Legal Risks and Execution Challenges Continue to Shape Investment in Romania (Part 2)

While Romania’s investment framework is evolving, the execution of transactions continues to reveal a range of legal and operational risks that foreign investors must carefully navigate. Based on extensive deal experience, Silviu Stratulat, Managing Partner at Stratulat Albulescu Attorneys highlights recurring issues that frequently emerge during due diligence and post-acquisition integration.

Tax exposure remains one of the most common findings in transaction processes. Issues related to transfer pricing, employee incentives and their potential reclassification often create unexpected liabilities. Although tax due diligence is typically conducted by specialised advisors, its outcomes significantly influence deal structure and pricing.

Employment-related risks also feature prominently. Companies may rely on service agreements or other arrangements that, under Romanian law, risk being reclassified as employment relationships. Such requalification can trigger substantial financial consequences, including back taxes and penalties.

In industrial and operational assets, environmental compliance is a recurring concern, particularly for legacy sites. Fire safety regulations represent another critical area, where non-compliance or incomplete permitting can expose investors not only to financial risk but also to potential criminal liability in extreme cases.

Data protection compliance continues to be underestimated, despite the direct applicability of GDPR. Many companies, particularly in business-to-business sectors, fail to fully align their operations with data protection requirements, including the handling of employee data. This creates exposure to significant fines, calculated as a percentage of turnover.

In real estate transactions, Romania presents a distinct set of challenges compared to other EU markets. Title risks remain relatively common, reflecting historical restitution claims and ongoing cadastral inconsistencies. Overlapping land records and documentation gaps can complicate acquisitions, making title insurance a more frequent requirement than in other jurisdictions.

Beyond due diligence, post-transaction integration introduces additional complexities. Regulatory approvals and permit transfers must be carefully managed, particularly in cases involving change of control. Contractual provisions in financing agreements and supplier contracts may also impose restrictions, requiring lender consent or renegotiation.

Operational integration can present less visible but equally significant challenges. Rapid implementation of new governance structures or compliance systems can disrupt existing organisations, affecting employee retention and performance. Managing cultural alignment is therefore a key factor in successful integration.

Looking ahead, several regulatory developments are expected to shape Romania’s investment environment. European digital legislation, including the AI Act, Data Act and cybersecurity frameworks, will introduce new compliance layers for businesses. At the same time, the energy transition, particularly in renewables, offshore wind and emerging technologies, will create both opportunities and regulatory complexity.

Fiscal policy remains a central variable. Future changes in taxation, alongside broader EU harmonisation initiatives, will influence investment decisions across sectors. Infrastructure development, supported by EU funding, is also expected to play a significant role, provided that implementation remains consistent and predictable.

Further reforms in insolvency and restructuring are anticipated, with potential to improve investor confidence, particularly in higher-risk or capital-intensive sectors.

From a structural perspective, Romania still has room to strengthen its investment ecosystem. Stratulat points to Poland as a relevant benchmark, particularly in areas such as investment fund structures, tax incentives and corporate governance flexibility. Encouraging the development of locally domiciled funds and expanding institutional capital could support broader market growth.

In the current market context, a more cautious economic sentiment has created what may be a favourable entry point for investors. While consumption and overall confidence have moderated, this environment may offer opportunities to deploy capital at more attractive valuations.

Stratulat remains optimistic about Romania’s medium-term outlook, citing its strategic location and growth potential. Sectors such as infrastructure, construction, food production and technology are expected to see increased activity, supported by both domestic demand and regional developments.

With expectations of stronger growth beginning from 2027, the current period may represent a window of opportunity for investors willing to navigate the complexities of the market.

Part 1 (Romania Eases FDI Framework as It Positions for a New Investment Cycle)

Slovakia’s inflation slows to 15-month low, but housing and energy costs remain elevated

Consumer price growth in Slovakia eased in March, reaching its lowest level in over a year, according to data published by the Statistical Office of the Slovak Republic. Despite the slowdown, housing and energy costs continue to exert upward pressure on inflation.

Annual inflation stood at 3.5 percent in March, down from previous months and marking the lowest rate in 15 months. On a monthly basis, prices increased by 0.1 percent, unchanged from February and significantly below January levels.

The moderation in inflation was driven largely by weaker price growth across most categories, particularly food and non-alcoholic beverages, as well as recreation and hospitality-related services. At the same time, lower food prices contributed to the subdued month-on-month increase, with broad declines across key categories such as dairy, oils and cereals.

However, rising costs in housing and transport partially offset this trend. Prices in the housing and energy segment increased both month-on-month and year-on-year, remaining a key driver of overall inflation. Energy costs for heating rose sharply compared to a year earlier, alongside higher imputed rents and service charges linked to housing.

Transport costs also contributed to inflationary pressures, with fuel prices increasing significantly during the month. This reversed the earlier trend of declining transport costs and had a noticeable impact on overall price development.

Across the consumer basket, prices rose year-on-year in all main categories, with the strongest increases recorded in financial and insurance services, as well as housing-related costs. By contrast, price growth slowed considerably in food and beverage categories, helping to moderate overall inflation.

Core inflation, which excludes regulated prices and administrative effects, reached 1.9 percent year-on-year, while net inflation stood at 2.6 percent. These indicators suggest that underlying price pressures remain more contained than headline inflation.

The latest data also reflect methodological changes introduced at the start of 2026, including an updated consumer basket and revised weighting of expenditure categories. Housing and energy now account for just under 22 percent of household spending, while food and non-alcoholic beverages represent just over 20 percent.

Overall, while inflation in Slovakia is easing, the data indicate that structural pressures—particularly in housing and energy—continue to shape price dynamics in the economy.

Inflation picks up in Czech Republic as housing costs remain a concern

Consumer price growth in the Czech Republic accelerated in March, driven mainly by fuel costs, while housing-related expenses continue to put pressure on overall inflation, according to data from the Czech Statistical Office.

Annual inflation reached 1.9 percent in March, up from 1.4 percent in February, while prices increased by 0.6 percent month-on-month. The rise brings inflation close to the Czech National Bank target of 2 percent, with analysts expecting further increases in the coming months.

Fuel prices were the main contributor to the latest increase. Pavla Šedivá from the statistical office noted that diesel and petrol prices reached their highest levels in recent periods. “The most significant impact on consumer prices was the fuel price in March. Diesel was sold at petrol stations for an average of 42 Kč/l and petrol Natural 95 for 38.10 Kč/l. In the case of Natural 95 petrol, this was the highest value since July 2024 and in the case of diesel even from November 2022,” she said.

According to Zdeněk Pikhart, earlier factors that had helped contain inflation—such as adjustments to renewable energy payments and lower food prices—have now been offset by higher fuel costs.

“The supply shock to fuel prices thus caught the economy in a relatively favorable situation in March, with briskly rising economic activity and inflation below the target. However, the month-on-month fuel price increase has largely exhausted this pillow and put inflation back in close proximity to two percent,” Pikhart said.

Beyond energy, analysts highlight housing-related costs as a key structural driver of inflation. Petr Dufek pointed to rents and imputed rent as major contributors.

“This is mainly due to the increasing rent and the so-called imputed rent, which reflects the high prices of apartments in the real estate market. Only these two items are behind almost half of the current annual inflation,” he said.

Rents rose by 6.1 percent year-on-year, while imputed rent, reflecting the cost of home ownership, increased by 5.4 percent. Service prices overall were up 4.7 percent, compared with only marginal growth in goods prices.

In a broader European comparison, inflation in the Czech Republic remains relatively moderate, although it is higher in neighbouring markets including Slovakia, Austria, Poland and Germany.

Analysts expect inflation to rise further in April, largely due to continued pressure from oil prices. Miroslav Novák said: “In April, inflation is very likely to accelerate further due to high oil prices. In my opinion, the price caps on margins and the lower excise tax on diesel will have only limited effects.”

The central bank expects inflation to remain contained over the full year, with average growth projected to stay below 3 percent, although external factors such as geopolitical tensions and commodity prices continue to pose risks.

Source: CTK

Slovakia extends dual diesel pricing and removes refuelling cap

The government of Slovakia has decided to extend its system of dual diesel pricing for a further 30 days, while removing the existing €400 cap on individual refuelling transactions. The move confirms earlier statements by Prime Minister Robert Fico and comes despite criticism from the European Commission.

Under the measure, diesel sold to vehicles with foreign licence plates remains priced at a higher level than for domestic users. The government has, however, lifted limits on the volume and value of fuel purchases, a change previously requested by Slovak transport operators. Motorists are still restricted to refuelling directly into vehicle tanks and, in limited cases, into a single container of up to 10 litres.

“The decision on double prices makes sense. Therefore, we will again put this provision into the preparation of the government regulation so that the Ministry of Finance can go down this path,” Fico said.

The price for foreign vehicles is calculated as an average of diesel prices in neighbouring countries, including the Czech Republic, Poland and Austria, based on data from the European Commission. This currently stands at around €2.00 per litre, compared with approximately €1.75 per litre on the domestic market.

The policy was introduced in March in response to increased cross-border demand, often described as fuel tourism, after Slovak fuel prices fell below levels in neighbouring countries following disruptions linked to the conflict in the Middle East. The European Commission has argued that the dual pricing mechanism is discriminatory and may be incompatible with EU law.

Slovakia implemented the regulation under a state of oil emergency declared earlier this year after supplies through the Druzhba oil pipeline were interrupted. Although some restrictions have since been eased, the government has opted to maintain selected measures.

State-owned refinery Slovnaft, part of the MOL Group, has resumed near-full operations and is sourcing crude oil via the Adria pipeline, including shipments from Libya and Saudi Arabia. According to CEO Gabriel Szabó, the company is continuing technical adjustments to enable processing of non-Russian crude, with completion expected next year.

At the same time, uncertainty around regional supply remains. Volodymyr Zelenskyy said that flows through the Druzhba pipeline could resume by the end of April, following earlier disruptions linked to the ongoing conflict.

The Slovak government maintains that the measures are necessary to stabilise the domestic fuel market, while discussions with EU institutions on their compliance continue.

Source: CTK

Czech rental market sees quarterly dip, annual growth remains strong

Rents across the Czech Republic declined slightly in the first quarter of 2026 compared with the end of last year, although year-on-year growth remains significant, according to data from Bezrealitky.cz.

Average asking rents fell by around 2 percent quarter-on-quarter to CZK 365 per sqm, while increasing by 13 percent compared with the same period last year. The data suggests that rental price growth is slowing, with some signs of stabilisation emerging across the market.

According to the analysis, supply levels are gradually increasing, while demand is becoming more constrained by affordability. Hendrik Meyer, head of the EEC Group, said the market is adjusting to more price-sensitive tenants.

“They have a clear budget and have no problem sharing it with apartment owners. By increasing the number of apartments on offer, sooner or later they will come across someone who will make a concession in price rather than look for a tenant for another month and thus lose a twelfth of the annual profit,” Meyer said.

Among major cities, Prague remains the most expensive rental market. Average rents reached approximately CZK 456 per sqm in the first quarter, equivalent to around CZK 27,350 per month for a 60 sqm apartment. Prices increased both quarter-on-quarter and year-on-year, with annual growth reaching up to 14 percent. Demand also remains strong, with an average of 45 applicants per listing.

In the surrounding Central Bohemian Region, rents declined by around 5 percent compared with the previous quarter, although they rose by 13 percent year-on-year. Average rents stood at CZK 309 per sqm. While towns closer to Prague continue to record increases, more distant locations such as Příbram or Rakovník saw declines.

In Brno, rents were largely stable for a third consecutive quarter, averaging CZK 346 per sqm, with a slight quarterly decrease of around 1 percent. Meyer noted that supply growth is influencing the short-term trend.

“The current situation does not mean that rents in Brno will not increase in the long term. The optics of comparisons during the rolling year grew by 12 percent. However, the market is responding to the current growing number of apartments on offer, which is increasing with each passing month,” he added.

Elsewhere, the largest quarter-on-quarter decline was recorded in Olomouc and its surrounding area, where rents fell by around 11 percent, although they remain higher than a year ago.

Overall, while rents have not declined on an annual basis in any major city, the first quarter data indicates a shift towards a more balanced market, with affordability constraints and rising supply beginning to moderate price growth.

REWE and Migros Zurich Plan Acquisition of Tegut Stores Pending Approval

REWE Group and Migros Zurich Cooperative have signed an agreement for the potential acquisition of up to 40 stores currently operated under the Tegut brand, with the transaction subject to approval by the Bundeskartellamt.

Under the proposed structure, most of the locations would be integrated into REWE’s supermarket network, while a smaller portion would be taken over by PENNY, part of the REWE Group.

Following completion, the stores are expected to undergo refurbishment and be incorporated into REWE’s existing supply and logistics systems. The retailer indicated that the locations would continue to offer a mix of branded and own-label products, while maintaining links to regional suppliers and organic product ranges.

Peter Maly, CEO of REWE Group, said: “We want to take responsibility for the locations and their teams. For us, this means securing jobs in the same way as the high-quality local supply. This allows us to give employees and markets an economic perspective. For us, the focus is on developing sustainable locations and promoting and welcoming the employees with us.”

Stefan Görgens, Head of Division PENNY Germany, added: “As soon as the approval is granted, we modernize the new markets to our market hall concept. In this way, we offer our customers an extensive range of fresh products and a large selection of attractive brands and own brands at discount-low prices.”

All employees at the affected stores are expected to receive job offers as part of the transition.

The agreement follows a process in which Migros Zurich evaluated multiple potential buyers. Further details on specific locations have not been disclosed due to ongoing regulatory procedures.

The parties intend to submit the transaction for competition review shortly, after which the transfer of the stores can proceed, subject to approval.

Czech Mortgage Lending Rebounds in March as Volumes and Demand Rise

Mortgage activity in the Czech Republic increased significantly in March, with banks and building societies issuing loans totalling CZK 55.4 billion, according to data from the Czech Banking Association. This represents a 37 percent rise compared with February and a 69 percent increase year-on-year.

New lending, excluding refinancing, reached CZK 40.3 billion, up 36 percent month-on-month. At the same time, the average mortgage interest rate edged down slightly to 4.43 percent from 4.46 percent in February.

“The frontload factor of lower interest rate and more welcoming conditions for investment mortgages are likely to translate into strong March numbers,” said Jaromír Šindel, chief economist at the Czech Banking Association. “The first reason reflects the reverberation of the central bank’s New Year’s price rate decline, while March with the Iranian price shock reversed the trend. The second reason is the April activation of the central bank’s stricter rules for investment mortgages.”

The number of newly issued mortgages rose by 30.7 percent from the previous month to 8,381, marking a 25 percent increase compared with a year earlier. The average loan size also grew, reaching CZK 4.81 million, nearly 4 percent higher than in February and 19 percent above last year’s level.

Refinancing activity also picked up. The volume of refinanced and increased loans climbed to CZK 15.1 billion in March, more than double the average monthly level recorded last year. As a result, refinancing accounted for 27.3 percent of total mortgage volumes, above the 2025 average of 20.7 percent.

Households refinancing their loans secured an average rate of 4.16 percent, around 0.5 percentage points lower than a year earlier. According to the association, the higher refinancing volumes reflect overlapping fixed-rate periods from both earlier low-rate environments and more recent higher-rate cycles.

The slight reduction in mortgage rates compared with 2025 levels has had a limited impact on affordability. The average monthly payment for a newly issued mortgage increased by approximately CZK 2,800 due to larger loan sizes, although lower rates reduced payments by around CZK 400. Monthly repayments now average about CZK 25,600 for a typical loan with a maturity of nearly 27 years.

“March was very successful from the point of view of mortgages and one of the factors of this success is the price,” said Petr Gapko, chief economist at Moneta Money Bank. “It was very favorable in March, but it is expected to grow in future months. Geopolitical events are to blame, because the Iranian conflict is raising fuel prices, which will result in higher inflation and probably higher interest rates.”

Source: CTK

Barrandov TV operator moves toward bankruptcy after failed restructuring

The operator of TV Barrandov, Barrandov TV Studio (BTS), is set to enter bankruptcy proceedings after an unsuccessful restructuring process approved by the court in mid-2024. The development was confirmed by owner Jan Čermák.

The company had entered reorganisation with debts of around CZK 1 billion, aiming to stabilise operations. However, a combination of declining advertising revenues and rising energy costs has undermined those efforts.

“We did our best to save the TV and the attempt alone cost me tens of millions of crowns. I regret the result because of the employees who were really trying, and because of the audience,” Čermák said.

According to the owner, the station had approached operational break-even last year, with advertising revenues covering running costs. However, market conditions deteriorated further, with advertising income reportedly falling to roughly one-third of previous levels despite stable viewership. Additional pressure came from a tax authority claim related to VAT refunds from before the insolvency process.

“Although we settled the economy last year, now there’s no way to keep the whole TV going and make up for the reorganization. Bankruptcy is now the only possible solution,” Čermák added.

Investment group S-24 holding, which participated in financing the broadcaster, stated that the Barrandov TV brand is expected to continue in a modified form. The group indicated that programming could remain available on at least one nationwide channel, following the acquisition of a broadcasting licence. The station is expected to operate in a limited or trial mode while its economic viability is reassessed.

Čermák acquired the broadcaster two years ago from Jaromír Soukup. While the television business faces insolvency, other parts of the former media group, including Empresa Media, are expected to continue operating.

The broadcaster’s channels, including Barrandov, Barrandov Krimi and Barrandov Cinema, recorded a combined audience share of 1.94 percent among viewers aged over 15 in March.

Source: CTK

Data Centre Location Gains Strategic Importance as Cloud Gaming Expands in Europe

The growth of cloud gaming is increasingly shaping investment decisions in digital infrastructure, with the physical placement of data centres becoming a key factor in service performance.

Unlike traditional gaming, cloud-based platforms rely on remote servers to process user inputs and stream content in real time. This makes responsiveness highly sensitive to delays in data transmission, placing greater emphasis on infrastructure located closer to end users.

As a result, operators are expanding networks of facilities across multiple regions, aiming to reduce the distance between servers and players. This approach, often associated with edge-based computing, is driving demand for sites that combine strong connectivity with access to reliable power and the ability to support high-performance computing workloads.

In this context, the partnership between DL Invest Group and Boosteroid reflects a broader shift towards more locally distributed infrastructure. Boosteroid operates cloud gaming services across a number of data centre locations globally, while the joint venture with DL Invest Group is intended to expand its presence across Europe.

The partners are planning a series of new facilities, with the first project under development in Bielsko-Biała. The site is being developed in phases, with initial capacity expected to reach between 50 MW and 82 MW, and the potential for further expansion over time.

The choice of location reflects both technical and logistical considerations. The site benefits from existing energy infrastructure and transport connections, which can support the deployment and operation of high-density computing systems. Its position within Central and Eastern Europe also allows service providers to improve coverage across the region.

The facilities are being designed to accommodate a range of uses, including cloud-based gaming, artificial intelligence processing and other data-intensive applications. These requirements are contributing to a shift in how data centres are planned, with greater focus on energy efficiency, cooling systems and scalability.

However, while proximity to users plays an important role in reducing delays, it is not the only factor influencing performance. Network quality, routing efficiency and broader connectivity infrastructure also affect how quickly data can be transmitted.

The expansion of such projects highlights the growing role of Central and Eastern Europe in the wider digital infrastructure landscape. Countries such as Poland are attracting investment due to their geographic position, improving connectivity and capacity to support large-scale developments.

At the same time, the sector remains highly competitive, with global technology firms continuing to dominate cloud infrastructure. Many gaming platforms rely on these broader ecosystems, which may shape how independent providers expand their operations.

Overall, the development of more geographically distributed data centres reflects a wider transition in the digital economy, where performance, location and energy access are becoming as important as computing power itself.

HSF System starts construction of Kaufland store in Hradec Králové

Construction group HSF System has begun work on a new store for Kaufland in Hradec Králové. The project is located between Sokolská Street, Benešova Avenue and Zborovská Street, close to the Mileta intersection, and forms part of a wider redevelopment of the surrounding area. Completion is scheduled for the first quarter of 2027.

The planned building will have two levels, with customer parking on the ground floor and a retail area of approximately 3,000 sqm on the upper floor. Additional smaller retail units are also included in the scheme.

“Our goal is to ensure the construction proceeds smoothly and to deliver a modern retail facility of a quality that meets the requirements of both the investor and future customers,” says Radka Rybolová, Head of the HSF System Center, adding: “We can draw on our many years of experience in the construction of shopping centers and department stores. Retail projects have recently become a significant part of our turnkey projects.”

The design allows for potential future expansion, with the structure prepared for additional office space on upper floors. The development will also include a covered loading area intended to separate deliveries from customer access.

Preparatory work for the project dates back to 2017, although construction was delayed pending upgrades to local transport infrastructure, including the reconstruction of the Mileta intersection. The completion of these works has enabled the project to proceed.

“The implementation of this project was a long-awaited milestone for us. We are excited to see the construction move into its above-ground phase, when the project will begin to take shape rapidly under the hands of our experts and assume its final form,” says František Hucl, Head of the Construction Department at Kaufland.

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Legal Risks and Execution Challenges Continue to Shape Investment in Romania (Part 2)

Slovakia’s inflation slows to 15-month low, but housing and energy costs remain elevated

Inflation picks up in Czech Republic as housing costs remain a concern

Slovakia extends dual diesel pricing and removes refuelling cap

Czech rental market sees quarterly dip, annual growth remains strong

REWE and Migros Zurich Plan Acquisition of Tegut Stores Pending Approval

Czech Mortgage Lending Rebounds in March as Volumes and Demand Rise

Barrandov TV operator moves toward bankruptcy after failed restructuring

Data Centre Location Gains Strategic Importance as Cloud Gaming Expands in Europe

HSF System starts construction of Kaufland store in Hradec Králové