On 3 April 2014, the Parliament of the Republic of Moldova (Moldova) passed Act No. 53/2014 on amending and supplementing certain legal acts (Act No. 53). Act No. 53 entered into force on 25 April 2014 and inter alia changed the Civil Code and Act No. 135/2007 on limited-liability companies (Act on LLCs). The effected changes have a direct and positive impact on the legal aspects which should be observed while incorporating and operating a business in Moldova.

Minimum share capital for a limited-liability company (LLC) scrapped

Act No. 53 puts an end to the famous rule, which existed for more than 20 years, pursuant to which the minimum share capital of a LLC should constitute not less than MDL 5,400 (or the equivalent in a foreign freely-convertible currency). As of 25 April 2014, the founding shareholder(s) are free to decide the exact share capital of the incorporated LLC on their own.

Still, while benefiting from this freedom, shareholder(s) should bear in mind the following:

  1. the exact size of the share capital should be specified in the statutes (constitutive act) of the LLC; and
  2. the set size of the share capital represents the value of the minimum assets a LLC should continuously hold; a failure to do so may result in the obligation to either reduce/increase the share capital, or liquidate the LLC; and
  3. the share capital and the share(s) should be evenly divisible by MDL 1; hence, practically the exact share capital may not constitute less than MDL 1;
  4. for particular types of activity (e.g. operating gambling businesses, etc.), the law may require higher share capital (to be checked on a case-by-case basis).

No more strict rules on when and in what size to wire the declared share capital / shares

Another novelty implemented by Act No. 53 is that it abolishes the norms under which a sole founding shareholder of a LLC was obliged to wire 100% of its in-cash contribution before the state registration of the LLC and under which the (multiple) shareholders of LLCs were obliged to wire at least 40% of their in-cash contributions before the state registration of their LLC.

As per current legislation, shareholder(s) are free to decide when and in what size the contribution as set forth in the constitutive documents for the declared share(s) is wired into the LLC, but this must occur within six months as of the state registration (incorporation) of the LLC.

Also, it should be noted that with respect to those shareholders which omitted to wire their participations within the proper timeframe, the LLC has a right of claim prescribed at three years as of the state registration of the LLC. Such right of claim is exercisable by the LLC’s managing director(s) on behalf of the LLC; in addition, the LLC can claim statutory late interest (RO dobanda de intarziere).

The norm under which cash, in-kind contributions, including patrimonial rights can constitute shareholders’ contributions at the incorporation of the LLC has remained unchanged.

Registration and operation permits only if required by law

Also, Act No. 53 modified Act No.235/2006 on fundamental principles regulating entrepreneurial activity. After the change, Moldovan law expressly provides and guarantees to all persons that natural and/or legal persons are obliged to register with the state authorities or/and to apply for permits to perform a certain activity only if doing so is expressly provided by law.

Documents required for incorporating a LLC with foreign capital

After the recent changes to the legislation, the list of documents to be submitted by a foreign founder with the local trade register for the purpose of incorporating a LLC with one shareholder looks as follows:

  1. A standard application (request);
  2. A resolution of the sole shareholder on establishing the LLC;
  3. An empowerment for persons to represent the shareholder before the trade register, unless the shareholder him/herself will show up;
  4. Drafts of constitutive documents (in 2 copies);
  5. Detailed excerpt from the trade register of the home country of the investor (if relevant);
  6. Up-to-date and complete copy of the investor’s constitutive documents (if relevant);
  7. Documents in respect of the future legal seat of the LLC;
  8. Documents in respect to the future managing director(s) [RO administrator(i)] of the LLC; and
  9. Proofs of payment of state taxes and services.

All documents should be presented in due form (e.g. legalized / authenticated, with Apostille, etc.) and be translated into Romanian with legalization (should the original language of the documents in a language other than Romanian and/or Russian).

The state registration process now takes between one to five business days as of the submission of a complete application with the local trade register.

Conclusion

The recently adopted amendments appear to show the Moldovan authorities’ openness and intention to be friendlier towards foreign investors. Now the authorities’ task is to ensure the uniform and stable application of such norms.