Edition 2016/2017 Agriculture ICT Textile, Apparel, Footwear and Leather goods Automotive Renewable Energy Republic of Moldova Opportunities nearby KEY FACTS Official name Language Population Republic of Moldova Romanian (official) 3.55 million Other spoken languages: Russian, Ukrainian, English, French, German, Italian, Turkish, Bulgarian Currency MDL Capital Chisinau Area 1 EUR = 21.63 MDL ca. 814,000 inhabitants 33,846 km2 December 2016 44 3 40.3% 235 € /month Doing Business Employment rate Average wage (gross) 2017 Rank 2015 2016 € 4,514 9.7% GDP per capita at PPP Inflation rate 2015 2015 > 1MIO Investment 6% FEZ 0 % CIT 12% General regime billion € /hour € 5.78 EXCISE 1.80 CUSTOMS GDP current prices 0% DUTIES in FEZ Full load (labor cost) 2015 0% VAT in FEZ 2016 Free Trade Agreements signed with 43 countries, including: • DCFTA (Deep and Comprehensive Free Trade Area with the European Union) – 500 million customers; • FTA with CIS countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, 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. 880 million FIN SWE Customers NOR RUS duty-free EST LVA market LTU BLR GBR DEU POL CIS EU CZE UKR AUS KAZ HUN FRA ROM ITA CEFTA GUAM BGR UZB ESP GRC TUR Contents Why Moldova ..........................................................................................................................2 Economic overview .................................................................................................................3 Available workforce .................................................................................................................4 Educational institutions ............................................................................................................5 Operational costs ....................................................................................................................6 Taxes & Customs ....................................................................................................................7 Trade potential ........................................................................................................................8 FDI facts ..................................................................................................................................9 Business start-up in Moldova ...............................................................................................10 Investment incentives ............................................................................................................11 Free Economic Zones & Industrial Parks ..............................................................................12 Success stories & Industrial competencies ..........................................................................14 Why Moldova? 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. With some 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, Confezione Andrea, Südzucker AG, Lactalis-Alba, Gebauer&Griller, Steinel Electronic, La- farge, Pentalog, Fujikura Automotive, SEBN and others already established their own plants in Moldova, or source from Moldova by making use of the local sub-contractors. Bordered by Romania on one side and by Ukraine on the other, Moldova is close to both EU and CIS mar- kets. Moldova is connected via Airports, wide and narrow gauge railways, roads and the Danube River to the whole of Europe and the Black Sea. Distances London Milano Vienna Bucharest Chișinău Moscow 2500 km 1900 km 1200 km 440 km 1300 km • The Giurgiulesti International Free Port is situated • 1138 km Railway network in Moldova (single at km 133.8 from the Black Sea, on the maritime track), with both wide and narrow track gauge; section of the river Danube; • Link to the Pan-European transport Corridor VII – • Direct connections to Ukraine and Romania (most the Danube from Passau (Germany) to the Black important crossings at Ungheni (MD) – Iasi (RO), Sea (2300 km long); Cantemir (MD) – Falciu (RO) and Giurgiulesti (MD) – Galati (RO) ). Top reasons to Invest in Moldova Moldova’s trade is largely liberalized to Moldova’s Free Economic Zones offer both the European Union and Com- further incentives, including a corporate monwealth of Independent States. Most tax of 3–6% and total exemption from VAT and custom duties. They represent important destinations in these markets excellent manufacturing platforms offer- can be reached within 2 truck days. ing also state guarantees and adminis- trative support. Moldova is constantly improving its busi- The workforce is skilled and multilingual. ness climate, being well positioned in Labor costs are the lowest in the region, the Doing Business ranking (44 / 190 in creating a competitive business environ- 2017). ment. 2 Economic overview The production of electrical equipment has increased by 32.2%, followed by the production of textiles Over the years 2011–2015, the average economic (+19.9%), significant intake was brought by the au- growth of the Republic of Moldova registered 3.9% tomotive industry, and chemicals (+17.6%), pharma- per annum. The most dynamic sectors have been ceuticals (+16.9), wood processing and wood articles ICT, manufacturing industry, automotive industry (+15.9%), and others. A significant intake was brought and agriculture. by the automotive industry, which is one of the most dynamic industries in Moldova. Total export of auto- Historically, the largest industries in Moldova have motive industry is over 257 million EUR (in 2015), been the manufacturing industry, agriculture and with a growth of ca. 13%. food processing, textile, apparel and footwear. The ICT sector is a rather new and fast growing sector Share of industry in GDP, % for Moldova, with many foreign companies entering 15.2 the market. 15 GDP in current prices, billion EUR 14.3 14.1 7 13.9 14 13.6 6.620 6.057 5.780 6 13 5.559 2011 2012 2013 2014 2015 5.357 Source: Ministry of Economy, Social-economic development of Moldova, 2016. 5 The agricultural sector has large potentials in pro- duction of fresh and processed fruits and vegeta- bles, wall nuts, honey, meat, dairy products and 4 2011 2012 2013 2014 2015 poultry. A strong potential is also located in the or- Source: IMF, World Economic Outlook Database, 2016. ganic and biological food production, due to the rich GDP per capita at PPP, EUR soil and appropriate climate. 5 The agricultural production registered a decrease of 4,514 13.8% in 2015, driven by the strong decrease of 4,149 the vegetable production by 22.6% (due to a severe drought in summer). However, the life stock produc- 4 tion registered a growth of 2.2% in 2015, mostly driven by the increase of cattle and poultry produc- tion by 5.6%. 3 2,852 Share of agriculture in GDP, % 2,581 2,554 14 13.0 13.0 13 2 12.0 2011 2012 2013 2014 2015 12 11.2 Source: IMF, World Economic Outlook Database, 2016. 11 The industry production reached 15.2% of GDP in 10 2015, while the agricultural production decreased to 9.2 12.0%. In 2015, the industrial production registered 9 an increase of 0.6%, mainly driven by the growth of 8 2.3% of the manufacturing industry. 2011 2012 2013 2014 2015 Source: Ministry of Economy, Social-economic development of Moldova, 2016. 3 Available workforce Moldova’s population is an adaptable society, with Active population across regions, 1000 workers 80% of the population multilingual and 33% of pop- ulation under 25. Chisinau 353.9 353.5 Moldova successfully and peacefully merges such nationalities as Moldovans, Romanians, Rus- North 384.0 sians, Ukrainians, Gagauz, Bulgarian, and others. 356.1 As well, Moldova’s population has a high degree of language skills in Romanian, Russian, English, Center 329.1 French, German and other international languages. 321.5 198.7 Moreover, the young population is looking to work South with international companies and uses their com- 201.3 petences and skills. The economically active pop- 2015 2014 ulation consisted of around 1.267 million people in 2015. Source: National Bureau of Statistics, Regional statistics. Vocational education is an integral part of the na- tional education system oriented towards training 47 and development of specific skills and competenc- secondary vocational es, in order to have prepared pool of workers for institutions the national economy and foreign companies. Vo- 45 post- secondary cational education provides training in a profession vocational according to the harmonized European framework institutions 31 higher of qualifications, as required by the labor market. education institutions Enrolled students and graduates of the upper secondary and higher education institutions, 2015/2016 81,669 67,397 30,428 23,630 17,828 16,098 14,272 9,220 6,252 Total Secondary vocational institutions Post-secondary vocational institutions Bachelor Master 5.802 Upper