Articles

Tightening Foreign Investment Controls: The "Hidden Permit" and the Council's New Powers

Since April 20, 2025, Moldova has enforced new foreign investment screening rules under Law No. 33/2025. The list of strategically sensitive sectors has grown, the Council for the Promotion of Investment Projects of National Importance has gained broader authority, and deal approvals now take over three months in practice.

What Changed

Previously, the focus was on energy and telecoms. Now, mandatory prior approval is required for IT systems in critical infrastructure, artificial intelligence, robotics, semiconductors, cybersecurity, quantum and nanotechnologies; data processing and storage; management of airports, ports, and railways; broadcasting, geophysics, and production of cryptographic protection tools.

The law leaves several key terms undefined — "exploitation," "data processing," "critical infrastructure." In practice, this means the Council scrutinizes companies simply for having a certain activity code (CAEM) in their charter — even if that activity has never actually been carried out. Removing a "dormant" activity code after the Council has taken notice is no longer an option.

How the Council Operates

The Council can reopen any previously approved deal at any time. If evidence of a security threat emerges, a review can be initiated regardless of when the transaction took place.

Documentation now includes criminal record certificates for all individual shareholders, not just ultimate beneficial owners. The Council examines the transparency of funding sources, foreign government control over the investor, risks of access to Moldovan citizens' personal data, and cybersecurity threats.

The formal review period under Government Decision No. 437/2025 is 45 days from the moment the document package is deemed complete. The real timeline in 2026 exceeds three and a half months. Any inaccuracy or request for additional materials resets the clock.

The Cost of Getting It Wrong

A transaction completed without prior approval is not a technical violation — it is grounds for forced unwinding. The Council can require the parties to restore the pre-investment position (within a minimum of 10 days), impose a fine of up to 5% of annual turnover (capped at 5 million lei), suspend operations in strategic sectors, and block voting rights, dividends, and participation in management.

When Approval Is Not Required

Exceptions: intra-group transactions, increasing an already controlling stake, transactions involving state-owned enterprises, and reorganizations that do not alter shareholding percentages. Asset deals fall under scrutiny only if their value exceeds €1 million and they represent at least 25% of the company's total assets per the most recent financial statements.

What to Do

Legal due diligence should be conducted before negotiations begin — not after a preliminary deal agreement is signed. Three essentials: reviewing CAEM codes and removing unused activity types; analyzing the transaction structure for applicable exceptions; compiling the investor profile — ownership structure, sanctions exposure, source of funds.

The law's vague language is not accidental. The Council and courts will interpret it on their own terms, and anticipating that logic without experience in administrative disputes is hard. This is precisely where a lawyer is not a formality: a transaction structure that looks clean on paper can be blocked six months after signing.