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Of LLCs and SRLs Part #2 - Banking and Conclusions

This is Part 2 of the process of introduing a US based LLC as a parent company of a Moldovan SRL. Find Part 1 here.


Note: this post is mostly a wordy, if humorous, take on banking and wire transfers in Moldova. If you would like to jump to the recommendations section for Parts 1 & 2 of this post do so here


**Update Nov 15: we just finalized all of the papers so this process is over. Once we got through the lower level people to the department director things got much easier. This is in spite of the fact that they royally messed up our paperwork. The director fixed it all himself and was not only professional but extremely pleasant to work with. It's always a wonder when you find someone in the government who really wants to help and make your day easier. Today, at the end of this mess, I have a lot of respect for the State Registration Chamber. Also we discovered that we can in fact have multiple "Administrators" of the company. Post coming soon...


Section 4: Wire Transfers and a Note on Banking in Moldova


This section is about the process of the wire transfer from the American bank (we use Wells Fargo) to the Moldovan bank (Mobias Bank). I know this seems like a pretty trivial discussion and perhaps even a waste of time, after all wire transfers pretty standard procedures. This is true, however there are enough nuances that it's worth mentioning here. Additionally I'll mention a few notable differences in dealing with banks here vs. in the states. 

Ok, so off we go. 

The first step we did was to go to the bank and ask what we should do. The basic procedure that was presented to us is this:

  1. Initiate the wire transfer from the states. It was mentioned in passing that the money should be indicated for statutory capital in the wire transfer (more info below). 
  2. On reception of the funds in Moldova come to the bank and present it with documents proving the purpose of the money. In this case that purpose is "to increase the statutory capital of the Moldovan SRL" and these documents are decisions by the companies to invest in/be invested in.
  3. Receive from the bank a confirmation of the money transfers reception with a value for the money in MDL (in our case we have a USD account at Mobias Bank so this reflects the amount the money was worth on arrival and will determine any profits/losses the company will incur as a result of currency fluctuations).
  4. Request from the bank a document confirming that the money was received for the purpose of statuatory capital. This is basically a form letter and the silly process of getting it I will mention below. 
  5. Bring these documents to State Registration Chamber so they can enter it into the statutory capital. 


So this is what we did with one notable exception. #1 says that we need to indicate that the money is for statutory capital. What they mean by this is writing something in the comments box of the wire transfer form. I forgot to do this and assumed that this is fine because they have ample proof in the form of contracts / us being physically present telling them things. It seemed a little silly that the comments box, used for things like "happy birthday sweetie!" on your Western Union transfers could be such a big thing. You know where this is going...

In fact, this is a very big deal in Moldova. After the received the money and we came in to stamp lots of documents and such they called us back in later in the day to resolve the comments issue. They told us that we need to amend the comments within 36 hours or they would send the money back. We were obviously startled by how serious this seemed to be and asked if something else was possible, maybe more papers from us (after all it IS OUR MONEY) or a call from the bank in the US or literally anything. Nope. It needed to be changed. We explained that wire transfers aren't like facebook wall posts that can be edited after you sober up. They remained adamant that it needed to be done. 



admirable in so many circumstances... of which this is not one


So we called up Wells Fargo and (predictably) they said, "ummm the comments box? really?" to which we replied "yes. This is Moldova. If there is literally any tiny spec of a process that does not have bureaucracy in it they will find a way." We asked them if there was anything at all they could do. They responded "I don't know sir. Let me find someone who does and get back to you." Hearing those lines over the phone in Moldova is more refreshing that you can possibly imagine. Our bank here (Mobias), despite charging us an arm and a leg above Wells Fargo on constant fees responds to those questions with "I have no idea." full-stop. Wells Fargo called back and said that transfers can't be changed past 30 min after their departure. We explained to them that this was critical to us. Not only did our money hang in the balance but possibly our visas (the upcoming post on Visa Part II will explain this). They said, "ok sir let me call our wire department and see if we can't figure it out." After the process in Moldova this was literally music to my ears. 


you get me kid



It turned out they could somehow. Basically they sent a followup message somehow. Wonderful customer service Wells Fargo.


...back to Mobias. A few days after the transfer went through, they called us and asked if we wanted a confirmation from them that the money was in the statutory capital (#5 above). We went into the bank thinking they needed more paperwork from us but she just asked if we want this document. We were like "why do we need it?" She replied "I don't know." Didn't see that coming did you?



eventually rightious anger fades to mild indignation and then just 
bitterness with a faint notion that somewhere things aren't like this...


We asked why she called us in then. She said "lots of people get it." We asked "how much does it cost?" She said 200 lei (~$13). We were like "you want us to spend 200 lei on something we may not need for a reason you don't know." She said "well... it could be 60 lei." Not the answer I was looking for (at least it got less expensive I suppose...). 

We called our lawyer and he recommended we get it because more documents is always superior to fewer documents in Moldova (also not the answer I wanted but sadly very true here). As icing on the cake with this exchange the following happened. While she prepared the document she asked us "where did the money come from." We said "our American company." She said (while pointing irritatedly at the wire transfer confirmation form) "where does it say that here? I don't see your company's name at all!!" (a mix of irritation and triumph on her face for finding our "mistake"). I numbly pointed at the form where it has Wells Fargo and the relevant account numbers and such. She was looking unsatisfied so I decided to show her my best "I have no idea how to process this. I did not invent the wire transfer system. Furthermore, you have already exlained that you do this process many many times. What the #*$% are you #*$%ing talking about!!!" face. It looked like this...



oh how you undertand me internet...


In a brief summary of other differences between Mobias Bank and Wells Fargo...

 Mobias Bank Wells Fargo 
Hard questions confuse them and get no answer.  Hard questions get the response "let me find someone who can help you with that" 
Mistakes they make are your fault*  Mistakes you make are going to get their full attention and never an accusation (see above wire transfer story 
Their "bank client" for managing your account online a.) does not work b.) can only be installed on Windows XP or earlier c.) looks like it was made in 1993 and d.) doesn't have an installer, opting instead for 2 convenient videos (read huge filesize, available on cd only and without explanation, captioning or sound) explaining hot to manually install the program dlls in the system32 folder. This was literally the first time in my life I was unhappy not to find the README file.  Has wonderful online banking 
Their policies are 100% uncompromising (even if they differ as you talk to different people) You are a customer and your needs are treated with respect. If they can help you, they will. 


*At one point this mislabeled a deposit we made to statutory capital - aka they forgot to mark what it was for. They then told us that we made a mistake and that they clearly "thought it was a loan." We said "we have done a loan and you needed a ton of contracts for that too so there's no way that's true." They said, fix it - not my problem.

Final note: In defense of Mobias Bank I can say that the following 2 things are true. 1.) The Moldovan Government has saddled them with a whole lot of silliness to deal with in terms of regulations so this isn't all their fault and 2.) all the other banks here are likely just as bad. That said, I am a customer. I have put a lot of money in your care. At least give me enough respect to realize that I did not either invent the banking system or study it in school. I'm not stupid for not knowing things, especially things that you don't know. So find me the person who does please. 


Section 5: Conclusions and Recommendations


1.) Just an SRL or SRL / LLC combo?

What do you need? If you need to manage anything more complicated than a company that you form in Moldova with your personal money (aka - no investors, no sale of shares nothing) then you should not deal with the SRL system. Found your company somewhere sane and manage it there with an SRL here to conduct the business. Let me stress here (because I think I forgot to earlier) this is not a tax strategy. You will likely pay more taxes this way because you pay US taxes on top of Moldovan taxes and even if you can fully write off the Moldova taxes (posts about this later when we manage our taxes) US tax rates may be higher than Moldovan taxes if you are talking about an LLC because profits are passed through to the indvidual who are subject to their personal tax rate. This is solely about your sanity. 

2.) Thinking about changing anything about the Moldovan SRL's statutory capital?

Hire a decent lawyer unless it's as easy as selling some shares to your cousin Ivan. Even then, hire a lawyer. 

3.) Apostiles and Documents

In Moldova there is a paradox. More documents is always better than fewer documents. However, whoever is reading your documents believes everything contained therein is their business. Our strategy was therefore find out what happy middle ground would pass muster. That said, because of the time delay involved and in spite of the cost we got Apostiles for MANY MANY more documents than we ultimately needed. $10 more up front is better than $10 + lost time + another $100+ DHL packet later.

4.) Time time time

Allot so much more time than you ever thought would be necessary for literally everything

5.) Wire transfer - check well in advance with both banks to see what is needed

Ideally have the Moldova bank write it down. They probably won't because it gives them deniability later (or they will but without a stamp they can deny it anyways). 

6.) Moldovan Banks - watch everything

Mistakes are your fault and it's your money so don't make them. 

7.) Next time you think about being short-tempered or rude to an American customer service representative don't.

Seriously. You have no idea what a wonderful job they are doing in spite of dealing with people like me (ask any one of my college roommates). Possible exceptions here for the robot (yell away) and anyone who works for Comcast or Verizon who, while possibly being nice people, are in the employ of satanically evil companies and thus forfeit some of their protections under this recommendation. 

8.) Keep your head up. 

Everything in Moldova is far harder than it should be but ultimately solvable. We're doing this because we believe the rewards outweigh the challenges and have some hope for change. You aren't alone being frustrated but just think of how funny this will all be in retrospect? right...?

Tagged in: Banking Bureaucracy LLC SRL
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Posted by on in Stories From The Field
Choosing a Bank

Ok team, this post shall be short and sweet. The title pretty much lets you know what it's about and the lead in pic gives away the end. So, Mobias Bank eh? why?

The answer turns out to be more that there wasn't anything significant to chase us away from it. In order to get there let me list off the main banking options in Moldova as well as their affiliations. 


Bank  International Affiliation Notes
Moldova Agroindbank   N/A This is the bank used by Peace Corps which speaks rather highly to it. 
BCR Bank   Erste Group (Germany)  
Mobias Bank  Groupe Societe Generale (France)   
Victoria Bank N/A Owned by and closely affiliated with Vladimir Plahotniuc, sometimes called "Moldova's one and only oligarch." Multiple people have referred to Victoria Bank as the safest bank in the country because of its association with Mr. Plahotniuc. 
Banka de Economia N/A Accused of laundering Russian Magnitsky Case money (see this article) amongst other possible scandals
Procredit Bank  Procredit Group (headquarters in Germany) Relatively small footprint in Moldova


I'd like to say that we did exhaustive research here but we pretty much just gathered the above information and decided that we wanted our money in an internationally backed bank which leaving Mobias and BCR. Choosing between them pretty much came down to convenience of location. 

Have any thoughts as to which bank we should have picked? do you have better metrics? comment below!

Coming soon - an equally breif post about picking an American bank for International Business. 

Tagged in: Banking Corruption SRL
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