The objective of the Government of the Republic of Moldova is to increase the country's competitiveness, which represents an increase in the welfare of the citizens of the Republic of Moldova
The impact of improving the business environment will be expressed by increasing investment, increasing exports, increasing the number of reliable enterprises motivated to implement innovations, capable of creating attractive jobs, ensuring high productivity and competitive export-oriented production, sustained by the advancement of the Republic of Moldova in the Doing Business international rankings (2018: Moldova ranks 44 out of 190), the Global Competitiveness Index, the Economic Freedom Index and the Logistics Performance Index, surpassing the average level in the region.
The legal framework has been strengthened; several laws on the regulation of foreign trade, competition, protection of industrial property rights, etc. have been adopted. An important aspect is that the legislative provisions are in line with the international legal framework, especially with the European Union. This process will continue, as the harmonization of legislation is the key to success in implementing DCFTA commitments. Signed and ratified, the agreement involves liberalizing trade in goods and services, free movement of labor, lower taxes, reduction of technical and non-tariff barriers, abolition of quantitative restrictions and harmonization of Moldovan legislation with the EU. More information regarding DCFTA here.
The tax framework
The Republic of Moldova has one of the most competitive tax systems in the region. From this perspective, there are 48 operational tax treaties on avoiding double taxation with other jurisdictions.
Therefore, the general Corporate Income Tax rate is 12%, Value Added Tax is 20% and Social Security Contributions of 23%.It should be noted that corporate tax may be reduced by half or more if a company is resident in the Free Economic Zone.
According to the distribution of the Foreign Direct Investments by branches of the economy, the main economic activities benefiting from investments are:
- Production and supply of electric and thermal energy, gas, hot water and air conditioning – 35.13% from the total FDI stock;
- Manufacturing – 17.51% from the total FDI stock;
- Financial and insurance activities – 15.08% from the total FDI stock.
- In TOP 10 investors for the social capital of Moldova are included the Netherlands, Italy, Romania, Russia, Germany, USA, Austria, Great Britain, Switzerland and Turkey.
As opportunities for attraction of the foreign investors are the Free Economic Zones, Industrial Parks and IT Parks – which are a innovation for the Republic of Moldova.
Free Economic Zones are parts of the customs territory of the Republic of Moldova, economically separated, strictly delimited on their entire perimeter, which allow certain types of preferential business activities for domestic and foreign companies. Currently, Moldova has 7 Free Economic Zones, being allocated proportionally in the north, central and southern parts of the country. At the same time, the Republic of Moldova also has the Giurgiulesti International Free Port (the southern region), as well as the Free International Airport "Marculesti" (Floresti, the northern region), both of which have legal status almost similar to the free economic zones.
Another industrial platform offering a series of opportunities is the Industrial Park - a relatively new tool for Moldova, created in 2011. Industrial Parks are defined territories where industrial production, service provision, applied scientific research and / or technological development are under certain preferences. 10 projects have been launched for the creation and development of industrial parks in the northern, central and southern parts of the country: “Tracom” in Chisinau city, “Bionergagro” in Drochia city, “Cimislia” in Cimislia city, “Raut” in Bălţi city, "CAAN" in Străşeni city, "Edineţ" in Edineţ city, “Cavi Triveneta Divelopment” in Străşeni city, "Comrat" in Comrat city, “Durlesti” in Durleşti city, and "Cahul“ in Cahul city.
„Moldova IT park” represents an attractive environment for IT businesses. The IT Park provides an organizational platform with a set of innovative mechanisms and incentives for the IT industry, as well as a predictable and motivating regulatory framework to facilitate IT business management. The first IT Park “Tekwill” established in Chisinau, comprises 100 resident companies with a turnover of over 1 billion lei. This mechanism has laid the foundation for a competitive IT industry in our country creating prerequisites for emigrated professionals and companies to return to the country producing jobs with competitive salaries. The estimated growth in the number of active IT companies is from 400 to 1000; of IT companies with foreign capital - from 150 to 250; in the number of employees in the IT industry from about 7,000 to 12,500, as well as the sector turnover increase up to USD 270 million and the IT exports increase from 1.5 billion lei to 3.5 billion lei per year. As a result, we anticipate an investment growth in IT industry, new highly skilled and well-paid jobs, technology and advanced practices transfer. Now, we intend to launch 2 others IT Parks, in the northern and southern regions of the country.
More information regarding investments here.
Citizenship through Investment
The Moldova Citizenship-by-Investment (MCBI) program is the latest European citizenship-by-investment opportunity. The citizenship provides access to 121 destinations, including the countries in Europe’s Schengen Area as well as Turkey and Russia. The MCBI program, launched in the second half of 2018, was developed by the Government of the Republic of Moldova in partnership with its service provider Henley & Partners and the Moldovan Investment Company. The program requires applicants to make a defined economic contribution to the country through the Public Sustainable Development Fund of Moldova (Public Investment Fund). In exchange, and subject to a stringent vetting and due diligence process, applicants and their families are granted citizenship.
For more information about MCBI program here.