Edi

tion

2016

/201

7

Textile, Apparel, Footwear and Leather Goods

Republic of Moldova

Free Trade Agreements signed with 43 countries, including:• DCFTA (Deep and Comprehensive Free Trade Area with the European Union) – 500 million customers;• FTA with CIS countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan) – 250 million customers;• FTA with Turkey – 80 million customers; • CEFTA Central European Free Trade Agreement (Moldova, Macedonia, Albania, Serbia,

Montenegro, Bosnia and Herzegovina and UNMIK (Kosovo) – 30 million customers; • GUAM Organization for Democracy and Economic

Development (Georgia, Ukraine, Azerbaijan, and Moldova) – 60 million customers.

KEY FACTS

€ 4,514GDP per capita at PPP 2015

9.7%Inflation rate2015

€ 5.78 billion

GDP current prices2015

0 % CIT 0% DUTIES0% VAT

EXCISE CUSTOMS

in FEZ

> 1MIO Investment 6% FEZ 12% General regime

in FEZ

40.3%Employment rate 2015

Monthly salary (netto)2016

170 € /month344Doing Business2017 Rank

33,846 km2

Area

3.55 millionPopulation

1 EUR = 21.63 MDLDecember 2016

Curency MDL

Republic of MoldovaOfficial name

Capitalca. 814,000 inhabitants

Chisinau

LanguageRomanian (official)Other spoken languages: Russian, Ukrainian, English, French, German, Italian, Turkish, Bulgarian

1.80 Full load (labor cost)2016

€ /hour

880 millionCustomersduty-freemarket

GUAMCEFTA

CISEU

ESP

FRA

GBR DEU

ITA

TUR

ROMHUNAUS

CZE

BGR

LTU

LVA

EST

GRC

POL

SWEFIN

NOR

BLR

RUS

KAZ

UZB

UKR

Contents

Textile, Apparel, Footwear and Leather goods (TAFL) sector overview ..................................2

Top reasons to invest in TAFL sector of Moldova....................................................................5

Human Resources ...............................................................................................................5

Operating costs and taxes ..................................................................................................6

Utility costs ..........................................................................................................................7

Textile sub-sector overview .....................................................................................................8

Apparel sub-sector overview ...................................................................................................9

Footwear, Leather and Accessories sub-sector overview .....................................................10

Specific incentives, investment opportunities ........................................................................10

Educational institutions in TAFL sector ..................................................................................12

Education system in the Republic of Moldova .......................................................................13

Free Economic Zones (FEZ) ...................................................................................................14

Industrial Parks (IP) .................................................................................................................14

Main reasons to choose Moldova ..........................................................................................15

Free Economic Zones & Industrial Parks map .......................................................................16

Success stories & Industrial competences map ....................................................................17

Invest in Moldova helps you ...................................................................................................18

2

The Textile, Apparel, Footwear and Leather goods (TAFL) Sector overview

Moldova’s modern manufacturing sector foundations build on its strong industrial past. The share of industry in Moldova’s GDP represented 60% until the 1990s. Then, Moldova was one of the important creators of industrial products among the CIS states – and now it revives.

The Moldovan industrial sector has developed along with the privatization and liberalization in trade, especially since 2005, when the quotas in textile and apparel trade were eliminated by the WTO (World Trade Organization).

Manufacturing textiles, apparel, leather, leather articles, and footwear (TAFL) represents an industry branch that started its successful development after World War II, and remains to be one of the most important industries of the Republic of Moldova.

Nowadays, the sector is vibrant and growing, and represents approximately 550 enterprises. They are active in producing:

• Textiles (knitted garments, carpets, fabrics);• Wearable apparel;• Leather and leather accessories, travel acces-

sories;• Footwear.The Government’s Industry Development Strategy lists the TAFL Sector as one of the key economic branches, given its significant advantages, such as: the possibility to engage a large number of employees into various branch activities, a relatively fast rotation cycle of current assets, moderate investment need and a professional training system for employees in place.

Presently, the TAFL industry plays an important role in the Moldovan economy, representing nearly 20 percent of the total country’s export volume, 86 percent of which is exported to the EU countries

and the rest is being consumed in the domestic market. Out of the delivered production, 91 percent are textiles, 78 percent are apparel and 69 percent are leather and footwear. Main export markets: Italy, Germany, Romania, Austria, France, USA, UK, Belgium, Bulgaria, Netherlands, Poland, Greece, as well as the CIS. Famous brands like Versace, Armani, Max & Co., NafNaf, Trussardi, Primark, Max Mara, Prada, Nike, Dolce & Gabbana, Moncler, Calvin Klein let produce their clothes in Moldova.

TAFL manufacturing is an industry with long-standing traditions in producing and exporting a wide range of products. Since 1990, this important industry has been restructured, upgraded and re-equipped in order to meet market economy demands.

The TAFL industry has recorded a continuous growth since 2000, significantly outperforming the overall development of Moldova’s industry.

TAFL sector is an essential part of the economy, especially in regards to external trade (16.4 percent of all exports). It employs 23,000 people, which represents 4.4 percent of the whole economy. Most of these jobs are rural-based and occupied by women. The sector represents 10.3 percent of Moldova’s industrial production and its share in the total investments of the country was 4.9 percent (2015). Out of the total number of companies, 28 are classified as big companies, while the majority of them are Small and Medium companies.

Source: “Euroyarns”

3

As manufacturing moves to lower cost countries, Moldova remains an attractive opportunity for investment in the sector. The textile/apparel cluster has become one of the leading exporting sectors in the country. Its proximity to the EU is a key element among its strategic advantages as a supplier of textiles and apparel to consumer markets.

A large number of enterprises, around 61 percent, are located in the central region of the country (Chisinau, laloveni, Orhei, Straseni); 21 percent are situated inthe north of the country (Bălţi, Soroca, Floreşti, Edineţ, Rîşcani, Sîngerei); and 18 percent in the south of Moldova (Cahul, Taraclia, ATU Gagauzia).

The competitiveness of the Moldovan products in the TAFL industry is a direct result of a combination of high quality levels of finished production that are guaranteed by modern systems of quality control, the timely realization of contractual obligations with foreign clients, and a speedy delivery to the main markets in EU and CIS countries. This helps promote a broadening of collaboration between Moldovan enterprises and foreign business partners.

The sector is structured as follows:

Apparel manufacturing

Textile manufacturing

Footwear manufacturing

Leather, leather products, accesories

TAF

L In

dus

try

The number of TAFL companies represents around 11% out of the total number of enterprises in the Moldovan industry.

Business registration

Most companies choose one of the following corporate forms:

• Joint Stock Company (JSC);• Limited Liability Company (LLC);• Joint Ventures – partially local investment and

partially foreign capital;• Companies with Foreign Capital – 100 percent

owned by Moldova’s non-residents.

Privatization The only company in the sector with a state share (59.4 %) is “Floare Carpet” which produces carpets. Now it represents an investment opportunity as the state share is announced to be for sale.

Several international practices of collaboration are established in the TAFL sector, which are well defined and known: CM, CMT, FOB, Own Label and Private Label.

A large number of apparel and footwear manufac-turers have managed to launch own brands in the domestic market. Some are penetrating new mar-kets with own branded goods to neighboring coun-tries.

Main products of TAFL sector produced in 2015

• Knitwear garments: 15 million pieces;• Woven apparel products: 7.6 million pieces;• Footwear: 1.8 million pairs.

Textile manufacturing

Apparel manufacturing

Leather, Footwear,

Travel goods

Employees Companies Turnover

million EUR4,244

3,761

14,635

120

76

356

85

21

87

Source: National Bureau of Statistics

Source: National Bureau of Statistics

4

During the last years, mixed business models continuously evolved, i.e. enterprises took on the purchase of a part of necessary raw materials, and provided an increased value added to the products in Moldova. The output volumes of the TAFL Industry overall grew constantly.

The share of exports in the industry is at approximately 80 percent. The largest part of this production is toll manufacturing of sewed and knitted products. The remaining part is concentrated on the export of carpets.

Different degrees of value creation

20%Private label / own label

80%CM / CMT& FOB

Source: Moldova Fashion Days

Source: “Tricon”

78%Export

22%Internalmarket

Services (inward processing): Germany, Italy, the USA, Poland, Austria etc.Own production: the CIS countries, the USA, Great Britain, Belgium, Romania, Lithuania, etc.E

xpor

t

Structure of product deliveries

Source: Invest in Moldova

5

Human resources

Moldova offers an active, educated and multilingual workforce. It is a melting pot of several nationalities, such as Romanians, Russians, Ukrainians and others. There is one official language – Romanian, however there are more languages in use: Russian, English, Ukrainian, Bulgarian and Gagauzian, which is close to Turkish. In addition, many Moldovans speak French, Italian, German.

Moldova’s population is a vibrant and adaptable society, with 80% of the population multilingual and 33% of population under 25. Moreover, the young population is looking to work with international companies and uses their competences and skills. The economically active population, in 2015, was around 1.267 million people.

Companies wishing to employ more than 1000 people, will find their employees in large cities, like Chisinau and Balti. They offer available and trained workforce. Companies looking for less, will find ex-tremely attractive and competitive regions all over the country. A considerable additional potential la-bor force are Moldovan migrants who are willing to return back when they find a job.

Well educated young students, in sector specific faculties, are available to work in companies and increase their productivity. The TAFL industry in

Moldova boasts a highly qualified labor force on account of on its educational system, including both secondary vocational and university levels. Tailors and technicians are educated in specialized vocational schools evenly spread throughout the country. Higher levels of education at specialized university departments offer post-graduate education in related fields. Design experts are educated in numerous secondary vocational schools, colleges, and universities.

The TAFL specialities in Higher Education Institutions are the following:

• Industrial Fashion Design; • Modeling and Technology of Clothing from

Fabrics;• Engineering and management in TAFL,

Modeling and Technology of Knitwear; • Modeling and Technology of Clothing from

leather and substitutes.

University & Colleges:

• Technical University of Moldova; • Pedagogical State University;• Academy of Arts;• Light Industry College Balti;• Technological College Chisinau.

376

506

Tailor Seamstress

Source: Ministry of Education

Graduates in vocational schools by specialities, 2015/2016

356

105

Colleges Universities

Source: Ministry of Education

Graduates in colleges and universities, 2015/2016

Top reasons to invest in TAFL sector

6

84€

148€

85€

154€

84€

132€

Moldova Romania

87€

177€

83€

199€

96€

276€

2011 20122010 2013 2014 20162015

95€

215€

Operating costs and taxesMoldova offers a highly-skilled, competitively-priced workforce. This provides an attractive basis for successful business.

The gross wages in Moldova for workers in the industry sector range from 180 EUR – 450 EUR, depending on the region and professional level of the employee, which is lower than twages in the region. Compared to other Eastern European countries, Moldova’s unit labor cost is stable and slowly growing.

Moldova’s labor force combines low-cost with high productivity, thus reflecting the key factor for a strong business performance.

The quality of the labor force also derives from the industrial experience and history of Moldova, as it was one of the most industrialized republics in former Soviet times.

Minute production costs

0.24€Bulgaria

0.145€PR of China

0.07€Moldova

0.27€Romania

0.30€Serbia

0.38€Turkey

Corporate Income Tax

15%

Serbia Romania

16%

Moldova

12%

Poland

19%

Evolution of the minimum wage in the Republic of Moldova and Romania

Source: PWC,worldwide tax summaries

Source: National Bureau of Statistics Moldova, Eurostat

Evolution of average gross salary in the economy

195€

2011

223€

2012

225€

2013 2015

220€

2016

235€

2014

224€

Source: National Bureau of Statistics

Source: Invest in Moldova

Minimum wage in Moldova developed very slow, in some years with negative growth. In Romania, the minimum gross salary doubled in the last six years.

7

220€Moldova

368€Serbia

386€Albania

451€Bulgaria

506€Russia

521€Macedonia

576€Romania

750€Croatia

801€Hungary

921€Poland

1025€Slovakia959€

Czech Republic

658€Bosnia andHerzegovina

175€Ukraine

Utility CostsThe utility costs are lower than in the region:

Electricity Water Sewerage Gas

0.09–0.10EUR/kWh

0.726EUR/m3

0.586EUR/m3

0.34EUR/m3

In Free Economic Zones the rental price for production halls is even lower, accounting for 0.8 EUR to 2 EUR per square meter.

Net Salary

182.20 50.75

Personal Income Tax (PIT) (7%,18%)

15.27

281.31

Employee Social Security Tax (6%)

13.24

Employee Health Insurance Tax (4.5%)

9.93

Employer HealthInsurance tax (4.5%)

9.93

Social Fund (23%)

Gross Salary

220.64

Total Labor Cost,

7% if the gross annual salary is less than 29,640 MDL - 8,27 euro18% if the gross annual salary is more than 29,640 MDL - 6,99 euro

The prices vary depending on the building conditions.

Moldova Romania Serbia

2–4 EUR/m2

3.5–4.5 EUR/m2

4–5 EUR/m2

Source: Trading economics, wages

Depiction: Invest in Moldova

Structure of the average salary in Moldova, 2015 (EUR)*

Average monthly wages in comparison in 2015

* There are locations with different salaries. The gross salary of 281 EUR (fully loaded or company cost) is an average country for all types of jobs.

8

Textile sub-sector overviewMoldova’s textile industry is represented mainly by the rug industry with an annual production of around 50 million EUR. The carpet manufacturers are primarily export-oriented, the two major ones being Floare-Carpet and Moldabela (with affiliated yarn manufacturer Filatura-Ungheni). Floare-Carpet is specialized in the production of wool rugs, while Moldabela specializes in wool and synthetic fiber rugs. The main wool supplier for the production of rugs is New Zealand. Around 10-15 percent of the total volume of supplied wool is bought locally. Synthetic fibers are imported. Synthetic yarn is produced out of fibers, and then the rugs are spun. Floare-Carpet factory has an integrated mill, while Moldabela factory buys yarn from the sister mill. Both companies enclose the whole value chain. The majority of rugs (78 percent) are sold to European countries, around 20 percent in Moldova, and 2 percent to other markets, such as the US and Japan.

“Euro-Yarns” is a Moldovan-Belgian joint venture and producer of synthetic yarns for carpet and tufting industry. The company is resident of “Ung-heni-Business” free zone and produces synthetic yarns. Production is delivered mainly in EU coun-tries (Belgium and Poland), as well as CIS countries, while 30 percent is delivered to the resident of FEZ “Moldabela” Ltd. to manufacture carpets.

Though the greatest share of textile manufacturing includes carpet and rug manufacturing, there is also fabric (cotton) manufacturing, bed linen and hosiery production. These are unique for the Republic of Moldova and there is one factory for fabric and bed linen manufacturing in Tiraspol, and one hosiery producer in Chisinau.

Source: “Covoare Ungheni” Source: “Euro-Yarns”

9

Apparel sub-sector overviewThe apparel industry has benefited from the near-shoring of the production of (fashionable) knitted and woven clothing for the EU market.

In the past 5 years, the apparel industry represented more than half of the turnover in the TAFL industry.

The apparel sector of Moldova is one of the oldest branches of the national economy and continues to remain vibrant and competitive, as it is based on one of the most important resources available in Moldova: a strong and competent labor force. It is a sector with long-standing traditions in exporting a wide range of products.

Moldova combines several unique features that will contribute to the further growth of the sector: due to its geographical location, Moldova delivers Fast Fashion. Within 1 truck day, goods are delivered to Eastern Europe, within 2 truck days to Western Europe. Moldova perfectly satisfies the ever-growing demand for Sustainable Fashion.

The Moldovan apparel industry is competitive in prices and maintains social and labor security standards at the same time. The proximity to the EU market also gives customers the possibility to out-source large parts of the value chain: Fashion, Taste, Design in Moldova is European, especially among the young generation of designers.

Price, quality, flexibility to produce smaller orders and lead time are thus the main strengths of the Moldovan apparel sector.

In 2015, there were an estimated 356 registered ap-parel producing companies in Moldova, of which an estimated 19 are considered to be large companies, 118 small and medium sized enterprises (SMEs) and 207 micro companies. Out of these, 77% are private local companies, 14% are companies with foreign capital and 8% Joint Ventures.

The domestic apparel consumer market is highly competitive due to low cost clothing imported from China and the lively trade in second hand clothing. Additionally, the size of the population is small, salaries are low and the average annual expenditure on all consumer goods is less than half of the expenditure in other countries in the region.

In order to be able to produce at full capacity, the majority of Moldovan apparel producers are presently dependent upon export to the EU, CIS and Turkish markets.

In 2015, around 70 percent of the Moldovan apparel-producing companies worked on C&M/CMT basis for EU export markets, led by Italy, UK and Germany. The provision of C&M/CMT production often does not require large investments for producers.

In addition, they do not have to purchase their own raw materials, as this is done by their European buyers. In the past few years, many Moldovan producers have gained experience in developing a skilled labor force that is capable of working with new technologies and producing high quality clothing, especially since some companies produce for high-end brands such as Prada, Armani, Dolce & Gabbana, Calvin Klein etc.

However, margins in C&M/CMT production are low, and international investors could use the Moldovan potential to the fullest in deciding to intensify the val-ue creation within Moldova by moving away from contract manufacturing and instead starting to de-sign, create, produce and export.

The apparel industry used to be concentrated in the center of the country around the capital city of Chisinau. In recent years it has become more decentralized, because salaries in rural areas are lower.

Most apparel producers receive the raw mate-rials (fabrics) from their foreign customers. This differs from the producers who sell under their own brand, since they buy their fabrics from Italy, Turkey, or China for lower costs.

Source: “Georgette”

10

Footwear, Leather and Accessories sub-sector overviewThe footwear, leather and accessories sector in Moldova contributes roughly 0.5 percent of GDP and 4.5 percent of exports. The industry employs an estimated 4,000 people in around 80 companies, located throughout Moldova, with concentrations in Chisinau, Soroca and Transnistria. The operators in this industry follow three types of business models: contract manufacturing for the EU market, production and distribution on the local market, production and export to Central Asia and regional markets (such as Russia, Kazakhstan).

Moldova has sufficient experience in the footwear production sector: The technological level of footwear and accessories companies allows them to produce competitive products. This fact is confirmed by long-standing cooperation between Moldovan companies and renowned foreign brands from Italy, Germany, UK, France and Romania. The fashion accessories industry, specifically the production of footwear, handbags, synthetic and leather goods, creates significant exports for Moldova.

There is an established supply chain of components for footwear which are imported from Italy, Germany, Spain, Poland, Ukraine, Romania and Turkey. The price per minute in the footwear industry is lower than that of other countries in Central Europe, the Baltic States, Ukraine, and Belarus. Most of footwear and accessories companies are small or medium sized, and capable to handle small production volumes with ease.

Specific incentives, investment opportunitiesTendencies that could offer good prospects for exports from Moldova:

• Fast-fashion remains important in the EU markets with flexibility in production and fast delivery (transport within 2–3 days, compared to 4–6 weeks from China). As demand in EU markets is more fragmented and less predictable, EU retailers prefer to order in smaller quantities, with shorter delivery times and on an irregular basis.

• The demand for ethical clothing continues to develop in the EU. More and more European retailers and brands focus on Corporate Social Responsibility (CSR) to ensure decent work-ing standards. Moldova has high official and de-facto standards for social security and rights of workers.

• Besides the demand for ethically produced clothing there is also a growing demand for sustainable clothing. Organic and sustainable fabrics are available through the European and Turkish fabric suppliers. In addition to this, Moldova is located near the European market, which has a positive effect on the carbon foot-print of its products.

• Moving from CM to CMT or Fob production. European buyers are searching for manufacturers who can offer value added.

• As a middle class develops in nearby eastern EU countries and in the other CIS countries, demand for fashionable knitted and woven clothing, sports clothing, work-wear and baby

Source: “Maritan Sor”Source: “Maritan Sor”

11

clothing is expected to develop further. Opening up factory outlets or single brand stores in these countries could be a chance to get easier access here.

• Rising wages in China have increased the costs of Chinese apparel imports, and European buyers are looking for new production locations. This has resulted in a growing interest in Eastern European production possibilities.

• Because of the rising costs in the neighboring countries, Moldova is the next logical country for European buyers to expand to. The price-per-minute cost in Moldova is competitive.

• New European brands, small retail chains and web-shop brands are an important target niche market for Moldova. These new brands, small retail chains and web-shops are not searching for the lowest price but value quality and flexibility.

All Companies operating in TAFL industry sector benefit from:

• Incentives to import of Raw Materials used to produce Export Goods. Export manufacturers registered in Moldova are entitled to request the deferral of the payment due date for VAT and customs taxes, for the period of the production cycle, but no longer than 180 days, for raw material, materials, accessories, primary packaging and imported finishing items that are used exclusively for manufacturing of export goods.

• Exemption from VAT payments and customs duties on raw materials and components supplied, based on Free Trade Agreement with CIS and GUAM.

• VAT and customs duties exemption for imported goods introduced in equity capital.

• Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union, which provides improved access to the EU market of 500 million consumers for Moldovan goods and services, as well as improved investment opportunities.

• Moldova joined the Convention on Pan-Euro-Mediterranean preferential rules of origin. Companies active in member states are now allowed to cumulate the origin from different countries. Enterprises producing in Moldova can import raw materials from third countries directly, process it in Moldova and export it as Moldovan goods to the EU or other member states of the Convention. Thus, Moldova’s accession to the Convention opens new opportunities for business, processing industry and cooperation with the countries of EU, CEFTA and Turkey as well as with the countries DCFTA agreements will be signed with.

Source: Invest in Moldova, photo “Mercedes C class trim covers” Source: “OldCom”

12

Edineţ

Briceni

Drochia

Soroca

Florești

Șoldănești

Fălești

UngheniCălărași

Strășeni

CHISINAU

Orhei

Nisporeni

Căușeni

Anenii Noi

COMRAT

Rezina

Cahul

Criuleni

Ialoveni

Ocniţa

Dondușeni

Rîșcani

Glodeni BĂLȚI

Sîngerei

Telenești

Hîncești

Ștefan Vodă

Leova

Cantemir

Taraclia

Cimișlia

VET

VET

VET

VET

VET

VET

VET

VET

VET

VET

VETVET

VET

VET

VET

VET

VET

VET

VET

VET

VET

LEGEND

Secondary Vocational Institutions(vocational schools)

Post secondary Vocational Institutions(colleges)

Higher Education Institutions(universities)

VET

Population, thousand people

3553.1

814.1681.1

150.7145.8

Republic of Moldova,total

Chisinau municipality,

Balti municipality,

Chisinau city

Balti city

Population, ATU Gagauzia, thousand peolple

161.9

26.2

22.9

16.7

ATU Gagauzia

Comrat municipality

Ciadir-Lunga

Vulcanesti

83.4 8.8 Anenii Noi

28.5 12.5 Basarabeasca

72.9 9.9 Briceni

124.6 39.6 Cahul

62.0 5.8 Cantemir

77.8 16.4 Calarasi

90.5 19.9 Causeni

60.1 14.3 Cimislia

42.9 8.5 Donduseni

87.4 10.4 Drochia

35.3 20.5 Dubasari

80.7 18.4 Edinet

91.5 16.9 Falesti

87.6 15.5 Floresti

59.6 11.3 Glodeni

120.2 17.3 Hincesti

101.3 16.4 Ialoveni

52.8 10.8 Leova

65.6 14.4 Nisporeni

54.0 9.4 Ocnita

125.0 33.7 Orhei

50.8 12.8 Rezina67.9 13.3 Riscani

92.2 14.8 Singerei

100.1 37.6 Soroca

92.3 20.7 Straseni

41.9 7.5 Soldanesti

70.4 8.5 Stefan Voda

43.6 14.9 Taraclia

72.6 8.1 Telenesti

117.3 38.4 Ungheni

Population of the region

Population of region capital city

Population of Moldova in 2016, thousand people

Educational institutions in TAFL Sector

13

3

First cycle Lycentiate(Bachelor)3-4 years

5

*****

One year compalsory pre-schooltrainig

Kindergarden

Secondary school

Second cycle Master

Doctorate3-4 years

1-2 years

5 yearsV- IX

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

2425

Age

26

27

Trade School1 year

3

1

2

Grammarschool

3 years

X - XII

3

0

General SecondarySchool2 years

3Professional

school2 years

3College2-5 years

4

5

6

Primary school4 years

I - IV

*****

*****

*****

*****

*****

Post-doctorate*****

***** ***** *****

i ISCED level Bacalaureat exam.

Exit to labour marketCompetition based enrolment

Hig

her

Ed

ucat

ion

Co

mp

ulso

ry E

duc

atio

n

Education system in the Republic of Moldova

14

Free Economic ZonesThe Free Economic Zones represent excellent platforms for businesses that are convenient to export-oriented manufacturing companies, which intend to benefit from a preferential customs and tax regime. There are 7 FEZs in Moldova, spread around through-out the country and located either near a border, or in big cities. This Free Economic Zones offer preferential conditions and a dedicated customer-oriented admin-istration. Activities in the FEZs are limited to industrial production, packaging, trade, transportation, logistics and utilities, with priority given to manufacturing. More-over, Giurgiulesti International Free Port and Marcules-ti Free Airport offer quite similar conditions to the FEZs. Incentives offered in Free Economic Zones• FEZs are connected to all important transport

routes and have access to all regions through the national and international roads;

• Customs Office available on site, operating 7days/week (if necessary 24 hours/day);

• Exemption from customs duties and excise duties on goods imported into the FEZs and subsequently exported;

• VAT for equipment and machinery: 0%;• Corporate tax rate stands at 6% (3% in free port);• Customs procedures tax: 0.1% from customs

value of goods (outside FEZs - 0.4%);• 10 years state guarantee for protection against

adverse changes in legislation (15 years in Free Port);

• Free connection to utilities in FEZs and Industrial Parks;

• EUR/USD payment among FEZs residents;• Exemption from CIT for a period of 3 years, when

investing 1 million USD in fix assets of the compa-ny and/ or in FEZ infrastructure development (for 5 years, when investing 5 million USD).

Industrial ParksIndustrial parks (IPs) are delimited territories in which industrial production, services provision, applied scientific research and/or technological development are carried out under some preferences. There are 8 Industrial Parks in Moldova: IP Tracom (Chisinau), IP Bioenergagro (Drochia), IP Cimislia (Cimislia), IP Raut (Balti), IP CAAN (Straseni), IP Edinet (Edinet), IP Triveneta Cavi Development (Straseni), IP Comrat (Comrat). Industrial Parks can potentially become the center for investment attraction and the place for different industrial and IT projects. Firms are given legal and consulting support in obtaining licenses, permits and approvals. Consulting services also include project development, personnel recruitment, knowledge management, marketing, etc.

Incentives for Industrial Parks:• Free re-zoning of agricultural into industrial land;

• Normative (below market) prices for the purchased land;

• Reduced rental price for state land;

• Free connection to existing infrastructure in the park;

• Minimal state inspection and control regime.

15

Main reasons to choose Moldova

Moldova delivers fast, flexible and with highest quality levels.

Labor force

Competitive labor and production costs in the region (Labor: Gross wage ca. 235 EUR/ month, Production Cost: 0.07 EUR per-minute, on average). This creates a competitive business environment for manufacturing.

Skilled and multilingual workforce (Romanian, Russian, Turkish, Ukrainian, Bulgarian, English, French, German, Italian, etc.)

Flexibility and short delivery time

Flexible, reliable and quick delivery tailored to customer needs. Major destinations both from the EU and CIS can be reached within 2 truck days. Orders are executed and delivered on average within 2 weeks, with no minimum order restrictions. Electronic customs declaration.

Proximity and easy access to major markets

Free trade with EU, CIS, Turkey.

Long standing experience

Most of Moldovan apparel companies have been involved in Cut & Make (C&M) or Cut, Make & Trim (CMT) operations and have long-term experience in working with upscale European brands. Local companies develop in FOB, Private Label, Own Label.

Goods that can be produced competitively in Moldova:

Textile

Accessories

Apparel

Footwear

Leather

Carpets

• Relocation of production capacity; • Automotive cut & sew.

16

Danube

Sulina Branch

Sf. Gheorghe Branch

Kilia B

ranch

UKRAINE

FREE ECONOMIC ZONES& INDUSTRIAL PARKS

ROMANIA

Prut

Prut

Nistru

Nistru

Edinet

Cupcini

Donduseni

Drochia

Soroca

Floresti

Rișcani

GlodeniBALŢI

Falesti

Singerei

Soldanesti

Ribnita

Telenesti

Ungheni

Calarasi

Straseni

Orhei

Nisporeni

Hincesti

Causeni

Stefan Voda

TIRASPOLAnenii Noi

Leova

Cantemir COMRAT

Basarabeasca

Ceadir-Lunga

Tvardita

Taraclia

Giurgiulesti

Slobozia

Grigoriopol

Dubasari

Otaci

Rezina

CHIȘINAU

Cahul

Criuleni

Cimișlia

Ialoveni

Briceni

Ocnita

Mohyliv-Podolikyi

Izmail

Bolgrad

Iasi

Bucharest, RO - 255kmConstanta, RO - 215kmCraiova, RO - 481kmGalati, RO - 10kmPitesti, RO - 370kmTimisoara, RO - 697kmMD: GiurgiulestiRO: Galati

Arad, RO - 654kmBucharest, RO - 407kmCraiova, RO - 641kmPitesti, RO - 531kmMD: LeuseniRO: Albita

MD: GiurgiuleștiUA: Reni

MD: MirnoeUA: Tabachi

MD: Ceadir- LungaUA: Novie Troiani

MD: BasarabeascaUA: Serpniovoe 1 MD: Tudora

UA: Starokazacie

Odessa, UA - 77kmMD: PalancaUA: Udobnoe

MD: VulcanestiUA: Vinogradovca

Iasi, RO - 24kmMD: SculeniRO: Sculeni

Baia Mare, RO - 443kmBototsani, RO - 55kmSuceava, RO - 97kmMD: CostestiRO: Stinca

MD: UnguriUA: Bronnita

Kaluga, RU - 1063kmKiev, UA - 385kmMohyliv-Podolskyi, UA - 0.5kmVinnytsa, UA - 120kmMD: OtaciUA: Mogiliov-Podolisc

MD: BriceniUA: Rososeni

Chernivtsi, UA - 105kmIvano-Frankovsk, UA - 215kmKatowice, PL - 768kmLviv, UA - 341kmTychy, PL - 771kmMD: CrivaUA: Mamaliga

M14

M14

M14

M3

M2

M2

M4

M4

M4

M4

M4

M21

22E

24

24C

24D

H10

P63

M05

M05

M13

M05

M05

H03

M14

M14

Buzau

Kilia

SulinaTulcea

Dnestrovsky Liman

Razim lake

Co

nsta

nta

Ista

mb

ul

BLACKSEA

FEZ Otaci Business FEZ Marculesti Hub Airport (Marculesti, Floresti rayon)FEZ Balti - FEZ Balti / Subzone Straseni - FEZ Balti / Subzone Causeni - FEZ Balti / Subzone Orhei - FEZ Balti / Subzone Cahul FEZ Ungheni Business FEZ Expo Business Chisinau FEZ Tvardita FEZ Taraclia FEZ Valcanes (Vulcanesti)FEZ Giurgiulesti Free International Port (GFIP)

FEZ location name

FEZ

FEZ Subzone

Industrial Park

Border pass

Airport

Sea / river port

Route numberi

LEGEND

17

Danube

Sulina Branch

Sf. Gheorghe Branch

Kilia B

ranch

Prut

Prut

Nistru

Nistru

Mohyliv-Podolikyi

Odessa

Izmail

Bolgrad

Galati

Iasi

Braila

Focsani

Buzau

Kilia

SulinaTulcea

Belgorod Dnestrovsk

Dnestrovsky Liman

Razim

lake

Co

nsta

nta

Ista

mb

ul

BLACKSEA

BĂLŢI

Căușeni

Cahul

GlodeniCostești

Sîngerei

Leova

Cantemir

Edineţ

Briceni

Drochia

Soroca

Florești

Șoldănești

Fălești

UngheniCălărași

Strășeni

Orhei

Nisporeni

Anenii Noi

COMRAT

Vulcănești

Rezina

CHIȘINĂU

Criuleni

Ialoveni

Ocniţa

Dondușeni

Rîșcani

Telenești

Hîncești

Ștefan Vodă

Basarabeasca

Ceadîr-Lunga

Tvardita

Taraclia

Otaci

Cimișlia

UKRAINE

ROMANIA

LEGENDShoes

Carpet

Garment & Knit wear

Furniture

Seat covers

Textile tapes

Rubber & Plastic injection

Steel casting

Pumps

Construction material

Electronics

Glass manufacturing

Cardboard manufacturing

Metal processing

Gravel & stone extraction

Energetics

Wires and harnesses

Ceramic tiles

Alcohol & bioethanol

Railway

Cannery

Sugar

Water bottling

Food products

Winery

Chocolate

Bakery

Cigarette and tobacco

Dairy products

Meat processing

Beer

Brandy production

Pharmaceuticals

SUCCESS STORIES &INDUSTRIAL COMPETENCES

Regions were the biggest employers from the TAFL sector are located

Danube

Sulina Branch

Sf. Gheorghe Branch

Kilia B

ranch

UKRAINE

FREE ECONOMIC ZONES& INDUSTRIAL PARKS

ROMANIA

Prut

Prut

Nistru

Nistru

Edinet

Cupcini

Donduseni

Drochia

Soroca

Floresti

Rișcani

GlodeniBALŢI

Falesti

Singerei

Soldanesti

Ribnita

Telenesti

Ungheni

Calarasi

Straseni

Orhei

Nisporeni

Hincesti

Causeni

Stefan Voda

TIRASPOLAnenii Noi

Leova

Cantemir COMRAT

Basarabeasca

Ceadir-Lunga

Tvardita

Taraclia

Giurgiulesti

Slobozia

Grigoriopol

Dubasari

Otaci

Rezina

CHIȘINAU

Cahul

Criuleni

Cimișlia

Ialoveni

Briceni

Ocnita

Mohyliv-Podolikyi

Izmail

Bolgrad

Iasi

Bucharest, RO - 255kmConstanta, RO - 215kmCraiova, RO - 481kmGalati, RO - 10kmPitesti, RO - 370kmTimisoara, RO - 697kmMD: GiurgiulestiRO: Galati

Arad, RO - 654kmBucharest, RO - 407kmCraiova, RO - 641kmPitesti, RO - 531kmMD: LeuseniRO: Albita

MD: GiurgiuleștiUA: Reni

MD: MirnoeUA: Tabachi

MD: Ceadir- LungaUA: Novie Troiani

MD: BasarabeascaUA: Serpniovoe 1 MD: Tudora

UA: Starokazacie

Odessa, UA - 77kmMD: PalancaUA: Udobnoe

MD: VulcanestiUA: Vinogradovca

Iasi, RO - 24kmMD: SculeniRO: Sculeni

Baia Mare, RO - 443kmBototsani, RO - 55kmSuceava, RO - 97kmMD: CostestiRO: Stinca

MD: UnguriUA: Bronnita

Kaluga, RU - 1063kmKiev, UA - 385kmMohyliv-Podolskyi, UA - 0.5kmVinnytsa, UA - 120kmMD: OtaciUA: Mogiliov-Podolisc

MD: BriceniUA: Rososeni

Chernivtsi, UA - 105kmIvano-Frankovsk, UA - 215kmKatowice, PL - 768kmLviv, UA - 341kmTychy, PL - 771kmMD: CrivaUA: Mamaliga

M14

M14

M14

M3

M2

M2

M4

M4

M4

M4

M4

M21

22E

24

24C

24D

H10

P63

M05

M05

M13

M05

M05

H03

M14

M14

Buzau

Kilia

SulinaTulcea

Dnestrovsky Liman

Razim lake

Co

nsta

nta

Ista

mb

ul

BLACKSEA

FEZ Otaci Business FEZ Marculesti Hub Airport (Marculesti, Floresti rayon)FEZ Balti - FEZ Balti / Subzone Straseni - FEZ Balti / Subzone Causeni - FEZ Balti / Subzone Orhei - FEZ Balti / Subzone Cahul FEZ Ungheni Business FEZ Expo Business Chisinau FEZ Tvardita FEZ Taraclia FEZ Valcanes (Vulcanesti)FEZ Giurgiulesti Free International Port (GFIP)

FEZ location name

FEZ

FEZ Subzone

Industrial Park

Border pass

Airport

Sea / river port

Route numberi

LEGEND

18

STRATEGY

PROJECT MANAGEMENT ASSISTANCE AND PROVIDING INFORMATION

LOCATION CONSULTING / SCOPING MISSION SUPPORT

AFTERCARE / POSTINVESTMENT SUPPORT SERVICES

DECISION & INVESTMENTEVALUATION

Identification of sector-specific investors

General data and statistics for investor feasability study support

Sector-specific details & information of legislation

Relevant site presentation and preselection

Joint project management assistance together with FEZs & IPs administration

Coordination andsupport of negotiationswith localauthorities

Identification of project-specific locations

Identification of sourcing opportunities

Information on suitable locations

Site visitorganization

Arranging meetings with public authorities, relevant private sector representatives

Final site decision support

Identification of and general information on relevant tax, legal and adminis-trative issues

Connecting with relevant recruitment, legal, tax and other consulting companies

Facilitation and communication with public local and central authorities, as well as relevant private sector representatives

Advice on administrative and legal issues

Supporting investors and associations in their efforts to improve the business climate

Invest in Moldova helps youWe will assist you in setting up your operations in Moldova. We support your project management activities from the earliest stages of your expansion strategy. We provide you with the industry informa-tion you need. This includes facts about the indus-trial competences throughout Moldova’s regions, as well as available sourcing and supply companies.

Foreign companies profit from our rich experience in identifying the business locations which best meet their specific investment criteria. We help turn your requirements into concrete investment site propos-als; providing consulting services to ensure you make the right location decision. We coordinate site visits, meetings with potential partners, relevant existing investors, universities, colleges, vocational schools and other institutes active in the industry,

as well as meetings with relevant embassies, busi-ness associations, government officials and other authorities.

Our team of consultants is at hand to provide you with the relevant background information on Moldo-va’s tax and legal system, industry regulations, and the domestic labor market. Invest in Moldova ex-perts help you create the appropriate financial pack-age for your investment and put you in contact with suitable financial partners. Our specialists provide you with detailed information about available incen-tives, support you with the application process, and arrange contacts with local developers.

All of our investor-related services are treated with the utmost confidentiality and are provided free of charge.

“We decide to open a new production plant in Moldova for a

good strategic position and a reasonable labor cost. Local and

central Government authorities offer entire support in investment

and business activity.”Gregorio Isgrò,

Administrator at CONFEZIONI ANDREA MDV S.R.L.

“Ungheni and its free economic zone, where Lear Moldova is

placed since 2010, confirmed itself as a well performing and

competitive plant. The geographical position (30 km from EU

border), the proximity to the European customer base and

suppliers as well as the dedicated labor force are the right

ingredients for a success story.”

Sven DAMM, VP of Trim Operations for Europe & Africa

“Due to the difference in the cost of living, it’s currently more

affordable to invest in Moldova than elsewhere in the EU. Mol-

dova has a good strategic position, high qualified workforce,

presents good opportunities on a broad market, and last but

not least has available funding and a good forecast for the

future.”

EURO YARNS,producers of synthetic yarns for carpet & tufting industry

“

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Kiev

Balti

Chisinau

Bucharest

Istanbul

500km

1000km

1500km

2000km

Paris

London

Berlin

Barcelona

Milan

Wien

Rome

Madrid

Antwerpen

Warsawa

Minsk

Moscow

Sankt Petersburg

500k

m1000

km1500

km2000

km

500k

m

1000

km

1500

km

2000

km

500km

1000km

1500km

500km 1000km 1500km 2000km

500km

1000km

1500km

2000km

MD

Our team consists of perma-nent investment attraction staff, sectorial consultants, as well as regional officers. Com-bining our experience, we are able to provide you with infor-mation relevant for your deci-sion making, as well as links to businesses and government.

The Moldovan Investment and Export Promotion Organization (MIEPO) is the prime source of information and assistance for potential investors.

We provide tailored services for potential investors through-out the investment decision process. We also support ex-isting investors in extending their operations.

Contact us:65 Alexei Mateevici str., Chişinău,Republica Moldova, MD-2009Tel:+373 22 27 36 54Fax: +373 22 22 43 10www.invest.gov.md, invest@gov.md© MIEPO 2016