Land ownership and real estate
Acquiring real estate
Before 1990, most land in Romania was owned by the state, by the state-owned entities
or by the so-called "agricultural cooperatives". Individuals owned only a limited amount
of farmland and residential land.
Currently, Romanian individuals and legal entities (including companies with foreign
participation) are free to acquire land. Under the Romanian Constitution, non-Romanian
citizens and stateless persons are allowed to acquire land in Romania only under the
following circumstances:
a. Under the conditions of Romania's accession to the European Union (envisaged for
2007)
b. In accordance with an international treaty to which Romania is party and on
reciprocity bases
c. By inheritance under the laws of intestacy.
However, non-Romanian individuals or legal entities may own buildings and/or acquire
the right to use the land (based on lease agreements, concession agreements, etc).
Legal entities without Romanian nationality (i.e. headquartered abroad) may not own
land in Romania. Companies headquartered in Romania may own land even though their
share capital owned is 100% foreign.
The Romanian law requires the authentication of a notary for any transfer agreement
regarding ownership of land situated in Romania. The authentication of a notary is
compulsory for the land transfer to be valid. To ensure validity of the ownership transfer
as against third parties, the transfer should also be recorded in the Land Register. When
purchasing a real estate property it is advisable to consider that in part of Romania, the
registration of ownership in the Land Register has been implemented only recently, and
therefore the review of ownership when purchasing real estate property may sometimes
require specialized help.
Romanian or foreign legal entities and individuals are allowed to rent property in
Romania. The landlord has the legal obligation to pay the taxes levied on income from
property (i.e. rental fees, realized capital gains), except for the case of foreign landlord,
when the tax would be withheld and paid to the state budget by the person paying the
revenue, subject to potential Double Tax Treaty relief. Leasehold provisions can be freely
negotiated between tenant and landlord, on the condition that the minimum values of
rent set by the law are observed.
Concession
Law no.219/1998, as further amended and supplemented, represents the legal
framework for concessions. A concession is made on the basis of a contract by which a
person called "conceding authority", conveys, for a determined period of time of
maximum 49 years, to another person called "concessionaire", who acts on his own risk
and responsibility, the right and obligation of exploiting an asset, an activity or public
service, in exchange for a royalty, or other services in exchange for a remuneration.
The concession contract shall be concluded, in accordance with the Romanian law,
irrespective of the nationality or citizenship of the concessionaire, for a duration, which
cannot exceed 49 years, starting from the date of its execution. The duration of the
concession is established depending on the period of depreciation of the investment to be
made by the concessionaire.
Object of concessions
The object of a concession may consist of assets, activities and public services in the
following fields:
- Public transportation;
- Highways, bridges and road tunnels with taxation;
- Road;
- Railway, port and civil airport infrastructures;
- The construction and exploitation of new hydro-electric plants, including the
plants in conservation;
- Postal services;
- Spectrum of frequencies and the telecommunication transport and distribution
networks;
- Economic activities related to natural and artificial water ways, works of water
administration, stations and measurement installations - hydrological, weather, water
quality and fisheries;
- Public property lands, beaches, quays and free zones;
- Pipelines for transport and distribution of oil and fuel gases;
- Thermal and electrical energy transportation and distribution networks;
- Transport and distribution networks for drinking water;
- Exploitation of mineral resources and substances - solid and fluid;
- Exploitation of thermal resources;
- Natural resources of the economic maritime zone and continental plateau;
- Sport grounds, entertainment places, specialized show establishments;
- Medical units, sections and laboratories of those medical units, as well as
auxiliary medical services;
- Economic activities related to capitalizing historical monuments and sites;
- Gathering, storage and valuation of waste;
- Any other goods, activities or public services that are not prohibited by special
organic laws.
Public assets, activities/services over which there are no regulating authorities, the
approvals of which are compulsory with respect to prices or tariffs applied by
concessionaires, may not be granted under concession.
The quality of conceding authority, on behalf of the state, county, town or commune
belongs to:
- The ministries or other specialty bodies of the central public administration for
the assets which are the public and private property of the state or for the activities and
public services of national interest;
- The county councils, local counties or the public institutions of local interest, for
the assets which are the public and private property of the county, town or commune or
for the activities and public services of local interest.
Any Romanian or foreign individual or legal entity is eligible for being a concessionaire.
Any interested investor as well as the conceding authority may initiate the concession
procedure.
The concession is granted by public auction (open or open with pre-selection), by direct
negotiation or competitive dialogue procedure. The concession agreement shall be
concluded under the Romanian law, regardless of the concessionaire’s nationality or
citizenship, for no more than 49 years, as of the date of its execution.
The concession agreement may be extended for a period, equal to no more than half of
its initial duration, by the mere consent of the parties.