Moldova Info
Joined: 20 Apr 2007
Posts: 14
Home Country: moldova
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 Posted: Thu May 10, 2007 11:03 am Post subject: DOING BUSINESS IN MOLDOVA / MOLDOVA BUSINESS GUIDE |
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DOING BUSINESS IN MOLDOVA
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Limited Liability Company (HH)
Minimum Capital Requirement: 5,400
City: Chisinau
Registration Requirements:
Procedure 1. File all the documents with the State Registration Chamber for the registration of the company; Obtain IDNO number
Time to complete: 15 days
Cost to complete: MDL 574 + 0.5%*capital + MDL 250 stamp fee
Comment: File Registration applications; name and address of the founders and the directors (copies of the passport/identity card); Documents confirming the legal address of the company (right establishing documents: ownership certificate, contracts of lease or guarantee of the future lease or other); documents confirming the payment of state taxes and fees. As a rule, all other documents are filled in by Registration Chamber employees.
Pursuant to the new order of registration of the companies, the Minutes of the founders' meeting; The Charter and the Contract on incorporation of the company; shall be drafted by the State Registration Chamber, but the founders can revise them before signing and ask for additional provisions to be included. They also shall provide the Chamber with the information regarding the share capital of the company, list of activities and other additional information that the founders may wish to have included into the constitutive acts. Lately the State Registration Chamber has also combined the Charter and the Contract on incorporation into one document named Constitutive Act, which is issued to the company upon the completion of the registration procedure, instead of the Charter and the Contract on incorporation. The Constitutive Act can be authenticated by the State Registrar, who is the State Registration Chamber representative, if all founders or their representatives will sign the Act in presence of the State Registrar. The Constitutive Act after being drafted by the Chamber may also be signed by the founders outside the Chamber, in such case the constitutive act shall be authenticated by the notary and then submitted to the Chamber. State Registration Chamber will verify the company name with the National Terminology Centre on its conformity with the legislation on languages.
The state taxes and fees include:
i. the state fee for registration - 250 lei
ii. the fee for preparation (editing) of the incorporation documents - 108 lei
iii. the fee for consultation - 27 lei
iv. the fee for verification of the name - 39 lei
iv.v. the fee for certification of the signatures by the state registrar - 36 lei
v.vi. the fee for statistic codes - 12 lei
vi.vii. the fee for publication - 54 lei
vii.viii. the fee for the extract (for permanent bank account) - 36 lei
viii.ix. stamp fee - 0.5% of the capital
ix.x. fee for the official stamp of the company - 352700 lei.
The State Registration Chamber also makes up the registration with the Department of Statistics for a Statistical Code.
The term of registration may be reduced up to:
1-4 working. 3 days with additional payment of 358 lei;
4 days with additional payment of 268.5 lei
5-9 working days with additional payment of 179 lei
The State Registration Chamber issues to the founders the Registration Form and this Form shall be registered and signed with the local Fiscal Inspectorate. The State Registration Chamber performs this procedure independently; therefore this procedure shall be completed by the founders only if the State Registration Chamber requires to do so.
As a step to implement the initiative to create a unique "State Register of legal entities", the government introduced a unique state identification number for enterprises and organisations on 14 July 2003. All enterprises and organisations are required to apply for the unique state identification number (IDNO) at the territorial offices of the State Registration Chamber.
In order to obtain the IDNO the following documents shall be presented by already registered companies: state registration certificate, certificate of the fiscal code attribution, certificate of the statistical code attribution. All the newly registering enterprises companies receive the IDNO upon registration. It was expected that beginning with the January 1, 2005, all enterprises should have the new Registration Certificate and should only use IDNO instead.
Procedure 2*. Open a temporary bank account and deposit at least 40% of the registered capital of the company; pay the registration fee
Time to complete: 1 day, included in the previous procedure
Cost to complete: no charge
Procedure 3*. Obtain the Registration Certificate and Constitutive Act; obtain an official stamp from the Department of Information Technologies
Time to complete: 1 day, included in the procedure 1
Cost to complete: no additional charge (these costs are covered by the charges listed in Procedure 1)
Comment: The Company files to the Registrar the certificate from the bank confirming the transfer by the founders of their capital contributions into the temporary bank account. Company files the order for the company stamp at the same time with the submittal of documents for registration. Subsequently, the stamp shall be issued on the day of company registration, together with the registration certificate and other documents.
Procedure 4. Register with the local Fiscal Inspectorates of the Ministry of Finance for VAT
Time to complete: 1-3 days
Cost to complete: no charge
Comment: Only the company that intends to sell VAT taxable goods and/or services for an amount exceeding 200 000 lei during 12 consecutive months is obliged to register with the local Fiscal Inspectorate in order to obtain VAT code. VAT code is different from the IDNO.
Procedure 5. Register the company with the Statistics Department of Republic of Moldova
Time to complete: 1 day
Cost to complete: MDL 12
Comment: After the registration is completed, the company shall register with the Statistics Department of Moldova. The Department will attribute to the company the Statistics Code according to the activities established in the Constitutive Act of the company as to be practiced by the company, as well as the territorial location of the company.
Procedure 6. A notary certifies the company's bank account signature cards required for the conversion of bank account
Time to complete: 1 day
Cost to complete: MDL 90-150
Comment: This procedure consists in the certification of the signature sample cards for the bank. The cards must contain in a mandatory fashion the signatures of the director and of the chief-accountant.
Procedure 7. Convert the company's temporary bank account to a permanent one
Time to complete: 1 day
Cost to complete: no charge
Comment: Need to present to the bank the notary-certified copies of the Certificate of Registration, incorporation documents, excerpt for the bank confirming the director, notarised signature cards, and a copy of the enterprise's stamp. The notary certification of the whole package of documents costs up to 180 lei, based on the calculation of 6 lei per one page.
Procedure 8. Obtain the permission from the State Inspectorate of Labour
Time to complete: 7 days
Cost to complete: no charge
Comment: In accordance with the Decree of the Government of the Republic of Moldova # 75 dated February 2, 1999 all the economic agents are obliged to obtain the permission of the Sate Inspectorate of Labour. The permission is issued on the basis of an expert's decision. All the costs and expenses of the expert's examination are born by the economic agent (the amount of the stated costs and expenses is not stable and may very from one company to another); in order to obtain such permissions, at least one employee of the new company - usually the manager or the human resource specialist - must attend special paid training courses for a few weeks). As a matter of practice, the newly registered company starts operations without this permissions, and obtains it in due course.
Procedure 9. Register the company with the Social Security Fund
Time to complete: 1 day
Cost to complete: no charge
Comment: Starting with 2003 every company should receive the individual social security number for each employee. The Law of the Republic of Moldova #383-XV as of November 11, 2004 "On the State Social Security Budget 2005" states that in order to follow this requirement the company should fill in the questionnaire for each employee and to present it along with the copy of a passport to the National Social Security Fund within 10 days from the moment of registration or from the moment of signing the labour contract. Later on, the company should present the report every 3 months to the National Social Security Fund.
Procedure 10. Register the company with the National Medical Insurance Company
Time to complete: 2 days
Cost to complete: no charge
Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).
FORMS OF BUSINESS ORGANISATION
1. Joint stock company
2. Limited liability company
3. Joint venture
Joint stock companies and limited liability companies are the most common forms of business organisation for investors in Moldova. Shareholders have limited liability and Moldovan legislation with regard to these types of entities is well developed.
TAXATION
Corporate tax
Main rate: 15%
Resident companies are taxed on their worldwide income; non-resident companies are taxed only on their Moldovan-source income. An entity is treated as resident if it is established or managed in Moldova. The corporate tax rate is 15%. Dividends paid to resident entities are subject to a final withholding tax of 15%. Profits of partnership are allocated to the partners for tax purposes.
Individual tax
Progressive rates to 20%
Resident individuals are taxed on their worldwide income; non-residents are taxed only on their Moldovan-source income. An individual is resident in Moldova if that individual permanently resides there or is present for 183 days in a calendar year. Income is taxed at progressive rates up to a top rate of 20% on annual income exceeding MDL 21,000. Resident individuals are exempt from tax on interest from bank deposits and on dividends from Moldovan companies.
Capital gains
Taxed as income
Capital gains of companies are taxed as ordinary income, but only 50% of the gain is taken into account for tax purposes. Capital gains derived by individuals are treated as income, but a deduction (equal to MDL 10,000 for each year after 1997) is available on the disposition of a private residence provided the individual lived in the dwelling for at least three years before the alienation.
Indirect tax
VAT standard rate: 20%
Value-added tax (VAT) applies to most transactions at a standard rate of 20%. A lower rate of 8% applies to certain basic food products, and a 5% rate applies to supplies of natural and liquefied gas. The zero rate applies to exports, electricity for private consumption and construction of housing financed by a mortgage. Exemptions include dwellings, educational services, certain financial services, services in relation to intellectual property, books and periodicals.
Registration is compulsory for entities with a taxable turnover exceeding MDL 200,000.
Tax administration and compliance
Tax year: Companies: accounting year; Individuals: calendar year
Companies with tax liabilities above a minimum level must pay tax in four quarterly instalments during the year, with each instalment calculated as 25% of the liability for the current year or previous year. A self-assessment return is due by March 31st following the end of the tax year. Employment income of individuals is taxed by withholding. Individuals with other types of income must submit a self-assessment tax return by March 31st following the year-end. A final tax payment is due with the return.
Additional tax information
Withholding taxes: Dividends and Interest 10%, Royalties 15%. Rates may be reduced by an applicable tax treaty.
Tax treaties: Moldova has concluded more than 28 tax treaties.
Dividends: Dividends paid to resident legal entities are subject to a withholding tax of 15%.
Revenue protection: There are thin-capitalisation rules.
Groups: There is no provision for group taxation.
Incentives: Small businesses; farm enterprises; free-trade zones; investors.
Other taxes: Area development levy, Customs duties, Excise duty, Land tax, Levy on border crossing (as from January 1st 2006), Natural resources tax, Private tax, Tax on buildings. |
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