DOING BUSINESS IN MOLDOVA IN 2021
Since 2003, Healy Consultants Group PLC efficiently and effectively assists our Clients with i) Moldova business registration ii) business licensing (when required) iii) Moldova business banking solutions iv) visa options and staff recruitment strategies and v) work space rental solutions.
|Compare different Moldova entities||Tax-resident LLC||Free zone LLC||JSC||LLP||Representative office|
|Also known as||SRL||SRL||SA||Parteneriat limitat||Birou reprezentativ|
|Best use of company?||All products/ svcs||Manuf/ export trading||To get pub. funding||Professional services||Marketing/ research|
|How soon to invoice Clients?||2 weeks||3 weeks||3 weeks||3 weeks||3 weeks|
|How soon can you hire staff?||2 weeks||3 weeks||3 weeks||3 weeks||3 weeks|
|How soon can you sign a lease agreement?||1 week||1 week||1 week||1 week||1 week|
|How long to supply corporate bank a/c?||6 weeks||6 weeks||6 weeks||6 weeks||6 weeks|
|How long to supply co. reg / tax numbers?||2 weeks||4 weeks||3 weeks||3 weeks||4 weeks|
|Corporate tax rate on annual net profits?||12%||6%||12%||0%||Cannot trade|
|Limited liability entity?||Yes||Yes||Yes||No||No|
|Government grants available?||Yes||Yes||Yes||Yes||No|
|Govt approval required for foreign owners?||No||No||No||No||No|
|Res. director/partner/ legal rep. required?||No||No||No||No||No|
|Minimum paid up share capital?||€ 1||€ 2,500||€ 1,000||€ 1||None|
|Can bid for Government contracts?||Yes||Yes||Yes||Yes||No|
|Corporate bank account location?||BCR||Mobias Banca||MAIB||Comertbank||Victoria Bank|
|Can secure trade finance?||Yes||Yes||Yes||Yes||No|
|VAT payable on sales to local customers?||20%||0%||20%||20%||Cannot trade|
|Average total business set up costs?||€ 10,145||Request a proposal||€ 10,050||Request a proposal||€ 9,300|
|Average total engagement period?||2 months||3 months||3 months||3 months||3 months|
Moldova business setup summary
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Advantages of Moldova company registration
- A limited liability company in Moldova can be registered with a minimum of one shareholder and one director of any nationality. The minimum paid-up capital required for registering a company in Moldova is US$300 and our Client will not need to travel to complete the engagement;
- Registering a business in Moldova offers our Clients the following fiscal advantages:
- Moldova’s corporate tax rate is 12% which is quite competitive in the region and the tax and customs framework is similar to that of the EU. This makes it tax-efficient jurisdiction to set up a business in Moldova;
- Registering a company in a Moldovan free economic zone offers the following tax incentives: i) 50% corporate tax deduction on income obtained from export of goods originating from the FEZ ii) 25% reduction of corporate tax on all other income iii) three year tax exemption on profits obtained from goods exported from the FEZ (minimum investment of US$1 million) and iv) five year tax exemption on profits obtained from goods exported from FEZ (minimum investment of US$5 million);
- Subsidiaries registered in Moldova will often benefit from waived/reduced withholding tax when remitting dividends and interest to their foreign parent company, as the country has a significant network of double taxation avoidance treaties with 48 countries including: i) Austria ii) Belgium iii) Bulgaria iv) Canada v) China vi) France vii) Germany viii) Ireland ix) Luxembourg x) Netherlands and xi) the United Kingdom;
- Moldova has a well skilled multilingual workforce with low employment costs as minimum wage is 1,800 Lei (US$96) per month;
- Foreigners running a business in Moldova there are no restrictions on i) foreign investments ii) foreign currency exchange controls and iii) capital imports and exports;
- Moldova is an excellent jurisdiction for agriculture, food processing, input supply and related industries. This is largely due to the presence of i) an untapped market which offers lucrative opportunities to the foreign entrepreneurs; ii) an attractive tax regime for entrepreneurs investing their annual profits on machinery and fixed assets; and iii) large shares of commercial lands;
- Moldova company formation offers express incorporation service with numbers issued within the day from formal application;
- Moldova introduced a new Citizenship by Investment Program, with investment amount as little as US$100,000 for a single foreign national.
Disadvantages of Moldova company registration
- In Moldova, the official language is Romanian therefore some business documents may need to be translated into this language. This slows down the process of company registration in Moldova. It is also a constraint when doing business in the country as communicating with employees and government officials is a problem for foreign investors;
- Our Clients forming a company in Moldova will face the following difficulties when exporting products abroad:
- Moldova is a landlocked country therefore making it quite difficult to transport products within as well as out of the country as the roads are bad and the nearest port is on the Danube river;
- While Moldova is in close proximity to the large European Union (EU) and Commonwealth of Independent States (CIS) markets, registering a business in Moldova will not be a practical solution to sell products and services to these markets, as Moldova is not part of these customs unions;
- A significant hurdle for business operations in Moldova is government bureaucracy. Obtaining necessary licenses to do business is time-consuming and costly. Healy Consultants will be happy to help you handle your administrative requirements.
- Corruption is a major constraint for business as public officials expect gifts to get things done. Interaction with tax officials, customs services and the judicial system often involves demands for facilitation of payments in order to expedite bureaucratic procedures and to overcome complicated and time-consuming administrative procedures. These factors as well as political instability collectively contribute to make Moldova a risky place to do business;
- Moldova is facing some serious environment-related problems in the country:
- Lack of industrial emission control in the previous years have led to an extremely polluted environment which has contributed to numerous diseases as well as raised the country’s infant mortality rates;
- Agribusiness and related industries are likely to suffer majorly due to the deteriorating quality of the soil leading to widespread soil erosion and a decline in the total arable lands in the country.
- Translation of personal and corporate documents is a mandatory requisite of company formation in Moldova;
- Moldova is a politically unstable country with both pro EU and pro Russia movements, leading to potential unrest in case of EU membership.
- Time to incorporate: Two weeks
- Cost to set up: €10,145
- Minimum capital: €300
- Physical office required: No
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: No
- Corporate tax rate: 12%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: SRL
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