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Moldova
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Moldova with efficiency and assurance.
WHY MOLDOVA?
Moldova, officially the Republic of Moldova, is a landlocked country in Eastern Europe, with an area of 33,843 km2 (13,067 sq mi) and a population of 2.38 million. Moldova is bordered by Romania to the west and Ukraine to the north, east, and south. The unrecognised breakaway state of Transnistria lies across the Dniester river on the country’s eastern border with Ukraine. Moldova is a unitary parliamentary representative democratic republic with its capital in Chișinău, the country’s largest city and main cultural and commercial centre. Amongst all the countries in Europe, Moldova, officially the Republic of Moldova, is a landlocked country located in Eastern Europe. It is known for its picturesque vineyards, rich winemaking traditions, diverse cultural heritage, and fertile agricultural land. Moldova is actively pursuing closer ties with the European Union, having gained EU candidate status in 2022. According to the World Bank, Moldova is classified as a Lower Middle-Income Economy. The currency of Moldova is the Moldovan Leu (MDL).
The official language of the country is Moldovan (which is virtually identical to Romanian), with Russian also widely spoken, and English gaining popularity, especially among the younger generation. Currently, Moldova has one major international airport, Chișinău International Airport (KIV), which is the primary gateway for international flights. As a landlocked country, Moldova utilizes its river port Giurgiulești on the Danube and relies heavily on the Black Sea ports of neighbouring countries (primarily Romania and Ukraine) for its international maritime trade, with goods transported mostly by road and rail.
Establishing a business in Moldova has become increasingly streamlined, with continuous reforms aimed at simplifying administrative procedures and aligning with European standards.
ADVANTAGES
Favourable Tax System & Incentives:
- Low Corporate Tax: A flat 12% corporate income tax rate.
- Reinvested Profit Incentive: 0% corporate income tax on retained earnings for micro, small, and medium-sized enterprises.
- Moldova IT Park: A 7% unique flat tax on turnover for resident IT companies, covering all taxes.
- Free Economic Zones (FEZs): Offer exemptions from VAT, customs duties, and various taxes.
Strategic Location & Trade Agreements:
- Access to Markets: Situated between the EU and CIS, with 43 free trade agreements providing access to a market of ~1 billion consumers.
- Proximity: Easy access to European and CIS destinations, with most reachable by truck within 2 days.
Competitive Workforce & Operating Costs:
- Talented Workforce: Skilled labour force, particularly in engineering, IT, and multilingual capabilities.
- Low Costs: Competitive labour costs and operating expenses compared to Western Europe.
Business Environment & Infrastructure:
- Fast Registration: Business registration is efficient, often taking only 1 day and 3 procedures.
- Digitalization: Advanced e-government services, including online tax declaration, mobile digital signatures, and electronic services.
- Stable Sectors: Strong potential in agriculture, manufacturing, renewable energy, and rapidly expanding IT and BPO services.
TAX REGIME
Corporate Taxation
A flat 12% rate applies to taxable profits of resident companies.
Personal Income Tax (PIT):
A flat 12% rate is applied to salary and other income sources.
Value Added Tax (VAT):
The standard rate is 20%. Reduced rates of 8% apply to certain foodstuffs and 6% to 12% for specific sectors like HoReCa (hospitality).
IT Park Tax:
Residents of Moldovan IT parks pay a single 7% tax on sales revenue, replacing CIT, PIT, social security, and other local taxes.
Special Regime for SMEs:
Small and medium-sized enterprises (non-VAT payers) can opt for a 4% tax on their gross income.
Social Security and Healthcare:
Payroll is subject to significant social contributions, with a total tax wedge for employers and employees combined often around 50% of net payroll.
Withholding Taxes:
Generally 12% for dividends, royalties, and interest paid to non-residents, with some specific exemptions for residents.
MOLDOVA COMPANIES
Limited Liability Company (Societate cu Răspundere Limitată – SRL):
The most common form, requiring at least one founder (individual or legal entity), with liability limited to their contribution.
Joint-Stock Company (Societate pe Acțiuni – S.A.):
Designed for large-scale operations and public trading, requiring a higher minimum capital.
Individual Enterprise (Întreprindere Individuală – Î.I.):
A simple, unincorporated structure suitable for sole traders, where the owner has unlimited liability for company debts.
Partnerships:
These include General Partnerships (SNC – unlimited liability) and Limited Partnerships (SC – combination of general and limited partners).
Cooperatives:
Structured for collective production or joint business activities.
Branches and Representative Offices:
Foreign companies can establish these to operate in Moldova without forming a new local legal entity.
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Contact Us
Get in touch with the right people to get the right help in setting up your business in Moldova.
enquiries@chandrawatpartners.com.