Branch or subdivision of a foreign public organization in the Republic of Moldova

I. Introduction

This report will help foreign non-profit organizations understand how to open a branch in the Republic of Moldova. We will review the main laws, the registration process, required documents, and tax conditions.

The main law regulating non-profit organizations (NPOs) in Moldova is Law No. 86 of June 11, 2020 on Non-Profit Organizations. It replaced all previous laws and is the only current source of information.

II. Possibility of Registering a Branch

Moldovan legislation allows foreign organizations to open branches. The Public Services Agency (PSA) has confirmed that there are no special restrictions or rules for foreign citizens and organizations. The procedure is the same for everyone and is clearly described in Law No. 86/2020.

This means that a foreign organization will not face additional complications due to its foreign origin. The main thing is to follow the general rules of Moldova.

III. State Registration Procedure

Competent Authority: Public Services Agency (PSA)

All legal entities, including branches of NGOs, are registered with the Public Services Agency (PSA).

Step-by-Step Instructions:

1. Submission of Application: In person, by email (with an electronic signature), or by registered mail.
2. Payment for Services: Through the state electronic payment system.
3. Review: The PSA checks the documents for compliance with the law.
4. Issuance of Decision: If everything is in order, the PSA issues a registration decision. This also triggers tax and social registration.

The standard registration period is 15 working days.

Important Requirements:

• Applicant: Documents must be complete and accurate. It is mandatory to provide data on beneficial owners.
• Legal Address: The branch must have a real, confirmed address in Moldova (e.g., a lease agreement).
• Name: The branch name must be checked and reserved in advance.
• Types of Activities: Clearly specify the branch’s activities according to the Moldova Classifier (CAEM-2).

Special attention is paid to the transparency of beneficial owner data and the existence of a real legal address. This helps combat money laundering.

IV. List of Required Documents

All documents must be in the Romanian language. This means that originals of foreign documents must be translated and certified.

Important: Documents issued in countries that are parties to the Hague Convention (e.g., most EU countries, the USA) require an apostille. However, thanks to bilateral agreements, documents from Ukraine **do not require an apostille or additional legalization**.

Main Documents:

• Registration application.
• Decision of the parent organization (foreign NGO) to open a branch. It must specify: the full name of the branch, its legal address, types of activities, and the name of the responsible person.
• Founding documents of the branch (e.g., Branch Regulations) in two copies. They must contain the same details as the decision.
• Copy of the founding document of the foreign legal entity (Charter of the parent NGO).
• Extract from the register where the parent NGO is registered (confirmation of its legal status).
• Document confirming the legal address of the branch in Moldova (lease agreement or certificate of ownership).
• Identity documents of the director/responsible person of the branch (passport, residence permit).
• Power of attorney, if documents are submitted by a representative.
• Information about the beneficial owner (ultimate beneficiary) of the parent NGO.
• Confirmation of payment of registration fees.

V. Operating Conditions and Tax Regime

General Rights of NGOs:

• Dissemination of information, publishing activities.
• Representation of the interests of their members.
• The right to establish branches.
• Conducting economic activities, if directly related to the statutory goals.
• Participation in grant competitions.

NGOs in Moldova can earn money to support their mission, but it is important that this activity is clearly linked to their statutory goals.

Exemption from Income Tax:

NGOs may be exempt from income tax if they:

• Are registered under Moldovan law and operate strictly according to their charter.
• Their economic activity corresponds to their goals.
• Prohibit the distribution of profits among founders, members, or employees.
• Use all funds exclusively for statutory purposes.
• Do not use funds for personal interests.
• Do not support or finance political parties.

The right to tax exemption begins from the date of registration. Any violation of these conditions may lead to the loss of tax benefits.

Taxation of Commercial Activities:

If a branch receives income from commercial activities that do not meet the strict conditions for exemption, this income is subject to corporate income tax at a rate of 12%.

It is necessary to maintain separate accounting records for non-commercial and commercial activities.

Other Tax Obligations:

The branch will also pay:

• VAT (20% standard rate if turnover exceeds the threshold).
• Personal income tax (on employee salaries).
• Social and medical insurance contributions.
• Possibly other local taxes (property, transport).

NGOs must file an annual tax return (form ONG17) and other reports.

VI. Bilateral Agreements between Moldova and Ukraine

Moldova and Ukraine have strong diplomatic relations and have signed over 150 international treaties. The key document is the Treaty on Legal Assistance and Legal Relations in Civil and Criminal Matters (1993).

These agreements ensure mutual recognition of official documents. This means that Ukrainian documents are accepted in Moldova without the need for an apostille.

However, these treaties do not create a separate, simplified, or expedited registration procedure specifically for Ukrainian NGOs. The process remains general, in accordance with Moldovan legislation.

VII. Important Notes and Recommendations

Preparation Tips:

• Prepare documents carefully: Ensure the accuracy of translations into Romanian.
• Transparency of beneficial owners: Provide complete and accurate information.
• Real legal address: Confirm the existence of a legal address in Moldova.
• Charter compliance: Ensure the branch charter complies with Moldovan NGO laws, especially regarding non-distribution of profits.
• Professional assistance: It is strongly recommended to consult local lawyers and accountants in Moldova. This will help avoid mistakes and speed up the process.

Contacts of the Public Services Agency (PSA):

For up-to-date contact information and to schedule an appointment, please visit the official website of the Public Services Agency of Moldova.

Glossary