Can foreigners acquire agricultural land in Romania?

Agricultural land located in the countryside can be alienated to and by natural and legal persons, only under the conditions of Law 17/2014 as amended, as well as other applicable regulations. Both Romanian citizens and citizens of a European Union Member State, of the States party to the Agreement on the European Economic Area (EEA) or of the Swiss Confederation, as well as stateless persons residing in Romania, in a European Union Member State, in a State party to the EEA or in the Swiss Confederation, as well as companies having the nationality of Romania, of a European Union Member State, of the States party to the EEA or of the Swiss Confederation, may acquire land located in the countryside.

The current legislation aims to establish imperative and restrictive criteria for the sale of agricultural land located in the countryside. The aim of the law is to keep the use of land in rural areas as close as possible to what Romania has established as having real agricultural potential due to climatic conditions, relief, soil structure and water network. The law also took into account the preservation of the unitary character of the communities created on the principles of agricultural exploitation of these lands located in the extravilan.

Among the conditions imposed by the law for the sale of agricultural land in the countryside we mention as being of major importance: respect of the right of pre-emption (i.e. offering the land for sale at the same price to certain categories of persons, established on certain criteria, according to the law), maintaining of the destination of the land, limitation of the possibility of consecutive sale, in short periods of time of this land, establishment of high taxes on the differences in value between the purchase price and the price at the time of alienation, etc.

However, the sale of land located in the countryside can be carried out, but achieving the investor’s desired goal depends on the specific circumstances of the investment project. The Legality Team, with 25 years of experience in the field of commercial and civil transactions, having a holistic approach and a synthetic vision of the legislation with practical applicability, can advise and assist you in the decision-making process regarding the start of a business in Romania involving the acquisition of land located in the countryside.

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The main management structure of the company in Romania is the general meeting of associates / shareholders. The constitutive act establishes the rules for convening and adopting decisions and whether the exercise of the vote can be delegated by special mandate by the associate / shareholder who cannot take part in the meeting. In the limited liability company, each shareholder entitles the holder to one vote in the respective meeting. The general meeting of associates has the following main obligations: ✓ to approve the annual financial statement and to establish the distribution of the net profit. ✓ to appoint the administrators and the censors, to revoke / dismiss them and to discharge them, as well as to decide to contract the financial audit, when it is not obligatory, according to the law; ✓ to decide the pursuit of the administrators and censors for the damages caused to the company, designating also the person in charge to exercise it; ✓ to modify the constitutive act.
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The limited liability company is the most common form of company in Romania, being the legal entity that best serves the interests of investors both from the point of view of the reliability of the activity, and from the perspective of its management. The limited liability company is abbreviated "SRL" in Romania and is the equivalent of the American limited liability company Limited Liability Company (abbreviated to LLC) or the German economic structure "Gesellschaft mit beschränkter Haftung" (abbreviated to GmbH), or the structure called "limited" , the structure used in most Latin American states.
The limited liability company is characterized by:
✓ the character intuitu personae, which means that this economic structure is based on the trust between the associates;
✓ the division of the share capital into fractions called shares, which cannot be negotiable securities;
✓ the liability of the associates is limited to their contribution to the share capital.
The limited liability company may also have a single partner, natural or legal person, of Romanian or foreign nationality, who will be the owner of all shares. Instead, the maximum number of associates is 50 people.
At present, the Romanian law no longer conditions the subscription and payment of a certain amount as share capital.
Through registration, the company acquires legal personality, becoming, under the law, a collective subject of law. The conclusion given by the judge is sent, ex officio, to the Official Gazette of Romania for publication at the expense of the company and to the Financial Administration in whose territorial area is the main headquarters of the company for fiscal registration, mentioning the registration number in the Trade Register .

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