What Happened to Moldova Citizenship by Investment?

Towards the end of 2018, Moldova launched one of the exciting citizenship by investment program in Europe. What happened to the program?

The Moldova citizenship by investment was launched in Q2 2018 and suspended for applications on Jul 2019. The suspensions extended further. On Sep 20, 2020, the Moldovan Parliament has voted to repeal the Moldova Citizenship by Investment Law. 80 of 101 parliamentarians have supported the initiative to close down the citizenship scheme. Though this program ran only for a a year, shift in politics and EU pressure have contributed to closing down of the program in Sep 2020. Only 52 people have acquired Moldovan citizenship via investment.

Background

Important changes Moldova’s legal framework of investment citizenship came in 2016 when new legislation was drafted to allow acquisition of citizenship by investment (CBI). This was pursuant to the Law No. 1024 of June 2, 2000 on Citizenship of the Republic of Moldova and the Government Decision No. 786 of October 4, 2017 on the acquisition of citizenship by investment, as amended from time to time.

Moldova’s CBI program was developed by the Government of Moldova was launched in Nov 2018 in partnership with its service provider Henley & Partners and the Moldovan Investment Company (MIC). The Regulations allowed passports for only 5,000 individuals and their immediate families will be issued. Moldova Citizenship by Investment Program is implemented by Public Services Agency of the Republic of Moldova, according to the provisions of the Government Decision no. 786 of 4 October 2017 on the acquisition of citizenship through investment.

Under the CBI investment regulations foreign investors were required to

Donate €100,000 to Sustainable Fund or
€250,000 in Real estate or treasury securities.

Agents and due diligence providers were also appointed for strongly vetting applicants.

Moldova citizenship by investment scheme projected to bring €1.3 billion euros over next five years contributing significantly to Moldova’s economy and state budget, as well as increase salaries and pensions, create new jobs. The purpose of the Citizenship acquisition program is to strengthen the international perception and competitiveness of the Republic of Moldova in order to attract foreign investments direct in the areas of strategic development established by the Government.

Applicants must pass background checks required to “a good economic and financial reputation” and “did not pose a danger to public order or risk for state security. Citizenship granted was confidential and was not disclosed to public. Successful candidates can gain Moldovan citizenship within a period of approximately 90 days, provided that the due diligence process can be completed without any hurdles.

Closed

With parliamentary elections in Moldova in February 2019, a new electoral bloc of ACUM and PAS gained ground allowing PAS leader, Maia Sandu to become Moldova’s prime minister. In this new political landscape, attention turned to the controversial CBI program with a four-month moratorium issued on 31 July 2019.

Further increased pressure from EU threatening visa liberalisation regime and financial aid, opposition from political parties citing corruption and money laundering led to the suspension of the scheme in 2019. In September 2020, Moldova abrogated legal provisions allowing the acquisition of citizenship for special economic interests. EU warned Moldova in a general statement that EU visa liberalisation “should not be used to attract individual investment in exchange for citizenship and is incompatible with the EU acquis. Moldova should refrain from developing an investor citizenship scheme (‘golden passports’) as it would pose risks as regards security, money laundering, tax evasion, terrorist financing, corruption and infiltration by organised crime. It would also be incompatible with the EU acquis.

The First moratorium CBI program for four-months issued on 31 July 2019
Second moratorium to be extended by two months from 20 December 2019
Third moratorium was Law no.39 of 28.02.2020 enacted from 20 March 2020 until 1 September 2020

On Sep 20, 2020, the Moldovan Parliament has voted to repeal the Moldova Citizenship by Investment Law. 80 of 101 parliamentarians have supported the initiative. As of this date, no further applications will be received, applications already submitted will continue to be processed.

Applications

Media reports suggested in 2019 that the program raised only €545,000 for the Moldova’s state budget after promising €1.3 billion. Further reports revealed 97 investors from Russia, Great Britain, China, Australia, and the US who have filed applications for citizenship.

Acquisition of Moldova Citizenship for Investments (Statistics)

According to GlobalCIT report, based on information from January 2021, 20 applicants and 32 family members have acquired via CBI, with only 5 applicants and 3 family members doing so before the first moratorium at the end of July 2019.