Moldova is a landlocked country with a small population of around 3 million. At this time, Moldova isn’t part of the European Union, but you can still become a freelancer in Moldova with a minimal amount of effort. The country of Moldova maintains political relations with the EU, and this is enacted through a framework called the mobility partnership.
Moldova’s economy consists of agricultural production and energy sources. The mobility partnership agreement regulates issues related to borders, migration and mobility across the boundaries of all member states of the European Union. Freelancers might wish to review this agreement to see if any business activities might be affected. Freelancing is not a highly regulated activity in this country.
Freelancing Market in Moldova
The freelancing market in Moldova is flexible, and the prospects for your business depend greatly on your industry. You will also need to understand the market in Moldova to gain the trust of local customers. Taxation for freelancers in Moldova and learning how to invoice as a freelancer in Moldova are two of the biggest topics for new freelancers.
This country has been a member of the WTO since 2001, and it participates in many free trade agreements. This climate can make it easier for freelancers to get started in the small country of Moldova where labor shortages and modest GDP growth characterize its overall conditions. This is a country that is influenced by Romanian culture. Freelancers can introduce needed economic activities while earning income for the individual. Once you establish a network of clients, it will be easier to generate new business.
How to Register to Freelance in Moldova
Freelancers also have to consider the issue of registering to work in Moldova. Once your freelance business is registered, you must learn how to invoice clients to earn income as a freelancer in Moldova in compliance with VAT. This helpful guide will enable you to make sound decisions while you strive to become a freelancer in Moldova.
Registration steps to become a freelancer in Moldova include submitting your company name and any necessary documents to the Public Services Agency. You can also make inquiries to find out if your preferred company name is already taken. This is also the location where you can register for VAT, if applicable. Once you get registered, you can immediately turn your attention to other important aspects of freelance work in Moldova.
Taxation for Freelancers in Moldova
Freelancers need to know what kinds of taxes must be paid on freelancing income in Moldova. The State Tax Service of Moldova, or STS, officially announced that it doesn’t define freelancers as a separate category for tax purposes. This effectively means that the method used to tax freelancers in Moldova is the same as the methods used for professional service providers. Moldova has one of the lowest tax rates of all European countries, which can make it attractive to freelancers.
- Freelancers are classified under the category of professional service for tax purposes. The standard rate of 12 percent applies to personal income, professional service providers and freelancers.
- The rate of social taxes on gross salaries is 27%.
- If the taxable income earned is under 360,000 MDL, a personal allowance of 24,000 MDL applies.
VAT Obligations for Freelancers in Moldova
Moldova isn’t a part of the European Union at this time, but it still observes some policies within the VAT system while membership is pending. For example, there is a destination principle policy for VAT, and Moldova recognizes this policy. The destination principle means that the VAT is paid to the country where consumption takes place. In addition, Moldova also adopts the policy of reverse charges. This means that the supplier does not pay VAT; instead, this is paid by the consumer. Check out our detailed guide on VAT rates and obligations for freelancers in Moldova.
How to Conduct your Freelance Business in Moldova
Conducting business in Moldova as a freelancer can be challenging on a number of levels. In addition to the vast differences in skills, freelancers in Moldova are also practicing within a wide range of industries. Each industry tends to have a standard rate that customers can expect to pay for a given service. However, higher rates can be charged when your services are in high demand or if you offer clients enough extras that they will be willing to pay. If you have more experience, you can also choose to set your price above the industry standard rate for your field.
There is no set service fee to offer, but here are some helpful guidelines you can use when deciding what to charge people as a freelancer in Moldova:
- Freelancers are allowed to charge any fee that the client is willing to pay, so the best option for getting a better rate is to brush up on your negotiating skills.
- Evaluate your skills: Years of experience, certifications and other industry-specific qualifications can be used to set your price.
- Negotiation strategy: Every freelancer will have to engage in a negotiation with a new client to determine the rate to be charged. Develop a negotiation strategy that establishes your experience in the related field and creates trust with your client.
- Expense calculation: Avoid underselling your services; keep good records of all your expenses, and determine a minimum rate for accepting a new client based on your operating costs. Always begin your negotiations above this number to create a financial buffer.
- According to Payoneer, the average fee for freelance work in general is just above 20 EUR.
- In high-skill industries that require a professional license, the fee is more likely to be around 50 EUR.
Invoice as a Freelancer in Moldova
Freelancers will eventually need to learn how to invoice clients in Moldova. Invoicing is one of the most important aspects of freelancing because this is how your revenues get recorded. However, it’s also important to consider the marketing aspect of invoicing. When you begin to invoice as a freelancer in Moldova, you may need to customize your invoices to reflect your brand's logo. This is one of the major ways that your brand will be recognized by your clients when they pay your invoice. With Xolo Leap, you are able to issue branded invoices, store them for future records as well as run other aspects of your business with compliance.
Conclusion
Moldova sits in an ideal location in the eastern part of Europe, and the country’s move to join the EU is pending approval. There are minimal steps to take to register your business and get started invoicing clients. There has never been a better time to become a freelancer in Moldova. Taxation for freelancers in Moldova is one of the lowest of all European countries. All of these factors should be reviewed carefully when you decide to open your freelance business in Moldova.
Moldova can be a great option for freelancers interested in conducting business in this small country. The business environment is friendly to foreign freelancers and new businesses. Over time, you may decide to expand your operations. Xolo Leap provides options for freelancers who wish to manage a freelance business at a remote location online. Set up an e-residency without leaving the comfort of your current location with us today!
