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Company Formation Moldova

Types of companies in Moldova

Updated on Monday 12th August 2019

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Investors can open different types of companies in Moldova and the choice can be suited according to the type of activity, the size of the company and the available capital as well as the number of founders (one or more). In some cases, companies may need licenses in order to perform certain type of activities (like banking or insurance).
 
The most common form of business that can be registered in Moldova are the partnerships and the companies. The partnership may be general or limited. The companies are with limited liability or joint-stock companies.
 
In Moldova the business may also be organized as sole proprietorship, Co-operatives or State and municipal enterprises.
 
Below, our team of agents who specialize in company formation in Moldova lists the main business forms:
 
  1. Limited liability company: the most popular business form, incorporated by founders who are liable up to the extent of their contributions.
  2. Joint-stock company: suited for larger businesses, maintains the characteristic of limited liability.
  3. Partnership: can be general or limited, referring to the degree of liability the founders have.
  4. Sole proprietorship: founded by a single individual, it is the simplest business form and the one with the highest liability.
  5. Branch: incorporated by foreign companies that wish to be present on the Moldavian market. 
 
All of these business forms, along with a few others, are described below by our team of agents specialized in company incorporation in Moldova. Each of these business types has its own characteristics, making it suitable for small, medium or large businesses. Entrepreneurs can start their business activities by opening a limited liability company and, as the business progresses, change the business form into a joint-stock company if the number of shareholders grows or if it is in their best interest to list the company on the stock exchange. 
 
The limited liability company (LLC) tends to remain the preferred business form because of the simpler setup and management requirements. Investors who open a joint-stock company (JSC) will need to observe a set of different procedures for annual reporting or auditing, as the regulations for these business forms are more complex (due to the fact that the company can be listed on the stock exchange).
 
Our team who specializes in company formation in Moldova can provide investors with complete details about the requirements for operating an LLC compared to those for the JSC if they need to make a choice between these two business forms. 
 

The types of companies in Moldova, described by our agents

 
Below, we describe the types of companies in more detail so that investors can find it easier to choose a suitable business form.
 
The Limited Liability Company (Societate cu Raspundere Limitata - SRL) is the most common type of business met in Moldova because of the advantageous incorporation procedure. The number of shareholders is limited to 50 and the requirements for a minimum share capital have been abolished. Founders will establish their capital and include the amount in the company’s Articles of Association. The management is overseen by the General Meeting of the Shareholders, and the company has one appointed manager and one administrator, in most cases.
 
The Moldavian Joint-Stock may be open or closed, the main difference between this two is the way the shares can be traded. The shares from the open joint-stock company can be public trade with no restriction for the third part who’s trying to purchase it. The minimal share capital for this type of company must be equal with at least 20,000 MLD (1.300 EUR). A closed joint-stock company cannot freely trade its shares to a third part and must have a minimal share capital of at least 10,000 MLD (650 EUR). The liability of these types of company is carried by the shareholders but only in the limit of their contribution.
 
The General Partnership is forms of business obtain by joining no more than 20 entrepreneurs under the same name in order to achieve the same economic goals. An agreement may be signed between the parties. It doesn’t require a minimum share capital but has a limited number of shareholders with unlimited liability under the losses and incomes.
 
The Limited Partnership is also based on an agreement signed between no more than 20 investors split into general partners (with unlimited liability and decisional power) and silent partners, which liability is limited and depending on the size of the contribution.
 
Other forms a business can take in Moldova are the sole proprietorships, state and municipal enterprises and the cooperatives.
 
A sole proprietorship owner is fully liable for the debts and incomes. His personal assets are subject to a claim from creditors in case the debts cannot be covered.
 
The state and municipal enterprises are legal entities based on the state or local authorities’ assets. These assets cannot be used as guarantees or in leasing procedures. Also, the assets cannot be invested in another country.
 
Cooperatives must be formed by at least five investors and can take two forms: it can be production cooperatives or business cooperatives.
 
Branches of foreign companies can be established but the parent company is fully liable for the activities of its Moldavian Branch. Foreign companies can also establish a representative office, however, this business form is limited and it cannot engage in commercial activities (it can be used only for marketing or research purposes).
 

Company formation in Moldova 

 
Not all business forms require the same steps for incorporation, however, registration with the state authorities is mandatory as well as obtaining the relevant permits and licenses. Investors who decide to open a company in Moldova and choose to establish a limited liability company can follow the short guide below:
 
  • - prepare the company documents: the founding documents include the Articles of Association and the Memorandum.
  • - prepare the registration file: included here are the Articles as well as the founder’s identification documents, the registration request (duly filled in) and others.
  • - submit the capital: the share capital of the company, as it is stated in the Articles, is deposited in a bank account opened for the business.
  • - register the business: all of the documents mentioned above are submitted to the Company Register for finalizing the process. 
  • - subsequent steps: these refer to obtaining any permits or licenses that may be required in the business field in which the company will activate.
 
One of our agents who specialize in company formation in Moldova can provide assistance during all of these steps.
 

Requirements for companies in Moldova

 
Companies are required to observe the taxation, accounting and reporting laws as well as those related to employment. In Moldova, the corporate income tax rate is 12% with a differentiated taxation method possible for certain businesses that are not registered VAT payers.
 
Corporations need to handle a subsequent VAT registration when the taxable supplies and imports of VAT-taxable services have a cumulative value of more than 1.2 million MDL in a period of twelve consecutive months.
 
According to the Moldavian National Statistical Office, the following key indicators refer to the number of companies and their type in 2018:
 
- the total number of companies: 56,500.
- total sales income: 356 662,6 million lei.
- percentage of small and medium companies out of the total number: 98,7%.
 
When choosing a business form to start their activities in Moldova, investors should carefully consider their characteristics and choose the one that is optimal to their business goals. Contact us for complete details about company formation in Moldova as per the chosen business form.
 

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