Newsletter

USAID|BIZTAR — Improving Business Environment

USAID|BIZTAR project makes available to the Government and the Moldovan business community this
quarterly newsletter to inform our partners, counterparts as well as our beneficiaries on the changes and
improvements in the Regulatory and Tax administration reforms.

World Bank’s 2010 Doing Business Report:

Moldova is a top reformer
Moldova improved its ranking among the 183 coun-
tries covered by the 2010 Doing Business Report,
from 103rd last year to 94th this year. The Doing Busi-
ness Report measures performance in ten different
areas. Moldova succeeded last year in introducing re-
forms in three of these 10 areas, namely, Starting a
Business, Registering Property and Paying Taxes. Some
of these reforms included assistance from USAID’s
Business Regulatory and Tax Administration Reform
Project (USAID|BIZTAR).
Starting in April, USAID|BIZTAR assisted the gov-
ernment to develop and to begin to implement a re-
form agenda targeting improvements of Moldova’s
business climate.The Action Plan, which was approved
following consultations with the private sector, pro-
posed action in almost all of the 10 areas in the Doing
Business 2009 report.
In the area of starting a business, Moldova simpli-
fied the process by implementing an expedited com-
pany registration service so that for an additional fee,
an entrepreneur can now obtain a company registra-
tion certificate within 24 hours. Moreover, the Na-
tional Bank of Moldova removed the requirement for
a notarizing the authorized signatures; businesses can
do this directly at the bank if they wish so.
Procedures were further simplified after
USAID|BIZTAR together with the Registration
Chamber and the National Bureau of Statistics (NBS)
eliminated one step from the business registration
process. Starting June 2009, entrepreneurs wanting
to start a business in Moldova can now obtain their
statistical code directly at the Registration Chamber
along with their registration certificate. A cross-town
visit to NBS is no longer required. As a result of these
changes, Moldova improved its ranking in business
registration from 90th to 77th.
In the area of paying taxes, Moldova has improved
its ranking from 125th last year to 101st this year. This
Beto Brunn, USAID|BIZTAR COP shakes hands with
Melanie Marlett,World Bank Country Manager for Mol-
dova, agreeing on future cooperation for
improving the business environment in Moldova
was due to recognition of Moldova’s elimination of
the corporate income tax, effectively removing any
tax on profits.
Sorin Hadarca, USAID|BIZTAR expert considers that
“Moldova’s ranking proves that important reforms
have been undertaken during this year. However, the
reform process should not stop here. Much more
needs to be done to ease the cost of doing business
in Moldova. I am sure that if we continue our efforts,
Moldova will rank even higher next year in the Doing
Business Report”.
Indeed, the USAID|BIZTAR project has ambitious
plans to further improve the business environment in
Moldova, so as increase Moldova’s ranking and to put
Moldova on a sustainable economic growth path. In
particular, USAID|BIZTAR is working with the State
Tax Inspectorate to simplify and streamline compli-
ance requirements and ensure fair treatment of tax-
payers. And perhaps, the best news for 2010 will be
the adoption of new laws, drafted with BIZTAR assis-
tance, streaming the process for obtaining construc-
tion permits and protecting investors’ rights.
 USAID|BIZTAR Newsletter
USAID|BIZTAR brings digital signatures to Cahul
The USAID|BIZTAR Project is working with the
Government of Moldova to improve the business
enabling environment. In particular, we decrease
bureaucracy affecting the private sector by re-
ducing time needed for reporting, streamlining
tax administration, curtailing opportunities for
corruption and improving access for citizens and
businesses to government information.
USAID|BIZTAR is organizing on October 29,
2009 at the Chamber of Commerce and Industry
(CCI) in Cahul the launch of a regional center
for e-signatures in partnership with the Center
for Special Telecommunications (CST). With the
digital signature businesses will be able to submit
reports electronically to state egencies, without
having to travel or wait in line. This will save time
for accountants to deliver reports, about 11 per-
son-days over the course of a year. At the event,
the first two digital signatures will be delivered
No.4 | October 2009
to the companies “Cahul PAN” and “Sanatoriul
Nufărul Alb”.
The Cahul branch of the Chamber of Com-
merce and Industry (CCI-Cahul) is one of the
most active partners of USAID|BIZTAR. It has
used BIZTAR resources to relaunch the Regional
Working Group on Regulatory Reform (which
covers three raions), and it continues to hold pe-
riodic meetings of that group, without additional
USAID funds. CCI-Cahul is the first entity allowed
to issue digital signatures outside of Chisinau. Ca-
hul’s branch of the CCI hopes to issue at least 50
e-signatures by March 31st 2010.
Local community and businessmen, representa-
tives of the US Embassy, Chamber of Commerce
and Industry, the Center for Special Telecommu-
nications, local authorities, USAID and journalists
participated at the event.
Improving Business Environment
Discussions with the designated Prime Minister Vlad Filat
On September 21th 2009 USAID|BIZTAR experts
participated at a meeting between Vlad Filat, and civil
society professional organizations representatives.
The meeting was attended by over 35 participants
and at least 30 journalists, including 10 TV crews.
Among the invited organizations were think tanks,
Producers Associations, NGOs, Banking Associa-
tions, Foreign Investor Association, National Associa-
tion of Employers, Trade Union Confederation and
others. Most speakers proposed policy solutions to
the new Prime Minister. Here are the main ideas
communicated by participants (selection):
Vlad Filat, designated Premier Minister: We will
have a greater degree of transparency in ruling and the
civil society will be a partner in elaborating and imple-
menting policies.We will have a different kind of gov-
ernment - the coalition, which implies a strong internal
control and doesn’t allow usurpation of power by one
person or one party in the government.
Petru Chiriac, leader of the Confederation of
Trade Unions of Moldova: Once in three years should
be recalculated pensions.We welcome the creation of
USAID|BIZTAR Newsletter
the Ministry of Labor and Social Protection. I propose to
create a social and economic council and labor arbitra-
tion. Courts now ignore cases concerning forced leave. A
major problem is that wages are too low compared to
the cost of services in our country.We think it's impor-
tant to have a law on minimum subsistence cost.
Pavel Caba,Vice President of Construction Em-
ployers’ Federation: If we take down bureaucracy, we
could build a housing block in two years. In the current
situation need the same time only for bureaucratic pro-
cedures.The construction branch is in a crisis.There are
over one million square meters of unfinished homes in
Moldova, which cost over one billion Euros.
Sorin Hadârcă, USAID | BIZTAR: It is important
that business speaks up.We need a guillotine for per-
mits and authorizations.We need modern methods for
accessing public services, because citizens should not be
humiliated, when calling a public service.
Armaşu Dinu, Director of the Association of For-
eign Investors: We want to have a rule of law.There are
issues of principle.VAT refund works poorly and some
companies are waiting two years for their VAT refund.
 USAID|BIZTAR Newsletter No.4 | October 2009

Business registration in Moldova - fewer steps to take

It’s easier now for entrepreneurs who are starting a
business in Moldova to register with government agen-
cies. In particular, it is no longer necessary to go to the
National Bureau of Statistics (NBS) to register and to get
a statistical code.
Previously, in order to register a new business in Mol-
dova, the entrepreneur had to visit several institutions,
such as the State Registration Chamber (SRC), State Tax
Service, National Medical Insurance Company, National
Social Insurance House and until recently NBS. This
takes both time and money that both entrepreneurs and
governmental agencies could best use in other activities,
especially during a recession. Also, these barriers discour-
age formalization and, ultimately, limit competition.
However, starting June 2009, entrepreneurs wanting to Alina Ghimp, Head of Division at the Registartion Chamber,
start a business in Moldova can now get their statisti- hands in a Registration Certificate to an entrepreneur,
cal codes directly at the Registration Chamber together explaining the simplification of the registration procedure.
with their registration certificate; a cross-town visit to
In 2008, the World Bank’s Doing Business report indicat-
the NBS is no longer required. This is due to the reen-
ed that companies had to navigate 9 procedures to start
gineering of the processes at the Registration Chamber
a business in Moldova – including registration at NBS.
and NBS with USAID|BIZTAR assistance. In addition,
Now with only 8 procedures, Moldova’s Doing Business
information on statistical reporting requirements for a
ranking has increased from 90th to 77th in the world.
newly registered business, which previously could only
Alexandru Gorincioi, an entrepreneur from Ungheni,
be obtained at an NBS office, now is also provided at the
a city in the center of Moldova, recently registered his
Registration Chamber.
business. “It took me one day to visit the NBS in Chisinau
As a result, each entrepreneur saves, on average, at least
to register my business. Besides the fact that I had to
three hours in his or her busy schedule. That actually
travel to Chisinau, I lost one hour at the NBS, waiting for
means that together all new Moldovan businesses will
the clerk to register my business and give me the statisti-
save more than a half a million Moldavian Lei or about
cal codes”, shares Mr. Gorincioi from his experience. He
$50,000 in their first year of operation. Eliminating
was very impressed by the news that this requirement
registration at NBS means one less opportunity for bribe
has now been eliminated. “Every step taken toward eas-
seeking. And this is one step forward in the BIZTAR’s ob-
ing the way of doing business in Moldova is a success for
jective to create a one stop business registration process
each businessman”, he concluded.
in Moldova.

Testing phase of Declaratia Rapida has ended

The program Declaratia rapida was tested during August-
October 2009. During the same period, the state enter-
prise “Fiscservinform” and USAID Business Regulatory
and Tax Administration Reform Project (USAID|BIZTAR)
organized training seminars for accountants from 13 ray-
ons: Balti, Singerei, Orhei, Riscani, Rezina, Soldanesti, Te-
lenesti, Glodeni, Falesti, Floresti, Criuleni etc. More than
450 accountants were taught to use Declaratia rapida.
During the testing period, the accountants submitted
more suggestions regarding program’s improvement. All
suggestions were studied and taken into account by “Fisc-
servinform” while making the modifications.
Currently, a group of 5 operators within the Main State
Tax Inspectorate collects in real time tax declarations gen-
erated in Declaratia rapida program.
Declaratia rapida is a new service launched by State Tax
Service that allows automatic filling of tax forms and print-
ing of a barcode containing all introduced data. The bar-
code stores all the information included in reports. The
information is introduced automatically in the database of
State Tax Service by scanning the barcodes. At the same
time, the taxpayers’ current account is updated automati-
cally. Declaratia rapida is distributed for free on CD’s or
can be downloaded from www.servicii.fisc.md

Editors: Gabriela Gordila, Ion Grosu, Mariana Dron, Beto Brunn BIZTAR/Moldova project is funded by the US Agency for International Devel-
Design: Ion Grosu, opment (USAID) and implemented by Development Alternatives Inc. (DAI)
Pictures: DAI, web: www.biztar.md The opinions expressed herein are those of the author(s) and do not neces-
sarily reflect the views of USAID.