Law about free economic zones
Art.1 General provisions
(1) Free economic zones (free entrepreneurship zones), hereinafter referred to as free zones, are parts of the customs territory of the Republic of Moldova, economically separated, strictly delimited on their entire perimeter, in which local and foreign investors are allowed, on a preferential basis, types of entrepreneurial activity, under the terms of the law.
(2) The security of the borders of the free zones shall be provided by specialized security companies of the Republic of Moldova on the basis of contracts concluded by them with the Administration of the respective zone. The system of authorized crossing of the free zone borders shall be applied to natural persons and means of transport, the functioning of which shall be established by Government decision.
(3) Free zones shall be created with the aim of accelerating the social and economic development of certain territories and the country as a whole by:
(a) attracting domestic and foreign investments;
b) implementation of modern techniques and technologies;
c) developing export-oriented production;
d) applying advanced production and management experience;
e) job creation.
(4) The free zones, in order to achieve their objectives, shall be granted preferential arrangements for stimulating entrepreneurial activity. Changes in the regime and in the manner of conducting entrepreneurial activity in a free zone shall be possible only by introducing amendments to this Law.
(5) The free zone may consist of several sub-zones.
The regimes and the manner of carrying out entrepreneurial activity and management shall be identical in all sub-areas.
Art.2 The meaning of some notions
For the purposes of this Act, the following terms are defined:
sub-area - part territorially isolated from the rest of the free area;
permit for carrying out - a certain kind of activity written permission issued by the Administration of the free zone to the resident of that zone for a certain period of time for carrying out the kind of activity permitted in that zone and stipulated in the contract concluded between the Administration and the resident;
development of the infrastructure of the free zone - construction and repair of buildings and facilities, construction of roads, installation of machinery and organisation of water, electricity, gas supply, installation of telecommunication networks and organisation of telephone connection and other such works (services) on the territory of the free zone, which the Administration of the free zone considers favourable for the development and functioning of the zone;
fixed assets - production buildings and constructions, warehouses, land, technical installations, machinery, including office equipment and machines, except for passenger transport vehicles, used in the process of carrying out business activity in the free zone.
foreign trade activity - wholesale trade in goods imported into the free zone from the territory of the Republic of Moldova or from outside the customs territory of the Republic of Moldova and delivered for export electronic trade in foreign goods on foreign markets, as well as the provision of various services on these markets;
goods introduced for non-commercial purposes - goods introduced by residents of the free zone into the territory of this zone, which are intended for final consumption, not used in production, processing, storage or sale.
indigenous goods brought into the free zone for non-commercial purposes - goods which are not intended for sale or immediate use in the technological production process;
industrial production of goods - production in the process of which raw materials and semi-finished products are transformed into finished products with the use of industrial equipment.
Art.3 Applicable law
(1) On the territory of the free zone are applicable:
a) international agreements to which the Republic of Moldova is a party;
b) the legislation of the Republic of Moldova;
c) normative acts of the Government;
d) normative acts of the Free Zone Administration adopted within the limits of its competence, which do not contradict this Law.
(2) Draft normative acts elaborated by the public administration authorities and free zone administrations which are to regulate the activity of free zones shall be subject to mandatory expertise at the Ministry of Economy.
(2.1) Regulatory acts approved by public authorities, except for the Government and the Parliament, in violation of the requirements set forth in para. (2) shall be considered null and void in the part concerning the operation of free zones.
(3) Investments on the territory of free zones shall enjoy the legal protection of the state. The regime of investment and entrepreneurial activity in the free zone may not be less favourable than the regime established for economic agents operating on the other part of the customs territory of the Republic of Moldova.
(4) Goods in free zones may be expropriated, nationalized, requisitioned and confiscated only by court decision.
(5) The transfer of funds and goods obtained by foreign investors from investments in the free zone shall be carried out in accordance with the provisions of the Law No. 81-XV of 18 March 2004 on investments in entrepreneurial activity.
(6) Free zones are demilitarized territories. The production, transportation and storage of weapons, as well as the deployment of military units are not allowed in these zones.
(7) Activities prohibited by the legislation of the Republic of Moldova or by international agreements to which the Republic of Moldova is a party shall not be allowed in free zones.
(8) The State shall not be liable for the commitments of the Free Zone Administration and the residents of the Free Zone, and the Administration and the residents for the commitments of the State.
Art.4 Creation of free zones
(1) A free zone shall be created, on the proposal of the Government, by a law adopted by the Parliament in accordance with this Law, which shall delimit for this purpose a part or parts of the territory of the Republic of Moldova. The law shall strictly determine the boundaries and configuration of the zone.
(2) The Government shall draw up the general concept for the creation and development of the free zone.
(3) The initiators of the creation of free zones may be central and local public administration authorities, economic agents and various organizations that will submit appropriate proposals.
(4) Proposals for the creation of free zones shall include:
a) the purposes of creation, the types of entrepreneurial activity and the functional orientation of the free zone;
b) the feasibility study on the desirability of creating the free zone;
c) the draft plan for the location of the free zone, coordinated with the appropriate central and local public administration authorities.
(5) The feasibility study on the opportunity to create the free zone shall contain:
a) delimitation of the boundaries of the area;
b) the complex characterisation of the socio-economic potential of the territory, including the production, commercial and social infrastructure and the economic relations with international markets;
c) the justification of the possibility of carrying out the types of activity permitted;
d) indication of the degree to which specialists are available;
e) the draft economic operating mechanism;
f) the justification of the stages and deadlines for the creation of the free zone;
g) the volume of investment required, assessment of sources and their effectiveness;
h) calculation of the expected flow of foreign exchange earnings into the free zone.
(6) Free zones may be created on territories not occupied by real estate, as well as on the basis of enterprises, institutions, organisations.
(7) Free zones may not be created on the basis of enterprises of strategic importance or which carry out or may carry out an efficient economic activity and without the creation of such zones.
(8) Prior to the adoption of the decision on the proposal for the creation of the free zone, an expert appraisal of the appropriateness of the creation of such a zone shall be carried out, which shall be provided by the Ministry of Economy.
(9) The following factors shall be taken into account when carrying out the expertise:
a) the approximate cost of creating and maintaining the free zone;
b) the benefit to the national economy of operating such a zone;
c) the social and economic situation and the degree of labour utilisation in the region where the free zone is to be established;
d) the proximity of the area in question to other free zones;
e) the number of free zones already existing in the country.
(10) The proposal for the establishment of the free zone may be approved only if the expert opinion establishes that the establishment of the free zone will substantially improve the situation in the national economy and that this improvement can be achieved only in this way.
(11) If the proposal on the creation of the free zone is accepted, the Ministry of Economy shall submit the corresponding draft law to the Government for approval.
(12) The free zone shall be deemed to be created after the entry into force of the corresponding law.
(13) The procedure established by the legislation for the creation of free zones shall be duly applied also in case of changing the configuration of free zones, changing their term of operation, as well as in case of creating a sub-zone.
Art.5 Management of free areas
(1) For the administration of the free zone, within 30 days of the entry into force of the law on its creation, the Government shall form a state body - the Free Zone Administration, hereinafter referred to as the Administration, which shall have the status of a legal person and shall operate on a self-financing basis. The seat of the Administration is located on the territory of the free zone.
(2) The Administration shall be headed by a chief administrator, appointed by a competitive examination by order of the Minister of Economy for a term of 5 years. The Chief Administrator shall be responsible for the work of the Administration, for ensuring the security of the boundaries of the free zone and for the observance of the authorised crossing system. The functions, rights and obligations, the amount and conditions of the salary of the chief administrator are established by the legislation, as well as in the contract concluded between him and the Ministry of Economy.
(3) The coordination and control of the activity of the free zones shall be the responsibility of the Government and shall be carried out through state bodies authorized by it. The work of the Administration is subject to an annual audit. The Administration shall coordinate its work with the Ministry of Economy in attracting investments, promoting exports of free zone residents, as well as on the elaboration and implementation of free zone development plans.
(3.1) The Ministry of Economy shall monitor compliance with the terms of the contract and the performance of its duties by the chief administrator.
(4) The main financial sources of the Administration are:
a) payments and fees paid for participation in competitions for obtaining the right to become a resident of the free zone and registration as a resident of the free zone, as well as for the issuance of permits for the corresponding types of activity in the zone;
b) payments and zone fees established by the Administration;
c) receipts from the lease of goods and land;
d) voluntary contributions from residents of the free zone for the development of its infrastructure;
f) other income related to the exercise of its functions under the law.
(5) The structure and scope of the powers granted to the Administration shall be determined by laws and regulations of the Government.
(6) The Administration shall perform the following main tasks:
a) coordinate the activity of creating the productive and non-productive infrastructure of the free zone;
b) to maintain in working order the electricity, water and heat supply systems on the territory of the free zone;
c) organizes competitions for obtaining the right of resident of the free zone and registers the residents, issues them permits for carrying out in the free zone specific types of entrepreneurial activity established by law;
d) ensures the maintenance in good condition of the fences and buildings in the free zone perimeter, carries out control over the compliance with the authorized system of crossing the free zone boundaries;
e) elaborates and ensures the implementation of the programme of complex development of the free zone and environmental protection;
f) establish, in agreement with the Ministry of Economy, the payments and charges of the zone;
g) collect from the residents of the free zone the lease payments and other payments provided for in this Law;
h) controls the way in which the residents of the free zone comply with the contracts concluded with it;
i) maintains relations with the customs authority in order to ensure compliance with customs legislation.
(7) The administration shall coordinate its work with the local public administration authorities in solving social, environmental and infrastructural problems of the free zone.
(8) The decisions of the Administration, adopted within the limits of its competence, shall be binding on all residents of the free zone.
(9) In accordance with the laws and regulations of the Government, the Administration shall determine the manner of leasing land, the manner of granting rights of use of natural resources, as well as buildings, constructions and fixed funds belonging to or transferred to the Administration. The rights and obligations of the Administration in the field of land use are regulated by the laws and regulations of the Government in the field of land.
(10) The Administration shall not have the right to interfere in the economic activity of the residents of the free zone, if this activity does not contravene the legislation and the contract concluded between the Administration and the resident.
(11) The Administration of the free zone has the right to develop production infrastructure (construction of industrial halls) and to build engineering networks, which are subsequently offered for rent to the residents of the free zone or for the use of which a user fee is charged.
(12) The remuneration of the Administration's employees shall be paid in accordance with the law. On the basis of the Model Regulation on the Salary of the Staff of the Free Zone Administrations, approved by the Ministry of Economy, the Chief Administrator shall approve the Regulation on the Salary of the Staff of the corresponding Free Zone Administration, coordinated in advance with the Ministry of Economy and Infrastructure.
(13) The administration shall carry out the accounting and statistical management of its activity according to the law. The main administrator shall submit quarterly and annual reports to the Ministry of Economy on the activity carried out in the free zone. The form and deadlines for submission of reports shall be determined by the Ministry of Economy.
(14) The administration is entitled to make donations for philanthropic or sponsorship purposes to public authorities and public institutions financed from the national public budget. The volume of donations shall not exceed the amount approved for these purposes in accordance with the annual budget of the institution approved by the Ministry of Economy.
Art.6 Residents of free zones
Art.7 Customs regime
(1) On the territory of the free zones the customs regime is ensured by the customs body of the Customs Department whose activity is coordinated in organizational aspect with the Administration.
(2) Within one month from the date of entry into force of the law on the creation of a free zone, the customs body shall draw up the regulations of the customs service in that area, the mechanism and the technical assurance of its operation, shall submit proposals to the Government the number of staff and the financing of the activity of the service in question.
(3) On the territory of the free zone, a regime of mandatory customs declaration of goods (services) imported into this territory and exported from it is established. Import during the day to the territory of the free zone of domestic goods not intended for commercial activities, with a total value of up to 500 euros inclusive, indicated in the accompanying documents for these goods, is carried out without a customs declaration.
(3.1) The placement of domestic goods in the free zone is carried out only by filling out a customs declaration on importation into the free zone by a resident, without the obligation of the supplier (seller) to complete other customs declarations.
(3.2) Residents of the free zone are allowed to take waste out of the free zone without lodging a customs declaration for the purpose of its destruction, processing or storage (burial) in accordance with the legislation in force. The Customs Service will supervise the procedure for destruction, processing or storage (burial) and will keep simplified records of these operations.
(3.3) If the same person regularly imports into the free zone or exports from the free zone the same types of goods, the customs authority at his request shall allow to submit one customs declaration for all batches of goods for a certain period of time (periodic customs declaration). The procedure for filing a periodic customs declaration shall be determined by the Customs Service.
(3.4) Waste generated in the production process and related processes, including electrical, electronic waste, batteries and accumulators, waste oils or packaging of any kind, is assimilated to those originating in the Republic of Moldova. The removal of this waste from the territory of free zones on the rest of the customs territory of the Republic of Moldova for destruction, processing / recycling or recovery to specialized enterprises will not be considered import, but taxable delivery with the issuance of the tax invoice without filing the customs declaration.
(4) The regime of quotas and licensing of imports and exports of goods (services) is not applied on the territory of the free zone.
(4.1) Goods wholly obtained or sufficiently processed in a free zone shall be recognized as having been produced in the free zone if:
a) there has been a change in the goods item (classification code) under the Combined Commodity Nomenclature at the level of any of the first four characters; or
b) the value of the declared goods exported from the free zone exceeds the value of the goods imported into the free zone because of an increase of more than 35 percent in the enterprise's consumption and costs.
(4.2) Goods (services) that have not been sufficiently processed in the free zone shall be subject to the provisions of customs legislation and international treaties to which the Republic of Moldova is a party, insofar as they relate to goods placed in the free zone used to produce goods that have not been sufficiently processed, when exported from the free zone to the rest of the customs territory of the Republic of Moldova.
(4.3) Worn goods, fixed assets and low-value items previously placed in the free zone shall be released in free circulation at residual value or value established on the basis of an examination conducted by the Chamber of Commerce and Industry of the Republic of Moldova or other licensed entities
(8) Passenger cars imported into the territory of the free zone for the needs of the Administration and residents are subject to taxation in accordance with the law.
(9) It is prohibited to import goods and other items into the territory of the free zone if their trade is prohibited by the laws of the Republic of Moldova or international treaties to which the Republic of Moldova is a party, and also if they:
a) pose a danger to other goods and objects located in this zone;
b) threaten the morale and security of society;
c) do not comply with the norms and rules stipulated by the legislation in ecology and sanitary and hygienic norms and rules;
d) do not meet the quality requirements established by law.
(10) For the purposes of taxation, the supply of goods (services) to the territory of free zones from the rest of the customs territory of the Republic of Moldova is equated to export, and the supply of goods (services) from free zones to the rest of the customs territory of the Republic of Moldova is equated to imports, with the application of measures of economic policies, and are governed by law. Relevant deliveries are carried out on the basis of a single customs declaration, which is submitted to the customs post of the free zone.
(11) Goods (services) located in the free zone before crossing its borders are in free circulation and are transferred from a resident to a resident without customs declarations. The circulation of goods between the territories of the same free zone is carried out on the basis of accompanying documents without filing a customs declaration in accordance with the procedure established by the Customs Service.
(12) In case of termination of activity of a free zone (subzone), as well as in case of revocation of the resident status before termination of activity of a free zone (subzone), the resident or former resident shall place the goods imported earlier under another customs regime or customs destination in accordance with the current legislation. Remaining goods in storage shall be placed at their customs value indicated in the customs declarations on placement under the customs purpose of the free zone, and goods in use (long-term tangible assets) shall be placed at their initial value corrected or revaluated reduced by the amount of depreciation (book value).
(13) Real estate objects (buildings, constructions, unfinished real estate objects), which at the time of termination of the free zone (subzone) are by default recognized as released for free circulation without calculation of import duties, are not subject to declaration.
(14) The presence of goods in the free zone is not limited in time.
(15) The residents of the free zones submit quarterly to the Customs Service reports on the flow of materials, goods and finished products, in the form established by the Government.
Art.8 Tax regime
(1) Control over compliance with tax legislation in the free zone is carried out by the State Tax Service.
(2) The tax on the income of residents received from the supply of goods (services) from the free zone to the rest of the customs territory of the Republic of Moldova is levied in accordance with the law.
(3) The Administration has the right to establish zone economic fees and charges. The amount of zonal payments and fees collected by the Administration from residents is determined by the agreement concluded between them.
(4) Subject to the exemptions provided for in this article, the tax legislation of the Republic of Moldova applies to the activities of free zones.
Art.9 Currency regime
(1) Payments and transfers, including those in the framework of foreign exchange operations, shall be made by and to residents of the free zone in accordance with the legislation of the Republic of Moldova.
(2) On the territory of free zones, transfer settlements between residents may be carried out both in national currency and in foreign currency.
(3) Transactions between residents and economic agents of the Republic of Moldova shall not be subject to the requirements of the legislation on repatriation of funds, goods and services.
(4) The requirements stipulated in the legislation on repatriation of funds, goods and services shall be extended to export-import transactions carried out by residents with foreign subjects.
(5) Remuneration of labour of persons working in the free zone shall be made in national currency.
Art.10 Visa and registration regime
(1) In the case of foreign investors and workers of the residents, as well as of the persons invited by the main administrator of the free zone, the consular fees for the issuance of official visas (business visas) are not applied.
(2) The application of the chief administrator of the free zone represents a sufficient ground for issuing a residence permit and a work permit to a foreign investor or employee of a resident for a maximum period of 5 years.
Art.11 Labor relations and social protection
(1) Labor relations and social guarantees in resident enterprises are regulated, in accordance with the law, through collective and individual labor contracts. The contracts may not contain provisions restricting the rights established by law.
(2) The creation and activity of the trade unions at the resident enterprises of the free zone shall be settled in accordance with the Trade Unions Act No. 1129-XIV of 7 July 2000.
Art.12 Disputes settlement
(1) Disputes between residents, between residents and other legal entities of the Republic of Moldova or the Administration are settled by the competent courts of the Republic of Moldova in accordance with the law.
(2) Disputes between foreign natural or legal persons and residents, between foreign natural or legal persons - residents and other legal persons of the Republic of Moldova may be settled by international arbitration, unless the legislation of the Republic of Moldova provides otherwise.
Art.13 State guarantees
(1) Free zones are established for a period of at least 20 years. The period of operation of a specific free zone is established by the law on this zone.
(2) If new laws are adopted which worsen the conditions for the activity of residents in terms of customs, tax and other regimes provided for in the laws on the activity of free zones, residents are entitled, for a period of 10 years, but not exceeding the term of operation of the concrete free zone, to carry out their activities in accordance with the laws in force before the date of entry into force of the new laws. This norm will apply to the activity carried out by the residents within the investment projects registered until the adoption of the new law.
(3) For residents who invest in the fixed funds of the enterprise located in the territory of the free zone and/or in the development of the infrastructure of the free zone a capital equivalent to at least 200 million US dollars, the state guarantees provided in paragraph (2) extend for the entire period of the resident's activity in the zone, but not more than 20 years.
Art.14 Termination of free zone activity
Art.15 Transitional and final provisions