How to Register a Business in the US from Moldova

Step 1: Benefits of starting your US business from Moldova

Starting a US business from Moldova presents a unique opportunity to tap into one of the world’s largest and most dynamic markets, while enjoying the strategic advantages that Moldova offers. For entrepreneurs based in Moldova, launching a business in the US can mean access to a diverse consumer base, robust infrastructure, and significant venture capital resources. Moreover, the ease of registering a company, along with the supportive legal frameworks in the US, makes it an attractive destination for Moldovan entrepreneurs looking to scale and expand globally.

In addition, the cost of living and operating expenses in Moldova are relatively low compared to many Western countries, providing a cost-efficient base for business operations. This affordability allows entrepreneurs to allocate more resources towards innovation, marketing, and growth in the competitive US market. Furthermore, Moldova's growing tech sector and increasing internet penetration provide the necessary tools and workforce skilled in IT and other crucial industries for running a successful business. Ultimately, the combination of Moldova’s cost advantages and the US market opportunities creates a compelling case for starting a US business from Moldova.

Step 2: How to start your US business from Moldova

Starting a US business from Moldova involves several key steps and adherence to specific regulations to ensure compliance with US laws. First, you need to choose the type of business entity that best suits your needs, such as a Limited Liability Company (LLC), Corporation, or Partnership. Each type has its own advantages and regulatory requirements. Once you have decided on the structure, you need to select a state to register your business in, as different states offer various benefits and regulations. Popular choices for foreign entrepreneurs include Delaware and Nevada due to their favorable business climates and streamlined registration processes.

Next, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number functions similarly to a social security number for your business and is crucial for tax purposes, opening a US bank account, and hiring employees. Additionally, you should ensure compliance with US tax laws, which may require you to hire a professional accountant familiar with international business regulations. Finally, opening a US-based bank account and securing any necessary licenses or permits related to your industry is essential for smooth operation. By following these steps, you can effectively establish and run a US business from Moldova.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Moldova

Understanding Compliance Requirements for Running a US Business in Moldova

Expanding your business to Moldova offers a gateway to the markets of Eastern Europe. However, understanding the compliance requirements is crucial to ensuring smooth operations. Here are some key considerations for US businesses planning to operate in Moldova:

Legal Structure and Company Registration

Choosing the appropriate legal structure is a critical first step. Different structures include:

• Limited Liability Company (LLC): The most popular option for small and medium-sized businesses due to its flexibility and limited liability.
• Joint Stock Company (JSC): Suitable for larger businesses requiring significant capital investment
• Branch Office: An extension of the parent company without a separate legal identity.

Regulatory Compliance

Ensuring adherence to Moldovan laws and regulations is essential. Key areas include:

• Tax Compliance: Understanding corporate income tax, value-added tax (VAT), and personal income tax obligations is crucial. Moldova has a standard corporate tax rate of 12% and a VAT rate of 20%.
• Employment Laws: Familiarize yourself with local labor laws, including employment contracts, work hours, and employee benefits.
• Intellectual Property Rights: Protect your intellectual property by registering patents, trademarks, and copyrights according to Moldovan laws.

Licenses and Permits

Depending on your industry, you may need specific licenses or permits to operate legally in Moldova. Common areas requiring permits include:

• Construction
• Healthcare
• Telecommunications
• Financial services

Banking and Financial Considerations

Establishing a local bank account is often necessary for operational efficiency. Consider the following:

• Currency exchange regulations, as the local currency is the Moldovan Leu (MDL).
• International transaction capabilities and fees.
• Compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

Cultural and Language Differences

Understanding local customs and language can facilitate smoother interactions and negotiations. Key points include:

• The official language is Romanian, but Russian is also widely spoken.
• Building relationships and understanding business etiquette can go a long way in negotiations and partnerships.

By thoroughly understanding these compliance requirements, US businesses can navigate the Moldovan market effectively and position themselves for success.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Moldova

Understanding Tax Obligations for Running a US Business in Moldova

Operating a US business in Moldova can present unique tax challenges that require careful navigation. This guide will help you understand the key considerations when addressing your tax obligations in Moldova.

1. Double Taxation Agreements

Moldova has signed double taxation agreements (DTAs) with several countries, including the United States. These agreements aim to prevent businesses from being taxed twice on the same income, making it essential to review the US-Moldova DTA to understand applicable tax credits and exemptions.

2. Corporate Income Tax

In Moldova, corporate income tax (CIT) is levied at a flat rate of 12%. US businesses operating in Moldova will need to register locally and ensure compliance with Moldovan CIT requirements. Keep in mind, profits from overseas activities may still be subject to US tax regulations.

3. Value Added Tax (VAT)

VAT in Moldova is applied at a standard rate of 20%. Businesses must register for VAT if their taxable supplies exceed certain thresholds. It’s crucial for US businesses to understand when and how to charge VAT on goods and services provided within Moldova.

4. Personal Income Tax for Employees

US companies employing local staff in Moldova must adhere to Moldovan personal income tax (PIT) regulations. The PIT rates range from 7% to 18% based on income brackets. Employers are responsible for withholding and remitting these taxes on behalf of their employees.

5. Social Security Contributions

Employers in Moldova are required to make social security contributions for their employees, which include health insurance and pension funds. These contributions are typically calculated as a percentage of the employee's salary and must be paid promptly to the Moldovan authorities.

6. Transfer Pricing Rules

Moldova has implemented transfer pricing rules to ensure that transactions between related entities are conducted at arm’s length prices. US businesses with subsidiaries or affiliates in Moldova need to prepare comprehensive transfer pricing documentation to comply with local regulations.

7. Repatriation of Profits

Profits earned by a US business in Moldova can be repatriated back to the United States. However, it’s important to be aware of any withholding taxes that may apply and to structure transactions efficiently to minimize tax leakage.

8. Reporting and Compliance

US businesses must comply with Moldovan tax filing and reporting requirements. This includes submitting annual tax returns and financial statements. Ensuring accurate and timely filings can prevent penalties and ensure smooth operations.

By understanding these key tax considerations, US businesses can better navigate the complexities of operating in Moldova and ensure compliance with both local and international tax regulations.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country