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LAW OF THE REPUBLIC OF MOLDOVA

ON FOREIGN INVESTMENTS

amended as of December 13, 1994

This law is aimed to attract and to protect foreign investments. It defines legal, organisational and economic grounds and forms of activities for foreign investors and enterprises with foreign investments in the Republic of Moldova.

 

CHAPTER I

GENERAL PROVISIONS

ARTICLE 1. APPLICABLE LAW

1. The activity of foreign investors and enterprises with foreign investments is regulated: by by legal acts of the Republic of Moldova with exclusions stipulated by this law; by interstate and international agreements (conventions) to which the Republic of Moldova is a party.

2. If provisions of interstate and international agreements (conventions) to which the Republic of Moldova is a party differ from those set by this Law, the provisions of the above agreements (conventions) shall prevail.

3. The provisions of the present Law cannot be modified or amended except by another Law passed by the Parliament. All legal acts contradicting to this Law in part that relate to foreign investments shall not be applicable.

4. Discrimination measures hindering foreign investments, utilisation and liquidation of their objects, as well as export of invested values and values obtained as a result of investments (income, products, work, services) shall be prohibited.

5. Minimum amount of authorised capital for enterprises with foreign investments is determined in conformity with the provisions of current legislation that relate to authorised capital of domestic enterprises* .

ARTICLE 2. FOREIGN INVESTORS

Foreign investors in the Republic of Moldova may be:

a) foreign natural and legal persons, their associations registered in the country of their citizenship, place of residence (permanent place of being), for conducting their entrepreneurial activity;

b) foreign individuals that are not registered for carrying out entrepreneurship activity in the country of their residence;

c) citizens of the Republic of Moldova and persons without citizenship, permanently living outside the republic and registered in the country of their permanent place of residence, for conducting their entrepreneurial activity;

d) foreign states;

e) international organisations.

ARTICLE 3. FOREIGN INVESTMENTS

1. Foreign investments can be:

– hard currency or other accepted foreign currency purchased by the banks of the Republic of Moldova and that make the object of bank operations;

– machinery, equipment, including office equipment;

– property and non-property rights, including the right on intellectual (industrial) property (property right, origin right, copyrights, samples, industrial samples, commercial labels, company names, production and commercial secrets, technologies, know-how etc.).

2. Foreign investments in cash into the public capital of the enterprise, brought into the country in conformity with the legislation in force, must be transferred to the account of the foreign investor opened with one of the banks of the Republic of Moldova or paid in cash.

3. Foreign investments in a non-monetary form should be brought into the republic or acquired on its territory for hard currency or any other foreign currency accepted by the banks of Moldova.

4. Foreign investor’s right on the imported intellectual (industrial) property objects or on their use should be confirmed.

5. Foreign investors have the right to re-invest their revenues in the Republic of Moldova. According to the present Law, any reinvestment is also considered to be a foreign investment.

ARTICLE 4. PROVISIONS FOR FOREIGN INVESTMENT

1. Foreign investment may be realised into all branches of economy of the Republic of Moldova provided the following is not violated: state security interests; anti-monopoly legislation provisions; norms of environmental protection, health of the people, social order and moral norms.

2. Types of activities being limited or forbidden for foreign investors and enterprises with foreign investments in the Republic of Moldova, as well as the areas where their activities are limited or forbidden, are set by the legislation of the Republic of Moldova.

ARTICLE 5 . FOREIGN INVESTMENT FORMS

Foreign investment in the Republic of Moldova may be realised in any of the following forms:

a) formation of enterprises, their branches and associations together with individuals and legal entities of the Republic of Moldova;

b) formation of enterprises, their branches and associations completely belonging to foreign investors;

c) formation of enterprises, branches by non-residents, their associations and international organisations;

d) acquisition of enterprises under construction or under operation, shares in such enterprises, as well as stock and other securities;

e) placing bank deposits with special purpose;

f) acquisition of separate buildings and constructions, as well as other property that, according to the legislation of the Republic of Moldova may belong to foreign investors as a property;

g) acquisition of property and non-property rights, including the right on lease, concessions and intellectual (industrial) property objects;

h) investment based on mutual activity agreements, as well as in any other forms permitted by the legislation of the Republic of Moldova.

ARTICLE 6. ORGANS FOR FOREIGN INVESTMENTS

The Government of the Republic of Moldova and its authorised organs ensure bringing in foreign investments, provision of assistance for foreign investors and enterprises with foreign investments.

 

CHAPTER II

FORMATION OF ENTERPRISES, THEIR ASSOCIATIONS, BRANCHES AND REPRESENTATIVE OFFICES

ARTICLE 7. ENTERPRISES WITH FOREIGN INVESTMENTS, THEIR ASSOCIATIONS

1. Enterprises with foreign investments in the form of joint ventures and companies which completely belong to foreign investors may be set up in the Republic of Moldova.

2. A venture is considered a joint one if it was set up according to the legislation of the Republic of Moldova, ownership capital of which is composed of foreign investments, as well as of investments of individuals and legal entities of Moldova and persons without citizenship, permanently living in the Republic of Moldova.

The following persons cannot be founders of joint ventures:

– persons with general civil competence limited by law or by court;

– persons outlawed to do any corresponding type of activities (until the expiration of a certain term), as well as persons having a non-paid off previous conviction for mercenary crimes;

– military men, state and municipal officials, entrepreneurial activity of which is limited by the normative acts of the Republic of Moldova.

3. A venture which completely belongs to a foreign investor is the one set up according to the legislation of the Republic of Moldova, ownership capital of which consists of foreign investments only.

4. Enterprises with foreign investments may be founded in the Republic of Moldova in any organisational-legal forms, not contradicting its legislation, by means of:

– formation of new enterprises;

– re-organisation (re-registration) of previously formed enterprises.

5. A venture is considered to be completely belonging to the foreign investor if it had been previously established without foreign investments and after its re-organisation (re-registration) was completely bought by a foreign investor for hard or any other foreign currency accepted by the banks of the Republic of Moldova.

6. A venture is considered a joint one at its re-organisation (re-registration) if a foreign investor has bought shares (stock) in a previously set venture without foreign investments for hard or any foreign currency accepted by the banks of Moldova.

7. Enterprises with foreign investments have the right to establish associations and international organisations, as well as to take part in already formed associations and international organisations.

ARTICLE 8. SUBSIDIARIES, AFFILIATES AND REPRESENTATIVE OFFICES

l. Enterprises with foreign investments have the right, if it is stipulated by their constituent documents, to set up subsidiaries, affiliates and trade-economical representative offices both in the Republic of Moldova and abroad.

2. Non-resident enterprises, their associations and international organisations have the right to establish affiliates and trade-economical representative offices in the Republic.

3. Affiliates set up in the republic by enterprises with foreign investments are legal entities.

Affiliates of non-resident enterprises, their associations and international organisations set up in accordance with the present Law acquire the status of an enterprise which completely belongs to a foreign investor from the date of their registration in the Republic of Moldova.

ARTICLE 9. CONSTITUENT DOCUMENTS

1. The incorporation documents of the enterprises with foreign capital shall contain data required in the legislation in force of the Republic of Moldova that refers to the organisational and legal forms of the national enterprises, as well as data concerning the citizenship and residence of the foreign investors.

2. All deposits into the ownership capital of an enterprise with foreign investments are evaluated on agreement between its founders in world market prices. The final evaluation of the above deposits is made at the moment of signing the company incorporation agreement in the currency unit of the Republic of Moldova.

3. The share of hard currency should contain no less than 10% of foreign investments into the ownership capital of an enterprise being organised, constituent documents of which provide for import of products (work, services) into the republic.

4. Non-monetary deposits into the ownership capital should correspond to the prescribed kinds of activity of an enterprise with foreign investments.

5. The constituent agreement of a joint venture should not contain a condition on obligatory transfer of the obtained technology improvements of the enterprise introduced in its ownership capital to the owner of the original technology, as well as other restrictions of similar non-property rights of a joint venture that contradict the international law on intellectual (industrial) property.

6. A considerable disproportion between the royalty quotas and other similar payments applied for the evaluation in cash of license agreements that are transferred to the public capital of the companies with foreign investments, and the value of technology introduced into the Republic of Moldova, as well as the valuables sold as a result of utilisation of this technology is not admitted.

7. The founder or the founders must mention in the incorporation documents the time limits for making their material and financial contributions, as well as non-material contributions into the public capital.

ARTICLE 10. ECOLOGICAL AND SANITARY EPIDEMIOLOGICAL EXAMINATION OF EXPERTS

Founders of an enterprise with foreign investments should obtain conclusions of experts on the technology safety of created production from the state organ on environmental protection, the sanitary-epidemiological service, in cases and in the order stipulated by the legislation of the Republic of Moldova.

ARTICLE 11. PERMISSION FOR THE FORMATION OF ENTERPRISES WITH FOREIGN INVESTMENTS

1. Formation of an enterprise, in the ownership capital of which the monetary evaluation of foreign investments exceeds 5 million US dollars, should be permitted by the organ of state administration exercising anti-monopoly regulation.

Formation of an enterprise with foreign investments in the sphere of limited access for foreign investors is carried out on permission of a corresponding organ of state administration.

2. Documents necessary for the registration of an enterprise should be attached to the founder’s application for permission to form an enterprise with foreign investments.

3. Permission to form an enterprise with foreign investments or a justified refusal to form it is given by a corresponding organ of state administration in written form within 30 days from the day of presenting properly processed documents.

ARTICLE 12. DOCUMENTS FOR REGISTRATION

For the registration of the companies with foreign investment (with the exception of banks, their branch offices and representations) the documents envisioned for the registration of national enterprises must be presented.

ARTICLE 13. THE MANNER AND THE TERMS OF REGISTRATION

1. The registration of enterprises with foreign investments (with the exception of banks, their branches and representations), of their commercial and economic representations and associations is carried out by the state body authorised by the Government of the Republic of Moldova.

2. The registration of the banks with foreign investments, their branches and representations is carried out by the National Bank of Moldova .

3. The manner and terms of registration are set up in a similar way as the one envisioned for the registration of national enterprises.

ARTICLE 14. (excluded according to the Law as of July 27, 1994)

 

CHAPTER III.

ACTIVITY OF ENTERPRISES WITH FOREIGN INVESTMENTS AND

THEIR LIQUIDATION

ARTICLE 15. BEGINNING AND DURATION OF ENTREPRENEURIAL ACTIVITY

1. An enterprise with foreign investments has the right to carry out such kinds of activity that are set in its constituent documents only. Beginning of an investment or a current entrepreneurial activity is defined by the date of entering the first document of payments concerned with the above activity on account of the enterprise with foreign investments.

2. An enterprise with foreign investments may be engaged in certain kinds of activity when obtaining state licenses only.

3. Activity (on investments and construction or current) of an enterprise with foreign investments should begin no later than 6 months from the day of its registration. When the above term disruption takes place, the organ that registered this enterprise shall declare it insolvent.

4. If on expiration of term set by constituent documents to form the ownership capital of an enterprise with foreign investments the documents confirming the deposit by each of its founders of 100% of their money with the ownership capital are lacking, the organ that registered this enterprise declares it insolvent.

5. When an enterprise with foreign investments is declared insolvent, the given enterprise discontinues its activity at the decision of its founders, court or arbitration.

6. Duration of activity of enterprises with foreign investments except concessional, is not limited, if not otherwise stipulated by its constituent documents.

 

ARTICLE 16. ADMINISTRATION ORGANS OF AN ENTERPRISE

l. Administration organs are organised at an enterprise with foreign investments in accordance with the legislation of the Republic of Moldova and (or) with the constituent documents of an enterprise.

2. Citizens of the Republic of Moldova, foreign citizens and persons without citizenship may hold posts in administration organs of an enterprise with foreign investments.

3. Persons being prohibited by court to be engaged in certain kinds of activity in the country of their citizenship (permanent place of residence), and persons having non-extinguished previous conviction of selfish crimes cannot hold posts in administration organs of an enterprise with foreign investments.

ARTICLE 17. LABOUR RELATIONS

1. Citizens of the Republic of Moldova, foreign citizens and persons without citizenship may work at enterprises with foreign investments in any speciality.

2. Foreign citizens have the right, to the extent it is important for their activity in the company with foreign investment participation, and if this is not against the interests of national security and order of the Republic of Moldova, to receive an entrance visa and permission to stay in the country if necessary.

3. Labour relations at an enterprise with foreign investments are regulated by a collective agreement concluded between the administration of this enterprise and its employees, and by labour agreements (contracts) with each of them. Agreements with local personnel may provide for payment of wages (salaries) in foreign currency accepted by the banks of the Republic of Moldova.

4. Collective and individual labour agreements (contracts) should not upset working and recreation conditions stipulated by the legislation of the Republic of Moldova.

 

ARTICLE 18. SOCIAL SECURITY AND SOCIAL INSURANCE

1. The social assistance and social security of the employees of the enterprises with foreign investments is carried out in conformity with the legislation of the Republic of Moldova. The company can make payments to the social security fund only to such foreign employees that are willing to benefit from free medical assistance and social assistance services in the Republic of Moldova. This provision also refers to the payments to the pension fund in conformity with the legislation of the Republic of Moldova.

2. Deductions for social security and social insurance of employees of enterprises with foreign investments are realised according to unified tariffs in currency of the Republic of Moldova and in foreign currency in proportion to wages (salaries) charged extra and paid in corresponding currency.

3. An enterprise with foreign investments transfers payments for pensions of foreign employees to the funds of the countries of their citizenship (permanent place of residence).

ARTICLE 19. RIGHTS ON INTELLECTUAL (INDUSTRIAL) PROPERTY

1. Performing and securing the rights of foreign investors on intellectual (industrial) property, presented by them as foreign investments, shall be ensured by the legislation of the Republic of Moldova, documents of establishment, and economic contracts concluded with third parties.

2. An enterprise with foreign investments may conclude agreements with its employees on concession of rights on objects of intellectual (industrial) property that will be created by them as a result of their production tasks implementation. Such agreements should also define enterprise commitments on provision of proper conditions to employees creating the above property objects.

3. If an agreement on concession of rights on an object of intellectual (industrial) property being created was not concluded, an enterprise with foreign investments has the right to use an invention, an industrial sample, a trade mark or a service mark created by its employee on agreement to acquire rights on the patent signed with an employee possessing the patent.

4. An enterprise with foreign investments independently patents abroad its own inventions, industrial samples, trade marks and service marks created in the Republic of Moldova.

ARTICLE 20. (excluded according to the Law as of July 27, 1994)

ARTICLE 21. PRICES, DELIVERIES AND PAYMENTS ON THE HOME MARKET

An enterprise with foreign investments has the right to fix by agreement the prices on their own products (works, services), to determine forms of payments for them, to deliver them to the domestic market of the republic, as well as to acquire products (works, services) on this market for its own entrepreneurial activity, if not otherwise stipulated by the legislation of the Republic of Moldova and by economic contracts of the given enterprise.

ARTICLE 22. TERMS OF UTILISATION OF PAYMENT INSTRUMENTS

For the utilisation of payment instruments in the currency of the Republic of Moldova and in hard currencies, the company with foreign investments opens accounts with the banks residents of the Republic of Moldova in conformity with the Regulation on Currency Control in the Republic of Moldova.

ARTICLE 23. (excluded according to the Law as of July 27, 1994)

ARTICLE 24 . RECOUNTING OF FOREIGN CURRENCY INTO THE CURRENCY OF THE REPUBLIC OF MOLDOVA

At monetary appraisal of foreign investments and assessment of the activities of enterprises with foreign investments foreign currency is recounted into the currency of the Republic of Moldova at the rate fixed by the National Bank of Moldova and effective on the day of the corresponding operation.

ARTICLE 25. INSURANCE OF PROPERTY RISKS

Property risks of enterprises with foreign investments may be ensured at any insurance organisations, if not otherwise stipulated by the legislation of the Republic of Moldova.

ARTICLE 26. COMMITMENTS SECURITY

1. Property, property and non-property rights of enterprises with foreign investments may be used for securing all kinds of commitments of the given enterprise.

2. Property, property and non-property rights secured by enterprises with foreign investments may be realised by a pawnbroker to any individual and legal entity in accordance with the legislation of Moldova.

ARTICLE 27. RECORDS KEEPING AND ACCOUNTING

Enterprises with foreign investments keep book records and statistical accounting in accordance with the legislation of the Republic of Moldova.

ARTICLE 28. TAXATION

An enterprise with foreign investments shall pay taxes in the currency of the Republic of Moldova and in foreign currency proportionally to the receipts gained by this enterprise in corresponding currencies, if not otherwise stipulated by the legislation of the Republic of Moldova.

ARTICLE 29. SUPERVISION OF THE ACTIVITY OF AN ENTERPRISE WITH

FOREIGN INVESTMENTS

1. Tax and other state control organs carry out supervision of the activity of enterprises with foreign investments within their competence and in the order stipulated by the legislation of the Republic of Moldova.

Enterprises with foreign investments should present their accounting and other documentation on its activity to the above control organs.

Competent republican and foreign audit organisations may be called in for realisation of tax checking of these enterprises.

2. If as a result of checking it was found out that the information presented by an enterprise with foreign investments to state control organs does not correspond to the actual state of affairs, the given enterprise should reimburse control organs for all the expenses in connection with carrying out of the above checking, besides executing other measures stipulated by the legislation of the Republic of Moldova, in the established order.

3. Tax and other state control organs should keep a commercial secret of an enterprise with foreign investments. In case of a violation of the above provision the corresponding organs should compensate the inflicted harm, including the lost profit, to the enterprise.

If the control organ lacks the funds, recovering of losses is carried out by taking from the state budget.

ARTICLE 30. LIQUIDATION OF ENTERPRISES WITH FOREIGN INVESTMENTS

1. Liquidation of enterprises with foreign investments is carried out in accordance with the legislation of the Republic of Moldova. Liquidation balance should be confirmed by an audit organisation located in Moldova. The audit organisation is formed by the proprietors of the enterprise or by a competent organ that made a decision to liquidate this enterprise.

2. In the event of liquidation of an enterprise with foreign investments only the part of profit obtained from the sale of liquidated assets that exceeds the amount of the initial investment shall be taxed. In the case of transferring abroad, the part of assets obtained by means of selling the liquidated assets in the form of material goods will not be subject to taxation.

 

CHAPTER IV

ACQUISITION AND ALIENATION OF PROPERTY AND PROPERTY RIGHTS

ARTICLE 31. ACQUISITION OF SHARES, STOCK AND OTHER SECURITIES

1. Foreign investors and enterprises with foreign investments have the right to acquire shares, stock and other securities of enterprises located in Moldova in the order and on conditions stipulated by the present Law and other legislative acts of the Republic of Moldova.

2. Foreign investors and enterprises with foreign investments may acquire state securities with the permission of the Ministries of Economy and Finance of the Republic of Moldova.

ARTICLE 32. ACQUISITION OF PROPERTY RIGHTS

1. Land plots and other real estate rented to the enterprises with foreign investments for a term up to 99 years with or without the right to prolongate it.

2. Renting out of state (municipal) property costing more than it is stipulated by the Parliament of the Republic of Moldova to enterprises with foreign investments is carried out with the permission of a state (municipal) control organ authorised to handle this property.

3. If property rights on buildings and structures go to a foreign investor or an enterprise with foreign investments, the right to use the land plots these objects are on goes to their proprietor, too.

4. If the national enterprises are given the right of ownership over land, this right will be also given to the enterprises with foreign investments. In this case the company with foreign investments has the right to own the land on which the premises (production market-place, storage, offices, selling halls) of the company are situated.

ARTICLE 33. PARTICIPATION IN PRIVATISATION

1. Foreign investors take part in privatisation in accordance with the legislation of the Republic of Moldova.

2. Enterprises with foreign investments have the right to use the funds in the currency of the Republic of Moldova obtained by them as legal profits and deposited on their accounts to take part in privatisation.

ARTICLE 34. ALIENATION OF A SHARE IN THE OWNERSHIP CAPITAL

In case complete or partial share in the ownership capital of an enterprise with foreign investments is alienated by at least one of its participants, the above enterprise should be re-registered (re-re-organised).

ARTICLE 35. CUSTOMS HOLIDAYS FOR THE IMPORTED GOODS

1. The material values envisioned in article 3 of the present Law, in the form of contribution to the formation and enlargement of the public capital of the enterprise are tax exempted.

2. If the tax exempted goods brought into the country by foreign investors as a contribution to the public capital are used for other purposes, then the company has to pay entirely the customs duties within 3 years, including the appropriate interest rate, and at the expiration of this period of time, the customs duties are calculated at the residual value of goods.

ARTICLE 36. CUSTOMS PRIVILEGES ON IMPORT AND EXPORT

1. An enterprise with foreign investments has the right to import products (works, services) of its own production and to export products (works, services) for its own production.

2. A company with foreign investments will be exempted from customs duties for such imported goods (raw materials, half-finished products, etc.) that are used for the manufacturing of goods to be exported.

 

ARTICLE 37. PROFIT TAX EXEMPTION

1. After the formation of the public capital and the declaration of the first profit, the company with foreign capital will benefit from a 50% reduction of the profit tax for a period of 5 years and is exempted from the compulsory sale of hard currency receipts.

Basing on the interest of the republic to attract foreign investments in order to implement efficient projects, the Parliament can adopt a decision on granting additional benefits.

2. The fiscal facilities envisioned in item 1 refer to the enterprises that have the part of foreign investments in the public capital exceeding US$250 thousand, and more than 50% of income of the enterprise comes from the sale of its own goods (works, services).

3. A reduction in the tax amount can be object of reimbursement only in case of committing a fraud with the aim to obtain these facilities.

ARTICLE 38. ADDITIONAL PRIVILEGES

1. During the period of reducing the profit tax, the company with foreign investments is also exempted from the tax on investments for the new capital constructions.

2. Once the bilateral agreements on the avoidance of double taxation are signed and ratified, the dividends paid to foreign investments are exempted from profit tax.

 

CHAPTER VI

GUARANTEES OF THE STATE

ARTICLE 39. GUARANTEES FOR THE CASES OF NATIONALISATION

OR EXPROPRIATION OF FOREIGN CAPITAL INVESTMENTS

1. Foreign investments in the Republic of Moldova are granted complete safety and protection.

2. Foreign investments cannot be expropriated, nationalised or be subject to any other similar measures in other way but according to the law on the basis of a law for the sake of national interests and for appropriate compensation.

3. Compensation should correspond to the value of alienated investment according to the evaluation made immediately before the moment of expropriation, nationalisation or other measures equivalent to the above mentioned are announced. It has to be paid not later than within 3 months from the moment the named measures were taken at an appropriate bank interest rate calculated before the date of payment. Amount of the compensation has to be paid in the currency in which the investment was made. It can be transferred abroad without any restrictions.

4. Payment of the compensation is ensured by the state institution entitled to perform expropriation, nationalisation or any other similar measures. The state institution must ensure, from the moment the named measures are taken, the determination of the value and the procedure of payment of the compensation. In case the institution does not have necessary financial resources, the compensation is paid from the state budget.

5. The affected investor is entitled to ask for verification of the juridical procedure of legalisation of the expropriation, nationalisation or other similar measures and of the amount of compensation.

ARTICLE 40. GUARANTEES AT A COERCIVE SUSPENSION AND CESSATION OF ACTIVITY

1. Activity of an enterprise with foreign investments may be coercively suspended on the decision of the Government of the Republic of Moldova, Court or Arbitration only, and in case it substantially violates the requirements of the legislation of the Republic of Moldova and the provisions of the constituent documents of the enterprise.

2. If on the initiative of the organ of state control for checking the activity of an enterprise with foreign investments was suspended, and in the result of the checking no violations of the requirements of the legislation of the Republic of Moldova and the provisions of the constituent documents of the enterprise were found out, the above organ should reimburse the losses to the enterprise; lost profit included. In case the organ of control has no funds, reimbursement of losses is realised from the state budget.

3. Material valuables of a foreign investor released due to the enterprise liquidation or due to retirement of the foreign investor may be taken by him abroad without any license.

ARTICLE 41. GUARANTEES FOR THE USE OF MONETARY FUNDS IN THE CURRENCY OF THE REPUBLIC OF MOLDOVA

After payment of taxes, customs and duties foreign investors and enterprises with foreign investments have the guaranteed right to use the funds obtained in the currency of the republic on:

– the current activity;

– re-investment, including acquisition of enterprises, their shares, stock and other securities;

– acquisition of foreign currency in the domestic currency market.

ARTICLE 42. GUARANTEES FOR REMITTANCE ABROAD OF MONETARY FUNDS IN FOREIGN CURRENCY

1. After payment of taxes, customs and duties foreign investors have the guaranteed right to remit abroad their monetary funds in foreign currency obtained as the result of investment, including:

– revenues in the form of dividends (shares of profit), interest, payments for technical assistance and technical servicing, license, commission and other similar receipts (payments);

– sums paid to investors on the basis of their monetary orders, well as other requirements having any economic value;

– sums obtained by investors arising from the enterprise liquidation, sale, withdrawal of their investments and objects of investment.

No other taxes or duties are imposed on these transfers and they can be paid within 6 month period without any special authorisation.

2. Foreign investors have the right to transfer abroad their monetary funds or a part of them in the form of products purchased in the organised domestic market without paying any taxes and without any approval in case it does not contradict the valid legislation.

3. In case one foreign investor withdraws from the enterprise with participation of foreign capital or in case of liquidation of such enterprise the state guarantees transfer into foreign currency within 3 month period of the income obtained in Moldovan currency from the part of public capital owned by the corresponding investor.

4. For enterprises with foreign investments producing especially important goods substituting the imported ones, the Government of the Republic of Moldova has the right to realise transfer of their revenues in currency of the Republic of Moldova into foreign currency taken from currency fund at the rate fixed by the National bank of Moldova.

5. After payment of income taxes, foreign employees have the guaranteed right to remit abroad their unused wages (salaries) and other incomes in foreign currency obtained by them as the result of their working activity.

ARTICLE 43. GUARANTEES ON CHANGING THE LEGISLATION

1. On adopting new legislative acts changing the conditions of the activity of an enterprise with foreign investments organised before the adoption of such acts, the indicated enterprise has the right to follow the legislation of the Republic of Moldova operating on the day of the enterprise organisation within ten years from the day of the new legislative acts go into effect.

2. The provision of item 1 doesn’t extend to the tax, customs, financial, monetary-credit, currency and antimonopoly legislation regulating insurance of state security, protection of environment, social order, moral and health of the population.

Foreign investors and enterprises with foreign investments which enjoyed customs, tax and other privileges in accordance with the formerly operating legislation of the Republic of Moldova have the right to enjoy these privileges after the new legislation goes into effect.

3. If after signing economic-agreements with participation of joint ventures and companies which completely belong to foreign investors, laws worsening the economic state of the sides that signed these agreements are issued, the latter shall remain in force for the whole period of their operation, if changing of the contractual terms is not stipulated by the agreement of the sides.

ARTICLE 44. ADDITIONAL GUARANTEES

Organs of state control and local self-administration bodies may within their competence grant foreign investors and enterprises with foreign investments additional guarantees, including property pawning assigned to the above organs of control, as well as property pawning in foreign and international banks.

ARTICLE 45. EXAMINATION OF ARGUMENTS

1. All litigations between foreign investors and state entities in terms of application of this law and of the provisions of other laws of the Republic of Moldova have to be settled by the Supreme Court of Justice or Arbitration of the Republic of Moldova. Parties involved in the litigation may agree to apply for the settlement of this litigation to the Arbitration situated in any other country or to an International Arbitration. Such Agreement can be concluded before or after the litigation occurs.

2. All other litigations between enterprises with foreign investments on one side and other individuals or legal entities, or state institutions, or public organisations on the other side that refer to relations regulated by the Civil Code as well as other litigations between associations of the corresponding enterprises should be settled by the Arbitration or other authority of the Republic of Moldova. Parties involved in the litigation can agree to apply for its settlement to the Arbitration situated in the Republic of Moldova or any other country. A different agreement can be made before or after the litigation occurs.

3. Labour arguments between the administration of an enterprise with foreign investments and its employees are examined in accordance with the legislation of the Republic of Moldova, if no other order is stipulated for foreign employees by the provisions of their individual labour contracts (agreements).

 

CHAPTER VII

CONCESSIONS AND FREE ENTERPRISE ZONES

ARTICLE 46. CONCESSIONS AND CONCESSIONAL AGREEMENTS

1. Granting foreign investors concessions on exploration, extraction and developing of the natural resources in the Republic of Moldova is in exceptional competence of the Government of the Republic of Moldova and is realised in accordance with its resolutions, the results of international contests (auctions, tenders) and the concessional agreements signed on their basis.

The term of the natural resources transmission into concession should not exceed 50 years.

2. A concessional agreement on exploration, extraction and developing of the natural resources is signed between a foreign investor and the organ of state control authorised by the Government of the Republic of Moldova.

Terms, conditions and order of realisation of concessional activity are defined in the concessional agreement, including:

a) terms of exploration, extraction and developing of the natural resources;

b) volume and techniques of extraction and developing of the natural resources, as well as the term of presentation of a license on certain kinds of works;

c) commitments on environmental protection, including storage conditions of way extraction, harmful by-products; re-cultivation and return of the used land plots;

d) order of distribution of expenses for exploration, extraction and developing of the natural resources, and risks and expenses connected with this;

e) order of financing the construction of housing and social-purpose objects on the territory transmitted into concession;

f) kinds and sizes of payments on concession and the order of their realisation;

g) forms of a lessor’s participation in the concessional enterprise control organs and other forms of control over its activity;

h) conditions, quotas, order and terms of the local personnel training for a concessional enterprise;

i) privileges and guarantees if they are different from those stipulated by the given law;

j) order of cessation of the concessional enterprise activity;

k) responsibility of the sides of the agreement and the order of arguments examination between them.

3. The Resolution of the Government of the Republic of Moldova on the natural resources transmission into concession frees a foreign investor from the necessity to obtain a permission to organise an enterprise with foreign investments stipulated by item 1, article 11.

4. Granting foreign investors the rights to use existing objects or objects under construction being a state (municipal) property but not transmitted under economic jurisdiction to enterprises, institutions or organisations, as well as the rights on construction, possession and utilisation of objects being transmitted to the state (municipal) property upon termination of the co-ordinated term of their maintenance is carried out on the basis of concessional agreements signed by authorised organs of state control.

5. Unilateral change of conditions of a concessional agreement is not allowed, if not otherwise stipulated by the agreement.

ARTICLE 47. FOREIGN INVESTMENTS IN THE FREE ENTERPRISE ZONES

1. To additionally attract foreign investments and specialists to the sphere of management and production organisation, development of export and import-substituting goods – free production, technical-scientific, transit, bank, insurance and other types of free enterprise zones may be organised in the Republic of Moldova.

2. Decisions on organising free enterprise zones in Moldova are made by the Parliament of the Republic of Moldova on presentation of the Government and local self-administration bodies, taking into account the feasibility report of each such a zone.

3. In free enterprise zones favourable systems of registration, customs, import-export, tax, currency, credit-financial and other types of activity regulation of enterprises with foreign investments are established. These systems may be extended to individuals and legal entities of the Republic of Moldova situated in these zones.

4. Types and sizes of privileges, conditions, order and terms of their granting are defined by the Parliament of the Republic of Moldova in each free enterprise zone.

5. Free enterprise zones on the territory of the Republic of Moldova and the neighbouring states are established and function on the basis of inter-state agreements.

 

 

Mircea Snegur,

President of the Republic of Moldova

Law No. 998-XII as of April 1, 1994.

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