Romania: Extension of the FDI screening regime to EU investors
Government Emergency Ordinance no. 108/2023, abbreviated as GEO 108/2023, introduces significant changes to Romania's legal framework concerning foreign direct investment (FDI). The FDI regulations underwent a substantial overhaul in April 2022 and experienced additional amendments in June 2023.
Effective from 6 December 2023, GEO 108/2023 encompasses several noteworthy modifications, outlined below:
1. EU investments under FDI screening
GEO 108/2023 broadens the scope of FDI screening to include investments from the EU. The updated definition of an EU investment pertains to any investment made by an EU investor, aiming to establish or maintain lasting and direct connections with the enterprise to which these funds are intended, in order to perform economic activity in Romania. This includes investments allowing an effective participation in the management or control of a venture. Unlike the previous criteria, all EU investments, regardless of whether they are subject to merger control procedures or not, are now subject to FDI screening if the investment exceeds EUR 2 million and falls within the sensitive sectors listed in CSAT Decision no. 73/2012.
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2. New procedural timelines
GEO 108/2023 introduces revised procedural timelines. Foreign or EU investors are required to furnish all necessary information to the Commission for Examination of Foreign Direct Investments (CEISD) within 15 calendar days of the request. CEISD is mandated to provide its opinion within 60 calendar days upon receiving a complete filing. If the opinion is positive, the Competition Council will issue clearance within 10 calendar days for EU investments and 30 calendar days for other foreign investments.
3. FDI screening fee
The ordinance establishes a screening fee for FDI, including EU investments, set at EUR 10,000. The calculation is based on the exchange rate provided by the National Bank of Romania on the last day of the month preceding the application submission. This fee is payable upon filing and is refundable if CEISD determines that the FDI screening conditions for the specific investment are not met.