Free Economic Zones in Moldova and the Benefits Offered by Them
February 22, 2012 By Furtuna Law Office
In accordance with national law, free economic zones (free enterprise zones) are part of the customs territory of the Republic of Moldova, economically separated, with strictly demarcated perimeter, where for local and foreign investors, according to the law, are allowed on preferential conditions different types of business activities.
Free economic zones were created for a period between 25 and 30 years in order to accelerate socio-economic development of individual territories and the country in a whole through:
a) attracting national and foreign investment;
b) implementation of modern equipment and technology;
c) development of export-oriented production;
d) application of advanced experience in production and management;
e) job creation.
On the territory of free economic zones acting:
a) international agreements to which Moldova is a party;
b) the law of the Republic of Moldova;
c) The Government's decisions;
d) regulations of the Free Economic Zone Administration, taken within its competence, not inconsistent with law.
In the free economic zone may be carried out following types of activity:
a) industrial production of goods for export, except alcohol and alcohol products;
b) sorting, packaging, marking and other similar operations with goods transited through the customs territory of the Republic of Moldova;
b1) external trade;
b2) transport activity;
c) auxiliary types of activities, such as utilities, storage, construction, catering, etc., necessary to conduct the above mentioned activities.
In order to achieve agreed objectives, for Free economic zones, were granted preferential arrangements to stimulate entrepreneurial activity as well as lot of other benefits, such as:
• Investment within the Free economic zones enjoy the legal protection of the state.
• Assets in free zones cannot be expropriated, nationalized, requisitioned and confiscated, except by court decision.
• After payment of taxes, fees and other charges imposed by the laws, for foreign investors are guaranteed the right to transfer outside the Republic of Moldova amounts in foreign currency, obtained by them as profits (dividends), resulting from the sales of all or part of property belonging to them or a share of a resident enterprise, as well as the profit from liquidation or reorganization of the enterprise.
• Special customs treatment:
- 50% discount from the tax rate fixed in the RM for the income obtained from export of goods (services) originating from free economic zones outside the territory of the RM;
- 25% from the tax rate fixed by the RM for the income obtained from other activities than export of goods (services);
- 3- year total exemption from income tax obtained from export of goods (services) originating from free economic zones outside the territory of the RM following investment of at least 1 million US dollars in the free zone;
- 5-year total exemption from income tax obtained from export of goods (services) originated from the free economic zone outside the territory of the RM following investment of at least 5 million US dollars in the free zone;
- VAT is not applied to the goods delivered to the free zone;
- Zero VAT rate for:
(1) goods (services) delivered to the free zone from outside the territory of the Republic of Moldova,
(2) goods (services) delivered from the free zone outside the territory of the Republic of Moldova,
(3) goods (services) delivered to the free zone from the rest of the territory of the Republic of Moldova,
(4) goods (services) delivered by residents of different free zones of the Republic of Moldova to each other.
- Exemption from excise payment for:
(1) goods introduced in the free zone from outside the Republic of Moldova,
(2) from other free zones,
(3) from the rest of the territory of the Republic of Moldova,
(4) goods originating from this zone and exported outside the territory of the Republic of Moldova.
- Exemption from payment of excise taxes for:
(1) deliveries of goods within the free zone,
(2) deliveries of goods from one free zone to another are not subject to excise duties.
Resident of free zone may be any individual or legal entity registered under the law as a subject of entrepreneurial activity in Moldova. In Moldova operating the following free economic zones:
Free economic zone International Port of Giurgiulesti;
Free economic zone International Airport of Marculesti;
Free economic zone Expo-Business-Chisinau;
Free economic zone Ungheni-Business;
Free economic zone Otaci-Business;
Free economic zone Taraclia;
Free economic zone Tvardita;
Free economic zone Valkanes; and
Free economic zone Balti.
AUTHOR: Viorel Furtuna, Attorney at Law
Copyright Furtuna Law Office
More information about Furtuna Law Office
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
a) attracting national and foreign investment;
b) implementation of modern equipment and technology;
c) development of export-oriented production;
d) application of advanced experience in production and management;
e) job creation.
On the territory of free economic zones acting:
a) international agreements to which Moldova is a party;
b) the law of the Republic of Moldova;
c) The Government's decisions;
d) regulations of the Free Economic Zone Administration, taken within its competence, not inconsistent with law.
In the free economic zone may be carried out following types of activity:
a) industrial production of goods for export, except alcohol and alcohol products;
b) sorting, packaging, marking and other similar operations with goods transited through the customs territory of the Republic of Moldova;
b1) external trade;
b2) transport activity;
c) auxiliary types of activities, such as utilities, storage, construction, catering, etc., necessary to conduct the above mentioned activities.
In order to achieve agreed objectives, for Free economic zones, were granted preferential arrangements to stimulate entrepreneurial activity as well as lot of other benefits, such as:
• Investment within the Free economic zones enjoy the legal protection of the state.
• Assets in free zones cannot be expropriated, nationalized, requisitioned and confiscated, except by court decision.
• After payment of taxes, fees and other charges imposed by the laws, for foreign investors are guaranteed the right to transfer outside the Republic of Moldova amounts in foreign currency, obtained by them as profits (dividends), resulting from the sales of all or part of property belonging to them or a share of a resident enterprise, as well as the profit from liquidation or reorganization of the enterprise.
• Special customs treatment:
- 50% discount from the tax rate fixed in the RM for the income obtained from export of goods (services) originating from free economic zones outside the territory of the RM;
- 25% from the tax rate fixed by the RM for the income obtained from other activities than export of goods (services);
- 3- year total exemption from income tax obtained from export of goods (services) originating from free economic zones outside the territory of the RM following investment of at least 1 million US dollars in the free zone;
- 5-year total exemption from income tax obtained from export of goods (services) originated from the free economic zone outside the territory of the RM following investment of at least 5 million US dollars in the free zone;
- VAT is not applied to the goods delivered to the free zone;
- Zero VAT rate for:
(1) goods (services) delivered to the free zone from outside the territory of the Republic of Moldova,
(2) goods (services) delivered from the free zone outside the territory of the Republic of Moldova,
(3) goods (services) delivered to the free zone from the rest of the territory of the Republic of Moldova,
(4) goods (services) delivered by residents of different free zones of the Republic of Moldova to each other.
- Exemption from excise payment for:
(1) goods introduced in the free zone from outside the Republic of Moldova,
(2) from other free zones,
(3) from the rest of the territory of the Republic of Moldova,
(4) goods originating from this zone and exported outside the territory of the Republic of Moldova.
- Exemption from payment of excise taxes for:
(1) deliveries of goods within the free zone,
(2) deliveries of goods from one free zone to another are not subject to excise duties.
Resident of free zone may be any individual or legal entity registered under the law as a subject of entrepreneurial activity in Moldova. In Moldova operating the following free economic zones:
Free economic zone International Port of Giurgiulesti;
Free economic zone International Airport of Marculesti;
Free economic zone Expo-Business-Chisinau;
Free economic zone Ungheni-Business;
Free economic zone Otaci-Business;
Free economic zone Taraclia;
Free economic zone Tvardita;
Free economic zone Valkanes; and
Free economic zone Balti.
AUTHOR: Viorel Furtuna, Attorney at Law
Copyright Furtuna Law Office
More information about Furtuna Law Office
View all articles published by Furtuna Law Office
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
