2023 Investment Climate Statements: Romania

Policies Towards Foreign Direct Investment

Romania actively seeks foreign direct investment and offers a market of around 19 million consumers, a relatively well-educated workforce at competitive wages, a strategic location, and abundant natural resources. To date, favored areas for U.S. investment include IT and telecommunications, energy, services, manufacturing – especially in the automotive sector, defense, healthcare, consumer products, insurance, and banking.

Through a government decision on February 23, 2023, the government established the Romanian Agency for Investment and Foreign Trade (ARICE) as a new lead agency to promote and facilitate foreign investment in Romania. ARICE, as part of the Prime Minister’s office, will have a broader mandate than its predecessor InvestRomania. Whereas InvestRomania was limited to providing promotional and advisory services to support foreign investors, ARICE will be able to serve as a point-of-contact for investors with government officials and will contribute to public and legislative policy processes on investments and foreign trade.

Romania’s accession to the EU on January 1, 2007, helped solidify institutional reform. However, the lack of legislative and regulatory predictability and impact assessments, as well as low institutional capacity, continue to negatively affect the investment climate. As in any foreign country, prospective U.S. investors should exercise careful due diligence, including consultation with competent legal counsel, when considering an investment in Romania. Governments in Romania have repeatedly allowed political interests or budgetary imperatives to supersede accepted business practices in ways harmful to investor interests.

The energy sector, in particular, suffers from frequent, unanticipated changes. The windfall profit tax instituted in 2018, and amended in 2022, applies to both onshore and offshore natural gas producers, who must pay royalties on gas they extract in Romania based on the Vienna Central European Gas Hub (CEGH) price. As energy prices surged in 2021-2022, Romania capped electricity and natural gas prices until April 2025. To comply with EU regulations, the government levied a windfall tax on natural gas and electricity producers’ profits and instituted in December 2022 a two-year solidarity contribution of 60 percent on profits over 120 percent of a producer’s last four-year average for companies with at least 75 percent of their turnover from crude petroleum, natural gas, coal extraction, treatment, and/or refining. Both Parliament and the government passed most of this legislation with little public consultation or regulatory impact assessments.

In March 2021, the Romanian Parliament passed a bill reinforcing the government’s authority to vet transfers of petroleum agreements to companies from non-EU countries, and to determine if a transfer poses a threat to Romania’s national security. Transfer of a petroleum agreement must be approved through a government decision.

Investments involving public authorities can be more complicated than investments or joint ventures with private Romanian companies. Large deals involving the government, particularly public-private partnerships, can be stymied by vested political and economic interests or delayed by a lack of coordination between government ministries.

Designed to recoup drug reimbursement costs that exceeded state-budgeted amounts, Romania’s claw back tax was 27.65 percent in 2019. In May 2020, the Romanian government approved a revised and differentiated claw back tax, capped at 25 percent for innovative medicines, 20 percent for generic medicines, and 15 percent for locally produced medicines. While the 2020 legislation provided some relief to pharmaceutical companies, the claw back tax continued to negatively affect the availability of drugs in the Romanian marketplace. In February 2022, the Romanian Competition Council fined five plasma therapies producers for allegedly colluding to limit immunoglobulin supplies in the Romanian market between 2015 to 2018.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities are free to establish and own business enterprises, and to engage in all forms of remunerative activity. Romanian legislation and regulation provide national treatment for foreign investors, guarantee free access to domestic markets, and allow foreign investors to participate in privatizations. There is no limit on foreign participation in commercial enterprises. Foreign investors are entitled to establish wholly foreign-owned enterprises in Romania (although joint ventures are more typical), and to convert and repatriate 100 percent of after-tax profits.

Romania has established legal parameters to resolve contract disputes expeditiously. Mergers and acquisitions are subject to review by the Romanian Competition Council. Under the Competition Law, the Competition Council must notify Romania’s Supreme Council of National Defense (CSAT) of mergers or acquisitions of stocks or assets that could affect national security. CSAT then reviews the referred mergers and acquisitions for potential threats to national security. The Romanian capital account was fully liberalized in 2006, prior to joining the EU in 2007. Foreign firms are allowed to manage and administer their investments, and to assign their contractual obligations and rights to other Romanian or foreign investors.

In 2022, Romania transposed EU Regulation (EU) 2019/452 into national legislation on foreign direct investment (FDI) screening, establishing a screening mechanism for FDI from non-EU countries or through entities controlled directly or indirectly by non-EU individuals or entities. The screening generally applies to FDI above $2.16 million (€2 million) in strategic sectors. Screening can also apply to investments below the threshold that could jeopardize national security or public order. FDI screening can apply to new investments in sectors CSAT has identified as strategic. These sectors include citizens’ security; border security; energy security; transport security; supply of vital resources; critical infrastructure; information systems; communications systems; financial, fiscal, banking, and insurance security; production and circulation of weapons, ammunition, explosives and toxic substances; industrial security; disaster protection; protection of agriculture; environmental protection; and privatization and management of state-owned enterprises (SOEs).

Other Investment Policy Reviews

In January 2022, the Organization for Economic Cooperation and Development (OECD) opened accession discussions with Romania, and published an economic survey with initial recommendations on how Romania can further its socioeconomic development. Among other findings, the OECD recommended that Romania continue to digitalize and modernize its tax administration to raise tax collection and improve tax compliance; to strengthen its administrative capacity to absorb EU funds; and to address gaps in transportation infrastructure.
The OECD technical review process, a multi-year assessment of Romania’s candidacy against OECD standards and policies in areas such as the investment climate, governance, and environmental protection, began on December 15, 2022.

Business Facilitation

The National Trade Registry has an online service available in Romanian at https://portal.onrc.ro/ONRCPortalWeb/ONRCPortal.portal . ARICE, replacing InvestRomania, will offer assistance to foreign investors and will maintain the investment agency’s website at http://www.investromania.gov.ro/web/ .

In addition to the procedures required of a domestic company, a foreign parent company establishing a subsidiary in Romania must authenticate and translate its documents. As of 2022, foreign companies must comply with investment screening reviews. A Trade Registry judge must hold a public hearing on a company’s application for registration within five days of submission of the required documentation. Applicants can submit and monitor the status of their registration documents online.

Companies in Romania are free to open and maintain bank accounts in any foreign currency. In practice, Romanian banks offer services only in the Romanian leu (RON) and certain hard currencies (euros and U.S. dollars). The minimum capital requirement for domestic and foreign LLCs is RON 1 ($0.22). Areas for improvement include making all registration documents available to download online in English.

Romania defines microenterprises as having an annual turnover of less than $539,000 (€500,000) and less than nine employees, small and medium-sized enterprises (SMEs) as having net annual turnover of less than $54 million (€50 million), or holding total assets less than $46 million (€43 million) and less than than 250 employees. Regardless of ownership, microenterprises and SMEs enjoy “de minimis” and other state aid schemes from EU funds or from the state budget. Business facilitation mechanisms provide for equitable treatment of women in the economy.

Outward Investment

There are no restrictions or incentives on outward investment.

Transparency of the Regulatory System

Romanian law requires consultations with stakeholders, including the private sector, and a 30-day comment period on legislation or regulation affecting the business environment (the “Sunshine Law”). However, public comments are not published. The Sunshine Law’s public consultation timelines do not have enforceable penalties or sanctions, and thus public authorities regularly bypass its provisions without harm. The EC’s 2022 European Semester Report for Romania stressed that evidence-based policymaking remains a long-standing structural challenge. Public consultations and impact assessments remain limited, with hasty changes to legislation passed in extraordinary proceedings.

Some draft pieces of legislation pending with the government are available in Romanian at the General Secretariat of the Government’s website ( https://sgg.gov.ro/1/). However, proposed items for cabinet meetings are not always publicized in advance or in full. Generally, the agenda of cabinet meetings includes links to the legislation drafts (government decisions, ordinances, emergency ordinances, or memoranda) slated for government decision, but this is not always the case. Pending parliament legislation is available at the Chamber of Deputies’ ( http://www.cdep.ro/pls/proiecte/upl_pck.home ) and the Senate’s ( https://www.senat.ro/legis/lista.aspx ) websites. The Chamber of Deputies is the decision-making body for economic legislation.

Foreign investors point to excessive time required to secure zoning permits, environmental approvals, property titles, licenses, and utility hook-ups.

International Regulatory Considerations

As an EU member state since 2007, Romanian legislation is largely driven by the EU Acquis Communautaire, the accumulated body of EU legislation. European Commission (EC) regulations are directly applicable while national legislation implements directives at the national level. Romania’s regulatory system incorporates European standards. Romania has been a WTO member since January 1995 and a member of the General Agreement on Tariffs and Trade (GATT) since November 1971. Technical regulation notifications submitted by the EU are valid for all Member States. The EU signed the Trade Facilitation Agreement (TFA) in October 2015. Romania has implemented all TFA requirements.

Legal System and Judicial Independence

Romania recognizes property and contractual rights, but enforcement through the judicial process can be lengthy, costly, and difficult. Foreign companies engaged in trade or investment in Romania often express concern about the Romanian courts’ lack of expertise in commercial issues. Romania has no specialized commercial courts, but it does have specialized civil courts. Judges generally have limited experience in the functioning of a market economy, international business methods, intellectual property rights, or the application of Romanian commercial and competition laws. As stipulated in the Constitution, the judicial system is independent from the executive branch and generally considered procedurally competent, fair, and reliable. Affected parties can challenge regulations and enforcement actions in court. Such challenges are adjudicated in the national court system.

Inconsistency and a lack of predictability in the jurisprudence of the courts or in the interpretation of the laws remains a major concern for foreign and domestic investors and for wider society. Even when court judgments are favorable, enforcement of judgments is inconsistent and can lead to lengthy appeals. Failure to implement court orders or cases where the public administration unjustifiably challenges court decisions constitute obstacles to the binding nature of court decisions.

Mediation as a tool to resolve disputes is gradually becoming more common in Romania, and a certifying body, the Mediation Council, sets standards and practices. The professional association, the Union of Mediation Centers in Romania, is the umbrella organization for mediators throughout the county. Court-sanctioned and private mediation is available at recognized mediation centers in every county seat.

Romania has no legal mechanism for court-ordered mediation, but judges can encourage litigants to use mediation to resolve their cases. If litigants opt for mediation, they must present their proposed resolution to a judge upon completion of the mediation process. The judge must then approve the agreement.

Laws and Regulations on Foreign Direct Investment

Since joining the EU in 2007, Romania has worked assiduously to create an EU-compatible legal framework consistent with a market economy and investment promotion. At the same time, implementation of these laws and regulations frequently lags or is inconsistent, and lack of legislative predictability undermines Romania’s appeal as an investment destination.

Romania’s legal framework for foreign investment is encompassed within a substantial body of law largely enacted in the late 1990s and subject to frequent revision. Fiscal legislation is revised frequently, often without scientific or data-driven assessment of the impact the changes may have on businesses and the economy.

Given the state of flux of legal developments, investors are strongly encouraged to engage local counsel to navigate the various laws, decrees, and regulations as several pieces of investor-relevant legislation have been challenged in both local courts and the Constitutional Court. Few hostile takeover attempts have been reported in Romania. Romanian law has not focused on limiting potential mergers or acquisitions. When considering association in joint ventures with foreign investors, private firms may want to review the FDI screening legislation.

Competition and Antitrust Laws

Romania has extensively revised its competition legislation, bringing it closer to the EU Acquis Communautaire and corporate best practices. As of 2014, companies with a market share below 40 percent were no longer considered to have a dominant market position. This eliminated the need for the Romanian Competition Council (RCC) to conduct full investigations, saving considerable time and money for all parties involved. Resale price maintenance and market and client sharing are still prohibited, regardless of the size of either party’s market share. The authorization fee for mergers or takeovers ranges between $10,764 (€10,000) and $53,820 (€50,000). The Fiscal Procedure Code requires companies that challenge an RCC ruling to front a deposit while awaiting a court decision on the merits of the complaint.

Romania’s Public Procurement Directives outline general procurements of goods and equipment, utilities procurement (“sectorial procurement”), works and services concessions, and remedies and appeals. An extensive body of secondary and tertiary legislation accompanies the four 2016 laws and has been subject to repeated revisions. Separate legislation governs defense and security procurements. In a positive move, this body of legislation moved away from the previous approach of using lowest price as the only public procurement selection criterion, allowing authorities to use price, cost, quality-price ratio, or quality-cost ratio. The revised laws also allow bidders to provide a simple form (the European Single Procurement Document) to participate in the award procedures. Only the winner must later submit full documentation. As of April 2021, only companies from EU member states or signatory countries of the WTO Public Procurement Agreement have been allowed to bid on public procurements in Romania.

Public procurement laws stipulated that challenges regarding procedure or an award can be filed with the National Complaint Council (NCC) or the courts. Disputes regarding execution, amendment, or termination of public procurement contracts can be subject to arbitration. The revised laws also stipulated that a bidder must notify the contracting authority before challenging either the award or procedure. Not fulfilling the notification requirement can result in the NCC or the courts rejecting the challenge. Public procurement laws allow contracting authorities to exclude bidders that previously infringed competition rules.

The EC’s 2022 European Semester Country Report for Romania noted that quality of public procurement in Romania remains a major challenge. Transparency, competition, and efficiency in procurement processes remain problematic.

Expropriation and Compensation

The law on direct investment includes a guarantee against nationalization and expropriation or other equivalent actions. The law allows investors to select the court or arbitration body of their choice to settle disputes. Several cases involving investment property nationalized during the Communist era remain unresolved. In doing due diligence, prospective investors should conduct a thorough title search to ensure land or assets are not subject to any pending restitution claims.

Dispute Settlement

ICSID Convention and New York Convention

Romania is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Romania is also a party to the European Convention on International Commercial Arbitration (Geneva) and is a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID). Romania’s 1975 Decree 62 provides for legal enforcement of awards under the ICSID Convention.

Investor-State Dispute Settlement

Investors brought 22 cases against Romania in the International Center for Settlement of Investment Disputes (ICSID). Three of them involved U.S. investors. The arbitral tribunal ruled in favor of Romania in two of them. Twelve investor-state arbitration cases against Romania are currently pending with the ICSID. Local courts recognize and enforce foreign arbitral awards against the government. Romania has no history of extrajudicial action against investors. On September 2, 2021, the Court of Justice of the European Union (CJEU) ruled that intra-EU arbitrations based on the Energy Charter Treaty (ECT) violate EU law. The decision is likely to affect pending intra-EU arbitrations brought under the ECT.

International Commercial Arbitration and Foreign Courts

Romania increasingly recognizes the importance of investor-state dispute settlement and has provided assurances that the rule of law will be enforced. Many agreements involving international companies and Romanian counterparts provide for the resolution of disputes through third-party arbitration. Local courts recognize and enforce foreign arbitral awards and judgments of foreign courts. There are no statistics on the percentage of cases in which Romanian courts ruled against state-owned enterprises (SOEs).

Romanian law and practice recognize applications to other internationally known arbitration institutions, such as the International Chamber of Commerce (ICC) Paris Court of Arbitration and the United Nations Commission on International Trade Law (UNCITRAL). The Chamber of Commerce and Industry of Romania (CCIR) administers the International Commerce Arbitration Court. In November 2016, the American Chamber of Commerce in Romania (AmCham Romania) established the Bucharest International Arbitration Court (BIAC). This arbitration center focuses on business and commercial disputes involving foreign investors and multinationals active in Romania.

Arbitration awards are enforceable through Romanian courts under circumstances similar to those in other Western countries, although legal proceedings can be protracted.

Bankruptcy Regulations

Romania’s bankruptcy law contains provisions for liquidation and reorganization that are generally consistent with Western legal standards. These laws usually emphasize enterprise restructuring and job preservation. To mitigate the time and financial cost of bankruptcies, Romanian legislation provides for administrative liquidation as an alternative to bankruptcy. However, investors and creditors have complained that liquidators sometimes lack the incentive to expedite liquidation proceedings and that, in some cases, their decisions have served vested outside interests. Both state-owned and private companies tend to opt for judicial reorganization to avoid bankruptcy.

In December 2009, Company Voluntary Agreements (CVAs) were introduced as a debt settlement mechanism for creditors and debtors to establish partial debt service schedules without resorting to bankruptcy proceedings. The global economic crisis prompted Romania to shorten insolvency proceedings in 2011.

Investment Incentives

Currently, customs and tax incentives are available to investors in six free trade zones. State aid is available for investments in free trade zones under EU regional development assistance rules.

In 2007, Romania adopted EU regulations on regional investment aid and instituted state aid schemes for large investments, SMEs, and job creation. Both Romanian and EU state aid regulations aim to limit state aid in any form, such as direct state subsidies, debt rescheduling schemes, debt for equity swaps, or discounted land prices. The European Commission (EC) must be notified of and approve Romanian state aid that exceeds the pre-approved monetary threshold for the corresponding category of aid. To benefit from the remaining state aid schemes, the applicant must secure financing separate from any public support for at least 25 percent of the eligible costs, either through his own resources or through external financing, and must document this financing in strict accordance with Ministry of Finance guidelines. Under amendments passed in 2010, the state aid scheme for regional projects scores applications based not only on the economics of the project, but also on the GDP per capita and unemployment rate for the county of intended investment. When granting state aid, the Ministry of Finance requires that the state revenues through taxes equals the state aid granted. Numerous foreign and U.S. firms have successfully applied for and received Romanian state aid. However, the government remains delinquent on reimbursing promised tax breaks or rebates to some foreign companies, for example, in the film industry. When applying for state aid, companies should be aware that state budget funding availability and regulatory compliance could affect disbursements.

The green certificate system, part of the Renewable Energy Law, provided incentives for certain types of renewable energy. The incentives are not available for renewable energy investments made after January 1, 2017, but investors that qualified under can trade certificates until 2032. Green certificates are traded in parallel with the energy produced. They are intended to provide an additional source of revenue for renewable energy producers. Repeated revisions to the support system – including deferring release of the certificates and lowering the mandatory green certificate quota that consumers and suppliers must acquire – have created instability in the renewables investment climate. Energy intensive industrial consumers receive exemptions from acquiring green certificates. Romania responded to the international energy crisis in winter 2021-2022 by suspending the green certificate system between April and December of 2022.

As an EU member state, Romania must receive EC approval for any state aid it grants that is not covered by the EU’s block exemption regulations. The Romanian Competition Council acts as a clearinghouse for the exchange of information between the Romanian authorities and the EC. The EC has launched formal investigations into several privatizations where the state aid grantors failed to properly notify the EC of aid associated with the privatizations. Investors should ensure that the government entities with which they work fully understand and fulfill their duty to notify competition authorities. Investors may wish to consult with EU and Romanian competition authorities in advance to ensure a proper understanding of notification requirements.

Companies operating in Romania can also apply for aid under EU-funded programs that are co-financed by Romania. When planning a project, prospective applicants should note that a project cannot start before the financing agreement is finalized. The application, selection, and negotiation process can be lengthy. Applicants also must secure financing for non-eligible expenses and for their co-financing of the eligible expenses. Finally, reimbursement of eligible expenses – which must be financed upfront by the investor – is often very slow. Procurements financed by EU-funded programs above a certain monetary threshold must comply with public procurement legislation. To increase the rate of EU funds absorption, Romania has amended regulations to allow applicants to use the assets financed under EU-funded programs as collateral. However, Romanian public institutions’ understaffing and lack of management expertise, cumbersome procedures, and applicants’ difficulty obtaining private financing still significantly impede the absorption and implementation of EU funds.

Foreign Trade Zones/Free Ports/Trade Facilitation

Free Trade Zones (FTZs) received legal authority in Romania in 1992 under the authority of the Ministry of Transportation. General provisions include unrestricted entry and re-export of goods, and exemption from customs duties. The law further permits the leasing or transfer of buildings or land for terms of up to 50 years to corporations or natural persons, regardless of nationality. Foreign-owned firms have the same investment opportunities as Romanian entities in FTZs. Currently six FTZs, primarily located on the Danube River or close to the Black Sea, operate in Sulina, Constanta-Sud Agigea, Galati, Braila, Curtici-Arad, and Giurgiu. The administrator of each FTZ is responsible for all commercial activities performed within the zone.

Performance and Data Localization Requirements

The government generally does not mandate local employment. A notable exception is the Offshore Law (Law 256/2018), which requires that at least 25 percent of the employees of offshore titleholders be Romanian citizens with fiscal residence in Romania. No excessively onerous visa, residence, work permit, or similar requirements inhibit mobility of foreign investors or their employees. The government imposed no conditions on permission to invest. The government does not require investors to establish or maintain data storage in Romania. Romania neither follows nor has legislation requiring localization in relation to goods, technology, or data. Romania does not require foreign IT providers to turn over source code or provide access for government surveillance. Romania has no measures preventing or unduly impeding companies from freely transmitting customer or other business-related data outside the country. The government imposed no performance requirements as a condition for establishing, maintaining, or expanding an investment.

Real Property

The Romanian Constitution, adopted in December 1991 and revised in 2003, guarantees the right to ownership of private property. Mineral and airspace rights, and similar rights, are excluded from private ownership. Under the revised Constitution, foreign citizens can gain land ownership through inheritance. With EU accession, citizens of EU member states can own land in Romania, subject to reciprocity in their home country.

Companies owning foreign capital may acquire land or property needed to fulfill or develop company goals. If the company is dissolved or liquidated, the land must be sold within one year of closure and may only be sold to a buyer(s) with the legal right to purchase such assets. Investors can purchase shares in agricultural companies that lease land in the public domain from the State Land Agency. However, legislation passed in Fall 2020 imposed additional restrictions and limitations on the purchase of agricultural land by foreign investors.

The 2006 legislation that regulates the establishment of specialized mortgage banks also makes possible a secondary mortgage market by regulating mortgage bond issuance mechanisms. Commercial banks, specialized mortgage banks, and non-bank mortgage credit institutions offer mortgage loans. Romania’s mortgage market is now almost entirely private; the state-owned savings bank (CEC Bank) also offers mortgage loans. The Electronic Archives of Security Interests in Movable Property (AEGRM) oversees the filing of transactions regarding mortgages, assimilated operations, or other collateral provided by the law as well as their advertising. Most urban land has clear title, and the National Cadaster Agency (NCA) is slowly working to identify property owners and register land titles. According to NCA data, the cadaster registry contained 52 percent of the estimated building registry as of January 2023.

Romania has marginally improved implementing digital records of real estate assets, including land. However, the cadaster property registry is far from complete; inaccurate and incomplete information for land ownership continues to challenge private investors ‎and SOEs alike.

Intellectual Property Rights

Romania was removed from the Watch List of the U.S. Trade Representative’s Special 301 Report in 2022 after taking significant action to improve intellectual property (IP) protection and enforcement. In January 2022, Romania appointed its first-ever national IP enforcement coordinator, who is charged with developing a national IP strategy and coordinating interagency efforts. Romania has also taken other actions to improve efforts to investigate and prosecute IP crime. For example, in 2021, the Economic Police established a department dedicated to online piracy cases and dedicated a minimum of two additional officers per county to IP investigations. Moreover, the General Prosecutor Office’s Intellectual Property Coordination Department resumed coordination of monthly IP working group sessions, comprising 17 public institutions, to develop the national IP strategy, including action items and an implementation timeline. The United States will continue to monitor Romania’s efforts to finalize and implement the strategy and to take specific actions to prioritize IP protection and enforcement.

Romania is a signatory to international IPR-related conventions, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and has enacted legislation protecting patents, trademarks, and copyrights. Romania passed broad IPR protection enforcement provisions as required by the WTO, yet gaps remain in enforcement. Romania signed the Internet Convention to protect online authorship. In 2020, Romania passed a law to enhance the transparency of collective rights management of copyrights. In 2020, Romania passed legislation implementing the EU Trademark Directive, and in March 2022, approved legislation to implement the EU Copyright Directive. The new legislation introduced a series of changes, including removal of requirements for graphic representation of trademarks and allowing for registration of sound marks, multimedia marks, and holograms. To increase transparency, the law included provisions to clarify dates of completed trademark registration and their entry into force.

Romania is both a transit and destination country for counterfeit goods. The People’s Republic of China is the top country of origin for counterfeit goods arriving by sea or air, while Turkey is the primary origin point for goods crossing the Bulgaria-Romania border. Customs officers can seize counterfeit products ex-officio and destroy them upon inspection and declaration by the rights holder. The government is responsible for paying for the storage and destruction of the counterfeit goods. The National Customs Directorate reported the seizure of 683,804 million items of counterfeited goods in 2022, with a value of $1.2 million. Major categories of seized goods included clothing, perfumes and cosmetics, technical accessories and parts, and toys. Customs authorities closely coordinate their efforts with the European Commission’s Anti-Fraud Office (OLAF), the European Observatory on Infringements of Intellectual Property Rights, and other stakeholders to increase transborder cooperation in line with the EU’s IPR action plan.

Patents

Romania is party to the World Intellectual Property Organization (WIPO) Patent Cooperation Treaty, the Paris Convention, and the European Patent Convention. Romanian patent legislation generally meets international standards with foreign investors accorded equal treatment with Romanian citizens under the law. Patents are valid for 20 years. Patent applications can be filed online. Since 2014, Romania has also enforced a distinct law regulating employee inventions. The right to file a patent belongs to the employer for up to two years following the departure of the employee.

Trademarks

Romania is party to the Madrid Agreement, the Singapore Treaty, and the Trademark Law Treaty. Romania’s trademark and geographical indications law was amended in 2010 to make it fully consistent with equivalent EU legislation at that time. The EU has since adopted the Trademark and Geographic Indications Directive (EU Directive 2436/2015). Romania implemented the directive under Law 84/1998, which entered force in 2020. An update to the trademark and geographical indications law in December 2022 allowed trademark invalidation and revocation requests to be made directly with the Romanian State Office for Inventions and Trademarks (OSIM).

Copyrights

Romania is a member of the Berne Convention, the WIPO Copyright Treaty, and the WIPO Performances and Phonograms Treaty. The Romanian Copyright Office (ORDA) promotes and monitors copyright legislation (https://orda.ro/). The Trademark and Copyright Office (OSIM) is responsible for copyright registration ( https://osim.ro/ ). The General Prosecutor’s Office (GPO) provides national coordination of IPR enforcement. Many magistrates still tend to view copyright piracy as a victimless crime, and this attitude has resulted in weak enforcement of copyright law.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

Romania welcomes portfolio investment. In September 2019, the Financial Times and the London Stock Exchange (FTSE Russell) promoted the Bucharest Stock Exchange (BVB) to Emerging Secondary Capital Market status from Frontier Capital Market classification.  The Financial Supervision Authority (ASF) regulates and supervises securities and insurance markets as well as private pension funds. The ASF implements the registration and licensing of brokers and financial intermediaries, the filing and approval of prospectuses, and the approval of capital market mechanisms.

The BVB resumed operations in 1995 after a nearly 50-year hiatus. The BVB operates a two-tier system with the main market consisting of 83 companies. The official main index, BET, is based on an index of the 20 most active stocks. BET-TR is the total return on market capitalization index, adjusted for the dividends distributed by the companies included in the index. Overall, the BVB calculates and distributes in real time 12 indexes. In 2015, the BVB opened an alternative trading system (MTS-AeRO) with relaxed listing criteria. MTS-AeRO has 275 listed companies, which are mostly small- and medium-sized enterprises (SMEs). The BVB allows trade in corporate, municipal, and international bonds. Investors can use gross basis trade settlements, and trades can be settled in two net settlement cycles. The BVB’s integrated group includes trading, clearing, settlement, and registry systems. The BVB’s Multilateral Trading System (MTS) allows trading in local currency of 14 foreign stocks listed on international capital markets.

Public institutions do not impose restrictions on payments and transfers. Country funds, hedge funds, private pension funds, and venture capital funds continue to participate in the capital markets. Minority shareholders have the right to participate in any capital increase. Romanian capital market regulation complies with EU standards with accounting regulations incorporating EC Directives IV and VII.

Money and Banking System

Thirty-four banks and one credit cooperative national union currently operate in Romania. The largest is the privately-owned Transilvania Bank (19.1 percent market share), followed by Austrian-owned Romanian Commercial Bank (BCR-Erste, 13.9 percent); French-owned Romanian Bank for Development (BRD-Société Générale, 10.2 percent); Dutch-owned ING (9.0 percent); Austrian-owned Raiffeisen (8.8 percent); state-owned National Savings Bank (CEC Bank) (8.8 percent); and Italian-owned UniCredit (8.7 percent).

The banking system is stable, well-provisioned, and profitable relative to its European peers. According to the National Bank of Romania (BNR), despite the COVID-19 pandemic, NPLs accounted for 2.8 percent of total bank loans as of September 2022. And as of September 2022, the banking system’s solvency rate was 21.5 percent, which has remained steady over recent years, while the banking system’s return on equity was 16.6 percent compared to an EU average of only 7.9 percent.

The government and the BNR have encouraged foreign investment in the banking sector, and mergers and acquisitions are not restricted. The only remaining state-owned banks are CEC Bank and EximBank, comprising 12.1 percent of the market combined, which grew after the latter’s 2020 acquisition of Banca Romaneasca from Greek-owned NBG.

While the BNR must authorize all new non-EU banking entities, banks and non-banking financial institutions already authorized in other EU countries need only notify the BNR of plans to provide local services based on the EU passport.

Foreign Exchange and Remittances

Foreign Exchange

Romania does not restrict the conversion or transfer of funds associated with direct investment. All profits made by foreign investors in Romania may be converted into another currency and transferred abroad at the market exchange rate after payment of taxes.

Romania’s national currency, the Leu, is freely convertible in current account transactions, in accordance with the International Monetary Fund’s (IMF) Article VII.

Remittance Policies

There is no limitation on the inflow or outflow of funds for remittances of profits, debt service, capital gains, returns on intellectual property, or imported inputs. Proceeds from the sales of shares, bonds, or other securities as well as from the conclusion of an investment, can be repatriated.

Romania implemented regulations liberalizing foreign exchange markets in 1997. The inter-bank electronic settlement system became fully operational in 2006, eliminating past procedural delays in processing capital outflows. Commission fees for real-time electronic banking settlements have gradually been reduced.

Capital inflows are also free from restraint. Romania concluded capital account liberalization in September 2006, permitting non-residents and residents abroad to purchase derivatives, treasury bills, and other monetary instruments.

Sovereign Wealth Funds

In January 2020, the government repealed plans to establish a Sovereign Development and Investment Fund (SDIF).

Privatization Program

Privatization has stalled since 2014. The government has repeatedly postponed the initial public offering (IPO) for hydropower producer Hidroelectrica. Fondul Proprietatea, a minority owner in Hidroelectrica, plans to divest its 15 percent stake of the company through a separate IPO tentatively scheduled for 2023.

As an EU member state, Romania must notify the EC’s General Directorate for Competition of significant privatizations and related state aid. Prospective investors should seek legal counsel to ensure compliance with relevant legislation. In previous privatizations, the government’s failure to consult with and then formally notify the EC resulted in delays and complications. State aid schemes aim to enhance regional development and job creation through financial support for new jobs or investment in new manufacturing assets. The Ministry of Finance issues public calls for applications under the schemes.

Private enterprises compete with public enterprises under the same terms and conditions with respect to market access and credit. Energy production, transportation, and mining are majority state-owned sectors. The Romanian government retains majority equity in electricity and natural gas transmission. The Ministry of Energy has authority over energy generation assets and natural gas production. According to the EU’s Third Energy Package directives, the same entity cannot control generation, production and/or supply activities, and at the same time control or exercise any right over a transmission system operator (TSO). Consequently, natural gas carrier Transgaz and national electricity carrier Transelectrica are under the Government’s General Secretariat. The Ministry of Transport and Infrastructure has authority over the entities in the transportation sector, including rail carrier CFR Marfa, national air carrier Tarom, and the Constanta Port Administration. Romania currently has no plans to privatize companies in the transportation sector.

Romanian law allows for the inclusion of confidentiality clauses in privatization and public-private partnership contracts to protect business proprietary and other information. In some high-profile privatizations, Parliament has compelled the public disclosure of such provisions.

Additional Resources

Department of State

• Country Reports on Human Rights Practices ( https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/);
• Trafficking in Persons Report ( https://www.state.gov/trafficking-in-persons-report/);
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ( https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/) and;
• North Korea Sanctions & Enforcement Actions Advisory ( https://home.treasury.gov/system/files/126/dprk_supplychain_advisory_07232018.pdf ).

Department of Labor

• Findings on the Worst forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  );
• List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods );
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab ) and;
• Comply Chain ( https://www.dol.gov/ilab/complychain/ ).

Climate Issues

Romania’s climate objectives align with EU strategies, including the 2030 Agenda and European Green Deal. Romania has introduced policies and incentives to mitigate and reduce carbon emissions, but climate and environmental policies are seldom implemented and enforced consistently. In 2020, Romania had the second lowest greenhouse gas emissions (GHG) in the EU (4 tons per capita compared to an EU average of 7 tons). However, the emissions intensity of the economy is still twice as high as the EU average. In December 2020, the European Commission updated the Nationally Determined Contributions (NDC) targetting emission reduction to at least 55 percent from 1990 levels by 2030. The new NDC superceded Romania’s 43 percent emissions reduction target from the 2030 Climate and Energy Framework.

Romania struggles with an extensive list of legacy environmental challenges, such as poor air quality, inadequate waste management practices, and insufficient protective measures for natural areas. These legacies may hamper Romania’s ability to achieve policy outcomes that preserve biodiversity and clean air. A September 2022 Romanian Presidency report on the country’s climate change challenges highlighted the need to improve institutional capacity and to base environmental policies on science.

Romania has taken steps to improve its climate and environment framework: http://www.mmediu.ro/categorie/strategia-nationala-pentru-paduri-2030/430 . It boasts a diverse geography, with many protected areas in biologically diverse areas such as mountains, plains, and coastal wetlands. Romania has more than 300 square miles of old-growth forests, the most in the EU. Romanian forests and woodlands represent a substantial carbon sink and cover six percent of the total forest and woodland carbon dioxide uptake at the EU level. Adopted in October 2022, the 2030 National Strategy for Forests, promised to further increase forests, expand strictly protected areas, create payments for conservation easements, and acknowledge forests as carbon sinks. Romania plans to reforest over 55,000 hectares by 2026 with NRRP funds. Owners planting new forests are eligible for a $456 per hectare per year carbon storage bonus for 20 years. Romania adopted a Circular Economy Strategy in September 2022 and is also updating its biodiversity, climate change, draught and land degradation strategies to allow for improved policy coordination. Romania’s 2023-2030 National Strategy for Environment and Climate Change Education aims to improve awareness on climate and environment issues.

Recurrent and underreported illegal logging remains a concern despite progress by the government to improve wood traceability. Public investigations into non-compliant wood shipments are frequent. In 2018, the Romanian government excluded non-governmental organizations from the management of protected natural areas, which diminished the quality of management of affected sites. Unpredictability remains a concern as Parliament can amend environmental legislation with insufficient consultation, which sometimes leads to misalignment and noncompliance with EU biodiversity provisions and goals.

Overall environmental taxes remain low, representing 1.96 percent of GDP and 7.21 percent of Romanian tax revenue in 2021, up from 1.9 percent and 7.07 percent in 2020. Sectoral regulatory incentives are in place to limit carbon emissions and promote more sustainable business and consumer practices. Romanian legislation upholds the EU principle of extended producer responsibility, applicable to all waste generated via the purchases of electric and electrical appliances as well as for plastic, glass, metal, and paper packaging. Producers and municipalities inconsistently uphold recycling quotas and targets. In October 2021, Romania adopted a legislative framework to create a Deposit Return System (DRS) for beverage packaging. The DRS, which is expected to become fully operational by 2025, requires consumers to pay a guarantee, as part of the purchase price, that they recover when they return packaging to retailers.

Romania aims to replace 250,000 cars older than 15 years by 2026. Companies or individuals that trade in older vehicles are eligible to receive vouchers up to $3,454 (RON 15,000) to purchase a hybrid vehicle or up to $13,126 (RON 57,000) to purchase an electric vehicle. Romania has used EU-funded programs to improve energy efficiency in buildings, both privately and publicly owned. It also has run programs to incentivize replacement of low-efficiency household appliances with new energy-efficient ones.

In 2022, the EC Complementary Delegated Act defined technical screening criteria for specific nuclear and gas activities covered by EU taxonomy. Inclusion of these activities, under strict conditions, created opportunities for Romania to further adopt advanced technologies, construct and operate new nuclear power plants (NPPs), and upgrade existing NPPs. The Delegated Act recognized nuclear energy would play a role in the green energy transition beyond 2050. It also limited permits to 2045 for new NPPs and 2040 for NPP upgrades. It stipulated that gas-fired power generation should transition to renewable gas or low carbon emissions by 2035. Covered natural gas activities included gas-fired power generation, high efficiency cogeneration, and centralized heating and cooling. The Delegated Act affirmed the right of the EU member states to develop energy programs based on national priorities and available energy resources.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Romania is a member of the UN Anticorruption Convention and the Council of Europe’s Group of States Against Corruption (GRECO). Romania is not a member of the OECD Anti-Bribery Convention but is in the process of adhering to this framework as part of its OECD accession bid.

Romania’s National Anticorruption Strategy (2021-2025), approved in December 2021, is spearheaded by the Ministry of Justice and has an enhanced focus on environmental crime.

Resources to Report Corruption

Contact at government agency responsible for combating corruption:

National Anticorruption Directorate (DNA)
Str. Stirbei Voda nr. 79-81, Bucuresti
+40 21 312 73 99
anticoruptie@pna.ro 
http://www.pna.ro/sesizare.xhtml?jftfdi=&jffi=sesizare 

Contacts at “watchdog” organizations:

Laura Stefan
Executive Director
Expert Forum
Strada Semilunei, apt 1, Sector 2, Bucuresti,
+40 21 211 7400
laura.stefan@expertforum.ro 
office@expertforum.ro 

Cristina Guseth
Director
Freedom House Romania
Bd. Ferdinand 125, Bucuresti
+40 21 253 2838 guseth@freedomhouse.ro 

Elena Calistru
President
Funky Citizens
Colivia, Pache Protopopescu 9
+40 723 627 448
elena@funkycitizens.org