Moldova to extend reach of free enterprise zones

Moldova’s government has announced plans to extend the Bălți, Ungheni-Business and Chisinau-Business free enterprise zones (FEZ), as well as improving the legal framework under which they operate.

“Adopting these proposals is necessary if we want to attract domestic and foreign investment,” said Moldova’s Minister of Economy and Infrastructure, Chiril Gaburici. “These proposals will create new, competitive sectors in industry based on modern technology and innovation. Small and medium-sized enterprises will also be able to develop, creating new jobs.”

Moldova currently has a total of nine free enterprise zones, which at the end of 2017 had attracted around 350 million US dollars worth of investment, 64.5 million US dollars in 2017 alone, a 22.7 per cent increase on the previous year.

The total value of goods produced in the zones amounted to around 400 million US dollars last year, also a significant increase  – of almost 50 per cent – on 2016.

The zones, which were first created in 1996 and last year employed 11,926 people, benefit from a number of fiscal incentives, including a 50 per cent reduction in taxes on exports, and a zero VAT rate for the majority of goods. Most products can be produced tax and VAT free in the special zones, with the notable exception of alcohol.

Bălți is the most successful of the Moldovan free enterprise zones, accounting for more than 42 per cent of all investment.