The Eastern European nation of Moldova is positioning itself as an attractive hub for foreign businesses, particularly in the tech sector, as it strives to overcome political challenges and advance its bid to join the EU by 2030.
Moldova’s standard corporate tax rate is 12%, significantly lower than in other European countries, such as 25% in the UK and 25.8% in the Netherlands. To further entice tech companies, the government established the Moldova IT Park (MITP) in 2018, a virtual scheme offering a 7% corporate tax rate to IT firms, including those relocating from overseas. Over 2,000 companies are registered with MITP, with about 300 from abroad, primarily the US, UK, Germany, the Netherlands, and Ukraine.
A Push for EU Integration and Economic Reform
Moldova’s pro-EU president, Maia Sandu, who was recently re-elected, is spearheading these reforms. Last month, Moldovans narrowly voted for constitutional changes supporting EU integration, with 50.46% voting "yes" against Russia’s opposition.
Deputy Prime Minister Dumitru Alaiba, responsible for economic development and digitalisation, describes Moldova as “a country that can change very fast.” In recent years, Moldova has made notable progress on Transparency International’s Corruption Perceptions Index, moving up to 76th place out of 180 countries.
“We’re reforming our economy at top speed,” Alaiba said, highlighting that businesses now operate with less bureaucratic interference. Vocks agrees that business operations have simplified over time, making Moldova more appealing to foreign investors.
MITP Benefits for IT Firms and Impact on the Economy
The MITP provides tech firms not only with the 7% corporate tax rate but also exempts them from employer social security contributions, and staff are not required to pay income tax. The IT Visa program within MITP also streamlines immigration procedures for foreign tech talent. This has led to strong growth in Moldova’s tech industry, with MITP companies generating €365 million in revenue and employing 22,000 people, contributing approximately 6% of Moldova’s GDP.
However, this influx of foreign companies has led to rising wages in the IT sector. German entrepreneur Sven Wiese, who runs Trabia, a small IT services business in Moldova, finds himself competing against larger MITP firms offering salaries upwards of €100,000.
Challenges and Moldova’s Regional Role
Despite its progress, Moldova still faces challenges. The war in neighboring Ukraine may deter some investors, and emigration remains high among Moldovan IT workers, even as wage opportunities improve domestically. Alaiba remains optimistic, stating that Moldova’s safety hinges on “support for Ukraine from the free world.”
Marina Bzovii, an MITP administrator, envisions Moldova as a regional business hub, connecting both European and Central Asian markets. “Moldova is the kind of business hub that Europe needs... and Chisinau is now really vibrant,” she said.
Through its reforms and ambitions, Moldova is charting a path toward becoming a key player in the European tech landscape.
