Opportunities in Moldova

1. Opportunities in Moldova Country presentation Wednesday, 08 January 2020 CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission from State Chancellery of Moldova is strictly prohibited

2. Republica Moldova în conştiinţa publică românească 2010, Cercetare realizată de Fundația Soros Romania, programul Bridging Moldova* Republica Moldova este puţin cunoscută • 82% consideră că nu sunt deloc sau că ar fi puțin informaţidespre Republica Moldova • 7,6% au avut o experiență directă, au efectuat o vizită în RM Graiul “mioritic” este pe plac • 49,1% afirmă că “le place mult” felul în care vorbesclocuitorii din Republica Moldova • 2,3%au declarat că “N-am înţeles aproapenimic din ce mi-a spus” Ţară cu valori Europene • 72% consideră că „Republica Moldova este o ţară europeanăşi ar trebuisă devină membră a Uniunii Europene” • Topul caracteristicilor atribuite locuitorilor din Republica Moldovade către români se situează: • 23%muncitori şi harnici • 18%uniţi • 17%toleranţi * Studiul a fost realizat pe un eșantion de 1547 de persoane, reprezentantiv la nivelul populației adulte a României, cu o marja de eroare de +/-2,5%. Culegerea datelor s-a făcut în perioada noiembrie-decembrie 2010. SOURCE: Source

3. What is Moldova? Moldova is a bridge between the EU markets and the growing CIS markets An open economy with on-going negotiations for EU integration • Open economy • Moldova is the only country with: • EU autonomous trade agreements • CIS countries free trade agreements • International Centre for Settlement of Investment Disputes (ICSID) member • World Trade Organisation (WTO) member Population 4 million Average monthly wage EUR 190 Multilingual population 70% • EU integration • No visa requirements for EU nationals • Ongoing negotiations on EU-Moldova Association Agreement and DCFTA

4. Why is Moldova an attractive destination? 1 2 Lowest wages in Europe for qualified, multilingual workforce Globally attractive fiscal regime • Average monthly salary €190 for relatively qualified professionals • Virtually all population is bilingual (Russian/Romanian), with many speaking English, French, Italian, Spanish, German • Attractive corporate tax rate (0% in 2011, expected 10% in 2012) • Extensive network of double taxation treaties • 10-year protection against any changes in the law that adversely affect FEZ1 residents 3 4 Relatively stable macroeconomic indicators Access to EU and CIS growth markets (500m + 275m = 775m customers) • Stabilisation of exchange rate to Euro and US-dollar • IMF agreement • Moldova is the only CIS country with autonomous trade agreements with the EU and FTAs with CIS countries • 3 truck-days away to the port of Rotterdam • International port access 1 Free Economic Zones

5. 1.0 Average monthly wage, gross EUR/month 1 Average wage in Moldova is lower than neighbouring countries and lower than in China, for educated, multilingual workforce SOURCE: National Bank of Moldova (2010); Chinese Government (July 16, 2010 data release)

6. 1 Average wage in Moldova is lower than neighbouring countries €2.0/h €1.1/h €4.0/h €4.0/h

7. 1.0 1 Moldova has relatively qualified labour force Educational attainment of the population aged 25 years and older, latest year available Education level, % of population with upper secondary education and above SOURCE: UNESCO Institute for Statistics (April 2011)

8. 1.0 Corporate tax rate, Percent, 2010 2 Globally competitive corporate tax rate in Moldova * Corporate tax rate is currently 0%; expected 10-12% in 2012 and beyond SOURCE: National Bank of Moldova (2010); OECD Tax Database (2010); World Bank – Paying Taxes (2010)

9. 1.0 MDL/EUR MDL/USD Exchange rate for the Moldovan currency 3 Stabilisation of exchange rate for the last several years SOURCE: National Bank of Moldova

10. 1.0 Trade agreements 4 Access to European and CIS markets #m Population, million • EU • Autonomous Trade Preferences (ATP) in its trade with the European Union, extended until 2015 (beyond likely to be replaced by DCFTA) • Central European Free Trade Agreement (CEFTA), 2006 • CIS • Bilateral Free Trade Agreements (FTAs) with all CIS countries, except Tajikistan • Organisation of the Black Sea Economic Cooperation, SECI, GUAM and other regional economic initiatives 275m 500m • World • Member of the World Trade Organisation (WTO), 2001 • International Centre for Settlement of Investment Disputes (ICSID), 2011

11. Where? Numerous investment opportunities across sectors How? A range of investment options are available Where and how to invest in Moldova? • Agriculture, wine & food processing • Free access on EU market w/o customer duties and tariffs for most products • Fertile soil for corn, fruits and vegetables • Direct investments • Direct investments in production assets are supported by the Government through tax incentives and other facilities • Free economic zones • Industrial parks • Business process outsourcing/ICT • Call centres and back-offices to leverage multi-lingual, highly educated, low wage workforce potential • Privatisation programme • Plans to privatise several state-owned companies in 2011-2012, including: • Telecom incumbent • Savings bank • Airports • Pharmaceutical company • Electricity distribution network • Power generation (CHPs) • Airlines • Assembly and manufacturing • Assembly of items, mostly requiring labour (e.g., car parts; electronics) • Energy • Expansion of power transmission capacity • Develop traditional and alternative energy sources (e.g., small-scale biomass, wind) • Public Private Partnerships • Public services and infrastructure are underdeveloped, while public financial resources for their rehabilitation and modernisation are insufficient • The Government promotes the PPP concept • Transport • Roads rehabilitation and maintenance • Public transport • Municipal utilities • Construction/modernisation of municipal water and sewage systems • Waste management Specific investment opportunities to be developed jointly with the Investment Support Team

12. Free Economic Zones – Predefined attractive conditions • Why free economic zones? • Exemption from VAT • Exemption from customs duties and excise duties on goods imported into the FEZ and subsequently exported • 0% corporate tax rate • 10-year protection against adverse changes in legislation • Infrastructure in place (transport, water, gas, electricity) Examples: • Draexlmaier Automotive • Lear Corporation • Danube Logistics

13. , Further contacts Investment support team Investors willing to share their experience in Moldova Full-time Investment Support Team Financial Institutions Dumitru Dediu, Advisor to Prime-Minister dumitru.dediu@gov.md +373.79.273787 or +31.653.855.876 Telecommunications Doina Cebotari, Advisor to Prime-Minister doina.cebotari@gov.md +373.798.487.09 or +373.681.099.74 Leadership team Industry Vladimir Filat Prime-Minister of the Republic of Moldova Valeriu Lazar Deputy prime-minister Minister of Economy of the Republic of Moldova

14. Supportingexhibits

15. Industrial parks – Predefined attractive conditions • Why industrial parks? • Free of charge change of the category of land with agricultural destination • Right to privatize the public property land associated with constructions, at the land normative price; • Optimization of state controls and minimization of bureaucratic barriers for investors

16. Source countries of foreign direct investments 1994-2009 BACKUP SOURCE: National Bureau of Statistics, FDI in Moldova for the period 1994-2009 (BNP Paribas Presentation, EU-Moldova Forum, 2011)

17. Main sectors of the economy 2009, volume of production SOURCE: NBS (2009)

18. Examples of major Energy Infrastructure Projects Sector Project Details Investment, €m Gas pipelines • Gas pipeline with Romania • Build Ungheni-Iaşi gas pipeline • 19 Power inter-connection capacity • Interconnection with Ukraine (121.5 km) • OHPL 330 kV (2nd line), Novodnestrovsc-BaltiCapacity 955 MVA • 25 • Interconnection with Romania (115 km) • OHPL 400 kV Balti-SuceavaCapacity 1715 MVA • 57 • Interconnection with Romania (100 km) • OHPL 400 kV Straseni-IasiCapacity 1715 MVA • 44