Opportunities in Moldova

1
Opportunities in Moldova
Country presentation
Thursday, 13 June 2019
CONFIDENTIAL AND PROPRIETARY Any use of this
material without specific permission from State
Chancellery of Moldova is strictly prohibited
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Republica Moldova în constiinta publica româneasca
2010, Cercetare realizata de Funda?ia Soros
Romania, programul Bridging Moldova

• 7,6 au avut o experien?a directa, au efectuat o
  vizita în RM

Republica Moldova este putin cunoscuta

• 82 considera ca nu sunt deloc sau ca ar fi pu?in
  informati despre Republica Moldova

• 49,1 afirma ca le place mult felul în care
  vorbesc locuitorii din Republica Moldova

Graiul mioritic este pe plac

• 2,3 au declarat ca N-am înteles aproape nimic
  din ce mi-a spus

• 72 considera ca Republica Moldova este o tara
  europeana si ar trebui sa devina membra a Uniunii
  Europene

Tara cu valori Europene

• Topul caracteristicilor atribuite locuitorilor
  din Republica Moldova de catre români se
  situeaza
• 23 muncitori si harnici
• 18 uniti
• 17 toleranti

Studiul a fost realizat pe un e?antion de 1547
de persoane, reprezentantiv la nivelul popula?iei
adulte a României, cu o marja de eroare de
/-2,5. Culegerea datelor s-a facut în perioada
noiembrie-decembrie 2010.
SOURCE Source
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What is Moldova?
Moldova is a bridge between the EU markets and
the growing CIS markets
An open economy with on-going negotiations for EU
integration

• Open economy
• Moldova is the only country with
• EU autonomous trade agreements
• CIS countries free trade agreements
• International Centre for Settlement of Investment
  Disputes (ICSID) member
• World Trade Organisation (WTO) member

Population 4 million Average monthly wage EUR
190 Multilingual population 70

• EU integration
• No visa requirements for EU nationals
• Ongoing negotiations on EU-Moldova Association
  Agreement and DCFTA

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Why is Moldova an attractive destination?

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Lowest wages in Europe for qualified,
multilingual workforce
Globally attractive fiscal regime

• Average monthly salary 190 for relatively
  qualified professionals
• Virtually all population is bilingual
  (Russian/Romanian), with many speaking English,
  French, Italian, Spanish, German

• Attractive corporate tax rate (0 in 2011,
  expected 10 in 2012)
• Extensive network of double taxation treaties
• 10-year protection against any changes in the law
  that adversely affect FEZ1 residents

3
4
Relatively stable macroeconomic indicators
Access to EU and CIS growth markets (500m 275m
775m customers)

• Stabilisation of exchange rate to Euro and
  US-dollar
• IMF agreement

• Moldova is the only CIS country with autonomous
  trade agreements with the EU and FTAs with CIS
  countries
• 3 truck-days away to the port of Rotterdam
• International port access

1 Free Economic Zones
5
Average wage in Moldova is lower than
neighbouring countries and lower than in China,
for educated, multilingual workforce
1.0
1
SOURCE National Bank of Moldova (2010) Chinese
Government (July 16, 2010 data release)
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1
Average wage in Moldova is lower than
neighbouring countries
2.0/h
1.1/h
4.0/h
4.0/h
7
Moldova has relatively qualified labour force
1.0
1
Educational attainment of the population aged 25
years and older, latest year available
Education level, of population with upper
secondary education and above
SOURCE UNESCO Institute for Statistics (April
2011)
8
Globally competitive corporate tax rate in Moldova
1.0
2
Corporate tax rate is currently 0 expected
10-12 in 2012 and beyond
SOURCE National Bank of Moldova (2010) OECD Tax
Database (2010) World Bank Paying Taxes (2010)
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Stabilisation of exchange rate for the last
several years
1.0
3
SOURCE National Bank of Moldova
10
Access to European and CIS markets
1.0
4
m
Population, million

• EU
• Autonomous Trade Preferences (ATP) in its trade
  with the European Union, extended until 2015
  (beyond likely to be replaced by DCFTA)
• Central European Free Trade Agreement (CEFTA),
  2006

• CIS
• Bilateral Free Trade Agreements (FTAs) with all
  CIS countries, except Tajikistan
• Organisation of the Black Sea Economic
  Cooperation, SECI, GUAM and other regional
  economic initiatives

275m
500m

• World
• Member of the World Trade Organisation (WTO),
  2001
• International Centre for Settlement of Investment
  Disputes (ICSID), 2011

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Where and how to invest in Moldova?

• Agriculture, wine food processing
• Free access on EU market w/o customer duties and
  tariffs for most products
• Fertile soil for corn, fruits and vegetables

• Direct investments
• Direct investments in production assets are
  supported by the Government through tax
  incentives and other facilities
• Free economic zones
• Industrial parks

• Business process outsourcing/ICT
• Call centres and back-offices to leverage
  multi-lingual, highly educated, low wage
  workforce potential

• Privatisation programme
• Plans to privatise several state-owned companies
  in 2011-2012, including
• Telecom incumbent
• Savings bank
• Airports
• Pharmaceutical company
• Electricity distribution network
• Power generation (CHPs)
• Airlines

• Assembly and manufacturing
• Assembly of items, mostly requiring labour (e.g.,
  car parts electronics)

• Energy
• Expansion of power transmission capacity
• Develop traditional and alternative energy
  sources (e.g., small-scale biomass, wind)

• Public Private Partnerships
• Public services and infrastructure are
  underdeveloped, while public financial resources
  for their rehabilitation and modernisation are
  insufficient
• The Government promotes the PPP concept

• Transport
• Roads rehabilitation and maintenance
• Public transport

• Municipal utilities
• Construction/modernisation of municipal water and
  sewage systems
• Waste management

Specific investment opportunities to be developed
jointly with the Investment Support Team
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Free Economic Zones Predefined attractive
conditions

• Why free economic zones?
• Exemption from VAT
• Exemption from customs duties and excise duties
  on goods imported into the FEZ and subsequently
  exported
• 0 corporate tax rate
• 10-year protection against adverse changes in
  legislation
• Infrastructure in place (transport, water, gas,
  electricity)
• Examples
• Draexlmaier Automotive
• Lear Corporation
• Danube Logistics

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Further contacts
,
Investment support team
Investors willing to share their experience in
Moldova
Full-time Investment Support Team
Financial Institutions
Dumitru Dediu, Advisor to Prime-Minister dumitru.d
ediu_at_gov.md 373.79.273787 or 31.653.855.876
Telecommunications
Doina Cebotari, Advisor to Prime-Minister doina.ce
botari_at_gov.md 373.798.487.09 or 373.681.099.74
Leadership team
Industry
Vladimir Filat Prime-Minister of the Republic of
Moldova
Valeriu Lazar Deputy prime-minister Minister of
Economy of the Republic of Moldova
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Supportingexhibits
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Industrial parks Predefined attractive
conditions

• Why industrial parks?
• Free of charge change of the category of land
  with agricultural destination
• Right to privatize the public property land
  associated with constructions, at the land
  normative price
• Optimization of state controls and minimization
  of bureaucratic barriers for investors

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Source countries of foreign direct investments
1994-2009
BACKUP
SOURCE National Bureau of Statistics, FDI in
Moldova for the period 1994-2009 (BNP Paribas
Presentation, EU-Moldova Forum, 2011)
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Main sectors of the economy
2009, volume of production
SOURCE NBS (2009)
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Examples of major Energy Infrastructure Projects
Sector
Project
Investment, m
Details
Gas pipelines

• 19

• Gas pipeline with Romania

• Build Ungheni-Iasi gas pipeline

Power inter-connection capacity

• 25

• Interconnection with Ukraine (121.5 km)

• OHPL 330 kV (2nd line), Novodnestrovsc-BaltiCapac
  ity 955 MVA

• 57

• OHPL 400 kV Balti-SuceavaCapacity 1715 MVA

• Interconnection with Romania (115 km)

• 44

• OHPL 400 kV Straseni-IasiCapacity 1715 MVA

• Interconnection with Romania (100 km)