Small Business in Moldova: Which Company Type to Choose and How to Open It

Only an SRL, and no hardcore!

That is the answer you will get from me to the question “what kind of company should I open?”. You can read separately about the pros and cons of this legal form, but if you aren’t sure exactly what your business needs, a limited liability company (SRL) is, with 98% probability, your case (people opening a garage cooperative don’t ask such questions).

According to Law No. 206 of 07.07.2006 on supporting the small and medium-sized enterprise sector, Article 2 (Classification):

(2) A micro-enterprise is an entity that meets the following criteria: an average annual number of employees of no more than 9, annual sales revenue of no more than three million lei, and a total annual balance-sheet value of assets of no more than three million lei.

(3) A small enterprise is an entity that meets the following criteria: an average annual number of employees of no more than 49, annual sales revenue of no more than 25 million lei, and a total annual balance-sheet value of assets of no more than 25 million lei, except for entities covered by paragraph (2).

Moldova currently applies an income tax rate of 4% on operating income and 6% on dividends from profit for such small companies that are not VAT payers (the VAT registration threshold is 1.2 million lei of revenue over 12 consecutive months; voluntary registration is possible at any time).

In Moldova, an SRL can be registered in three days, in one (working) day, or urgently within four hours. The standard procedure costs around 2,000 lei (including a standard stamp). Deadlines and fees are listed on asp.gov.md, where you can also book a registration appointment (given the current epidemiological situation, walk-in queues are not very welcome in public institutions).

Before registering, think about the company name and come to the registrar with several options. They will check them against the company name database for similarity. Your future company’s name cannot be too short (3–5 letters); in that case it is recommended to add -Prim, -Plus or -Group. To check existing names, idno.md is often recommended, but it isn’t always accurate. Edata.md is more up to date. Still, even if you find a very similar name, don’t be discouraged: there is always a way out (for example, changing the spelling).

P.S.: proper names, names of cities and countries and their derivatives cannot be used.

To “complete the quest” you will also need the original identity documents of the founders and the administrator, the future registered address and the company’s activities (statistica.gov.md – Classifications and nomenclatures – CAEM-2; be prepared, it runs to over 250 pages… If you haven’t come up with more than three lines of business, don’t worry about having to pay 1,600 lei to change or add to them later. Article 176(2) of the Civil Code of the Republic of Moldova states that a for-profit legal entity may carry out any activity not prohibited by law, including activities not listed in its articles of incorporation).

The company’s articles of association are drawn up on the spot by the Registration Chamber officials. The share capital can now be set by the founder (but no less than 100 lei).

That’s it, in short. For a more detailed consultation, book an appointment. www.tax.md

Law and order.