Foreign and local investors can incorporate several forms of business in Moldova. Here are some forms a company can take in Moldova: sole proprietorship, general (full liability) partnership, limited liability partnership, joint stock company, limited liability company, production cooperative, business cooperative, lease enterprise, state and municipal enterprise.
TYPES OF MOLDOVIAN BUSINESS ENTITIES
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. There are two forms of joint stock companies in Moldova: closed (where the minimum share capital is 10.000 MLD divided into nontransferable shares) or open (where the minimum share capital is 20.000 MLD and 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.
Other forms of business. 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.
COMPANY INCORPORATION IN MOLDOVA
In the beginning of the company incorporation in Moldova the companies must 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 new 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 in registering the company with the Social Security Fund and with the National Medical Insurance Company process which takes around 10 days.
ECONOMY OVERVIEW IN MOLDOVA
The 0% corporate tax is the main reason the investors register Moldavian businesses. Also Moldova is part of many trading bodies like IMF, World Bank, Central European Free Trade Agreement, Central European Initiative and the Commonwealth of Independent States which created a stable economic environment. Another advantage of managing business in Moldova is the strategic position in the South Eastern Europe in the north of the Balkan Peninsula.