Free Economic Zones in Moldova.

Free economic zones are parts of the customs territory of the Republic of Moldova separated from the economic point of view, where local and foreign investors benefit from preferential treatment in carrying out certain types of business activities.

In Moldova, there are several free economic zones and zones with a similar status:
• Expo-Business Chisinau (situated in the capital of Chisinau);
• Ungheni-Business (situated 107 km to the north-west of the capital);
• Tvardita (situated 115 km to the south of the capital);
• Otaci-Business (situated 220 km to the north of the capital);
• Valkanes (situated 200 km to the south-west of the capital);
• Taraclia (situated 153 km to the south of the capital);
• International Free Port of Giurgiulesti (situated 210 km to the south of the capital);
• Free International Airport of Marculesti (situated 126 km to the north of the capital).The following types of activities can be carried out within free economic zones:
• industrial production of goods for export, except for ethylic alcohol and alcoholic beverages;  
• sorting, packing, marking and other similar operations with goods transported through the customs territory of the Republic of Moldova;
• auxiliary types of activity, such as public utilities, deposit, constructions, public catering, etc. necessary to carry out the above-mentioned activities
• external trade activity – wholesale of goods imported to the free zone from outside the territory of the Republic of Moldova and delivered for export;
• transport activity – transportation of goods imported or exported through the free economic zone by means of air or marine transport.

On the territory of free economic zones, it is prohibited:
• to import tobacco and tobacco items
• to produce tobacco items
• to produce, transport and store armament
• other activities prohibited by the Moldovan legislation.The total volume of investments in free economic zones exceeded the amount of 104 million US dollars as of 1 July 2008. 144 companies are registered as residents of free economic zones.

Free economic zones in the Republic of Moldova offer investors:
• legal protection of the state for investments on the territory of free zones;
• legal status of free zones regulated by the law adopted and/or modified by the Parliament only;
• guarantee of the current legislation application within 10 years from the moment of registration as a free zone resident; 
• possibility to transfer profit abroad
• cheap and qualified labour force;
• possibility to use the existent infrastructure;
• preferential treatment for stimulation of business activity;
• impossibility of expropriation, nationalization, requisition and confiscation of assets from free zones other than by court decision;
• exemption from import duties and non-application of economic policy measures for import of foreign and local goods to the free zone;
• non-application of quota and licensing to import and export of goods (services);
• free circulation of goods and services situated in the free zone;
• possibility to transmit goods (services) situated in the free zone from one resident to another without drawing up a customs declaration;
• special customs treatment:
- 50% discount from the tax rate fixed in the RM for the income obtained from export of goods (services) originating from free economic zones outside the territory of the RM;
- 25% from the tax rate fixed by the RM for the income obtained from other activities than export of goods (services);
- 3- year total exemption from income tax obtained from export of goods (services) originating from free economic zones outside the territory of the RM following investment of at least 1 million US dollars in the free zone;
- 5-year total exemption from income tax obtained from export of goods (services) originated from the free economic zone outside the territory of the RM following investment of at least 5 million US dollars in the free zone;
- VAT is not applied to the goods delivered to the free zone;
- zero VAT rate for (1) goods (services)delivered to the free zone from outside the territory of the Republic of Moldova, (2) goods (services) delivered from the free zone outside the territory of the Republic of Moldova, (3) goods (services) delivered to the free zone from the rest of the territory of the Republic of Moldova, (4) goods (services) delivered by residents of different free zones of the Republic of Moldova to each other;
- exemption from excise payment for (1) goods introduced in the free zone from outside the Republic of Moldova, (2) from other free zones, (3) from the rest of the territory of the Republic of Moldova, and (4) goods originating from this zone and exported outside the territory of the Republic of Moldova;
- (1) deliveries of goods within the free zone, and (2) deliveries of goods from one free zone to another are not subject to excise duties.

Industrial park is a delimited territory where economic activities, industrial production, service rendering, application of scientific studies and/or technological development take place under a special treatment to capitalize human and material potential of the given region. Customs facilities provided for free economic zones are also applicable to industrial parks. Three zones are identified for industrial park placement: industrial park of Floresti (60 ha near the Ukrainian border), Ungheni (50 ha near the border with Romania), and Cainari (23 ha).