Mircea Baciu
– Mr. Baciu, you recently raised a question that no one has raised before, namely: why does a residence permit in Moldova not attract capital? What prompted you to do so?
M.B.: – I did it out of a sincere desire to contribute to the identification of new opportunities that would contribute to the development of the national economy. Under the conditions of slowing economic growth, lack of long-term capital and high competition for investments between the countries of the region, the Republic of Moldova objectively needs new sources of funds inflow into the real sector of economy. One of the potentially effective instruments is the residence permit for investment.
Formally, such a mechanism exists in Moldova. However, in practice it remains little known, not scalable and has little impact on the investment climate of the country.
– You said that formally such a mechanism exists in Moldova. Why is it not useful?
M.B.: – To understand this, we need to answer the question: residence permits are for whom? For an investor or for an entrepreneur? According to the current legislation, a foreign citizen can obtain a temporary residence permit in Moldova as an investor on condition of: participation in the authorized capital of a Moldovan legal entity; creation of jobs; or a combination of these conditions.
The minimum entry threshold is relatively low – the equivalent of about 30 average monthly salaries in the economy. This makes the regime accessible, but at the same time dilutes the very essence of investment status.
In fact, it is not a classical investment, but a business migration: the investor must be a founder; the investment must be active; constant confirmation of economic activity is required; the status directly depends on the operational stability of the business. The key problem is the confusion of concepts.
– What do you mean by this?
M.B.: – In the world practice there is a clear distinction between an entrepreneur, who creates and manages a business; and an investor, who places capital and bears financial risk, but is not obliged to participate in operational management. The Moldovan model combines these two roles into one, which sharply narrows the target audience. For a passive investor in real estate, infrastructure, bonds or funds, this regime is unattractive.
Unlike the investment programs of the EU and neighboring countries, the Moldovan residence permit:
– Is not tied to real estate as an asset class;
– does not allow passive investments;
– does not provide a clear and predictable path to permanent residence;
– depends largely on administrative interpretation.
As a result, the program does not scale, is not promoted as an investment product and does not generate sustainable capital inflows.
Undoubtedly, the current mechanism is useful for small and medium-sized businesses, IT specialists, as well as managers and startups. However, as an instrument of the state investment policy it practically does not work. It is unable to attract large private capital, development investments and long-term currency flows.
– And what would be the best solution in the current situation?
M.B.: – A rational solution would be to create a separate legal regime “residence permit for investment”, parallel to the existing one. The key principles should be clear and understandable:
– investment, not participation in management;
– fixed and transparent thresholds;
– automatic procedure.
– In your opinion, what potential areas for investment can be identified in our country?
M.B.: – For Moldova the greatest effect would be given by:
– new construction and development;
– logistics and industrial parks;
– energy;
– government and infrastructure bonds;
– export-oriented IT projects.
Even a conservative model – a few hundred investors per year – could provide tens of millions of euros of direct investment without creating social or political risks. For example: even 200-300 investors per year with an average investment of €200-300 thousand would mean €40-80 million in annual capital inflows.
– What conclusions should be drawn in this situation?
M.B.: – The current mechanism of residence permit for investors in Moldova is a working, but narrow tool, oriented to entrepreneurs, not to capital. If the country aims to compete for investments in the region, it is necessary:
– Recognize this limitation;
– separate business and investment migration;
– offer the market a clear and predictable product.
A residence permit for investment is not a migration tool. It is a tool for attracting capital. And today it remains unrealized in Moldova.
