The Republic of Moldova is an Eastern European landlocked country bordered by Romania and Ukraine. Though not part of the European Union, Moldova has yet managed to secure healthy business relations with its neighbors and the region. Moldova has good trade relations with Russia and China as well, collectively constituting over 20% of the total trade volume.
Moldova has mutual agreements for dual tax avoidance with more than 45 countries. On the other hand, low taxes, such as a mere 12% on income from operations and 6% on dividends, make Moldova a very attractive location for small and large enterprises alike. Among many business structures permitted under Moldovan law, the most favored ones are:
| Type of company | Moldovan name | Minimum paid-up capital |
| Limited Liability Company | Societate cu Raspundere Limitata (SRL) | €270 (approximately) |
| Joint Stock Company | Moldovan Joint Stock | €1000 (approximately) |
| General & Limited Partnership Company | Moldovan Partnership | No min.cap. required |
| Sole Proprietorship | — | No min.cap. required |
Limited Liability Company – SRL
A limited liability company is a simple enterprise formation among at least 2 and maximum of 50 shareholders having a paid-up capital of €270. 40% of the capital must be deposited at the time of registration while the remaining 60% within 6 months of incorporation. A management team is appointed with managers and at least one administrator at the shareholder’s general meeting. In case of dissolution and debt, the shareholders are responsible to the extent of their participation in the company, and not in a personal capacity in any case.
Joint Stock Company
A joint stock company is formed by large enterprises and ventures who need to raise large capital. The public is invited to subscribe to company stocks in the open market. Initially, the company’s executive board obtains a guarantee from a commercial bank by depositing a percentage of the capital they plan to invite from the public. This percentage is called the paid-up capital. The minimum required paid-up capital is €1,000.
General & Limited Partnership Company
Like a joint stock company, a General or Limited partnership company is formed by 2 members, but not exceeding 20, coming together for a common commercial purpose. In a general partnership, all partners are liable for losses and dissolution to the extent of their participation, whereas in a limited partnership at least one partner is liable in personal as well as participation capacity as well.
As per the Moldovan law, there is no minimum capital requirement to register a partnership company, however, the capital participation of each member must be clearly mentioned in the article of association along with their extent of liability and responsibilities.
Sole proprietorship
As the name suggests, a sole proprietary business is owned by a single owner who registers a trade under his/her personal name or a given name. Such a company does not require minimum paid-up capital, a board of directors/managers, and other formalities. Favored by self-employed and start-up entrepreneurs as the formation is simple and requires little to no paperwork or large funding.
Cost of incorporation
The general head of expenses constituting the overall cost of registering a company are listed below:
- Notarization
- Translation
- Registration fee
- Trade mark fee
- Attestation
- Postal fees
- Stamp duties
- Lawyer fees
- Business address
While the exact amount for each of the above heads of expenses may vary from case and time, these are the areas one must be aware of while budgeting.
The process of incorporation
The process is initiated with an application to the State Registration Chamber, a state body that oversees all commercial matters related to registration and incorporation. The application must be annexed with the required documentation, where documents are in a different language, translations of the same must also be provided.
Once, the approval is granted, the company is allocated a Unique State Identification number. This number represents the company on all official documentation such as contracts, AoA, official correspondence, etc. Subsequently, a bank account is opened in the name of the company with an initial deposit to be 40% of the contribution made by each member. The remaining 60% must be deposited within 6 months after formation.
The bank issues a certificate at the opening of a company account, this certificate must be submitted to the Ministry of Information and Communication to obtain a Registration Certificate, Constitutive Act, and the official stamp.
Working hours, overtime, and wages
According to the Moldovan Labor Law, the official working time is between 9 am to 6 pm; constituting a 40-hours work week. The Law provides for overtime too, which should not exceed 120 hours in any given year. In any case, a working day must not go beyond 10 hours. The first two working hours are to be paid at 1.5 times the regular agreed wage, while any overtime hours should be compensated at twice the regular wage.
The minimum wages as of 2021, are set at €145/month (approximately) applicable to public and private sector organizations alike. Furthermore, in case a worker falls sick, the first week is generally covered by the employer unless agreed otherwise in the employment contract.
Working hours, overtime, and wages
According to the Moldovan Labor Law, the official working time is between 9 am to 6 pm; constituting a 40-hours work week. The Law provides for overtime too, which should not exceed 120 hours in any given year. In any case, a working day must not go beyond 10 hours. The first two working hours are to be paid at 1.5 times the regular agreed wage, while any overtime hours should be compensated at twice the regular wage.
The minimum wages as of 2021, are set at €145/month (approximately) applicable to public and private sector organizations alike. Furthermore, in case a worker falls sick, the first week is generally covered by the employer unless agreed otherwise in the employment contract.
Investment opportunities in Moldova
Moldova has strong trade ties with its neighbors, the EU region, Russia, China, and 43 trade agreements with CIS (Commonwealth Independent States), CEFTA, GUAM, and Turkey.
Other important features that are attractive to foreign investors are listed below:
- Availability of skilled and competent workforce in Moldova
- Ease of communication as the majority people can speak English, French, or German languages
- Cheap labor; lowest daily wages compared to rest of the Europe
- Business-friendly monetary and fiscal policies, such as:
- 12% income tax for companies
- 7% income tax for farmers and agriculturalists
- 3% within the free port
- State-sanctioned investment platforms, such as:
- Free economic zones – 07
- Industrial parks – 08
- Multifunctional industrial platforms – 16
- IT park Moldova
- Advanced IT infrastructure that is fully automated providing e-reporting, e-governance, e-documentation, etc.
Apart from being strategically located at the focal point of trade routes, Moldova also offers easy access to vibrant sea routes through the port on the Danube River. The climate is conducive to the production of fruits, wines, tobacco, and other profitable agriproducts. In 2020 alone, Moldova exported upward of €2 million in agriproducts to various parts of the world.
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