COUNTRY RISK OF MOLDOVA :

INVESTMENT
FDI in Figures
According to the 2020 World Investment Report by UNCTAD, FDI inflows to Moldova
amounted to USD 589 million in 2019, up from USD 308 million of the previous year. The
total stock of FDI was estimated at USD 4,8 billion in 2019. The bulk of FDI comes from
other EU countries. The National Strategy for Investment Attraction and Export Promotion
2016-2020 identified seven priority sectors for investment and export promotion: agriculture
and food, automotive, business services such as business process outsourcing (BPO),
clothing and footwear, electronics, information and communication technologies (ICT), and
machinery.

Generally, the Moldovan economic and political environment is not particularly attractive to
investors. The country faces a number of challenges, including the need to fight corruption,
improve the investment climate, remove obstacles for exporters, convert remittances into
productive investments and develop a reliable financial sector. Administrative and judicial
reforms are also needed. On the other hand, the country could be a bridge between
Western and Eastern European markets, and foreign companies enjoy national treatment in
most sectors. Moldova ranks 48th out of 190 economies in terms of ease of doing business
in the World Bank's 2020 Doing Business report (losing one position compared to the
previous edition).
 
Foreign Direct
2017 2018 2019
Investment

FDI Inward 157 308 589

Flow (million USD)

FDI Stock (million USD) 3,679 4,121 4,792

Number of 7 4 6
Greenfield
Investments*

Value of Greenfield 101 117 130

Investments (million
USD)
Source: UNCTAD - Latest available data.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent
company starts a new venture in a foreign country by constructing new operational facilities
from the ground up.
 
 Country
Comparison For the Eastern Europe &
Moldova United States Germany
Protection of Central Asia
Investors

Index of 7.0 7.0 7.4 5.0

Transaction
Transparency*

Index of Manager’s 4.0 5.0 8.6 5.0

Responsibility**

Index of 8.0 6.0 9.0 5.0

Shareholders’
Power***
Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The
Greater the Index, the More the Manager is Personally Responsible. *** The Greater the
Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the
Index, the Higher the Level of Investor Protection.

What to consider if you invest in Moldova

Strong Points
Moldova's main strong points in terms of attracting FDI are:

- Skilled and low-cost labour;

- Privatizations of a number of companies underway;
- Investor-friendly taxes and duties;
- Agricultural potential (wine, dried fruits, vegetables, sunflower, wheat).
Weak Points
The main weak points of the country impeding FDI incude:

- high level of poverty;

- an important size of its informal sector;
- dependence on remittances from expatriate workers;
- political instability and social tensions;
- high level of corruption, weak governance and clientelism;
- the secessionist aspirations of Transnistria.
Government Measures to Motivate or Restrict FDI
Moldova, consistently ranked as one of the poorest countries in Europe, relies
heavily on investment, foreign trade and remittances for its economic growth.
The current Law on Investment in Entrepreneurship came into effect in 2004. It was
designed to be compatible with European legislative standards and defines types of
local and foreign investment. It also provides guarantees for respect of investors'
rights, non-application of expropriation or actions similar to expropriation, and for
payment of damages in the event of investors' rights being violated. The law permits
investment in all sectors of the economy, while certain activities require a business
license.
 The government promotes the following industries as attractive for foreign
investment through the Moldovan Investment and Export Promotion Organization
(MIEPO): agriculture, automotive, ICT, medicine, renewable energy and textiles.
Description of the sectors can be found on the MIEPO website.
The government established a number of mesures in order to promote investments
in the country. Companies investing USD 250,000 can benefit from tax deduction for
the first 5 years. Income tax has also been lowered. The government promotes
equality amongst international and local investors and the fact that there is no limit to
capital invested.
Free  economic  zones  (FEZ)  are  parts  of  the  customs  territory  of Moldova, 
separated  economically,  and  strictly  bounded  on  the  entire  area,  where 
certain  types  of entrepreneurial  activities  are  allowed   on   preferential  
conditions   to   local   and   foreign   investors. There  are  seven  Free  Economic 
Zones  (FEZs)  in  Moldova  at  present.
For more information, refer to the Invest in Moldova website.
Bilateral investment conventions signed by Moldova
The Republic of Moldova has signed numerous Bilateral Investment Treaties that
may be found on the UNCTAD's Investment policy hub website.
 

Procedures Relative to Foreign Investment

Freedom of Establishment
By statute, special forms of legal organizations and certain activities require a
minimum of capital to be invested. The most widespread forms are Limited Liability
Companies (LLC) followed by Joint Stock Companies (JSC). For a 100%
investment, using an LLC tends to be more convenient. It is easier to establish and
operate an LLC than a JSC.
To learn more about the different legal forms of enterprises that may be settled in
Moldova, you can visit the PWC guide to investment in Moldova.
Acquisition of Holdings
A 100% foreign ownership is legal.
Obligation to Declare
Establishing a business entity in Moldova involves registration with the State
Register of Legal Entities held by the State Registration Chamber of the Ministry of
Justice. The State Registration Chamber registers LLC / JSC within five business
days (general term) or four hours – one day (speed-up procedure) of submitting all
the required documents.
The JSC shares need to be subsequently registered with the National Commission
for Financial Market (NCFM). It takes five business days from the required
documents being submitted. The fee for the registration of JSC shares is 0.4% of the
amount of stock issue.
For more information, refer to the Invest In Moldova website or to the World Bank
report on Doing Business in Moldova.
Competent Organisation For the Declaration
 Ministry of Economy and Commerce of the Republic of Moldova
Ministry of Justice's website
National Comission of Financial Market 's website

Requests For Specific Authorisations

The list of activities subject to licensing is expressly provided by the Law on
regulation by licensing of entrepreneurial activity (which includes audit, banking,
insurance and private medical assistance). A licence may be obtained through
an online platform recently launched by the Moldovan Licensing Chamber.

Investment Opportunities
Investment Aid Agency
Governement Agency for Investment's website

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Moldova
Globaltenders, Tenders & Projects from Moldova
DgMarket, Tenders Worldwide

Other Useful Resources

Governement Agency for Investment's website
Ministry of Economy and Infrastructure's websute
https://capital.market.md/ro/content/moldova-business-week-2019-o-alta-moldova