Moldova

A former Soviet republic, in recent years Moldova has made remarkable progress in strengthening its democratic institutions and improving its business environment. With inexpensive labor, free trade agreements with the EU, and commercial laws aligned with WTO standards, the government actively courts foreign investment through tax incentives and other measures.

However, despite considerable potential across the finance, automotive, information technology, agriculture and agro-food sectors, foreign direct investment (FDI) has remained low. Bureaucratic hurdles, cronyism, a sizable informal economy, and low productivity rates hinder investment prospects. Moldova also grapples with a lack of skilled workers and dependence on remittances and international aid. Additionally, as a small economy heavily dependent on trade with Ukraine, Russia and Belarus, Moldova has faced severe repercussions from Russia’s full-scale invasion of Ukraine, including energy crises and unprecedented inflation rates.