Republic of Moldova. Opportunities nearby. Agriculture. Textile, Apparel, Footwear and Leather goods ICT. Medicine. Renewable Energy.

Transcription

1 Edition 2015/2016 Agriculture Textile, Apparel, Footwear and Leather goods ICT Medicine Automotive Renewable Energy Republic of Moldova Opportunities nearby

2 Republic of Moldova Moldova has a strong industrial tradition, a developed technical education system, which results in a well-prepared industrial labor force. Human resources are one of the most important assets of Moldova. Well-educated professionals with high proficiency in several languages are looking forward to work with foreign companies. With many significant investors already producing and outsourcing to the country, there is a large range of opportunities for companies which are seeking new production opportunities and investments. Dräxlmaier AG, Lear Corporation, Leoni AG, Südzucker AG, Lactalis-Alba, Gebauer&Griller, Steinel Electronic, Lafarge, Endava, and many others already established their own plants in Moldova, or source from Moldova by making use of the local sub-contractors. Whether you are looking to gain access to the Russian or European markets, optimize your operational costs, find skilled labor at competitive wages, relocate and still remain close to your distribution or assembly centers, Moldova is the country that meets your needs.

3 Contents Key facts...2 Top reasons to invest in Moldova...3 Favorable location...3 Economic overview...4 Available workforce...5 Labor & Utility costs...7 Taxes in Moldova...8 Customs...8 Market potential...9 FDI facts...10 Business start-up in Moldova...11 Free Economic Zones...12 Industrial Parks...12 Success stories & industrial competences...14 Investment incentives in the Republic of Moldova

4 Key facts 2014 Official name: Republic of Moldova Area: 33,846 km 2 Population: 3.55 million Language: The official language is Romanian; Russian is the second most spoken language in Moldova. Many Moldovans also speak English, French, German, Italian, Spanish, Gagauz (similar to Turkish), and other languages. The largest minority groups are Ukrainians, Russians, Gagauz and Bulgarians. Capital: The capital city is Chisinau with approximately 804 thousand inhabitants. It is also the commercial and cultural center of Moldova. National curency: The national currency is the Moldovan Leu (MDL), which is freely convertible in any international currency. The official exchange rate at the National Bank of Moldova is 20.5 MDL for one EUR (as for August 2015). GDP in current prices: billion EUR GDP per capita (PPP): 4,149 EUR Inflation rate: 5.1% Corporate tax: 12%, 6%, 0% in Free Economic Zones, 3% in Free Port Employment rate: 39.6% Labor costs (gross): averaging 220 EUR/ month Full load labor cost: ca EUR/ hour Free Trade Agreements signed DCFTA (Deep and Comprehensive Free Trade Area) million; CIS Commonwealth of Independent States (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan) million; Free Trade Agreement with Turkey - 80 million; CEFTA Central European Free Trade Agreement (Moldova, Macedonia, Albania, Serbia, Montenegro, Bosnia and Herzegovina and UNMIK (Kosovo) - 30 million; GUAM Organization for Democracy and Economic Development (Georgia, Ukraine, Azerbaijan, and Moldova) - 60 million. 880 million Customers duty-free market GBR NOR DEU EU SWE CZE POL FIN EST LVA LTU BLR UKR RUS CIS FRA ITA AUS HUN CEFTA ROM BGR GUAM KAZ UZB ESP GRC TUR 2

5 Top reasons to invest in Moldova: Moldova s trade is largely liberalized to both the European Union and Commonwealth of Independent States. Most important destinations in these markets can be reached within 2 truck days. Moldova is constantly improving its business climate, having again reached an improvement of 19 positions compared to last year in the Doing Business ranking (63/ 189 in 2015). Favorable location Moldova s Free Economic Zones offer further incentives, including a corporate tax of 3-6% and total exemption from VAT and custom duties. They represent excellent manufacturing platforms offering also state guarantees and administrative support. The workforce is skilled and multilingual. Labor costs are the lowest in the region, creating a competitive business environment. Bordered by Romania on one side and by Ukraine on the other, Moldova is close to both EU and CIS markets. Moldova is connected via Airports, wide and narrow gauge railways, roads and the Danube River to the whole of Europe and the Black Sea. Chisinau International Free Airport - for passenger flights, Balti and Marculesti Airports - for charter and cargo flights; Frequent and direct 1-2 hour flights to Chisinau from Munich, Vienna, Frankfurt, Paris, London (3h), Istanbul, Kiev, Moscow and Bucharest; Within 3-5 hours, you can reach virtually all capitals in Europe and CIS States; 1138 km Railway network in Moldova (single track), with both wide and narrow track gauge; Direct connections to Ukraine and Romania (most important crossings at Ungheni (MD) - Iasi (RO), Cantemir (MD) - Falciu (RO) and Giurgiulesti (MD) - Galati (RO) ); International passenger trains - to Bucharest, Kiev, Minsk, St. Petersburg and Moscow; Regular cargo trains - up to South of Poland, as well as to CIS countries; The Giurgiulesti International Free Port is situated at km from the Black Sea, on the maritime section of the river Danube; Easy access to the Black Sea with maritime vessels, to Romania and Ukraine along the Danube with river barges, as well as inland rail connections to both the CIS and EU countries; Link to the Pan-European transport Corridor VII - the Danube from Passau (Germany) to the Black Sea (2300 km long); Bi-modal and tri-modal transport infrastructure, low customs environment, and a unique customs and tax regime km road network in Moldova (with international routes and access points); Link to the Pan-European transport Corridor IX (3400 km long): Helsinki (Finland), Vyborg (Russia), St. Petersburg (Russia), Gomel (Belarus), Kiev (Ukraine), Chisinau (Moldova), Bucharest (Romania), Dimitrovgrad (Russia) and Alexandropoulos (Greece); Travelling by car to Chisinau from Bucharest - 6 hours (500km); from Berlin - 20 hours (1600 km); from Kiev - 7 hours (480 km); 3

6 Economic overview The economy of the Republic of Moldova developed more dynamically than neighbouring EU countries during the last years. Over the years , the economy grew approximately at 4.5% each year, which represents a remarkable rate in times of crisis. The most dynamic sectors have been ICT, manufacturing industry, automotive industry and agriculture. Historically, the largest industries in Moldova have been manufacturing industry, agriculture and food processing, textile, apparel and footwear. The ICT sector is a rather new and fast growing sector for Moldova, with many foreign companies entering the market. GDP in current prices, billion EUR Source: IMF, World Economic Outlook Database, The GDP registered a constant growth over the years , with positive forecasts for 2015 as well. GDP per capita at PPP, EUR 4 4,149 The production of electrical equipment has increased by 54.3%, followed by the production of chemicals (+42.4%), textiles (+20.4%), wood processing and wood articles (+20.3%), metallurgy (+14.3%), and others. A significant intake was brought by the automotive industry, which is one of the most dynamic industries in Moldova with a positive growth of 27% in Share of industry in GDP, % , ,159 2,343 2,554 2, Source: IMF, World Economic Outlook Database, The industry production reached 14.3% of GDP in 2014, while the agricultural production stood at 13.0%. In 2014, the industrial production registered an increase of 7.3%, mainly in the manufacturing industry Source: IMF, World Economic Outlook Database, The agricultural sector has large potentials in production of fresh and processed fruits and vegetables, wall nuts, honey, meat, dairy products and poultry. A strong potential is also located in the organic and biological food production, due to the rich soil and appropriate climate. 4

7 The agricultural production registered a growth of 8.2% in 2014, driven by the strong growing of the vegetal production by 10.4% and of the life stockproduction - by 4.0%. Active population across regions, 1000 workers Chisinau Share of agriculture in GDP, % North Center South Source: IMF, World Economic Outlook Database, Available workforce Moldova s population is a vibrant and adaptable society, with 80% of the population multilingual and 33% of population under 25. Moldova successfully and peacefully merges such nationalities as Moldovans, Romanians, Russians, Ukrainians, Gagauz, Bulgarian, and others. As well, Moldova s population has a high degree of language skills in Romanian, Russian, English, French, German and other international languages. Municipalities Population Chisinau 804,500 Balti 149,800 Cahul 39,600 Ungheni 38,400 Soroca 37,500 Orhei 33,600 Comrat 26,000 Straseni 20, Source: National Bureau of Statistics, Regional statistics. Chisinau and Balti. They offer available and trained workforce. Companies which need less than 1000 employees, will find extremely attractive and competitive regions all over the country. Moldova features a comprehensive education system, starting from kindergartens and primary schools up to higher education. Nearly 90% of the population graduated at least a secondary education. Vocational education is an integral part of the national education system oriented towards training and development of specific skills and competences, in order to have prepared pool of workers for the national economy and foreign companies. Vocational education provides training in a profession according to the harmonized European framework of qualifications, as required by the labor market. Source: National Bureau of Statistics, Moreover, the young population is looking to work with international companies and uses their competences and skills. The economically active population, in 2014, was around million people. Companies wishing to employ more than 1000 people, will find their employees in large cities, like 5

8 Graduates in Higher Education Institutions by fields of study, no. of students in 2014 Bachelor degree Master degree Source: Ministry of Education, Annual report 2014 There are 46 vocational schools and 15 trade schools in Moldova. In the academic year 2014/2015, 16,015 students were studying at vocational schools and 1,493 students at trade schools. The most popular studies in vocational schools are in the fields of construction, industry, transport, agriculture and telecommunication. Popular professions are: mechanic for reparation of cars, operator for electronic computers, electrical engineer, electrical mechanic of various equipment and many others. with a total number of 92,000 students in the academic year 2014/2015. The most important ones are: Technical University, Agrarian University, Academy of Economic Studies and State Universities in Chisinau, Balti and Cahul. Popular technical specialties are: Engineering and management in machine building, Engineering and management in mechanics, IT, Informatics and Micro-electronics, Radio Electronics. The network of higher education institutions consists of 31 units (19 state/ 12 private institutions), 6

9 Labor & Utility costs Moldova offers a highly-skilled, competitively-priced workforce. Labor costs are amongst the lowest in the region and low enough to ensure cost-effective operations. Monthly net wage in the economy (2014) 2089 Germany Source: National Bureau of Statistics of each country, The gross wages in Moldova for workers in the industry sector range from 200 EUR-500 EUR, depending on the region and professional level of the employee, which is lower than the wages in the region. A newly-graduated university student of engineering could earn up to 800 EUR. Average hourly labor costs, EUR Moldova Bulgaria Romania Hungary Poland Germany 496 Russia Romania 342 Macedonia Source: Eurostat, Statistics explained, Moldova 31.4 Moldova s labor force combines low-cost with high productivity, thus reflecting the key factor for a strong business performance. The quality of the labor force also derives from the industrial experience and history of the Republic of Moldova, as it was one of the most industrialized republics in former Soviet times. Technical education is strong in Moldova, and it comprises best engineers known for their expertise. The number of engineers, managers and other specialists is sufficient to meet the investor s demand in most sectors. In this context, private companies tend to point out that two types of skills can be considered to be in high offer in the Republic of Moldova: language skills (the majority of the population is bilingual in Romanian and Russian) and IT-related ones. (UNCTAD) Utility costs The utility costs are lower than in the region: Electricity Water Sewerage Gas 0.10 EUR/kWh EUR/m 3 EUR/m 3 EUR/m 3 The rental prices for the industrial spaces are also lower than in the region: Moldova Romania Serbia EUR/m 2 EUR/m 2 EUR/m 2 In Free Economic Zones the rental price for production halls is even lower, accounting for 0.8 EUR to 2 EUR per square meter. The prices vary depending on the building conditions. 7

10 Taxes in Moldova There are 47 operational Tax Treaties for Avoidance of Double Taxation concluded by Moldova with other jurisdictions. Although Moldova is not a member of the Economic Cooperation and Development Organization (OECD), Moldova applies OECD rules in interpreting Double Taxation Treaties. Customs Moldova is a member of the World Trade Organization since In general, legal provisions allow moving freely any type of goods in and from the territory of Moldova. Under the Moldovan law, both definitive and suspensive customs regimes can be applied. Type of Tax Individual income tax Corporate income tax (CIT) Social security Health insurance Tax Rate 7% < MDL annual income < 18% 12% 7% for farmers enterprises 6% within FEZs 3% within Free Port 6% for employee 23% for employer 4.5% for employee 4.5% for employer The Moldovan Customs Tariff is based on the Harmonized Commodity Description and Coding System and the customs valuations are applied according to the General Agreement on Tariffs and Trade (GATT). Preferential tariff treatment can be granted for specific categories of goods, depending on their origin and in accordance with the Free Trade Agreements (FTA) to which Moldova is a party. Moldova has signed FTAs with most of the CIS countries, CEFTA and GUAM. Moldova has a competitive general corporate income tax rate of 12%. The corporate tax is even lower for production in Free Economic Zones (6%) or in the Giurgiulesti International Free Port (3%). The CIT can be reduced even to 0% for 3 years, if the sum invested in fix assets of the company or in FEZ infrastructure is larger than 1 Mio. USD (for 5 years, in case of 5 Mio. USD investment). The standard VAT rate is 20%, but there are also reduced rates: 8% for certain types of supplies (i.e. bakery and milk products, pharmaceutical products etc.) and 0% for international transportation, supplies to and from FEZs etc. IT companies benefit from a range of tax incentives. The Personal Income Tax (PIT) is limited for salaries paid in this sector to a certain monthly amount (i.e. two average forecasted salaries per economy). Tax rates in comparison, % Moldova Romania Poland Croatia Ind. Income tax Corporate Income Tax Withholding Tax VAT Source: PWC, Worldwide Tax Summaries, In addition, on June 27, 2014, Moldova has signed the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union, which provides improved access to the EU market of 500 million consumers for Moldovan goods and services, as well as improved investment opportunities. Authorized Economic Operators (AEO) Since July 2014, companies can profit from the status of Authorized Economic Operator. It provides simplified transit of goods across the border, promoting voluntary compliance with customs requirements by providing more simplified clearance procedures and other benefits to companies. EU operating companies as well as Moldovan companies that correspond to the requirements listed in the Customs Code may apply for an AEO certificate and benefit of the corresponding advantages. The major benefits of an AEO status are border crossing priority (a special track for AEO has been designed), limited number of customs controls, saving time and reducing operational costs of cross-border traffic, priority treatment of consignments and checkpoint choosing, if selected for control. There are three types of AEO certificates: AEOC - AEO certificate for simplified custom procedures; AEOS - AEO certificate for security and safety; AEOF - AEO certificate for simplified custom procedures, security and safety. 8

11 Until July 2015, ca. 80 companies have been recognized as AEO, receiving one of the above-mentioned certificates (e.g. automotive companies, such as Gebauer&Griller). Market potential European Union is the main trade partner of the Republic of Moldova. In 2014, EU exports to Moldova amounted to 2.35 billion EUR, an increase of 3% since 2013 (mostly machinery and appliances, mineral products, transport equipment, and chemical products). Meanwhile, EU imports from Moldova grew significantly. Total imports increased by 20%, to 1.16 billion EUR in 2014 (mainly textiles and textile articles, machinery and appliances, vegetable products and other foodstuffs and beverages). Imports of agricultural goods grew particularly strong, noting a 30% increase in Total volume of exports and imports, EUR billion Export Import Source: National Bureau of Statistics, The social-economic evolution of Moldova in Businesses located in the Republic of Moldova can export duty free to the West (EU), East (CIS) and South- East (Balkans). Since 1995, the country also has a preferential access to the United States and Japanese markets under the Generalized System of Preferences. Imports by origin, % (2014) 24.4% Other countries 27.3% CSI countries 48.3% EU countries Source: National Bureau of Statistics, The social-economic evolution of Moldova in Exports by destination, % (2014) 15.3% Other countries 53.3% EU countries 31.4% CSI countries Source: National Bureau of Statistics, The social-economic evolution of Moldova in

12 FDI facts In 2014, the net flow of foreign direct investment in the economy of Moldova amounted to million USD. FDI stock in sectoral distribution, % Healthcare 7% Electricity, gas & water supply 11% Transport & communications 1% Agriculture & forestry 5% Other 26% Financial intermediation 12% Real estate & business services 14% 23% Manufacturing Wholesale & industry retail trade Source: National Bank of Moldova, FDI statistics in Moldova. diation, manufacturing industry, wholesale & retail trade, real estate, transport & communication, and others. FDI in Moldova by investor s country, % Ukraine 2% Turkey 3% Spain 4% Austria 4% Romania 18% Others 17% Netherlands 9% Russia 14% Italy 4% 5% Great 6% 12% Britain USA Germany Cyprus Source: State Chamber of Registration FDI statistics. Two thirds of the foreign capital present in the Republic of Moldova is invested in joint venture companies, while the rest belong to companies in foreign ownership. The majority of the foreign direct investment is concentrated in the financial interme- Investors come to Moldova from many different countries, Russia and the EU countries make up for large shares of the total investments. This shows that Moldova is open for business for everyone. 10

13 Business start-up in Moldova It takes 6 procedures and 7 days to register a business in Moldova. Country DB Rank Change Macedonia Poland Bulgaria Romania Moldova Croatia Serbia Ukraine Source: Doing Business 2015 ranking Getting credit, DB Ranking 2015 Romania Poland Ukraine Moldova Bulgaria Macedonia Serbia Croatia Paying taxes, DB Ranking 2015 Starting a business, DB Ranking Macedonia 3 Macedonia 36 Croatia 35 Moldova 52 Romania 38 Romania 70 Moldova 49 Bulgaria 87 Poland 66 Serbia 89 Bulgaria 76 Ukraine 108 Ukraine 85 Poland 165 Serbia 88 Croatia Registering property, DB Ranking 2015 Enforcing contracts, DB Ranking Moldova 42 Moldova 39 Poland 43 Ukraine 57 Bulgaria 51 Romania 59 Ukraine 52 Poland 63 Romania 54 Croatia 72 Serbia 75 Bulgaria 74 Macedonia 87 Macedonia 92 Croatia 96 Serbia 11

14 Free Economic Zones The Free Economic Zones represent excellent platforms for businesses that are convenient to export-oriented manufacturing companies, which intend to benefit from a preferential customs and tax regime. There are 7 FEZs in Moldova, spread around throughout the country and located either near a border, or in big cities. This Free Economic Zones offer preferential conditions and a dedicated customer-oriented administration. Activities in the FEZs are limited to industrial production, packaging, trade, transportation, logistics and utilities, with priority given to manufacturing. Moreover, Giurgiulesti International Free Port and Marculesti Free Airport offer quite similar conditions to the FEZs. Incentives offered in Free Economic Zones FEZs are connected to all important transport routes and have access to all regions through the national and international roads; Customs Office available on site, operating 7days/ week (if necessary 24 hours/day); Exemption from customs duties and excise duties on goods imported into the FEZs and subsequently exported; VAT for equipment and machinery: 0%; Industrial Parks Industrial parks are delimited territories in which industrial production, services provision, applied scientific research and/or technological development are carried out under some preferences. There are 8 Industrial Parks in Moldova: IP Tracom (Chisinau), IP Bioenergagro (Drochia), IP Cimislia (Cimislia), IP Raut (Balti), IP CAAN (Straseni), IP Edinet (Edinet), IP Triveneta Cavi Development (Straseni), IP Comrat (Comrat). Industrial Parks can potentially become the center for investment attraction and the place for different industrial and IT projects. Firms are given legal and consulting support in obtaining licenses, permits and approvals. Consulting services also include project development, personnel recruitment, knowledge management, marketing, etc. Incentives for Industrial Parks Free re-zoning of agricultural into industrial land; Normative (below market) prices for the purchased land; Reduced rental price for state land; Free connection to existing infrastructure in the park; Minimal state inspection and control regime. Corporate tax rate stands at 6% (3% in free port); Customs procedures tax: 0.1% from customs value of goods (outside FEZs 0.4%); 10 years state guarantee for protection against adverse changes in legislation (15 years in Free Port); Free connection to utilities in FEZs and Industrial Parks; EUR/ USD payment among FEZs residents. Exemption from CIT for a period of 3 years, when investing 1 million USD in fix assets of the company and/ or in FEZ infrastructure development (for 5 years, when investing 5 million USD). 12

15 H10 Chernivtsi, UA - 105km Ivano-Frankovsk, UA - 215km Katowice, PL - 768km Lviv, UA - 341km Tychy, PL - 771km MD: Criva UA: Mamaliga Prut IP Eco Garant Baia Mare, RO - 443km Bototsani, RO - 55km Suceava, RO - 97km MD: Costesti RO: Stinca 24D P63 H03 M14 IP Raut Briceni FEZ Balti MD: Briceni UA: Rososeni M14 Edinet Ocnita Cupcini Iasi, RO - 24km MD: Sculeni RO: Sculeni FREE ECONOMIC ZONES & INDUSTRIAL PARKS Donduseni Rișcani Iasi FEZ Ungheni Business IP CAAN Glodeni 24C Otaci M14 Falesti Kaluga, RU km Kiev, UA - 385km Mohyliv-Podolskyi, UA - 0.5km Vinnytsa, UA - 120km MD: Otaci UA: Mogiliov-Podolisc Mohyliv-Podolikyi Drochia BALȚI M14 Ungheni IP Triveneta Cavi Development FEZ Balti/ Subzone nr.4/ Straseni Arad, RO - 654km Bucharest, RO - 407km Craiova, RO - 641km Pitesti, RO - 531km MD: Leuseni RO: Albita 24 MD: Unguri UA: Bronnita IP Cimislia Soroca Nistru Singerei Nisporeni M2 Floresti Telenesti Calarasi Leova FEZ Otaci Business M2 M14 Soldanesti M2 Straseni Hincesti IP Bioenergagro M4 Rezina Orhei M2 CHIȘINAU Ribnita Criuleni M21 Cricova Ialoveni Cimișlia M3 M4 M3 M4 Dubasari Grigoriopol Causeni TIRASPOL Anenii Noi M14 M4 BENDER (TIGHINA) Slobozia Stefan Voda UKRAINE FEZ Marculesti hub airport M21 M14 M4 M12 M13 IP Tracom FEZ Expo Business Chisinau Nistru M05 M05 M05 M05 Odessa, UA - 77km MD: Palanca UA: Udobnoe M12 M13 Odessa ROMANIA FEZ Giurgiulesti International Free Port Focsani Buzau Bucharest, RO - 255km Constanta, RO - 215km Craiova, RO - 481km Galati, RO - 10km Pitesti, RO - 370km Timisoara, RO - 697km MD: Giurgiulesti RO: Galati 21 IP Comrat Galati Braila Prut Cantemir Cahul M3 Giurgiulesti 22E Danube Basarabeasca COMRAT M3 Ceadir-Lunga MD: Ceadir- Lunga UA: Novie Troiani Taraclia M3 MD: Giurgiulești UA: Reni MD: Mirnoe UA: Tabachi Bolgrad MD: Vulcanesti UA: Vinogradovca FEZ Valcanes Tulcea Izmail MD: Basarabeasca UA: Serpniovoe 1 Kilia Branch Razim lake Sulina Branch Sf. Gheorghe Branch MD: Tudora UA: Starokazacie FEZ Tvardita FEZ Taraclia Kilia Sulina Dnestrovsky Liman Belgorod Dnestrovsk Constanta Istambul BLACK SEA

16 Briceni SUCCESS STORIES & INDUSTRIAL COMPETENCES Ocnița Otaci Mohyliv-Podolikyi Nistru UKRAINE Prut Edineț Dondușeni Soroca Rîșcani Drochia Florești Costești Glodeni BĂLȚI Șoldănești Sîngerei Rezina Fălești Telenești Orhei Ungheni Călărași Strășeni Criuleni Iasi Nisporeni CHIȘINĂU Hîncești Ialoveni Anenii Noi Căușeni Cimișlia Ștefan Vodă Leova Nistru Odessa Prut Prut Basarabeasca ROMANIA Cantemir COMRAT Tvardita Dnestrovsky Liman Belgorod Dnestrovsk Ceadîr-Lunga Cahul Taraclia Vulcănești Bolgrad LEGEND Focsani Shoes Carpet Garment & Knit wear Furniture Seat covers Textile tapes Buzau Rubber & Plastic injection Steel casting Pumps Construction material Galati Glass manufacturing Cardboard manufacturing Braila Metal processing Gravel & stone extraction Energetics Wires and harnesses Ceramic tiles Alcohol & bioethanol Railway Cannery Danube Water bottling Izmail Food products Winery Chocolate Tulcea Bakery Kilia Branch Cigarette and tobacco Dairy products Meat processing Razim lake Beer Brandy production Kilia Sulina Branch Sf. Gheorghe Branch Sulina Constanta Istambul BLACK SEA Electronics 14 Sugar Pharmaceuticals

17 We picked Moldova as an investment destination due to the benefits the Government offers to the foreign investors, the costs of production and the strategic market for us. Main purpose for the dairy farm is to provide high quality milk during every month of the year. Favorable climate and geographical conditions are factors that help us achieve our goals. Jim Boet Millstream Dairy Moldova works hard on encouraging foreign companies to review it as a possible investment option. Moldova offers competitive financial support for the investments into agriculture sector and very cooperative state institutions, and, what is most important for us, a market with a high potential. Perebinos Ecaterina Pukoven Due to the difference in the cost of living, it s currently more affordable to invest in Moldova than elsewhere in the EU. Moldova has a good strategic position, high qualified workforce, presents good opportunities on a broad market, and last but not least has available funding and a good forecast for the future. Producers of synthetic yarns for carpet & tufting industry EURO YARNS We chose Moldova as an investment destination, due to the country s strategic geo-political position and reasonable labor cost for educated and fast learning workforce. Suat Erdogan, General Director Miso Textile This project is a very important part of our global presence strategy. We established an excellent partnership with the central and local officials and we are planning already the future growth of Gebauer& Griller in Moldova. Vasile Boangiu Managing Director at Cables and Wires G&G EE ( ) Moldova has many advantages for foreign investors. The proximity to the European market and the close links to markets of the CIS make Moldova interesting for European businesses. Our decision to open a facility in Balti is influenced by the proximity to key locations in Romania, as well as the good opportunity to train and develop skilled workers here. Peter Hilbert Government Relations consultant at DRA Draexlmaier Automotive SRL Managing Director at DRA Draexlmaier Automotive SRL ( ) We decide to open a new production plant in Moldova for a good strategic position and a reasonable labor cost. Local and central Government authorities offer entire support in investment and business activity. Gregorio Isgrò Administrator at CONFEZIONI ANDREA MDV S.R.L. In my experience, I find the local IT community, including fresh graduates and experienced managers, to be responsive, willing to change and ready to embrace new ideas. They have healthy competitive spirit, which shines through when supported effectively. It is a pleasure for me to work in an environment with lots of dedicated, passionate, ambitious and smart people. Kumail Jetha General Manager, Endava Moldova Delivery Unit 15

18 Investment Incentives in the Republic of Moldova General Incentives Job creation - Reduced calculation base of the taxable income, when increasing the number of staff (yearly average salary in the country for the year prior the reported fiscal year). Taxable income deductions - Expenses related to transport (MDL 25 per day per employee), meals (MDL 35 per day per employee), and professional training of employees are deducted from the taxable income. Agricultural sector - VAT exemption on import of tractors and agricultural equipment. - there is a wide range of agricultural subsidies available. Please refer to our agricultural sector report and information leaflets to learn more. Automotive sector days deferment to pay VAT and customs duties on imported raw materials; - VAT and customs duties exemption for imported goods introduced in equity capital. ICT sector - Reduced base of the taxable income of employees and applicable social security charges (2 average monthly salaries in economy forecasted for the concerned year). Textile sector days deferment to pay VAT and customs duties on imported raw materials; - VAT and customs duties exemption for imported goods introduced in equity capital. Free Economic Zones - Reduced CIT rate of 6% net, for income obtained from exports or sales to other FEZ residents-exporters; - Reduced CIT rate of 9% net, for income obtained from other activities conducted within FEZs; - CIT exemption for 3, 5 years for investing USD 1 Mio, and respectively USD 5 Mio; - 10 years guarantee of applicability of tax and customs regime existing at inception of activity. Industrial Parks - Exemption to compensate losses caused by exclusion of land from agricultural circuit; - Privatization of land at the normative price; - Concessional rent of public property (down to 0.3 of the tariff established in state budget law); - Alienation free of charge or bailment of public property goods to the managing enterprise for the purpose of establishing and developing the industrial park; - Optimization of state inspections; - Allocation of public funds for infrastructure within parks. Giurgiulesti International Free Port - Unrestricted right to practice any activity that is legal in Moldova; - Reduced CIT rate of 3% net, for activities within PILG for 10 years of residence; - Reduced CIT rate of 6% net, for next term till 2030; - Customs duties exemption; - VAT and excises exemption for shipments to GIFP and between GIFP residents; - 15 years guarantee of applicability of tax and customs regime existing at inception of activity. 16

19 We are here to support you We will assist you in setting up your operations in Moldova. We support your project management activities from the earliest stages of your expansion strategy. We provide you with the industry information you need. This includes facts about the industrial competences throughout Moldova s regions, as well as available sourcing and supply companies. Foreign companies profit from our rich experience in identifying the business locations which best meet their specific investment criteria. We help turn your requirements into concrete investment site proposals; providing consulting services to ensure you make the right location decision. We coordinate site visits, meetings with potential partners, relevant existing investors, universities, colleges, vocational schools and other institutes active in the industry, as well as meetings with relevant embassies, business associations, government officials and other authorities. Our team of consultants is at hand to provide you with the relevant background information on Moldova s tax and legal system, industry regulations, and the domestic labor market. Invest in Moldova experts help you create the appropriate financial package for your investment and put you in contact with suitable financial partners. Our specialists provide you with detailed information about available incentives, support you with the application process, and arrange contacts with local developers. All of our investor-related services are treated with the utmost confidentiality and are provided free of charge. STRATEGY EVALUATION DECISION & INVESTMENT PROJECT MANAGEMENT ASSISTANCE AND PROVIDING INFORMATION Identification of sector-specific investors General data and statistics for investor feasability study support Sector-specific details & information of legislation Joint project management assistance together with FEZs & IPs administration Coordination and support of negotiations with local authorities LOCATION CONSULTING / SCOPING MISSION SUPPORT Identification of project-specific locations Identification of sourcing opportunities Information on suitable locations Relevant site presentation and preselection Site visit organization Arranging meetings with public authorities, relevant private sector representatives Final site decision support AFTERCARE / POSTINVESTMENT SUPPORT SERVICES Identification of and general information on relevant tax, legal and administrative issues Connecting with relevant recruitment, legal, tax and other consulting companies Facilitation and communication with public local and central authorities, as well as relevant private sector representatives Advice on administrative and legal issues Supporting investors and associations in their efforts to improve the business climate

20 Contact us: 65 Alexei Mateevici str., Chişinău, Republica Moldova, MD-2009 Tel: Fax: MIEPO 2015 The Moldovan Investment and Export Promotion Organization (MIEPO), in cooperation with the Prime Minister s Office, is the prime source of information and assistance for potential investors. We provide tailored services for potential investors throughout the investment decision process. We also support existing investors in extending their operations. Our team consists of permanent investment attraction staff, sectorial consultants, as well as regional officers. Combining our experience, we are able to provide you with information relevant for your decision making, as well as links to businesses and government. 2000km Stockholm Sankt Petersburg 1500km 2000km Copenhagen 1000km Moscow Kaluga Nijnii Novgorod 1500km 2000km Amsterdam Genk Paris Pamplona Bremen Wolfsburg Leipzig 1500km Mlada Boleslav Glewice 1000km Poznan Katowice Kolin Lviv Sindelfingen Bratislava Munchen Esztergom Gyor Graz Oradea Pecs Novo Mesto Timisoara Turin Pitesti 1000km 500km 500km Sarajevo Craiova Minsk 500km Kiev Balti MD Chisinau 500km 1000km 500km Zaporoje 1000km 500km 1500km Tolyatti 2000km Valls Istambul Bursa Ankara 1500km 1000km 2000km 1500km Cairo Jerusalem