Why Romania Needs a Seed Investment Tax Credit
Romania has the founders and the capital. What it lacks is the fiscal mechanism to connect them. Here is the case for RO-SEIS.
Romania's startup ecosystem has outgrown its policy environment. The country has produced engineers of global standing, a generation of founders building companies across Europe, and several hundred million in venture exits over the past five years. What it has not built is a structural mechanism to keep early-stage capitalEarly-stage capitalPrivate capital deployed into companies in the pre-revenue or early revenue phase, typically in exchange for equity. Distinguished from growth-stage capital by the risk profile and the absence of significant trading history.OECD, Financing SMEs and Entrepreneurs 2022 ↗ at home.
The UK precedent
When the UK government introduced the SEISSEISSeed Enterprise Investment Scheme. A UK government programme offering a 50% income tax credit on investments of up to £200,000 per year in qualifying early-stage companies. Introduced in 2012 to address the documented gap in seed-stage private capital.HMRC, Finance Act 2012 ↗ in 2012, it changed the risk calculus for private investors overnight. A 50% income tax credit on qualifying investments meant that a £50,000 investment in a pre-revenue company carried a maximum downside of £25,000. For the first time, the risk-adjusted return on early-stage investment became competitive with other asset classes.
The outcomes were not incremental. A 2022 HMRC evaluation confirmed that 46% of SEIS investors would not have deployed capital in those companies without the scheme. Since its launch, SEIS and its growth-stage counterpart EISEISEnterprise Investment Scheme. Extends the SEIS model to growth-stage companies, offering a 30% income tax credit on investments of up to £1 million per year in qualifying companies. Together, SEIS and EIS have mobilised over £34 billion into UK early-stage businesses.HMRC EIS Statistics, 2024 ↗ have together mobilised over £34 billion into UK early-stage businesses, supporting more than 53,000 companies.
The Romanian gap
Romania currently has no equivalent. An angel investorAngel investorA high-net-worth individual who provides capital to early-stage companies in exchange for equity or convertible instruments. Distinguished from institutional venture capital by deal size, stage, and the personal involvement of the investor in the company.OECD Glossary of Statistical Terms ↗ who deploys €50,000 into a Romanian startup bears the full capital at risk. If the company fails, there is no relief against income tax. If it succeeds and shares are sold, capital gainsCapital gains taxA tax levied on the profit realised from the sale of a non-inventory asset. In Romania, gains from the disposal of unlisted shares are subject to a 10% flat rate under the Fiscal Code.Romanian Fiscal Code, Art. 91–97 ↗ are taxed in full.
This is not a marginal disadvantage. The OECDOECDOrganisation for Economic Co-operation and Development. An intergovernmental organisation with 38 member states that publishes authoritative research on SME financing, tax policy, and innovation ecosystems.OECD.org ↗'s 2022 report on SME financing identifies the tax environment as the single largest determinant of angel investment activity across member states. Countries with structured tax relief schemes attract between 30% and 50% more angel capital than those without.
Romania is competing for private capital against markets , Poland, France, Germany, Ireland , that have resolved this structural disadvantage. The result is predictable: domestic capital concentrates in bank deposits and listed securities, while early-stage investment migrates to jurisdictions with better incentive structures.
What RISE proposes
RO-SEISRO-SEISRomania Seed and Scale Enterprise Investment Scheme. The RISE Hub legislative proposal for a two-tier income tax credit on private investment in qualifying Romanian early-stage and growth-stage companies, designed for compliance with EU State Aid rules under GBER Article 21.RISE Hub Romania, 2025 ↗ proposes a two-component scheme calibrated to Romania's existing fiscal infrastructure.
RISE SEED would introduce a 50% income tax credit on qualifying investments of up to €250,000 per investor per year in early-stage companies , defined as Romanian-registered, under seven years from incorporation, below €12 million in gross assets, and receiving their first round of external private capital.
RISE SCALE would extend a 30% credit to investments of up to €5 million in growth-stage companies meeting the GBER Article 21GBER Article 21Article 21 of the EU General Block Exemption Regulation (Regulation 651/2014). Permits member states to grant state aid for risk finance measures in SMEs without prior notification to the European Commission, subject to defined thresholds.European Commission Regulation (EU) No 651/2014 ↗ thresholds.
Administration falls to ANAFANAFAgenția Națională de Administrare Fiscală , Romania's national tax authority, responsible for the collection and enforcement of national taxes. Designated as the competent authority for RO-SEIS scheme administration under the proposal.Romanian Government Ordinance 39/2015 ↗ through the existing Declarația UnicăDeclarația UnicăThe annual unified income tax declaration filed by Romanian individuals. Under the RO-SEIS proposal, the tax credit would be claimed directly through this return, with no new administrative infrastructure required.Romanian Fiscal Code, Art. 120 ↗ framework. No new administrative infrastructure is required.
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