Foreign investors expect business climate in Moldova to be improved

The foreign investors are awaiting an improvement in the business and investment climate in Moldova. Representatives of the Foreign Investors Association (FIA) in Moldova consider legal amendments to this effect are needed. In a meeting with Deputy Prime Minister and Minister of Economy Octavian Calmac, they highlighted the urgent need for a roadmap of measures to further improve it, and emphasized the importance of resetting the relationship with the International Monetary Fund and of restoring economic stability, IPN reports.

According to a press release of the FIA, a proposal suggested by FIA representatives was, among others, setting up a working group to create a clear body of fiscal legislation for the residents of Free Economic Zones. The Association representatives also spoke about the need for an assessment of the customs duties introduced on dairy products, as well as for certain categories of industrial goods, such as cement imported from Ukraine. As regarding dairy products, Moldova lacks the capacity to fully meet the local producers' demand for raw material. The deficit of milk on the market could lead to higher costs for the final consumers and impair Moldova’s export capacity.

FIA has pointed out that due to a massive subsidization of the the agri-food sector and the construction products sector (cement) abroad the Moldovan products are facing unfair competition from the goods produced by the neighboring countries. In this regard, the Deputy Prime Minister announced that a new subsidization policy would be implemented in 2017, featuring greater transparency and based on a competition of projects.

FIA Executive Director Elena Varta highlighted the necessity of reviewing the list of socially-important goods. The Association members emphasized the importance of removing sugar and cement, among other items, from the list of socially-important goods. According to the Minister, these are shortly to be excluded, given the price stability of the mentioned products on the internal market and the existence of a healthy competition on this segment.

The Association’s Executive Director noted the increased tax burden faced by some foreign investors because of the 2.5% tax that distorts competition, disadvantaging providers of mobile services in relation to other telephony service providers and other service providers in general. What was introduced in 2000 as a luxury tax can no longer be considered as such today when telecommunication services are so indispensable to everybody. The Ministry of Economy has promised to consider the possibility of removing the tax in 2017.

The Foreign Investors Association (FIA) is a non-profit organization founded in Moldova in September 2003 by 8 foreign investors.

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