How To Start A Business In Moldova

Nestled between Romania and the Ukraine is Moldova, one of Eastern Europe’s hidden gems. For the most part, the country is recognised for its exceptional wine production. Wine enthusiasts from all over visit to see the Milestii Mici wine cellar which boasts the largest collection in Europe.

Although recently, Moldova has begun to attract foreign entrepreneurs searching for new opportunities. Offering far more than just scenic landscapes and archaeological landmarks, this lesser-explored country is becoming home to a growing number of startups.

 

Why Start A Business In Moldova?

 

There are plenty of advantages attached to having a business in Moldova that make it a unique option.

Location: Moldova is ideally positioned between European Union countries along with the Commonwealth Independent States like Georgia and Armenia. This significantly widens the net in terms of market opportunities for startup founders.

Free trade: The country has free trade agreements in place with both the EU and CIS nations where businesses are allowed to export products at a reduced rate.

The IT sector is growing: Moldova has seen major growth in the IT industry, supported by government incentives.

The cost of living and labour is low: It is much more affordable to run a business in Moldova compared to Western European countries who typically have expensive rates for office spaces, utilities and wages.

 

What Business Opportunities Does Moldova Have?

 

Agriculture or wine production: Moldova is one of Eastern Europe’s biggest wine producers. This offers plenty of opportunities in an industry that is already thriving.

Exporting: With the country’s trade agreements in place, it’s the perfect location to manufacture products to be sent to the rest of Europe.

IT and software development: Startups in these industries are on the rise as tax incentives are offered for these sectors.

Tourism and hospitality: Tourists visit Moldova to see its epic vineyards and scenic landscapes. With this in mind, entrepreneurs can capitalise on the need for restaurants, tours and accommodation.

 

 

Tax Regulations In Moldova

 

Moldova’s tax system is fairly accommodating of businesses, which is another drawcard for company owners. While the standard corporate tax rate is 12%, IT companies can get 7% on tax revenue if they operate within the Moldova IT Park.

Value Added Tax (VAT) is at 20% although reduced rates of 8% apply to food products.

For business owners who require a team of employees, they can expect to pay about 24% of the employee’s salary towards health insurance and contributions.

 

Visa Requirements For Foreign Entrepreneurs

 

Foreigners who are planning on starting a business in Moldova will need a visa or residence permit. This will largely depend on what their native country is.

Short-Stay Visa (type C): This is valid for up to 90 days within a 180 day period and would be ideal for those attending conferences or business trips.

Long-Stay Visa (type D): This visa will be required for those who want to work and live in Moldova.

Residence permit: For those who want to run a long-term business in Moldova, they can apply for a residence permit. This can be done through the Bureau for Migration and Asylum.

 

Potential Challenges To Be Aware Of

 

Starting a business in any country will present some challenges in one way or another. Let’s take a look at some things to keep in mind before you start a business in Moldova.

Language barrier: The official language is Romanian and while Russian is widely spoken, English is less common. If you are unfamiliar with Romanian and Russian, you may need to hire a translator to help you navigate the language barrier.

Smaller population: Moldova’s total population is around 2.5 million which is on the smaller side. This could reduce the local demand for your product or service, especially if you only plan to trade locally.

Lack of infrastructure: Some areas, especially the outlying ones, are known to have poor infrastructure which could impact certain sectors like logistics.

 

How To Start A Business In Moldova

 

If you plan to go ahead with setting up a business in Moldova, here is a step-by-step guide on how you can do so successfully.

 

Choose A Business Structure

 

This will be the first step, and Moldova has three main entities to choose from.

Individual Enterprise: This is suited to solo business owners working alone.

Limited Liability Company: This is the most popular choice but does require a minimum capital amount of 5,400 MDL.

Joint-Stock Company: For bigger businesses, this would be the ideal choice. The minimum capital amount here is 20,000 MDL.

 

Register Your Business

 

The next step is to submit all of your registration documents to the Public Services Agency to receive an identification code. You can also register with the State Tax Service for VAT and taxes.

 

Open A Bank Account

 

Choose a Moldovan bank of your choice to open up a business bank account. If you are required to deposit a minimum capital amount then you can do so.

 

Register For Social Security

 

If you need employees, you will need to register with the National Social Insurance House and National Health Insurance company for employee health and social contributions.

 

Should You Start A Business In Moldova?

 

Moldova’s startup scene is expected to continue to rise in the coming years, and entrepreneurs can take advantage of the country’s unique opportunities. While some challenges like language barriers and infrastructure issues do exist, these can be overcome with some careful consideration and planning.

Overall, the country’s relatively low cost of living and working expenses together with its tax incentives are a major drawcard. Moreover, if you can innovate the agricultural and IT industries, your startup could be on the path to success.

Good luck!