Company Formation in Moldova – A Comprehensive Checklist

Embarking on the journey of forming a company in Moldova is a significant step towards establishing your business presence. At Incorpore, we specialize in providing comprehensive legal services in Moldova to ensure a seamless and efficient process. Here’s your detailed checklist for company formation in Moldova:

1. Decide on a Business Structure

Selecting the right legal structure is the foundation of your business in Moldova. The options include:

– Limited Liability Company (LLC): Ideal for small to medium-sized businesses, limited liability.

– Joint Stock Company: Suitable for larger businesses, offers the ability to issue shares.

– Individual Entrepreneur: Perfect for solo business endeavors, simple structure.

– General Partnership: Collaboration of two or more individuals sharing profits and liabilities.

– Limited Partnership: Combines general partners with limited liability partners.

2. Choose a Unique Company Name

Selecting a unique name is crucial for your identity. At Incorpore, we guide you through the requirements for company names in Moldova and assist in pre-approving your chosen name with the authorities. You can check a guide on how to choose a company name in Moldova here.

3. Submit KYC Documentation

To proceed with your company formation in Moldova, we will request a comprehensive Know Your Customer (KYC) documentation for every Ultimate Beneficial Owner (UBO), shareholder, and administrator. This includes submitting a copy of your passport passport, a recent bank statement, and a utility bill. Additionally, we will send you a form to gather essential personal information such as your name, surname, date and year of birth, address of residence, source of wealth, and other relevant details. This thorough process ensures compliance and smooth facilitation of company formation in Moldova.

4. Notarize Power of Attorney

For the successful completion of your company formation in Moldova, it is necessary to sign and notarize a power of attorney in the name of our lawyer. We will provide you with the full text of this power of attorney, available in both Romanian and English, to ensure clarity and comprehension. To facilitate this process, we will inquire about your current place of residence and accordingly arrange an appointment for you at the closest Moldovan consulate. Our team will thoroughly discuss with you the steps involved in the power of attorney process and coordinate with the consulate to schedule a meeting at your convenience. Additionally, we will request the consulate to have a translator present to assist you during the appointment if needed.

In cases where you reside in a country without a Moldovan embassy or consulate, we encourage you to visit the nearest notary office. You have the freedom to choose a notary office that suits you, or if needed, we can assist in identifying a suitable location. This step is a crucial aspect of ensuring that all legal requirements are met for the smooth company formation in Moldova.

5. Name Approval and Company Formation in Moldova

Upon receiving your preferred company name, we will diligently check its compliance with all requirements outlined at in the blogpost on company name choice. Once we ensure that the name adheres to these standards, we will proceed to obtain approval from Moldovan authorities. After the name is approved, we expedite the company formation process in Moldova, typically completing it within 24 hours. This efficient approach ensures a swift and seamless establishment of your company, provided the name meets all necessary guidelines.

6. Licenses and Permits Consultation

Once your company is set up, we offer consultation on all necessary licenses and permits your business may need for legal compliance.

Below is a comprehensive list of Licenses that we are equipped to assist you with:

Precious Metals and Stones, Pawn Shops

1. Licensing for activities with precious metals and stones; operation of pawn shops.

Alcohol and Tobacco

1. License for import and storage of ethyl alcohol; wholesale trade of imported alcoholic products and/or beer.
2. License for manufacturing ethyl alcohol, beer, and alcoholic products (except wine and products based on grape must) and/or wholesale trade.
3. License for import of tobacco products; industrial processing of tobacco; manufacturing of tobacco products and/or wholesale trade.

Recycling and Waste Management

1. License for collection, storage, processing, trading, and export of ferrous and non-ferrous metal waste, used batteries, and accumulators.

Firearms and Explosives

1. License for manufacturing, assembling, import/export, commercializing firearms and ammunition for civilian use and repair.
2. License for producing, importing, exporting, commercializing, storing explosive materials and/or conducting civil use explosive work.
3. License for producing, assembling, importing, exporting, storing, commercializing pyrotechnic articles and/or providing professional pyrotechnic shows.

Duty-Free and Customs Operations

1. License for operating duty-free shops in airports, on aircraft.
2. License for duty-free shops in ports, on ships.
3. License for duty-free bars and restaurants on board ships.
4. License for customs broker activities.

Information Security

1. License for activities related to the protection of information, including import/export of special technical means for obtaining information, cryptographic and technical information protection services.

Casinos and Gambling

1. License for maintaining casino activities.

Employment and Educational Exchange

1. License for activities related to domestic and foreign employment placement, and educational-cultural exchange programs involving remunerated employment.

Food and Pharmaceutical Industry

1. License for pharmaceutical activities.

Financial and Banking Services

1. License for banking activities.
2. License for cash foreign exchange activities (excluding banks).
3. License for payment services by payment companies, electronic money issuers, postal service providers.
4. License for issuing electronic money by electronic money issuers.

Insurance and Financial Markets

1. License for activities of insurers (reinsurers), insurance, and/or reinsurance brokers.
2. License for management of assets of non-state pension funds.
3. License for activities of savings and loan associations.
4. License for capital market activities: investment companies, capital market operators, trust investment management companies.
5. License for credit history bureau activities.

Energy and Fuel

1. License for import and wholesale/retail trade of gasoline, diesel, and/or liquefied gas at fuel stations.
2. License for producing electricity; operation of the electricity market; transportation, centralized control of the electro-energetic system; distribution and supply of electricity.
3. License for producing natural gas; transportation, distribution, storage, supply of natural gas; supply of compressed natural gas for vehicles at fuel stations.
4. License for public water supply and/or sewage services at the regional, district, municipal, city, and, if applicable, village, commune levels.
5. License for production, distribution, and supply of thermal energy.
6. License for producing electricity from renewable sources; producing thermal energy from renewable sources; producing biogas to be delivered to natural gas networks; producing biofuel to be purchased by main petroleum product importers.

Communications and Broadcasting

1. License for using radio channels or frequencies and/or numbering resources for providing electronic communication networks and/or services.
2. License for broadcasting activities for the distribution of program services via terrestrial radioelectric means and/or any other telecommunication means other than terrestrial radioelectric.

7. Accounting and Fiscal Laws Guidance post company setup in Moldova

Engage with our accountant who will introduce you to the accounting requirements, fiscal laws, and obligations associated with setup and operating business in Moldova.

Accounting and fiscal law in Moldova are governed by a set of regulations that align with international standards and practices. Here are some of the basic principles and regulations:

1. Accounting Standards: Moldova adheres to International Financial Reporting Standards (IFRS) for most enterprises, especially for public interest entities like banks, insurance companies, and listed companies. Small and medium-sized enterprises (SMEs) can use simplified standards.
2. Financial Reporting: Companies are required to prepare annual financial statements, which typically include a balance sheet, income statement, cash flow statement, statement of changes in equity, and explanatory notes. These statements must be audited annually.
3. Taxation System: Moldova has a progressive tax system. Key taxes include corporate income tax, personal income tax, value-added tax (VAT), excise taxes, and property taxes.
4. Corporate Income Tax: The corporate income tax rate in Moldova is applied to a company’s net profits. The standard rate has been subject to changes, so it’s important to refer to the current legislation for the accurate rate.

For a more detailed understanding of Moldovan taxes, you can refer to the comprehensive information provided on this link. However, for your convenience, here’s a brief summary of the key tax highlights:

In Moldova, the income tax rates for businesses vary based on the type of business and the specific economic zone they operate in. Here are the specifics:

•  General Businesses: For most businesses, the corporate income tax rate is 12%. This rate applies to the net profits earned by the company and is a standard rate for most sectors outside of specific designated areas or industries.
• IT Businesses: Businesses operating in the Information Technology (IT) sector benefit from a preferential tax rate. The unique tax for IT businesses is set at 7%. This reduced rate is part of Moldova’s initiative to encourage growth and investment in the IT sector.
• Free Economic Zones (FEZ): Companies operating within a Free Economic Zone in Moldova are subject to a corporate income tax rate of 6%. However, under certain conditions, this rate can be reduced to 0%. This significant tax incentive is designed to attract foreign investment and stimulate economic activity in these zones.
• 4% Tax for Non-VAT Registered Companies: If a company in Moldova is not registered for VAT, it is subject to a 4% tax. This applies to companies whose turnover does not exceed the threshold required for mandatory VAT registration or those who have chosen not to register for VAT voluntarily. The 4% tax is applied to their taxable turnover. This rate is particularly relevant for smaller businesses or those just starting, as it provides a simplified tax regime compared to the standard VAT system.

Personal Income Tax: Moldova uses a progressive tax rate for personal income. This means that the tax rate increases as an individual’s income increases. Income from various sources, including employment, business activities, and investments, is subject to personal income tax.

Value-Added Tax (VAT): VAT is applied to most goods and services. Businesses must register for VAT if their taxable turnover exceeds a certain threshold. The standard VAT rate and thresholds can vary, therefore below you have a short overview of VAT rates in Moldova

• Standard VAT Rate in Moldova (Article 96):

• • The general VAT rate in Moldovais set at 20%. This applies to the taxable value of goods and services imported and deliveries made within the territory of the Republic of Moldova.

• Reduced VAT Rates in Moldova (Article 96):

• A reduced VAT rate of 8% applies to several categories in Moldova:
  • Bread and bakery products; milk and dairy products (excluding baby food, which is VAT-exempt).
  • Medicines listed in the State Nomenclature of Medicines and authorized by relevant health authorities; undenatured ethyl alcohol for pharmaceutical production and medical use.
  • Specific goods and healthcare products under certain tariff positions.
  • Natural and liquefied gases, including services for transport and distribution of natural gas.
  • Products from animal husbandry, phytoproduction, and horticulture in natural form.
  • Sugar from sugar beet.
  • Solid biofuel for electricity, thermal energy, and hot water production, including raw materials for biofuel production, and thermal energy from solid biofuel supplied to public institutions.

• A reduced VAT rate of 6% applies to the following in Moldova:
  • Accommodation services in various types of lodgings & .
  • Food products and drinks (excluding alcoholic products), prepared or unprepared, for human consumption with related services for immediate consumption.
• VAT Exemption for Export Services in Moldova (Article 104):
  • Services intended for export are exempt from VAT, with the right to deduction. This allows businesses providing these services to deduct the VAT paid on inputs related to these services, even though the services themselves are not subject to VAT.

These VAT rates and exemptions are part of Moldova’s tax policy to regulate the tax burden on various goods and services and to support specific sectors such as agriculture, healthcare, and exports. The application of these rates is subject to the conditions and qualifications detailed in the respective articles of the Moldovan Fiscal Code. For the most accurate and comprehensive understanding, it’s advisable to contact us with an inquiry about taxes and we would provide all the up to date information.

7. Fiscal Reporting and Payments: Companies are required to report their taxes and make payments in accordance with Moldovan tax law. This includes regular declarations and payments of VAT, income tax, and other relevant taxes.
8. Tax Incentives and Exemptions: Moldova may offer various tax incentives and exemptions to businesses in certain sectors or regions, aimed at promoting economic development.
9. Audit Requirements: Certain types of companies, such as public interest entities and large companies, are required to have their annual financial statements audited by a licensed auditor.
10. Regulatory Authorities: The main regulatory bodies overseeing accounting and fiscal matters in Moldova include the Ministry of Finance, the National Bank of Moldova, and the State Tax Service.

 

8. Compliance and Bank Account Opening in Moldova

Ensure compliance with Moldovan laws and start performing business activities both within Moldova and internationally. We will also consult you in regards to bank account opening in Moldova.

For more detailed information on bank account opening in Moldova, you can consult the following link. However, the general process typically involves the steps below:

Steps to Follow for Bank account opening in Moldova:

1. Gather Company Formation Documents: Collect all essential documents required for the bank account opening in Moldova.
2. Complete KYC Requirements: Prepare a comprehensive Know Your Customer (KYC) file in line with European standards, integral to the company formation process in Moldova.
3. Appoint Legal Representation: Our lawyer is granted a power of attorney for client representation, especially for banking-related procedures in the context of company formation in Moldova.
4. Submission to the Bank: Necessary documentation, such as the company incorporation certificate and the complete KYC file, are submitted to the bank.
5. Initial Bank Meeting: If needed, arrange a brief introductory meeting with the bank, typically via Teams, to discuss the banking aspects of setting up your company in Moldova.

Highlighted Banks in Moldova for Company Formation:

– Banca Comerciala „MOLDOVA – AGROINDBANK” S.A. Partnered with HEIM Partners Limited, which includes the European Bank for Reconstruction and Development, Horizon Capital, and AB Invalda INVL.

– Banca Comerciala „Moldindconbank” S.A.

– Banca Comerciala „VICTORIABANK” S.A. – Part of Grupul Banca Transilvania, a leading financial group in Romania.

– OTP Bank S.A. – A part of the OTP Group, a significant player in the Central and Eastern European banking sector.

These banks are key players in the Moldovan banking industry and can be considered during the company formation process in Moldova for their services and partnerships with prominent financial groups in the region.

 Simplified Process for Company Formation in Moldova

For a more streamlined approach:

– Initial Documentation: Send us all necessary documentation, including the KYC file and notarized power of attorney, right at the start.

– Comprehensive Services: We handle every aspect of company formation in Moldova, including name selection, bank account opening in Moldova, and accounting services.

By entrusting us with the full process, from the initial paperwork to regular business operations, you can focus on the strategic aspects of your business. Our expertise in legal services in Moldova ensures that your journey in forming a company in Moldova is smooth and compliant with all legal requirements.

 Conclusion

Incorpore is dedicated to providing top-notch legal services in Moldova, guiding you through every step of company formation and beyond. From bank account opening in Moldova to navigating the complexities of business regulations, our team is here to ensure your venture into the Moldovan market is successful and compliant. Reach out to us today to begin your journey in forming a company in Moldova.

 

Reach out to Incorpore

Ready to streamline your business journey? Let’s discuss how Incorpore can assist you.

Call: +373 69 992 921

What to Expect After Contacting Us?

 

Initial
Consultation Call

 

Tailored Service Proposal

 

Launch Your Business Journey