Hategan Attorneys analyzes the new instructions issued by the Competition Council on the calculation of the value of foreign direct investments, which clarify key issues for investors looking to do business in Romania, given that at the end of April 2025, there were 259,407 foreign-owned companies in Romania, with a total share capital of $72.345 billion, according to the National Trade Register Office (ONRC).

 

Romania’s foreign direct investment regime requires investors to file a notification when they take control or become effectively involved in the management of a company operating in Romania, if the transaction concerns a sensitive sector and exceeds the threshold of €2 million. For transactions in critical sectors below this threshold, investors can file voluntary notifications and the Romanian authorities encourage them to do so proactively.

To respond to these challenges, the Competition Council published in the Official Monitor of July 30, 2025, the detailed instructions for the application of Government Emergency Ordinance No. 46/2022 on the measures implementing Regulation (EU) 2019/452 for the examination of foreign direct investments.

According to Ioana Chiper Zah, Managing Associate at Hategan Attorneys, “the new rules clarify what elements must be included in the value – not just cash, but also capital, tangible or intangible assets, services and other consideration in kind provided by the investor. Thus, any foreign or European investor must notify the Commission for the Examination of Foreign Direct Investment (CEISD) when the planned investment exceeds the value threshold set by law. In practice, this obligation has created difficulties, mainly due to the lack of clear rules for calculating the value of the investment.“

When investors notify a transaction, they must determine the total value of the investment according to these rules. If they are buying shares or shares in a company, they take into account the price paid or the capital contribution. If they make a capital increase or other contribution without transfer of securities, the value of the investment is the total amount of the contribution, including the share premium if any. Conversely, when an existing shareholder contributes additional capital without changing control of the company, the investment is not covered by the ordinance.

For transactions where there is no direct price – such as exchanges of assets or contributions in kind – investors use the market value of the assets acquired. If this is not available, they may use book or tax value or an independent valuation report. If the investment combines several forms – cash and assets, for example – the values are added together to arrive at the final amount.

If the transaction includes services or other benefits in kind, these are valued at the market value at the time of the application. When the investment is in the form of a loan or financing agreement, the full amount of the loan, including interest, is taken into account, except for ordinary bank loans, which do not confer control over the company.

For the conversion of previous holdings into equity, the initial amount paid is added to any additional amount involved in the conversion. In the case of publicly traded securities, investors take the closing price on the day before the notification is filed or, if not traded on that day, the last published price.

When the investment takes place in several stages, the values of each stage are cumulated. If there are conditional benefits or terms, investors include them in the total value. And in international transactions involving assets in more than one country, the value of the assets in Romania is taken into account; if this value is not separate, the total value of the transaction is used.

“With these rules, the authorities aim to provide a clear and uniform valuation framework so that investors know exactly when they need to notify CEISD and obtain authorization. This mechanism increases transparency and helps both investors to plan transactions correctly and the state to protect strategic sectors – such as energy, infrastructure or emerging technologies – without discouraging the necessary capital flows to the economy,” adds Ioana Chiper Zah.