Moldova - Foreign investment



With the exception of certain state-controlled enterprises, current legislation does not restrict foreign capital participation in Moldavian enterprises. Some foreign equity participation in privatization of government-owned enterprises is also possible. Land under privatized enterprises can now be owned by the enterprise owners. Barriers in Moldova to foreign investment involve the underdeveloped banking, insurance, legal, and trade services.

In 1997 and 1998, average annual foreign direct investment (FDI) inflows into Moldova had reached $77 million, up from about $24 million in 1996. In 1998, the financial crisis in Russia, which accounts for a 30% share of Moldova's inward FDI, helped reduce inflows to $40.6 million for the year, but in 2000 and 2001, record levels of FDI inflows of $143 million and $160 million, respectively, were attained. Total FDI stock has increased 22 times over since independence. The total stock of FDI in Moldova reached $620 million in 2001, equivalent to 36% of GDP and about 82% of gross fixed capital formation (compared to the world average of 22%). Moldova's share of world inflows of FDI from 1998 to 2000, while small in absolute terms, was 1.7 times its share of world GDP.

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