Company
LOGO

THE ECONOMIC SITUATION
AND INVESTMENT CLIMATE
OF THE REPUBLIC OF
MOLDOVA

Chisinau, 10 July, 2008

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CompanyLOGOWhat can Moldova Offer¾ Favorable geographic position in the South Eastern Europe;¾ Highly qualified labor force and relatively low labor cost;¾ Market access and regional market potential¾ One of the lowest corporate taxes in the region –15% andextended fiscal incentives on investments;¾ Well-developed banking system and international accountingstandards.
¾ Fertile soils and favorable conditions for agriculture;¾ Progressive visions on stimulating entrepreneurial activity.

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CompanyLOGO

Moldova – general overview

Area:
Population:
Capital:Climate:Official language:
National Legislature:

33,800 km2
3.4 million
Chisinau - 717,000 citizens
moderate winter(Jan. -4 -7°C ),warm summer(Jul. +25 +28°C)
Moldovanalso Russian spoken
Unicameral assembly, theParliament has 101 members

Head of state:

Vladimir Voronin

Administrative units:
National currency:

32
Moldovan Leu (MDL)

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CompanyLOGOMacroeconomic Development
Inflation/Exchange rate,%

During 2000-2007 years Government policy was oriented to assurance ofmacroeconomic stability, development of real sector of economy, promotionof structural reforms, intensification of external commerce.

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Foreign trade (mln. US$)

CompanyLOGOStructure byregions

Export, %Import, %

2003

2004

2005

2006

2007

2003

2004

2005

2006

2007

EU countries

26.7

30,1

40,751.1

EU-27
50.6

36.0

32,945.3

45.2

EU-27
45.6

CIS countries

53,6

51,0

50,540,3

41

42,3

43,2

39,5

37,936.1

Other countries

19.7

18,98.8

8.6

8.4

21.7

23.9

15.2

16.9

18.3

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CompanyLOGO

Foreign trade – main partners

Export2007
Importwww.company.com

Trade policy

CompanyLOGO• June 2001 – Moldova becomes member of WTO;
• June 2001 – Moldova becomes member of Stability Pact forSouth East Europe (SPSEE)• December 2006 – Moldova signs Central European Free TradeAgreement and becomes member of this agreement.
• Free Trade Agreements concluded with all SPSEE membercountries;• Free Trade Agreements signed with 10 CIS countries (exceptTadjikistan)• The Republic of Moldova benefits from the General System ofPreferences Plus (GSP+) granted by the EU (about 9.7 th.
groups of products out of 10.2 th. have free access on EU
market without customs duties).
•

1st March 2008 – Moldova will benefit from Autonomous Trade
Preferences (ATP) offered by European Union.
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Free Economic Zones

CompanyLOGO"Expo-Business-Chisinau"”Ungheni”– 107 km"Tvardita"– 115 km

"Otaci-Business“ – 220 km"Vulkanesti" – 200 km“Taraclia"– 153 km

¾ Import of raw material exemptedfrom all taxes, excise and VAT, if
exports > 70 % of total sales¾ Corporate tax reduced with 50%¾ Corporate tax exemption for 3 years– investments > 1 mln USD¾ Corporate tax exemption for 5 years- investments > 5 mln USD
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CompanyLOGO

Moldova - FDI Inflows
Share of Net FDI in GDP

Total cumulative

2003

2004

2005

2006

2007

FDI, mill.
US$

73,8

151,0

197,4241,9448

GDP, mill.
US$

1981,22598,12988

3409

4395

FDI/GDP,%

3,7

5,86,67,1

10,2

Actually, businessmen from more than 80 countries areinvesting in Moldova, the major investments being fromEuropean Union countries, CIS countries, USA andCanada.
Source – National Bureau of Statistics
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CompanyLOGO

FDI in Moldova by countries oforigin and breakdown by sectors
In 2007

Nr.
1Country
Netherlands

234567891011

Russian FederationItaly
CyprusSpain
United Kingdom
Germany
USARomania
FranceUkraine
Total% from total
21
10.6
10,2
10,0
7,8
5,0
4,94,2
3,83,81,1100

There are6357 registered companies withforeign capital. During 2007, there were 851
registered companies with foreign capital.
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Company
LOGO

Legal framework¾ Law on investments in entrepreneurial activity:Based on ”national treatment” principle;

Allows 100% investment participation in all sectors of theeconomy, full repatriation of incomes;

Ensures transparency between public authorities and foreign
investors;

Compensations and missed profits are repaired in case ofdisruptions for public benefit considerations;

Guarantees against expropriation, forced interruption ofactivity;

Clear framework for dispute settlement.

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Company
LOGO

Investment Incentives
Investment facilities:• Foreign investments to be included in equity capital more than US$250 000– 50% reduction of corporate tax - 5 years;• Foreign investments to be included in equity capital more than
US$2,000,000 – 100% reduction of corporate tax - 3 years;• Capital investment is made or statutory capital is formed or increased bycontributions that exceed the equivalent of USD 2 (5, 10, 20, 50) million andreinvest in the development of their own production, or in state or othernational economy development programs, at least 80 (50, 25, 10, 0) % of
the calculated but unpaid amount of the income tax – 100% corporate
income tax exemption during 3 (3, 3, 4, 4) years.
Other incentives:• IT companies and employees of IT companies are exempted from income
tax payment for a period of 5 consecutive years;• Imported material goods to be included in equity capital are exempted ofVAT and customs tax payment;• Incentives for activity within a Free Economic Zone.

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Company
LOGO

Republic of Moldova and cooperation
within regional structures- Co-operation activities; - Know-how exchange
Programme; - Technical Cooperation Projects- EU’s regional initiative - “Black Sea Synergy”- Project Development Fund
- Black Sea Trade and Investment PromotionProgram-Investment Compact for South-East Europe- Investment Reform Index

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CompanyLOGO•THANK YOU FORATTENTION !
•151, Stefan cel Mare Av., Chisinau,• Republic of Moldova, MD-2004• Tel.: (+ 373 22) 22-15-52• Fax: (+ 373 22) 23-44-25• ww.chamber.md••

e-mail: president@chamber.md,
foreign@chamber.md•www.company.com