This information is derived from the State Department's Office of Investment Affairs, Investment Climate Statement. Any questions on the ICS can be directed to EB-ICS-DL@state.gov
Last Published: 11/2/2017

Policies Towards Foreign Direct Investment

Moldova, one of the poorest countries in Europe, relies heavily on foreign trade and remittances from its workers abroad for its economic growth. Under Moldovan law, foreign companies enjoy national treatment in most respects. In principle, the government views FDI as vital for sustainable economic growth and poverty reduction. However, the amount of FDI received is far below what Moldova needs to create jobs and promote economic growth.

Moldova enjoyed a period of increased FDI with eastward expansion of the EU into Romania on January 1, 2007. However, the 2008 global financial crisis significantly decreased FDI in Moldova, which has yet to return to pre-crisis levels. Remittances have also not regained their 2008 levels and have been falling further in recent years, reflecting slower growth in the region and the falling value of the Russian ruble (most remittances are from workers paid in Russian rubles.)

Moldova’s development path in recent years has been guided by agreements with the EU for reforms in trade policy and the judiciary. Following the expiration of a Moldova-EU Action Plan in 2008, Moldova negotiated its Association Agreement with the EU, which was signed in June 2014 and ratified on July 1, 2016. Moldova hopes the Association Agreement will bring closer political association and economic integration with the EU. The DCFTA, a component of the Association Agreement, provides for mutual elimination of customs duties on industrial and most agricultural products and for further liberalization of the services market. It also addresses other barriers to trade and reforms in economic governance, with the goal of strengthening transparency and competition and adopting EU product standards. Moldova hopes to eventually join the common EU market.

As a country with a small economy, Moldova hopes a liberalized trade and investment strategy will increase the export of its goods and services.

The government has approved an activity program for 2016-2018 that centers on EU integration, with the ultimate goal of applying for EU membership. The program also sets economic development, creation of well-paid jobs, elimination of corruption, and rule of law among key objectives. The government also approved an Action Plan for the implementation of the Moldova-EU Association Agreement and DCFTA for the period 2017-2019. The government has identified in its national development strategy "Moldova 2020" seven priority areas for development and reform: education, access to financing, road infrastructure, business regulation, energy efficiency, justice system, and social insurance. The government has made a formal commitment to accelerate the country’s development by making the economy more capital-intensive, sustainable, and knowledge-driven.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no formal limits on foreign control, with the significant exception that foreigners are expressly prohibited from owning agricultural or forest land. Under Moldovan law, foreign companies enjoy national treatment in most respects. The Law on Investment in Entrepreneurship prohibits discrimination against investments based on citizenship, domicile, residence, place of registration, place of activity, state of origin, or any other grounds. The law provides for equitable and level-field conditions for all investors and rules out discriminatory measures hindering management, operation, maintenance, utilization, acquisition, extension, or disposal of investments. Local companies and foreigners are to be treated equally with regard to licensing, approval, and procurement. Companies registered in questionable tax havens are prohibited from holding shares in commercial banks and restrictions on foreign ownership of agriculture and forestry lands.

By statute, special forms of legal organizations and certain activities require a minimum of capital to be invested (e.g., MDL 20,000 (USD 1,000) for joint stock companies, MDL 15 million (USD 750,000) for insurance companies, and MDL 100 million (USD 5 million) for banks).

Moldovan law restricts the right to purchase agricultural and forest land to Moldovan citizens. Foreigners may become owners of such land only through inheritance and may only transfer the land to Moldovan citizens. In 2006, Parliament further restricted the right of sale and purchase of agricultural land to the state, Moldovan citizens, and legal entities without foreign capital. However, foreigners are permitted to buy all other forms of property in Moldova, including land plots under privatized enterprises and land designated for construction. There are reportedly Moldovan-registered companies with foreign capital known to own agricultural land by means of loopholes in the previous law. The only straightforward option available to foreigners who wish to use agricultural land in Moldova is to lease the land.

Other Investment Policy Reviews

The latest Investment Policy Review of Moldova was conducted the United Nations Conference on Trade and Development (UNCTAD) in 2013 and can be accessed at http://unctad.org/en/Pages/DIAE/Investment%20Policy%20Reviews/Investment-Policy-Reviews.aspx.

Moldova was last subject to a trade policy review by the World Trade Organization (WTO) published in October 2015 and can be accessed here: https://www.wto.org/english/tratop_e/tpr_e/tp423_e.htm

Business Facilitation

The government has taken steps over the years to simplify and streamline the process of business registration and licensing, lowering tax rates, strengthening tax administration and increasing transparency.

Business registration is overseen by the Moldovan State Registration Chamber, which keeps the State Register of Legal Entities and Individual Entrepreneurs. By law, registration should take five days for a standard procedure or four hours for an expedited procedure and is done in two stages. The first stage involves submission of an application and a set of documents, the range of which may vary depending on the legal form of the business (LLC, joint-stock company, sole proprietorship, etc.). At the second stage, the State Registration Chamber issues a registration certificate and a unique identification number for the business, conferring full legal capacity to the entity. In 2010, the government introduced the “one-stop-shop” principle, under which businesses are relieved of the requirement to register separately with fiscal, statistical, social security, or health insurance authorities. There are currently no procedures for online business registration.

The government took further steps to deregulate construction projects by reducing the number, cost and time of administrative procedures needed to obtain building permits. To further protect businesses from arbitrary inspection, in 2012 parliament passed a law that regulates the timing and the types of checks various authorities can conduct on businesses. Businesses submit electronic reports for statistical, tax or social security purposes. Starting in 2012, businesses are able to apply online to get licenses. In 2014, tax authorities introduced an online tax filing and payment system for businesses. In 2016, the government announced a so-called moratorium on state inspections in a bid to improve legislation dealing with state checks to bring some order and predictability in conducting such checks. The moratorium on inspections caused a reduction by half in inspections per company – now two per year. As next steps the government plans to reduce further the number of inspecting bodies, regulatory agencies and business authorizations.

Certain types of activity listed in the law on licensing entrepreneurial activity require businesses to be first licensed by public authorities. A business license may be obtained through an online platform recently launched by the Moldovan Licensing Chamber (www.servicii.gov.md).

In March 2006, the Moldovan Parliament ratified the 1961 Hague Convention on Abolishing the Requirement for Legalization for Foreign Public Documents. Acceptance of U.S. apostilles applied on official documents simplifies the legalization of official documents issued in the United States that are required in the process of business registration.

Moldova has an investment promotion agency called Moldovan Investment and Export Promotion Organization (MIEPO) to assist prospective investors with information about business registration or industrial sectors, facilitate contact with relevant authorities, and organize study visits. MIEPO has an investment guide available on its website www.miepo.md.

The government set up a special council for promoting investment projects of national importance to tackle red tape holding back the launching of large business investments.

Outward Investment

Moldova does not have an official policy or mechanism of promoting or incentivizing outward investment.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.