Romanian startups exempted from mandatory conversion of shareholder and investor loans

Romanian startups will no longer be subject to the government’s proposed requirement to automatically convert shareholder or investor loans into equity, following a last-minute amendment, Ziarul Financiar reported. The measure, part of a broader fiscal package, had sparked strong opposition from the technology sector, which warned it could destabilise early-stage financing.

The exemption ensures that financing instruments such as convertible loan agreements (CLAs) will remain unaffected for startups, easing concerns that investors and founders could be forced into unwanted ownership changes.

“The amendment regarding the removal of the obligation to convert CLA loans, supported by us along with the entire industry, was accepted and the provision was removed from the package. We are glad that our arguments were convincing and that we were able to strengthen a collaborative working framework with the state authorities on this occasion,” said Marius Istrate, Chairman of the Board of TechAngels, Romania’s largest network of private investors in technology startups.

He added that the decision reflects the government’s recognition of the strategic importance of the technology sector, alongside energy and industry.

“We believe that this recognition from the government is the foundation on which we can further build a predictable and solid framework for financing and supporting technology startups,” Istrate told ZF.

The amendment was introduced after the government’s initial draft included only a narrow set of exceptions, limited to transactions involving venture capital funds and certified investors. Industry groups argued this would have left the majority of startups exposed to mandatory loan-to-equity conversions, potentially undermining their ability to raise flexible financing.

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