Establish a Subsidiary in Moldova

Updated on Monday 20th January 2020

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The subsidiary is a company in Moldova controlled by another foreign corporation that holds 50% of more of its voting stock. The subsidiary, although partly or wholly owned, is a separate legal structure from the parent company and can engage in the same or in additional, different activities in the jurisdiction in which it operates.

Company formation in Moldova is a process that includes several steps and the subsidiary will be incorporated like any other resident legal entity. Because it is a locally registered company, it will be subject to all of the local laws as well as to taxation on its profits as per the local tax rate.

Our agents specialize in company incorporation in Moldova and can assist foreign investors who wish to establish their presence on the local market via a subsidiary.

Opening a subsidiary in Moldova

The limited liability company (LLC) is a widespread business form because of the relatively low minimum capital and the limited liability for the founders. Below, we list its characteristics:

• Shareholder number: formed by at least one founder and maximum 50 shareholders; natural or legal persons.
• Shareholder liability: the founders are only liable to the extent of their contribution to the company’s capital.
• Minimum capital: a share capital of 5.400 MDL deposited in two parts, 40 % at registration and 60% within 6 months from incorporation.
• Incorporation: the company’s constitutive documents are the Articles of Association and the Memorandum.
• Management and control: it is ruled by one manager and one administrator, appointed by the general meeting of the shareholders or by the Articles of Association.

Investors should know that when the LLC is formed by a single investor, the entire minimums share capital needs to be deposited upon incorporation. Investors who want to set up a company in Moldova and have chosen this business form can reach out to our agents for further details.

An alternative to the limited liability company for the purpose of opening a subsidiary in Moldova is the joint-stock company (JSC). This is suited to large companies as it has more complex reporting requirements and it requires a larger minimum share capital. Below, our agents who specialize in company formation in Moldova describe its characteristics:

• Shareholder number: formed by at least one founder and no maximum number of shareholders; can be formed by natural or legal persons (some conditions apply to the latter)
• Shareholder liability: like for the LLC, the founders are only liable to the extent of their contribution to the company’s capital.
• Minimum capital: a share capital of 20,000 MDL or approximately 1,325 EUR is required for this business form.
• Incorporation: the Articles of Association and the Memorandum need to be drawn up for the purpose of registering the company.
• Management and control: the supreme governing body is the General Meetings of Shareholders; an auditor or an auditing committee is mandatory.

Investors should know that the JSC is subject to different rules for accounting, reporting and the disclosure of information. For example, when the statutory capital exceeds the value of 50,000 MDL and the company has more than 50 shareholders, it must publicly disclose information. The same applies when it is listed on the stock exchange or when the company is engaged in banking, insurance, or investment activities.

Subsidiaries in Moldova are allowed to apply for EORI registration and complete trading activites.

Conditions for the Moldavian subsidiary

The subsidiaries’ basic documents are based on the decision of opening, foundation deeds and articles of association. The foundation deed contains the following: the company name and details regarding the founders and type of business, the registered office address, the minimum share capital and details regarding every shareholder part of the contribution. The articles of associations contain the following information: the name of the manager or the composition of the management board, the way the company can be liquidated or reorganized and other internal regulations.

The foundation documents must be submitted at the State Register of Legal Entities, belonging to the State Registration Chamber of the Ministry of Justice. which will issue a certificate with the state identification number. This registration certificate is used for opening a temporary bank account necessary for depositing the initial capital.

After opening the bank account, it will be formally checked and the Registration Chamber will issue the company’s stamp and the Registration Certificate.

After receiving the stamp, the company must be submitted to the Tax Inspectorate for a VAT code. After this process, the temporary bank account is converted into a permanent one. The last step is registering the company at the Social Security Fund and the National Medical Insurance Company.

Company formation in Moldova is a simplified process and one that can be easily handled by foreign investors. Entrepreneurs who need specialized assistance for subsidiary creation can reach out to our agents who specialize in incorporation. We provide complete services and can assist investors through a special power of attorney for registration matters when they cannot be present in the country during the entire company formation procedure.

Subsidiary taxation and compliance in Moldova

A subsidiary in Moldova is treated as a resident corporation for taxation purposes. The basis for taxation is the worldwide income of the corporation. A standard corporate income tax rate of 12% applies in Moldova, which is a low rate compared to other countries in Europe. Companies that are not registered Vat payers can calculate the corporate income tax at a 4% rate on their operating income. This calculation method does not apply to subsidiaries that provide business and management consulting services.

Other taxes for companies in Moldova include the withholding tax on dividends, interest and royalties, the payroll tax, real property tax, social security, stamp duty, and transfer tax. The value-added tax is 20% at its standard rate and at a 9% rate for some foodstuffs and other specific products; some types of services, such as financial services are exempt from VAT and with no possibility to deduct. Companies are subject to mandatory VAT registration when their taxable supplies and imports for VAT-taxable services is in excess of 1.2 million MDL during a 12-month consecutive period.

One of our agents who specialize in company incorporation in Moldova and taxation issues can give you more information about corporate taxation.

Moldova maintains an open foreign direct investment policy, with the following statistics:

- in the final quarter of 2018, foreign direct investment in the country increased by 51.02 million USD.
- at the beginning of 2018, the foreign direct investment value was at around 109.86 million USD.

Foreign investors who are interested in knowing more about company formation in Moldova can contact us. Our team specializes in company incorporation for all of the applicable business forms and can assist both local and foreign investors.

Partner: Firmengründung in Moldawien, Регистрация компаний Молдова

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.

Company Formation Moldova

Establish a Subsidiary in Moldova

Opening a subsidiary in Moldova

Conditions for the Moldavian subsidiary

Subsidiary taxation and compliance in Moldova

Meet us in Chisinau

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