Romania - Country Commercial Guide
Investment Climate Statement

The Investment Climate Statement Chapter of the CCG is provided by the State Department.

Last published date: 2021-08-13

The U.S. Department of State’s Investment Climate Statements, prepared annually by U.S. embassies and diplomatic missions abroad, provide country-specific information and assessments of the investment climate in foreign markets. Topics include: Market barriers, business risk, legal and regulatory system, dispute resolution, corruption, political violence, labor issues, and intellectual property rights.

Romania welcomes all forms of foreign investment. The government provides national treatment for foreign investors and does not differentiate treatment due to source of capital. Romania’s strategic location, membership in the European Union, relatively well-educated workforce, competitive wages, and abundant natural resources make it a desirable location for firms seeking to access European, Central Asian, and Near East markets. U.S. investors have found opportunities in the information technology, automotive, telecommunications, energy, services, manufacturing, consumer products, insurance, and banking sectors.

The investment climate in Romania remains a mixed picture, and potential investors should undertake due diligence when considering any investment. The European Commission’s 2020 European Semester Country Report for Romania points to persistent legislative instability, unpredictable decision-making, low institutional quality, and corruption as factors eroding investor confidence. The report also noted that important legislation was adopted without proper stakeholder consultation and often lacked impact assessments. Frequent reorganizations of public institutions also contribute to the significant degree of instability.

Prior government efforts to undermine prosecutors and weaken judicial independence had shaken investor confidence in anti-corruption efforts. Political rhetoric had taken an increasingly nationalist tone, with some political leaders occasionally accusing foreign companies of not paying taxes, taking advantage of workers and resources, and sponsoring anti-government protests. President Iohannis was reelected in November 2019 with a pro-business stance. The December 2020 parliamentary elections resulted in a pro-investment, center right coalition government with a parliamentary majority, providing increased political stability. The coalition has repeatedly voiced its support for rule of law and reform.

The government’s sale of minority stakes in state-owned enterprises (SOEs) in key sectors, such as energy generation and exploitation, has stalled since 2014. A bill passed in 2020 instituted a two-year ban on the sale of state assets and state equity in SOEs. The Government of Romania (GOR) is in the process of drafting legislation that will terminate the ban. Successive governments have weakened enforcement of the state-owned enterprise (SOE) corporate governance code by resorting to appointments of short-term interim managers to bypass the leadership requirements outlined in the corporate governance code. Instability in the management of SOEs hinders the ability to plan and invest.

Consultations with stakeholders and impact assessments are required before enactment of legislation. However, this requirement has been unevenly followed, and public entities generally do not conduct impact assessments. Frequent government changes have led to rapidly changing policies and priorities that serve to complicate the business climate. Romania has made significant strides to combat corruption, but it remains an ongoing challenge.

Visit the U.S. Department of Department of State’s Investment Climate Statement website at https://www.state.gov/reports/2021-investment-climate-statements/romania/