IT Parks in Moldova: Jump on the bandwagon
As on March 26, 2018 the first and so far the only park for information technology created in Republic of Moldova, “Moldova IT Park”, counted 140 residents, and this number is increasing every single day. Having in mind that upon its creation the IT Park planned to have 31 residents in its first year of activity, the whopping number of 140 residents has exceeded every expectation. So why are IT Parks so appealing in Moldova?
What is a park for international technology (IT Park)?
The Law defines the IT Park as an organisational structure whose residents practice certain activities in the information technology field, expressly established by the law.
In fact, an IT Park is nothing else but a space where a specific type of companies activate (physically or virtually).
Who can create an IT Park?
IT Parks may be created by decision of the Government at the request of any individual or legal entity that is registered as entrepreneur, provided that they haven’t been or are not affected in any way by insolvency, including potential. The period of operation of an IT Park cannot exceed 10 years.
How does an IT Park work?
The Government of the Republic of Moldova establishes the Administration of the IT Park, which has the status of a legal entity. Its activity is based on the principle of self-financing. The Administration of the IT Park is headed by an Administrator, who is appointed by the Government for a 5-year period. The duties, rights and obligations of the administrator are established by the Regulation for the organization and functioning of the IT Park’s Administration.
Who can be a resident of the IT Park?
Any individual or legal entity, if they meet the following conditions (cumulatively):
- is registered in the Republic of Moldova as an entrepreneur,
- is included in the Register of evidence of IT Park’s residents; and
- practices, as a main business, one or more activities from the list of activities stated by the law (in the IT field).
What particular activities can be practiced at the IT Park?
The law indicates that the following main activities may be carried out in the IT Park (the main business is the one that generates at least 70% of the Park’s resident’s sales revenue):
- custom software development activities (client-oriented software);
- computer games editing activities;
- editing activities of other software products;
- management activities of the means of computation;
- data processing, web page administration and other related activities;
- web portal activities;
- information technology consultancy activities;
- other activities related to informational technology.
What are the advantages of the IT Park’s residents?
Specific taxation regime
The residents of the IT Park pay a single tax of 7% of sales revenue (but not less than 30% of the average monthly wage in the economy, predicted for the fiscal year). This tax includes the following taxes and fees normally paid:
› income tax on entrepreneurial activity;
› income tax on the salary;
› compulsory social insurance contributions (employee and employer);
› compulsory medical insurance payment (by the employee and employer);
› local taxes;
› real estate tax;
› road usage tax.
Specific reporting regime
The companies report the single tax to the State Tax Service, in one record, on a monthly basis.
Application of the law over time
In case new laws that modify or cancel the quota and/or the composition of the single tax are adopted, the residents of the IT Park are entitled, until 2022, to perform their activities according to the existing law.
The individuals with senior management positions in entities performing information technology activities and specialists in the mentioned field are exempted from the obligation of obtaining a residence permit for working purposes. They are entitled to obtain a long stay visa in case they practice specific information technology activities. The residence permit shall be issued on a preferential basis.
How can you become a resident of the IT Park?
Step 1. The applicant submits an application to the Administration of the IT Park enclosing copies of the documents regarding his/her registration as an entrepreneur.
Step 2. If the Administration accepts the application, a Contract with the Administration is concluded. The minimum contract term is 4 years.
The advantages and benefits of IT Park in Moldova are obvious. The procedure of becoming the resident of the IT Park is rather simple. Even there are certain minor issues that the companies face in their activity as the residents of IT Park, the support of IT Parks by the Government of the Republic of Moldova is noticeable.