A Step Backwards for Romanian Entrepreneurship?

The Romanian Government is considering amendments to Company Law (Law 31/1990) as part of Reform Package 2. One of the most debated changes introduces an obligation for companies that record net assets below half of the subscribed share capital and have received loans from shareholders or associates to convert those loans into share capital within a short timeframe. Failure to comply could trigger fines and personal liability for directors or shareholders.

On the surface, this proposal seeks to bring greater discipline and transparency into the way companies operate. It aims to protect creditors, prevent firms from artificially surviving on shareholder debt, and force owners to make clear decisions about the future of their business.

However, while this reasoning may hold for traditional companies, the measure creates serious problems for startups and innovative firms. These companies often rely on convertible loans or bridge financing for years before reaching profitability. Forcing an automatic conversion eliminates contractual freedom, destroys the flexibility of standard investment tools like CLAs or SAFEs, and risks driving away venture capital and angel investors. Importantly, no other EU country has such a mandatory conversion requirement.

This is a critical moment for Romania’s entrepreneurial ecosystem. Instead of encouraging innovation and capital inflows, such measures risk isolating our startups from global investment practices.

Capital follows trust and flexibility — if we create a rigid, unique framework, investors will simply redirect funds to neighboring countries with more predictable rules.

We need legislation that strengthens transparency and discipline without dismantling the very instruments that fuel early-stage growth.

Romania should aspire to attract capital, not repel it.