New rules for direct investments: Romania is tightening the reins!

New rules for direct investments: Romania is tightening the reins!

Foreign investments play a crucial role in economic development in Romania. In order to protect national security and strategically important sectors, the Romanian government has issued comprehensive regulations for the approval of direct investments within the framework of Emergency Regulation No. 46/2022 (DVO 46). This regulation is subject to ongoing changes, most recently on December 6, 2023 and December 20, 2024, to reflect current economic circumstances, such as adz.news reported.

A central element of DVO 46 is the approval requirement for certain direct and new investments. All foreign, EU and Romanian investors are obliged to register their investments before implementation. A comprehensive review by a commission subordinate to the Romanian Cartel Office is required. This particularly concerns investments in areas of activity such as security and critical infrastructure that are considered sensitive.

Details on the approval requirement

The definition of direct investment includes participation in the management or control of a company. Reporting obligations exist for three central categories:

• Ausländische Direktinvestitionen
• EU-Investitionen
• Neue Investitionen

The reporting obligation applies if the value of the investment is over two million euros or if it occurs in one of the sensitive areas mentioned above. Investments requiring approval must be applied for through a formalized process, regardless of the registration requirement. Violations - particularly in the case of unreported investments requiring approval - result in substantial penalties of up to 10% of global sales and the closure of the project.

The approval process includes several steps: the approval application, the assessment of the safety impacts and the final decision on approval, if necessary taking into account additional security measures. The proposed fee structure is 10,000 euros, although a refund is possible for investments that do not require approval.

Deadlines and procedures

The deadlines for the different phases of the approval process are set: The Commission's proposal will be made within 60 days of the application being complete. The Cartel Office has 30 days to make a decision, while statements from various authorities must be obtained within 20 days of the application being submitted. A statement from CSAT is required within 90 days.

These developments are part of a broader trend that includes the tightening of foreign trade laws in Central and Eastern Europe. Loud cms-hs-blogs Countries such as Poland, Hungary and the Czech Republic have introduced similar regulations to protect strategically important sectors. These new requirements are partly a response to the global economic changes caused by COVID-19 and aim to impose stricter controls on investments in critical infrastructure and sectors.

In summary, Romania's DVO 46 represents part of this far-reaching effort to ensure the security and stability of the national economy while regulating access for investors.