In a regional context marked by instability and increasing security pressures, Romania is repositioning its defence industry as a pillar of strategic autonomy, supporting the commitments undertaken within NATO and the EU. Government Emergency Ordinance (GEO) No. 73/2025 on certain measures regarding investments in the field of national security addresses the need for a predictable legal framework for the development of the local defence industry and for attracting investments in military capabilities, advanced technologies and critical industrial infrastructure. GEO No. 73/2025 establishes the rules governing the construction, modernization, reconversion and expansion of defence production and service facilities, where such projects are necessary to protect essential national security interests and concern the production or trade of defence products.

According to a draft law approving GEO No. 73/2025, currently under parliamentary debate, the legislator is expected to introduce certain clarifications, required under the principles of legislative drafting, regarding notions such as “investor”, the mechanism for carrying out investments and their legal regime—elements which, in their current form, may give rise to unclear interpretations.

Who can invest and under which conditions

Eligible investors are legal entities from EU, NATO member states, or countries that have concluded economic and strategic partnerships with Romania, which have the necessary financial capacity, technical licences and relevant know-how. They may also acquire participations conferring managerial and operational control, provided they comply with the National Standards for the Protection of Classified Information in Romania and undergo the required security checks for the management of the companies involved.

Security filter and state control

Projects are subject to a twofold approval mechanism:

• CSAT, for assessing the impact on national security;
• CEISD, within the framework of the foreign direct investment examination regime, in accordance with Regulation (EU) 2019/452.

The state reserves its supervisory role through the relevant ministry, which validates the investment mandate and can intervene if essential security interests are affected.

Special legal status of investments

From a legal point of view, investments made under the ordinance are assimilated to public utility works and projects of national interest and national security, which allows:

• expropriation for reasons of public utility;
• prioritization of projects, even in the event of affecting protected natural areas;
• removal of land from agricultural or forestry use;
• accelerated procedures for concessioning public goods, including through direct award. In the case of concession by direct award, no specifications are drawn up. The duration of the concession cannot exceed 49 years from the date of signing the contract. The royalty is established by Government Decision based on the market value of the land or buildings and the duration established for the concession of public property of the state.

Investments can be made on land owned, leased/conceded to legal entities indicated by law or for which they hold a superficies right.

Public funding and support

State owned economic operators can benefit from budgetary allocations to increase their share capital, including to cover the VAT tax pertaining to the investments. In parallel, funding is encouraged through European programs, NATO or from states with which Romania has strategic and economic partnerships.

Governance, audit and accountability

Companies established for the development of such projects operate under Companies Law No. 31/1990. The bylaws set out the rights and obligations of the shareholders, including those relating to the increase or decrease of the share capital after incorporation, the transfer of participations, the approval of transactions, the performance of the statutory audit, the approval of the business plan, the budget and the annual financial statements, as well as the establishment of guarantees or other obligations that may lead to the impairment of essential national security interests. The management strategy is established by the investor, but failure to meet the objectives may trigger sanction mechanisms.

The financial audit is carried out according to international auditing standards - ISA adopted by the European Commission, and the use of public funds is subject to the control of the competent authorities.

Pre-emption right and project continuity

Upon the investor’s withdrawal, the state economic operator benefits from a pre-emption right on the shares, at the value established by an ANEVAR appraiser. Upon termination of the company for any reason, the shareholders are obliged to ensure the continuity of the activity and the use of the investment according to the security destination.

Implications for the business environment

GEO No. 73/2025 establishes a predictable legal framework for international industrial partnerships in the Romanian defence industry. In fact, shortly after the adoption of this regulatory act, the European Commission approved Romania’s access to more than EUR 16 billion through the SAFE (Security Action for Europe) instrument, representing the second-largest allocation in the EU. These funds are intended to support security acquisitions and investments already undertaken and will contribute to reducing financing costs and accelerating the modernization of Romania’s defence industry and critical infrastructure.

The national legal framework, along the European funding provide a concrete basis for partnerships, technology transfer and domestic capacity development, with high governance requirements and public support for investments. In a context where investments in the defence industry are becoming a strategic priority, this regulation creates the necessary legal framework for Romania to acquire and develop and especially to produce advanced military technologies, which will allow the armed forces to operate at NATO standards and be prepared to face the challenges raised by an increasingly complex operational environment.

Content provided by Gruia Dufaut & Asociații Law Firm