Diplomatic World_nummer 58_Online

LAND OF BUSINESS OPPORTUNITIES
Home to fertile and rich soil, the Republic of Moldova is
well known for its tasty agricultural products as well as
wine production. Strategic geographical positioning of the
Republic of Moldova, transforms the country into a bridge
between East and West. In the Global Location Trends
Report 2017 Moldova ranks number six in the world in
terms of the number of jobs created in relation to the
population, reaching the newest destination for emerging
investments.
The Republic of Moldova meets incredible conditions for
doing business. Still an unknown place for investments
and growing a business, Moldova offers a competitive
environment. To capitalize on its strategic geographical
position, over the last few years, the Government of the
Republic of Moldova has stepped up its regional integration
efforts, promoting an open economic policy. Thus, the
legal framework has been strengthened, several laws on
the regulation of foreign trade, competition, protection of
industrial property rights, etc. have been adopted.
According to the "Doing Business 2018" report, Moldova
is positioned 44 th out of 190 analyzed economies. We have
succeeded in significantly increasing starting a business,
protecting minority investors and registering property. At
the same time, we have good results in the field of paying
taxes (heading 32) and cross-border trade (heading 35).
FREE TRADE AGREEMENTS — A SOLID BASIS FOR
BUSINESSES
The Republic of Moldova has signed free trade
agreements with the EU, CIS and Turkey (in force since
1 November 2016) and is a member of the Central
Free Trade Agreement CEFTA (since 2007) and World
Trade Organization (WTO), which allows the companies
operating in Moldova to access almost 1 billion potential
consumers.
Moldova has signed bilateral trade-economic cooperation
agreements with 30 countries, bilateral agreements on
mutual promotion and protection of investments — with 44
countries, bilateral agreements to avoid double taxation and
prevent tax evasion — with 49 countries.
At the moment, Moldova is in an active process of
negotiations on the signing of the Free Trade Agreement
with the People's Republic of China.
It is important to mention that the legislative provisions
adopted by Moldovan authorities are in line with the
international legal framework, especially with those of
the European Union. This process will continue, as the
harmonization of legislation is the key to success in
implementing DCFTA commitments. Signed and ratified,
the agreement involves liberalizing trade in goods and
services, free movement of labor, lower taxes, reduction of
technical and non-tariff barriers, abolition of quantitative
restrictions and harmonization of Moldovan legislation
with the EU.
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In April 2016, the National Strategy for Investment
Attraction and Export Promotion for the period 2016-2020
was approved and seven priority economic sectors were set
up at national level: the information and communication
sector, manufacture of machinery and equipment
(automotive), administrative and support service activities,
manufacture of machinery and parts, manufacture of
textiles, clothing and footwear, electrical equipment and
food and agriculture. The existence of major investment
projects and the expected flow of new strategic investments
contributed to the Government taking additional actions
to protect investors. In this context, the Council for the
promotion of projects of national importance, chaired
by the Prime Minister, was created. The main aim of
the Council is to ensure the beneficial realization in the
Republic of Moldova of investment projects of national
importance, which influence the country's economy and
ensure a stable social and economic development of
Moldova.
TAX SYSTEM
The Republic of Moldova has one of the most competitive
tax systems in the region. From this perspective, there are
49 operational tax treaties on avoiding double taxation
with other jurisdictions. The general Corporate Income
Tax rate is 12%, Value Added Tax is 20% and Social
Security Contributions of 23%. It should be noted that
corporate tax may be reduced by half or more if a company
is resident in the Free Economic Zone. There are other
incentives for businesses worth mentioning: there is no
minimum capital requirement at the start of the business;
incentives for IT employment — partial exemption from
income tax and reduced social contribution; employers will
not pay taxes on the amounts spent on food, transportation
and employee training; companies importing raw materials
receive a holiday for VAT and customs duty if they
subsequently export the final product within 180 days.