Registration of a company in Moldova

Moldova is one of the small but promising countries in Eastern Europe. The jurisdiction is actively working on reforming the economy and many other areas to fulfill the plan for European integration. Among other things, the country is intensively developing such sectors as the production of building materials and glass, agriculture, the textile industry, and alternative energy. It should also be noted that winemaking is the visiting card of the country. Therefore, registering a company in Chisinau or any other Moldovan city is advantageous due to the following advantages of the jurisdiction.

Advantages of registering a company in Moldova

The decision to buy or open a company in Moldova can be potentially beneficial because of the following advantages of the country:

• advantageous geographic location;
• openness to foreign capital;
• ease of registration process, including online;
• availability of free economic zones;
• the ability to take advantage of the terms of double taxation agreements with many countries.

Forms of doing business in Moldova

It is possible to create a business or establish a legal presence in Moldova in one or more forms:

• Limited Liability Company is the most popular form of business in Moldova, in which the company participants do not bear any responsibility for the investment funds. Even one person can register this company, including non-resident and legal entities. The number of shareholders cannot exceed 50. The minimum authorized capital is 5,400 Moldovan lei (about $250) for companies operating in specific sectors.
• A joint-stock company is a form of business (usually large) designed to attract large amounts of external financing. A company can issue and offer its shares to third parties without restrictions. The liability of shareholders is limited solely to the value of their shares. The company can be founded even by one person, including a non-resident or legal entity, and the maximum number of shareholders is not limited by law. To form this type of company, a share capital of 20,000 Moldovan lei (about 1,000 USD) is required, but the amount of the share capital may be higher, which the company's scope will influence.
• A branch is an option chosen by foreign companies to conduct the same activities in Moldova as they do abroad, but with minimal costs. A simple registration procedure is required, after which the branch can start its activities in Moldova. The parent company bears full responsibility for the activities of the branch.
• A representative office is an alternative option for a foreign company. It receives the right to explore local markets and promote its goods/services without the right to conduct business activities in Moldova. A simplified registration procedure is required.

Business registration procedure in Moldova

If you want to register a company in Moldova, the process will cover the following steps in advance:

1. Selecting the appropriate legal entity for the type of business and a unique name for the future company.
2. Form the list of activities the company plans to engage in.
3. Gathering data on the founders, beneficiaries, and managers of the future company.
4. Searching for and drawing up an official address for the legal entity.
5. Drafting and executing constituent documents and registration forms.
6. Opening of a temporary account for contributing charter capital.
7. Payment of the registration fee and submission of the package of documents to the State Registration Chamber for consideration. Record of information about the new legal entity in the State Register of Legal Entities.
8. Registration for tax purposes and payment of mandatory social contributions.
9. Opening a corporate bank account.
10. Obtaining licenses (required for certain regulated activities).

Legislation and regulatory environment

Moldovan legislation is focused on attracting foreign investment. Non-residents have equal rights to do business here as citizens of the country. Registration takes one day, but it takes 1-2 weeks to prepare documents and complete the registration process. A license is required for certain activities. Contact Prifinance lawyers for more information on whether your activities in Moldova fall under special regulatory conditions.

Tax system in Moldova

The decision to create or buy a business in Moldova should be evaluated along with the following nuances of taxation in the country:

• Corporate tax - 12%
• PIT - 12%
• VAT - 20%
• Withholding tax (for non-residents) - (1) dividends - 6% (2) Interest - 12% (3) royalties - 12%
• Capital Gains Tax - (1) corporate - see corporate tax (2) individual - see personal income tax.

How Prifinance lawyers can assist

If you plan to register or buy a company in Moldova, the lawyers of Prifinance are ready to assist in every possible way to implement this business decision. The specialists have already implemented more than 11 000 successful projects in the field of company registration worldwide. Furthermore, the experts will happily apply this experience to launch and support a new business project.