Annual Report 2010 - AmCham Moldova

Membership Benefits & ServicesA n n u a lR e p o r t2 0 1 0Salary - Based Savings PlansIn March, AmCham addressed a letter to the NationalCommission on Financial Market with 13 page comprehensivecomments and recommendations related to draft lawon private pension funds. The draft law was elaboratedby the Commission with the help of international expertsand comes to replace old law, which was significantly outdatedand required substantial review to meet the needsof the market players, potential stakeholders etc.AmCham recommendations were prepared as a resultof several sessions of round table discussions and debatesbetween AmCham members interested in this specific subject.These were prepared with full support of the membercompanies (banks, law and consulting companies, etc.).Implementation of private pensions practice was includedin ROADMAP FOR THE DEVELOPMENT OF MOLDOVA`SBUSINESS AND ECONOMIC CLIMATE as a separate projectof high interest for AmCham both to meet the needs of itsmembers, but, most importantly, to promote domestic investments.For instance, the document states that “the Moldovaneconomy needs increased investment to fuel the developmentof Moldova’s manufacturing, services and growthof economic entities. Despite hundreds of millions of dollarsper year of foreign remittances coming into Moldova,Moldovans are investing only a very small portion of theseremittances into the future of their own economy. Instead,Moldovans consume almost 100% of their income, leavingMoldova almost entirely dependent on foreign investmentas the source of future growth and development. Withoutsignificant domestic savings, Moldovan banks and lendinginstitutions lose a significant and important source of fundsfrom which to make loans to economic entities that wouldinvest in future development. Furthermore, the majority ofMoldovan savings are extremely short-term in nature, orientingthe banks and lending institutions also to short-termloans with limited long-term economic impact. The effectis that only companies with access to foreign financing canreceive long-term credits at competitive interest rates. Moldovashould establish the legal framework to provide theprograms and incentives necessary to stimulate long-termdomestic savings on a mass scale in order to create a sourceof capital for long-term investments. The recommendationcould be to implement private pensions that would provideincentives and benefits to the employees, employers andlending institutions as a method to generate long-term domesticsavings.”AmCham plan of activities in case of private pensionsdoes not end here. Another drawback in the developmentof private pensions is tax regulatory framework. Currentprovisions are vague and create several misinterpretations.Together with the National Commission on FinancialMarket and the Ministry of Finance a close collaborationwill be maintained, with AmCham taking an activerole in enhancing the appropriate legal framework.One-Stop Window for Visa and Immigration Procedures for Foreign InvestorsDuring the last years, AmCham was constantly receivingcomplaints from foreign business community aboutthe burdensome and complex procedures related to theobtaining of visas, residency and work permits for foreignindividuals planning to develop a business activity in Moldova.Immigration procedures have always required returnvisits and re-filing of documents based on the demands ofadministrative personnel, who independently interpret theapplication requirements or demand additional documentationand procedures.AmCham has raised this issue in its Roadmap as one ofthe administrative barriers towards the attraction of foreigninvestments in Moldova and was highly encouragingMoldovan Government to establish a one-stop window approachfor immigration procedures and to reduce the bureaucracyin this respect.After the problem was raised to the Prime Minister, aworking group of AmCham members and Prime Minister’sadvisors had been created to tackle the issue. AmChammembers have thoroughly reviewed the procedures andall normative acts that regulate issue of visas, work andresidency permits for foreign businessmen. A list of recommendationswas submitted by AmCham members to optimizethe related procedures.Finally, there was established a one-stop window underthe Ministry of Internal Affairs for the processing of immigrationdocuments. It is everybody’s hope that it will facilitatedocuments’ formalization for foreigners and thus will improveRepublic’s image, attracting more investments, as wellas skilled specialists needed for country modernization.A publication of the American Chamber of Commerce in Moldova23