Headquarter in Moldova?! Law Hacks regarding Startups in Evolving

Legal Environment

REGIONAL DIGITAL COMMUNICATION SUMMIT

6 February 2016

Andrei Caciurenco, LLM, Partner

To start with…

The end of law is not to abolish or restrain,

but to preserve and enlarge freedom. For in

all the states of created beings capable of law, where there is no law, there is no freedom.

John Locke

Our approach:

• Why to do IT business in Moldova?

• Top 5 questions of our IT clients

Pro factors:

• Towards EU and EU laws

• Good laws in Moldova

• Sound state policy

EU Association:

• EU Directives transposed

• Facilitating access to electronic communications market

• Favouring fair competition and

investments in IT

• Developing public services on-line

Boring list of laws:

– Law on electronic communications (2007)

– Law on digital signature and electronic document (2014)

– Law on e-commerce (2004)

– Law on payment services and electronic money (2012)

– Law on prevention and fighting information crimes (2009)

Government policy:

• Favouring doing business in general

• Favouring IT sector specifically

General effort:

• Starting a business

• Paying taxes

• Labor market

• State controls

• Access to finance

• Restructuring / liquidation / insolvency

• Dispute resolution

Specific effort:

• National Strategy «Digital Moldova 2020»

• IT Competitiveness Increase Strategy (2015)

• Institutional framework

• Industrial Parks in IT

FAQ by IT clients:

• How to set up a company?

• What are the specific issues the IT employer should be aware of?

• Why should IT companies care of data protection rules?

• Are there any tax incentives for IT business?

• Copyright… Any problems with that?

Setting up a company:

• Incorporation

• Post-registration procedures

• Licenses

• Authorizations

Employer, beware:

• Employment regulations do exist (comply!)

• Fixed terms employment contracts (two sides of a stick)

• Confidentiality clause (2 yrs now)

• Resigning – less time to think back (7 days)

• Overtime paid

• Commercial secret

Must know about data protection:

• If you process Personal data you have to register as

controller of personal data at the State Agency of Personal Data Protection

• Know what data your organization is collecting and understand that certain privacy obligations may apply

• Be transparent about your data collection, use, and sharing activities and be accountable

• Train your employees on privacy and security issues • Assess your vendors and make sure your contracts

include data protection provisions • Appoint a privacy officer

Tax incentives:

• Currently, IT companies engaged in activities related to analysis, design and programming of informational systems as well as developing of software, shall benefit of the following tax incentives: – The monthly 23% SIC due by the employer for each employee is

limited to MDL 2,323 – No PIT is applied to the employee monthly taxable income that

exceeds MDL 10,100, i.e. only that part of monthly taxable income that does not exceed MDL 10,100 is taxed with PIT at the general rates of 7% (up to annual taxable income of MDL 29,640) and 18% (exceeding MDL 29,640);

• SIC of 6% and 8% MIC due by the employee - general rules • Corporate income tax – 12%

Intellectual property:

• Moral rights vest in the author (employee)

• Author cannot stop the employee from making use of IP

• Authors name indicated where it is effectively possible

• Authors remuneration – set in contract

• Economic rights vest in the employer, but do it right

“Dura lex, sed lex"

Tough Romans’ saying

Thank you for being patient

IPTEH Building 65 Stefan cel Mare Blvd., of. 806 Chisinau, Republic of Moldova

Phone: +373 22 27 93 23 Fax: +373 22 27 93 37

E-mail: andrei.caciurenco@aci.md