EXECUTIVE SUMMARY – INVESTORS’ RESIDENCE SCHEMES IN ROMANIA

General background

Government Emergency Ordinance 194/20021 on the regime of foreigners in Romania (OUG

194/2002), contains special provisions applicable to foreign investors, setting out a residence scheme,
by which foreign investors are subject to the same general regime as other foreigners when it comes to
obtaining the right to enter and stay on the Romanian territory. The Law on Foreigners has been
amended several times since its entry into force in 2003, the most significant of which led to the
increase of investment thresholds. The National Strategy for Immigration for the Period of 2015-
20182 highlighted the importance of measures facilitating the entry of third-country national investors
in Romania, recognising that such measures would have a beneficial effect for third-country investors,
third-country employees and Romanian employees.

The General Inspectorate for Immigration (Inspectoratul General pentru Imigrări - IGI), a
structure of the Ministry of the Interior, is the main authority responsible for implementing all
migration, asylum and integration policies and legislation, including residence permits. The Ministry
of Business Environment, Commerce and Entrepreneurship is responsible for applying the
strategies and policies relating to small and medium enterprises, business environment, commerce,
entrepreneurship and foreign investments; the foreign investors are requested to obtain an
authorisation of their business plan from the Ministry prior to applying for the long-stay visa for
commercial purposes. The Ministry of Foreign Affairs, through the diplomatic missions and
consular offices of Romania, is responsible for granting or rejecting long-stay visas for foreign
investors; the diplomatic missions and consular offices consult the National Visa Centre and the IGI
in this process.

Conditions and procedure

Third-country nationals who are or will become associates or shareholders with management and
leadership roles in Romanian companies are considered foreign investors and are eligible to apply
for a long-stay visa for commercial purposes which allows them to enter the country and stay for a
period of 90 days; foreign investors who wish to remain on the Romanian territory for a longer period
of time must request a temporary residence permit (referred to as an ‘extension of the right to
temporary residence’ in Article 55 of OUG 194/2002) 30 days prior to the expiration of the long-stay
visa. Foreign investors who resided on the Romanian territory for a continuous period of five years
are eligible to obtain permanent residence.

Conditions and procedure for long-stay visa for commercial purposes

Foreign nationals for whom the visa requirement has not been waived need to apply for a long-stay
visa for commercial purposes if they wish to travel to Romania for business. In order to be eligible
for a visa, foreign investors must make a minimum investment amounting to:
 over EUR 100,000 and the creation of at least 10 new jobs in a limited liability company; or
 more than EUR 150,000 and the creation of at least 15 new jobs in a joint-stock company.

1
The “emergency procedure” consists in the possibility for the Government to adopt legislation when they consider there is a
matter of urgency to have that piece of legislation approved and adopted, thus justifying an accelerated approval procedure
before Parliament or the delegation of the Parliament to the Government to pass the legislation concerned (“regular”
government ordinance). In the present case the Government did not justify the “emergency”. Government Emergency
Ordinance 194/2002 on the regime of foreigners in Romania (Ordonanța de urgență nr. 194/2002 privind regimul străinilor
în România), Official Journal, Part I, no. 421 of 05 June 2008 (latest republication), available at
http://legislatie.just.ro/Public/DetaliiDocument/93712 (OUG 194/2002).
2
Approved by Government Decision 780 of 2015 (HG 780/2015) on the approval of the National Strategy on Immigration
for the Period of 2015-2018 and the Action plan for 2015 on the implementation of the National Strategy on Immigration for
the Period of 2015-2018, available at http://legislatie.just.ro/Public/DetaliiDocument/172296.

Milieu Ltd Executive Summary – Investors’ Residence Schemes in Romania/i

Brussels, July 2018
The visa application procedure has two stages:
a) First, the investor needs to have the business plan approved by the Ministry of Business
Environment, Commerce and Entrepreneurship; the applicant is requested to demonstrate
that the investment is necessary, relevant and useful for the business and that the business
activity will be efficient from an economic and technological standpoint, profitable,
sustainable and viable for at least three years following this investment.
This approval is valid for a period of six months; should the investor fail to submit a visa
application within this timeframe, the approval becomes invalid and the investor needs to
apply for a new approval with the Ministry of Business Environment, Commerce and
Entrepreneurship is he/she wishes to enter Romania with a long-stay visa.
b) Second, if the business plan was approved by the Ministry of Business Environment,
Commerce and Entrepreneurship, the foreign investor may request a long-stay visa for
commercial purposes at the Romanian diplomatic missions and consular offices abroad.
The application can be filed no more than three months prior to the intended arrival in
Romania.
The documentation can be submitted either in person, or in advance via the e-visa portal, or
to an external service provider, in cases when the Ministry of Foreign Affairs outsourced the
collection of visa applications to an external service provider. However, in the last two
situations the applicant is still required to go to the diplomatic mission or consular office to
sign the application form in person. After submitting the documentation, applicants are
usually invited to sit an interview with the officials at the diplomatic mission or consular
office.

For the purposes of assessing the visa request, the diplomatic missions and consular offices need to
seek approval from the IGI and then the National Visa Centre; the role of IGI is to ensure that the
applicant fulfils the entry conditions in the Law on Foreigners (e.g. valid travel document, no threat to
national security, the applicant was not banned from entering Romania). The IGI and National Visa
Centre have a consultative role and their decisions do not bind the diplomatic missions or consular
offices.

The fee for long-stay visa applications is EUR 120.

The outcome of the visa application will be communicated to the applicants no later than 60 days
after the submission of their application and full documentation. If the request is rejected, the
diplomatic mission or consular office will also inform the applicant of the reasons for the rejection.

Applicants will be issued a rejection decision if they do not satisfy the general or specific conditions
in the Law on Foreigners (e.g. entry conditions, suspicion of fraud, submission of counterfeit
documents or failure to obtain the approval of the Ministry of Business Environment, Commerce and
Entrepreneurship). There are no legal avenues for the applicants to contest a rejection decision.

Conditions and procedure for temporary residence

Foreign investors who wish to stay in Romania beyond the duration of the visa or beyond the 90 days
afforded by the visa waiver must apply for ‘extensions of temporary residence’ with the IGI and will
be granted temporary residence permits valid for one year; foreign investors may repeat the
procedure for an indefinite period of time.

There is no minimum investment required for the first temporary residence permit, however
subsequent requests can be approved only if the investor maintains a minimum investment of EUR
70,000.00 or the creation of 15 new jobs if he/she is a shareholder and EUR 50,000.00 or the creation
of 10 new jobs is he/she is an associate.

Milieu Ltd Executive Summary – Investors’ Residence Schemes in Romania/ii

Brussels, July 2018
Aside from the minimum threshold mentioned above, the Law on Foreigners provides for additional
thresholds the fulfilment of which may give rise to certain benefits for the applicants:
 If the investment was greater than EUR 500,000 or it generated over 50 new jobs, the
temporary residence permit will be valid for three years;
 If the investment exceeded EUR 150,000 or more than 25 new jobs were created, the
foreign investor may demonstrate that he/she satisfies the legal requirement of adequate
financial means using any documents, not only those listed by the Law on Foreigners.
 For investments greater than EUR 200,000 or if more than 50 new jobs were created, the
applicant no longer has to demonstrate that he/she possesses adequate financial means to
support himself/herself for the duration of his/her stay in Romania.

All foreigners are charged a consular fee of EUR 120 and the cost of the residence permit, which
currently amounts to RON 259 (approximately EUR 55.95).

If IGI consider necessary, the applicant may be invited for an interview. The request is assessed
within 30 days from the submission of the application, but the deadline can be extended by a
maximum of 15 additional days in cases where IGI have to perform additional checks. If the
application is rejected, the Inspectorate will inform the applicant of the decision and the reasons
for the rejection and will issue a return decision.

Applications are rejected in cases where the explicit conditions listed in the Law on Foreigners are
not met – e.g. the foreign investors do not fulfil certain entry requirements, there is reasonable
suspicion that the applicant has committed or took part in the commission of certain very serious
crimes, fraud, the foreign investors did not provide proof of accommodation or health insurance in
Romania or if the business plan had not been respected.

Applicants whose requests were rejected can contest the decision with the administrative and tax
sections of the court of appeal in their area of residence and can demonstrate that their rights and
legitimate interests were harmed by the IGI decision. Against the decision by the court of appeal the
investors may file an extraordinary appeal (recurs) with the High Court of Cassation and Justice.

Conditions and procedure for permanent residence

The provisions on permanent residence in the Law on Foreigners were aligned with Council
Directive 2003/109/EC of 25 November 2003 concerning the status of third-country nationals who
are long-term residents (Long-Term Residence Directive).

The applications for permanent residence are decided by the IGI. The foreign investor must have been
a temporary resident in Romania for a continuous period of five years and physically present in
Romania; during this time, the investor should not have been abroad for more than six consecutive
months and the cumulated duration of absence should not exceed ten months. The law does not
establish an investment threshold for eligibility, but does offer certain benefits to investors whose
investment was greater than EUR 1.000.000 or led to the creation of at least 100 new full-time jobs –
they no longer need to demonstrate continuous physical presence or the minimum financial means
required.

Foreign investors need to follow a two-step procedure with the IGI: they must first apply for the right
to permanent residence and, if this is granted, request a permanent residence permit. The permit is
valid for five years and its renewal is merely an administrative procedure; the right to permanent
residence once granted is valid for an indefinite period of time. Applicants are requested to pay a
processing fee of RON 128 (EUR 27.65) and the cost of the permanent residence permit
amounting to RON 259 (EUR 55.95); renewals are charged only with the latter.

Milieu Ltd Executive Summary – Investors’ Residence Schemes in Romania/iii

Brussels, July 2018
Once a permanent resident, the foreign investor must maintain a physical presence in Romania,
otherwise the right will cease: he/she must not be absent from Romania for more than 12 consecutive
months, except for the case when he/she benefited from a temporary residence in another EU
Member State; he/she must not have spent more than six consecutive years abroad, regardless of
whether he/she may have been a temporary resident in another EU Member State during this time;
he/she may not be granted permanent residence in another country.

The IGI will reach a decision no later than six months after the application was registered, but for
objective reasons, the head of the Inspectorate can extend the deadline by another three months. If the
request for a right of permanent residence is approved, the applicant will be informed in writing no
later than 15 days after the decision has been taken. The foreign investor has to go to the local IGI
office in the next 30 days from the notification and request the permanent residence permit.

If the application is rejected, the foreign investor can appeal the IGI decision before the Bucharest
Court of Appeal no later than 30 days following the notification.

Security and ex-post checks

Security checks on the criminal records of the applicant are performed by IGI every time the
foreign investor applies for a visa, temporary residence or permanent residence. IGI is also mandated
to monitor the stay of foreigners in Romania and can verify at any time whether the foreign investor
still fulfils all the requirements for entry and stay in Romania. For such purposes, the National Alert
Informatic System (Sistemul informatic naţional de semnalări), Schengen Information System and the
Integrated Informatic System on Issues of Migration, Asylum and Visas (Sistemul informatic integrat
pentru managementul migraţiei şi azilului) are checked.3

Additionally, when applying for the long-stay visa, investors must deposit all the money for the
investment in an account opened with a Romanian bank. Banks are required by due diligence rules
(know-your-client regulations) to prevent money laundering and the financing of terrorism and have
at least a client acceptance policy, procedures for the identification and ongoing monitoring of
clients and their operations. When suspecting that the financial resources may be used for money
laundering or terrorist activities, banking institutions must inform the National Office for the
Prevention and Combatting of Money Laundering (Oficiul Național de Prevenire și Combatere a
Spălării Banilor); if the Office substantiates these suspicions, they must seize the Office of the
Prosecutor attached to the High Court for Cassation and Justice and, if terrorism activities are
involved, the Romanian Intelligence Service.

Family members4
There are no specific rules in force for family members of foreign investors, but, like all family
members of foreign nationals, they can enter Romania with a long-stay visa for family reunification,
then apply for temporary residence for family reunification and later for permanent residence. In
any case, the foreign national must file an application for family reunification with IGI proving that
s/he was granted temporary or permanent residence, the existence of the alleged family relationship,
sufficient means of subsistence, adequate accommodation and coverage by a health insurance. If the
request for family reunification is approved, the procedure for the corresponding permit (long-stay
visa, temporary residence or permanent residence) can be launched. These procedures follow the same
steps explained above for foreign investors.

The family members eligible for family reunification are: the spouse of the investor, the unmarried
minor children of the investor or his/her spouse, including those who were adopted; and the
unmarried minor children of the investor or his/her spouse of the investor in his/her care and under
his/her custody, including those who were adopted. IGI also has the discretion to approve an
3
Information gathered through consultation with national stakeholder (IGI official, competent authority, 30 May 2018).
4
Art. 46 OUG 194/2002.

Milieu Ltd Executive Summary – Investors’ Residence Schemes in Romania/iv

Brussels, July 2018
application concerning the following family members: the parents of the sponsor and/or of his spouse
if they are unable to support themselves and lack adequate family support in the country of
origin; and the unmarried adult children of the sponsor or his/her spouse if the former are unable
to support themselves for medical considerations.

Monitoring of the proceedings and authorities involved

There is no cap for the number of applicants.

In terms of scrutiny mechanisms in place, IGI is monitored by an oversight authority (Corpul de

Control) within the Ministry of the Interior, which oversees the activity of all Ministry structures.

Rights
As regards the rights of foreign investors, they are granted equal treatment in Romania, can invest in
any sector and in any legal entities, are guaranteed against nationalisation, expropriation or similar
measures, and may receive assistance with administrative formalities. They also have the right to
appear before the competent courts of law or arbitration tribunals, the right to hire foreign citizens and
to benefit from integration services. Moreover, once issued a temporary residence permit, foreign
investors may access the labour market; once employed or registered with the unemployment
authority, they have the right to equal treatment regarding work conditions, may access education and
life-long learning, have their qualifications recognised, benefit from social security rights, public
health services, tax deductions and exemptions, access to public goods and services, freedom of
association and membership of unions and professional associations, as well as services provided by
employment agencies.

Foreign investors who are permanent residents have the same rights as Romanian citizens regarding
access to the labour market, access to all forms of education and life-long learning, recognition of
qualifications, social security rights, public health services, tax deductions and exemptions, access to
public goods and services, freedom of association and membership of unions and professional
associations.

Family members holding a temporary residence can carry out economic and professional activities
and can be employed; once employed or registered with the unemployment authorities, they have the
same rights as the foreign investors or other foreigners – equal treatment regarding work conditions,
access to education and life-long learning, recognition of qualifications, social security rights, public
health services, tax deductions and exemptions, access to public goods and services, freedom of
association and membership of unions and professional associations, as well as services provided by
employment agencies. Family members who become permanent residents benefit from all the rights
granted to permanent residents.

The National Strategy for Immigration 2015-2018 establishes that the Romanian authorities will
create economic and tax facilities to attract potential investors. The Romanian Tax Code (Codul
Fiscal) provides for the principle of neutrality of fiscal policy in relation to the various categories of
investors, capitals and forms of property, establishing the same taxation level for all investors and
capitals, whether Romanian or foreign. Furthermore, there are tax incentives in place that benefit all
investors, foreign or Romanian, such as special incentives for investments in certain sectors, tax
deductions for certain R & D expenditures, tax exemptions and tax credits.

Other matters

Link to citizenship
Foreign investors can apply for Romanian citizenship to the National Citizenship Authority
(Autoritatea Națională pentru Cetățenie) through the general naturalisation process available to all
foreigners. Foreign investors wishing to obtain Romanian citizenship need have had their main

Milieu Ltd Executive Summary – Investors’ Residence Schemes in Romania/v

Brussels, July 2018
residence (domiciliu) in Romania for eight years (or five years if married to a Romanian citizen).
They must also demonstrate their loyalty to the Romanian State, have not been or be involved in any
activities against the rule of law or national security, be over the age of 18, have the financial
means to support themselves in Romania, have good conduct and have not been convicted of crimes
which would make them unworthy of Romanian citizenship, have knowledge of the Romanian
language, culture and civilization and be familiar with the provisions of the Romanian constitution
and the national anthem. Foreign investors who invested over EUR 1,000,000 can have the duration
of main residence reduced by half – four years or two and a half years if married to a Romanian
citizen. Minor children of foreign investors who have their main residence in Romania may become
Romanian citizens when their parents are granted citizenship if the latter so request in their
application.

Statistics and economic impact

There was no statistical information available on the number or success ratio of applications made
by foreign investors. There was a lack of relevant statistical information from the relevant
stakeholders, which did not disaggregate their data to provide details on the requests made by
foreign investors.

Furthermore, no mechanism to monitor the economic impact and financial efficiency of the
investors’ residence schemes was identified.

However, the Foreign Investors Council (FIC) - an organisation representing the largest foreign
companies in Romania (130 companies that have a total RON 183,000,000,000.00 turnover (26% of
Romania’s GDP))5 - published a report6 on the state of foreign investments in 2017, which highlighted
the following:
 Foreign Direct Investment has contributed significantly to the modernisation of the Romanian
economy as well as to its integration into the European market and international production
chains;
 Between 2010 and 2015, foreign companies continued to hire even though their turnover
remained relatively constant. This suggests that most have made long term investments in
Romania and they are not focussed on merely making short-term profits;
 Foreign companies account for an average of 70% of Romania's exports, as well as for 60%
of its imports;
 Although the general perception is that the volume of FDI is high, Romania has the lowest
FDI stock per capita in the region (EUR 3,130 per capita);
 Almost half of all FDI has been in the industrial sector. These investments are long-term and
capital intensive;
 Romania has the second most stable macroeconomic framework in the region after the Czech
Republic, but is among the last when it comes to the other indicators like infrastructure,
tertiary education and training, and labour market efficiency. 7

The National Bank of Romania estimated that between January and April 2018, total foreign
investment in Romania amounted to EUR 1,454 Million, EUR 263 Million more than in the same
period of the previous year. 8 Direct foreign investments amounted to EUR 4,517 Million in 2016 and

5
Foreign Investors Council website, “Membership. FIC in numbers”, available at https://www.fic.ro/membership/fic-in-
numbers (accessed 07 June 2018).
6
Foreign Investors Council website, “Foreign Direct Investment: Development and Importance in Romania”, available at
https://www.fic.ro/Documents/view/Report-Foreign-Direct-Investment-Development-and-Importance-in-Romania (accessed
05 July 2018).
7
Foreign Investors Council website, “Foreign Direct Investment: Development and Importance in Romania”, available at
https://www.fic.ro/Documents/view/Report-Foreign-Direct-Investment-Development-and-Importance-in-Romania (accessed
05 July 2018).
8
National Bank of Romania website, “Statistics. Data sets. Balance of Payments and International Investment Position -
BPM6. Direct investment - directional principle”, available at http://bnr.ro/Investitii-directe---principiul-direc

Milieu Ltd Executive Summary – Investors’ Residence Schemes in Romania/vi

Brussels, July 2018
at the end of the year, it reached the total of EUR 48,964 Million. Most of these investments were
made in the manufacturing industry, followed by constructions, real estate, commerce, financial
brokering and insurances.9

There are no legal amendments currently being prepared for OUG 194/2002.

%C8%9Bional-12332.aspx (accessed 05 July2018)

9
National Bank of Romania webstite, “Foreign Direct Investment in Romania in 2016”, available at
http://bnr.ro/DocumentInformation.aspx?idDocument=26094&idInfoClass=9403 (accessed 07 June 2018)

Milieu Ltd Executive Summary – Investors’ Residence Schemes in Romania/vii

Brussels, July 2018