How to register a company in Romania?

In order to register a company in Romania, you need to choose the type of company form you want to incorporate, to prepare the necessary documents and to submit the application to the Romanian Trade Registry. Most common forms of companies in Romania are the Limited Liability Company (LLC), Joint Stock Company (SA) and sole trader (PFA).

How long does it take to open a company in Romania?

The company formation in Romania process will take 2 working days, since the date the incorporation application is submitted to the Romanian Trade Registry.

What is the main advantage to open a company in Romania?

One of the lowest taxation in EU: 1% turnover tax for the companies whose turnover does not exceed EUR 60,000 and have at least one employee or 3% turnover tax if the companies has a revenue exceeding EUR 60,000 or the companies is engaged in some specific activities.

Can I start a company in Romania as a foreigner?

Foreign citizens and legal persons can quickly and easily incorporate their own company in Romania, without any restrictions. There is no need for a Romanian shareholder and director

Buying property in Romania | House for sale in Romania

Are you considering buying property in Romania? With its rich history, breathtaking landscapes and affordable real estate prices, Romania is becoming an increasingly popular choice for investors and homebuyers. But before you take the plunge, it's essential to understand the legal aspects and intricacies involved in the process of buying real estate in Romania.

Legal insights buying property in Romania

If you are considering buying property in Romania, it is essential to have a good understanding of the legal aspects involved. Romania has specific regulations and procedures that need to be followed to ensure a smooth and legal property purchase. By familiarizing yourself with these legal insights, you can make informed decisions and avoid any potential pitfalls. Navigate the legal maze of buying real estate in Romania like a pro with our invaluable insights!

In this comprehensive article, we bring you expert legal insights on acquiring property in Romania, providing you with the information you need to make informed decisions. Our team of legal experts have years of experience in Romanian real estate law and have shared their knowledge and expertise in this A-Z guide. Whether you're a first-time buyer or a seasoned investor, this guide will equip you with the necessary information to navigate the complexities of purchasing property in Romania successfully. So, if you're ready to embark on your Romanian property journey, this guide is a must-read. Let our expert legal insights pave the way to your dream property in Romania

The legal process of buying property in Romania. What are the law regulations for foreigners buying real estate in Romania?

The Romanian legal system has established a set of precise regulations governing the ownership of real estate in Romania. To fully grasp the legal approach, it is essential to explore different aspects of the matter. Foreign citizens are permitted to buy properties in Romania, but there are specific conditions that must be met in order to ownership rights to be acquired.

It's worth mentioning from the outset that Romanian legislation does not place any limitations on foreigners when it comes to owning apartments, houses, commercial buildings or industrial properties in Romania. Whether it's about these kinds of real estate, they can acquire ownership rights under the same conditions as Romanian citizens.

Nevertheless, it is crucial to understand that the land beneath these buildings cannot be bought, but only in some specific cases. Instead, a "superficies" right must be established to grant access to these properties. In a nutshell, foreign investors interested in Romanian real estate can acquire the right to use the land, but not the land itself.

Zoning and land use planning have a profound impact on the utilization of land, determining its purpose and restrictions. In Romania, every region has its own set of zoning laws that outline the permissible uses of land, be it residential, commercial, agricultural, or industrial. Familiarizing oneself with these laws is crucial prior to any property acquisition, as they govern the activities that can or cannot be undertaken on the purchased land.

Generally, foreign buyers do not require any specific authorization from a governmental body to acquire property. The procedure is relatively simple and mirrors the process followed by local purchasers.

Our Romanian Advocacy real estate lawyers would like to highlight certain important points regarding the legal situation of foreigners who want to buy properties in Romania.

Can foreigners purchase and own a real estate property in Romania? Are foreigners permitted to invest in and hold real estate assets in Romania?

A. Ownership right on the Romanian property acquired by EU citizens.

Foreign EU citizens, as previously mentioned, are entitled to acquire properties (for example apartments, houses, commercial buildings, and industrial properties, including also the land) in Romania without encountering any notable limitations. Consequently, you have the opportunity to procure apartments, houses, and various other types of buildings exactly in the same conditions as the local Romanian residents do. And also EU citizens enjoy equal rights to Romanian citizens when it comes to acquire land.

B. Ownership right on the Romanian property acquired by non-EU citizens.

As previously mentioned, as a non-EU foreigner, you are entitled to purchase various types of properties in Romania, such as apartments, houses, commercial buildings, and industrial properties, without encountering significant limitations. However, it is important to note that the process may be slightly more intricate for you due to the fact that non-EU citizens are prohibited from owning the land on which the property is constructed.

Non-EU citizens face tighter restrictions when it comes to acquiring land in Romania. To work around these limitations, it is often necessary for them to establish a Romanian company as a means to purchase land, as direct ownership by non-EU foreigners is generally not allowed. The legal framework in Romania enables Romanian companies recognized as Romanian legal entities, to obtain ownership rights over real estate properties within the country. This regulation applies to various types of land, including agricultural land, forests, and forestry land. Consequently, regardless of their nationality, shareholders or partners of a company are entitled to indirectly acquire lands and buildings.

As a conclusion, in the majority of cases, individuals are granted the right to possess the construction itself, but not the land it stands on. While a few countries have established special agreements with Romania on this matter, most do not. For instance, a person residing outside of the aforementioned areas may own a house, but not the land it is situated on. They can acquire the privilege to utilize both the house and the land, but solely as long as the house remains on the land. Once the construction ceases to exist, their legal rights over the land are terminated. This principle applies universally, irrespective of the type of construction or land being purchased.

C. Ownership right on the Romanian property acquired by US citizens. Can American people own real estate in Romania?

American citizens in Romania enjoy similar property ownership rights as local citizens, albeit with a few noteworthy differences. When examining the rights of Americans in comparison to those of other foreigners, it becomes evident that there is a general alignment; however, specific conditions are applicable, depending on the type and location of the property.

There are no notable restrictions for buildings like houses or apartments. American citizens have the same privileges as Romanian citizens when it comes to purchasing, owning, and selling these properties. However, the regulations differ in terms of land ownership.

Following Romania's accession to the European Union in 2007, Americans were granted the opportunity to purchase land for the construction of residential properties, such as houses. However, it is important to note that specific conditions may be applicable, as previously stated.

Regarding the land for residential purposes (for house construction or condominiums), following Romania's accession to the European Union, individuals now have the opportunity to acquire land for residential purposes, such as constructing their own homes.

It is permissible to acquire land for commercial endeavors, such as starting a business or industrial project.

However, stricter regulations apply to agricultural land. The acquisition of agricultural land is governed by a set of intricate restrictions that encompass multiple conditions. These limitations are not limited to Americans alone, but are applicable to all non-Romanian citizens as well as Romanian legal entities controlled by foreigners.

Additional restrictions or approval processes may be enforced for properties located near strategic areas like borders, military sites, or coastlines. These measures are primarily implemented due to national security concerns and are applicable to both Romanian citizens and foreigners, although they are usually more rigorous for the latter.

Foreigners, including Americans, often opt to invest in land in popular regions such as Prahova Valley, Transylvania, renowned for its natural beauty and historical significance, or in urban areas like Bucharest, the capital city, for residential and commercial purposes. These areas hold great appeal due to their potential for development, tourist attraction, and abundant economic opportunities.

The utilization of land is significantly influenced by zoning and land use planning, shaping the possibilities and limitations of its usage. In Romania, each region has its own specific zoning laws that define the permissible purposes of land, encompassing residential, commercial, agricultural, and industrial activities. It is essential to comprehend these laws before engaging in any property transaction, as they determine the scope of actions that can be undertaken on the acquired land.

Buying a property in Romania does not automatically confer residency privileges

If you are interested in buying property in Romania, it is not mandatory for you to live in the country. It is crucial to understand that owning real estate does not guarantee you residency rights. The processes of purchasing property and applying for residency or a visa are separate entities. However, having property ownership can work in your favor if you decide to seek residency.

Acquiring property in Romania does not guarantee permanent residency, as there is no specific investment or real estate purchase program that directly leads to residency or citizenship in the country. Instead, non-EU citizens, including Americans, typically obtain permanent residency through alternative means, such as prolonged temporary residency. This involves residing in Romania for a specific number of days/months under a valid residency permit, which can be obtained for various reasons like employment, study, family reunification, or other legal purposes.

It is important to note that Romania does not offer a "Golden Visa" program, which allows residency through real estate investment, unlike some other countries. But important to remember, as we said before, having property ownership can work in your favor if you decide to seek residency.

Essential documents for buying property in Romania. What are the necessary documents for a property transaction?

The public notary office requires both the seller and the buyer to submit a set of documents for the authentication of the sale/purchase agreement. When buying a property in Romania, you will need the following documents from the seller and buyer:

The identity cards / passport of the seller and the buyer. If the seller or the buyer is a legal person, it will be needed: the Trade Registry excerpt attesting the existence of the company which sell / buy the property in Romania and its legal representatives to sign the sale-purchase agreement; the general meeting of the shareholders' decision approving the sale / acquisition of the property and the power of attorney given by the company for its legal representative to sign on its behalf the sale-purchase agreement;
The ownership title deed (sale-purchase agreement, building permit, minute attesting the construction of the building etc.) - will be presented by the seller;
The tax certificate attesting that the real estate asset has the fiscal obligation paid for the year the transaction will be concluded - will be presented by the seller;
The cadastral documentation, including the measurements survey plan, building site plan and the minute of registration of the asset in the land book (land and construction) - will be presented by the seller; This one must be thoroughly verified in order to be assured that the land you want to buy has the mentioned area in the land book and the location provided by the seller.
The land book excerpt attesting the quality of the seller as the owner of the property, if there are actual mortgages or encumbrances, prohibition of sales, rights of first refusal, as well as disputes over the property - will be obtained by the notary at the date of signing the authentic sale purchase agreement;
The energy performance certificate (only for the building) - will be presented by the seller under the sanction of the sale-purchase agreement annulment;
The certificate of urbanism - is granted by the local authorities and remains valid for a duration of 12 months, with the possibility of renewal for an additional 12 months. It encompasses essential details such as: the minimum area required for building sites, the minimum distances from neighboring properties, the minimum size of openings, the maximum permissible height, the occupancy percentage, and the coefficient of land use. Furthermore, the Urban Area Plan (PUZ) supplements the urbanism certificate by providing information on the specific construction regulations set at the local level.
The certificate issued by the homeowners association attesting that the seller has all the maintenance and living costs paid (only for apartments located in condominium) - will be presented by the seller;
The last invoices for the utilities provided to the property (electricity, water, gas etc.) - will be presented by the seller;

Our real estate specialized lawyers from Romanian Advocacy can assist you during the whole process of signing the sale-purchase agreement if you have decided on buying a property in Romania, analysis of the preliminary documents and provide legal advice on the legal implications arising from the issues noticed. Don't hesitate to reach us at tudor@roadvocacy.ro or +40 723 77 37 59 or using the contact form on at www.roadvocacy.ro.

Steps to follow in order to buy a property in Romania?

Step I: If you have a keen interest in buying property in Romania, the initial step is to delve into market research. Seek out properties that fulfill your criteria, whether it pertains to location, size, or property type. This can be accomplished by utilizing online real estate listings or collaborating with a proficient local real estate agent who possesses extensive knowledge of the market.

Step II: Upon discovering a property that captures your interest, the subsequent step involves conducting a property title search. This particular procedure holds immense importance in Romania, as it serves to ensure that the property you are considering purchasing possesses a clean title, free from any legal encumbrances or disputes. Your lawyer will play a crucial role in this process by thoroughly examining the Land Book to verify the property's legal status and ensure the absence of any outstanding matters.

Step III: After ensuring the validity of the property's title, the next step is to enter into negotiations. This crucial phase entails reaching a mutual understanding with the seller regarding the price and conditions of the sale.

Step IV: Once an agreement has been reached, it is customary to draft and sign a preliminary contract. This contract serves to outline the terms of the sale and may entail the payment of a deposit.

Step V: A pivotal stage in the process involves the transfer of property, which is formalized through a purchase agreement. This agreement is signed in the presence of a notary public in Romania, who assumes the critical responsibility of ensuring strict compliance with all legal requirements related to the sale.

It is important to have knowledge about the regulations that govern international fund transfers when making a purchase. To facilitate these transactions, you may need to establish a bank account in Romania or collaborate with financial institutions that specialize in international transfers. It is crucial to consider exchange rates and any applicable fees during the process.

Step VI: Closing costs and fees are a crucial factor to take into account. These commonly encompass expenses such as notary fees, legal fees, land book fees, and fees associated with real estate agents.

Challenges and pitfalls in purchasing property in Romania. What are the risks in buying property in Romania?

Although rare, one of the main risks involved in buying property in Romania is the potential for title fraud. The reason behind this is the presence of specific regions in Romania where scammers can exploit the absence of a dependable public records system by fraudulently registering property transactions. As a result, purchasers may unknowingly acquire a property that does not hold legal validity.

Romania's intricate past of property ownership, which involves nationalization and subsequent restitution, often results in ambiguous property titles. This stands in stark contrast for example to the United States, where title insurance and meticulously maintained property records are more prevalent. It is imperative to undertake a comprehensive title search legal due diligence to guarantee that the property you intend to purchase is free from any legal encumbrances or disputes.

In order to mitigate the risk of ownership deed fraud in Romania, very rare as we mentioned, it is crucial to conduct a comprehensive verification of the necessary documents related to the property for selling before purchasing land in Romania. More exactly, the lawyers may conduct a thorough investigation on the following: the history of the ownership and owners during the time, the whole landbook of the property since its first registration, the cadastral documentation.

Our team of lawyers from Romanian Advocacy is well-equipped to offer comprehensive guidance on the process of obtaining these essential documents prior to buying property in Romania. In addition, our attorneys are specialized in real estate law and disputes and readily available to provide legal representation before the authorities and act as authorized representatives to facilitate the application and acquisition of these documents. We encourage you to reach out to our dedicated team if you are considering purchasing land in Romania. on't hesitate to reach us at tudor@roadvocacy.ro or +40 723 77 37 59 or using the contact form on at www.roadvocacy.ro.

One of the risks associated with the Romanian property market is the possibility of overpricing. This is primarily due to the absence of a centralized market, resulting in substantial price discrepancies across different regions. To avoid falling victim to overpriced properties, buyers should exercise caution and conduct thorough market research before making any investment decisions.

Zoning regulations in Romania present an additional risk factor. The disparity of zoning laws in Romania can significantly influence the permissible usage of your property. It is vital to familiarize yourself with the local zoning laws and their potential impact on your property, particularly if you plan to undertake any modifications or utilize the property for specific purposes.

Furthermore, the risk of property disputes and legal complications should not be overlooked. Romania's ongoing transition to a market economy means that navigating the legal system can be challenging in certain areas. Consequently, buyers may face difficulties in resolving disputes or ensuring contract enforcement. In Romania, there exists a legal framework specifically designed to tackle property-related disputes. Should you face any conflicts with neighbors or authorities, the customary procedure involves resorting to local courts for resolution. Despite potential delays, the legal system in Romania serves as the primary remedy for effectively solving real estate conflicts.

Underestimating the value of local legal guidance, neglecting to account for unforeseen expenses, and misjudging the time required to finalize a property transaction are common mistakes made by non Romanian residents. Due to the somewhat bureaucratic nature of the process in Romania, it is essential to exercise patience and conduct meticulous due diligence.

Do you need to run a legal due diligence appraisal on the property you want to buy in Romania?

Definitely YES. With the understanding that real estate is one of the prominent business prospects in Romania presently, we have assembled a proficient team of experienced lawyers in real estate field, who are dedicated to devising innovative and proficient solutions tailored to our clients' commercial objectives. Our lawyers possess the expertise to effectively conduct a comprehensive real estate due diligence process in Romania, ensuring that you are equipped to make the most informed decision when investing in property within this nation.

Our law firm in Romania is proud to offer a comprehensive range of services provided by our team of experts, such us: legal assistance and representation services in: setting up a company in Romania in order to create a special purchase vehicle company (SPV), agreement analysis and negotiations with the seller or the buyer, legal due diligence appraisal report including the property verification and its full screening starting from its first owner, assistance and representation before the public notary for the execution of the sale-purchase agreement and, finally, registration of the ownership title deeds to the relevant authorities.

What are the fees when buying a property in Romania?

Provided here is a detailed analysis in 2024 of the taxes pertaining to a property transaction in Romania, for you to have a complete picture when you decide on buying property in Romania:

Stamp duty - from 0,5% to 3% of the property value provided in the sale-purchase agreement - paid by the buyer. This is a tax which is levied on a range of legal transactions, encompassing the transfer of property ownership.
Capital gain tax - 10% on the net capital gain (the difference between sale price and the acquisition price, on the profit you make from the sale) - paid by the seller. This is the tax on the capital gain from the sales of the property.
Property tax - from 0,08% to 0,2% of the cadastral value of the property - paid by the seller. This is the annual tax on the property value and is determined based on factors such as the value and size of the property.
Property transfer fee - 3% of the property value, only if the value exceeds RON 450,000 - paid by the seller. This is a tax imposed on the sale of luxury estate.
Notary fees - from 0,44% to 2,20% of the transaction price - paid by the buyer. This is the fee for notary services for the authentication of the sale-purchase agreement.
VAT - 5% for any new residential properties under 120 sqm - paid by the buyer. This is the value added tax on the sale of new properties.
Real estate agent and lawyer fees - it depends on the negotiation - split between buyer and seller. This is the fee paid to the real estate agent and the lawyer involved in the transaction

Financing options for buying property in Romania. Do banks offer loans to foreigners for property purchase in Romania?

Romania's banking system enables foreigners to access property loans within the country. Non-residents can apply for these loans, provided they meet specific conditions and requirements set by the Romanian authorities. As a foreigner seeking a property loan in Romania, you can take advantage of the government's "First Home” (Romanian: „Prima Casă") program, which aims to support first-time homebuyers. This program offers attractive benefits such as preferential interest rates and reduced down payment requirements. Moreover, Romania offers mortgage rates on a 20-year term, ranging from 5% to 9%, which are considered to be within the average range.

A must for buying property in Romania: Obtaining the Fiscal Identification Number (NIF)

If a foreign citizen intends to purchase property in Romania without a Romanian Personal Identification Number (CNP / PIN), it is essential to obtain a Fiscal Identification Number (NIF) - this one being your tax identity number in Romania. The PIN can be easily obtained by foreigners who hold a residence permit in Romania, whether it is for study, business, research, or as a family member. Other than this requirement, there are no additional specifications for foreign citizens involved in the transaction. They can buy or sell property in the same manner as Romanian citizens and are subject to the same taxes imposed by the government, seller, and notary.

There are various instances where you may need to provide your NIF number: when buying a property in Romania, opening a bank account in Romania, contracting utilities services (electricity, gas, water etc.), concluding an insurance policy with a Romanian insurance company, dealing with the Romanian tax authorities, buying or selling shares, bonds and stocks and buying/selling a vehicle.

Prior to commencing a property transaction in Romania, it is advisable to engage in a discussion with a lawyer to ensure a clear understanding of your rights and obligations throughout the entire process. Furthermore, if you do not possess a Residency Permit in Romania, it is imperative to diligently complete all necessary legal steps to obtain a Fiscal Identification Number before embarking on a property purchase. Failure to do so may render any contracts you enter into null and void, potentially entangling you in a legal quagmire.

Step-by-step checklist for buying property in Romania

Streamline your property buying in Romania using our easy-to-follow step-by-step checklist, having the following to do's:

Decide on what property you are buying in Romania, where is located and why towards your needs.
Contact Romanian Advocacy lawyers at tudor@roadvocacy.ro or +40 723 77 37 59 or using the contact form on at www.roadvocacy.roand seek for legal expert advice on every matter regarding the purchase of property in Romania.
Verify the price of buying to be within your budget.
Document the whole process of buying, including legal information.
Verify the seller of the property in Romania.
Analyse multiple properties and finally choose one.
View and look thoroughly at the chosen property.
Request to Romanian Advocacy lawyers to check the property and prepare a due diligence appraisal report prior to signing any document for purchasing.
Sent Romanian Advocacy lawyers any sale-purchase agreement or pre-agreement or any other document regarding the property, prior to its signature.
Obtain the NIF.
Book the property and conclude the pre-agreement paying a small reservation fee.
After dealing the final form of the sale-purchase agreement, it follows the payment of the purchase price and arrange the signing of the sale purchase agreement.
Execution of the ownership deed and its registration with the land book;
Arrange the tax registration of the property acquired in Romania.
Take pleasure in a thoroughly deserved holiday within the confines of your recently purchased property.

Conclusion: Expert tips for a successful property purchase in Romania

In conclusion, buying property in Romania requires a thorough understanding of the legal aspects involved. By working closely with a knowledgeable lawyer, understanding the different types of property ownership, and being aware of the associated costs, you can navigate the process with confidence and ensure a legally sound property purchase.

Feel free to reach out to us at tudor@roadvocacy.ro or give us a call at +40 723 77 37 59. Alternatively, you can also use the contact form on our website at www.roadvocacy.ro.

Your business, our mission.

Must-read legal checklist for buying property in Romania