Trade and Investment Opportunities in Moldova

June 2015

Project number: 06-02-02-15

Fahd Shah
Dr Eisa Abdelgalil
Source: National Geographic Society, accessed via
http://travel.nationalgeographic.com/travel/countries/moldova-guide/

Economic Research Department

Dubai Chamber of Commerce and Industry
 Overview Moldova Key Statistics (2015)

Population (million) 3.56

Area (square kilometers)
33, 846
Moldova is small landlocked country located in the eastern
Europe. It is a member of the Commonwealth of independent Languages
Moldovan, Russian and
States (CIS) and is bordered by Ukraine and Romania. Gaguaz
Capital City Chisinau
Number of Regions 32
The capital of the country is Chisinau. The countrys official
language is Moldovan which is similar to Romanian. According Currency Moldovan LEU
to data from the Moldovan National Bureau of Statistics, the Total GDP (USD billions) 6.14
country had a population of around 3.56 million people in
2015. According to data from the World Bank Group, it also Per Capita GDP 1,726
had a high adult literacy rate of around 99% by 2012. Real GDP growth (%) -1%
Source: Dubai Chamber based on data from IMF World Economic Outlook, April 2015 and
Moldovan Investment and Export Promotion Organization

The Republic of Moldova has a parliamentary system and its Administrative map of Moldova
area covers about 33,846 square kilometers. Moldova has a
strategic position in between the CIS and EU regions.

To strengthen trade relations, Moldova has signed an

agreement with the EU to for a Deep and Comprehensive Free
Trade Area (DCFTA). It has also signed a free trade agreement
with Turkey, which was expected to come into effect in 2015.

Source: www.unesco.org , Moldova Country Report, Moldova Ministry of Education and

 Moldovas GDP structure
Moldovan GDP by sector (2015)

Agriculture
According to data from the IMF, Moldova had a GDP of around [PERCENTA
GE]
Billion USD in 2015. The services sector had the largest share at
around 64% of GDP, followed by industry at around 20% in 2015.
Services
Agriculture also has a relatively significant share of around 16% Industry 64%
in Moldova's GDP in 2015. This reflects the importance of
20%
Moldova's agricultural sector which has grown overtime due to
the presence of fertile land and a favorable climate.

Source: Dubai Chamber based on data from Economist Intelligence Unit (EIU) and World Bank, World
Private consumption makes up by far the largest portion of GDP Development Indicators. Data for 2015 is based on EIU forecasts.

by expenditure, around 93% of GDP by expenditure in 2015.

Government consumption makes up about 15% of GDP while
investments make up around 22%. Because imports exceed Moldovan GDP by Expenditure (2015)
exports, net exports subtract 32% from GDP.
Expenditure type % of GDP

Private consumption 93
The consumer oriented nature of the Moldovan economy is one
reason for the large share of private consumption and for Government 15
imports being much larger than exports. According to data from consumption
the IMF, income from remittances makes up about 24% of Investments 22
Moldovas GDP. As people have migrated from Moldova,
remittances sent back home to other family members have Net exports (Exports -32
fueled consumption. Imports)

Rebasing residual 2
Source: Dubai Chamber based on Economist Intelligence Unit (EIU)
 Economic Performance

Moldova GDP growth and budget deficit

Moldova's economic growth has seen large fluctuations due in 10

part to regional and global economic challenges. For example 8

Real GDP growth
according to the IMF, in 2012, the economy contracted due to 6
drought from which it later recovered. Future output is expected
4
to be impacted by slowdown in demand from major trading
partners including among the Commonwealth of Independent 2

States (CIS). 0
2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f

Percentage change
-2
Budget deficit
-4
Moldovas budget deficit which saw a reduction over the last few
-6
years is expected to see become larger. The increase in the deficit
is expected partly due in part to weaker economic growth coupled Source: IMF, World Economic Outlook Database, April 2015.

with a need for the government to increase pensions to support

Moldova's aging population. Moldova inflation rate
10

8
Inflation in Moldova is expected to remain between 4% to 8%
from 2015 to 2018. Overall, Moldovas economy is highly
6
dependent on remittances from Moldovanss working in foreign
countries and in demand form its major trading partners the 4
European Union and the CIS countries.
Percentage change

0
2008 2009 2010 2011 2012 2013 2014 2015f 2016f 2017f 2018f

Source: IMF, World Economic Outlook Database, April 2015.

 Moldova population
Moldovas Population (millions of people)
5
The population of Moldova is expected to fall overtime, partly due
4
to the impact of migration. Moldovan people have historically
preferred to move to other countries. The Moldovan population is 3
therefore expected to decreases from around 3.44 million people
in 2015 to around 2.484 million by 2050. Aging across Europe 2

combined with migration of working age people also means that 1

the average age of the Moldovan population is expected to
increase from 27.7 years in 1980 to around 45.8 years of age by 0
2050.

2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050

Source: Dubai Chamber based on data from Population Division of the Department of Economic
Social Affairs of the United Nations Secretariat, World Population Prospects: The 2012
Revision, http://esa.un.org/unpd/wpp/index.htm
While the trend of net migration has decreased from 2000 to
2015 and is expected to fall further, it is still expected to have a
continued negative impact on the growth of population. Moldovan net migration rate (%)
0

However, even if the number of people in Moldova falls overtime, -2

there are still opportunities in agricultural production and in -4

consumer sector. Also an aging population needs better access to -6

health care and medicines. These opportunities will be explored -8

later in this report. -10

-12

-14

-16

-18
Source: Dubai Chamber based on data from United Nations, Population Division of the
Department of Economic and Social Affairs of the United Nations Secretariat,
World Population Prospects: The 2012 Revision, http://esa.un.org/unpd/wpp/index.htm
 Foreign Trade: Flows
Goods trade flow with the world
3
Exports
A growing economy has meant that demand for imports of goods 1
by Moldova has seen strong increase. Imports by Moldova from
2009 2010 2011 2012 2013 2014
the world market grew at a Compound Annual Growth Rate -1

(CAGR) of around 14% from 2009 to 2014.

-3

Billion USD
Trade Balance
-5
Exports of goods to the world market in turn grew at a CAGR of Imports

around 16.36% during this period. Given the large amount of -7

imports over exports, Moldova had a negative trade balance

Source: Dubai Chamber based on data from trademap.org, International
during the period. The trade deficit grew from around USD 2 Trade Centre.
billion in 2009 to around USD 4 billion in 2014.

Services trade flows and trade balance

with the world
Moldova's service exports performed well and grew at a CAGR of
2
around 11.41% from 2009 to 2014. According to data from
Exports
trademap.org, Moldovas major services exports in 2014
included commercial services followed by transport, travel and
1
Trade Balance
telecommunication, computer and information services. Overall
Billion USD

service export and import trade was balanced and the trade 2009 2010 2011 2012 2013 2014
balanced was slightly positive in 2014. -1

-2
Imports

Source: Dubai Chamber based on data from trademap.org, International

Trade Centre
 Foreign Trade: Composition Moldova major imports from the world market (2014)
Commodities not elsewhere specif

Mineral fuels, oils, distillation prod

etc
17% Machinery, boilers, etc

Electrical, electronic equipment

Moldova's major imports from the world market in 2014
38% Vehicles other than railway, tramw
consisted of mineral fuels, machinery, electrical equipment, cars,
Plastics and articles thereof
tractors (for agricultural use), plastics and pharmaceuticals. Most
14% Pharmaceutical products
of the countrys imports therefore consisted of finished products.
Aircraft and parts thereof

Iron and steel

7% Tobacco and manufactured substi
Moldova's competitive advantage in exports consists of
6% Other
exporting agricultural products and also basic goods. Many of 2%
2% 2%
3% 4% 5%
Moldova's exports consisted of agricultural and food related
products. Source: Dubai Chamber based on trademap.org and International Trade Centre.

The largest category was Electrical and electronic equipment Moldova major exports to the world market (2014)
which made up about 11% of exports, followed by oil seed,
Electrical, electronic equipment
grains and fruits at 9%, cereals with a share in exports of about
11% Oil seed, oleagic fruits, grain,
8% and edible fruits and nuts with a share of around 8% exports seed, fruit, etc, nes

to the world market in 2014. Cereals

30% 9%
Edible fruit, nuts, peel of citrus
fruit, melons
Iron and steel

Other major exports products in 2014 consisted of iron and 8% Articles of apparel, accessories,
not knit or crochet
steel, apparel and footwear related products. Beverages and vinegar

4% 8% Articles of apparel, accessories,

knit or crochet
Furniture, lighting, signs,
4% prefabricated building
8%
6% Footwear, gaiters and the like,
7% parts thereof
5%
Other

Source: Dubai Chamber based on trademap.org, International Trade Centre

 Foreign Trade: Major partners Moldovas major export markets (2014)

30%

Moldova's major import and export partners are located in the 25% 23.3%

region around it either in Europe or former CIS countries. Its 20% 17.4%
major export market is Russia which takes almost one fourth of 15%
11.7%
goods exports. Other important export markets in 2014 included
10%
Romania, Ukraine, Germany and Poland. 6.8%
5.2% 4.6% 4.5% 4.2%
5%
1.9% 1.9%

0%
Moldova's major sources of imports are also little more spread
out geographically and where the top markets have lower share
in total imports, as compared to top export markets. Therefore
Romania is the top import source for Moldova, followed by Italy Source: Dubai Chamber based on trademap.org and International Trade Centre.
ad then the Russian Federation and then Turkey.

Moldovas major import sources (2014)

Moldova remains highly reliant on its top export markets as the 20% 18.3%
top 3 export markets Russian Federation, Romania and Ukraine
16%
demanded around 52% of total exports. There is therefore a 12.7%
11.4%
need a to diversify in other export markets. On the import side, 12%
9.1%
the top import source markets are more diversified with the top
8%
3 import source markets making up about 42% of imports in 6.1%
5.5%
4.9%
2014. 4% 2.9%
2.3% 2.2%

0%

Source: Dubai Chamber based on trademap.org, International Trade Centre

 Trade with Dubai: Flow and composition Dubais trade with Moldova (million AED)
20
Exports
10
Moldovas trade with Dubai has seen fluctuations but has 0
generally shown robust. Dubai's total exports to Moldova grew 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
-10
from around 9.66 million AED in 2005 to around USD 15.76
million by 2014. Exports therefore grew at a Compound Annual -20

Growth Rate (CAGR) of around 5.6% from 2005 to 2014. Imports

-30

AED Million
-40

Imports grew at a faster rate of around 15.9% during this period. -50

Imports from Moldova made up the majority of trade, with -60

imports valued at around AED 34.35 million in 2014, while exports Source: Dubai Chamber based on data from Dubai Customs
to Moldova were valued at around AED 15.76 million in 2014.
Dubais major exports to Moldova (2014)
[PERCENTAG Electrical machinery and
Dubai's major exports in 2014 consisted of finished goods such as 1% equipment
1% E]
2% Boilers, machinery and mehcanical
electrical machinery, appliances, vehicles, and coffee and tea. 2% appliances
Vehicles other than railway and
tramway
5%
Coffee, tea and spices

Dubais major imports from Moldova in 2014 consisted of mostly [PERCENTAG

E] Tobacco and substitutes
clothing and footwear articles. The largest share is for articles of [PERCENTAG
Paper and Paperboard
E]
apparel knitted and not knitted HS chapters 61 and 62. Together
Musical instruments and parts
these items of apparel alone made up around 74% share of
Plastics and articles
Dubai's imports from Moldova in 2014. Other import products 13%
Essential oils and perfumes
included articles of leather and footwear. 27%
Other products

Source: Dubai Chamber based on data from Dubai Customs

 Selected Free trade agreements of Republic of Moldova

Moldovas membership and Free Trade Agreements (FTA)

Moldova is a party to many free trade agreements. The
two major trade agreements are with Moldova's major
trading partners in the CIS region and the EU.
Moldova also has trade agreements with countries in
eastern Europe such as Bosnia Herzegovina and Albania.
Moldova also has recently signed a free trade agreement
with Turkey which is expected to increase trade between
the two countries.
World Trade Organization (WTO)
Agreement with EU , Deep and Comprehensive Free trade
Area (DCFTA)
Commonwealth of Independent States FTA
Moldova and Turkey FTA
Central European Free Trade Agreement (CEFTA) incudes
(Moldova, Serbia, Montegeru, Bosnia Herzegovina,
Kosovo and Albania).

The Republic of Moldova is also a member of the World

Trade Organization. The high number of free trade
agreement highlights Moldovas openness to new trade
partners and its desire to create a business friendly
environment.

Source: Dubai Chamber based on data from the Moldova Investment and Export Promotion
Organization, CEFTA Secretariat (http://www.cefta.int/ ), European Commission and the WTO
 Potential products for increased exports from UAE to Moldova

Product code and Imports by Annual growth Growth of UAEs Analysis of opportunity
description Moldova world of imports from export to the
market (USD world market world, 2010 to
million), 2014 2010 to 2014, % 2014 %
HS 27, Mineral fuels 919 16 12 Moldova needs to import its oil and this forms its biggest import fr
the world market. UAE oil companies can therefore export refined
products via ship and then land through nearby countries to g
access to the Moldovan market. This import market has seen str
growth of around 16% per annum from 2010 to 2014 making it
important growth market.

HS 84, Machinery 428 7 15 Machinery and boilers make up another large import categ
and boilers Important sub-categories include machinery for agricultural use such
HS 8432 Agricultural, forest machinery for soil prep/cultivation and
8433 Harvesting/threshing machinery. High quality used machinery
also be sourced from major agricultural producing countries
potential export to Moldova.

HS 85, Electrical 356 3 10 Moldova imported about 356 million USD of Electrical and electronic
and electronic equipment in 2014. Imports in this category grew at an annual rate of
equipment about 3 % from 2010 to 2014 and UAEs exports to the world market
grew at an annual rate of about 10% from 2010 to 2014. Some major
producers of electrical products are in Asia creating opportunities for
intermediation for Dubai businesses.

HS 8703 , Cars 156 5 20 Moldova imported about USD 325 million worth of cars in 2014. Impo
in the category grew at an annual rate of around 5% from 2010 to 20
UAE exporters also increased their exports to the world market in thi
product by 20% in this product category, indicating their competitive
strength.

Source: Dubai Chamber based on trademap.org, International Trade Centre

 Potential products for increased exports from UAE to Moldova

Product code and Imports by Annual growth Growth of UAEs Analysis of opportunity
description Moldova world of imports from export to the
market (USD world market world, 2010 to
million), 2014 2010 to 2014, % 2014, %

HS 8701, Tractors 47 6 13 Moldova imported about USD 47 million worth of tractors for use
agricultural production. Imports under this product category grew at
annual rate of 6% from 2010 to 2014 while UAEs exports to the w
of this product also grew at a rate of 13%. Further research of t
market could mean opportunities for UAE businesses to increase t
exports to Moldova in this product category.

HS 39, Plastics and 236 9 18 Moldova imported about USD 236 worth of plastics and articles in 20
articles Imports of this product category grew at an annual rate of around
form 2010 to 2014, while UAE exporters grew their exports to the w
market in this product category by a robust 18% from 2010 to 20
This product category could therefore also be a potential market
increased UAE exports and re-exports to Moldova.

HS 30, 192 10 24 With an aging population demand for pharmaceuticals is growing

Pharmaceutical Moldova. In 2014 the country imported about USD 912 worth
products products under this category and from 2010 to 2014 the imports gre
an annual rate of 10%. UAE exporters also increase their exports in t
category by 24% from 2010 to 2014 indicating their competit
strength.

HS 73, Articles of 121 6 10 Articles of iron and steel is another product category with im
iron and steel, potential for Moldova. In 20114 Moldova imported about USD
million worth of products under this category. The import market gre
an annual growth rate of about 6% between 2010 to 2014 while UA
exporters also grew their exports at an annual rate of around 10% fr
2010 to 2014. Articles of iron and steel could therefore be anot
possible product for increased exports from UAE to Moldova.

Source: Dubai Chamber based on trademap.org, International Trade Centre

 Establishing a business in Moldova Document required for business registration

1) Copy of the parent company's registration

certificate authenticated by a notary.
2) An extract from the national commercial register
According to PWC, Moldova allows for the creation of the following authenticated by a notary.
for profit entities: Limited Liability Company (LLC), Joint Stock 3) Copies of certificate of incorporation by a foreign
Company (JSC), General Partnerships, Limited Partnership and company.
4) Certificate of foreign company's solvency issued
Cooperatives.
by a bank.
For most foreign investors, the ideal company form would be either 5) Decision by foreign company to establish a
company through foreign investment in Moldova
an LLC and or a JSC. Limited liability structures and the ease of (for example through shareholder meeting).
meeting regulations in some sectors are reason for this preference. It 6) If the services of an attorney are used in
is also more convenient to use an LLC structure for 100% investment Moldova for registration purposes, a letter
in the company. authorizing the attorney to set-up business in
Moldova is required.
A series of steps that investors would normally have to take to set-up 7) Provision of a legal address is also required.
a business is provided below, while a list of documents required is
provided on the right. Source: Foreign Investment Guide 2007, Moldovan Investment and Export
Promotion Organization (MIEPO).

Steps in registering a company in Moldova

Open temporary Bank Account,

File documents and get ID
deposit at least 40% of company Obtain a registration certificate Obtain official stamp from Ministry
number from Chamber of
paid up capital and pay and Constitutive Act. of Information Development.
Registration
registration fees.

Source: Molodova Foreign Investment Guide 2007, Moldovan Investment and Export Promotion Organization (MIEPO)
Taxes
Major taxes and payments payable by businesses
Type of tax Rates of taxation
Corporate Income Tax Rate of taxation varies between 7% and 18% for Individual Entrepreneurs
depending on income. Rate of tax is 7% for farming enterprises, 3% for
legal entities that are small and medium enterprises. General Corporate
income tax is 12% for other legal entities. This 12% tax can be halved to
about 6% for entities within the Free Economic Zones (FEZ).
Value Added Tax 20% Standard VAT, 8% VAT on certain supplies such as bread, bakery
products, milk, some pharmaceuticals and sugars etc. VAT on other
supplies such as those involving of goods, supplies to and from the
territory of free economic zones (FEZs), import and supply of goods
destined for technical assistance projects under specific conditions
Capital gains tax Taxable gains are calculated as 50% of total capital gains from sale of assets
and are to be included as part of gross income to be taxed at normal tax
rates.
Social Security Contribution The employer is required to make social security contribution of about
23% of salary while the employee makes a contribution to about 6%.
Health insurance contribution Around 4% of salaries and health insurance contribution is paid by both
employer and employee.

Source: Doing Business 2015, doingbusiness.org, World Bank Group and Price WaterHouse Coopers and MIEPO, Investing Guide Moldova 2014.
 Free Economic Zones and Industrial Parks

The government of Moldova has created several Free Economic Industrial Parks incentives include the following:
Zones (FEZ) and Industrial parks to encourage investment in the
Free of charge transfer of land for purpose
country.
of establishing an industrial park
FEZ incentives include the following:
Allowance to private public land that is
Entities which are located in the FEZs of Moldova and which associated with construction according to
are involved in export of goods outside the customs territory of the price allowed by the law.
Moldova or delivery of produced goods to other FEZ residents
Allowance for free zoning of agricultural into
can apply 50% of the applicable CIT rate on their income.
industrial land.
Income obtained by a FEZ company on export of goods outside
Possibility of reduced rental price for state
the customs territory of Moldova or for supply of goods to
land.
other FEZ resident for export to outside Moldova is exempted
from CIT for three years provided the enterprises invested a
capital equivalent of about USD 1 million in fixed assets or
Some examples of potential FEZ locations
infrastructure.
are provided in the next page.
Income obtained by a FEZ company on export of goods outside
the customs territory of Moldova or for supply of goods to
other FEZ resident for export to outside Moldova is exempted
from CIT for five years provided the enterprises invested a
capital equivalent of about USD 5 million in fixed assets or
infrastructure.
FEZs also allow for repatriation of profits from Moldova after
full filling tax requirements. Furthermore, workers can be hired
through a simplified procedure.
 Selected Free Economic Zones

Selected Free Economic Zones (FEZ) locations for investment

Name FEZ description
FEZ Expo Business Chisinau Located in Chisinau, the free zone covers about 23.6 hectares and is planned to operat
between 1995 to 2025.
FEZ Balti Created for a period of 25 years in Balti city in the north of the country. The Free Zone i
divided into four subzones. A total of USD 39.3 million in investments have been made sinc
establishment.
FEZ Valkanes The FEZ was created in 1998 for a period of 25 years. The FEZ covers an area of around 122.
hectares divided into two zones. 30 residents were registered in the zone in 2012 while tota
investments amounted to USD 15 million.
Giurgiulesti International Free Located about 133.8 kilometers up the river Danube, GIFP was established for a period of 2
Port (GIFP) years in 2005. It covers an area of around 120 hectares including a petroleum terminal,
cargo port and an industrial free zone. The free zone is under private ownership and a
advantage of setting up business in this free zone is that business can also engage in activitie
that they would do outside the free zones in Moldova. Some examples of activities in thi
zone includes its use for port and transport services, manufacture of industrial products
wholesale trade and packaging of goods. There is no minimum investment required to be par
of GIFP.
Free Zone Ungheni Business Located in the city of Unfgheni in the centre of Moldova. The free zone was established i
2002 for a period of 42 years. Its total area is around 42.34 hectares. There were 35 resident
registered in the free zone in 2013 while investment amounted to around USD 55.8 million
Source: Doing Business 2015, doingbusiness.org, World Bank Group and Price WaterHouse Coopers and MIEPO, Investing Guide Moldova 2014.
 Inward FDI inflows into the Republic of Moldova
Republic of Moldova FDI inflows
(USD millions)
According to information from UNCTAD, Moldova has been 800
generally successful in attracting inward FDI. In 2009 FDI inflows
saw big fall due in part to the impact of the global economic 700

downturn. 600

500

While the Moldovan economy recovered in 2010 and 2011, in 400

2012 the economy experienced a decline in growth. This was also
300
coupled with growth concerns in the Eurozone economies.
Therefore while FDI inflows have recovered, they have not yet 200
risen to 2007 levels.
100

0
The Moldovan government has relatively low tax rates, for
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

example the corporate tax rate is about 12%. The Republic of

Moldova offers many tax and other incentive for potential
Source: Dubai Chamber based on United Nations Conference on Trade and Development
investors. The government of Moldova has created Free Economic (UNCTAD), UNCTADSTAT

Zones (FEZ) in which activities such as production for export,

sorting and packaging of goods for transit through Moldova.
There is zero VAT on goods exported from an FEZ and income
obtained from export of goods from FEZ to outside the customs
region of Moldova is exempted from Corporate Income Tax (CIT)
for five years provided that the enterprise invested about USD 5
million in fixed assets or in development of infrastructure of the
FEZ.
 FDI Inflow: Composition
Sector composition of cumulative FDI inflows into
Moldova (2011)

Financial Services
According to data from the Moldovan Ministry of Economy,
Manufacturing Industry
sectors receiving large shares investment inflows in 2011 included [VALUE]
financial services, manufacturing and real estate. Inspite of the [VALUE] Real Estate Transactio
1
potential in the agricultural sector, investment in this sector had a 2 Electricity, Water and
Gas
small share of overall FDI inflows
[VALUE] Transport and
Communication
Health and Social
[VALUE] Services
EU countries made up most of the FDI inflows into Moldova in Agriculture

2011. Therefore Holland, Germany, UK, Spain, Italy and Poland 23 Others
together made up the largest share of FDI inflows into Moldova. 10
Russia had the second highest share at 11% for individual
Source: Dubai Chamber based on data from Ministry of Economy Republic of Moldova and Invest
countries. in Moldova Country Report, Moldovan Investment and Export Promotion Organization (MIEPO).

FDI inflows into Moldova by source country (2011)

The US had about 7% share in FDI inflows in Moldova's economy
in 2011, while Turkey also had made investments into Moldova Holland
19
and had a share of about 3% in 2011. Overall most major 23 Russia
Cyprus
investors in Moldova tend to be countries across Europe, who [VALUE] USA
tend to understand the local business environment and want to [VALUE] Germany
UK
use Moldova as a hub for doing business. 3
Romania
3 11 Spain
4 Turkey
Italy
5 [VALUE] Poland
5 Ukraine
6 7 Others

Source: Dubai Chamber based on data from Ministry of Economy Republic of Moldova and Inves
Moldova Country Report, Moldovan Investment and Export Promotion Organization (MIEPO).
 Investment opportunities in the Agriculture
Production of selected agricultural and livestock products in
Moldova (thousands of tons)

With its rich natural environment, rich soil and favorable climate, 2010 2011 2012 2013
Moldovas agricultural sectors could hold potentially lucrative business
opportunities. Moldova's soil is ideal for growing corn, fruits and
vegetables. The production of corn has been stable from 2010 to 2013, Production of corn 1,420 1,468 572 1,419
while the production of vegetable has seen some reduction. Fruit
production has experienced significant growth during this period.
Vegetables 341 362 231 292

Given increased demand for organic products from the EU, thee exports
Fruits 322 378 380 415
of organic products have experienced strong growth, growing at a
Compound Annual Growth Rate of around 47% from 2004 to 2013. Source: Dubai Chamber based on data from Moldova National Bureau of Statistics and
Agricultural Report Republic of Moldova, Invest in Moldova.
Moldova has organic regulations in place and around 2% of its current
arable land is used to produce organic food products.
Export of Organic products by Moldova (tons)
100,000
Livestock production could have potential synergy for export of halal
80,000
meat to UAE and other GCC countries. Potential business opportunities
include setting up new cattle farms, renovation of existing cattle farms 60,000

and investment in halal meat storage and processing facilities. 40,000

20,000

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013
Source: Dubai Chamber based on data from Moldova National Bureau of Statistics an
Agricultural Report Republic of Moldova, Invest in Moldova.
 Investment opportunities in the Automotive sector

Comparison of per minute production costs for selected

Eastern European countries (Euro)
0.35
Moldova has a modern automotive industry which is supported
0.3
by a educated and skilled workforce, and proximity to major
European and CIS countries making it easy to transport 0.25
automotive products to Original Equipment Manufacturers 0.2
(OEM). Up until now the production has mainly been to produce
cables, car seat covers and wiring harnesses for cars. 0.15

0.1
In terms of production costs, Moldova compared favorably with
0.05
other central and eastern European countries.
0
Moldova Romania Serbia Bulgaria
Moldova is position on the largest pan European corridor
between Helsinki (Finalnd) and Alexandroupoli (Greece). It takes Source: Dubai Chamber based on data from Moldova National Bureau of Statistics, Spelleken
Assoc. and Avanz Experts Panel, introduction to the Automotive sector Republic of Moldova,
about 2 days to deliver good to Germany. This makes it possible to Moldova Investment and Export Promotion Organization

produce car parts and other automotive products using Just-in-

Time production. Prospective investors could invest in one of the Distance to some Original Equipment Manufacturers from
7 Free Economic Zones of Moldova which offer preferential Chisinau, Moldova (kilometers)
conditions and access to important transport routes. Investors
would also note that the 20% VAT in Moldova is reimbursed for Pitesti (Dacia Renault) 560
exports from FEZs. Hungary 980
Slovakia 1180
Czech Republic 1510
Germany 1510

Source: Dubai Chamber based on data from Moldova National Bureau of Statistics, Spelleken
Assoc. and Avanz Experts Panel, introduction to the Automotive sector Republic of Moldova,
Moldova Investment and Export Promotion Organization
 Investment opportunities in Pharmaceuticals and Health
care
Per capita total health care expenditure in Moldova (USD)
As discussed earlier, Moldovas population is undergoing significant 300

ageing. The average age of the Moldovan population is expected to 250

increase from 27.7 years in 1980 to around 45.8 years of age by 2050. 200
According to Business Monitor International (BMI) Moldova 150
Pharmaceutical and Healthcare Report Q2 2015, the Moldovan
100
Pharmaceutical sector was forecasted to be worth around USD 297
50
million in 2015, while the healthcare sectors. healthcare sector is
forecasted to be worth around USD 820 million. 0

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Source: Dubai Chamber based on data from Euromonitor International.

The size and growth of Moldova's health care sector creates
opportunities for businesses both on the supply side and demand
side. On the supply side Moldova's production value of medical and Production of Medical, Measuring, Testing Appliances
800 (Million Moldovan LEU)
testing appliances has seen grown at a CAGR of around 31% from
2009 to 2014. On the demand side per capita total health care
expenditure is also expected to continue to see a strong increase in 600
the future.

400
Niche areas of growth could include aged care centers and aviation
sanitation. Given the need for more hospitals, there could be many
potentially lucrative business opportunities. Medical and testing 200
equipment could also be exported to other countries in Europe.
According to data from trademap.org, Moldova exported about USD
113 million worth of goods under HS 30 Pharmaceutical products, 0
2009 2010 2011 2012 2013 2014
most of them going to the CIS countries. Further investments in
pharmaceutical and medical appliance production in Moldova could Source: Dubai Chamber based on data from Euromonitor International.

enable UAE businesses to benefit rom the opportunities in medical

 Investment opportunities in Textile and footwear
Gross Value Added from Manufacture of Textiles and Textile
products (Million Molodvan Leu)
1800
Moldova has a rich history in producing textile, quality apparel
1600
and footwear. Production of textile and apparel and footwear
1400
have grown, key markets include the EU, CIS countries and Turkey.
1200
1000

Moldova has the ability to quickly deliver fashion products given 800
that it takes about 1 day by truck to deliver products to Eastern 600
Europe and 2 days to Western Europe. With such low delivery 400
times and availability of required workforce, and relatively 200
competitive cost of production, there could be potentially 0
lucrative investment opportunities in the Moldovan textile and

2009

2010

2011

2012

2013

2014
footwear.
Source: Dubai Chamber based on data from Euromonitor International

Given the need to manage the logistics needs of fast changing Production of footwear (million Moldovan Leu)
fashion items, UAE businesses with experience in logistics could 300
establish warehouses and provide transport and trucking facilities
250
to Moldovan textile companies to get their goods quickly to the
export destination in Europe and elsewhere. 200

150

100

50

0
2009

2010

2011

2012

2013

2014
Source: Dubai Chamber based on data from Euromonitor International
 Risks And Challenges
Economic Challenges
Demographic change: Moldovas population is
facing a strong reduction in numbers due in part to
migration to other countries. This decline in
numbers of working members of society coupled
with an aging population can be expected to put a
significant burden on future economic growth and
budgetary revenues.
Spillover of global and regional macro-economic
challenges: The Republic of Moldova has a
relatively small economy and is surrounded by
many large markets. As a result global and regional
economic and trade turbulences have the potential
to cause economic challenges in the country.
Business wanting to hedge against these risks
should therefore aim to diversify their businesses
across sectors and also in other regions.
Challenges in effective financial intermediation:
Weak financial intermediation leading to difficulty in
access to finance is a major constraint for
businesses in Moldova which could also lead to
higher financing costs.
Ease of Doing business: While Moldova has made
improvements in the ease of doing business, some
challenges remain. Some of these include the following:
Trading across borders: According to Doing
Business 2015 of the World Bank Group, it takes
about 27 days to import goods into Moldova and 23
days to export goods. Furthermore, According to
Doing Business 2015 of the World Bank Group, it
takes on average about 9 documents and 23 days to
export goods from Moldova. This is significantly
higher than the documents and time for Romania
and Hungary. The landlocked geography of the
country combined with documentation required can
be challenge in trading with business in Moldova.
Dealing with construction permits: It takes about
247 days and 27 procedures to deal with
construction permits with Moldova ranking at 175 out
of 189 economies according to Doing Business
2015.
Getting electricity: It takes about 118 days and 7
procedures to get electricity in Moldova and it ranked
at 149 out 189 economies in getting electricity
according to data from Doing Business 2015.
 Conclusion

Despite some challenges and its landlocked geography, Moldova offers prospective business with a diverse range
of trade and investment opportunities. A large number of these opportunities arise from the potential to use Moldova
as a production, re-packaging and logistics base to do trade with the European Union countries on one side and the
CIS countries on the other side.

Selected trade opportunities for UAE businesses include opportunities for exporting and re-exporting finished
products to Moldova such as:
Cars,
Tractors (for agriculture) ,
Machinery,
Electrical equipment,
Plastics and articles and
Pharmaceuticals.

Several of these products are made in Asia and this creates opportunities for UAE businesses to intermediate between
Asia and Europe and export these goods to Moldova.

Sectors with possible investment opportunities include:

Agriculture
Automotive
Pharmaceuticals and health care
Textile and footwear
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