Moldova

Doing business in Moldova: Payroll, Benefits & Taxes

Moldova's strategic location, skilled workforce, and competitive tax regime make it attractive for businesses looking for outsourcing destinations. Doing business in Moldova requires careful consideration of various legal and financial aspects, including payroll and business taxes.

Bellow you can find a general overview of what it means to do business in Moldova in terms of taxes and compliance. 
 

Standard Salary Taxes in Moldova

While there is a standard taxation system that applies to many businesses in Moldova, depending on your activity complexities arise in areas like employee benefits, minimum wage adjustments, and industry-specific regulations. Professional consultation ensures accurate deductions and avoids penalties.
 

Meal Tickets: Value exceeding MDL 55 subject to PIT.

Personal Costs Covered by Employer: Subject to PIT.

Cancellation of Employee Debts: Subject to PIT.
 

Company Taxes in Moldova

Profit Tax: 12% on net profit.

Dividend Tax: 6% on gross dividends distributed to residents

Value Added Tax (VAT): Standard rate of 20%. Reduced rates apply to certain goods and services.

Minimum and Average Wage

Minimum Wage: MDL 2775 per month (as of January 2024).

Average Wage: Varies by industry and occupation.

Payroll Cycle

Monthly: Employees typically paid on the 25th of each month.

Penalties: Late payments subject to penalties.

Working Hours

Standard: 40 hours per week, 8 hours per day.

Reductions: Possible in hazardous workplaces through contracts or collective bargaining agreements.

Overtime

Rate: 150% for first 2 hours, 200% for remaining hours.

Limit: 120 hours per year, may be increased to 240 hours through collective bargaining agreements.

Restrictions: Under 18, pregnant women, and medically unfit employees cannot work overtime.

Leave

Annual Leave: 28 calendar days + public holidays.

Pro-rata leave: Granted after 6 months of continuous work.

Holiday Allowance: At least equivalent to wages during leave.

Public Holidays in Moldova:

Sick Leave: 5 paid days per year employer-funded, the difference is then state-funded.

Maternity Leave: 70 days before birth, 56 days after. Partially paid leave until the child turns 3 (duration depends on seniority, job role, and insurance scheme).

Paternity Leave: 14 days after birth.

Parental Leave: May be stipulated in contracts or collective bargaining agreements.

Bereavement Leave: 3 days for direct relatives after 6 months of service.

Termination

Reasons: Business, personal, or employee misconduct.

Notice Period: 30 days for employer, 14 days for employee.

Severance Pay: Linked to length of service (minimum 1 month's salary) if employed for at least 1 year.

Probation Period

Maximum: 6 months. Generally three months for non-management roles, and six for management roles, depending on the responsibilities. 

No extensions or renewals.

Visa and Work Permits

Residence permit: Required for stays exceeding 90 days.

Work permits: May be necessary depending on nationality and job role. Consult official resources for details.

Moldova citizenship: Possible after meeting specific requirements (investment, naturalization).

Rules of Employment Agreements and Documentation

Written contracts: Mandatory in Romanian, it can be in two languages with one in Romanian. 

Specific content: Required by law (wages, working hours, leave, etc.).

Records: Employers must maintain personnel records.

Moldova Tax Benefits for IT Sector, BPO, R&D

The IT sector has emerged as a vital driver of economic growth in the Republic of Moldova, becoming the fastest-growing industry and a top priority for the Government. Over the past years, the industry turnover has surged threefold, propelling IT services to the forefront of the country's export sector.

Despite competition from other emerging countries in the IT sector, Moldova's IT field benefits from significant incentives provided by Moldova IT Park. This specially established platform aims to support and streamline investment initiatives while fostering the development of the tech sector. It achieves this through unified state reporting and simplified tax arrangements, including a flat tax rate of 7% on turnover.

Thus, IT businesses in Moldova pay only 7% tax which replaces many other taxes due by companies, including:

• Corporate Profit Tax (ranging from 4% to 12%),
• Personal Income Tax (12%),
• Salary taxes for both employees and employers (around 36%).

If you're interested to learn more about IT tax benefits in Moldova read our article here. 

Don't navigate Moldova's business landscape alone! Schedule a consultation with our experts today!

Unlock the full potential of your business in Moldova with expert guidance. Our team of professionals is well-versed in the intricacies of payroll, taxation, and legal requirements specific to your industry.

Here's how we can help:

• Simplify payroll and tax compliance: Ensure accurate calculations, meet deadlines, and avoid penalties.
• Navigate complex regulations: Understand legal requirements for business operations in Moldova.
• Optimize your tax strategy: Leverage available incentives and minimize tax liabilities.
• Gain peace of mind: Focus on your business while we handle the administrative burdens.

Schedule your online consultation today and:

• Discuss your specific business needs and goals.
• Get tailored advice from our experienced professionals.
• Ask questions and receive clear, concise answers.

Don't wait! Contact us now and take the first step towards a successful business venture in Moldova. We look forward to helping you achieve your business goals in Moldova!