PRECISE. PROVEN. PERFORMANCE.

MOLDOVA AT GLANCE

www.moorestephens-ksc.ro

Moore Stephens KSC February 21st, 2017

PRECISE. PROVEN. PERFORMANCE.

Contents Slide No

Moldova – country overview 2 GDP and economy growth 7 Tax framework 8 Free economic zones 9 Moore Stephens International 11 Moore Stephens KSC Romania&Moldova - presence, experience and key team 12

Moldova – country overview

Moldova is an independent Republic from 27 August 1991

• Moldova is currently divided into 37 first-tier

units, including 32 districts (in Romanian - "raioane"), three municipalities (Chisinau, Bălţi, Bender), one autonomous territorial unit (Gagauzia) and one territorial unit (Transnistria). The capital and largest city is Chisinau.

• Moldova has 66 cities (towns), including the five

with municipality status, and 917 communes. Some other 699 villages are too small to have separate administration, so are administratively part of either cities (40 of them) or communes (659). This makes for a total of 1,681 localities in Moldova.

Moldova – country overview

National development strategy – Moldova 2020: seven solutions for economic growth and poverty reduction 1. Aligning the education system to labor market needs in order to enhance labor productivity and increase employment in the economy. 2. Increasing public investment in the national and local road infrastructure, in order to reduce transportation costs and increase the speed of access. 3. Reducing financing costs by increasing competition in the financial sector and developing risk management tools. 4. Improving the business climate, promoting competition policies, streamlining the regulatory framework and applying information technologies in public services for businesses and citizens. 5. Reducing energy consumption by increasing energy efficiency and using renewable energy sources. 6. Ensuring financial sustainability of the pension system in order to secure an appropriate rate of wage replacement. 7. Increasing the quality and efficiency of justice and fighting corruption in order to ensure an equitable access to public goods for all citizens

Positive tends Moldova belongs to the developing countries and significantly differs from developed once. The Government of Moldova takes the right steps to achieve the economy growth goals. A good example of such measures is an adherence to follow international standards in risk management for the financial sector by adoption of Basel III provisions as well as recent mandatory adoption of IFRS for all banks and insurance companies of the country as well as active anticorruption actions resulted in prosecution of top politicians and businessmen involved in money laundering, within past two years.

Moldova – country overview

Foreign investors’ guarantees and rights According to the Moldovan Constitution, the state must ensure the inviolability of foreign investments. The Government is keen to establish coordinated policies and well-balanced legislation in order to stimulate both domestic and foreign investments. The legal framework for the protection of foreign investments consists of the Law on investments in entrepreneurial activity and international bilateral treaties for the facilitation and mutual protection of investments. The law prohibits discrimination against investments based on citizenship, domicile, residence, place of registration, place of activity, state of origin or any other grounds. At the same time, certain restrictions are provided for residents of off-shore zones (e.g. limited amount of shares in banks and prior approval from Moldovan National Bank before acquisition) and for the acquisition of agricultural and forested land.

Price controls There are certain areas in which the Government establishes a limit on the prices for products and services, such as for state-owned land and mineral resources, transport and post services, medicines, natural gas, heating and electrical energy, etc. The state usually intervenes in the formation of prices by limiting the trade mark-up. There is no price controls in clothing industry now. The transfer pricing law is planned to be adopted in Moldova in year 2018.

Patents, trademarks and copyrights There is a special government agency in charge for the legal protection of trademarks, patents and copyrights on the territory of the Republic of Moldova is the State Agency for the Intellectual Property (AGEPI). Real estate The ownership title and other real rights over immovable assets (e.g. servitude, usufruct, mortgage, etc.) are subject to registration in the Real Estate Register, held by the Cadastral Office. Information from the Real Estate Register is public and registrations performed in the Register are presumed to be authentic and complete, until the contrary is proved. The ownership title over immovable assets is transferred from the seller to the buyer as of the registration of the transfer in the Real Estate Register.

International agreements and organizations Republic of Moldova is a member of the following key organizations: UN, Council of Europe, Associated Member of EU, Commonwealth of Independent States (CIS), BSTDB, EBRD, WTO, 25 Embassies or consulates of foreign countries are located in Moldova EU The EU and the Republic of Moldova have signed an Association Agreement to succeed the Partnership and Cooperation Agreement on 16 of July 2014. Association Agreement has significantly deepen Moldova’s political association and economic integration with the EU.

Moldova – country overview

Favorable geographical position at the crossroads of

commercial routes

Tax and customs framework similar to that of the EU

Platform for manufacturing and exporting both to the CIS and

to the EU

Competitive general corporate income tax rate in the region – 12% and tax on dividends of

only 6%

Proximity to large world markets (European Union and

Commonwealth of Independent States)

Considerable network of operational Double Tax Treaties

and Investment Protection Agreements

Market access through three Free Trade Agreements

including: 1. WTO members (worldwide); 2. Autonomous

Trade Preferences (EU countries); 3. Deep and

Comprehensive Free Trade Area (DCFTA)

Entrepreneurial activities under preferential terms and

conditions developed in free economic zones

CIS members (with certain exceptions)

CEFTA members (most Balkan countries)

Well-skilled multilingual workforce

Relatively low employment costs

Favorable visa regime Improved legal framework regulating entrepreneurial

activity

Starting a business – fast and easy to handle

Investment opportunities through privatization of public

property and public-private partnership

Moldova GDP

As per National Bureau of Statistics Moldova is highly depends on remittances which are at about 24% form the GDP. Production of goods in 2013 contributed to increasing the GDP with around 26%, while services contributed with around 58.9% (i.e. the main branches being transport and communication services, wholesale and retail trade services, construction activities, etc.) In year 2015 there was a sharp decrease related to the political instability and fraud in a banking sector. The government had to adopt unconventional measures to stabilize key macroeconomic variables, however with a negative impact on the economy pace of growth.

2010 2011 2012 2013 2014 2015 2016 2017GDP Nominal 5813 7018 7283 7985 7983 6475 6650 7034GDP Growth 7.10% 6.80% -0.73% 9.40% 4.80% -0.48% 6.30% 2.00%

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MOLDOVA - NOMINAL GDP AND REAL GDP GROWTH RATES

BY YEARS

Moldova – Tax Framework

Tax Code of the Republic of Moldova determines the tax environment which was first time adopted in year 1997. Moldova followed French tax model. There are certain number of direct and indirect taxes in Moldova.

Indicators 2016

Income tax 12%

Social Security Contributions:

- Employer 23%

- Employee 6%

Medical Insurance Contribution:

- Employer 4.5%

- Employee 4.5%

VAT 20%

The total average tax burden is provided below.

Social security contributions

64%

Corporate income tax 23%

[CATEGORY NAME] [PERCENTAGE]

Other taxes 2%

Country credit rating According to Moody’s credit rating Moldova holds stable a B3 category which is assumed as highly speculative investment environment.

Information: World bank

Free Economic Zones in Moldova

Resident of free zone may be any individual or legal entity registered under the law as a subject of entrepreneurial activity in Moldova. In Moldova operating the following nine free economic zones: Free economic zone International Port of Giurgiulesti; Free economic zone International Airport of Marculesti; Free economic zone Expo-Business-Chisinau; Free economic zone Ungheni-Business; Free economic zone Otaci-Business; Free economic zone Taraclia; Free economic zone Tvardita; Free economic zone Valkanes; and Free economic zone Balti. Key Benefits: - Exemption from excise payments. - VAT is not applied to the goods delivered to the free zone - Zero VAT rate for specific transactions - Favorable tax and customs regimes, including - 50% discount from the tax rate fixed in the RM for the income obtained from export of goods (services) originating from free economic zones outside the territory of the RM; - 25% from the tax rate fixed by the RM for the income obtained from other activities than export of goods (services); - 3- year total exemption from income tax obtained from export of goods (services) originating from free economic zones outside the territory of the RM following investment of at least 1 million US dollars in the free zone; - 5-year total exemption from income tax obtained from export of goods (services) originated from the free economic zone outside the territory of the RM following investment of at least 5 million US dollars in the free zone;

PRECISE. PROVEN. PERFORMANCE.

MOORE STEPHENS INTERNATIONAL A NETWORK OF PROFESSIONAL MEMBER FIRMS AND

MOORE STEPHENS KSC – ROMANIA AND MOLDOVA

Moore Stephens International and worldwide network of independent member firms

Moore Stephens International Limited is a global accountancy and advisory network with its headquarters in London.

Since the first Moore Stephens office opened a century ago, Moore Stephens International has grown to be one of the largest international accounting and consulting groups in the world. Based in over six hundred locations, the network is organized into seven regions – North America, Europe, Asia Pacific, Australasia, Middle East, Latin America and Africa with fee income of US$2,660 million in 2015 and partners/staff of 27,613 (2014 – 26,290). Moore Stephens is the 10th largest network in the world, based on staff. But size does not tell the whole story. For us what is more important is the quality of the service we provide. So, whilst we have international reach, we operate on a scale that allows us to ensure that our services are not only delivered in a professional manner but are also tailored to the needs of each individual client

Managing audits and dealing with multi-jurisdictional tax matters of multi-national operations is the core of our business. The scope of our global client management extends, therefore, beyond the delivery of compliance services to advising on international business structures and tax planning to minimize tax liabilities.

Key facts about Moore Stephens International network:

• Over 100 years of experience

• 657 offices worldwide

• 106 countries

• 27,613 employees

• 2,660 Million USD of consolidated free income

Members and correspondents

Countries

Firms Offices Principals and Staff

Fee Income US$m

Africa 6 20 25 852 26.5 Asia Pacific region 15 25 56 3,434 88.5

Australasia region 2 15 22 791 98.2

China region 1 4 48 4,922 304 Europe region 44 145 302 8,513 863.5 Latin America region

17 26 36 1,215 36.9

Middle East region 14 17 29 706 27.2

North America region*

7 48 139 7,180 1,215.2

Total 106 300 657 27,613 2,660.0

Moore Stephens’ member firms share following common values across the globe : • Integrity • Personal Service • Quality • Knowledge • Global View

Moore Stephens International - key consolidated statistical data including member firms

Moore Stephens KSC

Moore Stephens KSC is an independent member firm of Moore Stephens International with offices located in Romania - Bucharest, Timisoara and in the Republic of Moldova - Chisinau. We offer a range of integrated services to help companies grow both locally and internationally. The aim of all offered services is to add real commercial value to businesses of the clients we serve. Our aim is to contribute to the creation of a healthy business environment and to be recognized as one of the most trusted professional services firms in Romania and Moldova by providing bespoke business solutions of the highest international standards. We are specialized in a world that is becoming smaller and more complicated. Through quality, transparency and honesty our professional relationships are built on years of hard work to understand your business and your goals.

Why people choose us: • We provide a complete range of services: audit, accounting, tax, payroll, IT audit & IT advisory

corporate finance, legal & business advisory; • We are part of an international network so we have access to specialist expertise in all areas; • We’ve got a well–established pedigree throughout a team that gathers over 100 years of experience in

the profession; • We are flexible; • We are passionate about what we do and strive to make your life easier by knowing our stuff inside out; • We keep our prices competitive by offering real value for money without compromising quality; • We love long-term relationships; • We believe in personal service so you will have a dedicated relationship manager working closely with

you.

Our mission is to: • Keep our clients

competitive; • Expand opportunities; • Provide real commercial

value to our clients and their business;

• Keep companies of our clients in compliance with applicable Laws, rules and regulations.

There are three offices under the management of Moore Stephens KSC, located in Bucharest, Timisoara and Chisinau, and over 75 professional employees. The number of personnel to be involved at the proposed project will be adjusted assuming the composition of knowledge and experience required and as well as selected projects assigned to our company. All of Moore Stephens member firms of the countries listed in a procurement notice conformed their ability and willingness to participate the project and dedicate enough competent resources.

Moore Stephens KSC is an international mind set office operating as a service hub in Romania and Moldova, excelling in local expertise.

75 professionals cover the following fields:

o Audit & Assurance

o Tax Advisory & Transfer Pricing

o Accounting & Payroll

o IT Audit & Advisory

o Business Advisory (restructuring,

transformation, change management,

collection, credit risk etc.)

o HR & Recruitment

Moore Stephens KSC Three offices – two countries – one team

BUCHAREST

TIMISOARA

CHISINAU

Our experience at the core of our practice International bodies • World Bank / IFC • EBRD / EIB • E.U Funds/ EC. • USAID

Regional experience

Romania, R. Moldova, Bulgaria, Greece, Cyprus,

Russia, Central Asia including Tajikistan, and

Turkmenistan

Public authorities

• Ministry of Health, Agriculture, Justice,

Education, Labor

• State companies, including Cadastre, Road

Administration, Transport Regia

• Fiscal Authorities

Industry experience • Agriculture • Commodity trading and retail • Banking, MSME financing institutions and

insurance companies • Construction and Real estate • IT & Software • Energy sector • Pharmaceutical • Transportation a and logistics

Moore Stephens KSC Qualifications of our team

Professional qualifications

Technical qualifications

Undergoing qualifications

Over 60 years of partners professional experience

Mamas Koutsoyiannis FCCA, CAFR, CECCAR, CCF Chief Executive Officer Romania & Moldova Moore Stephens KSC

Mamas Koutsoyiannis is the Chief Executive Officer of Moore Stephens KSC. He has an experience of over 20 years, out of which 14 years in the region. He was nominated the ACCA Ambassador as recognition of its commitment to promote ACCA both in Romania and the Republic of Moldova and currently he is a member of ACCA Executive Board in Romania. Between 2007 - 2015 Mamas also served as the President of the Cyprus-Romania Bilateral Chamber of Commerce and Industry and in 2015 he was appointed Honorary Consul of Cyprus to Romania, Focsani region

Andrei Stan ACCA, ACAP Audit Partner, Head of Operations

Andrei Stan is the Partner of Moore Stephens KSC, in charge with the Audit & Operations. He has over 10 years of experience in audit, accounting, consulting and due-diligence applied both locally and internationally and is a member of the Association of Chartered Certified Accountants UK (ACCA). Andrei has coordinated for more than 5 years audit assignments for project financial statements and audit of entities financed under World Bank.

Key services

• Audit and assurance

• Outsourcing and taxation

• Consulting on business strategy

Key industries: • Public Sector

• Banking

• Infrastructure

• Agriculture

• Construction

• Petroleum

• Manufacturing

• Commerce

• Medical Services

Key services

• Audit

• Due Dilligence

• Business Advisory

• Transfer Pricing

• Internal controls

Key industries:

• Public Sector

• Banking

• Agriculture

• Production

Valeriu Cernei has over 14 years of experience in audit and IT consulting and he is ISACA and BCI affiliate member. He has carried out projects for various institutions in the financial, retail and industry in Romania, Moldova and Russia. He has a vast international experience in adoption different systems implementations, business continuity panning, information security, audit and implementation of IT processes for various financial institutions and retail companies located in Romania, Moldova and the some other CIS counties.

Valeriu Cernei CISA, CRISC, TOGAF 9, ISO 27001 Lead Auditor Partner, IT Audit & Advisory

Key Services • IT Strategy and

Governance • IT Effectiveness

and IT Transformation

• Information Security Management System audit and implementation

• Business Continuity Planning

• IT Processes

Over 60 years of partners professional experience

Alina Solomon Partner, Head of Outsourcing Department, Romania and Moldova

Key services • General accounting

services • Accounting

supervision • CFO Function • Other accounting

services • Payroll & HR

Administration.

Alina Solomon is the Partner in charge of Outsourcing Department of Moore Stephens KSC which owns the offices in Romania and the R. Moldova.

She has an experience of over 10 years in accounting, tax, payroll and reporting.

Vlad Tomosoiu Managing Partner, Moore Stephens Tomosoiu

At Moore Stephens Tomosoiu, the corresponding law firm of Moore Stephens KSC, we strive to deliver performance and highly competitive legal services to all our clients. Our main achievement is to provide legal assistance of the highest standards through innovative legal solutions. Vlad is a member of the Bucharest Bar and was involved in various areas related to corporate and commercial law.

Key services • Corporate law

• M&A transactions

• Real estate

• Banking & finance

• Capital market

• Corporate restructuring

• Private equity & venture capital

• Formation and restructuring of companies

• Corporate governance

• Drafting of contracts

Andreas Vovos MBA Director Advisory Department

Andreas has joined Moore Stephens KSC as Director of the Business Advisory Services Practice for Romania and Republic of Moldova, after a successful carrier in professional services within the “Big4” firms and international financial Institutions, bringing over 17 years of experience to the firm and will act as a key expert. He has experience in major restructuring and large scale performance improvement projects for leading and blue chip organizations in South Eastern Europe and the Middle East in a number of sectors.

Key services • Strategy creation • Performance

improvement • Technology • Finance

Optimisation • Transformation &

Change Management

MOVING FORWARD REQUIRES EXPERTISE

This document has been prepared for general guidance on matters of interest only, and does not constitute professional advice. Do not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this document. Τo the extent permitted by law, Moore Stephens KSC, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of anyone acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. ©2015-2016 Moore Stephens. All rights reserved. In this document, “Moore Stephens” refers to Moore Stephens KSC, a group of companies registered in Romania, which are independent members Moore Stephens International, a worldwide network of accounting firms. Ed.1, rev. 01 may 2016

Moore Stephens KSC Bucharest Office 014472, 175 Calea Floreasca, Floreasca Tower building, 13th Floor, District 1 Bucharest – Romania T: +4 0374 490 074 F:+4 0374 094 191 E: info@moorestephens-ksc.ro www.moorestephens-ksc.ro Timisoara Office Vasile Alecsandri, 2nd Floor, ap. 8 Timisoara – Romania T +40 374 490 074 F: +40 374 094 191 E: info@moorestephenes-ksc.ro www.moorestephens-ksc.ro Chisinau Office MD 2004, 202 Stefan cel Mare Bvd., Kentford building, 9th floor Chisinau – Moldova T +373 22 022 555 F: +373 22 022 556 E: info@moorestephenes-ksc.md www.moorestephens-ksc.ro