Moldova's IT Sector - Eastern Europe's New Digital hotspot

Moldova’s IT sector is advancing at an impressive pace, rapidly transforming the country into a prime destination for global investors.

In 2023, Republic of Moldova—a young nation with European aspirations—recorded the highest growth rates in IT service exports among regional peers, including Ukraine, Romania, Estonia, Latvia, and Lithuania. According to the National Bureau of Statistics, the Information and Communication Technologies (ICT) sector contributed 8.3% to the national GDP, with the IT sector alone (excluding telecommunications) accounting for 5.3%.

The IT sector’s recognized potential to drive economic growth has led the Government in Chi?in?u to make it a priority, focusing on attracting foreign investment by fostering a competitive and stable business climate. A cornerstone of this effort is the establishment of the Moldova Innovation Technology Park (MITP)? in 2016 and the government’s commitment to a reduced, single tax rate of 7% on turnover, which will remain in effect until 2035. This initiative positions Moldova as a highly appealing destination for IT businesses and investors.

Since the launch of MITP, nearly 1,600 companies have been established, including 178 foreign investments, representing 33 countries. The top seven countries with investors drawn to MITP’s favorable tax regime are Romania, Ukraine, the USA, Germany, Russia, the United Kingdom, and Turkey. Remarkably, 95% of MITP’s residents are small and medium-sized enterprises (SMEs), fostering a dynamic environment conducive to startups and innovation.

Increased Investment Due to Regional Dynamics

"Romania and Ukraine are leading the rankings by number of newly funded companies in MITP, influenced by the regional crisis and changes in fiscal policies. Romania is in first place, with significant growth starting in 2023 after IT tax benefits were canceled there, prompting many companies to shift to Moldova. Companies from Ukraine saw a sharp increase in Moldova starting in 2022, following the outbreak of the war. Moldova has become a safe and stable place for both local and international businesses. This attraction is further reinforced by the extension of the state guarantee term until 2037 and the operation of the IT Park until 2035, providing long-term security for companies," says the MITP Administrator, Marina Bzov?i.

"Currently, the park has entrepreneurs from all over the world: US, Israel, Germany, many from Romania," says the state secretary for digitalization from the Economic Development and Digitalization Ministry, C?t?lina Plinschi. "Our companies in the IT sector do not stay in Moldova but expand regionally and globally. Our population has digital skills. We have professionals and experts, and we can provide services worldwide. We desire to create this country brand and promote it internationally."

MITP's Economic Contribution and Long-term Security

In 2017, Moldova's IT industry contributed 19 million euros to the national public budget. By 2023, this figure had surged to over 68 million euros, marking a more than threefold increase just six years after the launch of the MITP. The latest data reveals that the total revenue of its residents exceeded 649 million euros, representing a 31% growth compared to 2022. The IT sector has become an essential pillar of Moldova's economy, steadily solidifying its role in national economic development.

To provide long-term clarity for residents and potential investors, at the end of 2023, the Government of Moldova extended MITP’s operational term until 2037. This extension preserves the 7% single tax and broadens the list of eligible activities within the e-park, including business services like call centers and other labor supply functions.

The simplified, de-bureaucratized model of MITP attracts investment, encourages business legalization, and promotes formalized salary payments. It also incentivizes highly qualified Moldovan specialists to remain in the country while drawing foreign managers and investors, facilitating expertise and know-how transfer. Although 4.4% of Moldova’s workforce is already employed in the ICT sector—the second-highest ratio in emerging Europe after Estonia—the demand for talent remains high. Currently, nearly 500 foreign citizens from 38 countries are part of this thriving virtual community.

To further enhance its appeal to international investors and IT professionals, the Moldovan Government has implemented significant labor market liberalization measures. These include a simplified procedure for obtaining residence and work permits for foreign specialists, as well as a special visa regime specifically designed for the IT sector. Importantly, Moldova allows for remote work without the requirement of physical presence in the country, enabling companies and professionals to operate within the MITP framework from anywhere in the world. These initiatives reduce administrative barriers and offer greater flexibility, making it easier for businesses to recruit global talent and for foreign professionals to contribute to Moldova's growing tech industry. Notably, MITP is not a physical economic or commercial space but a fully virtual community. To join, a prospective resident needs to visit Moldova only once to obtain an electronic signature, register a company with the Public Services Agency, and submit an application for MITP residency.

Strengthening MITP Governance and Decision-making Transparency?

To enhance the governance and coordination of MITP, the Ministry of Digitalization and Economic Development established a council with? o over 80 percent of members representation of the private sector . This council empowers MITP residents to participate actively in the park’s administration, ensuring transparency and representation. The commission oversees key decisions related to the park's budget, residents' contributions, and the allocation of collected funds, thereby promoting more effective and accountable management.

As a candidate for EU membership, Moldova is actively aligning its regulations and standards with the European Union, supported by the Deep and Comprehensive Free Trade Agreement (DCFTA) signed in 2014. The government aims to become a fully digital state by 2030, consolidating all public services onto a single platform known as the EVO App, thereby streamlining interactions for citizens and businesses alike.

With these strategic initiatives, Moldova's IT sector is increasingly becoming a vital pillar of the national economy, continually strengthening its role in driving economic development and establishing the country as Eastern Europe's new digital hotspot.