Free Economic Zones

activity in 2011

Location of free economic zones

The distance from Chisinau municipality : "Expo-Business-Chisinau" 0 km Ungheni-Business 107 km "Tvardia" 115 km "Otaci-Business 220 km "Valkane " 180 km Taraclia" 150 km Bli 130 km The surface of free zones : "Expo-Business-Chisinau" Ungheni-Business "Tvardia" "Otaci-Business "Valkane " Taraclia" Bli 29,41 h 42,34 h 3,57 ha 34,19 ha 122,3 ha 36, 0 ha 121,85 ha

Also, should be mentioned the Giurgiulesti International Free Port and the Marculesti Free International Airport, which are similar to free economic zones.

Legislation of Free Economic Zones

Law on free economic zones, no. 440-XV from 27 July 2001 Law on Free Entrepreneurial Zone Expo-Business-Chi inu no. 625-XIII from 03 November 1995 Law on Free Entrepreneurial Zone Tvardia no. 626-XIII from 03 November 1995 Law on Free Entrepreneurial Zone - Production Park Zone "Valkane no.1527-XIII from 19 February 1998 Law on Free Entrepreneurial Zone - Production Park Taraclia no.1529-XIII from 19 February Law on Free Entrepreneurial Zone - Production Park Otaci Business no.1565-XIII from 26 February 1998 Law on Free Economic Zone Ungheni-Business no.1295-XV from 25 July 2002 Law on Free Economic Zone Bli no. 26 from 04 March 2010
3

The number of employees on payroll

162 registered residents (as of 1 January 2012) The number of employees at 1 January 2012 5875 persons: o ZAL Expo-Business-Chi inu o ZEL Ungheni-Business o ZAL PP Valkane o ZAL Tvardia o ZAL PP "Otaci-Business o ZAL PP Taraclia o ZEL Bli 1021 persons 1943 persons 230 persons 283 persons 24 persons 18 persons 2256 persons
4

The total amount of investments from the beginning of free economic zones activities, million USD (at 1 January 2012)
60 50 40 30 20 10 0
51,9 36,1 15,1 12,8 15,3 3

11,4

Taraclia

Tvardita

ExpoBusinessChisinau

Valkanes

UngheniBusiness

Total amount of investments - 145.9 million USD, of which 15.5 million USD invested within 2011. The largest share of investments belongs to the Expo-BusinessChisinau FEZ - 52 million USD (35.6 %).
5

OtaciBusiness

Bli

The annual growth of investments amount in free economic zones, million USD
20 18 16 14 12 10 8 6 4 2 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Manufacture of industrial production

The total amount of net sales of industrial production, million MDL 2500
2000 1500 1000 500 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 351,5 536,3 770,7 1021,1 937,8 1162,9 1233,5 1409,6 983,9

2006,9

The total amount of net sales of industrial production in all FEZs in 2011 amounted to 2,006.9 million MDL (with 42.4% more than for the previous year (in current prices)), of which production worth 1,648.1 million MDL or 82.1% was exported. The total value of goods and services produced by the free economic zones during the reporting year amounted to 2,891.7 million MDL.
7

The most important types of goods produced by the free economic zones
2010 1 2 3 4 5 6 7 8 9 10
Grape wine, thousand dal. Divin, thousand dal. Electrical wiring for cars, mln. MDL Polymer film, tons Furniture, mln. MDL Carpets, mln. m Car seat covers, thousand pcs Technical oil, tons Black oil, tons Cork articles for spirits bottling, mln. pcs

2011 1146,9 305,4 216,1 1581 53,2 2,8 2297 5,1 2074 363,3

Growth rate, % 0,4 1,4 175,0 -3,7 187,9 -1,6 188,9 -5,3 371,4 -11,7

1142,9 301,3 78,6 1642 18,5 2,9 795 5,4 440 411,5

The share of net sales of industrial production per free economic zones
Tvardia 12,8% ExpoBusinessChi inu 18,9% 0,0% UngheniBusiness 46,1%

Bli 10,8% Valkane 11,1%

OtaciBusiness 0,3%

Basic indicators of FEZ activity

2004 Total volume of investments, mln. USD In % comparing to the previous year The volume of net sales of industrial production, mln. MDL Export share of net sales volume of industrial production, % Calculation of taxes and fees, mln. MDL Average number of residents' employees on payroll 60,4 2005 72,1 2006 88,2 2007 100,8 2008 119,9 2009 124,7 2010 128,7 2011 145,9

117,8 770,7

119,4 1021, 1 61,5

122,3 937,8

114,2 1162, 9 70,8

118,9 1233, 5 70,8

104,0 983,9

103,3 1409,6

113,3 2006,9

67,9

71,0

68,3

76,5

82,1

77,1

121,9

123,6

123,1

144,8

111,6

130,1

176,0

2827

3303

3563

3567

3590

3079

4581

5621

10

Basic incentives provided by the free economic zones

The income tax imposed on residents income is paid 50% of the rate established in the Republic of Moldova. Goods imported into / exported from the free economic zones are : exempted from import and export duties (custom taxes); are exempted from excise duty; a zero value added tax rate is applied. The delivery of goods to the free economic zones from the remaining parts of the customs territory of the Republic of Moldova are treated as exports. No quota and licensing systems are applied on the import and export of goods on the territory of the free economic zones.

11

The Balti Free Economic Zone

was founded in 2010 on the territory of the Balti Municipality for a period of 25 years, and consists of 3 subzones. On subzone no. 1 and no. 2 with a total surface of 11.85 ha is located the German company Draexlmaier LLC, the producer of spare parts for BMW cars, and subzone no. 3 with a surface of 110 ha. Draexlmaier, as a general investor of Balti FEZ, is contracted by the companies BMW, Mercedes-Benz, Audi, etc. for the manufacture of wiring. Nowadays, Draexlmaier LLC has 2,207 employees and has invested about 4.8 million EUR in production development.

12

Future development of FEZs

Additional opportunities for FEZs development - proximity to the EU. The development of free economic zones has become possible as a result of: the use of FEZs existing potential, including the extension, if necessary, of its territories (Expo-Business-Chisinau, UngheniBusiness, Otaci-Business, Balti); recently modified legislation on FEZs, which allows performing new types of activity and using large trade and transportation capacities.

13

The development of new investment structures

FEZs development should be carried out in parallel with the establishment of new mechanisms of investments attraction to the Republic of Moldova, including : industrial parks; technological and innovative parks; business incubators; individual investment agreements (e.g. the Investment Agreement on Giurgiulesti International Free Port). The primary task - making full use of the country's human and production potential.
14