REVIEW OF THE FDI SCREENING REGIME KEY CHANGES IN 2024–2025 AND THEIR IMPACT ON INVESTORS IN ROMANIA

In the past year, both at the European and Romanian level, the screening of foreign direct investments has moved forward from normative text to applied practice and methodological clarifications.

At EU level, a revision process was launched to harmonize and strengthen the assessment of economic and security risks. The European Parliament has adopted several key amendments to the European Commission’s proposal to revise EU Regulation 2019/452 on FDI screening, while the final trilogue negotiations (EP–EC–European Council) are still ongoing.

In Romania, following the implementation of the GEO no. 46/2022, the Competition Council issued in 2025 Operational Guidelines clarifying how to calculate investment value and to construe the notion of “control”. This comes after the Law no. 164/2023 having expressly extended the definition of “EU investment” to include investments made by Romanian companies.

“EU investor: a natural person who is a citizen of a Member State of the European Union and who has made or intends to make an investment in Romania. The category of EU investor also includes a natural person with Romanian citizenship, as well as a legal entity with its registered office in Romania having made or intending to make an investment in Romania” (Article 2 letter h, point 1 of GEO no. 46/2022).

Recent developments at EU Level

Revision proposal (January 2024): The European Commission submitted a proposal for revision of the Regulation (EU) 2019/452 on FDI screening, citing practical gaps and the need for better harmonized rules across the EU. The proposal expands the cooperation mechanisms and aims to increase the predictability of economic security assessments.

Position of the European Parliament (May 2025):  On May 8, 2025, the European Parliament adopted a package of amendments promoting deeper harmonization of national FDI screening frameworks, objective risk-assessment benchmarks, and a wider range of screening mechanisms for Member States.

The aim of the European legislator is to achieve a consistent EU-level standard for assessing security and public-order risks amid current regional challenges, and not to exclude national prerogatives. Moreover, the amendments adopted by the European Parliament stipulate that, for ensuring a coherent Union-level framework for FDI screening, Member States should be able to extend the scope of their national FDI screening mechanisms, to cover additional types of foreign investments, foreign investments in other sectors, other EU-based target entities, or economic activities identified by the Member State as essential for its security or public order.

Such screenings must, however, remain consistent with the provisions of this Regulation. Furthermore, another amendment adopted by the European Parliament specifies that screening mechanisms should minimize administrative complexity, avoid unnecessary delays, and take into account the limited resources of small and medium-sized enterprises when such mechanisms apply to them. In light of these developments, we can anticipate the emergence, in 2026, of a more stringent European framework for investment screening.

We expect clearer rules and more intensive information exchange at EU level, which will likely increase the compliance requirements for cross-border investors and reduce the likelihood of opaque control structures or transactions that may raise strategic risks.

Key developments in Romania 

It is largely known that the national framework is based on GEO No. 46/2022, which grants CEISD the authority to review new investments deemed sensitive and exceeding the EUR 2 million threshold.

Under the regulation, it falls to the investor to notify the FDI and obtain the screening clearance for FDI authorization when the thresholds and the control conditions set out by law are met.

To strengthen and clarify the existing legislation, the Competition Council adopted Order No. 2112 of July 22, 2025 for the implementation of the Guidelines issued pursuant to Article 3 (5) of the GEO No. 46/2022 on the application of EU Regulation 2019/452 of the EP and of the Council of March 19, 2019 on establishing the framework for the screening of foreign direct investments in the EU, and amending and supplementing the Competition Law No. 21/1996.

These Guidelines clarify three key areas: (i) the methodology for calculating the value of an investment subject to CEISD screening, (ii) the requirements for submitting a notification, and (iii) the notion of “control”.

With respect to the value of the investment, the general rule is that the value corresponds to the financial resources made available by the investor. “Financial resources” refers to the total consideration provided directly or indirectly, including payments, asset transfers, shares, debt waivers, offsetting, services, or consideration in kind.

The methods for determining the value of the investment apply depending on the specific structure of the transaction. In the case of acquiring participation titles, the value of the investment is calculated by taking into account the price paid and/or the capital made available by the investor. Where the acquisition takes place through a share capital increase or any other type of contribution to the share capital, the value of the investment corresponds to the full amount of the contribution, including the nominal value of the subscribed titles and, where applicable, the share premium. It should be emphasized that a contribution made by an existing shareholder, not altering the control over or management of the company, does not represent a foreign direct investment within the meaning of GEO No. 46/2022.

In cases where no actual payment is made, the value of the investment is determined on the basis of the market value of the acquired shares or assets. The appraisal is carried out by the acquirer and must be justified according to the following order of preference: market value, accounting value, or, as a last resort, fiscal value. External appraisal reports may be used to substantiate the declared amount.

The 2025 Guidelines also introduce specific rules for particular cases. Mixed operations are assessed by aggregating all relevant components, the result being the total value invested. Consideration provided in kind is quantified at its fair market value on the date when the authorization application is submitted. Loans and financing agreements made available by the investor are included in the value of the investment at their full amount, including accrued interest. An exception applies to loans granted by authorized financial institutions in the ordinary course of their lending activity, where such financing does not confer control; these loans are not included in the calculation. The conversion of an equity participation into own funds includes both the amounts initially paid by the investor for that participation and any subsequent consideration related to the conversion. For securities traded on a regulated market, is considered the closing price on the trading day immediately preceding the filing of the authorization application. If no transactions occurred, the last published price applies. In the case of staged investments, the values corresponding to each stage are aggregated to determine whether the threshold is met. For multi-jurisdictional transactions, where the price attributable to the Romanian assets is not expressly specified, the appraisal provided by the parties for the Romanian component shall be considered; in the absence of such appraisal, the total value of the multi-jurisdictional transaction is taken into account.

The practical impact is clear: any non-cash component, any loan, or any staged transaction must be quantified and properly documented in the notification. The allocation of value in cross-border transactions is decisive for determining whether a notification obligation arises and for assessing the risk of exceeding the thresholds that trigger CEISD’s screening competence.

Submitting the notification

Two key stages can be identified in this process: evidence of intent and the moment of filing the application. Evidence of the investor’s intention to carry out the investment must be provided through a concrete document - a preliminary agreement, letter of intent, contract, or any agreement confirming unequivocally that the investor is committed to carry out the transaction. This document is required for filling the application, as the authority must be able to verify the existence of a firm intention, not merely preliminary discussions.

The authorization application may be filed only after the negotiations on the essential elements of the transaction have been completed - price, financing structure, parties involved, and the object of the investment - but prior to implementation of the investment.

The notion of control

According to the Guidelines, the notion of control applicable to investments subject to CEISD screening corresponds to the definition of control under the competition law.

The Guidelines explicitly refer to Article 9 (5) and (6) of Competition Law No. 21/1996, meaning that control exists whenever a person acquires the ability to influence the strategic decisions of an undertaking. This also includes operations leading to the creation of a joint venture, in accordance with Companies Law No. 31/1990.

In order to determine whether an investment confers control, the Competition Council applies the same criteria used in the assessment of economic concentration. The Guidelines expressly indicate the application of the relevant sections of the Guidelines on the Concepts of Economic Concentration, adopted by Order No. 386/2010. The assessment considers voting rights, the ability to appoint or dismiss directors, veto rights over strategic decisions, or parallel agreements that enable the investor to influence management.

The practical consequence of these provisions is that the notification requirement does not depend solely on the shareholding percentage, but on whether control is exercised over an investment or activity of a company that falls under the scope of GEO No. 46/2022. Rights granted through a sophisticated contractual structure may confer control even where the investor is not a majority shareholder. As a result, transactions in which a foreign investor holds a minority shareholding - yet with decisive rights - are also subject to the authorization procedure.

Romania, a significant recipient of foreign capital

Foreign direct investments remain a fundamental pillar of economic development for any state, with a substantial impact on productivity growth, job creation, modernization of economic infrastructure, industry diversification, and the stimulation of innovation.

In an increasingly fragmented global landscape marked by geopolitical tensions and recurring economic shocks, policies for attracting and monitoring foreign investment have gained strategic relevance for both advanced and emerging economies. Romania remains a significant recipient of foreign capital, and private equity funds maintain a positive perception of the market, even though net FDI inflows in 2024 amounted to approximately EUR 5.6 billion, down from EUR 6.75 billion in 2023, representing around 1.6% of GDP.

According to Invest Europe’s “2024 Central & Eastern Europe Private Equity Statistics”, Romania ranked among the leading exit markets in Central and Eastern Europe in 2024, with an estimated exit value of EUR 98 million - placing it immediately after Poland and well ahead of the Czech Republic, Lithuania, and Hungary. This demonstrates that the Romanian market remains attractive to private equity and venture capital, where investors who can both enter and exit through profitable transactions. The growth potential also remains significant. Romania continues to hold substantial capacity to attract private equity investment and to climb further in the CEE rankings, currently dominated (in 2024) by Poland (44% of the total private equity investment value of EUR 2.83 billion), Hungary (21%), and the Czech Republic (14%).