Originally Posted by markf

...and finaly first reports regarding falling prices in Bucharest: "Prices for old flats down with 10% in february 2008" - romanian Business Publication DailyBusiness.ro.

Originally Posted by markf

For anyone who wants to be objectively informed, this is an article in English: zf.ro/articol_167194/ . This article is "hot".

Originally Posted by David howe

This is in my opinion a very badly written rticle that focuses on the stupidity of investors who did not carry out any due dilligence whatsoever, yet the author tries to tar the whole Romanian market by this. The same article could refer to the Manchester buy to let market, and we all know Manchester does not represent the UK.

Originally Posted by Transylvania Investment

I've heard many foreign investors saying they need to set up company in order to buy land in Romania. Most of the advisers in Romania teach them this is the only way to purchase land here. However there are serious reasons NOT TO form a company in Romania.
Reasons not to set up a company to buy residential property in Romania.

1. Rates/Council tax whatever you want to call them are 0.5% per year if you buy land in your own name. If you buy through a company they are 1.5%. This will equate to 1% of any gross rental income and probably close to 1.5% net rental income.

2. Costs for doing the accounts for a company will cost you in the region or in excess of 100 EUR per month.

3. Company formation is about 500 EUR and terminating the company will run you into into another 1500-2000 EUR.

4. When you sell as an individual you will be subject to 2% tax on the selling price, this is also applicable to a company. However, as an individual this is all you pay.

5. Additionally as a company you will have to pay 19% VAT on the sale price.

6. As a company you then pay an additional 16% on any profit made on your investment.

7. Then as a company you pay a further 16% on your dividends when you go to take your own money out of your own company.

More to what I've said before:
Buying residential property by setting up a LTD company is economic suicide. The idea is: set up company here ONLY if you consider doing business in Romania.
If you buy a property just to rent it or resell it when its value is rising, don't create a company here just to get the land under the building or if you buy land, the land itself. It's simply too much hassle. The last thing you want is to have to deal with accountants (here the accounting system is very complicated and good accountants are very important, rather hard to find and don't come cheap). Besides, to get over with the company takes a loooong time, so the costs are not only in terms of money, but also in terms of time.

I can tell you the ways on which you CAN buy in your own name.

The regions you want to invest in are around Bucharest, however your budget might prevent you to invest there, or Transylvania.

You can also ask for credit in Romania even as a non-resident citizen.

Originally Posted by markf

David, there are a lot of good opportunities in Romania but the potential investor should be informed by people like you that scams are everywhere in Romania. Starting with economic reports that are based on data from 2-3 years ago and finishing with so-called "ultra-central" projects that are built in areas with no facilities, 50km away from the city center. But when one is 3000km away and has only some nice autocad drawings and 3D animations taken from a nifty internet website, these scams are very hard to comprehend.