Company Formation in Moldova

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. Investors 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 setup and employment costs.

Our consultants, specialized in company formation in Moldova, can provide full legal assistance in the process of starting a local business.

What are the main business forms in Moldova?

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, in which the founder is liable for his company and its debts;
• general partnership – founded by two and not more than 20 partners, who 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 that has relatively low requirements and in which the founders have limited liability (it is suited for many types of activities);
• cooperatives – 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.

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 in the stages where the company is required to obtain special permits and licenses.

The characteristics of Moldavian company types

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

A limited liability company (Societate cu Raspundere Limitata – SRL) is a common way to engage in a business activity in Moldova, as this entity refers to a business form that has its own legal personality, separate from the founders.

The shareholders benefit from limited liability for company debts, limited to their capital contributions. Concerning capital, it must be noted that recently the minimum share capital requirements have been abolished.

Thus, starting with 12th of July 2023, investors can open a company in Moldova as a limited liability company with a share capital of only MDL 1 (as opposed to the previous share capital requirement of MDL 5,400). Please mind that in practice, during the process of company registration in Moldova, investors are advised to subscribe a minimum share capital of MDL 1,000 (recommended, not imposed).

This minimum share capital is recommended in connection to the Moldavian public authorities, as the capital of a legal entity can influence the level of trust public authorities and banks can have towards a business. Our consultants in company formation in Moldova can offer advice on the best approach to the minimum capital your company should have.

We also mention that this company type can be set up by not more than 50 shareholders. 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 large enterprises is the Moldavian joint stock company. Investors who plan to open a company in Moldova as a public company should be aware that the legislation concerning the capital obligations has been changed, just like in the case of the SRL. Thus, the following must be noted:

• up until 2020, this business form could have been incorporated with a capital of MDL 20,000;
• the capital requirements were modified under the Law no. 1134, published in the Official Gazette on 31st of December 2020;
• under the provisions of the law, existing joint stock companies in Moldova needed to increase their capital contributions to MDL 120,000 by 2022, to MDL 360,000 by 2023 and to MDL 600,000 by 1st of January 2024 (the same rules applied when starting the process of company registration in Moldova for this business form);
• thus, those who want to open this company type now need to subscribe a minimum share capital of MDL 600,000, which must be 100% subscribed during the process of company formation in Moldova.

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.

They have unlimited liability for the company’s debts and can split the profits; the silent partners bring contribution to the capital 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 it is not necessary to bring capital but his/her personal assets are not protected in case of liquidation.

There are also two forms of cooperatives which can be opened in Moldova, production 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.

Company incorporation in Moldova

At the beginning of the process of company incorporation in Moldova, investors must deposit all the documents with the State Registration Chamber. The term for registration is 5 working days. In order to speed up 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.

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

Later, 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 while non-resident companies, such as branches, are taxed only on the income they derive from Moldavian sources.

One of our agents who specializes 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.

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 MDL 1.2 million during a financial year. Companies also have the option to apply for VAT registration 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.

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 led 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.