Moldova: Investing

FDI in Figures

According to the 2022 World Investment Report by UNCTAD, FDI inflows to Moldova amounted to USD 264 million in 2021, up from USD 150 million in the previous year. The total stock of FDI was estimated at USD 4.8 billion in the same year, around 35% of the country’s GDP. The majority of FDI in Moldova comes from neighbouring European countries, particularly Romania, which accounted for 34.6% of total FDI in 2020 (latest data available). Other important sources of FDI include Cyprus, Russia, and Ukraine. The main sectors that attract FDI in Moldova are manufacturing, financial intermediation, and trade. In recent years, there has also been a growing interest in the country's IT sector, which has the potential to become a key driver of economic growth and development. The National Strategy for Investment Attraction and Export Promotion 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.

Foreign direct investment in Moldova remains low, and the economic and political environment is not particularly attractive to investors. The country faces several 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 is cost competitive, it offers tax breaks to investors and has 7 free economic zones; moreover, foreign investors are permitted to repatriate residual funds. With "Law 174/2021", the Moldovan Parliament approved the rules on control of investments into sectors important for the security of the state, including energy, water, transport, AI, aviation security activities, management of airports and other infrastructures, weapons, etc. Prior to investing in a relevant sector, any potential investor is obliged to obtain approval from the Council for Promotion of Investment Projects of National Importance. Moldova ranks 91st out of 180 economies on the 2022 Corruption Perception Index and 96th out of 176 on the 2023 Index of Economic Freedom.

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

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
DgMarket, Tenders Worldwide

Other Useful Resources

Governement Agency for Investment's website

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