Land - good investment

The land itself is Romania's most valuable natural resource. All but the most rugged mountainous regions sustain some form of agricultural activity. In 1989 more than 15 million hectares-- almost two-thirds of the country's territory--were devoted to agriculture. Arable land accounted for over 41 percent, pasturage about 19 percent, and vineyards and orchards some 3 percent of the total land area.

Romania's soils are generally quite fertile. The best for farming are the humus-rich chernozems (black earth), which account for roughly one-fifth of the country's arable land. Chernozems and red-brown forest soils predominate in the plains of Walachia, Moldavia, and the Banat region--all major grain-growing areas. Soils are thinner and less humus-rich in the mountains and foothills, but they are suitable for vineyards, orchards, and pasturage.

The area under cultivation has increased steadily over the centuries as farming has encroached on forest and pasture areas, marshes have been drained, and irrigation has been brought to the more arid regions. By late 1986, Romania had extended irrigation to roughly one-third of its arable land, and a major campaign had been conceived to drain the Danube Delta and develop it into a vast agro-industrial complex of some 1,440 square kilometers. The area of arable land grew incrementally from about 9.4 million hectares in 1950 to slightly more than 10 million hectares in the late 1980s.

Another strategy to gain arable land was the controversial program of systematization of the countryside. This policy, first proposed in the early 1960s but seriously implemented only after a delay of some twenty years, called for the destruction of more than 7,000 villages and resettlement of the residents into about 550 standardized "agro-industrial centers," where the farm population could enjoy the benefits of urban life. Only those villages judged economically viable by the authorities were to be retained. Through eradication of villages, fence rows, and reportedly even churches and cemeteries, the government aimed to acquire for agriculture some 348,000 hectares of land.

At the very time the government was attempting to increase the area of arable land, countervailing pressures were exerted by urban development, which consumed large tracts for residential and industrial construction. In May 1968, a law was passed to prohibit the diversion of farmland to nonagricultural uses without the approval of the central government. The law reversed the previous policy of assigning no value to land in calculating the cost of industrial and housing projects. It did not, however, curtail the ideologically driven policy of industrializing the countryside, and some of the country's most fertile farmland was lost to development.

In the present, markets for both sale and lease are emerging in many areas of Romania. Private land owners have received land in kind from former agricultural production cooperatives (CAPs) and are now able to freely conduct sale and leasing transactions under legal provisions adopted in 1998.
Procedures and fees are generally satisfactory, however notarization of aqusition is mandatory, notary fees are high and lack of adequate information as to potential buyers / sellers or lessors / lesses might be another problem for the transaction.

 Economy

Romanian economy was primarily agricultural. In 1948 the Communist government came to power and took control of nearly all aspects of the economy. Through a series of five-year plans, the Communists transformed Romania into an industrial nation. The economy grew considerably during the first part of the Communist period, but by the 1980s it had slid into decline, and shortages of consumer goods and degradation of the environment had become widespread. After the Communist government was overthrown in 1989, the Romanian economy virtually collapsed. Although dominated by former Communists, the new government began taking steps to reform the economy in the early 1990s. These steps included devaluing the national currency, removing government subsidies on most consumer goods, and converting some state-owned companies to private ownership. Romania's modern economic development dates to the opening of maritime trade routes to western Europe in the early 19th century. After independence in 1878, exploitation of the cereal lands, forests, and oil fields was complemented by a policy of encouraging industry, but, in spite of considerable success, Romania still had a predominantly agrarian economy at the end of World War II. The communist regime concentrated on the expansion of industry, with priority given to the heavy industries of metallurgy, chemicals, and engineering. Industrialization was assisted by a flood of cheap labour from rural areas, where collectivization and discriminatory price-fixing meant that farmers not only lost their own holdings but secured only modest returns as farmworkers. It also benefited from close economic integration with the Soviet Union, which secured markets for manufactured goods while supplying raw materials and fuels at relatively low cost. Romania, one of the poorest countries in Central and Eastern Europe, began the transition from communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. 
Three UE pre-accession instruments have been financed by the European Community to assist the candidate country of Romania with its pre-accession preparations: the Phare programme; SAPARD, which provides aid for agricultural and rural development; and ISPA, which finances infrastructure projects in the fields of environment and transport. The support provided by these programmes is focused on the Accession Partnership priorities, which are intended to help the candidate countries meet the criteria for membership.

Romania is steadily moving forward in the implementation of the priorities defined by the revised Accession Partnership with regard to the economic criteria. Economic growth was accompanied by some progress towards economic stability although macroeconomic risks have recently increased.

The regulatory framework is progressively developing but further efforts are needed in the areas of judicial and public administration in order to strengthen its functioning and ensure the enforcement of property rights. Further efforts will be needed on the priorities relating to structural reform.

 Da Cappo Max SRL Romania's personnel has a wealth of experience in land transactions, which guarantees fast and efficient solutions to your land related problems.