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Stories From The Field

This is a section for real entrepreneurs running real business in Moldova to share their experience, frustrations, lessons and insights with the community at large.

Category contains 27 blog entries contributed to teamblogs

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. 

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Tagged in: Banking Corruption SRL
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Location Search Part 1: Moldovan Law on Food Service Establishments

This is the first of a number of entries I'll be making dedicated to the process we're going through searching for a location.

Have you found a location yet?

...is a question that I hear literally every day (many times) and so this series of posts is designed to shed some light on the process of searching for and vetting a restaurant / cafe location in Moldova. Upcoming posts in this series will talk about the real estate market (or lack thereof) and our team's critical analysis of "where exactly is most desireable" in Chisinau. For now though we will start at the beginning. What is required of the location? 

On that note team, we're in for a wild ride. 

First off here is the text of the applicable Law (in Russian - much better for google translate than Romanian). I'm not going to hit all the points of that massive and far ranging document here but it's provided as reference. I want to first add a disclaimer that I have never owned, opened, run or worked in a restaurant in the states. I'm a first-timer. I mention that because while it seems to me that there is an incredible level of detail put into where I can or can't store tea vs. flour vs whatever I am sure that other countries have lots of requirements as well. In the interest of sanitation I understand this to be ok. What confuses me is an obsured level of detail in various other aspects that govern your location and the facilities required. The first bit of this is...

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Registering an SRL in Moldova

So we shall have an LLC and an SRL. Firstly I'll briefly mention the LLC. We selected Virginia (my home state) as a base for our stateside business because of its favorable business conditions and the proximity of contacts who could act as registered agents. I won't go into the LLC process here because it's covered ad nauseum elsewhere on the web (If you feel there were better options than VA for registration post a comment and we can talk it over). The one interesting portion of this is that one of our partners is Moldovan. Turns out this isn't a problem at all (at least in VA) and really makes no difference at all until it's time to pax taxes at which time Vlad will have to pay American taxes. That'll be an interesting process on it's own I suspect but we'll talk taxes in more depth once they are upon us.

Ok, so we have an LLC (at a cost of about $150 and 8 min out of my day to create it online). What about an SRL? 

b2ap3_thumbnail_IMG_20140820_130028.jpgUnlike in Virginia, a Moldovan SRL cannot be registered online and requires a trip to the government office of The State Chamber of Registration (pictured right - link to website). In this office you go see a small business beurocrat who takes you throught the registration process. So here are some key aspects along with my thoughts...

Residency / Necessary Documents

In order to do anything at all at the office you need passports to prove the identity of all of the partners / founders. For Moldovans this entails their "internal passport" / national identity document. For Americans (/ foreigners with visa free entry to Moldova) this means your passport. You will need copies of all of these documents including a stamp of entry for passport holders. This can be done at a small shop in the basement of the building (the same one where you get your stamp as mentioned below) for a small fee but it would be easier to have it ahead of time. It is not necessary for foreigners to have residency in order to found a company in Moldova or have ownership of it. 

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The first real question we were faced with after deciding to start our business was "how shall it be organized?" In America this is usually a question between LLC vs. a Limited Partnership. In Moldova there are some other considerations that needed to be settled. In order of how we explored them...

Can foreigners invest in / own Moldovan companies?

Yes. Non-Moldovans can own up to 99% of what is called a "mixed capital" Moldovan firm. Foreign firms can additionally wholly own subsidiaries in Moldova but this is subject to rules that I don't know anything about. Since we have 2 American and 1 Moldovan partner this seemed like a reasonable stipulation and not one likely to get in our way. Once we understood that it was possible to start a company here without too many hoops to jump through we asked...

**Update 8/18/14** I forgot to mention a really key fact here that is really rather important. In the event that any of your investors are NOT located in Moldova / able to fly to Moldova regurally to sign documents you need be ready to have them send Gold Apostilles every time you need to make a company decision requiring their aproval. A Gold Apostille is a type of international notorization authorized by a 1960s Hague Convention and is issued by competent authorities in every country party to the convention. Every US state does this differently and I've seen evidence of cost ranging from $10 to $200 per document. You can imagine that this has the potential to be a real burden. Thank you Clayton for the comments that inspired this edit :)

How to organize in Moldova - should we start an SRL or an SA?

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First Entry - What is my business?

That first picture in the entry is my (on the right) and my new business partner Matt Stahlman proudly displaying our thanksgiving deep fried turkey and a ladle covered in yellow (?). We like to cook. More than that we like to eat.

As you can find out if you read our bios we have just completed a two year service with the United States Peace Corps in Balti Moldova and have decided to stay here in order to start a small business based on our three favorite things: American BBQ, Beer, and Development through Entrepreneurship (compared to the first 2 the last one there is a mouthful). As volunteers we used our cooking skills to raise funds on multiple occasions for causes we believed in. Now we are hoping to use those same skills in the service of the twin goals of starting our own successful business (our first), and proving that such an effort, though widely decried as impossible, is not only possible in Moldova but a real way for someone with a good idea and a lot of drive to build a future for themselves. Enough about that though (it's covered over here) on to the business.

The Partners: 

Take a look at our profiles on this site to hear more about us in our own words: David, Matt, Vlad

 

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