Developing in Romania from abroad: how do you build cash flow when you cannot fund the project from buyers?

Off-plan sales in Romania: the short answer

Ask the developers about this

Many developers from abroad, Israelis among them, are used to thinking of presales as a source of funding. You sell off-plan, the buyers pay, and their money helps you build. In Romania it works differently.

Since Law 207/2025, and today under Article 422 of the Planning and Construction Code (Law 169/2026), the law sets four things that change the cash flow:

• No preliminary contract before the permit is registered. A preliminary contract for a future unit is signed only before a notary, and only after the building permit has been registered in the land register and the unit has an extract.
• A small, short reservation. Up to 60 days and up to 5% of the price.
• Advance payments in a separate account. A developer's bank account dedicated to this project only.
• Spending in step with construction. From the advance payments you may spend up to 25% of the price on the structure, and only after it up to 20% on the systems, each payment with the site supervisor's approval.

What this means: you finance the land, the design, the permit and the start of works without buyers' money. The financial plan has to stand on equity and financing, not on sales.

What the law says, article by article

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In Romania these rules are called the "Nordis law". Law 207/2025 (Monitorul Oficial no. 1133, 8.12.2025) inserted them into Article 22 of Law 10/1995. The new Planning and Construction Code repealed that article (Article 576(3)(c)) and moved the rules, in almost the same wording, to Article 422. The Code is in force 15 days after publication, that is, from 25 August 2026 (Article 575(1)). The full comparison between the texts is on the Law 169/2026 page.

What	The rule	Article of Law 169/2026
When a sale may be promised	Only after the permit is registered in the land register and pages are opened for the future units	422(6)
Form of the preliminary contract	Only as a notarial deed, and after the unit has an extract	422(7)
Registering the contract	The notary applies to register it on the day of signing or the next working day	422(8)
Reservation agreement	Up to 60 days, up to 5% of the price, otherwise void. If the contract is not signed solely through the developer's fault, everything is refunded within 30 days	422(9)
The advance payments account	A separate bank account of the developer, for this project only	422(10)
Spending caps	Up to 25% of the price for the structure, and after it up to 20% for the systems, with the site supervisor's "for payment" approval	422(10)
Any other use of the money	Prohibited. A fine of 1% of the developer's turnover in the previous year, if the act is not a criminal offence	422(11)
Handover	Only after acceptance of the works and a permanent utility connection	422(5)(k)

What this looks like in the cash flow

Ask the developers about this

Let us split the project into stages, and ask in each one: where does the money come from?

Stage 1: land, design and permit

There are no buyers here. You cannot sign a preliminary contract, so there are no advance payments. A reservation does not help either: it is limited to 60 days, and at the end of them you need a preliminary contract, which can be signed only after the permit is registered. Anyone who takes reservations too early risks having to refund them.

This whole stage is financed by equity, partners or other financing.

Stage 2: the permit is registered, the extracts are open

Only from here does selling begin. Now you can sign preliminary contracts before a notary, and each contract is registered in the land register. The advance payments go into the dedicated account. They are the project's money, but not yet money you are free to spend.

Stage 3: structure

From the advance payments you may spend up to 25% of the price on the structure, and every payment goes through the site supervisor's stamp. In other words, the money moves only when the work on site moves, and only after someone qualified has approved it.

Stage 4: systems

Only after the structure is complete may you spend up to another 20% of the price on the systems, again with the supervisor's approval.

Stage 5: finishes, acceptance and handover

Article 422 does not set a spending rule for the finishing stage. How the rest of the advance payments and the payments after the systems are handled is a question for your lawyer and for the contract. In any case, the home is handed over only after acceptance of the works and a permanent connection to water, electricity and sewerage. So plan for part of the receipts to arrive only at the end.

What such a payment schedule looks like from the buyer's side, we set out in the article on payments directly to the developer.

What is different from home: the Israeli example

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In Israel, for example, a buyer of an off-plan apartment usually receives a guarantee under the Sale (Apartments) (Assurance of Investments of Persons Acquiring Apartments) Law, most often a bank guarantee. A developer from Israel knows this world: the accompanying bank, the guarantees, and a cash flow built around them.

In Romania the mechanism is different. The buyer's protection does not come from a guarantee someone gives them, but from three things: registration of the contract in the land register, a separate account, and spending caps by stage. So you cannot copy a home-country model such as Israel's. You need to rebuild the plan:

1. Equity for the stage before the permit. The land, the design, the advisers and the fees, all before a buyer's first euro.
2. Financing that does not lean on free advance payments. The advance payments sit in a dedicated account, and spending from them is limited. When you talk to a bank, ask how it views this account and the presales. Do not assume the answer is the same as the one you know from home.
3. A margin for delays. Every delay in registering the permit is a delay in the start of sales. Every delay in the supervisor's approval is a delay in the money.
4. A contract with the contractor that fits the pace. If the contractor expects payment before the supervisor has approved, the gap falls on you.

What happens when the financing does not close in time, we wrote in the deal that failed when the financing fell through.

Why your buyers will ask about this

Ask the developers about this

Buyers from Israel, for example, are used to asking "where is the guarantee?". In Romania you have no guarantee under Israel's Sale Law to offer them. You have something else to show, so prepare it in advance:

• A land register extract in which the permit is registered, and the extract for their unit.
• The details of the dedicated account, and the contract that says the advance payments go into it.
• The supervisor's approvals for every payment that left the account.
• The payment schedule, linked to the construction stages.

Sophisticated buyers already know how to check this. They read articles like what happens to the money if the developer gets stuck halfway, and come to the meeting with a list. A developer who shows the documents without being asked builds trust faster.

Three cash flow mistakes to prevent in advance

1. Opening reservations before the permit is close to registration. The reservation lapses after 60 days. If by then there is no extract for the unit, there is no preliminary contract, and you may have to refund the money and lose the buyer.
2. Counting the advance payments as free cash. The money in the dedicated account is yours for the project, but only within the caps and only with the supervisor's approval. In the cash flow table, separate "came into the account" from "allowed to spend".
3. Forgetting that the fine is measured on turnover. The fine for any other use of the advance payments is 1% of the previous year's turnover, not of the amount transferred. For a developer with several projects, this can be a far larger sum than the mistake itself.

The guide for developers abroad, in five parts

This article is part of a series on moving from investing to real estate development abroad:

• Real estate investor or developer abroad: the 7 differences
• Checking land in Romania before you buy it for development
• A Romanian company (SRL) for a foreign developer: the structure
• A building permit in Romania for developers, step by step

Frequently asked questions

May a developer in Romania sell off-plan?

Yes, but only after the building permit has been registered in the land register and an extract has been opened for the future unit. The preliminary contract is signed before a notary and registered in the land register on the day of signing or the next working day (Law 169/2026, Article 422(6)-(8)).

How much may be charged under a reservation agreement?

Up to 5% of the price, for a period of 60 days at most. A higher amount makes the agreement void. If the preliminary contract is not signed in time solely through the developer's fault, the developer refunds the money in full within 30 days (Article 422(9)).

Can the advance payments of one project be used in another project?

No. The advance payments go into a separate project account, and may be spent only on that project. Any other use is fined at 1% of the developer's turnover in the previous year, if the act is not a criminal offence (Article 422(10)-(11)).

What is the difference between Law 207/2025 and Law 169/2026?

Law 207/2025 inserted the rules into Law 10/1995 in December 2025. Law 169/2026, the new Planning and Construction Code, repealed most of the articles of Law 10/1995, including Article 22 (Article 576(3)(c)), and moved the rules to Article 422 in almost the same wording. It has been in force since 25 August 2026.

Is there a bank guarantee for buyers in Romania, as in Israel?

Article 422 does not require such a guarantee. The protection it sets is registration of the contract in the land register, a separate account and spending caps. If a developer offers an additional guarantee, check with a lawyer exactly what it covers.

The bottom line

In Romania, off-plan sales are not the project's funding engine. They come after the permit, and their money is released in step with construction. A developer who plans to fund the first stages from buyers gets stuck.

Start from the simple question: how much money do you need until the permit is registered, and how much until the structure stands, without a cent of buyers' money? That answer is the basis for the conversation with partners and with a bank.

If you are planning a project in Romania, book a 30-minute call with me. We will go through your budget and your financing plan stage by stage, and the questions for the bank. Before that, run the deal through the three filters in our free deal check.

Moti Azulay, Compass Group Romania

Sources: Law 169/2026, Planning and Construction Code, Articles 422, 575 and 576 (Monitorul Oficial no. 661, 10.8.2026) · Law 207/2025 amending Article 22 of Law 10/1995 (Monitorul Oficial no. 1133, 8.12.2025, legislatie.just.ro) · Comparison of the texts: Law 169/2026

This article is for general information only and is not legal, financial or tax advice. The rules are correct as of 18 October 2026. Before building a financing plan for a project, consult a Romanian lawyer and a financial adviser.