Moldova

Moldova

MEMBERS:
Moldovan Association of ICT Companies

Moldova has made significant steps towards enhancing its startup ecosystem. Promoting a Tech friendly fiscal environment, Moldova is positioning itself on a niche connecting East and West where a flagship example is Tekwill, a private public partnership aiming to increase ICT industry competitiveness and develop its startup ecosystem.

Ana Chirita
Senior Project Coordinator of Tekwill, Strategic Projects Director of Moldovan Association of ICT Companies
#4 European Ecosystem: Affordable Talent

Highlights

Thanks to initiatives from the EU, the national government, and a growing range of support organizations, Moldova’s nascent startup ecosystem has been picking up steam in recent years. Since 2020 the European Union’s EU4Moldova program has allotted EUR 770,000 in grants, as well as mentorship and training, to support startups and social entrepreneurship initiatives in the Cahul and Ungheni regions. Thus far 28 companies have been awarded between EUR 15,000 – EUR 30,000 each. The EU has also launched a new technical assistance project in Moldova to help the national government plan and execute development projects. Moldova is home to 11 business Incubators. As of 2019 they had together supported more than 100 startups. Prominent among the country’s support organizations is Tekwill Academy, located within the Technical University of Moldova (UTM). A 4,000m² hub, it offers co-working spaces, tech labs for IoT and 3D printing, as well as community events. Together with Moldova Agroindbank, MasterCard, Startup Moldova, USAID and Sweden, Tekwill recently launched “FinTech Vertical 2021,” a program dedicated to supporting the country’s growing FinTech sector by connecting startups with existing financial services and IT players. In addition, Tekwill holds open days for students and others interested in learning more about the sub-sector.

Ecosystem by the numbers

TOTAL EARLY STAGE FUNDING
<$50 m
GLOBAL AVG.
$548 m
ECOSYSTEM VALUE
<$100 m
GLOBAL AVG.
$13.68 bn
MEDIAN SEED ROUND
$100 k
GLOBAL AVG.
$480 k
MEDIAN SERIES A ROUND
N/A
GLOBAL AVG.
$3 m
SOFT. ENGINEER SALARY
$13 k
GLOBAL AVG.
$44 k

Sub-sector Strengths

E-commerce

With high-speed internet reaching 98 percent of the population, Moldova is a hotspot for E-Commerce. The country’s 1.4 million online shoppers are expected to drive US$168 million in revenue this year, with projected revenue reaching US$269 million by 2025. Fashion is the largest segment of the market, contributing around $49 million in revenue this year. Shoppers generally pay on receipt of goods rather than online at the time of purchase. In 2020 Innovation hub Tekwill launched an initiative to offer co-financing for companies using technology to boost E-Commerce in the country.

Reasons to move your startup to Moldova

Affordable Talent

Salaries are extremely low in Moldova with the average worker making $5,912 a year. A data scientist can expect to make $8,673 and a software engineer $5,912. In addition to these attractive costs for employers, the population is relatively well educated with a literacy close to 100% and 13% of adults holding a university degree.

Low Cost of Living

It’s not just salaries that are low in Moldova. The cost of living is extremely affordable as well meaning foreign companies can retain Moldovan talent for a fraction of the cost typical for the US or Western Europe while still allowing for a good quality of life.

Tax Incentives

Companies investing USD$250,000 or more are eligible for a reduction in corporate income tax for up to 5 years under certain conditions. In addition, the corporate income tax rate has decreased from 28% to 15% since 2007. Individual income tax has also been reduced, with the top rate now set at 20%.

Openness to Foreign Investment

A number of foreign companies, including Lafarge, Sudzucker, Union Fenosa, and Metro Cash & Carry, have been operating successfully in Moldova. The country’s business environment compares favorably to many of its neighbors. The Heritage Foundation’s Index of Economic Freedom scored Moldova a 3.10 on scale from 1 to 5 with 1 being the best, compared to 3.24 for Ukraine, 4.11 for Belarus and 3.50 for Russia.

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