Can foreign nationals and companies be expropriated in Romania?

Yes. Romanian law allows expropriation of immovable property regardless of whether the owner is a Romanian or a foreign individual or company. The Constitution provides that private property is guaranteed and protected equally, irrespective of the owner, and expropriation is permitted only for public utility and against fair compensation. Foreign owners are therefore subject to the same rules and protections as Romanian owners when their property is needed for public projects.

What conditions must be met for expropriation to be lawful in Romania?

For expropriation to be lawful in Romania, several cumulative conditions must be satisfied. There must be a public utility cause established by law, the expropriation must follow a special procedure laid down in legislation, and the owner must receive fair and prior compensation, usually in money. In addition, the measure must comply with constitutional guarantees of property and with the standards of the European Convention on Human Rights, which require a fair balance between the public interest and the individual right to property.

How is compensation calculated in Romanian expropriation cases?

Compensation is intended to reflect the real market value of the property at the time of expropriation. In many infrastructure projects under Law no. 255/2010, authorities use valuation grids approved at county level, which set standard values per square metre for different categories of land. Owners who consider the resulting amount too low can challenge it in court and rely on independent expert valuations. Judges can order judicial expert reports and may award higher compensation if they find that the initial offer did not reflect market value.

Can a foreign owner challenge the amount of compensation offered for expropriation?

Yes. Owners, including foreign individuals and companies, can file court actions contesting the amount of compensation offered by the expropriating authority. The competent civil court will review the documentation and may appoint experts to determine the propertys market value. If the court concludes that the amount offered was insufficient, it can award a higher sum and, where appropriate, interest for delays in payment. It is essential to observe the legal deadlines and to support the claim with strong valuation evidence.

What practical steps should foreign owners take when they receive an expropriation notice in Romania?

Foreign owners should act quickly. First, they should collect and keep all notices, maps and valuation documents received. Second, they should verify the land register to ensure that their ownership and the characteristics of the property are correctly recorded. Third, they should consult Romanian legal counsel and, where appropriate, commission an independent valuation to assess whether the proposed compensation reflects market value. Finally, they should decide within the legal deadlines whether to negotiate, accept the offer or bring court proceedings to challenge the expropriation or the level of compensation.

Expropriation and compensation for foreign owners in Romania

Q: Is it possible to challenge the expropriation itself, not just the compensation?

In certain circumstances, yes. Owners can challenge decisions that declare public utility or the specific expropriation measure affecting their property, for example if procedural rules were breached, if their land was wrongly included in the expropriation corridor, or if the project clearly lacks genuine public interest. Such challenges are usually brought before administrative or civil courts under the rules on administrative litigation. However, courts tend to give authorities a wide margin in defining public utility, so these actions are more complex than disputes limited to compensation.

Public infrastructure projects in Romania – new motorways, bypass roads, railways, utilities, energy corridors or social infrastructure – often require the state or local authorities to take privately owned land. For foreign individuals and companies who own property in Romania, expropriation can be a major shock: they may receive a formal notice in Romanian, a reference to a government decision and a proposal for compensation that seems significantly below market value.

This guide explains, in practical terms, how expropriation works in Romania and what foreign owners should realistically expect when their land, buildings or other rights are affected by public projects. It focuses on three key questions:

On what legal basis can the Romanian state or a local authority expropriate private property?
Who is entitled to compensation, how is that compensation calculated in practice and what does “fair” mean?
What can a foreign owner do if they disagree with the expropriation itself or with the amount offered?

The analysis is based on the Romanian Constitution, expropriation laws (primarily Law no. 255/2010 and Law no. 33/1994), the Code of Civil Procedure, and on the case law of the European Court of Human Rights (ECtHR) under Article 1 of Protocol No. 1 of the European Convention on Human Rights on the protection of property. It is written for non-Romanian readers and deliberately avoids unnecessary jargon, but it does not replace tailored legal advice for a specific case.

Legal Basis for Expropriation in Romania

Romanian law protects private property but allows for expropriation as an exceptional mechanism when the public interest requires it. Understanding the legal framework is essential for assessing whether an expropriation is lawful and what margins exist to challenge it.

1. Constitutional protection and limits

The starting point is the Romanian Constitution. Article 44 guarantees private property and states that it is protected equally, regardless of the owner, whether a Romanian or foreign citizen, a company or another entity. At the same time, the Constitution expressly allows expropriation, but only if certain cumulative conditions are met:

the expropriation must be for a public utility cause established by law;
it must be carried out in accordance with the law, following a special procedure;
and it must be accompanied by fair and prior compensation, usually in money.

In other words, expropriation is not a routine administrative decision but an exceptional measure subject to strict constitutional control. Any deviation from these principles – for example, expropriation without clear public interest or with symbolic compensation – risks breaching both the Constitution and Romania’s obligations under the European Convention on Human Rights.

2. Main expropriation laws

Constitutional principles are implemented through ordinary legislation. Two laws are particularly important:

Law no. 255/2010 on expropriation for public utility, necessary for achieving objectives of national, county and local interest, which regulates modern infrastructure projects such as motorways, national and county roads, railways, energy and utility corridors and other large-scale public works;
Law no. 33/1994 on expropriation for public utility, which contains general provisions and continues to apply as a residual framework for cases not covered by Law 255/2010.

Law 255/2010 is the main reference for large transport and energy projects. It provides a relatively accelerated procedure, with standardised steps and a specific approach to valuing land and constructions. For other types of public works, authorities may still rely primarily on Law 33/1994.

Both laws reflect the same core idea: expropriation is allowed only if the project is declared to be of public utility and if owners receive just compensation.

3. The concept of public utility

A key condition for any expropriation is that the project serves a public utility. Romanian law gives a broad but not unlimited list of public utility works, including:

construction, rehabilitation or extension of roads, railways, bridges and other transport infrastructure;
energy infrastructure such as electricity transmission lines, gas pipelines, oil pipelines;
water supply, sewage systems and environmental infrastructure;
social infrastructure – schools, hospitals, public administration buildings, courts, cultural or sports facilities;
urban regeneration, parks and public green spaces, protective forest belts and similar projects.

The public utility of a project is typically established through a government decision or a decision of the county or local council, depending on the level of interest (national, county, local). That act will define the expropriation corridor or perimeter and authorise the expropriating authority to proceed with the procedure.

Foreign owners should understand that expropriation is not limited to mega-projects like motorways. It can also occur in the context of local roads, utility networks, social housing or public facilities. What matters is the legally recognised public utility, not the size of the project.

4. Expropriation procedure in practice

Although details differ slightly between Law 255/2010 and Law 33/1994, the procedure generally follows these stages:

Planning and technical documentation. The authority prepares technical studies and the expropriation plan, identifying properties that need to be taken and their surface areas.
Decision declaring public utility. The government or local authority adopts a formal act declaring the project to be of public utility and approving the expropriation corridor.
Identification of owners and cadastral documentation. Properties are identified in the land register, and the list of owners or holders of real rights is drawn up.
Valuation of properties. Independent valuers or valuation grids approved at county level are used to determine the amount of compensation.
Notification of owners. Owners are informed about the expropriation, the surface to be taken and the compensation proposed.
Payment or deposit of compensation. If the owner accepts the amount, it is paid directly. If not, the authority may deposit the amount in a special account, and expropriation is considered completed from a legal point of view, even if the owner disputes the amount in court.
Transfer of ownership. After payment or deposit, ownership is transferred to the state or local authority and is registered in the land register.

For foreign owners, the most important documents are the notification of expropriation (often accompanied by a list or annex in Romanian), the valuation report or reference grid and any subsequent communication from the authority. These documents will be the basis for any challenge or negotiation.

5. Protection under the European Convention on Human Rights

Beyond Romanian law, foreign owners benefit from the additional layer of protection provided by Article 1 of Protocol No. 1 to the European Convention on Human Rights. The provision guarantees the right to peaceful enjoyment of possessions and allows deprivation of property only in the public interest and subject to conditions provided by law and the general principles of international law. It also recognises the state’s right to control the use of property for the general interest.

The European Court of Human Rights has developed a substantial body of case law on expropriation, indirect expropriation and fair compensation. The core principle is the existence of a fair balance between the requirements of the general interest and the protection of the individual’s fundamental rights. If compensation is inadequate or the procedure is unfair, that balance is upset and a violation may be found.

In practice, this means that even if an expropriation complies with domestic law on paper, it may still raise issues under the Convention if compensation is clearly below market value, if there are significant delays in payment or if the procedure is arbitrary. For foreign investors, ECtHR standards are a useful benchmark when evaluating whether the Romanian state has acted fairly.

Who Is Entitled to Compensation and How It Is Calculated

Once expropriation is triggered, the crucial issue for foreign owners is compensation. Who exactly has the right to receive money and how is the amount calculated in practice?

1. Eligible persons: owners and other right holders

Romanian expropriation laws entitle to compensation primarily those who hold real rights over the affected property. These typically include:

Registered owners in the land register (cadastral register) – individuals, Romanian or foreign companies, and other entities;
Co-owners – in proportion to their share of ownership;
Holders of usufruct, surface, use or habitation rights – in some cases, the law allows these right holders to claim compensation for the loss or alteration of their rights;
Owners of constructions or improvements on expropriated land – even if the land and the building belong to different persons;
Mortgage lenders or other secured creditors – depending on contractual arrangements, part of the compensation may be directed to them to cover outstanding debts;
Tenants or agricultural users – they may not receive direct expropriation compensation, but could be entitled to compensation for crops, investments or early termination of leases under general civil law.

A foreign owner should always check that their name and rights appear correctly in the land register and in the expropriation documentation. If deeds have not been registered or corporate structures have changed, prompt rectification is critical to avoid compensation being paid to the wrong person or entity.

2. Treatment of foreign nationals and companies

Under the Romanian Constitution and expropriation laws, private property is protected equally regardless of the owner. Foreign individuals and companies are, in principle, treated the same as Romanian owners regarding expropriation and compensation. The only practical differences stem from language, the need for representation and, in some cases, tax treatment of compensation.

A foreign owner may be required to appoint a representative in Romania (for example, a lawyer or a local manager) to receive notifications and act in the procedure. It is also important to consider the tax implications of compensation received, particularly for foreign companies or non-resident individuals, and to coordinate with tax advisers.

3. Key principles for calculating compensation

Both the Romanian Constitution and the European Convention on Human Rights require that expropriation be accompanied by fair compensation. In practical terms, several principles apply:

Compensation should reflect the real market value of the property at the time of expropriation, not outdated administrative prices.
Compensation should be prior or at least reasonably prompt. Excessive delays can trigger additional claims or interest.
Compensation should cover both the land and constructions, as well as certain losses directly linked to expropriation (for example, demolition of a legally built structure).
In some circumstances, the law may allow compensation in kind (for example, allocation of another plot or building), but this is less common and usually requires agreement of the owner.

In ECtHR case law, a payment that is much lower than market value, without strong justification, is unlikely to be considered compatible with the fair balance requirement. The Court has repeatedly stated that, as a rule, compensation should be reasonably related to the value of the property. Only in exceptional circumstances (for example, control of use to prevent harmful activities) might lower compensation be accepted.

4. Valuation methods: valuation grid versus individual appraisal

One of the most controversial aspects for foreign owners is the valuation method used by Romanian authorities. Under Law 255/2010, compensation is often based on valuation grids (tables) approved at county level. These grids set standard values per square metre for different types of land and sometimes for certain categories of constructions.

While grids are meant to ensure speed and uniformity, they may lag behind real market dynamics, especially in fast-growing urban or peri-urban areas. This can lead to situations where the compensation offered is significantly below what a willing buyer would pay on the open market for the same property.

Owners who disagree with grid-based valuations can commission independent expert reports to establish higher market values and rely on them in court proceedings. Judges can order judicial expert reports to determine fair compensation and are not bound to accept administrative grids if they find them inconsistent with real market data.

5. Components of compensation

Compensation in an expropriation case can include several components:

Value of the land – based on category (urban, agricultural, forest, industrial), location, access and permitted use;
Value of constructions and improvements – buildings, fences, wells, irrigation systems, planted orchards, etc.;
Value of crops and planted vegetation – where expropriation takes place during the agricultural season or before harvesting;
Losses directly caused by expropriation – for example, costs of relocation of a business or technical equipment, as long as they are directly and necessarily connected to expropriation.

Romanian courts tend to be more conservative than some owners expect when it comes to indirect losses (such as lost profits or loss of opportunity). However, in commercial cases supported by strong evidence, it may be possible to argue for broader compensation, especially if expropriation demolishes a functioning business location.

6. Example: expropriation for a motorway

Consider a foreign company that owns an industrial warehouse on the outskirts of a Romanian city. The state decides to build a new motorway that partially crosses the companys land. Under Law 255/2010, the government adopts a decision declaring public utility for the motorway section and approves an expropriation corridor.

The corridor covers part of the land, including an access road and a section of parking. The warehouse itself is not directly affected but becomes significantly less accessible. The authority calculates compensation for the expropriated strip of land using the county valuation grid and offers an amount that, in the companys view, is far below market prices for industrial land in that area.

In such a case, the company has several options:

Accept the proposed compensation if it considers the amount commercially acceptable and prefers to avoid litigation.
Reject the amount and challenge it in court, relying on independent expert valuations to prove higher market value.
In parallel, discuss with the authority technical adjustments to the project (for example, alternative access to the warehouse) and, if necessary, claim additional compensation for loss of utility or business impact.

Realistically, the legal route will take time, but it can lead to significantly higher compensation if the initial offer was clearly below market value.

How to Challenge Expropriation Decisions or Compensation Amounts

Foreign owners who disagree with either the expropriation itself or the compensation offered have several procedural tools at their disposal. The strategy depends on the timeline, the strength of the case and the importance of the property for their overall business or investment plans.

1. Challenging the declaration of public utility

At the earliest stage, an owner may wish to challenge the decision that declares the project to be of public utility and approves the expropriation corridor. This act is typically normative (it applies to many properties and owners) and is adopted by the government or by local authorities.

Challenging such a decision can be legally complex, because courts tend to give authorities broad discretion in defining public utility. Nevertheless, if the project clearly lacks genuine public interest, is grossly disproportionate or violates other legal requirements (for example, environmental impact assessment, urban planning rules), there may be grounds to contest it under the law on administrative litigation.

For foreign owners, this route is more likely to be relevant when they are dealing with strategic, high-value assets or large-scale projects, rather than small parcels of land.

2. Challenging the expropriation decision for a specific property

The more common situation is that owners accept the existence of the public project but disagree with how it affects their property. They may argue that:

their property was wrongly included in the expropriation corridor;
the surface area recorded is incorrect;
the authority has not properly identified the real owners or right holders;
procedure was flawed (for example, notification defects, lack of consultation or missing documents).

In such cases, the owner can challenge the expropriation decision relating to their property in court. The exact procedural path depends on the law applied (Law 255/2010 or Law 33/1994), but generally involves filing an action before the competent court within a specific deadline after notification.

For foreign owners, respecting deadlines is critical. Notices are often drafted only in Romanian, and courts will not extend deadlines simply because an owner did not understand the language. Having local counsel or a trusted representative who can react quickly is therefore essential.

3. Challenging compensation amounts

Even when the owner accepts that expropriation is inevitable, they can still challenge the amount of compensation. This is, in practice, the most frequent type of dispute.

Under the expropriation laws, owners can file a lawsuit seeking a higher compensation than that offered by the authority. Such actions are usually brought before the civil courts in whose jurisdiction the property is located. The court will examine both the expropriation documentation and the valuation and may:

appoint one or more court experts to assess market value;
consider independent expert reports submitted by the parties;
hear witnesses or examine additional documents to clarify the real characteristics and potential of the property.

If the court concludes that the compensation initially offered was too low, it can award a higher amount. Interest may also be granted for delays between expropriation and actual payment.

4. Practical steps for building a strong case

Foreign owners who plan to challenge expropriation or compensation should take several practical steps:

Preserve all documents. Keep copies of all notices, decisions, maps, valuation grids and correspondence from the authority. These will be evidence in court.
Clarify the property status. Ensure that the land register reflects the real situation in terms of ownership, surface and any constructions or rights. If there are discrepancies, address them quickly.
Obtain an independent valuation. Engage a qualified valuer with experience in expropriation cases to assess real market value, taking into account comparable transactions.
Analyse the business impact. For commercial properties, document how expropriation affects operations, access, logistics and revenue. This can support claims for higher compensation.
Choose the right procedural path. Coordinate with Romanian legal counsel to determine whether to challenge the expropriation decision itself, the amount of compensation or both.

Time is crucial. Many rights are subject to short deadlines, sometimes measured in days or weeks from the date of notification. Foreign owners should not postpone seeking advice until later because opportunities may be lost.

5. Administrative remedies and negotiations

In addition to court actions, there may be opportunities to negotiate adjustments or improvements with the expropriating authority. For example:

minor rerouting of infrastructure to reduce impact on the remaining property;
technical solutions to preserve access or utilities;
agreement on compensation in kind, such as alternative land, in exchange for avoiding litigation.

Romanian law allows parties to reach agreements on transfer of ownership and compensation without formally triggering the full expropriation procedure, provided legal requirements on form and publicity are met. Skilled negotiation can sometimes achieve better results, especially where both the public project and the private business are important for the local economy.

6. Resort to international mechanisms

In extreme situations, foreign investors may consider international avenues, such as investment arbitration under bilateral investment treaties or the Energy Charter Treaty, if applicable. Many treaties protect investors against unlawful expropriation and require fair and equitable treatment.

However, resorting to international arbitration is a complex step that should be considered only after thorough analysis and in coordination with local remedies. In many cases, disputes can be resolved satisfactorily within the Romanian legal system, especially when owners act promptly and present solid evidence on valuation.

Conclusion

Expropriation in Romania is a legally regulated process that balances the need for public infrastructure against the protection of private property. For foreign individuals and companies, the key is to understand early how the system works, what rights they have and how to use those rights effectively.

The Romanian Constitution and expropriation laws guarantee compensation and set procedural safeguards. The European Convention on Human Rights adds an extra layer of protection through the requirement of a fair balance and fair compensation. In practice, foreign owners should expect the state to proceed with infrastructure projects, but they are not powerless: they can influence how expropriation is implemented and how much compensation they receive.

By carefully monitoring notifications, reacting within deadlines, relying on independent valuations and engaging experienced local counsel, foreign owners can significantly improve their position. While expropriation cannot always be avoided, it can be managed in a way that leads to fairer outcomes and preserves, as much as possible, the value of cross-border investments in Romania.