What to Know When You Company Incorporate in Moldova
Located in Eastern Europe, the Republic of Moldova has a small lower-middle-income economy, according to the World Bank. While it is considered among the poorest countries in the continent, the country has been reducing poverty significantly and pushing for inclusive growth for two decades already.
Its economy has grown by an average of 4.6 per cent per year in the past 20 years, thanks to the consumer sector and money remittances. In 2020, its gross domestic products (GDP) stood at $11.9 billion while GDP per capita reached $3,395.
With a flourishing economy, it is no wonder why investors are looking to company incorporate in Moldova.
Apart from its promising economic growth, the country is also touting its competitive business environment for both local and foreign entrepreneurs.
Companies are benefiting from low corporate income tax rate, double tax treaty network, low capital requirements, and cheaper employment costs. At the same time, they are accessing big markets in the European Union and other foreign channels.
What Are the Types of Business You Can Company Incorporate in Moldova?
Whether the company is private or public, the business is giving safeguard to the personal assets of the investors as a general rule. They are only liable up to the extent of their investment in the company. Investors are ensuring this because they do not want to go personally bankrupt should they need to liquidate the company.
Limited Liability Company
Upon incorporation, a limited liability company needs a share capital of 5,400 MDL. Investors are depositing at least 40 per cent of this amount during company registration. The rest is to be collected within six months from incorporation. Less than 50 shareholders are allowed under a limited liability company. During a general meeting of shareholders, they are appointing a manager and an administrator.
Moldovan Joint Stock
Investors with bigger funding for capital are setting up a joint-stock. It requires a minimum share capital of 20,000 MLD or around 1,100 euros. By selling the shares at a stock market, joint stocks are increasing their share capital. A board of managers is governing the joint-stock.
Not more than 20 investors are comprising this type of business. They are classified as general partners and silent partners.
Defining general partners, they are not required to provide capital, but they have unlimited liability. They are also the ones dividing the profits among partners.
Meanwhile, silent partners are investing capital in the business. They are only liable to the amount of their investment. Also, they are not allowed to be involved with the management of the business.
Unlike most companies, a general partnership means its members have unlimited liability. This partnership onboards not more than 20 members working for the same economic purposes and sharing the profits equally. A general partnership has no required minimum share capital when setting up.
How to Company Incorporate in Moldova?
Just like in any country, you are following different regulatory procedures to set up and company incorporate in Moldova.
Submission of Documents
First, you must submit all the required documents to the State Registration Chamber. These include identity cards of the investors, application of registration, file confirming the investments of the owners, and proof of registration fee payment.
Registration is taking five working days to be completed. If you need to accomplish this more quickly, you can file a request to expedite the process.
Securing Identification Number
After forming the company, the government is giving it a unique state identification number. This number appears on the registration certificate and in the constitutive act. Companies open a bank account after this, depositing at least 40 per cent of the investors’ capital contribution right away.
Acquiring Official Stamp
After the company gets ahold of the registration certificate, they are applying for the official stamp from the Ministry of Information Technologies and Communication. The Registrar is the one in-charge in issuing the official stamp, registration certificate, and other documents.
Registering with More Regulatory Bodies
The final step to the company incorporates in Moldova is to register with the Social Security Fund and the National Medical Insurance Company. The process takes around 10 days usually.
What Are the Promising Sectors in Moldova?
Investors are always doing homework before they throw in their hard-earned money into the business. They are looking into the potential markets they can penetrate. Investors are doing this to make sure their money will not be put to waste. Here are some of the promising sectors to consider when your company incorporate in Moldova.
Textile and Apparel Sector
It is one of the most important sectors in Moldova, especially because it generates numerous job opportunities and profitability. At the same time, textile and apparel are the country’s top export. The apparel industry alone is thriving because of cut and make services, which are driven by demand coming from foreign clients.
As textile and apparel, the wine sector is also a major exporting industry. This sector is a source of living for some 50,000 farmers and is directly employing 7,100 people in the process of production. Its market has also been showing a change of pace as it becomes more diverse. Still, Russia is the top foreign consumer of Moldovan wine.
Information and Communication Technology Sector
Information and communication technology (ICT) industry has been showing quick growth and surge in productivity in recent years. Demand for this sector is coming from the domestic market looking for technological advancement. Education and infrastructure are mainly supporting the information technology sector in Moldova.
It is one of the most robust industries in Moldova. The country is producing different types of furniture such as upholstery and those for office, bedroom, and kitchen. Furniture exports have been showing growth as well. At the same time, it is employing a huge number of workers across many firms, which are mostly small and medium enterprises.
Looking for Help?
If you are an investor or business owner looking for help, reach out to 3E Accounting right away. We are a corporate service provider ready to serve you and your company. Contact us today.