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Under the conditions of a limited domestic market, the growth and diversification of exports are the actions the Republic of Moldova should undertake to significantly improve living standards for current and future generations. And the exports, in turn, are directly influenced by the volume of investments. It is the ascertainment found in the National Strategy for Investing and Exporting Exports for the years 2016-2020 and which is being implemented by the current government with firm steps. Today our country meets the investors’ requirements by offering a set of concrete tools, competitive at the regional level and having a direct impact on improving the business climate as a whole.

International specialized charts also reflect the stability of the national economy and business-friendly legislation. The Republic of Moldova ranks 47th out of 190 countries included in the World Bank Group rankings of the business environment, ahead of neighboring countries Romania and Ukraine. According to Doing Business 2019, Moldova has reached high positions in “starting a business” (14) and “property registration” (22). Currently it only takes 1 day and 4 formalities to register a company.

Last year, our country ranked 6th in the world in terms of the number of jobs created in relation to the population, at the same time being remarked as the newest emerging investment destination, according to the Global Location Trends Report 2017.

The transformation of the Republic of Moldova into an increasingly attractive destination for foreign investors is the result of a series of reforms and government policies implemented over the last few years.

Their goal is to make the most of our country’s advantageous geographical position, as well as its access to a market of about 800 million potential consumers – the result of the conclusion of 43 free trade agreements with EU, CIS and Asian countries. The results were not long in coming: in 2017 the value of Moldovan exports amounted to US $2.5 billion, a 19% increase over the 2016 indicators. In the first nine months of 2018, this indicator has already exceeded $2 billion. Export distribution has also reconfigured: more than two-thirds of goods are exported to the European Union (70%).

A positive development was registered in the 7 Free Economic Zones. Since the beginning of 2018, sales of industrial goods, produced within the FEZs, increased by 68% compared to the previous year, reaching $384 million.

“The Government of the Republic of Moldova is making important efforts to create an attractive business climate to stimulate investments. We are aware that investments generate new economic activities and have the ultimate goal of obtaining the goods and services indispensable to a viable and prosperous economy, that is why attracting foreign capital and promoting exports is our strategic priority. By concluding new free trade agreements at regional and international level, by reducing fiscal pressure, by creating preferential conditions for residents within the FEZs, IT and Industrial Parks, we aim to make the most of the country’s potential as a natural transit point between East and West, to consolidate a growth model based on the development of goods and services exporting industries.”

In particular, the reforms implemented by the Government focused on reducing the burden of taxes and bureaucracy. Today, Moldova has one of the most competitive tax systems in the region with a Corporate Income Tax of 10% for HoReCa, 6% for residents of the Free Economic Zone and a 7% single tax for IT Park residents. When it comes to “Social Insurance Contributions”, our country has the most competitive rate in the region – 18%. The number of organs with control functions has been reduced by 70%, and economic agents need 300 less permissive documents to develop their businesses legally. Since July 2018, through the Automated Information System which operates as a “Unique Counter”, the business environment is able to get the necessary documents online.

Entrepreneurs who meet certain conditions can get subsidies for newly created jobs – the Government offers them 40,000 lei for every 100+1 new job. According to the estimates by the Ministry of Economy and Infrastructure, over the next two years Moldova will attract a net investment flow of 380 million USD and 10 thousand jobs will be created. The Moldovan Investment Agency is the governmental structure directly responsible for the implementation of the National Strategy for Investment Attraction and Export Promotion for 2016-2020.

“Due to the fact that the Government has undertaken to implement a series of ambitious reforms aimed at improving the investment climate, we have several good reasons to say that Moldova has the potential to attract but also to maintain and develop direct foreign investment. The latter would allow local companies to transition to activities generating greater added value and would provide opportunities to integrate into the value chains of the global economy. The new team of the Agency will strengthen its efforts to develop and promote a brand of Moldova as an investment destination – InvestMoldova – with distinct visual identity, supported by competitive opportunities in all sectors identified as strategic for the national economy. When using promotional tools such as economic diplomacy, B2B and B2G business missions, roundtables, forums and international exhibitions, we will focus on relevance, efficiency and results. In the long term, we aim to offer complete support to entrepreneurs who are committed to manage serious and transparent business in Moldova, to bring innovations, to create attractive jobs and to ensure competitive production.”

The unprecedented opening of the Government of Moldovan to investors will be discussed during the most important economic event in the country – “Moldova Business Week 2018” – to be held from 27 to 29 November in Chisinau.

Oer 1,500 investors, financiers, importers and exporters from the Republic of Moldova and 30 other countries will learn firsthand about the investment potential of the seven strategic sectors of the national economy: Energy, Infrastructure, Automotive and Electronics, Agriculture and Food Industry, Information and Communication Technology, Tourism and Light Industry. More than 75 speakers, including representatives of the Government of Moldova, ambassadors, representatives of foreign strategic partners, local companies, as well as special guests, will elucidate the competitive advantages of the sectors, current investment opportunities and state policies to support investment.

The event cannot be missed by those who want to internationalize their business, to be aware of new trends in approaching external partnerships, to identify new customers and markets, to adopt new models of business success and new solutions to everyday challenges.

The access to the conference is free of charge for all guests, based on prior online registration on www.mbw.md.

Economy

How many millionaires are there in the Republic of Moldova?

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1 760.

1760 citizens of the Republic of Moldova obtained revenues of over 1,000,000 lei in the year 2018. The total income earned by these people was 6.140,000,000 lei and the tax paid to the budget from this income is the amounted to 479.710,000 lei, the State Tax Service announced.

According to the quoted source, the highest amount of income earned by a natural person in 2018 was 83.250,000 lei.

Territorial, most millionaires are registered in Chisinau – 1384.

The youngest person in this category is 21 years old and the oldest – 90 years old.

Accordingly, the average income of a taxpayer is 49.700 lei in 2018 compared to 44.800 lei in 2017.

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Economy

The past and the future of Moldova’s energy sector security

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The energy sector is one of the vulnerable areas of the Republic of Moldova because it could not provide national security in case of exceptional situations.

The energy vulnerability of the Republic of Moldova is caused by the dependence on natural gas and electricity from the outside, obsolete infrastructure and tariffs inadequate to economic rigors. The accession of the Republic of Moldova to the European Energy Community could represent the solution to many problems existing in the energy sector, says the political analyst of the IIDIS Viitorul, Ion Tăbârţă via the Newsletter.

Achieving commitments under the European Energy Community could ultimately lead to diversification of energy supply, demonopolization and liberalization of the energy market, separation of energy activities, renovation and modernization of infrastructure, non-discriminatory tariffs for consumers.

With the signing of the Association Agreement with the EU, the Republic of Moldova started transposing and implementing the provisions of the Energy Package III, adopted by the European Union in 2009.

The Republic of Moldova has achieved good results in transposing the European directives into national legislation, adopting several laws in the energy field. However, the Republic of Moldova is experiencing some delays in adopting sectoral energy laws, such as the Oil Law.

The reforming and modernization of the Moldovan energy system will be realized only after the implementation of these laws, when their functionality will be ensured. The Government of the Republic of Moldova and ANRE are the main institutions responsible for the implementation of the regulatory framework.

The implementation has several dimensions:

  1. development and approval of secondary legislation
  2. liberalization of the energy market and institutional and organizational consolidation
  3. modernization of energy infrastructure.

To achieve these goals, the energy interconnection with the EU must be achieved, which can only be done through Romania. The Government of the Republic of Moldova concluded in 2015 a Memorandum of Understanding with that of Romania. This implied the realization of 5 large projects that would ensure the interconnection of the natural gas and electricity networks between the two states.

What should the Republic of Moldova do for a more secure energy sector?

The Republic of Moldova needs to modernize and restructure it in order to overcome the inherited vulnerabilities of the past. Contrary to expectations arising from the national interest of the Republic of Moldova, this process is much slower than expected.

We have delays in the adoption of legislation, especially the secondary one, and delays in the modernization of energy infrastructure. This is particularly evident in energy interconnections with Romania, which could be viable solutions to many of the existing energy problems in the Republic of Moldova. Under the conditions that there is external support from the outside, such an attitude means that things are “intentionally entangled” inside. Money is capacity, the rest is at the mercy of political will.

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Economy

Moldova will receive a $70,000,000 loan from the World Bank

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The aim of the money is to increase electricity distribution capacity. According to a communiqué to the international institution mentioned above, the decision to grant the loan was approved yesterday by the World Bank Board of Directors.

A new high-voltage 400 kV line will be built from the WB money between Vulcanesti, in the south of Moldova and Chisinau. Also, the modernization and extension of substations in Chisinau and Vulcanesti are envisaged, as well as strengthening the energy transmission and metering system.

“The project will strengthen the capacity and reliability of local energy distribution in Moldova and will support the future interconnection of Moldova’s electricity system to the European electricity grid through Romania. This will be vital for the diversification of Moldova’s electricity supply, which will allow electricity to be supplied at competitive and transparent prices,” says the communiqué.

Over the last 27 years, the World Bank has granted the Republic of Moldova loans totaling over $1,000,000,000 for about 60 projects.

Currently, the World Bank portfolio includes ten active projects with a total commitment of $391.300,000. The areas of support include regulatory reform and business development, education, eGovernment, healthcare, agriculture, local roads, the environment, and others.

The commitment portfolio of the International Financial Corporation in Moldova includes five projects amounting to $17,000,000 (69% loans and 31% equity). The Multilateral Investment Guarantee Agency provided $95,000,000. Both institutions are members of the World Bank Group.

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