An international investor acquiring a Romanian target assumes the deal follows familiar European M&A patterns. In practice, Romanian corporate legislation introduces procedural layers, regulatory thresholds, and notarial requirements that routinely delay or derail transactions structured under other legal traditions. Missing a single closing condition or overlooking a mandatory competition filing can expose a buyer to liability or invalidate the transfer entirely.
M&A transactions in Romania are governed by corporate legislation, competition law, and – for regulated sectors – sector-specific investment rules. A share purchase agreement (SPA) is the principal instrument for most acquisitions, supported by due diligence, regulatory clearance where required, and notarial execution for certain asset transfers. Timelines from letter of intent to closing typically run between two and five months, depending on regulatory complexity and the state of the target's records.
This page covers the key instruments, procedural stages, common pitfalls for international buyers, cross-border considerations relevant to EU-based acquirers, and a self-assessment checklist to help you determine whether your transaction is ready to proceed.
The regulatory setting for M&A in Romania
Romania operates a civil law system rooted in the French tradition, significantly recodified over the past decade. Its corporate legislation governs the formation, operation, and transfer of companies. The commercial registry – the Registrul Comerțului (Romanian Trade Register) – is the central repository for all corporate acts, and its involvement is mandatory for most structural changes arising from an acquisition.
Romanian corporate legislation distinguishes clearly between share deals and asset deals. In a share deal, the buyer acquires equity in the target entity, stepping into the shoes of the seller with all associated liabilities. In an asset deal, specific assets and liabilities are transferred, often requiring individual assignment of contracts and, in some cases, third-party consents. International buyers accustomed to common law asset purchase structures should note that Romanian civil procedure rules impose additional formality requirements that have no direct equivalent in English law.
Competition law in Romania is enforced by the Consiliul Concurenței (Romanian Competition Council). Transactions exceeding prescribed turnover thresholds require prior notification and clearance. Filing must occur before closing. Failure to notify – or proceeding without clearance – constitutes a breach of competition legislation and can attract substantial administrative penalties. The Romanian Competition Council has demonstrated active enforcement in recent years, particularly in transactions involving consumer-facing businesses and infrastructure assets.
Sector-specific investment rules apply in energy, banking, insurance, media, and defence. Acquisitions in those sectors require parallel regulatory approvals from sectoral authorities, which operate independently from competition clearance. Each regulator sets its own documentary requirements and processing timelines. Underestimating the sequencing of these parallel tracks is one of the most common causes of closing delays in cross-border Romanian deals.
Foreign direct investment screening adds a further layer. Romania has implemented an FDI screening mechanism aligned with EU Regulation 2019/452. Transactions involving sensitive sectors or strategic infrastructure may trigger a national security review. The screening authority has broad discretion to impose conditions or prohibit the transaction. Buyers from outside the EU should factor this review into their transaction timeline from the outset.
Romania's corporate legislation also governs the rights of minority shareholders, pre-emption rights on share transfers in limited liability companies (societăți cu răspundere limitată, or SRLs), and the procedural requirements for shareholders' resolutions approving an acquisition. Many Romanian target companies are structured as SRLs rather than joint-stock companies (societăți pe acțiuni, or SAs). The distinction matters because transfer restrictions and consent requirements differ significantly between the two forms.
Key instruments and deal structure
The share purchase agreement is the central document in most Romanian acquisitions. It records the agreed price, the representations and warranties given by the seller, the closing conditions, and the post-closing adjustment mechanism. Romanian law does not impose a prescribed form for an SPA, but notarial authentication is required when the target is an SRL. The buyer's counsel must file the executed transfer documents with the Trade Register within the statutory deadline. Late filing attracts penalties and, more critically, the transfer is not effective against third parties until registered.
Representations and warranties in Romanian deals are heavily negotiated. Sellers familiar with local practice often resist the breadth of warranty coverage expected by international buyers. A well-drafted warranty package should address corporate authorisation, the completeness of financial statements, the existence and enforceability of material contracts. Pending litigation, tax compliance, environmental liabilities. Additionally, the status of real estate or intellectual property held by the target. The interaction between Romanian civil law rules on warranty liability and contractual warranty regimes requires careful drafting to avoid gaps.
Warranty and indemnity (W&I) insurance is available in Romanian transactions and has become increasingly common in cross-border deals. It allows sellers to offer a clean exit while providing buyers with recourse against an insurer rather than pursuing the seller directly. W&I policies in the Romanian market are underwritten by international carriers and are priced on the quality of the due diligence process. A thorough due diligence exercise is therefore not merely a risk management tool – it is a prerequisite for obtaining affordable W&I coverage.
Due diligence in Romanian transactions presents specific challenges. Corporate records at the Trade Register may be incomplete or reflect historical structures that were never formally wound down. Real estate titles require verification through the land registry (Cartea Funciară), and encumbrances registered there take priority over contractual arrangements. Tax due diligence is particularly important: Romanian tax legislation has historically been subject to frequent amendment, and the statute of limitations for tax assessments is relatively long. A buyer who does not adequately scope the tax due diligence may inherit liabilities that substantially erode the value of the acquisition.
Employment law due diligence is a further priority. Romania's employment legislation provides significant employee protections. In an asset acquisition, the transfer of a business as a going concern triggers mandatory transfer-of-undertakings obligations, which require prior employee consultation and impose restrictions on post-transfer changes to employment terms. In a share deal, existing employment contracts transfer automatically, but the due diligence should still assess collective agreements, outstanding severance claims, and any undisclosed benefit arrangements.
Earn-out provisions are used in Romanian deals, particularly in technology, healthcare, and family-business acquisitions where the seller remains operationally involved. Romanian courts have addressed disputes arising from earn-out calculations. Additionally. Practitioners note that clear drafting of the earn-out methodology. including accounting standards and the seller's operational obligations during the earn-out period. is essential to avoid post-closing disputes.
For a structured introduction to the corporate legal environment in which Romanian M&A targets operate, see our overview of corporate law in Romania, which covers governance, shareholder rights, and regulatory compliance for operating companies.
To receive an expert assessment of your acquisition structure in Romania, contact us at info@ferrazwhitmore.com.
Practical pitfalls and what international buyers miss
The most frequently underestimated element in Romanian M&A is the Trade Register timeline. Registrations that appear straightforward – a change of shareholder following a completed SPA – routinely take three to six weeks, depending on the complexity of the filing and the workload of the competent registry office. In transactions where the buyer needs to take operational control immediately after closing, this registration gap can create practical difficulties, particularly for regulated businesses where the new ownership must be reflected in licences and permits.
Pre-emption rights in SRL transactions are a structural trap for unwary buyers. Romanian corporate legislation grants existing shareholders pre-emption rights over shares being transferred to a third party, unless those rights have been expressly waived or modified in the company's constitutive act. A buyer who proceeds without confirming that pre-emption rights have been properly waived risks having the transfer challenged by a remaining shareholder. The remedy – reconstitution of the transaction – is time-consuming and commercially disruptive.
Tax indemnities are a recurring battleground in Romanian deal negotiations. Romania's tax authority (Agenția Națională de Administrare Fiscală, or ANAF) conducts audits that can reach back several years. Buyers who rely solely on representations and warranties without a specific tax indemnity for pre-closing periods may find themselves in a weaker position when an ANAF assessment arrives post-closing. Experienced practitioners recommend a standalone tax covenant covering the pre-closing tax period, with appropriate carve-outs for matters disclosed during due diligence.
Notarial requirements create another friction point. For share transfers in SRLs, Romanian law requires the execution of a notarial deed (act notarial). Both parties – or their duly authorised representatives – must appear before a Romanian notary public. Powers of attorney for foreign signatories must be apostilled and, in some cases, translated into Romanian by a sworn translator. Coordinating this in a cross-border transaction with sellers in multiple jurisdictions adds time and cost. Buyers who do not account for this in their signing mechanics risk a closing day failure.
Real estate held by the target deserves particular attention. Romanian land registration rules mean that title is not fully secure until the transfer is registered in the Land Registry. If the target holds material real estate assets and those assets have encumbrances, environmental restrictions, or title defects, the standard SPA framework may be insufficient. Specialist real estate due diligence – including a review of urban planning certificates and building permits – is advisable before signing.
A non-obvious risk in smaller Romanian acquisitions is the undisclosed pledge over shares. Romanian law permits the registration of pledges over shares in SRLs through the Electronic Archive of Security Interests in Movable Property (Arhiva Electronică de Garanții Reale Mobiliare). A buyer who does not search this registry may acquire encumbered shares. The pledge creditor retains rights over the shares notwithstanding the transfer, and the buyer's recourse is then limited to a warranty claim against the seller.
Cross-border and EU strategic considerations
Romanian M&A transactions frequently involve acquirers or sellers based in other EU member states, or holding structures routed through Luxembourg, the Netherlands, or Cyprus. EU law has a significant bearing on the deal at several levels. The free movement of capital ensures that Romanian law cannot impose discriminatory restrictions on foreign EU investors, but it does not override Romanian corporate formality requirements. Buyers should not assume that their home jurisdiction's M&A practice translates directly into Romania.
For acquirers structured through Portuguese or other EU holding entities, the EU Parent-Subsidiary Directive and the EU Mergers Directive provide tax-efficient mechanisms for cross-border dividend repatriation and structural reorganisation. Romanian tax legislation implements these directives, but their application is fact-specific and subject to anti-avoidance rules. The choice of acquisition vehicle. whether a Romanian holding, an EU holding. Alternatively. A direct acquisition by the parent. has material consequences for withholding taxes on dividends, capital gains on exit. Additionally, the deductibility of acquisition financing costs.
EU state aid rules are relevant where the Romanian target has received government grants, subsidies, or tax incentives. A buyer who acquires a beneficiary company may inherit repayment obligations if the state aid was granted in breach of EU rules, or if the acquisition triggers a change-of-control clause in the grant agreement. State aid due diligence is an area where Romanian and EU legal expertise must work together.
For clients who are evaluating Romania as part of a broader multi-jurisdictional acquisition – for example, a target with operations in Romania and Portugal – the interaction between the two jurisdictions' M&A regimes is instructive. Both are civil law systems, but their procedural requirements, competition notification thresholds, and employment transfer rules differ in important respects. Our analysis of M&A transactions in Portugal provides a useful comparative reference for deal teams managing dual-jurisdiction mandates.
Cross-border enforcement of contractual rights post-closing is another dimension to consider. If the seller is based outside Romania, the buyer's ability to enforce warranty claims depends on the governing law and jurisdiction clause in the SPA. Romanian courts will apply EU private international law rules to determine whether they have jurisdiction and which law governs the dispute. Arbitration clauses designating a neutral seat – London, Vienna, or Paris – are common in cross-border Romanian deals and provide a more predictable enforcement environment than domestic litigation.
For buyers who have not yet established a Romanian corporate presence, our guide to company formation in Romania provides practical background on the corporate structures available and the registration process.
For a tailored strategy on structuring your Romanian acquisition and managing the cross-border dimensions, reach out to info@ferrazwhitmore.com.
Self-assessment checklist before proceeding
An M&A transaction in Romania is viable and well-positioned when the following conditions are met. Use this checklist to identify gaps before committing to a timeline.
- The target's corporate structure has been verified: its constitutive act is current, its Trade Register filings are up to date, and no undisclosed pledges over shares are registered in the Electronic Archive.
- Pre-emption rights have been identified and a waiver or consent mechanism is agreed with existing shareholders before signing.
- Competition law thresholds have been assessed, and – where applicable – the filing strategy and expected clearance timeline are built into the deal schedule.
- Tax due diligence has been scoped to cover the full ANAF limitation period, and a standalone tax indemnity is included in the SPA.
- Notarial signing mechanics are confirmed: all required powers of attorney for foreign signatories are apostilled, translated, and ready before the scheduled closing date.
If sector-specific regulatory approvals are required, the sequencing of competition clearance, sector regulator consent, and Trade Register filing should be mapped in a condition-precedent timetable before the SPA is signed. A buyer who signs without this timetable in place frequently discovers that one approval track has a longer lead time than anticipated – creating a mismatch with other conditions and forcing a closing extension.
For family-owned Romanian targets, an additional layer of verification is prudent. Succession arrangements, informal shareholder agreements, and undocumented related-party transactions are more common in closely held companies than their corporate records suggest. A targeted legal and financial due diligence exercise – rather than a reduced-scope review – is the appropriate response where the seller has not previously undergone institutional scrutiny.
Frequently asked questions
- How long does an M&A transaction in Romania typically take from signing to closing?
- For a straightforward SRL acquisition not requiring competition clearance or sector regulator consent, the period from letter of intent to closing is typically two to three months. This allows time for due diligence, SPA negotiation, Trade Register verification, and notarial execution. Where competition notification is required, add a further two to three months for the review period. Sector-specific approvals – for example in banking or energy – can extend the timeline further. Engaging a lawyer in Romania with cross-border M&A experience early in the process is the most effective way to control the timeline.
- Is a share purchase agreement in Romania subject to any mandatory form requirements?
- Yes, for acquisitions of shares in SRLs, Romanian corporate legislation requires the SPA to be executed as a notarial deed before a Romanian notary public. This is a mandatory requirement, not a matter of commercial practice. A privately signed SPA for an SRL share transfer is not legally effective for registration purposes. Joint-stock company (SA) share transfers do not require notarisation, but must comply with the company's articles and – for listed SAs – with capital markets legislation. International buyers using standard common law SPA templates should ensure their documents are adapted to Romanian formality requirements before execution.
- Can a foreign buyer acquire a Romanian company without establishing a local presence first?
- Yes. Romanian law does not require a foreign acquirer to have a local legal entity in place before completing an acquisition. The buyer may acquire shares directly in its foreign capacity, provided the SPA complies with applicable form requirements and the Trade Register filing is completed. However, operating the acquired Romanian entity post-closing will typically require local management, tax registration, and compliance with employment and accounting rules. A law firm in Romania with experience in cross-border transactions can advise on the most efficient post-acquisition operational structure.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions on M&A transactions, corporate restructuring, and cross-border investment. Our team combines Portuguese civil law expertise with English common law tradition to support buyers, sellers, and investors in structuring and executing acquisitions in Romania and across the EU. We advise on due diligence strategy, SPA negotiation and drafting, regulatory clearance sequencing, and post-closing integration – drawing on experience in both civil law and common law M&A environments. The firm's M&A practice covers transactions across Central and Eastern Europe, Iberian markets, and Atlantic jurisdictions, supported by a network of local counsel in each target market. Our attorneys have advised on share and asset acquisitions, joint venture formations. Additionally, cross-border restructurings involving Romanian entities. Additionally. Our Lisbon base provides direct access to EU regulatory bodies relevant to competition clearance and investment screening. Ferraz & Whitmore is a member of leading international legal associations participating in cross-border M&A practice groups. To discuss your Romanian acquisition or investment strategy, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.