In line with global and European security trends, Romania has implemented through Government Emergency Ordinance 46/2022 (“GEO 46/2022”) stricter FDI screening regulations than the ones existent before.

In a nutshell, any European (including Romanian) or foreign investment of any nature, intended to establish or maintain lasting, direct relationships between the investor and the Romanian business receiving funds, including those enabling active involvement in the management of the company exceeding €2 million, made in a sensitive sector as outlined in the Supreme Council of National Defense (“CSAT”) Decision no 73/2012 and in accordance with the criteria set forth in Article 4 of Regulation 2019/452, is subject to the FDI review conducted by the Commission for examining foreign direct investments (“CEISD”). Under certain circumstances, the €2 million threshold may be lower, such as for investments in critical national infrastructures.

It’s important to note that even minority acquisitions may trigger FDI screening - for example, a 10% stake acquisition has been considered within FDI regulations (Decision 198/2024). Furthermore, Romania's FDI regime encompasses the concept of “new investment,” expanding oversight to initial investments, capacity expansions or diversifications of production.

In essence, any investment, normally over €2 million, could fall under FDI regulations, particularly considering CEISD’s broad interpretation of FDI scope, including of the sensitive sectors concerned.

In 2024, public information reveals a notably active CEISD, which has issued 257 decisions for investments which did not raise security issues. In fact, from the public information available, only one transaction has been conditionally approved (through Government decision no. 35/12.02.2024). Public statements from the CEISD General Secretary indicate that further conditional approvals are anticipated in the future.

The level of activity of CEISD is even greater, as for EU investments it is the Competition Council who sends approval letters to the concerned investor, and as in some cases CEISD issued non-intervention letters, both of which are not published.

Despite the numerous confidential sections in CEISD’s decisions, likely for security reasons, making it challenging to discern the rationale behind its analysis of whether an investment falls under the FDI regime, it has become clearer over time how the FDI framework operates.

Additionally, the FDI framework is being continuously clarified. Recently, the draft guidelines for GEO 46/2022 was published, providing valuable insights into how the investment value should be calculated.

Further on, we provide below insights into CEISD’s practices concerning specific types of investments.

Such investments were included in the sensitive domain of "the security of citizens and communities", without making available the reasoning for this or any other criteria taken into consideration - e.g., criteria regarding the proximity of the real estate to an essential infrastructure etc.

In light of the above, investors must stay alert, carefully assessing each investment on a case-by-case basis to determine whether FDI notification is required. The stakes are high, as failing to secure the CEISD’s approval before implementation of the investment can result in substantial penalties (up to 10% of annual turnover) and contracts through which such an investment is made are deemed null and void. In line with global and European security trends, Romania has implemented through Government Emergency Ordinance 46/2022 (“GEO 46/2022”) stricter FDI screening regulations than the ones existent before.

In a nutshell, any European (including Romanian) or foreign investment of any nature, intended to establish or maintain lasting, direct relationships between the investor and the Romanian business receiving funds, including those enabling active involvement in the management of the company exceeding €2 million, made in a sensitive sector as outlined in the Supreme Council of National Defense (“CSAT”) Decision no 73/2012 and in accordance with the criteria set forth in Article 4 of Regulation 2019/452, is subject to the FDI review conducted by the Commission for examining foreign direct investments (“CEISD”). Under certain circumstances, the €2 million threshold may be lower, such as for investments in critical national infrastructures.

It’s important to note that even minority acquisitions may trigger FDI screening - for example, a 10% stake acquisition has been considered within FDI regulations (Decision 198/2024). Furthermore, Romania's FDI regime encompasses the concept of “new investment,” expanding oversight to initial investments, capacity expansions or diversifications of production.

In essence, any investment, normally over €2 million, could fall under FDI regulations, particularly considering CEISD’s broad interpretation of FDI scope, including of the sensitive sectors concerned.

In 2024, public information reveals a notably active CEISD, which has issued 257 decisions for investments which did not raise security issues. In fact, from the public information available, only one transaction has been conditionally approved (through Government decision no. 35/12.02.2024). Public statements from the CEISD General Secretary indicate that further conditional approvals are anticipated in the future.

The level of activity of CEISD is even greater, as for EU investments it is the Competition Council who sends approval letters to the concerned investor, and as in some cases CEISD issued non-intervention letters, both of which are not published.

Despite the numerous confidential sections in CEISD’s decisions, likely for security reasons, making it challenging to discern the rationale behind its analysis of whether an investment falls under the FDI regime, it has become clearer over time how the FDI framework operates.

Additionally, the FDI framework is being continuously clarified. Recently, the draft guidelines for GEO 46/2022 was published, providing valuable insights into how the investment value should be calculated.

Further on, we provide below insights into CEISD’s practices concerning specific types of investments.

Such investments were included in the sensitive domain of "the security of citizens and communities", without making available the reasoning for this or any other criteria taken into consideration - e.g., criteria regarding the proximity of the real estate to an essential infrastructure etc.

In light of the above, investors must stay alert, carefully assessing each investment on a case-by-case basis to determine whether FDI notification is required. The stakes are high, as failing to secure the CEISD’s approval before implementation of the investment can result in substantial penalties (up to 10% of annual turnover) and contracts through which such an investment is made are deemed null and void.