R 221039Z JAN 09
FM AMEMBASSY CHISINAU
TO SECSTATE WASHDC 7535
DEPT OF TREASURY WASHINGTON DC
DEPT OF COMMERCE WASHINGTON DC
CIM NTDB WASHINGTON DC
INFO EUROPEAN POLITICAL COLLECTIVE

UNCLAS CHISINAU 000043 
 
 
STATE FOR EB/IFD/OIA AND EUR/UMB 
BUCHAREST FOR FCS 
KYIV FOR FCS 
SOFIA FOR FAS 
STATE PASS OPIC 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ETRD PGOV KTDB OPIC USTR MD
SUBJECT: MOLDOVA 2009 INVESTMENT CLIMATE STATEMENT 
(PART 1 OF 2) 
 
REF: 08 STATE 123907 
 
¶1.  Embassy Chisinau submits the Investment 
Climate Statement in response to reftel: 
 
Openness to Foreign Investment 
------------------------------ 
 
¶2.  Moldova continues to take small steps toward 
developing a stronger economy, reforming a 
cumbersome regulatory framework, combating 
corruption and adopting reforms aimed at improving 
the business climate.  Poor physical 
infrastructure, cumbersome licensing procedures, 
excessive permit requirements, and proliferation 
of fee-for-services to public authorities and 
commercial organizations all contribute to a 
business environment that remains among the most 
challenging in the region.  For example, in the 
Doing Business Dealing with Construction Permits 
indicator, Moldova ranks 158th out of 176 
economies and requires twice as many procedures as 
the average for OECD countries. 
 
¶3.  Corruption is a serious concern and 
"unofficialQ payments are widespread.  An American 
investor recently encountered numerous 
bureaucratic obstacles in attempting 
unsuccessfully to renew a license.  Government tax 
authorities conducted an extensive audit of the 
investor's company during the same period, in a 
reminder of the government's power to harass 
existing investors and keep them in suspense.  The 
company was found to be in compliance with tax 
laws but had to invest staff time and effort to 
comply with the audit.  The Embassy has also 
received reports of targeted actions by 
politically connected individuals against 
profitable businesses.  These measures include 
abusive inspections and opaque administrative 
sanctions.  Major foreign investors have also 
complained about the government's lack of 
willingness to engage in constructive dialogue on 
important issues affecting the business community. 
 
¶4.  After a prolonged recession in the 1990s, GDP 
has grown for seven straight years and inflation 
has decreased.   Moldova, which is consistently 
ranked among the poorest countries in Europe, 
relies heavily on investments, foreign trade, and 
remittances sent by Moldovans working abroad, for 
economic growth.  Remittances equaled 38 percent 
of GDP in 2007.  Recent years have seen an 
increase in foreign direct investment (FDI) as 
investors have taken advantage of the eastward 
expansion of the European Union (EU), which now 
borders Moldova following the January 1, 2007, 
accession of Romania.  The Government of Moldova 
(GOM) has made efforts to tackle some obstacles to 
investment, such as corruption and red tape. 
Furthermore, Moldova has declared European 
integration a strategic objective.  The country 
had an Action Plan with the EU that set out a 
roadmap for democratic and economic reforms and 
the harmonization of Moldovan laws and regulations 
with European standards. 
 
¶5.  Moldova has been a member of the WTO since 
2001 and has signed free trade agreements with 
countries of the former Soviet Union (CIS) and 
Southeast Europe.  In December 2006, Moldova 
joined the Central European Free Trade agreement 
(CEFTA).  Moldova benefits from an extended 
generalized system of preferences (GSP-plus) with 
the EU.  Starting in March 2008 the EU 
unilaterally granted  Moldova autonomous trade 
preferences, which expanded the duty-free access 
of Moldovan goods to EU markets.  Moldova also 
seeks to further deepen its preferential trade 
arrangements with European markets in the 
negotiation of a new EU agreement. 
 
¶6.  The GOM has created an adequate legal base, 
including favorable tax treatment for investors. 
Under Moldovan law, foreign companies enjoy the 
same treatment as local companies (national 
treatment principle).  The GOM views investments 
as vital for sustainable economic growth and 
poverty reduction. However, the amount of foreign 
direct investment (FDI) is far below the countryQs 
needs.  In attracting FDI, the GOM continues to 
add incentives.  In 2008 the GOM introduced zero 
tax on business profit reinvested in a business. 
 
¶7.  After years of low FDI due to a weak business 
climate, FDI inflows have been steadily increasing 
since 2004.  In 2007, FDI inflows amounted to USD 
537.7 million, representing almost half of total 
FDI stock since Moldova's independence in 1991. 
In the first nine months of 2008, FDI amounted to 
USD 627.4 million.  Recent years have seen large 
investments by Germany's Metro Cash & Carry, 
Germany's Draexlmaier, FranceQs Societe Generale, 
Austria's Grawe insurance company, AustriaQs 
Raiffeisen Investment, the Netherlands' Easeur 
Holding B.V., Italy's Veneto Banca, and the U.S. 
investment fund NCH Capital. 
 
¶8.  The GOM states on its website that one of its 
primary tasks is to attract investments and create 
a favorable business climate for all investors 
both foreign and local ones.  The GOM claims it 
taking measures to stimulate the business activity 
and improve the investment climate focusing on the 
country's geographical position, labor resources, 
fertile soils and participation in free trade 
agreements with the CIS countries and the EU. 
American investments in Moldova are primarily in 
the wine and food industry, cosmetics, 
telecommunications, banking and real estate. 
 
¶9.  Despite some GOM efforts to lower tax rates, 
strengthen tax administration, increase 
transparency and simplify business regulations, 
decision-making remains opaque and the application 
of regulations inconsistent.  Additionally, on 
occasion, government officials interfere in 
business decisions in favor of a protected 
individual, use governmental powers to pressure 
businesses for personal or political gain, and 
selectively apply regulations.  Since the judicial 
system remains weak, recourse to the courts does 
not guarantee citizens and foreign investors an 
impartial ruling on alleged governmental misdeeds. 
 
¶10. In December 2007 the Moldovan Parliament 
adopted the National Development Strategy (NDS). 
The NDS succeeded the Economic Growth and Poverty 
Reduction Strategy (EGPRSP) of 2004-2007.  The NDS 
was developed in broad-based consultations with 
stakeholders and civil society.  The NDS defines 
the GOM's developmental objectives and will guide 
the budgetary process over the period 2008-2011. 
Attracting FDI is critical to enhancing one of the 
pillars of the NDS, namely enhancing the 
competitiveness of the national economy.  This 
pillar focuses on policies to improve the business 
environment in order to encourage more investment 
activity, technological innovation and 
modernization; promote the expansion of the small- 
and medium-enterprise sector; increase labor 
productivity; improve state asset management; 
promote inclusion into international networks; 
address MoldovaQs deteriorating physical 
infrastructure; and reduce its energy 
vulnerability.  In 2006, after a five-year 
intermission, the GOM resumed financial relations 
with the IMF by signing a Memorandum of Economic 
and Financial Policies that included criteria for 
the improvement of macroeconomic indicators, 
infrastructure development and better state 
property management.  In coordination with the 
IMF, the GOM has introduced budgets with low 
deficits and made reducing inflation a goal.  In 
2008 the GOM held inflation under ten percent for 
the first time since 2002.  The memorandum expires 
in June 2009 and the GOM has not decided whether 
to renew its cooperation with the IMF. 
 
¶11.  The Constitution of the Republic of Moldova 
guarantees the inviolability of investments by all 
natural and legal entities, including foreigners. 
Key constitutional principles include the 
supremacy of international law, a market economy, 
private property, provisions against unjust 
expropriation, provisions against confiscation of 
property, and separation of powers among 
government branches.  The Constitution provides 
for an independent judiciary; however, government 
interference and corruption remain problems in the 
application of laws and regulations and in the 
impartiality of the courts. 
 
¶12.  Current investment legislation is based on 
nondiscrimination between foreign and local 
investors.  Moldovan law ensures full and 
permanent security and protection of all 
investments, regardless of their form, although 
application of the law remains spotty.  There are 
no economic or industrial strategies that have a 
discriminatory effect on foreign-owned investors 
in Moldova, and no limits on foreign ownership or 
control, except in the right to purchase and sell 
agricultural and forest land, which is restricted 
to Moldovan citizens. 
 
¶13.  International treaties and Moldovan law 
regulate business activity, including foreign 
investments.  Such laws include, but are not 
limited to, the Civil Code, the Law on Property, 
the Law on Investment in Entrepreneurship, the Law 
on Entrepreneurship and Enterprises, the Law on 
Joint Stock Companies, the Law on Small Business 
Support, the Law on Financial Institutions, the 
Law on Franchising, the Tax Code, the Customs 
Code, the Law on Licensing Certain Activities, and 
the Law on Insolvency. 
 
¶14.  The Law on Investment in Entrepreneurship 
came into effect on April 23, 2004, superseding 
the previous Law on Foreign Investment.  It was 
designed to be compatible with European 
legislative standards and defines types of local 
and foreign investment.  It also provides 
guarantees for the respect of investors' rights, 
non-application of expropriation or actions 
similar to expropriation, and for payment of 
damages in the event investors' rights are 
violated. 
 
¶13.  There is no screening of foreign investment 
in Moldova and legislation permits 100 percent 
foreign ownership in companies.  By statute, 
special forms of legal organizations and certain 
activities require a minimum of capital to be 
invested (e.g., Moldovan Lei (MDL) 5,400 for 
limited liability companies, MDL 20,000 for joint 
stock companies, MDL 15 million for insurance 
companies and MDL 50 million for banks).  The 
current rate of exchange is 10.4 MDL per USD. 
 
¶15.  The Law on Investmentin Entrepreneurship 
permits investment in all setors of the economy. 
Certain activities require abusiness license. 
 
¶16.  The Law on Entrepreneurship and Enterprises 
permits only state enterprises to participate in 
the following activities: 
- Some types of human and animal medical research; 
- Manufacture of orders and medals; 
- Production of symbols verifying payment of state 
taxes and fees; 
- Postal services (except express mail) and 
production of postage stamps; 
- Sale and production of combat and special 
military technical equipment, explosives (except 
gun powder) and all weapons; 
- State registry, tracking and technical inventory 
of real estate, restoration of ownership titles 
and administration of real estate; 
- Printing and minting of currency and printing of 
state securities; and 
- Certain scientific activities. 
 
¶17.  The GOM launched the first privatization 
process in 1994.  It has adopted three different 
privatization programs since that time, including 
privatization via National Patrimonial Bonds 
(foreigners were not allowed to participate); via 
cash transactions for both locals and foreigners; 
and via a program which involved only cash 
privatization.  The third program began in 1997- 
1998 and was extended to 1999-2000.  The program 
was later extended with some modifications to the 
end of 2006. Foreign investors have successfully 
participated in these privatizations.  In 2007, 
Parliament passed a new privatization law which 
introduced a new plan for privatizing and managing 
state-owned assets with a priority on economic 
efficiency.  The law has a list of assets not 
subject to privatization.  The GOM also adopted 
regulations on the privatization of state-owned 
non-agricultural land through commercial tenders. 
A list of assets subject to privatization has been 
approved. 
 
¶18.  The GOM has privatized most state-owned 
enterprises, and some sectors of the economy are 
almost entirely in private hands.  However, some 
large enterprises are still controlled by the 
government and their privatization has been either 
postponed indefinitely or abandoned altogether. 
The major government-owned enterprises are two 
northern electrical distribution companies, the 
Chisinau heating companies, the fixed-line 
telephone operator Moldtelecom, the state airline 
Air Moldova and the majority state-owned bank 
Banca de Economii.  After a period of abated 
privatization activity consisting of a selloff of 
residual governmental shares in companies 
originally sold during the mass privatizations of 
the 1990s, the GOM picked up efforts to sell a 
series of attractive assets.  In 2008, the GOM 
privatized the footwear manufacturer Zorile, the 
former Soviet military-industrial complex Mezon, 
and the hotel Codru.  Many have questioned the 
sales which sometimes appear to proceed at rates 
far below market price.  The GOM does not promote 
transparency in how it evaluates bids.  At times 
the announcements and very short deadlines for 
submitting make it difficult for potential bidders 
to arrange financing and comply with all the 
requirements for bids.  It may seem that only 
bidders with previous knowledge of the sale may be 
able to comply with bid requirements. 
 
¶19.  The Law on Investment in Entrepreneurship 
prohibits discrimination against investments based 
on citizenship, domicile, residence, place of 
registration, place of activity, state of origin 
or any other grounds.  The law provides for 
equitable and level-field conditions for all 
investors.  It rules out discriminatory measures 
hindering the management, operation, maintenance, 
utilization, acquisition, extension or disposal of 
investments.  Local companies and foreigners are 
to be treated equally with regard to licensing, 
approval, and procurement. 
 
¶20.  In recent years, the GOM made significant 
efforts to streamline business registration.  In 
the business registration procedure, the GOM 
simplified document submissions by implementing a 
"one window" approach.  This process reduced the 
number of documents and days necessary for 
business registration.  Limited on-line business- 
registration services were introduced in 2006 and 
¶2007.  In the business licensing procedure, the 
government simplified the process in 2002 by 
establishing one authority in charge of business 
licensing -- the Licensing Chamber -- and by 
reducing the number of business activities that 
require licensing.  The GOM plans to streamline 
the permit process for entrepreneurial activity 
and introduce elements of the "one-window" 
approach in the activities of public authorities, 
including their electronic interconnection to 
facilitate the exchange of electronic data. 
 
Currency Conversion and Transfer Policies 
----------------------------------------- 
 
¶21.  Moldova accepted Article VIII of the IMF 
Charter in 1995, which required liberalization of 
current foreign exchange operations.  There are no 
restrictions on the conversion or transfer of 
funds associated with foreign investment in 
Moldova.  After the payment of taxes, foreign 
investors are permitted to repatriate residual 
funds.  Residual-funds transfers are not subject 
to any other duties or taxes, and do not require 
special permission.  There are no significant 
delays in the remittances of investment returns, 
since domestic commercial banks have accounts in 
leading multinational banks.  Companies are not 
obliged to sell their hard currency earnings to 
the government.  Foreign investors enjoy the right 
to repatriate their earnings. 
 
¶22.  Generally, there are no difficulties 
associated with the exchange of foreign or local 
currency in Moldova.  However, shortages of 
Moldovan currency in the banking system have 
occurred in the past.  While the local currency, 
the Moldovan Leu (plural, Lei) (MDL), has been 
generally stable.  The Moldovan Leu has been 
strengthening in recent years owing to the 
weakness of the U.S. dollar, a massive surge in 
remittances, and changes in monetary policies. 
The Leu appreciated from MDL 11.3 to 10.4 per U.S. 
dollar over the course of 2008. 
 
¶23.  The U.S. Embassy has no information on 
complaints from U.S. investors regarding 
converting or remitting funds associated with 
investments in Moldova. 
 
Expropriation and Compensation 
------------------------------ 
 
¶24.  The Law on Investment in Entrepreneurship 
states that investments cannot be subject to 
expropriation or measures with a similar effect. 
An investment may be expropriated only if all 
three of the following conditions are present: 
the expropriation is done for purposes of public 
utility, is not discriminatory, and is done with 
just and preliminary compensation.  If a public 
authority violates an investor's rights, the 
investor is entitled to reparation of damages. 
The compensation will be equivalent to the real 
extent of the damage at the time of occurrence. 
The public authorities concerned will pay 
compensation for any damage caused, including any 
lost profits.  Compensation must be paid in the 
currency in which the original investment was made 
or any other convertible currency, if the 
investment was made in a convertible currency. 
Public authorities may provide investors 
additional guarantees beyond those described in 
the law. 
 
¶25.  The government has given no evidence of 
intent to discriminate against U.S. investments, 
companies, or representatives by expropriation or 
of intent to expropriate property owned by 
citizens of other countries.  No particular 
sectors are at greater risk of expropriation or 
similar actions in Moldova. 
 
¶26.  Moldovan law restricts the right to purchase 
agricultural and forest land to Moldovan citizens. 
Foreigners may become owners of such land only 
through inheritance and may only transfer the land 
to Moldovan citizens.  In 2006, Parliament further 
restricted the right of sale and purchase of 
agricultural land to the state, Moldovan citizens 
and legal entities without foreign capital. 
However, foreigners are permitted to buy all other 
forms of property in Moldova, including land plots 
under privatized enterprises and land designated 
for construction.  Moldovan-registered companies 
with foreign capital are known to own agricultural 
land, by means of loopholes in the previous law. 
There have been some reports that the newer limit 
on foreign ownership of agricultural land was used 
in lawsuits as an argument against foreign 
companies.  The only option available to 
foreigners who desire to obtain agricultural land 
in Moldova at this time is to rent agricultural 
land. 
 
¶27.  Since 2001, the GOM has cancelled several 
privatizations, citing the failure of investors to 
meet investment schedules or irregularities 
committed during privatization.  While the 
government agreed to repay investors in such 
disputes, payment of compensations was delayed. 
Often, investors have had to apply to the European 
Court of Human Rights (ECHR) to enforce payment of 
compensation from the Moldovan government.  The 
GOM has been generally compliant with the ECHR 
rulings involving foreign businesses. 
 
¶28.  Investors should be aware that Moldovan 
territory east of the Nistru (Dniester) River is 
under the control of a separatist regime that does 
not recognize the sovereignty of the legitimate 
Moldovan authorities in Chisinau.  These 
separatists have declared a self-proclaimed 
"Dniester Moldovan Republic," commonly known as 
"Transnistria."  The U.S. Embassy regularly warns 
potential investors who are considering doing 
business in Transnistria that the Embassy is 
extremely limited in its ability to provide any 
assistance there, including consular and commercial 
services.  Also, the GOM has indicated that it will 
not recognize the validity of contracts for the 
privatization of firms in Transnistria that are 
concluded without the approval of the appropriate 
Moldovan authorities.  In March 2006, Ukraine imposed 
new customs regulations under which Transnistrian 
companies seeking to engage in cross-border trade 
had to register in Chisinau.  Despite initial 
protests by the local regime, most of 
TransnistriaQs large companies subsequently 
registered with Moldovan authorities. 
 
¶29.  In 2000, a U.S. company claimed that it 
exported packing equipment and other capital goods 
to a privatized Transnistrian factory, only to be 
forced out later by the local factory manager 
working in collusion of local authorities.  The 
company's representatives reported that they had 
been harassed by Transnistrian authorities until 
they decided that the safety of their company's 
employees could not be guaranteed and the company 
decided to pull out. 
 
Dispute Settlement 
------------------ 
 
¶30.  Moldova has a record of disputes over past 
privatizations involving foreign investors.  Party 
of Communists (PCRM) officials, when in opposition 
prior to 2001, were critical of what they regarded 
as "sweet-heart deals" in many privatizations. 
Consequently, once in power, the first government 
appointed by the PCRM in 2001 increased its 
scrutiny of the privatization process, including 
previously concluded contracts.  The GOM cancelled 
some privatizations because of alleged 
irregularities in the privatization procedures or 
the failure of investors to meet an investment 
timetable.  In order to ensure the predictability 
and credibility of the government's privatization 
policy, the GOM has attempted to introduce a 
statute of limitations of three years on the 
investigation of privatization files.  There have 
been reports in recent years from companies that 
they had become targets of investigations by the 
Center for Combating Economic Crimes and 
Corruption (CCECC), while others complained of 
bureaucratic red tape or arbitrary decisions made 
by government agencies, police or tax authorities. 
 
¶31.  As a result of negotiations connected with 
Moldova's accession to the WTO, modern commercial 
legislation was adopted in accordance with WTO 
rules.  In recent years the GOM has taken opaque 
measures, which violate WTO commitments, to 
protect domestic producers from foreign 
competitors.  For example, the GOM has introduced 
an environmental tax on bottles and other 
packaging of imported goods, while not taxing 
bottles and packaging produced in Moldova.  The 
Embassy interprets this measure to be a non-tariff 
barrier to trade.  The Ministry of Economy and 
Trade stated it had informed the WTO of the 
measure and not received a reply. 
 
¶32.  In 2003, the government restructured the 
judiciary by eliminating the lower-tier of 
appellate courts (called tribunals) and the Higher 
Court of Appeals.  The judiciary now consists of 
lower courts (i.e., trial courts), five courts of 
appeals, and the Supreme Court of Justice. 
Moreover, a separate set of courts covering the 
judicial settlement of economic/trade-related 
litigations was created.  This quasi-separate 
court system consists of the District Economic 
Court as a trial court, the Economic Court of 
Appeals, and the Supreme Court of Justice, whose 
jurisdiction includes the adjudication of economic 
litigations.  Courts are nominally independent 
from government interference.   However, the 
Ministry of Justice controls their administration 
and budget, and reports of interference in law 
suits by influential figures are commonplace.  In 
January 2008, a new department was created under 
the Ministry of Justice - the Judicial 
Administration Department Q which deals with all 
judiciary-related administrative and financial 
matters.   Moldovan courts suffer from low levels 
of efficiency, independence and citizen trust. 
During 2008, several lawyers representing Moldovan 
nationals at the European Court of Human Rights 
claimed that some judges are loyal to the 
government and that government officials influence 
their decisions. 
 
¶33.  The GOM accepts binding international 
arbitration of investment disputes between foreign 
investors and the state.  By law, investment 
disputes can be solved through Moldovan courts or 
arbitration.  In the event of ad hoc arbitration, 
the law requires following United Nations 
Commission on International Trade Law (UNCITRAL) 
rules, arbitration rules of the Paris 
International Chamber of Commerce (ICC) of January 
1, 1998, and other rules, principles and norms 
agreed upon by the parties. 
 
¶34.  Moldova is a signatory to the Convention on 
the International Center for the Settlement of 
Investment Disputes (ICSID - Washington 
Convention) and the New York Convention of 1958 on 
the Recognition and Enforcement of Foreign 
Arbitral Awards.  Moldova is also a party to the 
Geneva European Convention on International 
Commercial Arbitration of April 21, 1961, and the 
Paris Agreement relating to the application of the 
European Convention on International Commercial 
Arbitration of December 17, 1962.  Moldova has 
also ratified various trade agreements 
establishing bilateral investment protection with 
35 countries (see paragraph 73), including with 
the United States.  Moldova enjoys normal trade 
relations with the United States. 
 
Performance Requirements/Incentives 
----------------------------------- 
 
¶35.  Any incentives are applied uniformly to both 
domestic and foreign investors.  Unlike the 
previous law, the new Law on Investment in 
Entrepreneurship no longer protects new investors 
from legislative changes for ten years.  However, 
the new law left in effect past privileges and 
guarantees granted to foreign investors according 
to the old Law on Foreign Investment.  One such 
privilege provides for exemptions from customs 
duties on imports until April 23, 2014, if the 
imports are used to manufacture goods bound for 
export. 
 
¶36.  Effective January 1, 2008, a zero percent 
income tax rate on re-invested corporate profits 
entered into force as part of a GOM initiative of 
"economic liberalization."  The current Moldovan 
Tax Code also provides for a series of corporate 
income tax breaks.  Many of these tax breaks were 
rendered redundant when the new zero tax rate was 
introduced.  Companies with investments of more 
than USD 250,000 in charter capital enjoy a 50 
percent exemption from income tax for five 
consecutive years.  Companies with investments 
exceeding USD 2 million in charter capital enjoy 
full exemption from income tax for three 
consecutive years.  Companies are eligible for 
such exemptions, if at least 80 percent of their 
income-tax payments were reinvested in production 
development or in national or sectoral development 
programs.  For a minimum investment of USD 5 
million, a company is exempt for three years from 
income-tax payments, if it reinvests locally 50 
percent of what it would otherwise have paid in 
income tax.  A USD 10 million investment requires 
only 25 percent reinvestment of income-tax payment 
for a full three-year exemption from income tax. 
Four-year exemptions are available for a USD 20 
million investment with 10 percent reinvestment 
and for a USD 50 million investment with zero 
percent reinvestment.  Furthermore, upon 
expiration of these exemptions, eligible companies 
investing an additional USD 10 million can enjoy 
tax exemptions for an extra 3-year period.  Also, 
fixed assets contributed in-kind to the charter 
capital are exempted from the value-added tax and 
customs duties.  Full income tax exemptions may 
also be enjoyed by small businesses (three years), 
software developers (five years), agribusiness 
(five years), and scientific research and 
innovations (unspecified).  Commercial banks and 
microfinance organizations are tax exempt on 
income derived from loans with maturities over 
three years.  Other tax exemptions and deductions 
are also available according to the Tax Code.  The 
loss carry-forward period was raised from three to 
five years. 
 
¶37.  No formal requirements exist for investors to 
purchase from local sources or to export a certain 
percentage of their output.  Informally, however, 
such requirements, often decided in an arbitrary 
and non-transparent basis, have been imposed by 
Moldovan authorities in some industries to serve 
short-term goals. 
 
¶38.  No limitations exist on access to foreign 
exchange in relation to a company's exports. 
There are no special requirements that nationals 
own shares of a company.  Both joint ventures and 
wholly foreign-owned companies may be set up in 
Moldova.  However, individual privatization 
projects in sectors such as energy, 
telecommunications, wine, and tobacco may have 
specific performance requirements.  In a previous 
unsuccessful effort to privatize a power plant in 
the northern part of Moldova in 2001, the GOM 
required bidders to have experience 
with electricity distribution activity in free 
market conditions and to have work experience in 
developing countries.  In 2002 the GOM attempted 
to privatize the monopoly telephone company, 
Moldtelecom.  GOM required bidders to have 
experience servicing at least 1,000,000 customers, 
an annual turnover at least USD 150,000,000, asset 
values of at least USD 300,000,000 and experience 
in developing countries. 
 
¶39.  Foreign and local investors are nominally 
treated the same. 
 
¶40.  The government does not impose "offset" 
requirements on procurements.  Moldovan law allows 
investments in any area of the country in any 
sector, provided that national security interests, 
anti-monopoly legislation, environmental 
protection, public health, and public order are 
respected. 
 
¶41.  Enforcement procedures for performance 
requirements to enjoy tax incentives are described 
in the Tax Code and related governmental decisions 
and Ministry of Finance instructions. 
 
¶42.  Foreign investors are required to disclose 
the same information as local ones.  Moldova has 
no discriminatory visa, residence, or work-permit 
requirements inhibiting foreign investors' 
mobility in Moldova.  However, the government 
administers a quota system limiting the number of 
available residence permits.  The Embassy receives 
regular complaints that the issuance process for 
work and residence permits is unnecessarily 
complicated and seemingly arbitrary. 
 
¶43.  Moldova has commercial relations with over 
100 countries.  It has a liberal commercial 
regime.  According to the Tax Code, Moldovan 
exports are exempt from value added tax.