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Survey COST OF DOING BUSINESS 2017
Chișinău, December 2017
Developed by: NGO Rural Economic Development Center PROMO-TERRA
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2 Contents
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Contents
ABBREVIATIONS .......................................................................................................................................................................................... 7
EXECUTIVE SUMMARY ................................................................................................................................................................................. 8
PURPOSE OF THE STUDY ...........................................................................................................................................................................12
METHODOLOGY .........................................................................................................................................................................................13
1 GENERAL INDICATORS ........................................................................................................................................................................19
1.1 Regulatory environment – general considerations .................................................................................................... 19
1.2 General time indicator ............................................................................................................................................... 19
1.3 General perception of the changes in the business environment ............................................................................... 20
1.4 General assessment of various business aspects ........................................................................................................ 21
2 REGISTRATION PROCEDURE ...............................................................................................................................................................22
2.1 Regulatory framework ............................................................................................................................................... 22
2.2 Time to complete registration procedures ................................................................................................................. 23
2.3 Costs of registration procedures ................................................................................................................................ 24
2.4 Perception of procedures ........................................................................................................................................... 24
2.5 Summary of analysis ................................................................................................................................................. 25
3 CONSTRUCTION ...................................................................................................................................................................................27
3.1 Regulatory framework ............................................................................................................................................... 27
3.2 Costs and time required to obtain construction permits ............................................................................................ 28
3.3 Perception of procedures ........................................................................................................................................... 29
3.4 Summary of analysis ................................................................................................................................................. 30
4 LICENSING ............................................................................................................................................................................................31
4.1 Regulatory framework ............................................................................................................................................... 31
4.2 Number of licenses .................................................................................................................................................... 32
4.3 Costs to obtain a license ............................................................................................................................................ 32
4.4 Perception of procedures ........................................................................................................................................... 33
4.5 Summary of analysis ................................................................................................................................................. 34
5 NOTIFYING OF THE TRADE ACTIVITY .................................................................................................................................................35
5.1 General regulatory framework .................................................................................................................................. 35
5.2 Time required to submit a notification ...................................................................................................................... 35
5.3 Perception of the notification procedure ................................................................................................................... 35
5.4 Summary of analysis ................................................................................................................................................. 36
6 TRADING ACROSS BORDERS ................................................................................................................................................................37
6.1 Regulatory framework ............................................................................................................................................... 37
6.2 Import transactions .................................................................................................................................................... 38 6.2.1 Certification costs of imported goods ............................................................................................................... 38 6.2.2 Customs costs ................................................................................................................................................... 39 6.2.3 Perception of import procedures....................................................................................................................... 39
3 Contents
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
6.3 Export transactions .................................................................................................................................................... 40
6.4 Summary of analysis ................................................................................................................................................. 40
7 CERTIFICATION OF GOODS ..................................................................................................................................................................42
7.1 Regulatory framework ............................................................................................................................................... 42
7.2 Certification costs ...................................................................................................................................................... 42
7.3 Perception of certification procedures ....................................................................................................................... 43
7.4 Summary of analysis ................................................................................................................................................. 44
8 SANITARY OPERATING AUTHORIZATIONS ..........................................................................................................................................45
8.1 Regulatory framework ............................................................................................................................................... 45
8.2 Obtaining sanitary operating authorizations .............................................................................................................. 45
8.3 Perception of the process to obtain a sanitary operating authorization ..................................................................... 45
8.4 Summary of analysis ................................................................................................................................................. 46
9 SANITARY CERTIFICATION OF GOODS .................................................................................................................................................47
9.1 Regulatory framework ............................................................................................................................................... 47
9.2 Obtaining sanitary certificates ................................................................................................................................... 48
9.3 Perception of procedure to obtain a sanitary certificate ............................................................................................ 48
9.4 Summary of analysis ................................................................................................................................................. 49
10 PHYTOSANITARY CERTIFICATION ......................................................................................................................................................50
10.1 Regulatory framework ............................................................................................................................................... 50
10.2 Obtaining phytosanitary certificates .......................................................................................................................... 50
10.3 Perception of procedure to obtain a phytosanitary certificate ................................................................................... 51
10.4 Summary of analysis ................................................................................................................................................. 52
11 INSPECTIONS .......................................................................................................................................................................................53
11.1 Regulatory framework ............................................................................................................................................... 53
11.2 Number and duration of inspections .......................................................................................................................... 53
11.3 Expenses incurred folowing the inspections ............................................................................................................. 54
11.4 Perception of number of inspections and difficulties ................................................................................................ 55
11.5 Summary of analysis ................................................................................................................................................. 57
12 TAXES ..................................................................................................................................................................................................59
12.1 Regulatory framework ............................................................................................................................................... 59
12.2 Administration of taxes ............................................................................................................................................. 59
12.3 Main difficulties in paying taxes ............................................................................................................................... 60
12.4 Summary of analysis ................................................................................................................................................. 61
13 PRICE REGULATION .............................................................................................................................................................................62
13.1 Regulatory framework ............................................................................................................................................... 62
13.2 The extent of goverment's intervention in price setting............................................................................................. 62
13.3 Perception of price regulation ................................................................................................................................... 62
13.4 Summary of analysis ................................................................................................................................................. 62
14 REGULATION OF LABOUR RELATIONS ................................................................................................................................................64
14.1 Regulatory framework ............................................................................................................................................... 64
4 Contents
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
14.2 Availability of workforce .......................................................................................................................................... 64
15 EXECUTION OF CONTRACTS ................................................................................................................................................................66
16 PROMOTION OF PERSONAL INTERESTS OF PUBLIC EMPLOYEES ........................................................................................................67
17 EVALUATION OF THE JUDICIARY SYSTEM ...........................................................................................................................................68
17.1 Regulatory framework ............................................................................................................................................... 68
17.2 Methods used to settle disputes ................................................................................................................................. 68
17.3 Assessing the efficiency of using courts.................................................................................................................... 69
17.4 Summary of analysis ................................................................................................................................................. 69
CONCLUSIONS ............................................................................................................................................................................................70
5 Tables and Figures
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
List of Tables
Table 1. Distribution of companies participating in the study .......................................................................................... 15 Table 2. Amount of time to complete the primary registration procedure, by government institution, in the last three
years .............................................................................................................................................................................. 24 Table 3. Amount of time to amend the incorporation documents, by government body, in the last three years ......... 24 Table 4. Registration-related problems .............................................................................................................................. 25 Table 5. Duration and amount of time spent to register with the SRC in recent years .................................................. 26 Table 6. Time and costs required to obtain permissions to commence reconstruction works ....................................... 28 Table 7. Time and costs required to obtain permissions to place into service the reconstruction works ..................... 29 Table 8. Problems relating to obtaining permissions for reconstruction and repairs .................................................... 29 Table 9. Average amount of time to obtain permissions and final approval, days ......................................................... 30 Table 10. Average costs to obtain a license ......................................................................................................................... 33 Table 11. Licensing related problems ................................................................................................................................. 33 Table 12. Evolution of costs related to licensing activities ................................................................................................ 34 Table 13. Documents required at the time of notification ................................................................................................. 36 Table 14. Costs and time to complete import customs procedures .................................................................................. 39 Table 15. Most significant problems on import ................................................................................................................. 39 Table 16. Changes in import-export procedures and regulations .................................................................................... 41 Table 17. Problems faced in the certification process ........................................................................................................ 43 Table 18. Changes in the process of certification of goods ................................................................................................ 44 Table 19. Average expenses incurred by respondents to obtain a sanitary authorization ............................................. 45 Table 20. Problems faced in the process of obtaining sanitary authorizations ............................................................... 46 Table 21. Changes in the process of obtaining a sanitary authorizations ........................................................................ 46 Table 22. Average costs incurred by respondent companies to obtain a sanitary certificate ........................................ 48 Table 23. Problems faced in obtaining sanitary authorizations ........................................................................................ 49 Table 24. Changes in procedures for obtaining sanitary certificates ............................................................................... 49 Table 25. Average costs incurred by respondents to obtain a phytosanitary certificate ................................................ 51 Table 26. Problems faced during the process of obtaining phytosanitary certificates ................................................... 51 Table 27. Changes in the procedures to obtain phytosanitary certificates ...................................................................... 52 Table 28. Average number and duration of inspections .................................................................................................... 54 Table 29. Share of companies that incurred payments following the inspections in the last year ................................. 55 Table 30. Impartiality of public servants ............................................................................................................................ 56 Table 31. Purposes of the inspection visits .......................................................................................................................... 56 Table 32. How inspections have changed ............................................................................................................................ 57 Table 33. Changes in the share of inspected companies, % per total surveyed companies............................................ 57 Table 34. Frequency of inspections (calculated only for companies inspected by respective authority) ...................... 58 Table 35. Frequency of inspections (calculated for all companies contained in the sample) ......................................... 58 Table 36. The necessary number of accountants to ensure timely and correct payment of taxes ................................. 59 Table 37. Time spent to submit a statement, hours ........................................................................................................... 60 Table 38. Taxes that generate most difficulties .................................................................................................................. 60 Table 39. Problems encountered in the taxation system ................................................................................................... 61 Table 40. Comparing the tax administration system ......................................................................................................... 61 Table 41. Methods used by government to control prices ................................................................................................. 62 Table 42. Price regulation in the Republic of Moldova ..................................................................................................... 63 Table 43. Assessment of labour force availability .............................................................................................................. 65 Table 44. Assessment of main problems related to labour relations regulation .............................................................. 65 Table 45. Monitoring the execution of contracts in Moldova ........................................................................................... 66 Table 46. Promotion of personal interests of public servants ........................................................................................... 67 Table 47. Methods used to solve conflicts, % of companies that had to solve conflicts .................................................. 69 Table 48. Reasons for not going to court ............................................................................................................................ 69 Table 49. Efficiency of resolving disputes through courts ................................................................................................. 69 Table 50. Comparison of main indicators ........................................................................................................................... 73
6 Tables and Figures
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
List of Figures
Figure 1. Geographical distribution of companies ............................................................................................................ 16 Figure 2. Distribution by legal form of business ............................................................................................................... 16 Figure 3. Share of companies based on number of employees ......................................................................................... 17 Figure 4. Sample structure by type of activity .................................................................................................................. 17 Figure 5. Share of time spent to comply with regulation requirements ........................................................................... 20 Figure 6. Assessment of changes in the business environment ......................................................................................... 20 Figure 7. Difficulties encountered ....................................................................................................................................... 21 Figure 8. Share of enterprises that contacted the State Registration Chamber over the last three years .................... 23 Figure 9. Problems faced by economic agents in the registration process over the last three years ............................. 25 Figure 10. Perception of changes in procedures governing the use of spaces .................................................................. 29 Figure 11. Problems relating to obtaining permissions for construction and repairs .................................................... 30 Figure 12. Perception of changes in the licensing process, % ........................................................................................... 33 Figure 13. Problems related to licensing ............................................................................................................................. 34 Figure 14. How managers perceive the transition from authorizations to notifications ................................................ 35 Figure 15 Handling situations of lacking certificate of compliance .................................................................................. 38 Figure 16. Perception of changes in import procedures .................................................................................................... 39 Figure 17. Perception of difficulties related to import transactions ................................................................................. 40 Figure 18. Perception of changes in export procedures ..................................................................................................... 40 Figure 19 Share of companies that certify goods ............................................................................................................... 43 Figure 20. Changes in the certification process .................................................................................................................. 43 Figure 21. Exporters’ perception of difficulties related to the certification procedures ................................................ 44 Figure 22. Changes in the process of obtaining sanitary authorizations ......................................................................... 46 Figure 23. Problems encountered in the process of obtaining sanitary authorizations .................................................. 46 Figure 24. Changes in the process of obtaining sanitary certificates ............................................................................... 48 Figure 25. Problems encountered in obtaining sanitary certificates ................................................................................ 49 Figure 26. Changes in the process of obtaining phytosanitary certificates ...................................................................... 51 Figure 27. Problems faced in the process of obtaining phytosanitary certificates .......................................................... 52 Figure 28. Changes in the number of inspections .............................................................................................................. 55 Figure 29. Changes in the perception of state inspection procedures .............................................................................. 56 Figure 30. Taxes that generate most difficulties ................................................................................................................. 60 Figure 31. Changes in the tax system .................................................................................................................................. 61 Figure 32. Companies that had to settle disputes ............................................................................................................... 68
7 Abbreviations
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Abbreviations
CIS Commonwealth of Independent States
CMEA Classifier of Moldova's Economy Activities
JSC Joint Stock Company
LLC Limited liability company
LPA Local Public Authorities
ME Municipal Enterprise
NAC National Anticorruption Center
NBM National Bank of Moldova
NHIC National Health Insurance Company
NSIH National Social Insurance House
SE State Enterprise
SRC State Registration Chamber
USD United States Dollar
VAT Value Added Tax
8 Executive summary
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Executive summary
This study was organized with the support of the Ministry of Economy and the World Bank. The
Survey on Cost of state regulation of business activity is carried out annually since 2002.
Survey timeframe
The data collection period was from September to October 2017. The survey study covered the
registration, construction, trading across borders, purchasing of equipment - in the last three years, the
judiciary environment - in the last two years and for the remaining areas - the last year or the time of
questioning.
Method
Interviews were carried out by trained personnel, guided by a structured questionnaire approved by the
beneficiary. Interviewers travelled to respondent’s business office to conduct face to face interviews
with company managers.
Companies have been randomly selected from the total number of companies in Moldova, currently
functioning.
The data was analysed using the SPSS software. To ensure the representativeness of the obtained
results, the high dispersion series outliers were removed. In many cases the median was used to
distinguish the central tendency.
Indicators were calculated by overall country, region, type and size of company. The report contains
only relations bearing some sort of relevance. Average indicators with values displaying very large
dispersions due to the low number of respondents were not included in the report.
Sample
For the questioning were selected randomly 630 representative companies based on their legal form,
number of employees, type of activity and geographic location. The sample does not contain
agricultural and individual enterprises, banking institutions, or companies located on the left bank of
the Nistru River.
Around 72% of the surveyed companies are located in Chisinau. Most entities (94%) are limited
liability companies. Companies employing up to 10 people accounted for 85% of the total.
General time indicator
The general time indicator describes the managers' perception of the degree of government
interference in the company's activity. The 2017 indicator remained steady compared to 2016, at 8%.
Registration
In 2017, it took 4 days to register a company with the State Registration Chamber - the average
amount of time recorded in the last 3 years. The amount of time required to modify the incorporation
documents has slightly decreased.
Most businesses do not encounter difficulties in the registration process. The share of respondents who
use intermediary services to complete the registration procedures has diminished.
9 Executive summary
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Construction
In 2017 the procedure for issuing urban planning certificates and construction permits by the one-stop
shop for the authorization of construction works has been finalized. The amount of time to obtain
construction permits has slightly decreased.
Over the past three years, almost 29% of respondents have moved into new premises. Of these, only
3,3% have built them, their number decreasing continuously over the last years.
Most of respondents that moved to new locations (77,3%) have not carried out any alterations to the
premises. About 24% of them were required to get permissions to use the premises.
Licensing
In 2017, the share of companies that had a license at the time of questioning (42%) has not changed
compared to 2016. The average number of licenses per company increased from 1,1 to 1,4 - a value
registered throughout 2013-2015.
The amount of time and cost to obtain a license have not changed significantly. The share of
respondents who paid unofficial payments has diminished.
Notification
More than half (54%) of Moldovan companies fall under the Law on domestic trade. Three quarters
(76%) of them have submitted notifications to local public authorities of their operating trade
activities.
The amount of time to prepare and submit a notification was 6,0 days. Managers have spent around 4,6
hours on this procedure.
More than half of respondents do not think that carrying out a trade activity has become easier with the
elimination of the need to obtain an authorization. This opinion is influenced by the LPA's request that
the notification be accompanied by documents that were necessary to issue an authorization.
Import
About 34% of importers were required to obtain compliance certificates conforming to Moldovan
standards for their imported goods. Of these, more than three quarters had certificates of compliance
with the requirements of the country of origin. In a quarter of cases the goods were retained at
customs.
The certification of imported goods took 5,7 days. The cost of obtaining a certificate has decreased
from USD 202 to 137. About 16% of respondents paid bribes to obtain certificates.
About 40% of importers were required to obtain sanitary authorizations for imported goods.
The average amount of time to complete a customs procedure increased from 2,7 days in 2016 to 3,1
days in 2017. Related costs increased to USD 307.
Export
The procedures for an export transaction took an average 2,1 days, slightly longer than last year. The
cost of procedures has decreased to USD 105.
Certification of goods and services
Only 9% of the companies contained in the sample certified their goods.
10 Executive summary
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
About 60% of companies certify batches of goods. This certificate is now obtained in significantly less
time - from 7,6 days in 2016 to 3,0 days in 2017. Costs related to certification of batches of goods
amount to USD 106, an year-on-year increase by USD 60.
About 4% of companies certify mass-manufactured goods. The amount of time required to obtain this
certficate has not changed significantly and stands at 10 days. Related costs have increased to USD
122.
Sanitary operating permits
In 2017 the process of obtaining sanitary operating permits has not undergone major changes.
About 39% companies had to obtain sanitary operating permits. A sanitary permit is obtained in 6,7
days. The total cost is about USD 75.
Sanitary certification of goods
Only 8% of respondents had to obtain sanitary certificates. The process took 5 days on average and
cost about USD 60, without significant changes compared to the previous year. Most companies have
not pointed out any changes in the sanitary certification process.
Phytosanitary certification
Companies are less involved in phytosanitary certification compared to sanitary or compliance
certification. The 6% of respondents that applied for this certificate paid USD 34 and obtained it in 2
days. Compared with the previous year, both indicators have essentially not changed. It should be
noted that the sample does not include agricultural enterprises and farm households that are affected by
the respective regulatory area to a greater extent.
Inspections
In 2016, the share of verified companies has diminished, as a results of the moratorium on inspections
imposed by the Government. The waiver of moratorium at the moment has led to an increase in the
number of inspections to 2,9 visits per year. The total amount of time spent by inspectors with a
company has increased more than twice (11,5 hours/year).
Most government institutions now carry out inspections more frequently.
The share of companies that were fined has increased. Meanwhile, the share of companies that paid
bribes has diminished.
Only 9% of companies said that they are treated equally by the law. About 38% are convinced that the
law is applied selectively.
Taxes
The procedure for calculating, reporting and paying corporate income tax generates the most
difficulties.
Price regulation
No major changes were noted in this field over the past three years. The government interferes in
product price formation at 13% of companies. The sales volume at regulated prices slightly increased
to 3,9%, returning to the 2015 value.
11 Executive summary
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Regulation of labour relations
Most of the companies have the necessary number of employees. One in four interviewed companies
think they have staff shortage. No specific problems have been identified in labour relations regulation.
Contract monitoring
Over the past thirteen years there have been no significant fluctuations in the contract execution
process. The state interfered in contract signing process of 4% of companies.
Judiciary system
Every fifth respondent had to settle disputes. Their share has not changed significantly over the last
four years. Most of the disputes were business conflicts with other companies.
The share of companies taking to courts to address the conflicts has diminished, returning to the level
of 2015 (46%). Almost a third of businesses used various unofficial but legal methods. Disputes were
solved by illegal methods in only 7% cases, with no major changes compared to the previous year.
Around half of the companies who filed a lawsuit were satisfied with the decision.
12 Purpose of the study
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Purpose of the study
The study was developed to monitor the main indicators describing the business environment
regulation as well as to quantify the impact on economic agents of the actions undertaken by the
Government during the analyzed period.
The project was carried out with a focus on the following goals:
Provide the Government of the Republic of Moldova, as well as the national and international
institutions with quantitative data on the cost incurred by businesses to comply with
government regulations.
Assist the Moldovan Government in the qualitative policy analysis with a view to implement
the necessary decisions to improve business and investment climates in Moldova.
Assist the civil society institutions that make recommendations and need to monitor their
impact.
Establish a tool to monitor the changes in the business environment and the impact of the
measures taken to reduce barriers and corruption in business.
13 Methodology
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Methodology
Outlines
The objective of the study can be achieved by measuring and comparing in time the perception of the
entrepreneurs and managers of the companies about the costs incurred by them in order to comply with
the requirements imposed by various government regulations.
The method is based on the assumption that the decision to start and develop a business is based more
on managers' perception on costs rather than on the actual expenses incurred by them. If managers feel
less pressure in a certain regulatory domain, it is deemed as a positive fact, even if no improvements
have been made in the respective domain in recent years. Similarly, cases where government bodies
have undertaken improvements in a certain area, but the changes were not made known to companies
or were insufficiently "visible" to be referred to by managers, were deemed as a neutral fact.
Managers' perceptions of virtually every analyzed segment are depicted concurrently with regulatory
costs, expressed in terms of time and money, pursuant to the regulations in effect in the Republic of
Moldova.
Areas analyzed
In order to ensure the comparability of the results, the questionnaire developed in this study follows
with small changes the logic of the questionnaires used in previous surveys.
In order to keep the questionnaire updated with the latest changes to the current legislation, the chapter
on trade authorizations was modified and the questions regarding the need to return VAT invoices
upon the replacement of the founder were excluded.
Other changes refer to removing the regulatory areas with impact on an insignificant number of
companies, such as the construction of new premises and the procurement of equipment, as well as
explaining certain questions that often required clarification on behalf of the interviewers.
Regulatory costs are analyzed on the following components, where applicable:
taxes/tariffs established by state institutions;
various legal payments to people outside the company or institutions, intended to facilitate the
process of compliance with state regulations (lawyers, experts in various fields, acquaintances
who have passed these procedures, etc.);
payments for notary services that are required to comply with state regulations;
transportation costs for travelling to the regulatory body or to collect the necessary documents
(round trip);
various "voluntary" contributions made under the pressure by state bodies to facilitate the
process of obtaining documents;
bribery and other unofficial payments to representatives of state bodies to facilitate regulatory
procedures;
time spent by company employees to obtain the necessary documents;
amount of time spent to obtain documents, from the time the procedure was initiated until the
required document was obtained.
14 Methodology
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
The overall perception is analyzed for each area of regulation to unveil the changes in the complexity
of procedures compared to the previous year (more difficult/bad, no changes, simpler/good). It also
analyzes, if necessary, on a scale of one to five, the impact of various impediments in the regulatory
area in question.
Selection of companies
To select businesses for interviewing a database was created comprising all companies functioning at
the time of questioning, excluding farming households, financial institutions and individual
enterprises. The database does not contain legal persons that do not carry out economic activities:
nongovernmental organizations, community associations, educational institutions, housing associations
and others. The selection of companies to be excluded was carried out based on CMEA codes. The
regulatory framework of these companies is specific and does not comply with the purpose of this
study.
For the survey, a sample of 600 companies was randomly generated from the database using the SPSS
programme. Each company had equal chances to be selected. The sample was tested in terms of
representativeness, using four criteria: region (raion), field of activity, legal & organizational form and
number of employees.
The sample structure was compared with the general population structure, from which it was extracted.
Cases where significant differences (of more than 1%) were seen between the share of general
collectivity and the sample, the "surplus" companies were removed from the general population. As a
result, another 20 companies were randomly selected from the "deficient" group of companies, using
the SPSS software. After verifying the structure of the sample with that of the collectivity, another 10
companies were selected using the above method.
In several instances, no representatives of the company could be found at the legal address. Using the
information found on the internet or the landline telephone numbers, interviewers travelled to the
premises where the actual activity was carried out. Businesses that could not be found at both
addresses were excluded from the sample. In some cases the persons entitled to offer information
could not be contacted after repeated attempts or they refused to be interviewed.
Companies that were removed from the sample were replaced by others, that were part of the same
group, according to the four criteria above.
Approximately 19% companies refused to be interviewed, other 35% could not be found at the
address. There has been noted an improvement of these indicators compared to the previous year and
the 7 p.p. decrease of the refusal rate indicates that companies are now more open in relation to
business regulatory issues.
Sample
The sample includes 630 businesses across the country except the raions located on the left bank of the
Nistru river. In order to make region-wise comparisons, the raions and Bălți Municipality were
grouped into three regions: north, centre and south.
15 Methodology
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 1. Distribution of companies participating in the study
Region Companies Share
Chisinau 454 72%
North 64 10%
Centre 68 11%
South 44 7%
Legal form
Limited liability companies 589 93,5%
Joint stock companies 17 2,7%
State or public enterprises 4 0,6%
Other 20 3,2%
Number of employees
1 – 10 533 84,6%
11 – 50 73 11,6%
51 – 200 18 2,9%
> 200 6 1,0%
Field of activity
Food industry 16 2,5%
Other industries 54 8,6%
Trade 265 42,1%
Transport 43 6,8%
Constructions 35 5,6%
Services (excluding transport) 159 25,2%
Other companies (management consultancy,
scientific activity, legal advice, research, etc.)
58 9,2%
Most of the interviewed companies are located in Chisinau (72%). Around 10% are located in the
north, including the municipality of Bălți. Companies located in the centre accounted for 11% of the
total. The remaining entities are found in the south region (see Figure 1).
16 Methodology
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Figure 1. Geographical distribution of companies
Similar to previous surveys, limited liability companies made up more than 90% of the total number of
the surveyed companies (see Figure 2)
Figure 2. Distribution by legal form of business
Most companies have up to 10 employees, their share has not changed compared to previous studies.
(see Figure 3).
Chișinău ; 72%
Centre; 11%
North; 10%
South; 7%
LLC; 94%
JSC; 3%
SE and ME; 1% Other; 3%
17 Methodology
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Figure 3. Share of companies based on number of employees
More than 40% of the surveyed companies carry out trade activities. Companies in the service
industry, including transport, account for more than 30%. Compared with previous years, the
distribution has not changed significantly.
Figure 4. Sample structure by type of activity
Interviewing
The persons approved to conduct interviews were accepted only after completing special training.
Where possible, respondents were informed in advance about the interviewer's visit.
The interview was conducted with the first person in the company or his delegated representative. The
respondent was informed about the purpose of the survey. Respondents were interviewed in face-to-
face interviews, based on questionnaires structured by regulatory areas. In order to facilitate the
interviewing process and avoid ambiguities in the interpretation of the text, the questions were set up
in the form that would be read to the respondent. Also, the questionnaire contained references to
different questions depending on the answer.
In order to prevent a distorted assessment of managers’ perception, it was recommended, if possible,
1-10 employees; 85%
11-50 employees; 12%
51-200 employees; 3%
more than 200 employees; 1%
Trade; 42%
Other services; 25%
Transport; 7%
Construction; 6%
Industry - other; 9%
Food industry; 3%
18 Methodology
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
that they avoid consulting the accounting records. Interviewers were instructed to avoid suggesting
answers or objecting to the answers provided by managers.
Checking the quality of data collection
In order to ensure the quality of data collection, about 10% of interviewed companies were randomly
contacted. Following a short discussion on the phone, it was verified that:
1. the interviewer has indeed discussed with the company official
2. answers to several questions match those noted in the questionnaire.
Data processing
The statistical data obtained in the survey were analysed using the SPSS statistical program.
Before starting the calculation of indicators, the outliers in the database most likely to distort the
average values were removed. The threshold is decided upon by the expert that performs the analysis.
As a rule, the elimination of one data should not affect the average value of the series. In practice, the
degree depends on the number of answers and the size of dispersion. If the resulted dispersion is too
high, the indicator average is not representative and it is removed from the analysis results.
The average values are calculated both within the sample and divided into groups, depending on the:
region, company size, type of activity and organizational and legal form. The report contains only
results bearing some kind of correlation. Often times, the dispersion drawn by the amount of payments
is too high to allow the calculation and the analysis of the average amount. However, it might prove
useful to include the data on the share of companies who made such payments. E.g. it is important to
see how the share of companies that made unofficial payments has changed. For areas where the
number of respondents is insignificant, only synthetic indices were calculated per total country.
The average data was calculated only for respondents who answered the corresponding question. For
example, the average transportation expenses are calculated only for respondents who mentioned
having incurred such expenses. The average total expenses represents the average component
expenses, weighted by the number of respondents who have incurred such expenses.
The value of indicators included in the report are calculated in US dollars at a rate set by the National
Bank of Moldova during that period or, where applicable, at the time of questioning.
The following exchange rates set by the National Bank were used in the study:
2015 - 18,82
2016 - 19,92
January-October 2017 - 18,72
19 General Indicators
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
1 General Indicators
1.1 Regulatory environment – general considerations
The main laws that regulate the entrepreneurial activity are as follows:
Law no. 235 of 20 July 2006 on Fundamental principles governing entrepreneurial activity
(Guillotine II). Some of the principles to be mentioned:
The tacit approval to start and/or operate a business activity where the applicant is not
notified within the deadline set by law.
The advisory status of the state supervision of entrepreneurial activity, except for financial
and tax.
Nullity of payments for services rendered and documents issued to entrepreneurs by public
authorities if they are not approved by law.
Prerogative of the Parliament in establishing the compulsory technical and sanitary
conditions, standards and other similar documents.
Handling doubts of law enforcement in favour of the entrepreneur
Law no. 280-XVI of 14 December 2007 and Law no. 281-XVI of 14 December 2007, approved
for the purpose of adapting the regulatory framework to the principles laid down in Law no.
235-XVI.
Law no. 160 of 22 June 2011 on Regulation through authorization of entrepreneurial activity
and Law no. 162 of 22 July 2011 on Amendment and supplement of certain legislative acts that
establish the Nomenclature of permissive documents, as well as sanctions against persons in
key positions who delay the release of permissions or request additional documentation that is
not set out in the Nomenclature (Guillotine II+).
1.2 General time indicator
The general time indicator is a synthetic indicator broadly
describing the influence of state bodies over a company. It
represents the perception of the amount of time the company
management spends to communicate with representatives of the
state bodies. Throughout 2010-2015 the indicator has virtually
not changed, fluctuating between 10% and 11%. In 2017, the
indicator did not change compared to 2016 – standing at 8%.
The absolute value of the indicator is relevant to a limited extent.
However, it is important to observe how the indicator changes
over time, as shown in Figure 5.
Companies in Other Services (6,7%) and
Trade (7,3%) spend the least amount of
time to communicate with state bodies.
Companies in Non-food Industry spend
the longest period of time for this
purpose (10,7%).
Managers of companies with up to 10
employees, which account for 80% of
the sample, spend on average 7,6% of
the time on communicating with state
bodies, while companies with more than
10 employees feel more pressure from
state bodies (9,7%).
By regions, the best situation is
observed in the North (6,3% of the
time), while the South experiences the
opposite, with managers spending an
average 9,3% of their time on this
process.
20 General Indicators
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Figure 5. Share of time spent to comply with regulation requirements
1.3 General perception of the
changes in the business
environment
In 2017 respondents' perception of
changes in the business environment
has improved. The share of companies
who noticed improvements has grown,
while the share of businesses who
stated that the situation has worsened
has decreased. It is worth mentioning,
however, that the share of the latter
continues to be higher.
This indicator measures the trust managers and entrepreneurs have in state institutions rather than the
implemented policies. It depicts the business environment’s perception of state’s image.
Figure 6. Assessment of changes in the business environment
17%
13%
16%
14%
11% 10% 10% 10% 11% 11%
10%
7,9% 7,9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
34%
30%
32%
42%
26%
33%
36%
33%
46%
30%
27%
23%
40%
47%
53%
53%
52%
42%
45%
49%
43%
55%
60%
57%
25%
24%
15%
5%
22%
25%
18%
18%
11%
15%
13%
20%
0% 20% 40% 60% 80% 100%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
worse no changes better
By sector, companies in Construction (34%) and Transport (30%)
account for the largest number of companies that believe that doing
business in Moldova has become more difficult
In R&D, scientific, legal, notarial, consulting (26%) and Other services
(24,5%), the number of managers who saw improvements in the business
environemnt surpassed the number of managers who say the opposite
Companies in Chisinau saw more improvements in the business
environment (25,2%) compared to companies in the rest of the country
(7,4%).
At the same time, companies in both Chisinau (23%) and the rest of the
country (22,2%) noted a worsening of the business environment.
21 General Indicators
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
1.4 General assessment of various business aspects
The biggest problems faced by companies in managing and operating their business were related to
frequent changes in the legislation, tax system and protection against unfair competition.
The graph below shows how the regulatory areas have changed over the last four years in terms of
their impact on business environment.
Certification of goods is the least challenging procedure.
Figure 7. Difficulties encountered
2,7 2,6
2,8 2,6
3,1 2,8
2,2 2,3 2,2
2,7 2,5
3,1 2,9
2,6
0
0,5
1
1,5
2
2,5
3
3,5
Lice
nsi
ng
Re
gist
rati
on
Au
tho
riza
tio
ns
Co
nst
ruct
ion
Tax
syst
em
Insp
ect
ion
s
Pro
mo
tin
g p
ub
lic s
erva
nts
'in
tere
sts
Ce
rtif
icat
ion
of
goo
ds
Pu
blic
ser
van
ts r
equ
esti
ng
favo
urs
Law
ap
plie
d s
ele
ctiv
ely
Nee
d t
o m
ake
un
off
icia
lp
aym
ents
Fre
qu
en
t ch
ange
s in
legi
slat
ion
Un
fair
co
mp
eti
tio
n
Imp
ort
-exp
ort
op
erat
ion
s
2014 2015 2016 2017
22 Registration procedure
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
2 Registration procedure
2.1 Regulatory framework
The State Registration Chamber has the authority to register new businesses and amend the
incorporation documents. These procedures are regulated by Law no. 220-XVI of 19 October 2007 on
State registration of legal entities and individual entrepreneurs" (effective 30 May 2008).
In order to officially register a business, the following documents are required:
a) application for registration, compliant with the sample approved by the state registration
body;
b) decision on incorporation and incorporation documents of the legal person, based on its legal
form, in two copies;
c) a document confirming the payment of the registration fee.
To register their business with the state, foreign-funded legal entities are required to submit additional
documents:
a) excerpt from the national register of investor's resident country;
b) incorporation documents of the foreign legal entity;
According to Law 21 of 04 March 2016, procedures related to state registration are carried out through
the one stop shop for state registration office. This is a "mechanism whereby the state registration
body delivers to parties engaged in entrepreneurial activities, through one access point, advice on legal
formalities regarding the incorporation and registration of a legal person and of an individual
entrepreneur; verifies the name of the legal entity, produces the incorporation documents, the state
registration, publishes the information in the electronic Newsletter; requests the necessary information
on registration from public authorities without involving the registrant; distributes the elements
contained in the Register of legal entities and the Register of individual entrepreneurs to relevant
authorities responsible for tax, statistical, health and social records."
The state registration is carried out within one office day.
Registration of legal entities and amendments to the incorporation documents cost MDL 1149. Other
services related to the state registration are rendered for the amount set by Law no. 220-XVI of 19
October 2007.
The State Registration Chamber is responsible for the legal person’s tax, statistical, health and social
registration (record) by submitting electronically the data on its registration to relevant authorities. The
Chamber also notifies the legal person of the registration process.
Law no. 90 of 29 May 2014 (published on 27 June 2014) simplified the procedures to suspend an
activity, to reorganize or close a company. The Law also reduced the waiting period from the moment
the notice has been published in the Official Gazette.
Government bodies may request information at no charge from the State Register only in electronic
form.
Law no. 104 of 9 June 2017, published on 7 July 2017, is to further simplify the procedures for
liquidation of companies by clarifying and simplifying respective procedures.
23 Registration procedure
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
2.2 Time to complete registration procedures
About 14,8% of the interviewed companies contacted the
State Registration Chamber throughout the past 3 years. The
share remained unchanged compared to previous years.
Around one third of them have registered their business; two
thirds of them have made changes to the incorporation
documents.
Figure 8. Share of enterprises that contacted the State Registration Chamber over the last three years
One third of respondents registered or changed the incorporation documents through an intermediary.
The average registration time in this case was 8,0 days. Amendments to the incorporation documents
via intermediaries took 8,4 days to complete.
During the period under review, the registration of a new company with the State Registration
Chamber took 4,0 days. Managers spent 4,0 hours on the registration procedures.
The above figures cover the timeframe from the moment the documents are filed with the State
Registration Chamber up to moment the registration or the amendments are finalized. These figures do
not cover the cases where companies have turned to an intermediary.
The share of new businesses that had to "register" over the past three years with the Statistics and
Sociology Department, the State Tax Service, the National Health Insurance Company and the
National Social Insurance House is steadily decreasing.
Registration; 5,1%
Amendments; 9,7%
Did not contact; 85,2%
By sector, companies engaged in
Industry account for the largest share
(20%) of registrations/amendments to
the incorporations documents.
Companies in Transport account for the
lowest (9,3%) number of
registrations/amendments.
By regions, companies located in the
North have contacted most often the
State Registration Chamber (20,3%).
Only 7,4% companies located in the
Central region were involved in these
processes.
24 Registration procedure
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 2. Amount of time to complete the primary registration procedure, by government institution, in the last three years
Duration Time
Government body Reported, % days Reported, % hours
State Registration Chamber 90 4,0 81 4,0
Statistics and Sociology Department 38 1,0 24 1,0
State Tax Service 48 1,0 38 2,0
National Health Insurance Company 38 1,0 24 1,0
National Social Insurance House 38 1,0 24 1,0
The amount of time required to make changes to the registration documents was 3,2 days. The amount
of time spent on procedures was 2,7 hours.
Table 3. Amount of time to amend the incorporation documents, by government body, in the last three years
Duration Time
Government body Reported, % days Reported, % hours
State Registration Chamber 53 3,2 50 2,7
Department of Statistics and Sociology 25 1,5 23 2,0
State Tax Service 30 1,5 30 3,0
National Health Insurance Company 20 1,0 15 3,0
National Social Insurance House 20 1,0 15 3,0
Most of the time in the registration procedures was spent with the State Registration Chamber.
Registering entries with other institutions took 1-3 hours.
2.3 Costs of registration procedures
The cost for registration with the State Registration Chamber is around USD 73. An insignificant
number of respondents mentioned payments to other institutions.
The costs to register or make changes to incorporation documents through intermediaries were USD
191 and USD 150 respectively.
In order to ensure the representativeness of the data, the median was used to describe the average.
The number of respondents who made unofficial payments to facilitate the registration process is
insignificant.
2.4 Perception of procedures
Respondents who registered or amended the incorporation documents during the last three years were
asked to assess the problems they encountered by scoring from 1 to 5, where 1 - no issues and 5 -
major issues. The table below illustrates the assessment results of difficulties faced during the
registration of a company.
25 Registration procedure
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 4. Registration-related problems
Period of data collection
Problems 2014 2015 2016 2017
Difficult registration procedures 1,7 1,9 2,6 2,4
High costs of the procedure 1,8 2,0 2,3 2,2
Need to prove the physical address of the legal
entity
1,3 2,0 1,9 1,9
The need to make unofficial payments 1,2 1,7 2,1 1,9
The data represent the opinion of respondents that have registered or made changes to the
incorporation documents over three years: the survey period and two previous years.
The share of companies that had rated the procedures with the State Registration Chamber as being
complicated has slightly decreased (see Table 4 and Figure 9).
Figure 9. Problems faced by economic agents in the registration process over the last three years
2.5 Summary of analysis
In the last three years the average amount of time to register a company with the SRC was 4,0 days.
Amendments to the incoporation documents took during this period of time around 3,2 days to
complete. The data does not include registrations with other state institutions (see Table 5). Compared
to previous periods, the indicator has slightly improved.
About one third of respondents have resorted to using intermediaries to carry out registration
procedures. Both the time and costs were higher compared to registering in person. Their share has
decreased compared to last year.
Most companies do not encounter difficulties in the registration process.
-7%
-12%
-9%
-7%
-2%
-2%
-2%
30%
26%
23%
19%
23%
35%
49%
49%
-40% -20% 0% 20% 40% 60% 80% 100%
Difficult procedures
Cost of procedures
Proving the legal address
Unofficial payments
Significant problem Critical Insignificant Not difficult
26 Registration procedure
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 5. Duration and amount of time spent to register with the SRC in recent years
Survey period
Indicators
2015 2016 2017
Time to complete a registration, days 7,1 3,9 4,0
Time to complete amendments to the incorporation documents,
days
5,0 4,4 3,2
Time spent on registering, hours 4,8 4,2 4,0
Time spent on amending the incorporation documents, hours 3,9 5,1 2,7
The data represent the opinion of respondents that have registered or made changes to the
incorporation documents over three years: during the survey period and two previous years.
27 Construction
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
3 Construction
3.1 Regulatory framework
Law no. 721-XIII of 2 February 1996 on the Quality of Constructions establishes the legal, technical,
economic and organizational framework of activities in Construction carried out by natural and legal
persons, their obligations and responsibility regarding the quality in construction. The law sets out
regulations on new constructions, upgrading works, modifications, transformations, repairs and
strengthening works.
According to the amendments introduced by Law no.153 of 30 July 2015, a construction may
commence only after the project has been verified by project verifiers certified with relevant
authorized institutions.
According to Law no. 721-XIII 02 February 1996, two Government Decisions were approved on 25
June 1996: no. 360 on State Supervision of Quality in Constructions and Government Decision no. 361
on Construction Quality Assurance.
Decision no. 360 approves three regulations aimed at quality control in constructions:
The regulation establishes ways to exercise government supervision of quality in constructions;
Regulation on State Inspection in Construction;
Regulation on the supervision of the use of public investments in constructions.
Decision no. 361 approves the Regulation on verification of projects and carrying out of constructions.
It also approves the technical expertise of projects and constructions. The Regulation stipulates the
procedures for verification and technical expertise of the project as well as verification techniques of
the construction process.
The final approval is governed by Regulation on permission to use the construction and related
facilities, approved 23 May 1996 by Government Decision no. 285. Through the amendments brought
by Government Decision no. 318 of 23 May 2017, procedures for the approval of constructions
financed by private financial means have been substantially simplified.
The main responsibilities in placing the constructions into service following the final approval are
stipulated in the Regulation on monitoring the construction's performance, interventions over time and
post-use of construction, approved 24 April 1997 by Government Decision no. 382.
Law no. 835 on Urban and Spatial Planning Principles of 17 May 1996 and Law no. 163 of 09 July
2010 on the permission to build a construction define the principles for issuance of the urban planning
certificate and the building permit:
The urban planning certificate and the building permit are issued by local public administration
authorities.
The urban planning certificate is issued within a maximum of 20 office days. The building
permit is issued in 10 office days.
If the local public administration authority remains silent for the time prescribed by law, the
urban planning certificate and the building permit will be deemed granted. If the applicant does
not receive a written notification on the reasons for the registration rejection and/or for the
rejection of the application for building permit/urban planning certificate, the construction may
commence.
28 Construction
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
The Government Decision no.1469 published on 3 March 2017 approved the Regulation on the
creation and functioning of the one-stop shop for the issuance of construction permissions. The
Regulation sets out in detail the procedure for issuing the urban planning certificate and the building
permit.
The main provisions contained in the regulation on constructions are as follows:
The use of land plots and design drawings can be performed only after the urban planning
certificate has been obtained
Construction works are carried out exclusively according to a plan developed by an authorized
natural or legal person.
o Construction works can commence only after obtaining the building permit.
The quality of constructions of any use, regardless of their type of ownership and source of
funding, also construction works, reconstructions, upgradings and major repairs to existing
constructions, manufacture of construction materials and items are subject to government
inspections.
The State Inspection in Construction carries out separate quality of construction verifications in
all stages of the construction (planning, design, permission, construction progress,
performance, post-use, decisive phases and manufacture of building materials and items).
3.2 Costs and time required to obtain construction permits
According to the survey, 28,7% of the interviewed companies have moved into new premises in the
past three years. About 3,3% of them had built these spaces, 19,3% have repaired or adjusted them,
while 77,3% used them without making any changes.
The number of companies that have built their premises has been steadily decreasing over the past few
years (only six respondents in the current study).
Obtaining permits for readjustment of premises took on average 9,0 days. Managers spent about 6,5
hours on this process.
Table 6. Time and costs required to obtain permissions to commence
reconstruction works
Have
reported
Amount,
USD
Fees to obtain permission 77% 95
Payments for notary services 29% -
Payments to lawyers and intermediaries 14% -
Transportation expenses 49% 10
“Voluntary contributions” 20% -
Unofficial payments 17% -
After the repairs were completed, the surveyed companies
have spent 9 hours to obtain all permissions required to place into service the renovated spaces (final
approval). The total amount of time spent on procedures was 14 days.
Companies located in Chisinau have
moved more often to new or recently
repaired spaces (33,9%), compared to
those located in the North and South
(below 10%).
About 1/3 of companies in Trade and
Construction moved into new/recently
repaired spaces. The lowest share was
noted in R&D, science, legal, notarial,
consulting segments (22,4%).
29 Construction
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 7. Time and costs required to obtain permissions to place into service the reconstruction works
Have
reported
Amount,
USD
Formal payments 66% 157
Payments for notary services 17% -
Payments to lawyers and intermediaries 14% -
Transportation expenses 20% -
“Voluntary contributions” 20% -
Unofficial payments 14% -
Around 24% of the companies that used premises without modifying them had to obtain permissions
to use them.
3.3 Perception of procedures
Most respondents stated that they did not notice any changes, for good or for worse, in the construction
sector. Only 3% said that the procedures were simplified (Figure 10).
Figure 10. Perception of changes in procedures governing the use of spaces
Respondents who started using premises in the last three years were asked to assess the difficulties
related to obtaining construction permissions by scoring from 1 to 5, where 1 - no problems and 5 -
significant problems.
The biggest problem revealed by respondents is the lenghty process to obtain permissions (see Table
8), mentioned by around 57% respondents.
Table 8. Problems relating to obtaining permissions for reconstruction and repairs
Problems Share
Complicated procedures 3,1
Procedures taking too long 3,7
High costs 3,0
The need to make unofficial payments 2,5
18
18
16
72
79
81
10
3
3
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2015
2016
2017
worse no changes better
30 Construction
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Figure 11. Problems relating to obtaining permissions for construction and repairs
3.4 Summary of analysis
As a result of the actions taken to facilitate the construction regulation process, including the
elimination of redundant permissions, there is a slight decrease in the amount of time required to
obtain construction permissions (see Table 9).
Table 9. Average amount of time to obtain permissions and final approval, days
Survey period
Activity
2011 2012 2013 2014 2015 2016 2017
Repairs/renovation 26 38 39 29 31 36 23
-16%
-22%
-23%
-20%
-3%
-14%
-34%
-17%
31%
19%
13%
16%
20%
16%
5%
17%
-80% -60% -40% -20% 0% 20% 40% 60%
Unofficial payments
Cost of procedures
Duration of procedures
Complicated procedures
Significant problem Critical Insignificant No problems
31 Licensing
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
4 Licensing
4.1 Regulatory framework
The licensing system in Moldova is regulated by framework Law no. 451-XV of 30 July 2001 on
Regulation through Licensing of Entrepreneurship, republished in 2005 and substantially amended by
Law no. 281 of 14 December 2007.
According to Law no. 451/2001, obtaining a license is compulsory in carrying out 48 types of business
activities. These licenses are issued by the following licensing bodies:
Public Services Agency (30 activities);
National Bank of Moldova (4 activities);
National Commission of Financial Market (5 activities);
National Energy Regulatory Agency (6 activities);
National Regulatory Agency for Electronic Communications and Information Technology (2
activities);
Broadcasting Coordination Council (1 activity).
Law no. 281/2007 of 20 June 2008 introduced the notions of:
tacit approval – a license is deemed granted or renewed if the licensing authority does not
notify the applicant within the set time limits;
single window– procedure whereby the licensing authority verifies the authenticity of the
information presented by the applicant/licensee without involving him/her in the process.
Documents required to obtain a license
To obtain a license, the company files a default application with the concerned licensing authority,
containing:
a) general information on the company;
b) type of activity;
c) a statement signed by the applicant to comply with the licensing conditions in carrying out the
activities for which the license was requested and for the authenticity of the submitted documentation.
The following documentation is being attached to the application for license:
a) a copy of the certificate of the state registration of the enterprise or organization;
b) additional documents as provided by legislative acts regulating the licensed type of activity for which
the license is requested.
The request of documents other than those contained in this article is prohibited.
The data in the documents and the information submitted is verified through the single window
procedure.
Decision to issue a license or to reject the application for obtaining a license
The licensing authority decides on the issue/renewal or rejection of the application based on the
application and the documents attached, within a maximum of 5 working days from the registration
date.
32 Licensing
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
If the application for obtaining a license is rejected, the applicant may file a second application after
removing the causes that led to rejection.
The license shall be deemed granted if the licensing authority does not notify the applicant within the
terms provided by law. If the deadlines set out to notify the applicant of the refusal to register his
application to obtain a license, or of its rejection or approval expires, the applicant can start to operate
the activity s/he requested the license for, provided there was no written notice on the grounds for
refusal to register/application rejection.
Tacit approval procedure applies to all licenses except for those issued by regulatory authorities in the
financial sector (banking and non-banking), in businesses trading firearms, ammunition and
explosives.
Licensing fees
The standard license fee is MDL 3 250.
License validity period
Most often, licenses are issued for a period of 5 years. In other cases, licenses are issued for one, three
or eight years. The validity of licenses for activities that do not fall under the jurisdiction of the Public
Services Agency is established by laws governing the respective license activity.
Law no. 26 of 13 March 2014 has introduced the e-licensing procedure. This allows the applicant, via
a web interface, to send online applications for the issuance/renewal/reissue of a license. The notice of
approval or rejection of the application is also received electronically.
4.2 Number of licenses
Nearly half (42%) of the surveyed companies had a license at
the time of questioning. Of these, 14% companies had two or
more licenses. The average number of licenses per company is
1,4.
The average validity of a license has not changed since last year
- 4,0 years. It is useful to note that in 62% of cases the average
validity period of a license was 5 years.
4.3 Costs to obtain a license
The average amount of time to obtain a license is around 11,1
days. Costs amount to USD 179, of which USD 147 is the
license issuance fee. Time spent by managers to obtain a license
has been relatively short - about 7,5 hours.
Companies in Construction (77,1%) and
Transport (76,7%) are most often
subjected to licensing. The lowest share
of companies having a license is noted
in Trade (27,5%).
The share of companies located in
Chisinau having a license (42,3%) is
similar to the results in the rest of the
country (42,0%).
Also, 41,7% of companies with up to 10
employees have licenses. Companies
with more than 10 employees are more
often required to have a license - 54,2%.
33 Licensing
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 10. Average costs to obtain a license
Category of payment Have made
payments, %
Amount,
$
Official payments / license fee 87% 155
Expertise and evaluation 31% 41
Notary services 18% 26
Lawyers and intermediaries 19% 52
Unofficial payments 13% 13
Transportation expenses 35% 10
The series median was used to determine the central trend for costs. The calculations in the Table
above were made using the average exchange rate in the last three years.
4.4 Perception of procedures
Interviewed companies were asked to assess the changes that occurred in the licensing process over the
last year (Figure 12).
Figure 12. Perception of changes in the licensing process, %
Most respondents believe that the situation has not changed over the past year.
Respondents who have carried out licensed activities were asked to assess the difficulties encountered
in the process by scoring from 1 to 5, where 1 - no problems
and 5 - major problems. The evaluation results are shown in
Table 11 and Figure 13.
Table 11. Licensing related problems
Potential difficulties revealed Significance
Complicated regulatory procedures 2,6
Procedure takes too long 2,7
High cost of obtaining a license 2,6
Need to perform unofficial payments 2,2
In 2017 the impact of licensing difficulties has practically not changed.
Licensing procedures are perceived as being difficult by about 19% respondents. Over 20%
respondents are affected by the high cost of procedures. About 15% respondents are dissatisfied with
the need to make unofficial payments.
13 74 13
0% 20% 40% 60% 80% 100%
worse no change better
Most often, complaints about the
difficulty of the licensing process were
made by:
1 Companies located in Chisinau
(15,5%)
2 Companies engaged in R&D,
science, legal, notarial and
consulting activities (17,6%).
34 Licensing
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Figure 13. Problems related to licensing
4.5 Summary of analysis
Almost all indicators describing the licensing procedure have not changed compared to last year (Table
12).
The share of companies that make unofficial payments has slightly decreased. Costs have changed
insignificantly, the relative difference between the values recorded over the past two years being lower
than the relative fluctuation in the dollar exchange rate.
Table 12. Evolution of costs related to licensing activities
2010 2011 2012 2013 2014 2015 2016 2017
Share of companies subject to licensing 61% 61% 52% 49% 37% 47% 43% 42%
Average number of licenses 1,3 1,3 1,3 1,4 1,4 1,4 1,1 1,4
Time to obtain a license, days 22 18 16 18 14 11 12 11
Average cost, $ 270 240 266 294 401 163 172 179
Share of respondents who made
unofficial payments, %
14% 7% 9% 8% 1% 15% 18% 13%
-12%
-16%
-14%
-13%
-3%
-4%
-7%
-6%
31%
28%
30%
36%
32%
18%
15%
14%
-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70%
Unofficial payments
Cost of procedures
Time spent on procedures
Complicated procedures
Significant problem Critical Insignificant No problems
35 Notifying of the trade activity
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
5 Notifying of the trade activity
5.1 General regulatory framework
Trade activities are regulated by Law no. 231 of 23 September 2010 on Domestic Trade. The
amendments brought by Law no. 153 of 1 July 2016 eliminated the authorization requirement of trade
activities. Companies under consideration are currently
required to submit a notification. The notification to initiate a
trade activity is submitted separately for each trading unit
and/or place of sale with the local public administration
authority in person or using the online informational resource
on trading.
5.2 Time required to submit a notification
More than half (54%) of the companies in the Republic of
Moldova work under the Law on Domestic Trade. Three
quarters of them (76%) have filed notifications with LPA to
carry out a trade activity.
The amount of time to prepare and submit a notification was
6,0 days. Managers spent around 4,6 hours for this purpose.
5.3 Perception of the notification procedure
Respondent companies that submitted a notification with local
authorities were asked to assess the process compared to the
previous year, when they were required to obtain authorizations. The answers are presented in Figure
14.
Figure 14. How managers perceive the transition from authorizations to notifications
Just over half of respondents said that they did not “feel” the improvements brought by Law no 153 of
01 July 2016. Around 37% said that the notification process is less complicated than obtaining
authorizations.
Even if not provided for in the legislation, upon filing a notification, authorities still request the same
documentation that was necessary to obtain a trade authorization:
5% 58% 37%
0% 20% 40% 60% 80% 100%
worse no change better
In Chisinau, the share of companies
engaged in Trade activities is 47,8%
compared to the rest of the country -
which reveal a higher share (68,2%).
By sector, the highest share of
companies engaged in Trade activities
are found in Trade (77%) and Industry
(65%).
Companies operating trade activities that
applied for a notification with LPA least
frequently:
By region, companies located
in Chisinau (71,4%)
Based on CMEA, companies
in Transport (50%)
By size of business,
companies with more than 10
employees (63,8%)
36 Notifying of the trade activity
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 13. Documents required at the time of notification
Requested documents Share of respondents, %
Total Chișinău North Centre South
Property act / contract with the lessor 79 73 100 67 86
Regsitration certificate 93 88 100 96 100
Excerpt from the SRC 90 86 98 93 100
Copy of administrator documentation 82 74 96 85 100
The „old” authorization 65 48 89 85 100
Design of commercial spaces 73 62 91 78 100
Other documentation 66 52 89 70 96
As can be seen in the above table, the worst situation is noted in the north and south regions, where
managers have had to travel to the "raion" in order to submit all kinds of documents requested by local
decision-makers.
5.4 Summary of analysis
Over the past years, the procedures regulating the trade activities have improved. This was particularly
possible with the elimination of the requirement to obtain authorizations.
More than one-third of respondents believe that the improvements have simplified the trade-related
regulations. Among the most important benefits were mentioned:
the notification does not need to be “renewed” along with the extension of the lease contract;
the company is no longer affected by the delay due to the examination of submitted documents,
since the trade activity can commence once the notification has been made;
for most companies, the requirement to obtain sanitary permits has been eliminated;
the requirements to obtain approvals from the fire department and the sector praeture (in the
municipality of Chișinău) have been eliminated.
However, the efforts of central authorities to simplify the trade activity were in most cases sabotaged
by local public authorities, which, contrary to the current legislation, continued to request the same
documents that were necessary to obtain a trade authorization. Thus, the effect of the improvements
mentioned above has been diminished by local bureaucracy. This is also confirmed by the 63%
respondents who did not notice any improvement, with some of them mentioning that the situation in
this area has actually worsened
37 Trading across borders
Cost of Doing Business
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6 Trading across borders
6.1 Regulatory framework
General provisions on customs procedures are contained in the Customs Code of the Republic of
Moldova, approved by Law no. 1149-XIV of 20 July 2000, reissued on 1 January 2007.
All import and export activities require their prior registration with the Customs Service in the
Republic of Moldova.
The Customs Code establishes the rights and obligations of the customs broker, as well as the
situations where his license may be withdrawn.
Repatriation of funds is also covered by import-export operations regulatory area. Even if not directly
related to customs procedures, it is a requirement imposed by Law, which affects the import-export
activity.
Pursuant to Law no. 1466-XIII of 29 January 1998 on Regulation of Repatriation of Money Funds,
Goods and Services Originating from foreign Economic Transactions, the notion of "repatriation of
money funds” is the collection of money from non-resident businesses, within a set time limit, of the
money funds related to exports of goods, provision of services/works to non-residents. The term also
covers other foreign operations and transactions in accounts opened with authorized banks in the
Republic of Moldova. The amount of funds must be shown in the customs declaration, while the costs
of services and works - in the confirming documents (contracts, deeds of works performed or services
rendered, invoice).
Companies that sell predominantly abroad face another procedure – the recovery of VAT.
The refund of value added tax is regulated by Government Decision no. 93 of 01 February 2013. The
company has the right to choose the method of repayment: offset against other tax liabilities and/or
money refund.
The tax authority is obliged to adopt the decision on the procedure for the refund, relying on the risk
criteria stipulated in the Decision. The decision must be taken within 3 working days from the date of
the application for refund was filed.
The state tax authority initiates the thematic inspection as soon as the taxable subject files an
application. Applicants who meet the following four conditions are exempt from this inspection:
1) the subject of taxation has been active for at least two years;
2) the subject of taxation was granted refunding of VAT previously at least twice;
3) the last thematic inspection on the VAT refund revealed that the amount of refunded VAT,
confirmed by the tax authority, is equal to the amount declared by the payer;
4) during the last tax inspection the amount of taxes, duties, compulsory state social insurance
contributions and compulsory health insurance premiums did not exceed 1% of the total
deliveries made during the verified fiscal periods.
38 Trading across borders
Cost of Doing Business
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The VAT is refunded within 45 days out of which 30 days are spent on verifications and decision
making and 7 days - on the actual refund.
6.2 Import transactions
About 15% respondents carried out import operations over the past three years. On average, an
importer carries out 11,3 transactions per year. In 2017 the share of importing companies has declined,
whereas the number of transactions per company has increased.
6.2.1 Certification costs of imported goods
About 34% importers had to obtain certificates for imported
goods compliant with the standards in the Republic of
Moldova. In 78% cases, companies that had to obtain
certificates of compliance with the standards in the Republic of
Moldova had already been certified under the requirements of
the country of origin.
The certification process of imported goods took 5,7 days. The
amount of time spent to obtain the certificate was 5,1 hours.
Costs amounted to USD 137. About 16% respondents have
paid bribes to obtain a certificate.
A quarter of respondents that had to obtain certificates of
compliance mentioned cases where their goods have been
retained by customs because they lacked certificates of
compliance. One third of respondents obtained the certificate
some time later.
Figure 15 Handling situations of lacking certificate of compliance
Around 40% importers had to obtain sanitary authorizations for imported goods. Sanitary certificates
were issued in 5,4 days. Companies spent 5,4 hours to obtain the certificate.
Goods retained by customs; 25%
Agreed to submit later; 34%
Had the certificate upon arrival of goods;
31%
Do not know; 9%
The highest shares of companies that
carry out import operations are found in
Chisinau (17,2%). In the remaining
regions importing companies account
for 8,5%.
The share of importing companies is
higher (30%) among companies with
more than 10 employees compared to
the share of importers per total
companies employing up to 10
employees (12%).
By type of activity, the largest share of
importers are found in Trade (23,8%)
and Construction (17,1%). R&D,
science, legal, notarial and consultancy
segments are zero rated in this aspect.
39 Trading across borders
Cost of Doing Business
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6.2.2 Customs costs
In the last three years, customs compliance took 3,1 days to complete. Taxes paid for customs
procedures (excluding customs tax and excise duties) amounted to about USD 307. About 5% said
they paid bribes to facilitate customs procedures.
Table 14. Costs and time to complete import customs procedures
Type of payment Have made
payments, %
Average
amount, $
Days 100 3,2
Official payments, $ 100 307
Penalties 6 -
Unofficial payments 5 -
6.2.3 Perception of import procedures
Companies practically did not notice any improvements in the import conditions (see Figure 16).
About 28% respondents said that procedures have become more difficult this year and only 5%
claimed the opposite.
Figure 16. Perception of changes in import procedures
The problem of the degree of indicative price of goods has shown an upward trend over the past three
years, reaching an alarming level.
Table 15. Most significant problems on import
Elements Survey period
2013 2014 2015 2016 2017
Difficulties related to obtaining permissions and licenses 2,4 1,6 2,1 2,6 2,8
Difficulties with certification 2,7 1,6 2,3 2,7 2,7
Customs procedures 3,0 1,8 2,3 3,2 3,1
High taiffs on customs procedures 3,3 2,3 2,6 3,3 3,0
Unequal terms for importers 2,7 1,9 2,4 3,1 2,9
Corruption in customs 2,9 2,0 2,3 2,9 2,7
Indicative prices for goods 2,7 1,8 2,4 3,1 3,3
Phytosanitary certification 1,9 1,4 1,9 2,1 2,4
Note: difficulties were scored from 1 to 5, where 1 - no difficulties and 5 - significant difficulties.
28% 67% 6%
0% 20% 40% 60% 80% 100%
worse no change better
40 Trading across borders
Cost of Doing Business
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Nearly every second respondent was dissatisfied with the practice of customs inspectors in using
indicative prices for the imported goods. One third of respondents identified the corruption in customs
as a serious problem. About 40% consider that customs procedures take too long.
Figure 17. Perception of difficulties related to import transactions
6.3 Export transactions
Only 4,9% of respondents carried out export operations in the past three years, with an average 16
operations per year.
An export customs procedure takes 2,1 days to complete. Companies spent USD 105 to complete the
customs process. The median was used to estimate the figure.
Figure 18. Perception of changes in export procedures
Unlike last year, about 19% of respondents mentioned that
export procedures have improved, although 29% claimed the
opposite.
6.4 Summary of analysis
The amount of time spent on customs procedures has
slightly increased over the last year (see Table 16).
Assessing the monthly performance of the customs service
according to the value of the fees paid by the companies has
led to a negative phenomenon for the recent years. Under
these circumstances, where the value of imports does not
-16%
-23%
-26%
-17%
-16%
-22%
-21%
-22%
-3%
-24%
-6%
-10%
-15%
-18%
-7%
-10%
19%
18%
14%
23%
19%
17%
26%
19%
34%
10%
24%
15%
16%
10%
20%
24%
-60% -40% -20% 0% 20% 40% 60%
Phytosanitary certification
Indicative prices
Corruption
Unequal conditions
High cost of procedures
Clearance
Certification
Licenses and permissions
Significant problem Critical Insignificant No difficulties
29% 52% 19%
0% 20% 40% 60% 80% 100%
worse no change better
By sector of activity, the largest share of
the exporting companies is recorded in
Industry (10%).
The share of exporters in companies
with up to 10 employees is 4,3% and
8,2% among companies with more than
10 employees.
41 Trading across borders
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
depend on the performance of customs inspectors and the customs tariffs value is set by the
Parliament, the only leverage with immediate visible effect to increase the performance is the
unjustified increase of prices, which further influences the customs duties .
Table 16. Changes in import-export procedures and regulations
Indicators Survey period
2011 2012 2013 2014 2015 2016 2017
Time spent on customs compliance on import,
days per transaction
1,9 2,7 2,5 2,0 1,5 2,7 3,1
Cost of customs compliance on import, $ per
transaction
144 152 158 261 136 287 307
Time spent on customs compliance on export,
days per transaction
1,6 1,7 2,0 2,0 2,1 1,9 2,1
Cost of customs compliance on export, $ per
transaction
85 89 152 213 37 172 105
42 Certification of goods
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
7 Certification of goods
7.1 Regulatory framework
Certification of goods is governed by the following laws:
Law no. 20 of 04 March 2016 on Standardization;
Law no. 420-XVI of 22 December 2006 on Technical regulation activity, republished 31
March 2017;
Law No. 235 of 1 December 2011 on Accreditation and Compliance assessment activities;
Law No. 78-XV of 18 March 2004 on Food goods.
The Standards Institute in Moldova is the national institution responsible for standardization in the
Republic of Moldova. The Institute creates technical standardization committees. These committees
develop moldovan standards which are approved by the Standards Institute in Moldova. Moldovan
standards are approved or adopted through decision by the Standards Institute in Moldova.
The decision to apply national standards is voluntary. Only then does a standard become mandatory
(through a legislative act which makes direct reference to this standard) when public concerns such as
protection of life and health, security of people, environment protection and consumers’ interests make
this action necessary. Application of standards is also mandatory for parties that report compliance
with a certain standard through a contract, trademark, declaration, certificate or any other form.
Law no. 235 of 01 December 2011 sets out the regulated areas. In the regulated areas covered by the
EU harmonization legislation, national technical regulations transpose this legislation.
7.2 Certification costs
Only 9% of the surveyed companies have certified goods.
Businesses have two options in the certification process: 1)
certify individual batches of goods or 2) certify mass
manufactured goods. In the first situation the certificate is
granted for a certain quantity of goods, in the second - for a
certain period. Around 60% companies certify individual
batches of goods. The other 40% certify mass manufactured
goods.
By region, the smallest (5,9%) share of
companies that are required to certify
their goods are found in the Central
region. The largest share is accounted
for by companies located in the North
(12,5%).
As expected, by type of actvity,
companies operating in Industry are
most familiar with certification of goods
(25,7%).
On average, every fourth company with
more than 50 employees and every 12th
company with up to 10 employees
certify their goods.
43 Certification of goods
Cost of Doing Business
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Figure 19 Share of companies that certify goods
The certification of batch goods takes on average 3 days. Preparation and sumbission of necessary
documents take an average 4,5 hours.
The certification of mass manufactured goods takes around 10 days, time spent - 8 hours.
The certification costs of mass-manufactured goods are about USD 122, certification of individual
batches of goods cost less - USD 106.
A company certifies batches of goods an average 1,5 times a year. Mass production is certified
approximately once a year. The average validity period for mass production certificates is 12 months.
The values obtained in this chapter have a high degree of dispersion. The central tendency for costs
was determined based on the median, not the arithmetic average.
7.3 Perception of certification procedures
Over the past year respondents noted minor changes in the certification conditions.
Figure 20. Changes in the certification process
Table 17. Problems faced in the certification process
Problems Share
Certification procedures take too long 2,9
High tariffs to obtain certificates 2,4
High requirements for company's products 2,5
Batches of goods; 5% Mass production;
4%
Do not certify; 85%
Do not know; 6%
23% 64% 14%
0% 20% 40% 60% 80% 100%
worse no change better
44 Certification of goods
Cost of Doing Business
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More than a quarter of respondents consider that certification procedures take too long to complete.
About 20% of respondents encounter difficulties in meeting the requirements of official standards.
Figure 21. Exporters’ perception of difficulties related to the certification procedures
7.4 Summary of analysis
Only 9% of respondents were required to certify their goods, their share decreasing compared to the
previous years.
In 2017 the certification of individual batches of goods took less time (see Table 18). Due to the small
number of observations and the high data dispersion, a cost trend could not be produced.
Table 18. Changes in the process of certification of goods
Indicators Survey period
2011 2012 2013 2015 2016 2017
Time spent to obtain a certificate for mass
manufactured goods, days 13,0 16,6 11,7 13,2 10,3 10,0
Costs to obtain a certificate for mass
manufactured goods, $ 158 191 158 63 84 122
Time spent to obtain a certificate for individual
batches of goods, days 11,7 12,1 10,3 8,6 7,6 3,0
Cost to obtain a certificate for individual batches
of goods, $ 83 145 124 57 46 106
-7%
-4%
-11%
-13%
-6%
-15%
20%
26%
26%
33%
22%
13%
-30% -20% -10% 0% 10% 20% 30% 40% 50% 60%
High requirements for company products
High tariffs to obtain certificates
Lengthy procedures to obtain certificates
Significant problem Critical Insignificant Not difficult
45 Sanitary operating authorizations
Cost of Doing Business
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8 Sanitary operating authorizations
8.1 Regulatory framework
The state sanitary and epidemiological regulation is governed by Law no. 10-XVI of 03 February 2009
on State supervision of public health. Businesses carrying out activities that impact public health are
subject to sanitary operating authorization.
Law no. 153 of 01 July 2016 establishes that trading units obtain an operating sanitary authorization if
they carry out activities set out in Annex no. 4 to Law 231 of 23 September 2010 on Domestic trade.
8.2 Obtaining sanitary operating authorizations
Around 39% of respondents had to obtain sanitary operating
authorizations.
On average, companies apply for sanitary operating
authorizations 1,2 times a year. The process takes 6,7 days.
Related costs are about USD 75. Gathering and submitting the
necessary documents to competent bodies take on average 5,1
hours.
Table 19. Average expenses incurred by respondents to obtain a sanitary authorization
Survey period
Indicators
Have made payments, % Amount, $
2014 2015 2016 2017 2014 2015 2016 2017
Official payments 92 88 93 93 89 47 69 68
Payments to lawyers and intermediaries 4 13 9 9 44 34 13 46
Transport expenses 47 48 34 37 22 19 11 11
“Voluntary contributions” 11 13 9 9 35 17 12 29
Unofficial payments 11 17 9 10 35 16 11 11
Total costs, $ - - - - 102 60 71 75
8.3 Perception of the process to obtain a sanitary operating authorization
As shown in the table below and the above indicators, in the last year no substantial improvements
were observed in the process of obtaining sanitary authorizations. However, it is important to note that
the number of respondents who have noticed improvements is higher compared to the share of
respondents who indicated that the situation has worsened.
Companies operating in Trade (49,8%)
and Industry (47,1%) are most often
required to obtain sanitary operating
authorizations. On the other hand, only
20% of companies in Construction and
21% companies in Transport have this
permissive document.
By region, only 31,7% of the companies
in Chisinau have sanitary operating
authorizations, compared to the 56,8%
share in the rest of the country.
46 Sanitary operating authorizations
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Figure 22. Changes in the process of obtaining sanitary authorizations
According to the data in Table 20 and Figure 23, companies do not encounter major difficulties in
obtaining sanitary authorizations. The situation is similar to last year.
Table 20. Problems faced in the process of obtaining sanitary authorizations
Only 10% of respondents rated the process as being difficult, while 15% think that the process of
obtaining sanitary authorizations takes too long. The share of companies experiencing problems has
increased slightly compared to last year.
Figure 23. Problems encountered in the process of obtaining sanitary authorizations
8.4 Summary of analysis
Both the amount of time and costs to obtain a sanitary authorization vary without providing a trend
(see Table 21).
Table 21. Changes in the process of obtaining a sanitary authorizations
Indicators Survey period
2011 2012 2013 2014 2015 2016 2017
Time for obtaining a sanitary authorization, days 8 8 6 10 9 7 7
Cost of obtaining a sanitary authorization, $ 67 94 71 102 60 71 75
9% 77% 14%
0% 20% 40% 60% 80% 100%
worse no change better
-8%
-8%
-9%
-7%
-1%
-4%
-6%
-3%
27%
40%
40%
43%
54%
31%
28%
31%
-20% 0% 20% 40% 60% 80% 100%
Unofficial payments
Cost of procedure
Time of procedure
Difficulty of procedure
Significant problem Critical Insignificant Not a problem
Problems Share
Complicated regulatory procedures 2.1
Long time to complete the process 2.3
High cost to obtain sanitary certificates 2.1
Unofficial payments 1.8
47 Sanitary certification of goods
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9 Sanitary certification of goods
9.1 Regulatory framework
The state sanitary and epidemiological regulation is governed by Law no. 10-XVI of 03 February 2009
on Government supervision of public health. Sanitary standards that set out human security and safety
criteria for environmental and occupational factors, of goods and services, of the requirements to
ensure favourable conditions for life and sanitary regulations are regulated by health regulations
developed by the Ministry of Health and approved by the Government. The law establishes the
compulsory adjustment of these regulations to the EU requirements.
Goods and services are subject to the following forms of sanitary authorization:
a) Notification: notifying the authority responsible for supervision of public health on the
marketing of a new product or service and on its features relevant to public health;
b) Sanitary approval: required for the following activities, document projects, goods and
services:
allocation of land for construction/reconstruction;
elaboration of urban certificates for planning, in cases set out exclusively in the current
legislation;
final approval of built/rebuilt premises financed from state or local budgets;
standards of goods and services;
production technologies.
c) State registration: compulsory with goods and services potentially hazardous to human health
and life - chemical, radioactive and biological substances, new food products, drugs,
microbiological diagnostic systems, diagnostics, nutrient media, chemical reagents,
biodistructive substances;
d) Sanitary certification: verifying if batches of goods comply with applicable health regulations.
Sanitary certification implies laboratory investigations of the batch of goods.
Sanitary authorizations of goods and services are performed on request, submitted by interested legal
or natural persons, also based on the sanitary expertise of the documents, goods, services and/or
activities.
Sanitary authorizations imply a sanitary expertise charged as per the list and tariffs for public health
services approved by the Government. Sanitary opinions, registration certificates, sanitary certificates
and sanitary authorizations are issued free of charge.
Trading of goods and services subject to sanitary authorization under the applicable laws, but yet
unauthorized, is prohibited.
48 Sanitary certification of goods
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9.2 Obtaining sanitary certificates
A relatively small number of respondents (8%) had to obtain
sanitary certificates for their marketed goods.
Two thirds of respondents obtain certificates once a year. On
average, companies apply for a certificate 1,9 times a year.
A sanitary certificate is obtained within 4,9 days from the
application date. Gathering and submitting the necessary
documents to competent bodies took an average 6,0 hours.
Table 22. Average costs incurred by respondent companies to obtain a sanitary certificate
Indicators Have made
payments, %
Amount, $
Official payments 79 59
Payments to lawyers and intermediaries 25 19
Transport expenses 40 17
“Voluntary contributions” 10 -
Unofficial payments 19 11
Total costs, $ - 60,3
The average amount of unofficial payments and of payments to lawyers and intermediaries was
determined by median measure.
Costs of obtaining a certificate is about USD 60. Every fifth respondent admitted to having paid bribes.
9.3 Perception of procedure to obtain a sanitary certificate
In the last year there have been no major changes in the process of obtaining sanitary certificates. More
than three quarters of respondents believe that procedures and conditions related to sanitary
certification have not changed.
Figure 24. Changes in the process of obtaining sanitary certificates
According to the data contained in the Table 20, the process of obtaining a sanitary certificate does not
pose significant problems for companies.
13% 76% 11%
0% 20% 40% 60% 80% 100%
worse no change better
Companies operating in Industry are
most often required to undergo sanitary
certification - 12,9% (of these - 31,2%
are companies in the Food Industry).
By region, companies located in the
North (1,6%) and Centre (4,4%) need a
sanitary certificate least often. A higher
share is noted in Chisinau (7,7%) and
much higher in the South (20,5%).
49 Sanitary certification of goods
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Table 23. Problems faced in obtaining sanitary authorizations
Problems Share
Complicated regulatory procedures 2.5
Long time to complete the process 2.3
High cost to obtain sanitary certificates 2.4
Unofficial payments 2.2
As shown in
Figure 25, only 13% of respondents said that the process of obtaining sanitary certificates is difficult.
About 18% think that the cost of obtaining certificates is too high.
Figure 25. Problems encountered in obtaining sanitary certificates
9.4 Summary of analysis
Both the time and costs to obtain a sanitary certificate have virtually not changed compared to last year
(see Table 24).
Table 24. Changes in procedures for obtaining sanitary certificates
Indicators Survey period
2016 2017
Time to obtain a sanitary certificate, days 5,6 4,9
Time spent to obtain a sanitary certificate, hours 5,9 6,0
Costs to obtain a sanitary certificate, $ 59 60
-12%
-18%
-11%
-11%
-2%
-2%
26%
27%
41%
36%
35%
25%
21%
16%
-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70%
Unofficial payments
Cost of procedure
Duration of procedure
Difficult procedure
Significant problem Ciritical Insignificant Not difficult
50 Phytosanitary certification
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10 Phytosanitary certification
10.1 Regulatory framework
Phytosanitary regulation is regulated by Law no. 228 of 23 September 2010 on Plant protection and
phytosanitary quarantine.
If the importing countries impose such a requirement, the phytosanitary control body shall issue
phytosanitary certificates. The phytosanitary certificate shall be issued to the exporter by the
subdivision of the phytosanitary inspection body under whose jurisdiction the goods subject to
quarantine are produced. In order to obtain the phytosanitary certificate, the exporter shall submit, at
least 48 hours prior to shipment, a series of documents:
a) an application requesting a phytosanitary certificate;
b) certificate on the use of phytosanitary products, at the request of the importing country;
c) phytosanitary certificate of the country of origin;
d) copy of fiscal invoice or cargo shipping invoice.
The validity of phytosanitary certificate is 14 days from the issue date. If the inspection establishes that
phytosanitary requirements have been observed, instead of phytosanitary certificate, a phytosanitary
passport is issued to ensure the free movement of imported plants and plant products.
10.2 Obtaining phytosanitary certificates
About 6,2% of respondents had to obtain phytosanitary
certificates. On average, businesses pass this procedure 2,5
times a year.
Phytosanitary certificate are obtained in 2 days. Gathering and
submitting the necessary documents to competent bodies takes
an average 4 hours.
The above average data was calculated based on the median.
The cost to obtain a phytosanitary certificate is about USD 34.
Phytosanitary certification is required
for certain companies in Industry (10%)
and Trade (8,3%). Its share in the
remaining sectors is insignificant.
The share of companies with more than
10 employees that have a phytosanitary
certificate (10,3%) is higher compared
to companies with up to 10 employees
(5,5%).
51 Phytosanitary certification
Cost of Doing Business
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Table 25. Average costs incurred by respondents to obtain a phytosanitary certificate
Have made
payments, %
Amount,
$
Official payments 69 39
Payments to lawyers and intermediaries 8 -
Transportation costs 44 11
“Voluntary contributions” 18 11
Unofficial payments 10 -
Total costs, USD - 34
10.3 Perception of procedure to obtain a phytosanitary certificate
The share of respondents who noticed certain improvements in the process of obtaining phytosanitary
certificates is higher compared to the share of companies that saw the situation worsen.
Figure 26. Changes in the process of obtaining phytosanitary certificates
Overall, this segment does not generate significant problems for companies. However, one in five
respondents encountered difficulties in obtaining the phytosanitary certificates. About 19% are
dissatisfied with the long process of obtaining the certificates.
Table 26. Problems faced during the process of obtaining phytosanitary certificates
Problems Share
Complicated regulatory procedures 2,8
The process takes too long 2,7
High costs to obtain phytosanitary certificates 2,1
Unofficial payments 1,9
13% 68% 18%
0% 20% 40% 60% 80% 100%
worse no change better
52 Phytosanitary certification
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Figure 27. Problems faced in the process of obtaining phytosanitary certificates
10.4 Summary of analysis
Both the time and cost of obtaining phytosanitary certificates remained at the previous year level.
Table 27. Changes in the procedures to obtain phytosanitary certificates
Indicators Survey period
2015 2016 2017
Time to obtain a phytosanitary certificate, days 2,0 2,0 2,0
Time spent to obtain a phytosanitary certificate, hours 3,5 5,0 4,0
Costs to obtain a phytosanitary certificate, $ 35 37 34
-3%
-8%
-8%
-13%
-11%
-8%
34%
42%
24%
18%
37%
26%
16%
16%
-40% -20% 0% 20% 40% 60% 80%
Unofficial payments
Cost of procedures
Duration of procedures
Difficult procedures
Significant problem Critical Insignificant Not difficult
53 Inspections
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11 Inspections
11.1 Regulatory framework
According to Law no. 131 of 08 June 2012 on State supervision of entrepreneurial activity,
substantially amended by Law no. 230 of 23 September 2016, "the only authorities/public institutions
entitled to initiate and carry out an inspection are set out in the Annex to this Law, within appropriate
limits." The law expressly prohibits "overlapping the scope of inspection by inspection bodies."
The inspecting authority does not have the right to initiate an inspection if it has the necessary
information ascertaining the law compliance or if the information can be obtained from other
inspection and/or supervision bodies, from official records or any other available sources, as well as if
all the other means to establish the business entity’s law compliance were exhausted.
The authorized institution does not have the right to inspect a period longer than 3 years of a business
activity preceding the start date of the inspection. Scheduled inspections carried out during the first 3
years from the state registration date of the person engaged in entrepreneurial activities have advisory
status and will not result in sanctions or restrictive measures, except for cases where very serious
violations of the law are identified.
A single inspection body does not have the right to carry out scheduled inspections more than once in a
calendar year of the same person or object if the person owns several distinct objects, placed separately
from the headquarters and other objects, unless a higher frequency of inspections is required in
accordance with the inspection-scheduling methodology based on risk assessments, applied to the
concerned areas subject to inspections.
11.2 Number and duration of inspections
As a result of the moratorium on inspections carried out by
government authorities, the average number of visits to a
company in 2016 has decreased almost twice, from 3,8 to 2,0
visits per company per year. These numbers do no include the
checks by Police on vehicles. Following the lifting of
moratorium, the number of inspections has increased to 2,9
visits per year.
The overall amount of time spent by inspectors with a
company has increased from 5,0 to 11,5 hours per year, largely
due to the increase in the amount of time of inspections carried
out by the State Tax Service. The average number and duration
of inspections, by particular inspecting body, are shown in
Table 26.
Share of companies subject to State Tax
Service inspection:
By region, only 38% companies
located in Chisinau undergo
inspections, compared to 71,3% in
the rest of the country.
By sectors, the highest share is
reported in Industry (63%) and
Transport (57%).
Companies with more than 10
employees (58,8%) are inspected
more frequently than companies
with up to 10 employees (45,2%).
54 Inspections
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Table 28. Average number and duration of inspections
35% of respondents who own a means of transport claimed that the Traffic Police have stopped their
vehicle without any legal reason and proceeded to verify the legality of documents or cargo. Their
share has slightly decreased compared to last year.
11.3 Expenses incurred folowing the inspections
Most of the companies are fined by the State Tax Service -
about 18% per total companies or nearly 40% of the inspected
companies. Their share has increased compared to last year. At
the same time, the share of companies that bribed tax
inspectors decreased from 22 to 6%.
Slightly less than 40% of the inspected companies paid fines
after police visits. More than 18% of those inspected bribed
the police.
Other institutions with a high share of fines are Labour
Inspection, Local and Central Public Authorities, National
Anticorruption Center and the Sanitary-Epidemiological
Service.
Most often bribes are paid following the inspections by local
and central public authorities.
Survey period
State bodies
Share of inspected
companies, %
Frequency, visits
per year
Number of days per
visit
2015 2016 2017 2015 2016 2017 2015 2016 2017
State Tax Service 51 32 47 1,4 1,5 1,4 0,5 0,37 1,03
Fire department (emergency situations) 35 24 38 1,2 1,2 1,3 0,2 0,24 0,33
Sanitary Epidemiological Service 22 14 15 1,3 1,2 1,5 0,2 0,30 0,46
Police 19 12 12 1,5 1,5 1,7 0,2 0,20 0,24
Traffic police 18 8 11 5,0 2,7 2,5 0,1 0,14 -
Price monitoring bodies 11 4 4 1,1 1,4 1,3 0,3 0,38 0,31
Standard monitoring bodies 13 3 4 1,1 1,3 1,3 0,2 0,40 0,41
Environmental Inspection Bodies 16 3 13 1,3 1,4 1,2 0,2 0,26 0,35
Licensing bodies 11 7 8 1,3 1,5 1,3 0,1 0,41 0,31
National Anticorruption Center 8 1 3 1,1 1,0 1,0 0,2 0,31 0,71
Other ministries and departments 12 13 7 1,3 1,8 1,6 0,1 0,41 0,82
Local authorities 17 12 18 1,2 1,6 1,2 0,1 0,23 0,32
Labour inspection 32 15 24 1,3 1,3 1,3 0,4 0,29 0,53
Share of companies inspected by the
Fire Department:
The indicator for Chisinau (28,2%)
and Centre (30,9%) is relatively
moderate compared to North and
South regions, where the share of
companies subjected to inspections
surpasses 80%.
By sector, companies operating in
Industry (58,6%) and Trade
(40,8%) are inspected most
frequently.
Companies verified by Labour
Inspection:
In Chisinau (18,1%) and Centre
(27,9%) the number of inspected
companies is lower compared to
North and South regions - with
45,3 and 52,3% shares
respectively.
Companies in Costruction (40%)
and Industry (28,6%) are verified
by inspectors most frequently.
55 Inspections
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Table 29. Share of companies that incurred payments following the inspections in the last year
Fines, % Unofficial payments, %
Share per
total
Share per
inspected
companies
Share per
total
Share per
inspected
companies
Share per inspected companies Survey period 2016 2017 2016 2017 2016 2017 2016 2017
State Tax Service 10 18,4 32 39,1 7 2,7 22 5,7
Fire department (emergency situations) 3 4,9 13 12,9 3 2,5 12 6,6
Sanitary Epidemiological Service 3 2,5 20 16,7 3 1,0 18 6,7
Police 1 4,4 11 36,7 1 2,2 11 18,3
Traffic police (patrol) 4 4,3 44 39,1 4 1,9 26 17,3
Price monitoring bodies 0 0,5 3 12,5 0 0,2 0 5,0
Standard monitoring bodies 0 0,3 4 7,5 0 0,2 0 5,0
Environmental inspection bodies 0 1,4 4 10,8 0 0,5 0 3,8
Licensing bodies 1 0,5 9 6,3 1 1,3 18 16,3
National Anticorruption Center 1 0,5 25 16,7 0 0,3 8 10,0
Other ministries and departments 3 2,1 22 30,0 5 1,6 37 22,9
Local authorities 2 3,5 16 19,4 5 4,4 33 24,4
Labour inspection 3 4,4 16 18,3 3 4,4 20 18,3
The share of companies paying bribes to traffic police, the sanitary-epidemiological service, the fire
department, and the tax inspectors has declined.
11.4 Perception of number of inspections and difficulties
Although the average number of inspections increased compared to 2016, about 28% of respondents
said they received inspections less frequently. About 15% of companies said the number of inspections
was higher compared to the previous year.
Figure 28. Changes in the number of inspections
Only 9% respondents believe that companies are treated equally by the law. Their share has slightly
increased compared to last year. Half of respondents who provided an answer or 42% of the total
believe that the equality of companies before the law is only partially secured.
Around 38% respondents believe that the law is applied selectively at all times, depending on the
attitude of public persons. Another 27% partially agree with that statement (see Table 30).
15% 57% 28%
0% 20% 40% 60% 80% 100%
more no changes fewer
56 Inspections
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Table 30. Impartiality of public servants
Yes Partly No Do not
know
All companies are treated equally by the law 9% 42% 34% 15%
The law is applied selectively 38% 27% 15% 19%
Nearly one third of respondents stated that most visits were "scheduled and legally justified". The
share of companies who mentioned various subjective motives - obtaining bribes, economic pressure,
political motives - oscillates between 10 and 16%.
Table 31. Purposes of the inspection visits
Purpose 2012 2013 2014 2015 2016 2017
Inspections were justified, previously announced 3,4 3,0 2,1 2,7 2,2 2,7
Investigation of violations 2,2 2,2 1,4 2,0 2,2 2,4
Soliciting bribes and "voluntary contributions" 2,3 2,1 1,4 2,2 2,2 2,2
Attempts to put pressure on management to take economic
decisions
1,5 1,6 1,2 1,7 2,0 2,0
Abuse of power for unfair competition 1,6 1,5 1,2 1,9 2,0 2,0
Political reasons 1,3 1,4 1,1 1,8 1,9 2,0
Other subjective reasons 1,7 1,7 1,1 1,8 2,0 2,0
Over the past three years, the share of companies verrified for the purpose of resolving various
violations has increased. Unfortunately, the number of companies verified for political reasons is
slowly but steadily increasing.
Most companies believe that state
inspection procedures have not changed
substantially over the past year (see
Figure 29).
Figure 29. Changes in the perception of state
inspection procedures
10% 77% 13%
0% 20% 40% 60% 80% 100%
worse no changes better
Perception of changes in the number of inspections compared to
last year:
By region, the number of companies in Chisinau (31,3%) and
Centre (41,3%) that saw the number of inspections decreasing
is higher compared to the number of companies that say the
opposite - 14,9% in Chisinau and 20,6% in the Central
region). Only 8,1% of the companies in the North and 2,4%
in the South noted a decrease in the number of inspections.
The largest share of companies that noticed a decline in
inspections is accounted for by companies working in R&D,
science, legal system, notarial and consulting services
(48,2%) and Trade (31,3%).
57 Inspections
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11.5 Summary of analysis
Over the past year, the number of inspections has increased, from 2,0 to 2,9 visits per company. The
time spent by inspectors with a company has increased from 5 to 11,5 hours per year.
Table 32. How inspections have changed
Survey period
Indicators
2009 2010 2011 2012 2013 2014 2015 2016 2017
Average number of inspections per
company 8,2 7,9 4,2 5,2 3,6 6,5 3,8 2,0 2,9
Number of days per year with a
company 10 15 6,5 6,3 4,7 4,5 0,95 0,63 1,44
Table 33. Changes in the share of inspected companies, % per total surveyed companies
Survey period
Inspection bodies
2012 2013 2014 2015 2016 2017
State Tax Service 74 54 58 51 32 47
Fire department (emergency situations) 53 42 56 35 24 38
Sanitary and epidemiologic service 31 18 48 22 14 15
Police 31 22 41 19 12 12
Traffic police 23 20 10 18 8 11
Price monitoring bodies 11 8 5 11 4 4
Standard monitoring bodies 16 10 18 13 3 4
Environment inspection bodies 17 13 22 16 3 13
Licensing bodies 15 9 12 11 7 8
National Anticorruption Center 22 11 8 8 1 3
Other ministries and departments 13 19 10 12 13 7
Local authorities 27 24 20 17 12 18
Labour inspection 54 48 40 32 15 24
Following the lifting of the moratorium on inspections (established in 2016), their number has
increased, but not with the same frequency recorded in previous years. Almost all state institutions
increased their frequency of inspections, with the highest relative increases being observed for the fire
department (over 70%), labour inspection (over 50% increase), environment inspection bodies (a
threefold increase in number).
58 Inspections
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Table 34. Frequency of inspections (calculated only for companies inspected by respective authority)
Survey period
Inspection bodies
2012 2013 2014 2015 2016 2017
State Tax Service 1,7 1,4 1,9 1,4 1,5 1,4
Fire department (emergency situations) 1,3 1,2 1,4 1,2 1,2 1,3
Sanitary epidemiologic services 1,6 1,6 1,9 1,3 1,2 1,5
Police 1,7 1,5 3,9 1,5 1,5 1,7
Traffic police 2,8 3,8 6,1 5,0 2,7 2,5
Price monitoring bodies 1,2 1,5 1,1 1,1 1,4 1,3
Standard monitoring bodies 1,1 1,3 1,3 1,1 1,3 1,3
Environment inspection bodies 1,2 1,2 1,4 1,3 1,4 1,2
Licensing bodies 1,1 1,1 1,2 1,3 1,5 1,3
National Anticorruption Center 1,3 1,1 1,8 1,1 1,0 1,0
Other ministries and departments 1,4 1,2 1,5 1,3 1,8 1,6
Local authorities 1,5 1,3 2,7 1,2 1,6 1,2
Labour inspection 1,4 1,2 1,4 1,3 1,3 1,3
Most often, companies are verified by the State Tax Service and the Fire Department (DES):
Table 35. Frequency of inspections (calculated for all companies contained in the sample)
Survey period
Inspection bodies
2012 2013 2014 2015 2016 2017
State Tax Service 1.3 0.8 1,1 0,7 0,48 0,64
Fire department (emergency situations) 0.7 0.5 0,8 0,4 0,29 0,50
Sanitary epidemiologic services 0.5 0.3 0,9 0,3 0,17 0,23
Police 0.5 0.3 1,6 0,3 0,18 0,20
Traffic police 0.6 0.8 0,6 0,9 0,22 0,28
Price monitoring bodies 0.1 0.1 0,1 0,1 0,06 0,05
Standard monitoring bodies 0.2 0.1 0,2 0,1 0,04 0,05
Environment inspection bodies 0.2 0.2 0,3 0,2 0,04 0,15
Licensing bodies 0.2 0.1 0,1 0,1 0,11 0,10
National Anticorruption Center 0.3 0.1 0,1 0,1 0,01 0,03
Other ministries and departments 0.2 0.2 0,2 0,2 0,23 0,11
Local authorities 0.4 0.3 0,5 0,2 0,19 0,22
Labour inspection 0.8 0.6 0,6 0,4 0,20 0,31
59 Taxes
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12 Taxes
12.1 Regulatory framework
The tax system in Moldova is regulated by several normative and legislative acts. The principal
document is the Tax Code approved on 24 April 1997, completed in the subsequent years. Currently it
includes ten titles:
1. General provisions
2. Income tax
3. Value added tax
4. Excises
5. Fiscal administration
6. Real estate tax
7. Local taxes
8. Taxes on natural resources
9. Road traffic taxes
10. Other tax regimes
12.2 Administration of taxes
According to respondents, an average of 5,7 types of taxes are
paid in the Republic of Moldova. The number of taxes has
essentially not changed over the previous years.
58 percent of companies employ full-time accountants to
calculate and pay all taxes in due time. Their share has
decreased compared to last year (see Table 36). The share of
those keeping their accounts on their own has fluctuated over the past eight years below 10%. The
decreasing trend in the number of full-time accountants is primarily due to the increasing degree of
digitalization in Finance and Accounting, which also led to a reduction in bureaucracy in this field.
Table 36. The necessary number of accountants to ensure timely and correct payment of taxes
Survey period
Resources
2010 2011 2012 2013 2014 2015 2016 2017
Hire accountants, full time 78% 74% 67% 64% 73% 64% 71% 58%
Average number of full-time
accountants
1,2 1,2 1,2 1,2 1,3 1,2 1,1 1,1
Only part time accountants or
outsourcing
28% 26% 35% 37% 19% 32% 28% 37%
Keep tax records on their own 2% 9% 5% 8% 8% 9% 8% 5%
About 23% of the profit obtained in 2016 by respondent companies was reinvested in 2017. The share
has been steadily decreasing in recent years.
The electronic filing of tax returns and tax calculations has reduced considerably the amount of time
spent on drawing up the statements.
However, in 2017, the time spent on filing statements has slightly increased (see Table 37).
By region, companies in the Centre
(54,4%) and Chisinau (51,1%) employ
full-time accountants less often than
companies in the North (98,4%) and
South (72,7%). Companies in Chisinau
and Central region most often use part-
time or outsourced accountants.
By sector, the largest share of
companies employing full-time
accountants are working in Industry
(72,9%). The lowest share is accounted
for by companies in R&D, science,
legal, notarial and consulting activities
(44,8%).
Companies with more than 10
employees employ full-time accountants
more often (72,2%) compared to
companies with up to 10 employees
(55,2%).
60 Taxes
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Table 37. Time spent to submit a statement, hours
Type of tax 2015 2016 2017
Value added tax 2,8 1,8 2,6
Personal Income Tax 2,4 1,7 2,2
Corporate Income Tax 3,3 1,9 2,5
Contributions to National Social Insurance Fund 2,2 1,5 2,1
Landscaping tax 1,6 1,2 1,9
Contributions to National Health Insurance Company 1,8 1,4 1,8
TOTAL 14,1 9,5 13,1
12.3 Main difficulties in paying taxes
The procedure to calculate, report and pay the corporate income tax proved to be the most difficult (see
Table 38). On third of respondents encounter difficulties in paying this tax. It's important to note that
its share has been increasing for the fourth consecutive year.
Table 38. Taxes that generate most difficulties
Problems 2013 2014 2015 2016 2017
Value added tax 2,7 1,7 2,4 2,3 2,7
Personal income tax 2,6 1,6 2,4 2,5 2,7
Corporate income tax 3,0 1,8 2,7 2,8 2,9
Contributions to National Social Insurance Fund 2,5 1,7 2,5 2,3 2,5
Landscaping tax 1,9 1,4 1,8 2,1 2,3
Contributions to National Health Insurance Company 2,2 1,6 2,1 2,2 2,2
Figure 30. Taxes that generate most difficulties
An insignificant number of respondents mentioned certain changes in conditions and procedures
related to the calculation and payment of taxes (see Figure 31).
-11%
-13%
-15%
-18%
-17%
-19%
-2%
-4%
-5%
-16%
-8%
-8%
35%
31%
30%
25%
26%
21%
29%
31%
23%
16%
19%
20%
-40% -20% 0% 20% 40% 60% 80%
Contribution to NHIC
Landscaping
Contributions to NSIH
Income (legal persons)
Income (natural persons)
VAT
Significant problem Critical Insignificant Not difficult
61 Taxes
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Figure 31. Changes in the tax system
Confirming the above-mentioned indicators, Table 39 shows the main problems related to tax
procedures, assessed on a scale of 1 to 5. The biggest problem is the unclearness of fiscal and
accounting procedures.
Table 39. Problems encountered in the taxation system
Survey period
Problems
2012 2013 2014 2015 2016 2017
Impossibility to project the future number of taxes 3,0 3,3 2,2 2,4 2,5 2,9
The whole fiscal and accounting process is complicated and
unclear
3,1 3,5 2,4 2,8 2,7 3,1
High sanctions for errors 3,5 3,8 2,8 2,9 2,8 2,7
Lack of fixed rules 2,8 3,1 2,2 2,4 2,7 2,5
Total dependence on fiscal inspectors, lack of respect 2,8 3,0 2,0 2,2 2,5 2,1
High tax rates 3,7 3,6 3,3 2,9 2,8 2,4
Unofficial payments 2,1 2,3 1,3 1,9 2,3 2,1
12.4 Summary of analysis
There have been no significant changes in the last year related to the number of taxes to be paid or the
accountants employed by companies. Most respondents did not notice any changes in the terms and
procedures related to tax.
Table 40. Comparing the tax administration system
Indicators Survey period
2011 2012 2013 2014 2015 2016 2017
Average number of taxes 6,1 7,1 7,0 7,5 5,9 5,6 5,7
Number of full-time accountants 1,2 1,2 1,2 1,3 1,2 1,1 1,1
The steadily decreasing share of reinvested profit can have two causes: companies generate less money
or the pessimistic expectations in terms of business environment improvement.
It is worth mentioning that businesses are now less worried about the high tax rates but rather
dissatisfied with the lack of clear procedures and a predictable environment.
8% 88% 4%
0% 20% 40% 60% 80% 100%
more difficult no changes easier
62 Price regulation
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13 Price regulation
13.1 Regulatory framework
Government Decision no. 774 of 20 June 2016 on the Pricing of Socially Important Goods is the main
document governing price regulation. In most cases, products can be marketed at free-market prices.
Following the approval of the Respective Decision, only a few food products are now be marketed
with regulated additions.
The government keeps the right to regulate prices for socially important domestic and imported goods
that are marketed with a trade margin not exceeding 20 percent. Exceptions were set for bread and
knot-shaped bread, sold with a trade margin not exceeding 10%.
Socially important goods, both imported as well as domestic, which have undergone processing by
trading units, are marketed with a trade margin not exceeding 40% of the total purchase price/delivery
price.
If the characteristics of the goods are not altered, even if having undergone some type of technological
processing, the seller will not be deemed as a manufacturer.
Regardless of the number of units involved in the supply chain, trade margin's final size should not
exceed the limit set from the purchase price/delivery price.
13.2 The extent of goverment's intervention in price setting
In around 13% of cases companies said that the government
intervenes in setting prices for their goods. The share of sales
at regulated prices varied between 1 and 99% per total, with
an average of 29%.
On average, 3,9% of total sales of the companies in Moldova
were carried out at government regulated prices.
13.3 Perception of price regulation
In 50% of cases, the state intervenes in companies' pricing by
issuing a limit on trade margins (see Table 41). The share did
not change significantly compared to previous years.
Table 41. Methods used by government to control prices
Method 2010 2011 2012 2013 2015 2016 2017
By limiting profitability 21% 11% 19% 20% 19% 20% 15%
By limiting prices 19% 21% 24% 23% 34% 38% 35%
By limiting the trade margin 61% 68% 57% 57% 47% 52% 50%
13.4 Summary of analysis
The largest share of companies that are
marketing goods and services at state-
regulated prices are found in Transport
(27,9%) and Trade (18,5%). The lowest
share is accounted for by companies
carrrying ouy R&D, science, legal,
notarial and consulting activities (5,2%).
Most often, the state intervenes in price
formation in companies located in the
South (25%). In Chisinau, 12,1% of
companies are found in this category.
63 Price regulation
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In the last three years, the share of companies whose products were sold at state regulated prices has
undergone minor changes. After the slight decline observed in 2016, the sales volume at regulated
prices has fallen back close to 2015 levels.
In 50% of cases, the state intervenes in companies' pricing by issuing a limit on trade margins.
Table 42. Price regulation in the Republic of Moldova
2010 2011 2012 2013 2014 2015 2016 2017
Share of businesses subjected
to price regulation
31% 26% 24% 24% 17% 12% 10% 13%
Share of prices subjected to
state regulation
18% 10% 8% 10% 10% 4% 3,5% 3,9%
64 Regulation of labour relations
Cost of Doing Business
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14 Regulation of labour relations
14.1 Regulatory framework
The main legislative documents governing labour relations are as follows:
Labour Code of the Republic of Moldova (Law no. 154-XV of 28 March 2003);
Law no. 847-XV of 14 February 2002 on Remuneration;
Government Decision no. 743 of 11 June 2002 on Salaries of employees in financially
autonomous units;
Government Decision no. 152 of 19 February 2004 on Compensation quantum bonus for work
in adverse conditions;
Government Decision no. 165 of 9 March 2010 on Minimum guaranteed salary quantum in the
real sector.
According to the amendments to Labour Code introduced by Law 254 of 09 December 2011, the
employer is obliged to provide employees with a nominal access permit at the workplace. In his turn,
the employee is required to carry at all times the nominal access permit provided by the employer.
Starting 1 January 2018, the employer will no longer have to approve the staff structure within the first
month of starting the business activity, and further - in the first month of every calendar year. The
employer will no longer have to submit, within 2 months from the date the staff lists were approved, a
copy to the territorial labour inspectorate under whose jurisdiction the business is located.
Starting 1 January 2019, the requirement to complete (paper-based) labour books upon start or end of
employment will be removed.
14.2 Availability of workforce
Three quarters of respondents stated that they have the
required number of employees to meet the needs of the
company at the time of interview. An insignificant number
of respondents said that their company has staff surplus.
Every fourth respondent said they do not have the necessary
number of employees.
The largest number of companies facing
staff shortage are working in Industry
(30%).
By region, the largest share of
companies that are short of staff is
accounted for by Chisinau (26,7%) and
Central region (27,9%).
Companies with more than 10
employees experience staff related
problems to a greater extent (30,9%)
compared to companies with up to 10
employees (22,3%).
65 Regulation of labour relations
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 43. Assessment of labour force availability
No specific difficulties related to labour relations could be identified given their almost equal shares
(see Table 44).
The requirement to obtain and return the medical insurance policy within the set deadline is no longer
a problem for companies. A small number of companies said they were affected by this problem.
A relatively low number of companies are dissatisfied with the frequent visits of the labour inspection
(16%), even if it has slightly increased compared to 2016 (15%).
Other procedures and problems shown in the Table below were rated as being difficult by a share
ranging between 21 and 23% of total respondents.
Table 44. Assessment of main problems related to labour relations regulation
Problems 2012 2013 2015 2016 2017
Obtaining permission from the Labor Inspection to initiate
the activity
2,2 2,3 2,0 2,1 2,4
Hiring only under an individual contract of employment 2,2 2,4 2,1 2,2 2,5
Obligation to pay the minimum salary 2,3 2,4 2,2 2,3 2,4
Frequent inspections by labour inspection 2,0 2,0 1,8 2,1 2,3
Complicated process of staff reduction 2,2 2,3 1,9 2,5 2,5
Complicated process of staff record-keeping 2,4 2,4 1,9 2,4 2,6
Obtaining and returning the medical insurance policies within
the established deadline
2,5 2,1 1,8 2.2 2.2
Survey period
2011 2012 2013 2014 2015 2016 2017
More than I need 3% 2% 5% 3% 8% 5% 2%
As much as I need 76% 71% 60% 77% 69% 76% 73%
Less than I need 20% 26% 32% 18% 20% 19% 25%
66 Execution of contracts
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
15 Execution of contracts
Nearly 4% of respondents said that the state intervened
in their conclusion and execution of contracts. With
small fluctuations, the average stood at the same level
throughout 2005-2017.
This area of regulation has a low impact on business
activity (see Table 45).
Table 45. Monitoring the execution of contracts in Moldova
2009 2010 2011 2012 2013 2014 2015 2016 2017
Share of companies whose
contracts were monitored
10% 4% 3% 6% 6% 4% 5% 5% 4%
Most often, the state intervenes in the
process of concluding contracts in
Industry (7,1%), and least often in Trade
(only 1,9% respondents).
In the Northern region, the state
intervened in only 1,6% of the
companies, compared to the 9,1% share
revealed by companies located in the
South region. The indicator for Chisinau
stands at 3,5%.
67 Promotion of personal interests of public servants
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
16 Promotion of personal interests of public servants
In less than 3% of cases, managers said that public servants have interfered in their business activity.
The extent of intereference has not changed compared to last year and is several times lower compared
to previous years.
Table 46. Promotion of personal interests of public servants
2012 2013 2014 2015 2016 2017
Share of companies claiming that public
servants interfered in their business activity
4% 8% 4% 8% 3% 3%
68 Evaluation of the judiciary system
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
17 Evaluation of the judiciary system
17.1 Regulatory framework
The settlement of disputes between companies in the
Republic of Moldova is carried out through courts,
according to Law no. 225-XV of 30 may 2003 on Civil
Procedure Code or through arbitration courts, according to
Law no. 23 of 22 February 2008 on Arbitration.
Disputes with government authorities are regulated by Law
on Administrative Contentious (no. 793-XIV of 10
February 2000), republished on 3 October 2006).
17.2 Methods used to settle disputes
In the last two years, one respondent in five had to settle disputes with state authorities or partners.
Their share has practically not changed in the last four years.
Figure 32. Companies that had to settle disputes
In 71% of cases, companies had conflicts with other business entities, the other 29% – with state
authorities.
46% of the companies have filed a lawsuit to resolve the dispute. The share of companies that resort to
illegal methods to solve their problems is steadily declining.
19,9 23,4
31,7 31,5
35,8
18 21 21 20
0
5
10
15
20
25
30
35
40
2009 2010 2011 2012 2013 2014 2015 2016 2017
%
Surveyed year
The highest share of companies that
settled disputes over the past 2 years
was noted in Constructions sector
(37,1%), the lowest - in R&D, science,
legal, notarial and consulting profiled
companies (10,3%).
By region, the share of companies
ranges from 15,9% in the South to 25%
in the Central region.
69 Evaluation of the judiciary system
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 47. Methods used to solve conflicts, % of companies that had to solve conflicts
2011 2012 2013 2014 2015 2016 2017
Turned to state bodies 31 35 48 14 25 43 34
Filed a lawsuit 52 61 49 69 46 64 46
Illegal methods 14 8 7
Various unofficial, but legal methods 34 27 30
17.3 Assessing the efficiency of using courts
The main reasons why businesses do not turn to courts is the long waiting period for the decision
making and the availability of other, more effective methods. Table 48 shows the results of assessing
the reasons by scoring from 1 to 5, where 1- the least important reason and 5- the most important
reason.
Table 48. Reasons for not going to court
Reasons 2014 2015 2016 2017
Long waiting period 3,1 2,7 2,5 2,5
Decision will be incorrect because the courts are corrupt 2,9 2,4 2,3 1,7
Decision will be incorrect because the court is incompetent 2,3 1,8 2,4 1,7
High costs of court services 2,7 1,8 2,1 1,9
High costs of legal services 2,7 2,0 2,0 1,9
The dispute is not very serious 3,5 2,7 3,2 2,3
Other methods are more efficient 3,5 2,2 2,1 2,4
Court decisions are not enforced 2,4 1,8 1.9 1,5
Around 41% of companies that resolved their disputes in courts were satisfied with the procedures and
the outcome, another 24% were not happy with the result.
On average, respondents rated their satisfaction at 3,17 points on a scale from 1 to 5, which would
result in a 54% satisfaction degree. The indicator has not changed compared to last year.
17.4 Summary of analysis
During the last two years, around 20% of the surveyed economic entities had to settle disputes (with
partners, clients or state authorities). In less than half of cases they took the dispute to court.
Table 49. Efficiency of resolving disputes through courts
2013 2014 2015 2016 2017
Respondents who had to settle disputes,% 36 18 21 21 20
Respondents satisfied with resolving through court,% 49 33 31 48 41
Taking court action, degree of satisfaction 3,25 2,90 2,83 3,15 3,17
Taking court action, degree of satisfaction, % 56 48 46 54 54
The key indicators characterizing the capacity of the judiciary system to resolve commercial disputes
have not changed compared to last year.
70 Conclusions
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Conclusions
The general time indicator has maintained its position of last year, following a two percentage point
drop compared to 2015. The indicator quantifies the general perception of managers and entrepreneurs
in terms of attractiveness of the business environment. Another indicator reveals the share of economic
entities that noticed improvements in the business environment, which increased by seven percentage
points as compared to 2016.
Registration process
Procedures for the primary registration of a company have changed insignificantly. Both the amount of
time to register with the SRC and the time spent by entrepreneurs have not changed compared to last
year. Procedures for amending the incorporation documents have been simplified. The two indicators
mentioned above are decreasing.
Only 9% respondents said that registration procedures are difficult.
Regulation in Constructions
The number of companies that build new spaces on their own is steadily decreasing. Only six
companies out of a total 629 have built new spaces on their own.
The number of companies that changed the use of premises has increased: almost 20% of companies
that moved into new spaces or 5,5% per total surveyed companies. Relevant authorizations are
obtained in less time compared to last year.
Licensing
In 2017 there were no significant changes in the licensing conditions, as mentioned by 76% of the
survey participants.
The costs and time to obtain licenses have virtually not changed since last year. The share of
companies that paid bribes to expedite this procedure has declined.
Only one company in five faces difficulties in obtaining the license.
Notification of a trade activity
The efforts of central authorities to simplify trade activities were in most cases sabotaged by local
public authorities, which, contrary to the current legislation, requested the same documents that were
neccessary to issue a trade authorization.
Only 37% of respondents said that notification procedures are easier compared to the process of
obtaining trade authorizations.
Regulation of imports
The conditions for the import of goods have worsened in 2017, as confirmed by about 28% of
respondents, who think that procedures have become more difficult. Both time and cost of import
customs clearance procedures have increased in the current year.
The most problematic aspect revealed by respondents is the customs' practice to calculate taxes on
imported goods based on higher prices than their real value. In consequence, companies pay more in
taxes to contribute to the budget.
71 Conclusions
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Regulation of exports
Respondents' perception of procedures regulating exports is divided: almost 20% think that they are
now less difficult, while almost 30% claim the opposite.
The amount of time to complete a procedure is almost equal to the 2013-2016 time indicator.
Certification of goods
Costs of certification of goods have increased significantly over the past year. The amount of time
required to certify individual batches of goods declined considerably, reaching the lowest level
observed during 2005-2017. The amount of time required to certify mass-manufactured goods has not
changed since last year and is 24% lower compared to 2015.
Even though the time has been reduced and the costs have risen, only 10% of respondents are
dissatisfied with overly high amounts of money they have to pay to the certification bodies. Only 26%
think that procedures take too long to complete.
Sanitary operating authorizations
The procedures for obtaining sanitary authorizations have not changed significantly throughout the last
year. Very few (10%) respondents mentioned having experienced difficulties in obtaining this type of
authorization.
Sanitary certification of goods
The number of companies that were required to obtain sanitary certificates is insignificant: 8% of all
respondents. The conditions for obtaining the certificates are practically the same as last year. The time
has slightly decreased from 5,6 to 4,9 days.
A small number of companies encounter difficulties in complying with related procedures.
Phytosanitary certification
Only 6% of all surveyed companies were required to obtain phytosanitary certificates. These
procedures have not changed during the last two years. The share of respondents who mentioned
improvements is practically equal to the share of those who experienced a worsening in this area.
Inspections
Even though in 2017 the moratorium on inspections was not in place, their number increased
moderately, falling below the level of 2015. Instead, the duration of an inspection has doubled
compared to last year and is also a 50% increase compared to 2015.
Taxation system
The most important problem faced by company accountants is the calculation of corporate income tax.
An insignificant number of respondents mentioned having noticed changes in tax calculation and
reporting procedures.
Price regulation
No significant changes in the degree of price regulation were observed between 2015-2017. According
to the survey data, about 3,9% of goods were marketed at regulated prices, 50% of which - by limiting
the trade margin.
72 Conclusions
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Regulation of labour relations
An increasing number of companies face shortage of staff, which left behind other difficulties related
to the regulation of labor relations.
Execution of contracts
State's intereference in the process of concluding and executing contracts is a rare practice - 5% per
total. The share of companies whose contracts were verified by state representatives has not changed
throughout 2005-2017.
Judiciary system
One in five respindents had to settle disputes over the past two years with other economic entities or
state institutions. Nearly half of them went to court to settle the disputes. Only 7% turned to illegal
methods to solve the problem, even though less than half of respondents who went to court were not
satisfied with the outcome.
73 Conclusions
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Table 50. Comparison of main indicators
Indicators Survey period
2011 2012 2013 2014 2015 2016 2017
General time indicator, % 10 10 11 11 10 8 8
Registration (including changes in the registration
documents)
Time to register, days 15 13 9 10 12 7 8
Costs to register, $ 136 108 112 71 99 99 73
Time to amend the documents, days 9 6 6 8 7 6 8
Construction
Renovation and reconstruction, days 26 38 39 30 31 36 23
Licensing
Average number per company 1,3 1,3 1,4 1,4 1.4 1.1 1.4
Time to obtain a license, days 18 16 18 14 11 12 11
Average costs, $ 240 266 294 402 163 172 179
Share of unofficial payments, % 7 9 8 1 15 18 13
Import
Time to certify imported goods, days 9,6 7,4 5,9 13,2 9,7 6,2 5.7
Expenses incurred to certify imported goods, $ 80 83 120 350 76 202 137
Time to complete customs procedures, days 1,9 2,7 2,5 2,0 1,5 2,7 3,1
Expenses incurred on customs procedures, $ 144 152 158 261 136 287 307
Export
Time on customs procedures, days 1,6 1,7 2,0 2,0 2,1 1,9 2.1
Expenses incurred on customs procedures, $ 85 89 152 213 - 172 105
Certification of goods and services (individual
batches)
Time to obtain a certificate, days 12 12 10 11 9 8 3
Costs, $ 83 145 124 167 57 46 106
Certification of goods and services (mass
manufactured goods)
Time to obtain a certificate, days 13 17 12 10 13 10 10
Costs, $ 158 191 158 311 63 84 122
Sanitary operating authorizations
Share of respondents that obtained sanitary
operating authorizations, % 61 60 53 47 34 34 39
Time to obtain an authorization, days 8 8 6 10 9 7 7
Total costs, $ 67 94 71 210 60 71 75
74 Conclusions
Cost of Doing Business
Competitiveness Enhancement Project (CEP II) AOCDER Promo-Terra
Indicators Survey period
2011 2012 2013 2014 2015 2016 2017
Share of unofficial payments, % 17 27 21 11 17 9 10
Sanitary certification of goods
Share of respondents who obtained sanitary
certificates, % 8
Time to obtain a certificate, days 5
Total costs, $ 60
Share of unofficial payments, % 19
Phytosanitary certification
Share of respondents who obtained phytosanitary
certificates, % - - - - 7 6 6
Time to obtain a certificate, days - - - - 2 2 2
Total costs, $ 35 37 34
Share of unofficial payments, % - - - - 10 9 10
Inspections
Average number of inspections per company 4,2 5,2 3,6 6,5 3,8 2,0 2,9
Average annual time of inspections, days 7 6 5 5 0,95 0,63 1,44
Administration of taxes
Employ full-time accountants 74% 67% 64% 73% 64% 71% 58%
Number of permanently employed accountants 1,2 1,2 1,2 1,3 1,2 1,1 1,1
Price regulation
Companies subjected to price regulation, % 26 24 24 17 12 10 13
Average share of prices regulated by the state 10 8 10 10 4 3,5 3,9
Execution of contracts
Companies subjected to regulation of contracts, % 3 6 6 4 5 5 4
Judiciary system
Share of respondents that turned to state
institutions to settle disputes, % 31 35 48 14 25 43 34
Share of respondents that turned to courts to settle
disputes, % 52 61 49 69 46 64 46
Share of respondents that used illegal methods to
settle disputes, % - - - - 14 8 7
Share of respondents that used unofficial, though
legal methods to settle disputes, % - - - - 34 27 30