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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...

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Tagged in: Banking Bureaucracy LLC SRL
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Posted by on in Stories From The Field
Of LLCs and SRLs Part #1

Note 1: This post is an update to our first post about organizing a company in Moldova. While that post was pretty general and explained our initial reasoning this one will attempt to explain the results of that reasoning over the last few months and a few preliminary recommendations for other entrepreneurs (ok, this got long. Conclusions Recommendations will be in Part 2 [COMING SOON]). We will be writing a further update on this topic later on with more solid recommendations. (small update below)

Note 2: This post is covering quite a lot of experience had over a long period of time. The topic is dense and often technical. Please comment if things are unclear and I will add more information. Also, as usual, please feel free to tell us how stupid we are. Everyone can learn from that. 

 

Jump to... (note to use these section links open up the full version of the post by clicking the title or on "Continue Reading" below)

Section 1
Basic Organization 

Section 2
Selling Shares vs Adding a Founder: 
Section 3
The Necessary Documents for Adding a Founder
Section 4
Notarizations, Apostilles, Translations and DHL 

 

 

So Begins a Tale of SRLs and LLCs...

 

 

b2ap3_thumbnail_tumbling_blocks.png

The path to success is almost self evident!

 

 

Section 1: Basic Organization


 

I'll begin where the last post ended which was with a discussion of the process that we decided to embark upon. That was to organize the companies basically as follows:

 

b2ap3_thumbnail_SRL-Ownership.jpg

I'll let you all guess which silhouette represents which manager...

  

So to describe what you're seeing there we founded a Moldovan SRL called "Smoke House SLR" (they refused to believe it was one word and we didn't fight it). Additionally we founded an American LLC called "The Moldova Company LLC" in Virginia. The purpose of the LLC, as described briefly in the previous post, is to escape from some of the more challenging bureaucratic differences between a Moldovan SRL and an American LLC. These all...

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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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