M&A Due Diligence in Romania: A Legal Checklist for Buyers

Legal position as at: 24 October 2026

A buyer of a Romanian company takes over its history: its debts, disputes, tax positions, employees and permits. Due diligence is how a buyer finds out what that history contains before the price is fixed and the share purchase agreement is signed. This article sets out the areas we review in a typical acquisition of a Romanian company, the questions that most often change a deal, and the regulatory clearances that must be built into the timetable. Two of these changed recently: Romanian foreign investment screening now applies above a threshold of EUR 5 million, and new corporate rules on capital, dividends and shareholder loans came into force in December 2025.

Scope and organisation

Due diligence works best when it is focused. Before the data room opens, agree with the advisers on:

• materiality thresholds, so that the report concentrates on what can move the price or the structure;
• the structure of the deal (share deal or asset deal), because the risks differ: in a share deal the company keeps all its liabilities, while in an asset deal the buyer chooses what it takes over, but must deal with transfer formalities for each asset, contract and permit;
• a red-flag format for the report, with each finding linked to a remedy: a price adjustment, a specific indemnity, a condition precedent or a pre-closing action.

Public sources should be checked in parallel with the data room: the trade register (ONRC), the land book (carte funciară), the courts' portal and the insolvency bulletin.

Corporate

Title to the shares and corporate history

The first question is whether the seller owns what it sells. For an SRL, check every transfer of shares since incorporation. A transfer to an outsider requires, unless the articles of association provide otherwise, the approval of shareholders holding at least three quarters of the share capital (Companies Law no. 31/1990, art. 202(2)), and a transfer is effective towards third parties only from its registration in the trade register (art. 203(2)). Gaps in the chain, or transfers that were never registered, should be fixed before closing.

For an SA, check the shareholders' register, any share classes and the history of capital increases.

Articles of association and shareholder agreements

Look for transfer restrictions, rights of first refusal, tag-along and drag-along clauses, special majorities and appointment rights. Shareholder agreements are not filed with the trade register, so the seller must disclose them. In an SRL, the general meeting decides by a double majority of shareholders and shares unless the articles provide otherwise (art. 192(1)); a buyer acquiring a majority stake should check that its votes will actually control the company.

Minimum share capital after Law 239/2025

Since 18 December 2025, Article VI of Law no. 239/2025 requires an SRL whose net turnover in the previous financial year exceeded RON 400,000 to have a share capital of at least RON 5,000. Companies registered before that date must comply no later than two years after the law's entry into force, that is by 18 December 2027; otherwise the tribunal will order dissolution at the request of any interested person or of ONRC (art. VI(6) and (8)). Many targets still have very small share capitals. The fix is simple, but it belongs on the closing checklist.

Dividends and shareholder loans

Law 239/2025 also tightened the rules on distributions:

• a company that distributes interim (quarterly) dividends may not grant loans to its shareholders or affiliates until the differences from those distributions are settled in the annual financial statements (Law 31/1990, art. 67(2^3));
• a company whose net assets, according to the approved annual financial statements, are below half of its subscribed capital may not repay loans received from shareholders or affiliates (art. 67(2^4));
• breach of these prohibitions makes the company and the benefiting shareholder jointly liable for the company's overdue tax debts, up to the amounts involved, and is sanctioned with a fine of RON 10,000 to RON 200,000 (art. 67(2^5) and (2^6));
• dividends from the current year's profit may be distributed only after legal reserves are set up and losses carried forward are covered, and not at all while net assets are below half of the subscribed capital, until they are restored (art. 69^1).

These rules matter for the target's history, but also for the deal structure: a seller who plans to extract cash through a dividend or a loan repayment before closing must do so lawfully, or the buyer inherits the exposure.

Registered office and dissolution risk

Check the title to the registered office and its expiry date. ONRC may establish that the conditions for dissolution are met where the right to use the registered office has expired, or where the company has ceased activity or not resumed it after a period of temporary inactivity of up to three years (art. 237^2(1)).

Contracts

Review the contracts that carry the business: major customers and suppliers, distribution, licences, leases, financing and security documents. The questions are always the same:

• change of control clauses that allow the counterparty to terminate or renegotiate;
• exclusivity and non-compete obligations that may bind the buyer's group;
• assignment restrictions, decisive in an asset deal;
• financing covenants and security over shares, receivables, bank accounts or real estate, which must be released or consented to at closing;
• public contracts, which may have their own rules on changes in the contractor's ownership.

Litigation and insolvency

Search the courts' portal for files involving the target, its directors and, where relevant, the seller. Ask for a schedule of pending and threatened disputes, administrative investigations and enforcement proceedings, with the amounts at stake. Check the insolvency bulletin to make sure that no insolvency proceedings have been opened or requested.

Tax

Tax is often where the largest hidden liabilities sit, because the tax authority can review past years and the liability remains with the company after a share deal. A tax review should cover:

• the tax regime applied each year: micro-enterprise tax (1% of revenues in 2026, Fiscal Code art. 51(1), for companies with revenues up to the equivalent of EUR 100,000 and at least one employee, art. 47(1)) or profit tax at 16% (art. 17), and whether the conditions for the micro regime were actually met, including the aggregation of revenues of linked companies (art. 47(1^1));
• VAT: registration status, returns, deductions and the correct application of the reverse charge; the standard rate is 21% (art. 291(1));
• payroll taxes and contributions, including the classification of contractors who work like employees;
• withholding tax on payments to non-residents, including dividends, which are taxed at 16% when paid to non-residents unless a treaty or an EU exemption applies (art. 224);
• transfer pricing documentation for transactions with related parties;
• past and ongoing tax audits, tax decisions and challenges, and the tax certificate (certificat de atestare fiscală).

The salary income tax exemption for IT employees, once common in software targets, was repealed with effect from January 2025 (Fiscal Code, art. 60 point 2, repealed by Government Emergency Ordinance no. 156/2024). Targets that still apply it, or that relied on it without meeting the conditions in earlier years, carry a risk.

Employment

In a share deal the employer does not change, so employment contracts continue as they are. In an asset deal, the rules on transfer of undertakings, which implement Directive 2001/23/EC, may transfer the employees together with the business. In both cases review:

• the employment contracts of key people, their notice periods, non-compete and retention clauses;
• the registration of all contracts in the electronic employee register (REGES);
• collective agreements, internal regulations and pending labour disputes;
• working time, overtime records, health and safety compliance;
• any incentive plans or promises of shares made to employees.

Real estate and permits

For each property owned or used by the target:

• obtain an up-to-date land book extract (extras de carte funciară) and check ownership, mortgages, easements, litigation notes and other entries;
• check the building permits and the certificate of completion for buildings, and the urban planning documents for planned development;
• review leases: duration, renewal, termination rights and whether the lease is registered in the land book;
• check environmental permits and any history of pollution for industrial sites.

Operating licences and sector authorisations are often personal to the company. In a share deal they generally stay with the target; in an asset deal they usually have to be obtained again.

Intellectual property and data

Check registered trademarks and patents, but also the less visible assets: ownership of software developed by employees and contractors, open-source licences used in products, domain names and databases. Where the target processes personal data, review its compliance with the General Data Protection Regulation (EU) 2016/679: records of processing, legal bases, data processing agreements, security incidents and any proceedings before the national data protection authority.

Merger control

A concentration must be notified to the Romanian Competition Council when, in the year preceding the transaction, the combined turnover of the undertakings concerned exceeds the RON equivalent of EUR 10,000,000 and at least two of the undertakings concerned each achieved a turnover in Romania above the RON equivalent of EUR 4,000,000 (Competition Law no. 21/1996, republished, art. 12(1)). The RON equivalent is calculated at the exchange rate published by the National Bank of Romania for the last day of the financial year preceding the transaction.

A notifiable concentration must be notified before it is implemented, after the agreement is concluded, the public bid is announced or the controlling stake is acquired (art. 13(1)). Failure to notify before implementation, or implementing the transaction in breach of the standstill rules, is an offence punishable by a fine of up to 10% of the worldwide turnover of the undertaking in the previous financial year (art. 55(1)(b) and (c)), and not less than 0.5% of its revenues in Romania (art. 55(1^1)).

Larger transactions may instead fall under the EU Merger Regulation (Council Regulation (EC) No 139/2004) and be notified to the European Commission. The jurisdictional analysis should be done early, because it drives the timetable.

Foreign investment screening

Romania screens investments under Government Emergency Ordinance no. 46/2022, which implements Regulation (EU) 2019/452 and was amended most recently by Government Emergency Ordinance no. 17/2026 (Official Gazette no. 199 of 13 March 2026). The regime is wider than its name suggests:

• it covers foreign direct investments by investors from outside the EU, but also investments by EU investors, a category that, under the ordinance, includes Romanian citizens and companies with their registered office in Romania (art. 2(h)), as well as new investments;
• an investment requires authorisation where it concerns the security and public order fields listed by the decision of the Supreme Council of National Defence no. 73/2012 and its value exceeds EUR 5,000,000, calculated at the National Bank of Romania exchange rate for the last day of the previous financial year (art. 3(1)); before March 2026 the threshold was EUR 2,000,000;
• an investment below the threshold may still be examined if, by its nature or potential effects, it may affect national security or public order (art. 3(2));
• interdependent operations carried out by or between the same persons within one year are treated as a single investment, and the obligation to file arises when their cumulative value reaches EUR 5,000,000 (art. 3(2^1) and (2^2));
• commitments, agreements or contractual clauses through which an investment is made without the required authorisation are null and void by operation of law (art. 12(3^1)), and investors who breach the procedure face fines of up to 10% of their worldwide turnover (art. 12).

Because the sanction includes nullity, the screening analysis must be done before signing and the authorisation, where required, must be a condition precedent to closing.

Sector regulators

Acquisitions in regulated sectors need approvals in addition to merger control and screening, for example from the National Bank of Romania for credit institutions, from the Financial Supervisory Authority (ASF) for insurers and investment firms, from the energy regulator (ANRE) or from the communications regulator (ANCOM). Each regulator has its own procedure and timetable.

From findings to the contract

The value of due diligence lies in what happens next. Each significant finding should lead to one of the following:

• price: a reduction, a retention or an escrow;
• specific indemnity for an identified risk, such as a pending tax audit or a dispute;
• condition precedent: clearances, consents of financing banks or key counterparties, a capital increase under Law 239/2025, the correction of the share title chain;
• pre-closing covenant: how the business is run between signing and closing;
• warranties and disclosure: what the seller warrants, and what it discloses against those warranties.

When to seek legal advice

Every acquisition of a Romanian company benefits from a legal review proportionate to its size. Specialist advice is particularly useful where the buyer is foreign, the target operates in a regulated or sensitive sector, the transaction may be notifiable to the Competition Council or subject to investment screening, or the target holds real estate, significant intellectual property or a large workforce.

This article provides general information and does not constitute legal advice for a specific transaction. If you would like our practice to support your transaction, please write to us at