[BUYING AND SELLING REAL ESTATE IN ROMANIA]
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➢ the creation of a new unit for carrying out the activity in the sensitive sector which is technologically independent from other existing facilities; ➢ the extension of the capacity of an existing establishment (i.e. the increase of the production capacity in the existing location); ➢ the diversification of the output of an establishment through products that have not been previously manufactured in that plant or a fundamental change in the overall production process of an existing establishment. For foreign investors, pending an FDI Screening clearance by the Romanian Competition Council based on the positive recommendation issued by the Commission for Foreign Direct Investment Screening (“CFDIS”), a standstill obligation is provided under the FDI Law, meaning that any acquisitions of real estate that qualify as foreign investments in the economic sectors mentioned above cannot be implemented. Following amendment to the FDI Law, investors from the EU—including Romanian investors— are now expressly brought within the scope of the screening regime. As a result, the standstill obligation and related gun-jumping penalties are now applicable to both EU and non-EU investors. EU investors are defined as EU citizens, companies established in an EU Member State (including trustees), as well as EU-based companies controlled by EU citizens or EU legal entities, who have made or intend to make an investment in Romania. Consequently, any investment in a sensitive sector—as defined under the existing list which remains the same—and exceeding the two
million Euro threshold must be notified, regardless of the investor’s nationality. IV. Transfer of Ownership As a general rule, the property right transfers automatically upon the execution of the agreement, unless the parties have otherwise agreed (e.g., until fulfilment of conditions precedent). The registration in the Land Book is made for opposability purposes only and is to be carried out by a public notary following the execution of the agreement. Certain rules shall come into effect after the finalization of cadastral works on all land in Romania. Specifically, once the entire cadastral works for all land in Romania are finalized (a date which is difficult to estimate at this stage), the registration of the property right transfers with the relevant Land Book shall no longer be performed for opposability purposes only but shall become constitutive of a right (i.e., the transfer will operate as of and on the basis of the registration with the relevant Land Book). In relation to brownfield/greenfield renewable power generation projects, the project company must secure, already from the development phase, a title to land proper for building purposes, which would typically be ownership right or superficies right. The new Land Book registration regulation that entered into force on 14 February 2023, expressly stipulates that photovoltaic panels erected on buildings or other similar surfaces do not have to be registered in the Land Book. With this added clarity on the matter, photovoltaic panels can now be installed without legal hassle or doubt on structures including, but not limited to, constructions, constructive elements of road or rail transport infrastructure, constructive elements of building
ILN Real Estate Group – Buying and Selling Real Estate Series
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