Moldova flag Moldova: Investing in Moldova

Foreign direct investment (FDI) in Moldova

FDI in Figures

According to the World Investment Report 2023 by UNCTAD, FDI inflows to Moldova amounted to USD 587 million in 2022, up from USD 410 million in the previous year. The total stock of FDI was estimated at USD 4.9 billion in the same year, around 34% of the country’s GDP. The majority of FDI in Moldova comes from neighboring European countries, particularly Romania. Other important sources of FDI include Cyprus, Russia, and Ukraine. The main sectors that attract FDI in Moldova are manufacturing, financial intermediation, and trade. In recent years, there has also been a growing interest in the country's IT sector, which has the potential to become a key driver of economic growth and development. The National Strategy for Investment Attraction and Export Promotion identified seven priority sectors for investment and export promotion: agriculture and food, automotive, business services such as business process outsourcing (BPO), clothing and footwear, electronics, information and communication technologies (ICT), and machinery.

Foreign direct investment in Moldova remains low, and the economic and political environment is not particularly attractive to investors. The country faces several challenges, including the need to fight corruption, improve the investment climate, remove obstacles for exporters, convert remittances into productive investments and develop a reliable financial sector. Administrative and judicial reforms are also needed. On the other hand, the country could be a bridge between Western and Eastern European markets, and foreign companies enjoy national treatment in most sectors. Moldova is cost-competitive, it offers tax breaks to investors and has 7 free economic zones; moreover, foreign investors are permitted to repatriate residual funds. With "Law 174/2021," the Moldovan Parliament approved the rules on control of investments into sectors important for the security of the state, including energy, water, transport, AI, aviation security activities, management of airports and other infrastructures, weapons, etc. Prior to investing in a relevant sector, any potential investor is obliged to obtain approval from the Council for Promotion of Investment Projects of National Importance. Moldova has established free trade agreements with 43 countries, including CIS member states, CEFTA nations, Turkey, and the United Kingdom. Additionally, Moldova has concluded FTAs with China and the European Free Trade Area (EFTA). Moldova ranks 60th among the 132 economies on the Global Innovation Index 2023 and 99th out of 184 countries on the latest Index of Economic Freedom.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 150410587
FDI Stock (million USD) 4,7104,7814,901
Number of Greenfield Investments* 559
Value of Greenfield Investments (million USD) 13469244

Source: UNCTAD, Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Country Comparison For the Protection of Investors Moldova Eastern Europe & Central Asia United States Germany
Index of Transaction Transparency* 7.0 7.5 7.0 5.0
Index of Manager’s Responsibility** 4.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 8.0 6.8 9.0 5.0

Source: Doing Business, Latest available data

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

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What to consider if you invest in Moldova

Strong Points
Moldova's main strong points in terms of attracting FDI are:

- Skilled and low-cost labour;
- Privatizations of a number of companies underway;
- Investor-friendly taxes and duties;
- Agricultural potential (wine, dried fruits, vegetables, sunflower, wheat).
Weak Points
The main weak points of the country impeding FDI incude:

- high level of poverty;
- an important size of its informal sector;
- dependence on remittances from expatriate workers;
- political instability and social tensions;
- high level of corruption, weak governance and clientelism;
- the secessionist aspirations of Transnistria.
Government Measures to Motivate or Restrict FDI
Moldova, consistently ranked as one of the poorest countries in Europe, relies heavily on investment, foreign trade and remittances for its economic growth.

The current Law on Investment in Entrepreneurship came into effect in 2004. It was designed to be compatible with European legislative standards and defines types of local and foreign investment. It also provides guarantees for respect of investors' rights, non-application of expropriation or actions similar to expropriation, and for payment of damages in the event of investors' rights being violated. The law permits investment in all sectors of the economy, while certain activities require a business license.

The government promotes the following industries as attractive for foreign investment through the Moldovan Investment and Export Promotion Organization (MIEPO): agriculture, automotive, ICT, medicine, renewable energy and textiles. Description of the sectors can be found on the MIEPO website.

The government established a number of mesures in order to promote investments in the country. Companies investing USD 250,000 can benefit from tax deduction for the first 5 years. Income tax has also been lowered. The government promotes equality amongst international and local investors and the fact that there is no limit to capital invested.

Free  economic  zones  (FEZ)  are  parts  of  the  customs  territory  of Moldova,  separated  economically,  and  strictly  bounded  on  the  entire  area,  where  certain  types  of entrepreneurial  activities  are  allowed   on   preferential   conditions   to   local   and   foreign   investors. There  are  seven  Free  Economic  Zones  (FEZs)  in  Moldova  at  present.

For more information, refer to the Invest in Moldova website.

Bilateral investment conventions signed by Moldova
The Republic of Moldova has signed numerous Bilateral Investment Treaties that may be found on the UNCTAD's Investment policy hub website.

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Latest Update: May 2024