In brief
As Moldova aims for EU membership by 2030, it has introduced generous tax incentives for businesses, particularly in the tech sector, while combating previous corruption to create a favorable business environment, drawing the attention of foreign entrepreneurs.
Moldova is making concerted efforts to draw in overseas businesses as it seeks a new economic direction amid a backdrop of political transitions. Dutch entrepreneur Luc Vocks recalls his journey of setting up shop in Moldova in 2007, saying, "I went with a backpack and started a business." Having first ventured to this Eastern European nation three years prior, he remembers the challenge of navigating a struggling economy characterized by low prices and significant attention for foreigners. Today, Vocks owns DevelopmentAid, based in the capital city of Chisinau, employing 180 people and managing a platform for job listings in the international development sector.A growing number of foreign entrepreneurs are following in Vocks' footsteps, lured by Moldova's advantageous business tax rates, including a corporate tax rate of just 12%, significantly lower than the 25% rate in the UK and 25.8% in the Netherlands where Vocks originally established his company. For tech companies, the situation is even more favorable. The Moldova IT Park (MITP), a virtual initiative aimed at expanding the nation's IT sector, offers a reduced corporate tax rate of 7%. This program is part of broader governmental efforts to modernize the economy as Moldova aims to join the EU by 2030, spearheaded by pro-EU President Maia Sandu, who has recently secured re-election.While Moldova's journey toward EU membership is fraught with challenges, including Russia’s interference and ongoing corruption, the government reports progress. Deputy Prime Minister Dumitru Alaiba highlights the country’s rapid transformation over the last decade, as Moldova rises in the global Corruption Perceptions Index—moving from 91st to 76th place—a significant improvement that reflects a more transparent environment for entrepreneurship. Vocks echoes this sentiment, noting the decreased bureaucratic hurdles and improved business climate compared to his earlier experiences.MITP participant companies benefit from additional incentives, such as no employer social security contributions and no personal income tax for employees, making the prospect of operating in Moldova increasingly attractive. Since the introduction of MITP, over 2,000 firms, including 300 international companies, have registered, generating nearly €365 million ($397 million) in revenues in the first half of 2024 alone. These businesses comprise around 6% of Moldova’s GDP and employ 22,000 individuals.Despite these positive developments, challenges remain, including rising employee salaries that may limit opportunities for smaller firms and the persistence of emigration among skilled workers. Nonetheless, the atmosphere in Moldova is changing, with the country aiming to establish itself as a regional business nexus connecting Central Asia to Europe—a shift described by MITP administrator Marina Bzovii as essential for building a vibrant business ecosystem in Chisinau.
