EWS helps you to hire an international workforce quickly and compliantly, without setting up a legal entity locally. If you’d like to get in touch about our employer of record solution in Moldova, click here
Country Introduction – Moldova
Capital – Chisinau
Currency – Moldovan Leu
GDP – 13.68 billion USD (2021)
Language – Romanian
Major Religion – Christianity
Population – 3,415,565 (as of September 8, 2023)
Moldova, an Eastern European country, transitioned from a planned to a market-oriented economy after gaining independence from the Soviet Union in 1991. Moldova’s economy has a significant agricultural sector, with a focus on wine production, fruit cultivation, and cereal crops. The manufacturing sector in Moldova includes industries such as food processing, textiles, machinery, and light manufacturing.
It’s main trading partners include the European Union (EU) countries, particularly Romania, Russia, Ukraine, and China. The country has signed a free trade agreement with the EU, which has boosted its exports to European markets.
The country has implemented economic reforms to improve the business environment and attract foreign investment, while also receiving international assistance to address economic challenges and promote development.
Living in Moldova offers a unique experience with a low cost of living, diverse culture, and picturesque landscapes. The country has affordable housing and a blend of Romanian, Russian, Ukrainian, and Gagauz traditions. Healthcare is improving but may require private options, while education is accessible and affordable. Moldova is generally safe, with a focus on wine and traditional cuisine. Public transportation is available, and the country hosts cultural events and natural beauty. Moldova offers an enriching experience for those seeking a distinctive European lifestyle.
Contract of Employment
In Moldova, it’s a legal requirement to have a written employment contract in the local language that clearly outlines the employee’s compensation, benefits, and termination conditions. Both the offer letter and employment contract should specify the salary and any compensation in Moldovan leu, not in foreign currency. Fixed-term contracts are allowed but cannot extend beyond a maximum of five years.
The duration of a probationary period can vary and is typically defined in the employment contract. It is common for probation periods in Moldova to last between one to three months, but the specific duration may depend on the employer’s policies and the nature of the job.
In Moldova, financial obligations upon termination of an employment contract can vary based on factors like the reason for termination, length of service, and terms in the employment contract or collective bargaining agreement:
Termination by the Employer: Employers may need to provide severance pay if they terminate an employee without a valid reason. Severance pay is calculated based on years of service, following specific formulas outlined in the Labor Code.
Termination by the Employee: Employees who terminate their employment contract typically do not receive severance pay. They may, however, need to provide notice as specified in their contract or labor laws.
Redundancy: In redundancy cases, additional compensation beyond severance pay may be required. This compensation depends on the monthly salary and years of service.
Other Obligations: There may be additional financial obligations upon termination, such as payment for unused annual leave, outstanding salary, and benefits, as stated in the contract or labor laws.
The standard workweek in Moldova typically consists of 40 hours, with 8 hours per day. This is based on the standard “8 x 5” model, where employees work eight hours a day, five days a week.
According to Moldovan labor laws, the maximum duration of overtime work on any given day should not exceed four hours. This means that an employee may work up to four additional hours beyond their regular daily schedule as overtime.
The total weekly overtime hours should not exceed 20% of the employee’s regular weekly working hours. For example, if an employee’s standard workweek is 40 hours, they can work up to 8 additional hours as overtime in that week.
13th Month Pay
There is no legal obligation to offer a 13th-month salary in Moldova.
The duration of annual leave in Moldova can vary, but it is typically at least 20 working days per year for employees with standard full-time contracts. The actual number of days may be higher based on the employment contract or collective bargaining agreements.
Employees covered by Moldovan social insurance are entitled to sick leave benefits, which are mandatory for most employed individuals. To qualify, employees must provide a medical certificate from a qualified healthcare provider, specifying the diagnosis, expected leave duration, and the medical need. Sick leave duration varies based on the illness or injury, ranging from days to months, as advised by healthcare professionals.
Maternity and Paternity Leave
Maternity leave in Moldova typically lasts for a total of 126 calendar days, or 18 weeks. This period includes both prenatal and postnatal leave.
Paternity leave typically lasts for a total of 14 calendar days, starting from the day of childbirth.
VAT / GST
Standard VAT rate is 20%, Reduced VAT rate is 6% and 8%. Recent developments in Moldova’s VAT system include:
From January 1, 2021, a reduction in the VAT rate from 15% to 12% for accommodation services, food, and beverages provided by entities offering public accommodation and catering services.
Starting June 21, 2021, the introduction of a 6% reduced VAT rate for services and food supplies offered by entities engaged in accommodation and restaurant services.
The personal income tax rate is 12 % (flat tax rate).
Employer / Employee Contributions
In Moldova, both employers and employees are typically required to make contributions to various social security funds and programs, including pensions and healthcare. Employees contribute a portion of their gross monthly salary, while employers also make contributions on behalf of their employees. These contributions help fund social benefits, healthcare services, and other social programs provided by the state. Specific contribution rates and rules may vary, so it’s essential for employers and employees to stay informed about the latest regulations and requirements related to social security contributions in Moldova.
Here is a list of some of the major public holidays celebrated in Moldova:
January 1 – New Year’s Day
March 8 – International Women’s Day
May 1 – Labor Day
August 27 – Independence Day
August 31 – Limba Noastră (Our Language Day)
August 27 (also celebrated on August 31) – National Day
December 25 – Christmas Day
December 26 – Second Day of Christmas
December 31 – New Year’s Eve (Revelion)
These are some of the major public holidays in Moldova. Keep in mind that Moldova has a diverse cultural heritage, and there may be additional regional or cultural holidays observed in specific areas or communities. Additionally, the dates of some holidays, such as Easter, may vary from year to year based on the Orthodox Christian calendar.
In cases of termination due to underperformance, severance pay may or may not be required, depending on the specific circumstances and the terms of the employment contract. If the underperformance is considered a breach of contract, the employer may not be obligated to provide severance pay.
If an employer terminates an employment contract without a valid reason (e.g., redundancy, employee misconduct), they may be required to provide severance pay to the employee. The amount of severance pay is generally calculated based on the employee’s length of service.
Work and Residence Permits (Expatriates)
Moldova typically offered several types of permits for foreign nationals, including work permits, residence permits, and temporary residence permits.
It’s crucial for expatriates and their employers to follow the proper procedures and comply with Moldovan immigration laws to ensure they have the necessary permits to work and reside legally in the country.