Home to about 2.3 million people, Moldova is a landlocked country in Eastern Europe that is bordered by Romania and Ukraine. The nation became an independent state in 1991, after the dissolution of the Soviet Union. Moldova is known for its vineyards, traditional architecture, agricultural progress, and tourism potential. In 2022, Moldova applied to become a member of the European Union. After two years of candidacy status, accession negotiations officially opened in June 2024 and continue to be underway.

The ongoing European Union accession project has helped Moldova develop in several strategic areas, including rule by law, economic growth, public education, safe and sustainable infrastructure, and environmental sustainability. Although Moldova’s economy is one of the poorest in Europe, the nation’s commitment to progress and betterment as well as its advantageous geographic position make it a top contender for hiring internationally.

Why Expand Your Business to Moldova

Strategic Advantages of the Moldovan Market

Moldova’s strategic location at the crossroads of Europe and Asia is just one of the many factors that make it a strong place to do business. Free trade agreements with the EU reduce the cost of doing business, and you will also find favorable tax incentives in certain business areas and industrial parks, which are meant to encourage economic development and foreign investment. Moldova also offers competitive labor costs, a multilingual workforce, and pro-business policies.

The current GDP of Moldova is about $19.46 billion, in American dollars, and this has been increasing year over year. Moldova’s currency is called the Moldovan Leu (MDL), and it is equivalent to 0.061 US dollars. The minimum wage in Moldova is 6,300 MDL per month, which equates to about 370 USD. Although Moldova faced many administrative and privatization challenges after gainings its independence from the Soviet Union, it is now taking positive steps in infrastructure and development, making it a prime place to get in on the ground floor.

For more detailed information on expanding into this region, you can review our guide to working with an Employer of Record in Moldova.

Importance of Being Aware of Moldovan Labor Laws

The Labour Code of the Republic of Moldova was passed in 2003 and essentially strives to define the relationship between employees and employers, defining and delineating the rights and responsibilities of each party. It covers topics like non-discrimination policies, the abolition of forced labor, collective bargaining rights, negotiation practices, the ins and outs of employment contracts, termination and severance, employee data collection, minimum wage, working time, leave, and much more. This is a comprehensive piece of legislation that is crucial to review before you begin any hiring process in Moldova.

Being aware of these legal requirements is essential for anyone hoping to avoid potential legal problems and build a positive reputation as an employer in Moldova. Vetting your current employment practices against these new regulations is a good place to start.

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Step 1: Define Your Hiring Needs

The first step to hiring in a foreign country, such as Moldova, is outlining your organization’s long-term goals. For instance, are you hoping to establish a small team tasked with managing local operations, or are you looking to initiate a larger-scale hiring process? When you have a good sense of the bigger picture, then you can zoom in on a more specific level to think about the roles you need to fill in order to accomplish said goals.

As you clearly define the positions you are hiring for, ask yourself a few questions: What skills do these roles require? How many employees will you need? What specific qualifications and experience are relevant or necessary for each distinct position? Understanding these criteria in advance will help with your efforts to recruit employees in Moldova. You’ll be better equipped to find the right candidates and ensure that the roles you are hiring for correspond with your organization’s overall goals in this Eastern European nation.

Step 2: Familiarize Yourself with Compliance Requirements

An effective international hiring process begins with understanding the labor laws, tax obligations, and mandatory benefits offered in Moldova. The Labour Code of the Republic of Moldova, circa 2003, will be your go-to document and addresses virtually everything you need to know about employer-employee relationships in Moldova. Reading this document in its entirety is an important step in understanding the ins and outs of Moldovan labor laws – but make sure to devote some time and energy, as it is 127 pages long. In this article, we will cover some of the most important sections.

Moldova also has a robust social security system. What started in the 1950s as a pension system has grown into a strong social insurance network that provides old-age benefits, disability payouts, social assistance, and more. Contributors to the system include employers, employees, and the Moldovan government.

Understanding Moldova’s tax system is another important part of hiring employees here. For Moldovan citizens, income from employment is taxed at a flat rate of 12%. Moldova also levies a number of other personal income taxes that are higher, such as taxes on capital gains, gambling winnings, royalties, and more. Corporate income tax is also assessed at a flat rate of 12%, although agricultural entities are taxed at just 7%.

Step 3: Choose Your Hiring Method

The next step in hiring employees in Moldova involves deciding on the best hiring method for your needs. Will you establish a legal entity in Moldova, use an Employer of Record(EOR), or hire independent contractors? Each option comes with pros and cons.

Establishing a Legal Entity

Establishing a legal entity in Moldova often comes with the most flexibility and independence. It can be a good option for those who intend on building a large or long-term headquarters in Moldova.

On the other side, establishing a legal entity in Moldova is typically a lengthy, time-consuming, and labor-intensive process. It can also be expensive. Typically, you will set up a limited liability company, also known as an SRL. You will need to register your company’s name with the Public Services Agency, prepare a series of documents including articles of association, register for taxes and social insurance programs, and open a local corporate bank account to manage finances and payroll. Although registration is possible within 24 hours of document submission, it can often take weeks or even months to put together the required documentation and set up all relevant accounts. We also estimate that it will cost over $10,000 during the first year to set up a legal entity in Moldova, plus additional costs of more than $1,500 per year. There can also be legal complexities that incur further legal fees and risk noncompliance penalties, which can be another major financial blow.

Using an Employer of Record (EOR)

Using an employer of record, or EOR, in Moldova can significantly simplify the international hiring process. Instead of stressing about local compliance, you will hand off the administrative burden of hiring to the EOR, who will serve as the legal employer for your Moldovan employees. An EOR in Moldova will already be familiar with the country’s labor laws and will ensure that you are complying with these rules. The EOR handles HR functions, helping you save time, money, and effort. They also tackle burdens like payroll, taxes, benefits administration, contracts, dismissals and terminations, compliance, and even recruitment.

There are limited cons when it comes to using an EOR in Solomon Islands. One potential drawback is a less direct relationship with employees during the hiring process. However, when you are hiring in a foreign country, this can end up being a benefit that saves you time, money, and headaches throughout the process.

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Hiring Independent Contractors

Those who do not have the desire or resources to set up a company or use an EOR in Moldova can hire independent contractors, also known as freelancers. Independent contractors typically elicit a reduced administrative burden, as employers do not need to provide social insurance contributions for them. Freelance employees typically work remotely on flexible schedules, and they may also work for other employers. 

Because freelance employees in Moldova and around the world often work for multiple companies and manage their own schedules, you will likely be able to exert less control over what they do. They may also charge higher hourly fees than permanent employees would. Proper classification is also important: If you are found to be misclassifying employees as independent contractors to avoid paying benefits, you may face major financial penalties.  

Step 4: Develop a Recruitment Strategy

Now that you know which method you are using to hire and what positions you are hiring for, it is time to ask yourself: How am I going to find the right talent for this job? To begin with, you need to write an effective job description that is aligned with local market expectations. While many Moldovans are multilingual, Romanian is the country’s official language. Russian is also widely spoken, but Romanian is the key language to use for business purposes. You will also want to make sure your job description aligns with the country’s anti-discrimination codes.

Now, where are you going to post your job description? Some international job boards, such as LinkedIn and Glassdoor, are used in Moldova. However, local options are also popular, including Rabota.md, Delucru.md, E-Jobs.md, and AllJobs.md.

Want to learn more about effective recruitment methods? Check out our research on strategies for successful hiring, which provides tips for drawing in top-tier candidates.

Our best tip? Work with a Moldovan recruitment agency or partner with an EOR experienced in Moldova. These organizations have the local expertise you need to find candidates who are perfect for your unique roles. An experienced EOR can also help you navigate expectations on standard salaries, employment trends, and benefits that will attract potential employees in Moldova.

Step 5: Conduct Interviews and Assessments

Once you have identified some potential candidates for your position, you’ll want to conduct interviews that adhere to cultural norms. Moldovan culture places an emphasis on family ties, hierarchical relationships, community bonds, and warm hospitality. In business settings, it is common to share a meal, embrace firm handshakes, and use formal titles. A great way to build rapport is showing interest in Moldovan holidays and remembering family details of your Moldovan business associates.

You will want to make sure that you structure interviews appropriately, keeping cultural norms in mind, and assess candidates fairly. Additionally, including written or practical assessments can help you better evaluate a candidate’s readiness to succeed in their new position.

Step 6: Know the Legal Limitations of Background Checks

Conducting thorough background checks can be an important part of hiring employees, no matter which country you are looking at. A background check does not always have to be related to criminal activity. For instance, you could confirm a job candidate’s employment history, educational achievements, and skills/qualifications through reviewing transcripts, calling references, and more.

In Moldova, background checks are broadly legal and do not require candidate consent. However, it is important to comply with the country’s data protection laws regarding how you store and use information gained through background checks.

Step 7: Draft Employment Contracts

When drafting an employment contract in Moldova, you can find all of the regulatory information you need in Title III, Chapter I of the Labour Code of the Republic of Moldova. Within this section, Article 49 lists the required components of an individual labor contract. Here is what you will need to include when drafting an employment contract in Moldova:
  • Names of both parties and identification/contact information
  • Nature of the job and duties to be performed, both job responsibilities and risks
  • Remuneration, or the fee/salary to be paid (must be provided in local currency)
  • Rights and obligations of both the employer and employee
  • Place of work or any relevant remote work options
  • Date of commencement and contract duration, including any relevant trial period
  • Schedule of working hours, including leave entitlements
  • Other terms and conditions such as social insurance, medical insurance, severance pay, and any additional perks or benefits offered

Step 8: Register with Authorities and Set Up Payroll

Before any of your employees begin work, it’s important to complete a few registration steps with the Moldovan authorities. Here are the items you need to check off your list:

  • Reserve your company name with Moldova’s Public Services Agency, if you are registering a legal entity in the country
  • Submit documents including the Articles of Association, if you are registering a legal entity in Moldova
  • Register with the state, also through the Public Services Agency
  • Submit a company application to receive a work permit through the National Agency for Employment
  • Consider visa requirements if you are hiring foreign employees who are not residents of Moldova at the time of candidacy
  • Register with tax and social insurance departments in order to withhold and remit tax payments for your employees in Moldova as well as social security contributions
  • Set up payroll to automatically withhold tax and social security payments, and ensure your HR department is trained on how to remit these payments to the proper authorities
  • Build a robust onboarding process to ensure your employees are set up for success (more on this in Step 9)

Step 9: Onboard Your New Employees

Onboarding new employees is a crucial step in ensuring long-term success. An intentional and organized onboarding process allows you to kick off each new hire’s workplace experience on the right foot, integrating them into company culture and building loyalty and confidence.

Devlin Peck reports that 69% of employees who have a positive onboarding experience are likely to remain at their jobs for more than 3 years. Plus, 89% of employees said that a well-designed onboarding process made them more engaged at work. Here are some suggestions to streamline your onboarding routine:

  • Provide the necessary training and resources
  • Introduce the new team member to peers and key stakeholders
  • Explain company policies, procedures, and expectations
  • Immerse the new hire in the company culture and discuss company values
  • Set clear objectives and goals for the new hire’s role

Key Employment Laws and Regulations

Labour Code of the Republic of Moldova

The Labour Code of the Republic of Moldova was passed in March, 2003. Over two decades later, this comprehensive piece of legislation continues to govern rights and responsibilities for both employees and employers in Moldova. Here are some key sections in the law:

  • Title II, Chapter IV and V: Collective bargaining
  • Title III, Chapter III and IV: Termination and suspension of labor contract
  • Title III, Chapter V: Employee data protection
  • Title IV: Working time, rest time, and leave
  • Title V: Minimum wage, payment regulations, and special pay circumstances
  • Title VIII, Chapter III: Apprenticeship contracts
  • Title X: Special regulations for certain sectors or employment categories

Social Security Regulations

Moldova’s social security system was initiated in the 1950s as a limited pension system. In the late 1990s and early 2000s, however, after the country gained independence from the USSR, the social security program grew, adding a few key laws:

  • 1998: State pensions are introduced
  • 1999: Social insurance and social assistance programs are added
  • 2000: Social insurance programs expand further
  • 2001: New pension calculations are introduced
  • 2008: Civil servants become covered under the social security laws

The current social assistance system covers all residents of Moldova. The social insurance system covers employed persons in Moldova, including agricultural workers, some civil servants, and certain self-employed people.

Contributions to Moldova’s social security system are split between employers, employees, and the Moldovan government. Here is the breakdown:

ContributorContribution Rate
Employees6% of gross monthly earnings
Employers24% of gross monthly payroll (18% for the agricultural sector)
Government6% of gross monthly earnings for agricultural workers

Types of Employment Contracts

Understanding the different types of employment contracts in Moldova is important when hiring in the country.

Indefinite Employment Contracts

Also called “without-limit-of-time” contracts, indefinite-term contracts are the country’s most common option. These are the standard for open-ended contracts with no fixed end date, which is the norm for full-time hires in professional roles. Indefinite-term contracts can be either full-time (at least 8 hours per day and 40 hours per week) or part-time (less than 8 hours per day or 40 hours per week).

Fixed-Term Employment Contracts

This type of contract has a fixed start and end date. It cannot exceed five years in length, and it cannot be renewed after that period. Like indefinite-term contracts, fixed-term contracts may be either full-time or part time.

Traineeship, Internship, and Apprenticeship Contracts

In Moldova, there are a few additional types of contracts with special structures for those learning a trade or building skills in a certain sector.

A traineeship contract typically takes place at the beginning of a longer-term contract, allowing for a trial period before work officially begins. Internships and apprenticeships allow workers, especially younger individuals, to learn the ins and outs of a certain trade or vertical, typically with reduced hours and lower pay.

Working Hours and Overtime

Standard Working Hours

The standard workweek in Moldova is 40 hours per week, normally split into five 8-hour workdays. Employees working a shift longer than six hours are given a 30-minute meal break.

Overtime Regulations

In order to ask your employees to work overtime, you must receive their verbal or written consent. Overtime is limited to a maximum of 120 hours per year. The first two hours of overtime each day is compensated at 150% of the normal rate at which the employee is paid. After two hours in a day, overtime is compensated at 200% of the employee’s normal rate. If an employee is asked to work on public holidays or weekends, they will receive per-hour overtime pay at 200% of their normal rate.

Leave Entitlements

Moldova offers employees generous leave entitlements, which we will outline below. 

Annual Leave

After completing one year of service with a company, an employee is entitled to 28 days of paid leave each calendar year. This leave can be split into two parts, but 14 days must be used at a time. The employer must pay for this time at least 3 days before the leave commences.

Public Holidays

In addition to annual paid leave, the country honors a number of public holidays:

  • New Year’s Day (1 January)
  • Orthodox Christmas (7-8 January) 
  • International Women’s Day (8 March)
  • Orthodox Easter (Date varies, typically April or May)
  • Labour Day (1 May)
  • Victory and Commemoration Day (9 May)
  • Ascension Day (Date varies)
  • Independence Day (27 August)
  • Day of the Declaration of the Republic (25 October)
  • National Wine Day (First weekend in October)
  • Christmas Day (25 December)

Sick Leave

There is no limit on how many sick days an employee can take in Moldova, but they must present a medical certificate in order to be paid and excused for sick leave.

The first five days of sick leave are paid at 75% of the employee’s normal salary and are paid by the employer. Subsequent sick days are paid at 60% of the employee’s normal salary and are paid by the state’s social insurance fund.

Maternity and Parental Leave

Social insurance pays for 126 days of fully paid maternity leave, which is split up into 63 days before the birth and 63 days after the birth. Fathers are entitled to 15 days of fully paid paternity leave, which must be taken within 56 days after the child is born.

Moldova also offers partially paid childcare leave that either parent can take during the first three years of the child’s life.

Termination and Severance

Notice Periods

An employment contract in Moldova can end for a number of different reasons, including resignation, dismissal, or mutual agreement. If a person is dismissed, it must be for a valid reason, such as redundancy or misconduct. The standard notice period for termination is one month, and must be provided in written form.

Severance Pay

Employees who are dismissed without fault are eligible for severance pay in Moldova. This pay is equivalent to one month’s salary per year of service. For example, someone who has been working for a company for 10 years will receive 10 months of pay as severance.

Mandatory Contributions

Social Security Contributions

Contributions to Moldova’s social security system are split between employees, employers, and the government. Employees contribute 6% of their monthly earnings to social security, plus another 9% to mandatory health insurance. Employers contribute 24% of gross monthly payroll, which is reduced to 18% for the agricultural sector. The government contributes 6% for employees in the agricultural sector only, bolstering agricultural employers’ contributions to bring them up to 24% as well.

Bonus Pay

Labor laws in Moldova do not require employers to pay out a 13th month bonus or any other bonus structures. As such, bonus payments are typically outlined in employment contracts or agreed upon at the company level. They can even be used as an optional benefit meant to attract the best candidates when your company is looking to hire top talent.

Optional Benefits

While Moldova has a generous suite of mandatory benefits offered to employees, adding optional benefits into the mix can help employers attract and retain top talent. Here are some of the most common offerings:

  • Performance bonuses
  • Additional healthcare coverage
  • Extra maternity or paternity leave
  • Expense coverage for housing or transportation
  • Improved sick pay or additional days of sick leave
  • Holiday bonuses
  • Life insurance
  • Professional development programs
  • Extended notice periods
  • Additional severance pay

How to Hire Employees in Moldova – Our Take

When you are hiring employees in Moldova – or any foreign country, for that matter – you will have to work with a complex set of legal requirements, including labor laws, mandatory contributions, and employee protections set in stone by civic codes. Being familiar with these regulations and ensuring you are complying with the country’s legal considerations is crucial for avoiding lawsuits and building a positive reputation in Moldova.

If tackling these requirements by yourself seems daunting, working with an Employer of Record (EOR) in Moldova can simplify the process, saving you time, money, and effort and countless headaches along the way.