Registration and operation of NGOs and Taxation of NGOs
Registration and operation of NGOs and Taxation of NGOs


The creation and existence of noncommercial organizations is a consequence of achieving the right of association, enshrined in art. 21 of the Universal Declaration of Human Rights, art. 22 of the International Covenant on Civil and Political Rights of December 16, 1966, and the Constitution of the Republic of Moldova which ensure freedom of opinion and expression (art. 2), freedom of assembly (Article 40), freedom of parties and other social and political rights (art. 1).

Legal framework:
Moldova has a legal framework aimed to ensure the right of association. The main rules guaranteeing the rights of association are:
Constitution of RM,
Civil Code of the Republic of Moldova, approved by Law no. 107/2002,
Law no. 837/1996 of 17.05.1996 on Public Associations (LPA)
Law no. 581/1999 of 30/07/1999 on the foundations
Law no. 1420/2002 of 31.10.2002 on philanthropy and sponsorship.
Law no. 179 /10.07.2008 on Public-Private Partnership



CHARTER 1: Registration and operation of NGOs.

  1. Legal forms of NGOs

There are two types of NGOs according to the Moldavian legislation: public associations and foundations that are regulated by two different laws respectively: the Law on Public Associations and the Law on foundations and the Law on Philanthropy and Sponsorship.
In article 5 (1) of LPA, public associations can be founded under one of the following legal forms:
a.   public movement (association of natural and/or legal persons which do not have a fixed membership);
b.   public organization (membership association of natural and/or legal persons based on a fix membership, founded  to achieve the objectives and goals of the Statute, as well as the protection of the members' common interests through their joint efforts and activity;
c.   public institution (union of citizens without fixed membership, created to provide certain services, to work according to the interests of its members and in order to achieve the Statute goals).
d.   public fund  - Public associations can voluntarily unite in unions (associations) on the basis of Charter agreement, forming a new legal person. The rules of foundations and termination of the activity of unions (associations) of public associations is specified in accordance with the Law

  1. Who can register an NGO physical or legal entities, foreigners?

In accordance with art.14 (1) from the LPA, founders of public associations can be legal persons or physical persons (citizens of Moldova as well as foreigners or persons without citizenship) being at least 18 years old.
The founders of youth organizations must be physical persons – citizens of Moldova at the age of 18, under the control of an already established public associations.
Founders of public association can also be other public associations.
Legal persons, set up by the initiative or with the participation of the state and/ or state institutions, as well as public (central and local) authorities cannot be founders of public associations.
Only foreign citizens and persons without citizenship, having a permanent resident ship on the territory of the Republic of Moldova can found or can be a member of an public associations according to the legal interests of the citizens of the Republic of Moldova, but they can't be chairpersons of public association, or members of control and auditing bodies. Another requirement is that at least half of the members of a foundation council must be citizens of Moldova.

  1. Is there a minimum capital requirement?

There isn't a minimum capital requirement for public associations in Republic of Moldova. Starting capital of foundation must amount a total sum of not less than two hundred minimum wages which may not be reduced in the process of foundation functioning.

  1. Is there a minimum requirement for number of founders/members?

Public associations can have fixed and unfixed membership. Public movements and public organizations do not have fixed membership.
In accordance with art.14 (2) a public association can be founded by on the initiative of at least three people and one or several juridical entities - public associations.
Foundation, in accordance with art.6 from the LF may be established on initiative of one or several physical and/or juridical persons (further - founder, founders).   Founders, i. e. physical persons, can be any citizens of the Republic of Moldova capable of functioning, persons without citizenship and foreign citizens as well.  Foundation can be established on the basis of testamentary disposition. Founders of foundation cannot be central or local governmental bodies and budget organizations.

  1. Where are NGO registered in court, in a ministry?

Public Association is created in a single document  in the form of statut (Charter). The Charter of  Public Association is determined by  the content of art. 18 of LPA. The total amount for expenditure for registration of an NGOs varies between 500-1000 lei:
1) 90 lei - state tax payable by the founder in any branch of Banka de Economii.
2) about 100 lei - the cost of the notary signature authentication when open bank account for proper NGO
3) 300-800 lei - manufacture of printing (price depends on the model).
4) about 20 lei – the certificate issued by the National Center for Terminology for the name of the organization.
In 2009 there was a change of the competent government bodies responsible for registration of NGO Charters. According to the current regulation , the registration of Charters of all kinds of public associations (local, republican and international), is held by the Ministry of Justice. After this procedure is ready the territorial tax bodies register NGOs in the state tax Register .(Before the change, the Charters of the republican Public Association were registered at the Department Parties and NGOs with the Ministry of Justice while the Charters of  Local Public Association - at the District Council in which jurisdiction it is .
The Ministry of Justice of the Republic of Moldova keeps the State register of public associations.This register should be published in the official mass media in Republic of Moldova till the end of the second quarter of each calendar year according to the information of the last calendar year.
Registration of foundations, branches, representations in foreign foundations shall be exercised by the Ministry of Justice.

  1. Grounds for refusal of registration and grounds for termination of registration

In accordance with art.20 registration state body is obliged to make one of the following decisions within a month: either register the Charter of the public association and issue the founders a certificate of state registration, or to postpone the registration of the public association, or to reject registration of the Charter of the public association.
Also, registration can be postponed up to the period of three months if the legal order for establishing a public association, is breached. The reasons of the postponement of the registration of public association have to be mentioned in the decision about the delay in registration. The public association has to be aware about this decision within three days from its adaptation.
The refusal to register the Charter of a public association is possible in the following exceptional cases:
a.   if the Charter of the public association contradicts the Constitution of the Republic of Moldova, the present Law and other legislative acts of the Republic of Moldova;
b.   if requirements, mentioned in the decision about the delay in registration are not fulfilled within a three-month period;
c.   if the Charter of a public association with the same name was registered before;
d.   if the court issues a decision for termination of an NGO because the NGO performs illegal activity and within one year term given by the court to the NGO, it does not legalize its activity or Charter and fulfill the court's recommendations;
e.   if the registration body has found out uncertain information in the constituent papers presented for registration;
f.    if the name of the public association insults morals, national and religious feelings of citizens.
Refusal in registration of the public association on a due date on motives, which the founders of the public association do not consider as reasonable can be appealed judicially within one month from the date of taking this decision. Consideration of complaints is implemented in the order envisaged by civil procedure laws.
In accordance with art 15 LF, the refusal to register a foundation shall be possible in case of:

  1. the goals of a foundation are unlawful or its activity may damage principles of constitutional state, sovereignity, independence and territorial integrity of the Republic of Moldova as well as law order or moral norms;
  2. requirements related in the decision to postpone the registration were not fulfilled within three months period;
  3. the registering authority ascertained that documents submitted by a foundation contained inauthentic data;
  4. early it was registered a foundation with the same name.

The decision on refusal to register a foundation shall be notified to an applicant within three days.  The decision on the refusal to register a foundation within the established term or for reasons which an applicant considers as groundless may be appealed in a judicial instance within one month from the date of its adoption.

  1. Structure of the NGOs

The organizational structure of an association includes the following mandatory bodies:

  • General Assembly;
  • Board of Administration;
  •  President;
  •  Censors  commission.

The supreme governing body is the Association of General Assembly members or
their delegates, who shall hold regular and ad hoc meetings?
The Board of Administration is leading the Association's permanent body and  controlled by to General Assembly.
The President of the Association is Chairman of the Board of Administration. The president is elected by the General Assembly for a term of 5 years.
Control over financial and economic activity is conducted by the Censors  commission, elected by the General Assembly for a term of 5 years. Members of the Board of Administration can not participate in the Censor Commission
About the structure of a foundation, Higher managerial body of a foundation shall represent the Board.
First membership of the Board of a foundation shall be assigned by the founder or the executor if the members are not listed by name in the will.
The Foundation may have a trustee council which controls foundation activities. Public foundations whose property value or assets exceed 1 million leus must have a trustee council. The trustee council shall exercise oversight of the compliance of Foundation activities with the legislation, the Foundation Statute, and ethic norms, as well as oversight of the accounting record-keeping; it shall exercise audit of annual financial reports and annual reports on Foundation activities; it shall point out the defects and suggest the Foundation Board the ways of their elimination; no less than once a year, it shall submit an account of its activities to the Foundation Board. The trustee council shall be entitled to examine documents of the Foundation and call special meetings of its Board. Members of the trustee council shall be entitled to participate in Foundation Board meetings. The Foundation may also have other bodies exercising executive functions.
Supervisory Body shall be appointed by the Foundation Board. A revisory commission or auditor may act as a supervisory body.

  1. Is there a public benefit status in your country?


Public benefit status is aimed to distinguish public benefit and mutual benefit organization for taxation purposes. In Moldova Certification Commission of the Ministry of Justice is entitled to give public benefit status to public associations and foundations. The Commission was established in 1997 and is formed of 9 members. Commission members work on voluntary basis and have 5 year mandate. No information about how are these members elected and who points them out.
Application is examined within one month of the submission. After the examination, the Commission decides either to grant public benefit status and issue the certificate, or refuse, but in this case has to indicate the grounds for refusal. Refusal decision may be appealed in court within three months.
State certificate issued by the Certification Commission is the official document proving public benefit and non-profit status to the relevant organization. State certificate is issued for a three year period and after that the organization shall apply again for the status, in accordance with Low on that moment.  
State certificate is a ground for total or partial exemption of certain taxes and state fees according to the current legislation. Public associations who are not holders of the certificate may not benefit of any exemption.
Lists of the documents needed to be filled for acquiring the certification for public benefit status
1.   Application form.
2.   Activity and financial report.
The report is signed by the Chairperson and accountant of the organization and is authenticated with the organization seal.
3.   Letter from the State Fiscal body certifying that the organizations has no obligations to the state budget.
4.   Copy of the registration certificate.
5.   Copy of the organization bylaws.
6.   Decision of the organizations' governing body designating the person to represent the organizations at the Certification Commission.
7.   Other relevant materials (published reports, newsletters, brochures, articles in press).
Requirements for obtaining public benefit status
Organizations applying for the public benefit status should meet the following requirements:
1.   be registered as public associations or foundations;
2.   operate for at least 6 months;
3.   do not violate the legislation or by laws;
4.   be active in one of the following fields:
o    human rights;
o    education;
o    healthcare;
o    social assistance;
o    culture and art;
o    sports;
o    liquidating the effects of natural disasters;
o    environment;
o    other fields of public benefit recognized as such by the Certification Commission.
5.   do not distribute profits or incomes among its members or founders, members of the governing or control bodies, or staff, but rather use them to pursue statutory goals;
6.   do not support any political party, electoral bloc or independent candidate in any elections, including financial support.
Note. Certification Commission is assisted in its activity by the Political Parties and NGOs Registration Department of the Ministry of Justice, which receives the applications and provides relevant advice and consultation.

  1. Reporting requirements and oversight authorities who is responsible for monitoring NGO activity?

NGOs have to submit report to the following institutions:

  • Certification Commission with the Ministry of Justice,  when they apply for public benefit status;.
  • To the Tax autorities – only financial reports that are related to their activities(Annual Statement on Income Tax should be presented by March 31)
  • Departament of Statistics at the end of each year – NGOs have to submit financial, narative and accounting reports.

The oversight authorities are:

    • the Procsecutor office in terms of wether the NGO performs illegal activity;
    • the Fiscal department – they supervise whtehrethe NGO declares all the income and pays all the taxes;
    • Corruption Center – when there are elements of penal case;

Ministry of Justice is aware of areas in which NGOs operate, but he did not supervise them.
In practice there are not somme exemples of NGOs penal cases .
Acording to our low we have a procedure before the Miniter of Justice according to which NGOs that have no activity can suspend their activity. Inthese cases these Ngos are not obliged to submit their annual financial statements to the tax authorities. Otherwise NGOs that not have activity, but did not go through this procedure are obliged to submit the reports. 

J. Possibility for direct economic activity
A public association can have its productive-economic and other entrepreneur activity exclusively for the realization of objectives and goals specified in its Statute. It is allowed to use income for charitable goals, even if it is not mentioned in the Charter of the public association. An NGO can possess any patrimony (enterprises, institutions, buildings etc.) that it needs for its activity, besides the one which can belong only to the state.
Foundation shall have the right to carry out economic activity directly connected with the achievement of its statutory purposes. Any other economic activity of a foundation shall be carried out through its own enterprises which have a status of corporate body.

K.Possibility to register a commercial company
The law regulates that a public association  and the foundations has the right to found enterprises and economic organizations. Every legal person has the right, (as well as acquire property complexes), to carry out scientific, technical, pedagogical, cultural, sports, entrepreneur and other activity allowed by the legislation. Public associations of invalids have the right to establish specialized enterprises in accordance with the Law on social protection of invalids.
Enterprises of public association function according to the Law "About entrepreneur activity and enterprises" and in accordance with the Statutes of the public associations.
The income obtained from productive-economic and other entrepreneur activity of public associations cannot be redistributed between the members (participants) of these associations and should be used exclusively for implementation of goals and objectives specified by the Charter of the public association. It is allowed to use income for charitable goals, even if it is not mentioned in the Statutes of the public association.
Enterprises and other economic organizations of public associations pay taxes to the budget in the order and amount specified by the legislation in force.
Public associations and their juridical representatives for productive - economical and other entrepreneur activities are obliged to get licenses for certain kind of activities that require one.
The enterprises established by a foundation shall carry out their activities in conformity with the Law on Entrepreneurship and Enterprises. Records of administrative expenditures of a foundation must be kept separately from other expenditures.
The administrative expenditures of a foundation of socially useful purpose must not exceed 20 % of its total payments. Administrative expenditures of a foundation shall include, in particular, assets related expenses, current expenses, expenditures on personnel, rewards for the Board members, trustees and auditor. Wages of employees of socially useful foundation must not exceed well those ones of governmental sector employees of the same qualification.
The enterprises established by a foundation shall transfer payments to the budget in accordance with the procedure determined by legislation.
The enterprises set up by a foundation shall register in accordance with the established procedure. Foundation and enterprises set up by it must obtain licenses for activities to be licensed.

    • Possibilities to engage in political/public policy activity

Yes, the NGOs  can perform political activity,  but in strict accordance with next stipulations:
Public associations and their juridical representatives that have supported or acted against some political parties, social - political organizations or particular candidates during the elections shall be taken away the right for state financial support, beneficiary taxation, financing and crediting. The financial sources that have been already received on state grants shall be returned to the state`s budget, based on the court`s decision and the present legislation. If the leaders of the public association were not aware of the fact that some of the members of their organization took part in the pre-electoral agitation they should declare as soon as possible about their association`s neutrality and the mass-media element should publish the `deny`. The persons that acted in the name of the association without its leader`s approval shall be persecuted in accordance with the legislation.
Public associations and their juridical representatives are not allowed to use financial support from foreign (international) natural or juridical persons for supporting political parties, social-political organizations and particular candidates during the elections. These financial sources shall be confiscated and transferred to the state`s budget following the court`s decision.
Yes, the NGOs  can  propose changes in policies, laws and moreover for to implement  the recent approved  Law nr.239-XVI, November 13, 2008 on transparency in decision-making, the Government adopted Regulation on procedures for public consultation in decision making and organization of public meetings through the consultation of citizens and NGOs.



CHARTER 2: Taxation of NGOs
In general the taxation of NGOs is the same as the taxation for all business companies.
Аfter registering at the Minister of Justice , the NGOs should be registered at  the territorial tax bodies, where NGOs are included in a state tax Register, and ultimately, the fiscal code is assigned.
Also, for tax purposes, in 15 days after Registration at the tax bodies, the NGOs  are obliged to be recorded by National Social Insurance Company, National Health Insurance Company, and the Directorate of Statistics:
After registering,  the NGOs, will have to present, the following obligatory  accounting reports:
1. At the Tax Inspectorate:
- Tax for the territory arrangement is binding for non-commercial organizations, quarterly yearly reports. For 2009, 2010 years the quantum of Tax is 40 lei from each employee.
- Calculations of contributions on salaries: health and social insurance (quarterly):











Health insurance fund 






Social insurance fund 






- Statement of the income tax deducted from salary and other payments, on a monthly bases (presented only if the organization has also made payments and gave salaries). For 2009 year the quantum was 7% from each salary.  For 2010 year if you will receive a salary till 25 200 lei the income tax will be 10%, more than 25200 lei  - 18 %.
- Annual Statement on Income Tax with 0% for income tax because the public benefit associations and foundations are entitled for the income tax exemptions. The decision is taken by the Ministry of Finance based on the list of public benefit organisations issued by the Certification Commission under the Ministry of Justice.
- Calculation of land tax if you owned real property is 0.1% from the cost of the real property
- Calculation of rent office, means of transport in case if it was effectuated is 10 % from the cost of service.

2. The National Social Insurance Company:
- Report  4-BASS - (quarterly report)
3. National Health Insurance Company
- Report on the contributions deducted from salary calculations (monthly)
4. The Directorate of Statistics:
- Balance Sheet
- Report on financial results
- Report on charges NGOs - (quarterly reports)

  1. Is NGO income taxed? Is there tax on grants?

The income tax on the annual profit from any kind of activity made by public association or public foundations for 2010 is 0 %, no matter the benefit status of the NGOs. The tax rate was reduced to zero in order to attract investments. Tax losses may be carried forward for 5 years in equal installments, provided that taxable profits are reported in the following years. Any unutilized tax loss is forgone.
There is no tax on grants, received by NGOs, both in public benefit or in private benefit.

  1. Is there a tax on the NGO's economic activity income?

The NGO, both in public and in private benefit, has to prove that the income from its economic activity is not distributed between its members; the entire income is  is reinvested in the NGO non-profit activities, exclusively for achieving the objectives and goals specified in the Statute, the property or the income shouldn't be used in the favor of the members or founders and it shouldn't be used to support any political party. If all these requirements are fulfilled there will be no tax for paying, because the tax rate is zero for 2010.

  1. Is there a tax on donations?

No, there is not tax on donations.
Donations for charitable purposes shall be deducted provided proper evidence is presented. A donor declares donations to the Ministry of Finance, that fixes the fact in order to decrease taxation of the donor for an appropriate amount.
There are no clear provisions regarding donations to non-resident associations or foundations.

  1. Are there exemptions for donors of NGOs (both physical or legal)?

The Fiscal law contains in different sections and articles information concerning exemptions.
Article 36 of the Tax Code defines donations for charitable purposes as gifts and donations in favour of organisations issued public benefit certificate. Under the same article, resident donors are entitled to deduction of any donations made for charitable purposes during the current fiscal year, provided these do not exceed 10% of the taxable income. Benefits for donations for charitable purposes can be used if proper evidence is presented. A donor declares donations to the Ministry of Finance, that fixes the fact in order to decrease taxation of the donor for an appropriate amount.
There are no clear provisions regarding donations to non-resident associations or foundations.
The corporate donors also have the right to use tax benefits for the donations, made by them to NGOs in public benefit. The exact size of tax benefits is specified in special governmental regulations.
Practice:  there are not many exemples.

  1. Is there a tax on income from passive investments (interest on deposits, dividends, etc)?

Interest is included in gross income of the enterprise and is taxed according to art. 15 Tax Code, but for this income the % is 0 (zero).
The dividends should be paid in accordance with art.80, Tax Code, and it sais that NGOs who  receive dividends from any economic agents, include such dividends in gross income and pay income tax in accordance with law. But for this income the persentage is 0 (zero).

  1. Are there taxes on the property owned by NGOs?

On one hand the taxation of the immovable property owned by NGOs is regulated by  Title VI of the Fiscal Code. On the other, the  Local public administration bodies decided on local taxes (e.g. rent fees for premises in municipal property), however, individual privileges are allowed.
Calculation of land tax if an NGO owns real property is 0.1% from the cost of the real property.

  1. Is there an inheritance tax on property inherited by an NGO?

There are no inheritance tax on property inherited by an NGO.

  1. Is there any limitation on foreign funding (e.g. there needs to be a preliminary approval of the state, it can be only a certain percentage of your total income, etc.)

There are no limitations on foreign funding .

  1. Are there any exemptions from VAT for NGOs?

Neither public associations nor foundations are entitled to VAT privileges. Exceptions are cases related to inter-governmental agreements on technical assistance, in which case the decision to levy VAT is made by the Ministry of Finance. Other possibilities are ruled out.
As for customs duties, public associations,  and public foundations are exempted from custom duties and other taxes when they carry out export-import operations and can prove that the shipped goods come under intergovernmental agreements for technical assistance (this specifically refers to World Bank, TACIS, USAID).

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