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Free Economic Zones

activity in 2011

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Location of free economic zonesThe distance from Chisinaumunicipality :"Expo-Business-Chisinau" 0 kmUngheni-Business 107 km

"Tvardi a" 115 km"Otaci-Business 220 km"Valkane " 180 kmTaraclia" 150 kmB li 130 kmThe surface of free zones :

"Expo-Business-Chisinau" 29,41 h Ungheni-Business 42,34 h "Tvardi a" 3,57 ha"Otaci-Business 34,19 ha"Valkane " 122,3 haTaraclia" 36, 0 haB li 121,85 ha

Also, should be mentioned the GiurgiulestiInternational Free Port and the Marculesti FreeInternational Airport, which are similar to free

economic zones.

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Legislation of Free Economic Zones Law on free economic zones, no. 440-XV from 27 July 2001 Law on Free Entrepreneurial Zone Expo-Business-Chi in u no.

625-XIII from 03 November 1995 Law on Free Entrepreneurial Zone Tvardi a no. 626-XIII from 03November 1995

Law on Free Entrepreneurial Zone - Production Park Zone"Valkane no.1527-XIII from 19 February 1998

Law on Free Entrepreneurial Zone - Production Park Taracliano.1529-XIII from 19 February

Law on Free Entrepreneurial Zone - Production Park Otaci -Business no.1565-XIII from 26 February 1998

Law on Free Economic Zone Ungheni-Business no.1295-XV from25 July 2002

Law on Free Economic Zone B li no. 26 from 04 March 2010

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162 registered residents (as of 1 January 2012)

The number of employees at 1 January 2012 5875 persons:

o ZAL Expo-Business-Chi in u 1021 persons

o ZEL Ungheni-Business 1943 persons

o ZAL PP Valkane 230 persons

o ZAL Tvardi a 283 persons

o ZAL PP "Otaci-Business 24 persons

o ZAL PP Taraclia 18 persons

o ZEL B li 2256 persons

The number of employees on payroll

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The total amount of investments from the beginning of

free economic zones activities, million USD(at 1 January 2012)

Total amount of investments - 145.9 million USD, of which 15.5million USD invested within 2011.The largest share of investments belongs to the Expo-Business-Chisinau FEZ - 52 million USD (35.6 %).

51,9

36,1

15,1 12,8 11,43

15,3

01020304050

60

E x p o -

B u s i n e s s -

C h i s i n a u

U n g h e n i

-

B u s i n e s s

T a r a c l i a

T v a r d i t a

V a l k a n e s

O t a c i -

B u s i n e s s B

l i

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The annual growth of investments amount in freeeconomic zones, million USD

0

2

4

68

10

1214

1618

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

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Manufacture of industrial productionThe total amount of net sales of industrial production,

million MDL

351,5536,3

770,71021,1 937,8

1162,9983,9

1409,6

2006,9

1233,5

0

500

1000

1500

2000

2500

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

The total amount of net sales of industrial production in all FEZs in

2011 amounted to 2,006.9 million MDL (with 42.4% more than for the previous year (in current prices)), of which production worth1,648.1 million MDL or 82.1% was exported. The total value of goods and services produced by the free economic zones duringthe reporting year amounted to 2,891.7 million MDL.

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2010 2011 Growthrate, %

1 Grape wine, thousand dal. 1142,9 1146,9 0,4

2 Divin, thousand dal. 301,3 305,4 1,4

3 Electrical wiring for cars, mln. MDL 78,6 216,1 175,0

4 Polymer film, tons 1642 1581 -3,7

5Furniture, mln. MDL

18,5 53,2 187,96 Carpets, mln. m 2,9 2,8 -1,6

7 Car seat covers, thousand pcs 795 2297 188,9

8 Technical oil, tons 5,4 5,1 -5,3

9Black oil, tons

440 2074 371,410 Cork articles for spirits bottling, mln. pcs 411,5 363,3 -11,7

The most important types of goods produced by thefree economic zones

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The share of net sales of industrial production per

free economic zones

Expo-Business-Chi inu

18,9%

0,0%

Otaci-

Business0,3%Valkane

11,1%

Tvardi a12,8% Ungheni-

Business46,1%

B li

10,8%

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Basic indicators of FEZ activity2004 2005 2006 2007 2008 2009 2010 2011

Total volume of investments,mln. USD

60,4 72,1 88,2 100,8 119,9 124,7 128,7 145,9

In % comparing to the previousyear

117,8 119,4 122,3 114,2 118,9 104,0 103,3 113,3

The volume of net sales of industrial production, mln. MDL

770,7 1021,1

937,8 1162,9

1233,5

983,9 1409,6 2006,9

Export share of net salesvolume of industrialproduction, %

67,9 61,5 71,0 70,8 70,8 68,3 76,5 82,1

Calculation of taxes and fees,mln. MDL

77,1 121,9 123,6 123,1 144,8 111,6 130,1 176,0

Average number of residents'employees on payroll

2827 3303 3563 3567 3590 3079 4581 5621

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Basic incentives provided by the free economic zones

The income tax imposed on residents income is paid 50% of the rate

established in the Republic of Moldova.

Goods imported into / exported from the free economic zones are : exempted from import and export duties (custom taxes); are exempted from excise duty; a zero value added tax rate is applied.

The delivery of goods to the free economic zones from the remainingparts of the customs territory of the Republic of Moldova are treatedas exports.

No quota and licensing systems are applied on the import and export

of goods on the territory of the free economic zones.

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The Balti Free Economic Zone

was founded in 2010 on the territory of the Balti Municipality for aperiod of 25 years, and consists of 3 subzones.

On subzone no. 1 and no. 2 with a total surface of 11.85 ha islocated the German company Draexlmaier LLC, the producer of spare parts for BMW cars, and subzone no. 3 with a surface of

110 ha.

Draexlmaier, as a general investor of Balti FEZ, is contracted bythe companies BMW, Mercedes-Benz, Audi, etc. for themanufacture of wiring.

Nowadays, Draexlmaier LLC has 2,207 employees and hasinvested about 4.8 million EUR in production development.

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Future development of FEZs

Additional opportunities for FEZs development - proximity to theEU.

The development of free economic zones has become possible as aresult of:

the use of FEZs existing potential, including the extension, if necessary, of its territories (Expo-Business-Chisinau, Ungheni-Business, Otaci-Business, Balti);

recently modified legislation on FEZs, which allows performing newtypes of activity and using large trade and transportation capacities.

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The development of new investment

structures

FEZs development should be carried out in parallel with the establishmentof new mechanisms of investments attraction to the Republic of Moldova, including :

industrial parks;

technological and innovative parks;

business incubators;

individual investment agreements (e.g. the Investment Agreement on

Giurgiulesti International Free Port).

The primary task - making full use of the country's human and productionpotential.