The Republic of Moldova Autonomous Territorial Unit of Gagauzia
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The Republic of Moldova Autonomous Territorial Unit of Gagauzia Edition 2017/2018 FOREWORD investment, obtaining grants in-kind, preferences on taxes, investment subsidies for construction and installation works, for the creation of industrial and technical infrastructure as well as for the purchase of equipment. Gagauzia is an integral part of the Republic of Moldova, with functioning preferential trade regimes with the CIS and the European Union. On 1st November 2016, a comprehensive free trade regime with the Republic of Turkey came into force. Free trade area regimes offer excellent opportunities for investors by expanding their activity to Gagauzia. Investors can profit from Dear Partners, Dear Friends, trade opportunities in a 360o perspective. The central objective of the Executive and It is also important that Gagauzia has a favorable Legislative authorities of ATU Gagauzia are geographical location, natural and climatic the stimulation of business development and conditions, modern logistics and infrastructure, the attraction of investments to the region, and advanced legislation for the implementation realizing that only by developing the economy of investment projects. The Authorities of the through domestic and foreign investments can autonomy and the whole Gagauz nation are open create jobs, increase revenue, develop social for a mutual beneficial cooperation and efficient infrastructure, and standards of living. development of new opportunities. The Executive Committee of Gagauzia pays constant attention to the activities of businesses Due to competitive advantages that the region in the autonomy and builds a constructive has, we feel confident to recommend some dialogue to identify the solutions of any issues by priority sectors for investment. These are initiating and adopting regulations to encourage agriculture and agro-processing, manufacturing, entrepreneurial activity and investment in the and business process outsourcing. However, of region. The building blocks for such an enabling course, we do not want to limit ourselves only policy are the openness of the region to domestic to these sectors. There are many other attractive and foreign investors, improving the business business fields, and you know your business best. and investment climate, and the creation of In any case, we will be delighted if you decide to preferential conditions for attracting investments join us. Let us develop the economic potential of to the main sectors of the region. the Gagauz autonomy together. We invite you to Gagauzia – the region of new opportunities! The Gagauz autonomy has the authority to adopt its own legislation in order to implement economic reforms and to stimulate investment Irina VLAH activity. This year, on the initiative of the The Bashkan of Gagauzia Executive Committee, the People’s Assembly of Gagauzia adopted a new «Investments Law». Foreign and domestic enterprises that decide for an investment in Gagauzia and open work places may take advantage of the regional law on CONTENT Gagauzia profile 3 Economic cooperation 4 Economic potencial 5 Top reasons to Invest in Gagauzia 9 Investment opportunities & incentives 10 Free Economic Zone «Valkanes» 11 Bussines start-up in Gagauzia 13 Available workforce 14 Operating costs 16 Succes stories & Industrial competencies 18 Invest in Moldova & Invest Gagauzia help you 21 GAGAUZIA PROFILE Political and administrative status Autonomous Territorial Unit of Gagauzia Total area 1,848 km2 Currency Moldovan Leu (MDL) Capital Comrat (26,200 inhabitants) Total population 162,000 people (4.8% of the Moldovan population) Spoken languages Gagauzian, Russian, Turkish, Romanian LOCATION COMRAT KIRSOVO Situated in the southern part 26,200 of the Republic of Moldova, inhabitants 7,100 Gagauzia is bordered by inhabitants CONGAZ the Ukrainian district of Odessa to the East and has 12,230 CEADIR- administrative border with inhabitants LUNGA districts of Leova, Cantemir, 22,900 and Cahul to the West. By inhabitants car, it takes 1.5 hours to travel from the capital of BAURCI Gagauzia, Comrat, to the 8,250 capital of Moldova, Chisinau. inhabitants VULCANESTI Its location in the South 16,700 COPCEAC of Moldova is close to the inhabitants Danube ports of Giurgiulesti 10,120 (International Free Port, inhabitants Moldova), and to the river ports of Galati (Romania), Reni, and Ismail (both Ukraine). 1320 km 2612 km 992 km 2061 km 232 km 1928 km 218 km 1263 km 177 km 112 km 100 km London Milano Frankfurt Vienna Chisinau Istanbul Moscow Ungheni Comrat Odessa Giurgiulesti Galati ECONOMIC COOPERATION The Republic of Moldova has signed 43 Free Trade Agreements (FTA), all of them are valid also for Gagauzia, including: • DCFTA Deep and Comprehensive Free Trade Agreement with the European Union – 500 million customers • FTA with CIS countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, and Uzbekistan) – 250 million customers • FTA with Turkey – 80 million customers • CEFTA Central European Free Trade Agreement (Moldova, Macedonia, Albania, Serbia, Montenegro, Bosnia and Herzegovina, and UNMIK (Kosovo) – 30 million customers • GUAM Organization for Democracy and Economic Development (Georgia, Ukraine, Azerbaijan, and Moldova) – 60 million customers million costumers 880Free Trade Area ECONOMIC POTENTIAL GDP in current prices, 2015 5.780 billion EUR GDP per capita (Purchasing Power Parity), 2015 4,514 EUR Inflation rate, 2016 6.4% Economic growth, 2016 4.1% Note: General data for the Republic of Moldova Leading industries in Gagauzia are agriculture Republic of Moldova. The index of industrial and food processing (wine making and production as compared to 2015 made up production of canned fruits and vegetables), 111.1%. In 2016, the share of industrial textile, apparel, and footwear. Gagauzia is production in Gagauzia increased and well known for its agricultural potential and amounted to 3.2% of the total volume of traditions for decades, defined by common industrial production in the Republic of multicultural values in the region. Moldova. In the structure of production, works and services by industrial enterprises A total of 7,141 companies, of which 2,828 of ATU Gagauzia, Comrat district accounts are the companies registered as legal entities, for 39.8% (521.0 million MDL), Ceadir-Lunga and 3,564 individuals, are registered in all district accounts for 22.5% (293.6 million economic sectors of Gagauzia. Circa 200 MDL), and Vulcanesti district – 37.7% (492.5 enterprises with foreign share ownership million MDL). The volume of products are registered in Gagauzia. In 2016, 241 shipped in 2016 by surveyed industrial economic operators, of which 17 are with enterprises amounted to 1244.7 million foreign ownership, were registered in the MDL, of which 71.8% was exported (893.5 Authonomy. million MDL), 28.2% was placed on the domestic market of the country. Products, works and services amounting to 1307.1 million MDL (in current prices) were The gross agricultural output in all economic produced in 2016, including manufacturing categories in 2016 made up 1792.7 million industry – 1297.6 million MDL, Gagauzia MDL (in current prices), which is by 18.3% accounting for 3.7% of the total in the more than the level of the previous year. Industrial and 80 62.2 62.8 agricultural production, 60 60.4 59.7 53.1 40 47.9 45.8 50.6 49.5 2011-2016 38.8 43.5 (million EUR) 31.9 20 Industrial production Agricultural production 0 2011 2012 2013 2014 2015 2016 Source: General Department for Economic Development, ATU Gagauzia 5 Share of economic sectors, 2016 (%) 4.1% Agriculture 16% Manufacturing Public services 36.1% Transportation Construction 34.6% Trade Others Source: General Department for 2.7% 4.3% Economic Development, ATU Gagauzia 2.2% Businesses located in Gagauzia can export market represents an important niche for duty free to the West (EU), East (CSI) and Gagauzian products (14.8% of total exports Southeast (Balkans). 40% of Gagauzian in 2016). exports have as destination the EU market, while 29.9% the CIS market. The Turkish Total volume of 100 000 exports and imports, 80 000 2011-2016 60 000 (thousand EUR) 40 000 Export 20 000 Import 0 Source: Customs Service of the RM 2011 2012 2013 2014 2015 2016 Export by destination, 2016 (%) 14.8% EU 40% Turkey 29.9% CIS Other coutries 15.3% Source: Customs Service of the RM 6 COMPETITIVE ADVANTAGE OF THE FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF MOLDOVA AND TURKEY The FTA signed by the Republic of Moldova Starting with November 1st 2016, the and Turkey, entered into force on November Republic of Moldova can act as a trade and 1st, 2016, provides competitive advantages production mediator between Turkish and for both sides. The current situation stated Russian companies, as Turkish companies in the table below, describes the actual residing in the country will have the trade relations between Turkey and Russia, opportunity to export to Russia tax-free. regulated by the specified import rates. EU CIS Turkey Exports, 2016 (thousand EUR) 37,204 27,874 13,791 Romania, Poland,Bulgaria, Russia, Georgia, Main trade partners Germany, Austria, Ukraine, Belarus, Czech Republic, Kazakhstan Italy Oil seeds, Beverages Beverages (Alcohol and (Alcohol and Non-Alcohol) Non-Alcohol) Knitwear / Main traded goods Fruits and nuts, Glass products, Oil Seeds Cereals / Fuel / Boilers and Industrial Oils / Equipment Knitwear, Apparel Imports, 2016 (thousand EUR) 18,668 28,709 19,840 Romania, Russia, Ukraine, Main trade partners Italy, Bulgaria, Kazakhstan, Germany, Poland Belarus Fuel / Boilers, Fuel / Industrial Oils Knitwear Industrial Oils Boilers, Boilers Main traded goods Paper, Vehicles Bakery Products Paper Cotton Cacao Products Metal Products Wood Products Competitive advantage of the FTA with Turkey Code of Import commodity Goods duty, % group Clothing, 61 10 knitwear 34 Detergents 5-11 Pharmaceutical 30 2-7,5 preparations Cooper and 74 3-5 articles thereof Vegetables, 07 edible roots and 5-15 tubers Vehicles and 87 5-20 Parts 08 Fruit and nuts 3-10 TOP REASONS TO INVEST IN GAGAUZIA Multilingual population Gagauzia offers a qualified and multilingual workforce, due to three official languages in the region: Romanian, Gagauzian, and Russian.