Why is Romania a good option for foreign investments?

Situated in the southeastern part of Europe, at the crossway of the European Union, Eastern European states and the Middle East, Romania appears to be an eclectic and interesting market for foreign investors. As the 9th country in the EU in terms of size and the 7th in terms of population, Romania offers a flourishing environment for investments due to its growing economy, its vast natural resources and due to the large consumption market it provides.

Romania is a parliamentary republic, a member of the European Union and of NATO, withholding multiple relations at regional and international level.

According to the latest reports provided by Romania’s National Bank (BNR), the main sectors for foreign investments are: manufacturing, real estate, IT and tech, trade and financial intermediation. 

What to know when investing or settling in Romania

When deciding to invest in Romania, one needs to take into consideration the benefits and challenges this operation involves. The present article aims to provide a legal overview on setting up a business in Romania.

Forms of business vehicles:

The company incorporation in Romania can be made within the following five types, the most common ones being joint stock companies and limited liability companies:

  • Unlimited guarantee collective company (societate în nume colectiv).
  • Limited partnership (societate în comandită simplă).
  • Limited stock partnership (societate în comadită pe acţiuni).
  • Joint stock company (societate pe acţiuni).
  • Limited liability company (societate cu răspundere limitată).

Both foreign and local companies are allowed to establish secondary offices in Romania, as follows: subsidiaries, which are treated as Romanian legal persons and have the same status as Romanian companies, branches and representative offices, that don’t have legal personality of their own.

Real Estate:

Real Estate is an indispensable part of an investment, therefore it’s important to analyze the conditions in which foreign individuals or companies can acquire private ownership of land in Romania. Romanian citizens and companies have the free right to acquire and own real estate, regardless of the citizenship of the shareholder. Foreign investors, on the other hand, are able to acquire residential or commercial buildings, but are not allowed, in principle, to own the land itself. Therefore, as a general rule, foreign citizens or companies may have the right to use the land – establishing a right of ”superficies” – but cannot acquire the land itself.

However, there are certain conditions under which land acquisition by foreign citizens and stateless persons is allowed. According to the provisions of the Romanian Constitution and based on Romania’s accession to the EU, a citizen of a EU member state, a stateless person which resides in a member state or in Romania or a legal entity established in one of the EU member states, are allowed to acquire land in Romania under the same terms as a Romanian citizen or as a Romanian legal entity.

In what concerns the non-EU citizens or legal entities and the stateless persons, they are able to acquire the right of ownership over Romanian land only if an international treaty to which Romania is a party stipulates this prerogative and if this right is reciprocal.


When it comes to capital requirements, the foreign investors need to follow the same legal frame applicable to domestic corporations.  According to Romanian law, there is a minimum capital threshold starting from of 1 RON for the limited liability companies, under the condition that the amount deposited is divided into equal shares and one of 90,000 RON for joint stock companies and limited stock partnerships.


As a member state of the European Union, Romania must apply the EU regulations when it comes to the import process, as set-out by the EU Customs Code. According to the EU regulations, a common EU tariff system must be applied by all member states, including Romania. Moreover, there are certain goods for which the EU imposes quantitative quotas if imported from non-EU countries.

Fiscal policy:

All the foreign legal entities that are carrying out activities in Romania through a permanent establishment are obliged to pay income tax, as set out by Romanian legislation. In what concerns foreign companies, only the income and the expenses associated to the permanent establishment are taken into consideration.

The Romanian corporate income tax is relatively low compared to the one applied in other EU member states. The standard tax rate applied to the corporate profit is 16%, calculated as the difference between the taxable income and the deductible expenses. For the income deriving from the distributed dividend a 5% tax rate is applied.

For microenterprises, a lower tax rate of 1% or 3% on turnover is applicable, depending on the number of employees they have.

KEY Takeaways:

  • There are five forms of business vehicles available in Romania: unlimited guarantee collective company, limited partnership, limited stock partnership, joint stock company and limited liability company.
  • As a general rule, foreign citizens cannot acquire the right of ownership over Romanian land; exceptions apply for EU citizens, stateless person which resides in a member state or in Romania or a legal entity established in one of the EU member states.
  • There are minimum capital requirements applicable when setting-up certain companies.
  • Imports in Romania are ruled by EU regulations.
  • Foreign legal entities which have permanent establishments in Romania are subject to Romanian corporate income tax. The general profit tax rate is 16%.


BUCHAREST 08/04/2021