EU accession will test Moldova’s businesses and tax system
Moldova must overhaul its tax system, strengthen competition and support small businesses as it prepares to enter the EU Single Market, economist Dumitru Pântea said on November 6.
Competition reform poses a major challenge
Two negotiating clusters covering 17 chapters will have a significant impact on how Moldovan businesses operate and how the national economy develops, Pântea said.
“The state of the national economy will depend on how quickly these measures are implemented. They will shape Moldova’s economic development not only in the short term but also in the years ahead,” said Pântea.
Competition policy could prove one of the most difficult areas of reform. The challenge goes beyond aligning national legislation with EU rules and requires changes to how businesses operate and compete.
Pântea said competition had been neglected for years, with Moldova’s Soviet-era economic legacy favouring state intervention over market mechanisms.
“Personally, I anticipate that this will be one of the most difficult chapters to implement, transpose and put into practice. This is not just about transposing legislation. It is about how the economy and every individual business will function,” said the economist.
The internal market cluster also covers the free movement of goods, capital and people. Applying these principles would help remove barriers and allow businesses to compete on more equal terms, giving more efficient companies opportunities to expand.
Small businesses face pressure from EU competition
The size and capacity of domestic companies present another challenge. While some Moldovan businesses already export to the EU and have access to financial and human resources, many smaller enterprises struggle to reach foreign markets.
Moldova had 74,590 enterprises in 2025, including 74,358 small and medium-sized enterprises (SMEs), which accounted for 99.7% of the total, according to the National Bureau of Statistics.
“Many entrepreneurs, particularly smaller ones, find it quite difficult to access foreign markets in general. This is not limited to the European Union market,” Pântea said.
Small businesses also operate in a domestic market with a limited number of consumers. This restricts their ability to generate sufficient profit margins to invest in production capacity, efficiency and performance.
By contrast, larger and more specialised companies in EU economies can produce greater volumes at lower costs. Moldovan entrepreneurs, particularly in agriculture, have yet to develop a sufficiently strong culture of cooperation and association that would allow them to increase output and reduce expenses.
“Everyone has a chance. Anyone who starts a business has an opportunity to find their niche in the European integration process. What is needed is state support that addresses their specific needs,” said Pântea.
Government support for businesses needs to change
Moldova will also have to reconsider how it supports the private sector as it aligns its economy with EU rules. SMEs need better access to financing, skilled workers and foreign markets if they are to compete with larger companies.
Existing support mechanisms include programmes run by the Organization for Entrepreneurship Development (ODA), as well as assistance schemes for the agricultural sector.
Pântea highlighted the government’s 373 programme, which facilitates access to investment loans. He also pointed to nearly 2 billion lei allocated annually to agriculture and the food industry through the Agency for Intervention and Payments in Agriculture (AIPA).
The government’s agricultural support allocation for 2026 stands at approximately 2.326 billion lei, according to official data.
“These resources are relatively small compared with the national economy, which is likely to reach around 400 billion lei this year. Direct support for businesses stands at somewhere between 1% and 2% of GDP,” he said.
Pântea added that other countries going through EU integration had operated under different conditions, while Moldova still maintained numerous tax incentives for businesses.
As the country aligns its legislation with EU standards, some of these incentives will have to be reduced or redesigned. State support will need to focus more effectively on companies that genuinely require assistance.
IT parks and free economic zones may face tax changes
Tax harmonisation with EU rules is another important part of the accession process. The authorities will need to review VAT provisions, certain tax incentives and the preferential regimes currently applied to IT parks and free economic zones.
Pântea warned that these changes must be carefully prepared. Companies benefiting from favourable tax arrangements could relocate to other jurisdictions if Moldova fails to offer viable alternatives.
“We need to find alternatives for entrepreneurs operating under these regimes because they could very easily find similarly favourable arrangements elsewhere in the world and relocate their businesses,” he said.
Moldova has requested transitional periods for certain tax measures. Whether these arrangements can be maintained will depend on negotiations with the European Union.
Changes to VAT exemptions could affect consumers
Tax reforms could also have a direct impact on households. Pântea said removing certain VAT exemptions, including those applied to electricity supplied to household consumers, could increase the cost of some goods and services.
People on lower incomes would be particularly vulnerable to such changes.
“Removing VAT exemptions will inevitably translate into higher costs for certain goods and services. This means inflation, and people on lower incomes will be particularly affected,” said the economist.
He said the government should prepare mechanisms to ensure that households with modest incomes can cope with the potential impact of tax changes.
Moldova targets early 2028 to conclude EU accession talks
Moldova aims to conclude its EU accession negotiations by early 2028. According to the European Commission’s roadmap presented on November 4, 25 of the country’s 33 negotiating chapters could be provisionally closed by the end of 2027, provided that the country maintains the pace of reforms and meets the required benchmarks.
The proposed schedule includes nine chapters in the first half of 2027 and another 16 in the second half. Their provisional closure will depend on Moldova meeting its commitments, the European Commission’s assessment and the agreement of EU member states.
The roadmap is indicative and does not guarantee that the proposed timetable will be met. Nor does the provisional closure of negotiating chapters mean that Moldova has completed the accession process.
Pântea said aligning national legislation with EU requirements was not enough in itself. The greater challenge was preparing businesses and society to operate under the rules of the European market.
“What really matters is how long it will take for our society to change and become ready to function within the European Union, both for individuals and, particularly, for entrepreneurs,” he said.
The economist warned that Moldova could lose both financial and human resources if it failed to become an attractive and competitive economy within the EU.
“The economy is about competition. Areas that develop faster attract resources, both human and financial. If we fail to make Moldova an attractive place within the European Union, those resources will move elsewhere,” said Pântea.
Translation by Iurie Tataru
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