The Moldovan tech sector is experiencing an unprecedented growth, largely supported by Moldova Innovation Technology Park (MITP). As the first e-Park in Europe, MITP quickly became an ecosystem that has drastically changed how foreign investors view business opportunities in the country. We'll explore this impact by examining the details of foreign investment, geographic distribution, as well as contributions to national income and job creation.
Out of more than 1,500 companies, in September, MITP hosted 229 residents with foreign capital from 38 countries. Of these, 134 companies, or about 59%, were established after the launch of Moldova Innovation Technology Park, signaling a direct correlation between the establishment of the Park and an increase in foreign investor interest in the local market. However, this interest does not only come from traditional sources; in fact, 14 new countries have emerged on the Moldovan IT scene since 2018, significantly expanding the diversity of foreign investors. The geographic growth also reflects a change in the investor profile, with countries like Argentina, Austria, and Japan investing in the Moldovan IT market for the first time.
By the end of 2022, the countries with the most companies in MITP were the USA (29), Romania (27), Germany (18), the UK (15), and Russia (14). However, when we examine indicators such as the number of employees and turnover, the order of the countries differs. For example, the UK and Germany dominate in terms of job creation, followed by the USA, Romania, and the Netherlands.
The economic impact of these investments is considerable. The sales revenue of companies with foreign capital has increased fourfold in the last five years, and the number of employees has doubled. Half of MITP's turnover comes from these companies. They also account for 40% of the total number of park employees. These figures clearly demonstrate the significant role of MITP in the national economy. Additionally, 98% of these companies' revenues come from exports, thus having a positive impact on the country's trade balance.
Foreign capital companies in MITP operate in a variety of sectors, ranging from custom software development, data processing, web page management to IT consulting and specialized design. Most are micro and small companies, with fewer than 49 employees. In terms of wage structure, the average monthly salary per employee at foreign-invested companies was 39,000 MDL (~€2000) at the end of 2022. Although this was slightly lower than the average salary at local companies, which was 40,375 MDL (~€2100), labor productivity was higher at companies with foreign capital.
In just five years, MITP has become not just a local tech hub but a player with a substantial impact on the national economy and Moldova's international technology relations. By concentrating resources, talent, and innovation, MITP has managed to change the investment narrative, attracting foreign capital and creating synergy between different sectors of the economy.
With a rapid growth rate and a diversified portfolio of companies and industries, the Park has become a model of how well-structured infrastructure can accelerate development in an emerging market country. For anyone considering investments in Eastern Europe, it is imperative to pay attention to Moldova, which has proven its ability to create a favorable environment for innovation and business.
MITP is also known for its liberalized framework and unique taxation system. Moldova's main attraction is highlighted by a flat tax rate of 7% for resident companies, IT visas, simplified and fully digital interactions between residents and the Park administration as well as state authorities, the ability to open a company online, and the facilitation of opening a bank account in less than 72 hours, thus surpassing many regional competitors.
Furthermore, it can be argued that MITP's success underscores the importance of strategic planning and vision in technological and economic development. With efficient management and a well-thought-out development policy, MITP could serve as a best practice example for other countries aspiring to diversify their economy and attract foreign investment.
Press contact:
Veronica Bucur
Head of Communications at MITP
Mobile: +373 79 409 212
Email: [email protected]
www.mitp.md
