ROMANIA Law and Practice Contributed by: Monia Dobrescu and Mădălina Trifan, Mușat & Asociații
parameters to be observed while carrying out construction works. Investors are able to enter into specific develop - ment agreements with relevant public authorities in order to facilitate a project, as Romanian legis - lation provides for the possibility of establishing public-private partnerships under specific public procurement conditions. 2.9 Condemnation, Expropriation or Compulsory Purchase Expropriation can only take place for works of public utility, and only in exceptional circum - stances. Therefore, real estate can be trans - ferred from private property to public property in exchange for direct and prior compensation paid by the state to the owner. In any disagreement, the court decides on the expropriation and establishes the compensation amount. If there is disagreement over the com - pensation amount, the court will decide on it. 2.10 Taxes Applicable to a Transaction According to Romanian legislation, no stamp duty or transfer taxes are charged for direct transfers of real estate made by companies. The only fees to be paid are those for the notary public services (the amount varies depending on the value of transaction) and registration with the Land Book (0.5% of the purchase price for legal entities). These are usually paid by the buyer, but the parties are free to agree otherwise. In an indirect transfer of real estate (shares deal), Trade Register fees must be paid. 2.11 Legal Restrictions on Foreign Investors Individuals and companies from the EU or EEA that are resident in Romania have the right to buy
land under the same conditions as Romanian citizens and companies. Non-EU or non-EEA resident persons and companies have the right to purchase land in Romania for the purpose of establishing a secondary residence or a regis - tered office. EU or EEA citizens and companies can purchase agricultural land or forests that are in the Romanian territory. Other persons and companies, and stateless persons domiciled in a non-EU country, have the right to purchase agri - cultural land outside the city limits under condi - tions governed by international treaties, based on reciprocity. In general, the main investors in the Romanian real estate market are large private companies. Following the trends of recent years, debt financ - ing is the most popular form of financing. In addition, the legislation provides a number of facilities that encourage development, including a tax exemption for reinvested profit. However, even if it is not reinvested, corporate tax has a fixed rate of 16%. Moreover, no fees (building tax or property tax) are charged for buildings and land that are part of industrial and technological parks. 3.2 Typical Security Created by Commercial Investors Mortgage Over Real Estate In order to be valid, a mortgage agreement should meet the following requirements: 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate • the amount for which it is constituted can be reasonably determined on the basis of the mortgage deed;
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