Romania's new savings and investment accounts (CEI): a significant step towards long-term investing

The law has been adopted by Parliament, and as of the date of this article, it is in the process of promulgation by the President. Its final form, entry into force and practical application should therefore continue to be monitored until promulgation, publication in the Official Gazette and the issuance of any required implementing rules.

The new regime is expected to become effective on 1 January of the year following its publication in the Official Gazette. However, its practical application will also depend on the adoption of any implementing rules required under the law.

The policy context

The CEI initiative reflects a broader European policy objective: encouraging households to move from short-term savings toward diversified, long-term investment. Romanian households have traditionally relied to a significant extent on cash and bank deposits, while retail participation in capital markets remains comparatively very limited.

At the same time, demographic developments continue to place pressure on public pension systems, especially in Romania, where the deficit reached RON 52.4 billion in 2025, according to the Annual Report of the Romanian Fiscal Council. The proposed CEI framework is intended to complement, rather than replace, the public pension system and existing private pension arrangements. It seeks to give individuals an additional instrument through which they may build long-term financial resources, while directing private savings towards productive investment.

What are Savings and Investment Accounts?

Under the proposed framework, individuals would be able to open dedicated accounts with authorised financial institutions and invest in eligible financial instruments. The legislation provides for two account types with different tax treatments:

CEI-S: taxed on contribution, exempt on qualifying withdrawal

• Contributions are made from salary or self-employment income that has already been taxed and, therefore, from net income earned.
• Income and gains generated within the account may accumulate without annual taxation.
• Qualifying withdrawals from the account benefit from an income tax exemption. Moreover, qualifying withdrawals are intended to remain outside the Romanian health insurance contribution base (CASS). Furthermore, no pension contribution (CAS) should apply.

This model follows a "tax first, exempt later" approach.

CEI-D: deductible contribution, taxed on withdrawal

• Eligible contributions benefit from an upfront tax deduction.
• Investment income may accumulate within the account during the investment period without annual taxation.
• Amounts withdrawn are subject to final income taxation at the moment of distribution.
• The framework also contemplates employer contributions under favourable tax conditions, subject to the applicable statutory requirements and limits.

This model follows a "deduct now, tax later" approach.

Key tax implications

Incentives for individual investors

For taxpayers using CEI-D, the deduction of eligible contributions may reduce taxable income during active earning years, with taxation deferred until withdrawal. Under CEI-S, contributions are made from the net income, but qualifying withdrawals would benefit from an exemption.

Employer participation

The proposed rules may provide employers with an additional tax-efficient benefit that could be incorporated into remuneration, retention and financial wellbeing programmes. The precise treatment should be assessed together with the statutory conditions, the existing limits applicable to salary-related benefits and the related implementing rules.

Tax-efficient investment growth

Furthermore, investment income and gains generated within the account are not taxed while the funds remain invested. By removing the need for annual taxation of investment returns, the regime allows returns to compound without the recurring tax cost that can arise in a conventional investment account.

A dedicated long-term investment framework

The special tax treatment is linked to the long-term purpose of the account, with one objective being to encourage individuals to invest consistently over a longer period and to diversify their future sources of income. The rules governing eligible investments, transfers, withdrawals and reporting will therefore be important when assessing whether the product is appropriate for a particular individual.

Considerations and potential limitations

Restricted access to funds

The tax advantages are linked to long-term accumulation. Restrictions on access to the funds limit flexibility, particularly for individuals who may require liquidity before retirement, as the funds may generally be withdrawn only upon reaching the statutory retirement age or the age of 65, whichever occurs first.

The choice between CEI-S and CEI-D requires analysis

The more suitable model will depend on several factors, including current taxable income, expected income at withdrawal, the investment period and possible future changes in tax legislation.

Long-term legislative uncertainty

Because CEI accounts are designed for long investment periods, taxpayers should recognise that tax rules may evolve and especially considering the often changes which occur in Romania in relation to the tax framework. Monitoring future legislative amendments remains important.

What should taxpayers and employers consider?

Once the legislation becomes applicable and the operational framework is clarified, individuals and employers should consider:

• the tax treatment applicable when contributions are made and when amounts are withdrawn;
• the statutory conditions for qualifying withdrawals;
• the treatment of employer contributions within the wider remuneration package;
• the investment options, fees and risk profile offered by authorised providers; and
• the reporting, payroll and documentation requirements arising under the final rules.

Looking ahead

The CEI framework has the potential to mark an important development in Romania's approach to personal investment and long-term financial planning. If implemented effectively, it may encourage broader investor participation, enhance individuals' long-term financial security and provide employers with an additional option for tax-efficient employee benefits.

However, the practical impact will depend on the final legislative process and on the detailed implementation of the regime. Taxpayers, employers and financial institutions should therefore monitor promulgation, publication in the Official Gazette and the subsequent implementation of rules before taking action.

_{Disclaimer: This material has been prepared for general information purposes only and does not constitute tax, legal or investment advice. The legislative process and implementing rules should be reviewed before any decision is taken. Specific advice should be obtained based on the facts and circumstances of each case.}