Romania

Contact your central contactperson for A-Law law Firm Romania, attorney-at-Law Patricia Leers (NL/EN/FR) or Carmen Nita (NL/ROU/EN).

Why trade or invest in Romania?

Given the large size of the country, Romania is one of the top ranked countries in the CEE region with a large market base.

Foreign investors have the scope to cater to these markets and earn valuable returns on their investments.  Since the Inception of Romania into European Union on 1st January, 2007, the country has undergone a drastic change in its political structure. Today, Romania boasts itself of being one of the most politically and socially stable countries in the European Union.

Being a part of the European Union, Romania has access to funds directed towards the development of the member countries (European funds). Romania has several bilateral agreements with other countries and diplomatic relations and it has signed free trade agreements with other EU countries.

One of the most significant advantages of investing in Romania is the strategic Geographic location of the country; its central location in the EU provides an easy gateway for foreign investors to easily access other markets within the European Union and also allows the investors to penetrate through the lucrative markets of Middle-East countries. 

Foreign investors can readily have access to highly qualified labor force with technical qualification at a very low cost.  

The country has abundant high quality natural resources including mineral deposits and highly fertile agricultural land. The Romanian government offers free access to the energy supplies.

Other than that, the start costs of a business are very low in Romania; and the corporate tax is also one of the lowest: 16% for a ‘normal’ company and 6% for a small one.

There are many highly skilled workers in Romania. The salary costs are still below the European average.

The most important Investment areas are:

Property / Real Estate

The demand for real estate properties greatly outstrips the supply; thereby there is great scope for rise in the prices of the properties. It thus presents a great opportunity for foreign investors to earn profits.

Romania has a strong currency; the beneficial exchange rate means even better buying power for investors.  The central bank of Romania is implementing 100% mortgage scheme for property buyers, this will further push the property prices by about 15%.

Tourism

Romania is an exotic tourist destination. It is popular for its fairy tale romantic destination. It thus opens up great avenues for foreign investment. Investors can greatly invest in establishing restaurants, buying motels, hotels, luxurious beach side villa and other accommodation facilities and rent it out to the visiting tourists.

IT (Information Technology)

Romania is one of the rapidly growing IT markets in the central European region. The country has made tremendous progress in all IT sectors including mobile phones and Internet. The growth leaves a scope for foreign investment in the sector. The investors can invest in establishing Research and Development centers in the country.

Agriculture

Low prices for land acquisitions are an incentive for potential buyers and investors since the agricultural land price in Romania is up to five times lower than in other European countries. Romania offers 1500-4000e/ha farmland, one of the best deals worldwide. Thanks to EU funds that benefit Romania, fertile land and low agricultural competitiveness, investment in this area is a very profitable business opportunity.

If you acquire a land with a very good soil and high fertility, you should not have to worry about the not cultivated land plots, because for example, in areas that are of interest for cereal, the investor who buys land here will have 100% of the land worked through local farmers who are interested in renting a land.

Not all plot lands are fertile and suitable for obtaining food, so Romanian citizens and investors can opt for energetic cultures to produce biomass, without entering into competition with agriculture for food. Investors can acquires such plots at a much lower price and invest in energetic culture to obtain higher returns and in the same time be ecological. By setting up these types of crops that are planted only once and are operated annually you protect the forest, no longer being needed for irrational cutting firewood. In terms of financial efficiency, this type of culture, according to the calculation of gross margin results, is one of the highest in the agriculture industry.

Some particularities of the Romanian law and the Romanian legal system you should know

Romania has a special labor and employment legislation. In order to legally dismiss an employee, the employer has to follow very strict formal rules, such as the supervision by a disciplinary commission.

Also special for Romania is the procedural ‘stamp tax’; you cannot initiate a legal procedure in Romania without paying the procedural stamp tax; there is only one centralized bank account where this tax should be paid; otherwise the whole procedure will be unacceptable for the court.

The Romania government enacted a special law in 1991 that would regulate the foreign investments in the country. The law is very investor friendly. As per the law foreign investors are provided several financial benefits in terms of tax exemptions on their capital investments, loans at reduced rates of interests and also tax benefits on investment in real estate.   The law also grants other fringe benefits to foreign investors including complete ownership rights of the business enterprise and repatriation of after tax profits.

The Romanian Government’s rule to levy a flat rate of corporate tax at 16%, which is one of the lowest tax rates in the European Union, can greatly benefit the foreign investors. Romania is sure to become a global economic super power in the future. All foreign investors investing in the country are sure to earn valuable profits from their investments. 

A-Law law firm Romania

A-LAW has covered a wide range of economic and civil areas related to Romania ranging from real estate, infrastructure and construction to transport and logistics; from establishment of new companies to inheritance and family issues; from agriculture and forestry to tourism and HR and employment issues including secondment.

A-LAW services comprehend due diligence, advisory services, mediation and litigation.  A particular scope of work lies in the guidance of commercial cooperation relationships, distribution, franchising, commercial agency and procurement.  Considering the importance of EU funded projects, A-LAW provides guidance for compliance audits by in-house attorneys understanding the culture and business habits.