1. What is the current legal landscape for your practice area in your jurisdiction?

The Romanian legal framework remains broadly aligned with EU standards and generally offers a familiar environment for international investors. Over the past years, it has nonetheless undergone notable evolution, driven primarily by domestic fiscal pressures and by a renewed international focus on foreign investment screening.

On the fiscal side, Romania’s high budgetary deficit has led to a series of recent legislative changes with a direct impact on transactions. These include increases of dividend and capital gains tax rates, as well as a new obligation to notify the tax authorities for transactions involving transfers of control in limited liability companies, together with a requirement to provide guarantees for outstanding tax liabilities of the target. Moreover, new rules relating to the capitalization of the companies, affecting dividend distributions, shareholder lending and debt-to-equity conversions, have been introduced. Taken together, these measures reflect a more assertive approach by the authorities and require increased attention to tax structuring and compliance in M&A transactions.

At the same time, a defining shift in the legal landscape over the past years has been the expansion of the foreign direct investment (FDI) screening regime. The scope of review applies not only to non-EU investors, but also to EU-based investors in strategic sectors, with a relatively low threshold of EUR 2 million per investment. These developments have had a tangible impact on deal timelines and transaction planning, particularly in sectors such as energy, technology, defence and infrastructure. There are also recent proposals to further expand the regime to cover any asset transfer reaching the relevant threshold if related to critical infrastructure or, among others, critical technologies, such as AI, robotics, aerospace, quantum or nuclear technologies.

Overall, while the current environment is characterised by increased regulatory scrutiny and a greater need for an early, holistic assessment of fiscal and regulatory issues, Romania continues to offer a stable, EU-aligned framework for private equity deals. At the same time, the fiscal consolidation programme announced by the Romanian authorities is expressly coupled with commitments to streamline administrative processes and reduce regulatory and bureaucratic burdens, with the stated objective of improving the overall business and investment climate. If implemented as envisaged, these measures are expected to have a positive impact on transaction efficiency and deal execution over the medium term.

2. What three essential pieces of advice would you give to clients involved in your practice area matters?

Identify and plan early for key regulatory approvals, with particular focus on FDI screening and merger control.

Clients should prioritise an early assessment of regulatory approvals, with specific attention to the FDI screening regime and merger control clearance. While in practice FDI clearance is often obtained within approximately six to eight weeks, timing can vary depending on the sector and the sensitivity of the target’s activities, and authorities may issue additional requests for information that extend the review period. Importantly, the authorities accept FDI filings based on a term sheet or letter of intent, allowing the review process to run in parallel with due diligence and transaction negotiations, which can materially reduce overall deal timelines. In parallel, merger control thresholds and filing obligations should be assessed at an early stage, together with any additional sector-specific consent, such as from banking, financial, energy or environmental authorities, and appropriately reflected in the transaction timetable and conditions precedent.

Adopt an early, integrated approach to tax structuring and transaction financing.

In light of recent fiscal measures and the tightening of capitalisation rules, tax structuring should be addressed at an early stage and closely coordinated with acquisition financing and post-closing plans. Changes affecting dividend distributions, shareholder lending and debt-to-equity conversions require careful consideration, particularly in leveraged acquisitions or group restructurings. Early tax modelling, combined with a clear understanding of capital maintenance and solvency constraints, allows clients to preserve transaction economics, manage compliance risk and avoid the need for disruptive restructuring late in the process or post-closing.

Build flexibility into transaction execution through targeted structuring and documentation tools.

To manage increased regulatory and fiscal complexity, clients should adopt concrete measures to preserve flexibility without undermining execution certainty. These include the use of clear and tailored conditions precedent, appropriate long-stop dates, and mechanisms allowing for deferred or staggered transfers of control where regulatory clearance is pending. From a risk-allocation perspective, transaction documents should clearly address regulatory timing risk and tax exposures. In parallel, key post-closing integration matters, such as governance arrangements, management incentive schemes and identified synergies, should be considered early and, where appropriate, reflected in contractual protections or adjustment mechanisms.

3. What are the greatest threats and opportunities in your practice area law in the next 12 months?

M&A activity, and private equity transactions in particular, is expected to remain sensitive to geopolitical and macroeconomic developments over the next 12 months. A key source of risk continues to be regional instability. The ongoing war in Ukraine remains an important factor affecting investor sentiment; this uncertainty has recently been compounded by the complexity and unpredictability surrounding discussions on a potential peace settlement, the timing and terms of which remain unclear. These dynamics continue to influence risk assessments across Central and Eastern Europe, including Romania.

At domestic level, political factors are also relevant. The controversies surrounding the Romanian presidential elections at the end of 2024, extending into the first half of 2025, have contributed to a more cautious investment environment. In parallel, Romania is governed by a coalition comprising four political parties, which may affect the pace and sequencing of policy initiatives. In this context, investors are likely to focus on the consistency and predictability of measures affecting taxation, regulation and state participation in the economy.

Fiscal and regulatory uncertainty represents an additional challenge, as the extent to which additional changes will be required will depend largely on the progress of the consolidation programme over the coming year. Until greater visibility is achieved, the combination of increased tax burdens and additional procedural requirements is likely to continue to influence deal timelines and, in some cases, investor appetite.

Despite these challenges, the outlook is one of cautious optimism. Romania continues to benefit from strong structural tailwinds. A significant volume of funding remains to be deployed under the National Recovery and Resilience Plan (i.e., the COVID era-related EU funding programme), with substantial allocations expected to flow into infrastructure and related sectors in 2026, supporting both direct investment and follow-on M&A activity.

Further opportunities are expected to arise from the government’s stated intention to restructure certain state-owned enterprises, including through potential IPOs. These initiatives could generate transaction opportunities in their own right and are also likely to have positive secondary effects on the development, depth and liquidity of the Romanian capital markets, enhancing exit options for financial investors.

In addition, a growing number of regional and national funds have capital earmarked for deployment in Romania. This capital overhang, combined with Romania’s continued convergence with EU markets and its track record of resilience during periods of volatility, is expected to sustain M&A activity and build on the positive momentum observed in recent years, particularly in sectors such as technology, healthcare, energy and infrastructure.

All in all, while heightened uncertainty is likely to persist in the short term, Romania remains well positioned to benefit from structural investment drivers and continued investor interest, provided fiscal consolidation and reform efforts progress broadly as anticipated.

4. How do you ensure high client satisfaction levels are maintained by your practice?

For us, each mandate is an opportunity to build strong and reliable partnerships. Developing long-term relationships and acting as trusted advisors, rather than transaction-only counsel, is central to our approach.

We place strong emphasis on being proactive through close collaboration, transparency and alignment of interests. From the outset, we invest time in developing a deep understanding of our clients’ objectives, constraints and risk appetite, as well as the commercial and legal positions of counterparties. This enables us to anticipate potential issues, manage expectations on all sides and propose solutions and transaction structures that are both robust and achievable.

Responsiveness is a core element of how we deliver value to clients, particularly in the context of fast-paced and high-stakes transactions. We ensure a high level of involvement from partners and senior lawyers throughout the lifecycle of a mandate, allowing us to provide timely, focused and consistent advice. Our communication is clear, pragmatic and commercially oriented, translating complex legal considerations into practical, actionable guidance for investment teams, management and founders.

Finally, we are committed to providing best-in-class legal advice grounded in market-leading expertise and sector insight. Through continuous involvement in complex transactions and close engagement with clients across industries, we remain attuned to evolving market practice and regulatory developments. This depth of knowledge allows us to deliver advice that is not only technically sound, but also aligned with current market realities and industry-specific dynamics.

5. What technological advancements are reshaping your practice area law and how can clients benefit from them?

Technology is evolving rapidly, with artificial intelligence (AI) emerging as a transformative force in the M&A and private equity landscape. AI is reshaping how transactions are sourced, assessed and executed, with a tangible impact across multiple stages of the deal process.

One of the most immediate and practical applications is in legal due diligence, which is traditionally document-heavy, time-consuming and prone to manual error. AI-powered tools can efficiently process large volumes of data, automatically classify and compare documents, identify inconsistencies across templates, flag anomalies and detect recurring patterns. This significantly accelerates first-level reviews and enhances accuracy. As a result, lawyers can focus their time on higher-value analysis, rather than on repetitive or administrative tasks. For clients, this translates into faster execution, improved risk visibility and more efficient use of advisory budgets.

AI is also increasingly supporting transaction strategy and negotiations. By analyzing historical transaction data, market precedents and comparable deal terms, AI-based tools can help benchmark positions, identify prevailing market practice and assess negotiating ranges. Clients benefit from more informed decision-making and a clearer understanding of where flexibility or firmness is commercially justified.
At the same time, it is essential to recognize the limitations of technology. AI outputs are dependent on the quality and completeness of the underlying data and may not fully capture transaction-specific nuances or contextual factors. Accordingly, we view AI as an enabling tool rather than a substitute for legal judgement. Human expertise remains critical to interpret results, apply legal and commercial context and translate data into actionable advice.

In practice, the combination of advanced technology and experienced legal counsel allows us to deliver advice that is more efficient, more transparent and easier to understand, while preserving the depth of analysis required in complex private equity transactions. For clients, this means better-informed decisions, reduced execution risk and greater confidence throughout the transaction process.