OBSCURE MOLDOVA PRESENTS OPPORTUNITIES FOR BUSINESS
Speaking live from Chisenau, Moldova, Stefan Gligor, an attorney, and Elena Dragalin of Moldova AID, told the International Business Initiative the agriculture, wine. IT and real estate of Europe’s poorest but rising country present great investment opportunities. After 80 years of communism, a third of the population departed. Located between Romania and Ukraine, Moldova created a special agency to deal with the Diaspora, Moldovans living abroad. A democracy, it has a widespread corruption problem, which is improving. $1. billion disappeared from the country’s state banks. Yet it is ranked #26 of 189 countries in favorability for business. Seeking energy independence from Russia, it is building a pipeline to Romania. Business startup costs are low. Income taxes are 12%. Legislation is favorable for business. But implementing it is a challenge. Western investment is usually “untouchable”, but potential risks to foreign investors must be carefully considered. Reform is needed but there is not the political will to bring it about. Labor is cheap. Many IT companies act remotely. There is free optical fiber. IT is well-developed. Moldova is 5th in the world in internet quality. In September 2009, it was the first country to launch high-definition voice services (HD Voice) for mobile phones, and the first in Europe to launch 14.4 Mbit/s mobile broadband at a national scale, with over 40% population coverage. In 2010, there were 1,295,000 internet users with overall Internet penetration of 35.9%. Skype is a necessity. Russian and Romanian is spoken. English is becoming common. Education is good. The chernozen soil is rich. Moldova is known for its wine and champagne. The infrastructure is good in Chisenau, but not in villages. Giurgiule?ti, an international seaport connects to the Black Sea by the Danube. Tariffs are high. The fruits have a unique taste. Unfortunately EEU standards favor appearance over taste. There are opportunities in winemaking, agriculture, construction, apartments, and real estate for locals. Foreigners cannot own real estate.
There is religious and political freedom and free speech in the public arena, but less than in the US. Local companies may have more influence with judges than foreign companies. Appeal can be made to the European Convention for Human Rights in Strasbourg to overturn Moldovan courts. Government decisions may be contested in constitutional court. Advance notice for searches is required.
The people are friendly and warm. Moldova AID is a North Carolina nonprofit which provides English books in libraries, clothing and shoes and relief in Moldova. A recent conference of the Diaspora, encouraged efforts to help Moldova. Mamaliga, a hard corn porridge, is the national dish, poured onto a flat surface in the shape of a big cake and served with cheese, sour cream, or milk.Filled cabbage and grape leaves as well as soups such aszama and the Russian borsch also form part of daily meals.Placintais a pastry filled mainly with cheese, potatoes, or cabbage, is sold on the streets.
J. Michael Considine, Jr. is chairman of the International Business Initiative.