- Choosing a legal form , company`s name and business activities
- Required Documents
- Shared capital and registration cost
- After Registration
- Accounting & banks
- Licensing & authorizations
- VAT registration and employs
Choosing a legal form , company`s name and business activitiesThe process of creation of the own business must begin with the choosing of its organizational-legal form. The potential entrepreneurs should draw attention on aspects regarding different organizational-legal form: advantages and disadvantages, in process of choosing the best business form, must possess sufficient information about what documents should be submitted when is registering a company and about the procedure of registration.
According to the legislation of the Republic of Moldova, the entrepreneurship can be practiced under the following organizational-legal forms:
a) Individual Enterprise (IE);
b) General Partnership (GP);
c) Limited Liability Partnership (LLP);
d) Joint Stock Company (JSC);
e) Limited Liability Company (LLC);
f) Co-operative (Coop).
More information about the pluses and minuses of each form can be find reading the tutorial with the topic: How to Choose the Right Legal Entity for Your Business In Moldova.
However, LLCs (SRL) are much easier to register and easier to operate. And that is why this form is the most preferable choice for newly registered companies.
There are no restrictions for foreign individuals and companies to register a company in Moldova. The companies can be registered in common with Moldovan co-founders or exclusively by foreign founders.
The State registration authority of businesses in Moldova is Moldovan State Registration Chamber (SRC). SRC registers all business entities incorporated in Moldova. The information about location, work hours and contacts can be accessed visiting the official SRC site: http://cis.gov.md/content/contacte
Person(s) entitled to apply for registration are the founders or duly authorized representative(s) of founders.Before registering the company, the founders should prepare several names for the future company, because there can be situations when the chosen name may be occupied. There is an option to reserve the name of the future company. The Law allows the booking of the name, under which an individual or legal entity intends to register a company, for a term up to 6 months. Therefore, no other third party will be allowed to register a company under the same name during the booking period.
Additional, when registering the company there have to be mentioned in founding documents the business activities that the future company is going to perform. Therefore, it is important to choose the business activities before going to State Register Chamber. The business activities of the future company must be selected from the official classificatory of business activities CAEM rev.2. The official classificatory of business activities CAEM rev.2 can be accessed visiting: http://www.statistica.md/pageview.php?l=ro&idc=385
Required DocumentsFor founders – individuals:
- Identification documents of the company's founders;
- Identification documents of the company's future administrator. Note: In case of foreign citizens temporarily staying in Moldova (up to 90 days) - valid national passports with the stamp of the Border Service on the entrance to the territory of Moldova. The foreign citizens permanently residing in Moldova should present a valid residence permit.
- an extract from the commercial registry of home jurisdiction (containing all major information about the founding company);
- copies of the constitutive acts and of the statute;the resolution on formation of the company in the Republic of Moldova issued by the founding local/foreign company containing the information and documents regarding the name, future manager (administrator), business objects, the size of share capital and legal address of the future company.
- the information about the company's founders;
- purposes of the company's activity;
- the size of the share capital;
- the amount of the founders' shares and the order of the contribution;
- the cost of the property - in case the share capital is constituted in kind;
- the company's legal address;
- the structure, responsibilities, competence, formation and the order of functioning of the managing bodies;
- the modality of company's representation;
- the reasons and the order of the company's reorganization or liquidation;
- information regarding branches and representative offices;
- other information that do not contradict the legislation.
Administrator & share capitalThe administrator of the future company can be a Moldovan citizen or a foreign national with no previous criminal records.
The size of the share capital shall be determined by founders and is fixed in statute, therefore the size of the share capital can be established even in size of 1 lei. The shareholders’ contributions to the share capital of LLC’s may be both cash and in-kind. In situations when the share capital is constituted in kind (e.g. real estate or technological equipment, is introduced as the founders` contribution into the share capital) than an evaluation act signed by an authorized valuer have to be provided.The fees for registering companies with the SRC are in total amount around 1600 lei (ordinary term of registration), and include the following services performed by SRC:
- State registration;
- Name verification;
- Incorporation document preparation (editing);
- Certification of signatures by the State Registrar;
- Certification of the statutory documents;
- Notary fees.
The SRC provides options for expedited services in which company registration can be completed within 4 hours (same day). In case of an urgent registration the fees can increase 4 times. Apart from the registration cost, the applicant shall order a stamp, the cost of which may vary between 200 lei and 450 lei (the stamps have been eliminated according to law, but as of today is steel impossible to operate without using stamps). The detailed information about registration costs and fees can be accessed visiting the official SRC site: http://cis.gov.md/content/tarife
The standard term for registration of the company is 24 hours (2 business days). The applicant may apply for urgent registration procedure. The shorter registration procedure is of 4 hours.
After RegistrationFinally, a business entity is considered to be registered once it is issued with the extract of registration and other corporate founding documents. An unique state identification number IDNO is attributed to each entity at the date of its registration. The IDNO is a numeric code, consisting of 13 numbers, attributed to all legal entities upon state registration and is destinated for their identification within informational system of the Republic of Moldova. The identification number (IDNO) is also considered as tax code of the business entity. The IDNO is inserted in the extract and in the constitutive acts.
After it has been registered by the State Registration Chamber, the newly business entity automatically is register at Fiscal, Statistical, Medical Mandatory Insurance and Social Security authorities.
Therefore, the entrepreneur doesn`t need:
- to register as payer of the state social security contributions with the territorial subdivision of the National Social Security House where its legal address is situated;
- to register the newly created company to National Health Insurance Company;
- to register the newly created company to Statistical body.
After it has been registered by the State Registration Chamber, the newly business entity automatically is register at Fiscal, Statistical, Medical Mandatory Insurance and Social Security authorities. Therefore, the entrepreneur doesn`t need:
to register as payer of the state social security contributions with the territorial subdivision of the National Social Security House where its legal address is situated;
to register the newly created company to National Health Insurance Company;
to register the newly created company to Statistical body.
Accounting & banksAccording to the law, all legal entities are required to keep accounting and to report to state authorities. Even if the company does not operate (it is not active from economic point of view during a period of time) there have to be submitted reports to state authorities. In case the company does not report, the company will be penalized. Therefore, after setting up the company, one of the most important questions is to contract a professional accountant or an accounting firm.
Opening a bank accountIn order to operate, the company has to open an account at any commercial bank. The procedure of opening a bank account is relatively simple and is performed usually within 3 days. For working with local clients and suppliers, the company has to open a lei account (because payments in foreign currency among Moldovan residents in Moldova are prohibited). For working with international clients and suppliers there can be opened accounts in foreign currencies. Moldovan two-tiered banking system consists of two levels:
- the National Bank of Moldova (NBM);
- Commercial banks. The National Bank of Moldova exercises regulatory powers in the monetary, currency and financial domains, and acts in the capacity of State’s bank, bank of banks, and monetary and currency regulator. The creation, operation and termination of commercial banks are regulated and strictly supervised by the NBM. As of today, 11 commercial banks operates in Moldova namely:
- B.C. Moldova-Agroindbank S.A.
- B.C. Victoriabank S.A.
- B.C. Mobiasbanca - Grouppe Societe Generale S.A.
- B.C. Fincombank S.A.
- B.C. EximBank - Gruppo Veneto Banca S.A.
- B.C. ProCredit Bank S.A.
- B.C. Moldindconbank S.A.
- B.C. Energbank S.A.
- B.C. Eurocreditbank S.A.
- Banca Comerciala Romana Chișinau S.A.
- B.C. Comertbank S.A.
The commercial banks offer different opportunities for using online banking systems. After the bank account is opened, the founder has to deposit the share capital. The deposited money as share capital can be used for different purposes (purchasing office supplies, paying salaries etc.). There is no obligation to keep the money (deposited as share capital) in bank accounts
Licensing & authorizationsThe newly established company has to verify if the future activities to be performed need a special license. Certain business activities performed by a company are subjected to a special license according to the law. The exhaustive list of such business activities is strictly regulated by law. As of today, there is a list of activities requiring special license, including but not limited to auditing activity, construction of buildings, banking and foreign currency exchange activities, insurance activity, activity of professional participants on security market, etc. For around 65% of business activities the license is issued by the Licensing Chamber. For regulated market (around 35% of licensed activities), such as banking, insurance, energy and communications the licenses are issued by the corresponded market regulatory authorities. More information about licensed activities can be found by reading the tutorial with the topic: Obtaining Licenses and Public Procurements.
Local authorizationsAll legal entities involved in performing commercial activity, including trade of goods, rendering of services and performance of works, have the obligation to obtain an authorization from the local public authority. Such authorization have be obtained prior to the start of the business activity. The list of required authorization include:
- Functioning authorization - is issued by local authorities in order to perform commercial activity, usually by Trade and Food Departments of City Hall. More information about issuing functioning authorizations can be accessed visiting: http://www.chisinau.md/doc.php?l=ro&id-c=511&id=1163http://comert.chisinau.md/
- Sanitary Operation Authorization – issued for activities of sale goods and services that may have an impact on public health. More information about issuing Sanitary Operation Authorization can be accessed visiting: http://cspchisinau.mdhttp://www.ansa.gov.md http://www.lex.justice.md/md/331169/
- Outdoor Advertising Authorization – issued for installing billboards or displaying the name of the company by inscriptions and images on the building where the company performs its activity. More information about issuing Outdoor Advertising Authorization can be accessed visiting: http://www.chisinau.md/doc.php?l=ro&idc=511&id=11575
VAT registration and employeesThe registration as VAT payer may be mandatory and voluntary.
Any legal entity carrying out business activity is required to register as a VAT payer if during any 12 consecutive months such legal entity performs taxable supplies of goods/services exceeding the threshold of 600.000 lei, with exception of VAT-free supplies.
A business entity has the voluntary right to register as VAT payer if the entity anticipates to supply VAT taxable goods and services.According to the law every company is obligated to notify the National Health Insurance Company on any employment/dismissal or other change in the list of employees by the 7th day of the month following the month in which the employment/dismissal or other change took place. This procedure can be performed on paper or online (after receiving the authorization).
The same time the new established companies must approve a document named Personnel List (specifying the job names and the salaries) during the first month from the state registration. Within 2 months from the date of the approval of Personnel List, the company has to present it (written or electronic) to territorial Labor Inspection, in which jurisdiction is located the entity.