Legal information for buying Romanian property
Can foreign EU citizens purchase property in Romania? What about non-EU citizens?
There are more and more foreigners interested in purchasing real estate properties in Romania. The question is whether current legislation allows non-resident investors to buy land (or at least other real estate properties such as houses/villas) directly as in other EU legislations.
Law No. 312/2005 stipulates the conditions in which European Union citizens (as well as non-EU foreign citizens), are able to purchase Romanian land.
Article 4 in the above-mentioned Law stipulates: "The citizen of a member state without legal residency in Romania, the stateless non-resident having residency in an European Union country and the non-resident foreign legal entity (company) incorporated per the stipulations of the EU legislations, are able to gain ownership on land for secondary residences, respectively secondary headquarters, within an interval of 5 years after Romania has joined the European Union".
Actually The Law differentiates upon on the type of land. For example the persons or legal entities mentioned above can only gain ownership of Romanian forests, agricultural land after 7 years from the date Romania has joined the EU. (This last stipulation is not applied to foreign farmers who are able to prove their statute as farmers in their home countries).
What if purchasing a house/villa in Romania?
Buying a house in Romania automatically implies buying the adjacent part (a percentage) of the land on which the building stands upon. As a result even if theoretically foreign European Union citizens would be able to acquire houses (dwellings) directly, practically it is not yet possible without a Romanian company. There are however, some ways around this requirement.
What about non-EU citizens?
The non-EU-foreign-citizen is able to own real estate properties in Romania in conditions of reciprocity based only on international treaties between the countries; however they cannot acquire ownership of Romanian land in more favourable conditions then citizens of the European Union.
Answers to common questions
I'm starting a business in Romania. How do I know if I need any special permit/authorization from the authorities? Permits can be required before or after the incorporation of the company. Some of the activities requiring post-authorization are: recruiting of personnel, travel agencies, activities involving the handling of personal data etc. Activities requiring pre-authorization are: banking, insurance, certain financial activities, activities related to firearms, security companies.
Company vs. Micro-Company Choosing to incorporate a Micro-Company could mean less taxes paid to the State. These types of Romanian companies will pay 2.5% of their income in 2008 and 3% in 2009 as taxes as opposed to 16% of the profit if incorporating a regular Romanian company.
What taxes do I have to pay if I purchase property in Romania? You would have to take into account the tax to the Romanian State, Public Notary Fee (1-2% of the purchase price) and eventually VAT (if the seller is a company).Overview of the Romania property market between 2004-2007
A quick English dictionary for buying Romanian property