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30 November 2021

Moldova: Control of investments legislation entered into force

Through its 11 November 2021 law ("Law 174/2021"), the Moldovan Parliament approved the rules on control of investments into sectors important for the security of the state. Law 174/2021 applies equally to local and foreign investors and entered into force on 19 November 2021.

What are the relevant sectors?

These are as follows: (a) activity in the hydrometeorological and geophysical field; (b) radioactive waste management; (c) operation of energy (including electric energy, natural gas and petroleum products), transport, water and sewerage, aerospace, defence, election infrastructure; (d) exploitation (exploatarea) of artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, quantum and nuclear technologies, nanotechnologies and biotechnologies; (e) production of protection for cryptographic information; (f) production and purchase for the purpose of resale of state secret protection means; (g) production of explosive materials for industrial use and distribution activities; (h) aviation security activities; (i) design, production, maintenance and operation of aircrafts and of components; (j) design, production, maintenance and operation of systems and components used in air traffic management and provision of air traffic services; (k) design, maintenance and operation of air/heliports, including of safety equipment; (l) management of airports, bus-ports, rail traffic, inland waterways, ports and quays for waterway traffic; (m) television broadcasts / audio-visual services; (n) supply of networks and/or fixed or mobile electronic communication services; (o) supply of services in national ports; (p) services of geologic study of subsoil's resources and/or exploration of natural resources; (q) production, export, re-export, import of weapons, ammunition and military equipment, products, technologies and services that can be used in manufacturing and use of nuclear, chemical, biological and missile weapons; and (r) administration of state's public registers, information security.

Additionally, the Government is empowered to determine which assets are important for the security of the state and which will fall under the scope of Law 174/2021.

Which transactions fall under the scope?

Investment operations (transactions) (by any person(s)) which, by any means, directly or indirectly, individually or jointly, including as ultimate beneficial owner(s), in relation to any relevant sector, directed/intended: (a) holding control (control criteria being determined pursuant to the Civil Code), purchase/obtaining or increase of qualified share participation in a company, including in a company already with investment in a sector; (b) entering into certain types of concession agreements, as further regulated; (c) entering into a public-private partnership, as further regulated; (d) entering into investment agreements with the Moldovan Government, as further regulated; (e) entering into asset sale purchase transitions that are part of or belong to companies with investments in a relevant sector and with a value equal to at least 25% of the asset value of the respective companies (pursuant to their last financial statement); and/or (f) entering into, on behalf of and/or for the account of a company with investments in a relevant sector, into one or several linked financial transactions (loans/credits or assistance) with persons from other states and which are directly or indirectly controlled by governments of other states.

Where, when and how to apply

Prior to investing in a relevant sector, any potential investor is obliged to obtain approval from the Council for Promotion of Investment Projects of National Importance (the "Council"), composed of the prime minister, the country's key ministers and heads of various public authorities.

The investor's application must be accompanied, among others, by (i) information on the share capital of the investor and its ultimate beneficial owner(s), (ii) the value of the investment, (iii) information on countries of operation and main business partners, (iv) financial statements for the last three years, (v) information on source of funds, (vi) the date of planned investment, (vii) criminal record certificates in relation to shareholders / ultimate beneficial owner(s), and (viii) a statement on the intention to invest individually or in concert. All documents will likely need to be filed in due form, i.e. apostilled, translated and the like. Law 174/2021 empowers the Government to set additional mandatory documents.

Applications are reviewed within 45 days of receipt, while in the first 30 days the Council can solicit supplementary information from the applicant. So far, there is no indication in Law 174/2021 that an application can be filed electronically.

The Council can either admit or reject an application, or issue a conditional approval, while setting the deadline to fulfil the condition (which should not exceed 90 days after receipt of conditional approval).

What are the risks and sanctions involved?

Entering into or carrying out transactions without the prior approval of the Council may lead to the following legal consequences (depending on the precise transaction being implemented):

  • Council's decision to suspend the investor's voting right, right to summon a general meeting of shareholders, right to include questions on the agenda of the general meeting of shareholders, propose members to management bodies, receive dividends / net income, etc.; and/or
  • Council's decision to suspend ongoing transactions.

Upon receiving the Council's decision(s), the investor can opt to: (a) apply for prior approval (within a term, as regulated) with the Council, or (b) sell its participation held or terminate the ongoing transaction(s). If a third party takes control over the investment in a relevant sector following the initial investor's option to sell as mentioned herein / change of control mechanisms but without prior approval from the Council, the Government will have at least six months after learning about the change in control to demand the termination of the transaction and the recovery of damages (regardless of substantive law applicable to the transfer).

Failure by the investor to exercise the above-mentioned options in a timely manner will lead to (a) the duty of the local management to annul the investor's shares in that company and issuance of new shares of the same class/value (with consecutive communication of such measures implemented to the Council), and/or (b) a decision from the Council to the investor to terminate the ongoing transaction(s) within 30 days of receipt and recovery of damages by the investor.

Decisions of the Council are subject to recourse with the administrative court, but until a final and irrevocable judgment is made, their effect cannot be suspended by the court or a court procedural ruling.


Law 174/2021 appears to be an attempt to transpose the EU's FDI mechanics in Moldova. Still, the scope of the law also covers investors from Moldova. As of today, investments in these sectors from Member States like Malta are impossible. The text leaves margins for interpretations and requires more detail in certain parts to reduce the "stress" it may already have caused.

authors: Vladimir Iurkovski and Viorica Cornescu


Office Managing Partner