30 April 2016
Moldova: Market Profile
Major Economic Indicators
- Situated in Southeastern Europe and north of the Balkan Peninsula, landlocked Moldova is sandwiched between Romania and Ukraine. Its favourable location and good transportation infrastructure provides easy access to the EU and the former Soviet countries. The longest Pan-European Corridor IX (connecting Helsinki in Finland and Alexandroupoli in Greece) crosses Moldova from north to south, while the Corridor VII (connecting Passau-Germany with the Black Sea) passes through the Giurgiulesti Port on the Danube River.
- Historically, Moldova’s largest industries have been manufacturing, agriculture and food processing, textiles, apparel and footwear. Meanwhile, ICT, medicine, automotive and renewable energy are rather new and fast-growing sectors, with many foreign investors entering the market.
- Moldova has exceptional resources that are highly favourable to agricultural production. Its black, fertile soil (which occupies around 75% of the overall territory) is ideal for growing corn, fruit and vegetables. Traditionally, the agriculture and processing industry represented the main branches of the national economy, placing Moldova among the main suppliers of agricultural products and foodstuffs to the former Soviet market.
- It is a member of the Central European Free Trade Agreement (CEFTA) along with Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia. In addition, in June 2014 Moldova and the EU signed an Association Agreement (AA) and have applied it provisionally since September 2014. The AA introduces a preferential trade regime – the Deep and Comprehensive Free Trade Area (DCFTA) – which sets up a free-trade area between Moldova and the EU.
- To stimulate investment in priority sectors such as IT, a number of investment incentives has been offered by the Moldovan government. For instance, employees of IT companies may benefit from personal income tax (PIT) incentives for employment salaries earned from software companies, while the monthly social security contributions of IT companies are also capped. More information can be found at the Moldovan Investment and Export Promotion Organization (MIEPO).
- The inflows of foreign direct investment (FDI) to Moldova amounted to US$207 million in 2014. As of the end of 2014, China’s total stock of FDI to Moldova topped US$3.8 million, up from US$0.8 million in 2005. Hong Kong’s investment in Moldova is, however, far from significant.
Hong Kong’s Trade with Moldova
More information on the Belt and Road countries’ economic and investment environment, tax and other subjects that are important in considering investment and doing business are available in The Belt and Road Initiative: Country Business Guides.