Gruia Dufaut



Last updated: 14 December 2022

The global economic shock caused by the Covid-19 pandemic with effects all over the EU and the war in Ukraine have resulted in the enactment of protection measures across Europe and changed the paradigm of business development. Part of the global response to growing threats to strategic industries, from health care to energy and industrial production, the EU states have equipped with new instruments of control of foreign direct investments.

In Romania, the Emergency Ordinance of the Government no. 46/2022 (”GEO 46/2022”) harmonizes and corelates domestic law with the European law in screening foreign direct investments (”FDI”), namely with the provisions of the EU Regulation 2019/452 of the European Parliament and of the Council, in order to prevent circumvention of the screening mechanisms of foreign direct investments and to address risks to security or public order.

The new ordinance enacts a set of mandatory measures to condition outward investments aimed at sectors deemed strategic and likely to affect projects and programmes of interest for the Union.

Although a screening system for such investments has been in place since 2012, the new regulation increases complexity of the procedure and, considering interdependency across the European market, aims to tackle a potential massive sell-off of companies and industrial players, including SMEs, in the context of the current economic crisis.

Which foreign direct investments are targeted by the new regulation?

Investments in Romania topping EUR 2 billion (calculated at the exchange rate of the NBR on the last day of the financial year preceding the year of implementation of the operation) by a foreign investor (the natural person who is not citizen of an EU Member State or the legal person with the registered headquarter outside the EU or the legal person which, although headquartered in the EU, is controlled by persons or entities outside the EU) in strategic sectors, deemed as such under the law, shall require prior consent of a special commission created to this purpose, namely the Commission for FDI screening (“CFDIS”).

Exceptionally, lower investments may also be reviewed by the CFDIS if they are likely to have an impact on security or public order or if there are risks related thereto.

The new FDI review regime applies to both greenfield investments and any kind of existing investments (e.g., such as funds provision) by a non-EU investor enabling it to gain control over the management of an undertaking / separate unit of a company.

The same review also applies to changes in the ownership of a foreign investor legal entity if such change is likely to result in controlling, directly or indirectly, the company, including by developing an existing company, either by means of increasing the production capacity or of diversifying production by adding new products or services.

It should be noted that portfolio investments consisting of (i) share purchase on the stock exchange (ii) that do not involve direct immixture in the management of the company do not fall under the GEO 46/2022.

Also, purely intracommunity investments are not subject to approval. Essential fields The fields in which non-EU investments are subject to screening have been set under the Decision no. 73/2012 of the Supreme Council for Defense (“CSAT” in Romanian).

Therefore, are subject to screening and approval by the CFDIS investments in the following fields :

• Security of citizens and collectivities • Borders security • Energetic security • Transports security • Security of vital resources supply • Security of critical infrastructure • Security of IT and communication systems • Security of financial, fiscal, banking and insurance activities • Security of manufacture and circulation of weapons, ammunition, explosives, toxic substances • Industrial security • Protection against disasters • Protection of agriculture and of the environment • Protection of privatization operations of state-owned companies or of their management

Also, there are special transparency rules for investments in media companies.

Such companies refer to companies (i) holding audio-visual licences or (ii) having released publications of an average 5,000 printed copies / day during the previous calendar year or (iii) owning a web portal of minimum 10,000 views/ month.

Such transaction will be subject to public consultation of at least 30 calendar days.

The commission for foreign direct investments screening. FDI screening procedure Prior to the entry into force of the GEO no. 46/2022, foreign investments in one of the fields herein above was subject to approval by the CSAT, either by direct notice to CSAT or by notice of economic concentration to the Competition Council, who would refer the matter to CSAT.

The new regulation sets the legal framework for the creation of the Commission for FDI screening (“CFDIS”), a body without legal personality subordinated to the government and assisted by the Competition Council. Following review of the file submitted by a non-EU investor, the CFDIS may issue either (i) an opinion of approval of the FDI, (ii) a conditioned approval (subject to commitments or other measures) or (iii) a dismissal of the application for approval of FDI.

Pursuant to the legal provisions, the approval application shall include at least the information provided for in the EU Regulation 2019/452, namely : (a) the ownership structure of the foreign investor and of the of the undertaking in which the foreign direct investment is planned or has been completed, including information on the ultimate investor and participation in the capital ; (b) the approximate value of the foreign direct investment ; (c) the products, services and business operations of the foreign investor and of the undertaking in which the foreign direct investment is planned or has been completed ; (d) the Member States in which the foreign investor and the undertaking in which the foreign direct investment is planned or has been completed conduct relevant business operations ; (e) the funding of the investment and its source, on the basis of the best information available to the Member State ; (f) the date when the foreign direct investment is planned to be completed or has been completed. CFDIS will issue an opinion in maximum 60 days since the date when the application is declared complete.

Conditioned approval and dismissal of the application by the CFDI are conveyed to the Government, which, in its turn, issues a Decision of conditioned approval or, as the case may be, a decision for dismissal of the application.

It is important to point out that, if the CFDIS deems necessary to consult the CSAT, it will start a detailed review of the application.

Such detailed review procedure may, in certain situations, be initiated also upon request by the CSAT.

Penalties under the new regulation

According to the GEO no. 46/2022, unauthorised foreign direct investments are banned and potentially subject to major penalties, similar to those in the competition field.

Unless qualifying as offence, the following acts of the foreign investor account for contravention and are subject to a fine, which shall not top 10% of the worldwide turnover of the financial year preceding the year when the penalty is enforced :

  • intentionally supplying inaccurate, incomplete or misleading information in the authorisation application ;
  • implementation of an unauthorised foreign direct investment, intentionally or by negligence ;
  • implementation of a foreign direct investment in incompliance or infringement of the commitments undertaken under the decision of conditioned approval provided for under article 9 paragraph (2) letter b), intentionally of by negligence.

If during the financial year preceding the penalty, the undertaking had no turnover or that it cannot be determined, the penalty will be determined based on the turnover of the financial year preceding the reference year and if still unavailable, then the penalty will be set based on the last turnover of the undertaking.

For newly incorporated companies from foreign direct investments that have no turnover in the year preceding the penalty, a fine amounting to between lei 10,000,000 and lei 50,000,000 shall apply.

Sanctioning falls to the Competition Council.


The new regulation under the GEO 46/2022 is in line with the new EU framework for the screening of foreign direct investments operational as of 2020, of paramount importance in protecting Europe’ strategic interests. Even if the framework remains welcoming for outward investments, the conditions for access have been sharpened.

At the same time, the new mechanism fosters collaboration between member States via information exchange, with the EU as the main destination for foreign direct investments worldwide.

This new control mechanism will become effective and operational in Romania once the implementation rules of the GEO no. 46/2022, bringing clarification on the content thereof.

Therefore, it is difficult to assess the impact of these regulations on the FDI by the non-EU investors and their weight on the overall FDI in Romania.

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