Company Register in Moldova

Updated on Thursday 06th January 2022

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The Republic of Moldova offers a competitive regime for companies and businesses, a good geographical location as well as proximity to large markets in the EU and outside of the Union. Companies will find a number of advantages when they decide to open a company in Moldova, starting with a low corporate income tax rate, a good double tax treaty network as well as low company set up and employment costs.

Foreign and local investors can incorporate several forms of business in Moldova. Here are some forms a company can take in Moldova:

• sole proprietorship: the simplest business form, the founder is liable for his company, its debts.
• general (full liability) partnership: founded by two and no more than 20 partners, they all bear unlimited liability.
• limited liability partnership: as the name suggests, not all of the partners have unlimited liability for the business.
• joint stock company: suited for larger businesses, the founders are not liable for the company debts.
• limited liability company: a widely used business form, has relatively low requirements, the founders have limited liability and it is suited for many types of activities.
• production cooperative and business cooperative: these are used for joint production or joint business activities.

Our agents who specialize in company formation in Moldova detail the characteristics of these business forms below, as well as list the main steps for company incorporation. Our agents can also put you in contact with our partners from this company formation firm in Turkey, in case you are interested in starting a business in Turkey.

First-time foreign investors in Moldova can request our complete services for company formation. Our agents are able to assist from the early stages of choosing a business structure and onto the stages where the company is required to obtain special permits and licenses.

Types of business entities in Moldova

Companies in Moldova can be private or public; having in common that the liability of its members is limited by the contribution to the capital.

A Limited Liability Company (Societate cu Raspundere Limitata - SRL) is based on a share capital of 5,400 MDL from which at least 40 % must be deposit at registration and 60% within 6 months from incorporation. Not more than 50 shareholders can form this type of entity. The management of an SRL is assured by the General Meeting of the Shareholders, an appointed manager and one administrator .It is very popular among the small entrepreneurs due to the advantageous conditions of formation and administration.

A form of business established mostly by the large entrepreneurs is the Moldavian Joint Stock. The minimum share capital for this business form is more substantial, at 20.000 MLD (or approximately 1,100 euros). The share capital can be increased by subscribing the shares at the Stock Market where can be purchased by third parties). The management is also assured by the general meeting of the shareholders but the daily decisions are established by a board of managers, whose actions are watched by a supervisory board.

A General Partnership in Moldova is formed by not more than 20 members joined together under the same name and with the same economic purposes, where all the members have the same unlimited liability on the entity’s debts and who can share the profits equally. Unlike the companies, no minimum share capital is necessary for this business.

Another form of Moldavian partnership is the Limited Partnership which is also formed by not more than 20 members divided into general partners and silent partners, where the general partners don’t need to deliver capital and who have unlimited liability on the company’s debts and can split the profits between them and where the silent partners bring a contribution to the capital and are limited to that contribution and cannot take part of the entity’s management.

A simple form of business in Moldova is the Sole Proprietorship where the owner is fully liable for the entity’s debts and can use the profits without restrictions. Just like in the case of the partnerships there is not necessary to bring a capital but his/her personal assets is not protected in case of liquidation.

The state or local authorities’ assets can be used to form State And Municipal Enterprises. These assets cannot be invested in another country.

There are also two forms of cooperatives which can be opened in Moldova: Production Cooperatives and Business Cooperatives. These types of entities must be formed by at least five investors.

The chosen type of company will influence the taxation and reporting requirements as well as it will have a significant impact on the founder’s liability. The preferred business form is thus the private limited liability company and one of our agents who specialize in company formation in Moldova can give you more details.

Company Incorporation in Moldova

At the beginning of the process of company incorporation in Moldova, investorsmust deposit all the documents with the State Registration Chamber. The term for registration of the company is 5 working days. In order to speed the process two expedited options are available, one in which the procedure can be completed within 4 hours and one in which the procedure can be completed in 24 hours.

A unique state identification number is attributed to the newly formed company as a result. This number is visible in the Registration Certificate and in the constitutive act. A bank deposit must be open and at least 40% of each founder’s contribution to company capital must be paid in and the other 60% must be paid in within 6 months of registration.

After that, the investor must obtain the registration certificate and constitutive act; obtain the official stamp from the Ministry of Information Technologies and Communication and obtain statistical codes. This is possible by submitting the bank certificate to the Registrar and order the company stamp order.

After delivering those, the Registrar will issue the stamp along with the registration certificate and other documents. The newly established companies must also register with the Tax Inspectorate. After that, the investors must convert the company’s temporary bank account to a permanent one. The last step of company incorporation in Moldova consists of registering the company with the Social Security Fund and with the National Medical Insurance Company process which takes around 10 days.

Corporate compliance in Moldova

Companies in Moldova are subject to a low corporate income tax rate of 12%. Resident companies are taxed on their worldwide income whole non-resident companies, such as branches, are taxed only on the income they derive from Moldavian sources. Those companies that are not paying value-added tax and thus are not registered for this purpose can use a different calculation method for the corporate income tax: they can apply 4% to the operating income. This is not applicable to individual entrepreneurs, companies that offer business management and consulting services or farmers. One of our agents who specialize in company formation in Moldova can give you more information about corporate taxation.

Other taxes for companies are the payroll tax, the real property tax, social security contributions, stamp duty, and transfer tax.

Companies need to comply with accounting and reporting regulations. The tax year is generally the same as the calendar year and for newly registered companies, it is the time between the date of registration and up to the end of the calendar year. Businesses are required to file their own return as consolidated returns are not possible.

The self-assessment regime makes it mandatory for company owners to submit the tax return on the 25th of the third month after the end of the tax year. Penalties are applicable for late filing, for failure to comply with the filing requirements as well as for tax avoidance or evasion.

Value-added tax registration is only mandatory for those businesses that are engaged in VAT-taxable services and imports over the value of 1.2 million MDL during two consecutive years. Companies also have the option to apply for VAT taxation voluntarily when they plan to engage in VAT-taxable activities. VAT returns are prepared and submitted monthly (by the 25th of the following month).

One of our specialists in company incorporation in Moldova can give you more information about the tax, accounting and reporting requirements as well as the double tax treaties signed between Moldova and other countries.

Economy overview in Moldova

Moldova’s economy is partly sustained by remittances from individuals working abroad, either in the EU or in Russia. Some of the relevant information about the economic situation is highlighted below:

• in 2010, the value of remittances was around 1.3 billion MDL.
• industrial production increased between January and April 2019 by 12,3 percent.
• In 2017, the extractive industry and the manufacturing industry remained the pillars that provided for a 6,9% industry growth compared to 2016.
• GDP in 2917 was approximately 150,4 billion lei, a 4.5% increase compared to 2016.

Moldova is part of many trading bodies like IMF, World Bank, Central European Free Trade Agreement, Central European Initiative and other bodies and associations, an advantage that has lead to the creation of a stable economic environment. Another advantage of managing a business in Moldova is the strategic position in South Eastern Europe in the north of the Balkan Peninsula.

The country’s open economy, the recent development of key industry sectors as well as the low corporate income tax rate are some of the main reasons why investors choose to set up a company in Moldova.

Investors who are interested in opening a company here can contact our team of agents who specialize in company incorporation.

Meet us in Chisinau

Call us now at +40 723 500 027 to set up an appointment with our lawyers in Chisinau, Moldova. Alternatively you can incorporate your company without traveling to Moldova.

As our client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Moldova.