Trade Moldova

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Macroeconomics of MOLDOVA

and its TRADING PARTNERS

Lupu Ilie



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General country overview

Area: 33,800 km2

Population: 3.58 million

Capital: Chisinau - 717,000 citizens

Climate: moderate winter (Jan. -4 -7°C ),

warm summer (Jul. +25 +28°C)

National Legislature: Unicameral assembly, the

Parliament has 101 members

Head of state: Marian Lupu - Interim president

Administrative units: 32

National currency: Moldovan Leu (MDL)

Exchange rate: 1 ¼ = MDL 16.20

1 $ = MDL 10.50

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National Development Strategy

2008-2011

EGPRSP

(Economic Growth and PovertyReduction Strategy Paper)

National DevelopmentStrategy 2008-2011

strengthen a modern democratic state

promote the reintegration of the country

enhance national economic competitiveness

develop human resources

promote regional development



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* forecast for 2008

Macroeconomic Development

Inflation, %

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Foreign Direct Investments

* forecast for 2008

FDI Inflow, mln. USD

2002 2003 2004 2005 2006 2007

Total FDI in national economy 639,2 716,6 868,9 1056,4 1300,2 1812,8

including:

subscribed capital 529,2 570,8 677,3 742,6 857,7 1123,8

reinvested earnings -55,6 -40,2 6,1 45,5 87,1 190,4

other capital 165,6 186,0 185,5 268,3 355,4 498,6

FDI in national economy at the end of the year , mln. USD



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L egal framework forinvestment in Moldova

Law on investments in entrepreneurial activity

nr. 81-XV din 18.03.2004

Investment Attraction and Export Promotion Strategy

for 2006-2015

40 signed bilateral agreements in relation to promotion

and reciprocal protection of investments

Law on Entrepreneurship and Enterprises 845-XIX

form 03.01.1992

Law on Limited Liability Companies ± nr.135-XVI from 14.07.2007

Law on Joint Stock Companies ± nr. 1134 from 02.04.1997,

modified by Law 163 from 13.07.2007

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Reforms for the liberalization

of economy

Cancellation of all taxpayers'debts and arrears to the State

Prohibition to perform checksby control bodies of fiscalperiods until 01.01.2007

Fiscalamnesty

Legalization of real estate andfinancial assets, shares

Payment of 5% from thedifference between the declaredvalue and the previouslyestimated value to the budget

Capitallegalization

³0%´ income tax for all legalentities

Distribution of dividends ± 15%share deducted

³0%´Income tax

4335 mln. MDL

(270 mln. Euro)as of 14.03.2008

Expectations:

Increase of FDI inflow

by 100%

Increase of reinvested

earnings by 300%

The amount of legalized capital

112 mln.MDL

payments to the budget

5.6 mln MDL



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L egal Framework for business

² new challenges

Law on administration and deetatization of public ownershipnr. 121-XVI as of 04.05.2007

Scope: to intensify the transparency and monitor the administration anddeetatization process of public ownership

Law regarding basic principles of entrepreneurial activity - ³Guillotine II´

Scope: substantial reducing of entrepreneurs¶ dependency on administrativeregulation of entrepreneurial activity, as well as decrease the costs and time for obtaining licenses, authorizations etc.

Law on National Commission of the Financial Market,

nr. 129-XVI as of 07.06.2007

Scope: to undertake a unified supervision of the non-banking sector in theRepublic of Moldova.



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Free Economic

Zone

Free

International

Airport -

Marculesti

FreeInternational

Port -

Giurgiulesti

Industrial Park

Giurgiulesti Port

1. GIFP Infrastructure

- Oil Terminal

- Cargo Terminal

- Passenger Terminal

2. GIFP free economic zone:

- zero income tax;

- exemption from excise Taxes

and import VAT;

- exemption from import and

export duties;

Floresti

Cainari

Ungheni

Law on industrial parks N. 164-X VI from

13.07.2007

Non-discriminatory

principle

Public Private

Partnership principle

Designed to

encourage and

facilitate

manufacturing

activities

IP life period up to 50 years

International Free

Airport

MARCULESTI

Law on Free International Airport -

M ARCULESTI (project)

1. Favourable geographical location

2. Well developed infrastructure

3. Proximity to industrial parks and FEZ

4. Qualified labour force

5. Special custom and tax regime (freeeconomic zone)

B

usiness opportunitiesin the region

OTACI BUSINESS

UNGHENI

CHISINAU

TVARDITA

VULKANESTI

TARACLIA

"Expo-Business -Chisinau³

´Ungheni ± 107 km

"Tvardita³ ± 115 km

"Otaci-Business³± 220 km

"Vulkanesti³ ± 200 km

³Taraclia" ± 153 km



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Foreign Trade

TOP 5 Foreign

Trade Partnersaccounting for

more than 60% of

foreign trade

mln. USD



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Foreign Trade by regions

EU countries Other countriesCIS countries

Export

Import

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Trade Policy

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June 2001 ± Moldova becomes member of WTO;

June 2001 ± Moldova becomes member of Stability Pact forSouth East Europe (SPSEE)

December 2006 ± Moldova signs Central European Free TradeAgreement and becomes member of this agreement.

Free Trade Agreements signed with 10 CIS countries (exceptTajikistan)

January 2006 - The Republic of Moldova benefits from theGeneral System of Preferences Plus (GSP+) granted by the EU

1st March 2008 ± Moldova benefits from Autonomous TradePreferences (ATP) offered by European Union.

Trade Moldova

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