In September 2017, the government of the Republic of Moldova announced the launch of their Moldova Citizenship By Investment program (MCBI). According to the changes in legislation, now wealthy investors are allowed to obtain a passport of Moldova by investment. It was expected that the citizenship status would be available for purchase either via donations to the national fund, via buying government bonds, or via buying real estate. Despite being theoretically ready, the program was not put into effect when planned.
In July 2018, the Ministry of Economy and Infrastructure of Moldova announced their intention to re-launch the MCBI program. Their aim is to improve the perception of Moldova in the world, attract foreign investment and increase the country’s competitiveness.
The government is expecting that within the first 5 years, the MCBI program will help attract €1.3 million in foreign investment.
According to Chiril Gaburici, the minister of economy and infrastructure, the MCBI program is based on world’s best practices in the investment immigration field. Similar programs are active in Malta, Cyprus, the Caribbean region.
- 1 Moldova’s passport: What’s in it for the investor?
- 2 Countries Moldovans can enter on a visa-free basis
- 3 The cost of Moldova’s passport program
- 4 What else is there to know about the MCBI program?
- 5 By way of conclusion: Does Moldova stand a chance at becoming a leader in the investment immigration market?
Moldova’s passport: What’s in it for the investor?
Moldova’s passport offers a number of benefits:
- Increased mobility. Citizens of the Republic of Moldova don’t need to worry about visas, since it’s possible for them to enter 121 countries visa-free, including the Schengen states;
- Citizenship for the whole family. The investor’s spouse, children under 29 years of age, as well as parents over 55 years of age may also apply for citizenship simultaneously with the investor;
- Stability and social security. Moldova is a member of the UN, OSCE, WTO and other international associations and communities;
- It’s affordable. The minimum cost of a Moldovan passport starts at €100,000. In comparison, the cost of Malta’s citizenship starts at €880,000, and that of Cyprus at €2 million;
- Tax planning opportunities. There is no gift or inheritance tax, and the corporate income tax rate is 12%;
- European integration. The principal EU institutions view the republic as one of the most promising candidates for EU membership;
- Double citizenship is officially recognized. It is not necessary to renounce the citizenship of one’s country of origin;
- The possibility of business development. There are several economic zones in Moldova for one to engage in business on beneficial terms.
Countries Moldovans can enter on a visa-free basis
The cost of Moldova’s passport program
The investors willing to apply for a Moldovan passport via the citizenship for investment program are expected to make a contribution to the national fund. The donation amount depends on the number of applicants and preliminary revolves around:
- EUR 135,000 for a sole applicant;
- EUR 150,000 for the investor and their spouse;
- EUR 180,000 for a couple with two children;
- EUR 190,000 for a family of 5 or more people.
Some additional fees:
- Processing fee: EUR 5,000 for the main applicant; EUR 2,500 for the spouse; EUR 1,000 for a child; EUR 5,000 for a dependent parent;
- Due diligence fee: EUR 6,000 for the main applicant; EUR 5,000 for the spouse and children over 16 years of age, as well as dependent parents.
- Passport fee: EUR 300 for each applicant.
The total cost of the passport for a sole investor is approximately €146,300; €211,700 for a family of 4 people (a married couple and two children).
What else is there to know about the MCBI program?
- Only investors over 18 years old are eligible to apply. Each applicant must have a clean banking history and an impeccable personal reputation. Applicants with a criminal record are not eligible to apply. Applications filled by persons who were previously denied entry into any country Moldova has a visa-free agreement with are also rejected.
- Normally, application processing takes up to 3 months. The official relaunch of the program is scheduled for November 2018, but it’s already possible to submit a preliminary application.
- All potential Moldovan citizens must undergo a due diligence. Specifically for this immigration program, a four-level due diligence check was developed. At the initial stage, the checks will be carried out by international consulting companies (for instance, the Risk Advisory Group). At the final fourth level, Moldova’s authorities and international organizations, like Interpol.
By way of conclusion: Does Moldova stand a chance at becoming a leader in the investment immigration market?
If the MCBI program is indeed launched successfully at the end of November, the Moldovan passport will effectively become the most affordable in Europe. A family of four will be able to obtain their passports for just one-sixth of what Cyprus currently charges. But it is worth remembering that Moldova is not yet a full-fledged member of the EU, therefore its passport holder does not have the right to reside, study and work in the EU. Nevertheless, passport holders will still have the possibility of visa-free travel to the Schengen area countries.
At the same time, Moldova’s refreshed CBI program will be similar to its counterparts in the Caribbean region and Vanuatu cost-wise. Benefits-wise, however, Moldova’s passport will be slightly weaker. Caribbean countries offer ample opportunities for round-the-world travelling (visa-free travel to England and all countries of the Schengen area, the possibility to obtain long-term visas to the US and Canada) and attractive tax planning opportunities (donations, wealth, inheritance, world income are not taxed). Vanuatu should also be seen as an alternative, since it offers a speedy document processing and allows paying in cryptocurrency.
The Moldovan citizenship by investment program is a great opportunity to expand one’s geography of visa-free travel and develop a decent Plan B to use outside their home country.