One of the most important sectors of Ukraineʼs economy, IT has felt the impact of the war. Although the invasion didnʼt hinder Ukrainian ITʼs efficiency, many companies secured themselves with additional offices abroad, while some partially relocated to other countries.
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Relocation: where IT companies are moving
According to a survey by the IT Ukraine Association and the Sayenko-Kharenko law firm, more than 50% of Ukrainian companies did not relocate. In comparison, 26% relocated partially while keeping their main offices in Ukraine.
Such numbers indicate that the IT business is more interested in an additional safe location and business expansion rather than relocating completely. The most popular countries for relocation are currently Poland, Germany, Portugal, the Netherlands, Turkey, Slovakia, the Czech Republic, Moldova, and Croatia.
Some states provide additional benefits for the Ukrainian IT sector. For example, Moldova is a worthy option with a democratic tax policy, developed IT infrastructure, and other advantages.
Only 7% single tax and IT visa: key benefits of Moldova Innovation Technology Park residence
The opening of the Moldova Innovation Technology Park (MITP) in 2018 was a turning point for establishing Moldova as a powerful technological center in Eastern Europe.
The Park allows Ukrainian IT companies and developers to choose the presence options: you can select a «virtual presence», meaning the company is not limited in terms of its actual location. At the same time, MITP has a simplified registration procedure for foreign IT specialists and managers, which makes it possible to move the entire company without extra barriers if needed.
Additionally, Moldova offers a uniquely low, single tax on IT activities – only 7%, almost three times less than taxation in Estonia and more profitable than in Bulgaria or Romania. Practically, this is the lowest revenue tax for IT in Europe.
For the residents, the Park provides unmatched benefits for any IT company looking for ways to optimize the tax burden and reduce regulatory barriers to sustainable business growth. About 1,200 companies and more than 15,000 specialists from more than 40 countries are already Park residents.
Also, more than 10 Ukrainian companies are fully working at MITP, along with numerous Ukrainian talents and specialists. Ivan Pascal, the founder of XFamily, is one of the Ukrainian entrepreneurs who have become residents of the Park.
Ivan Pascal, CEO of Xfamily
We at Xfamily chose Moldova as a country for our further development for many macroeconomic reasons. The countryʼs authorities are willing to invest in economic development and improve the population's welfare. Moldova provides transparent, comfortable, and stable conditions for business growth.
The most important advantage for us is the single tax of 7%, which is collected in one payment under a simplified system of administration. This greatly facilitates business processes. We are also very grateful to the local authorities for providing us with all the necessary infrastructure.
Additional benefits of residency at MITP
- A uniquely low, single unified tax of 7%. The employer or resident companies pay no additional taxes. This policy will be in place for at least 2026. Residents are offered full medical insurance and a social package.
- IT visa and simplified employment. Under the IT visa program, you can obtain a residence permit to work for two years (for IT professionals) or four years (for IT managers). In addition, you can receive a residence and work permit for the residentsʼ family members. Currently, Ukrainians are exempted from obtaining a residency permit for work purposes, and their documentation is simplified.
- Significant foreign capital. In MITP, almost 200 resident companies have foreign investment from more than 40 countries – these companies finance 55% of the entire Moldovan IT sector. As a result, MITP is not only trusted by foreign investors but also attracts more talent, which creates an innovative, progressive and professional tech and IT community.
- International investments. The Moldovan IT ecosystem is supported by development partners such as the Future Technologies Activity (FTA), which is implemented by Chemonics, and financed by USAID and Sweden. Ukrainian IT specialists could continue their professional activities in centers of excellence colliding their skills and expertise with local creative talent, such as Mediacor, Tekwill, and Artcor founded together with the Government of Moldova, USAID, and Sweden.
Natalia Dontu, Moldova Innovation Technology Parkʼs administrator, says that since the first days of the war, the management of the Park has been working on new opportunities for Ukrainian companies looking for a safe relocation option. MITP created an additional informational resource for Ukrainian refugees and advocated for a simplified employment process.
Moldova Innovation Technology Parkʼs administrator
The Ukrainian IT sector is extraordinary and progressive. Our goal isnʼt to get those companies to move out, but rather to offer a safe and convenient opportunity that Ukrainian companies could use as long as they need.
The new IT hub of Eastern Europe: why extend business presence to Moldova
IT is one of the most important sectors of Moldovaʼs economy, accounting for 4.2% of the countryʼs total GDP in 2021 – a three-fold increase over the past six years. Moreover, the industry occupies 11% of the countryʼs full export capacity. Despite the expected economic downturn, the IT industry revenues are growing in 2022. From the first days of the Russian invasion, Moldova demonstrated its support by creating opportunities for Ukrainian refugees.
The Prime Minister of the Republic of Moldova, Natalia Gavrilita, believes that Moldova has the potential to become one of the leading technological states in the region. Therefore, the country invests in education, research and development, innovation, and the digital economy.
The Prime Minister of the Republic of Moldova
Moldova is more open than ever to foreign talent and is interested in partnering with the best people in the technology sector, including Ukrainian IT specialists. We are working with our European partners to make our country more appealing for IT business and talent.
With a promising business community, Moldova has a great quality of life and a welcoming environment for fleeing families – the country has accepted the largest number of Ukrainian refugees per capita.
Scott Hocklander, director of the USAID Moldova Mission, notes that investments in Moldovaʼs entrepreneurial ecosystem, particularly MITP, create a foundation for innovation and generate high-paying jobs.
In 2021 alone, Moldovaʼs IT industry earned 425 million US dollars, which is 37% more than in 2020. Of this amount, $345 million was generated by MITP residents.
Director of the USAID Moldova Mission
We have long supported Moldovaʼs IT industry and closely cooperate with the government on the digitalization reforms, as this is a transformational sector with growth potential. Today, IT is one of Moldovaʼs economyʼs most progressive and promising industries
George Teodorescu, the MITP resident and entrepreneur, sees Moldovaʼs future role as a high-quality IT cluster.
MITP resident and entrepreneur
My company joined the Park when there were about 50 residents, and now there are more than a thousand. This partnership has brought tremendous value to the business. In addition, the stateʼs legislation simplifies business for IT companies and specialists. As a result, foreign companies are not just tapping into Moldova’s IT sector via long-distance freelance work or remote professionals, but are actually investing in full-fledged offices in the country
IT is Moldovaʼs fastest-growing and developing industry, and MITP plays a very important role.
For Ukrainian IT companies and specialists, a residence in MITP is a reliable, safe, and profitable opportunity to expand business presence, open an additional office, or relocate fully or partially.