LLC or Sole Proprietorship in Moldova: What to Choose for Your Business in 2025?
When launching a business in the Republic of Moldova, the first practical decision is simple but fundamental: which legal structure is more advantageous – Sole Proprietorship or Limited Liability Company (LLC)? This choice affects taxes, personal financial risk, access to investments, credibility with banks and partners, and often determines whether the business will survive its first year.
Below, we explain clearly how an individual sole proprietor differs from a limited liability company, how taxation works, and when it’s more beneficial to start as a Sole Proprietorship or to register an LLC in Moldova right away.
The Main Difference Between a Sole Proprietorship and an LLC — In Simple Terms
| Criteria | Sole Proprietorship | LLC (Limited Liability Company) |
|---|---|---|
| Business liability | Owner is personally liable with personal assets | Only the company is liable with its assets |
| Legal status | Business and owner are legally the same person | Separate legal entity |
| Scalability | Suitable for small activities and freelancers | Ideal for expansion: employees, investors, large contracts |
Key takeaway:
If risks and financial volumes are small — start as a Sole Proprietorship.
If you plan for employees, credit, tenders, or major partnerships — safer to form an LLC.
What Is a Sole Proprietorship in Moldova?
A Sole Proprietorship is a business structure where an individual is legally registered with ASP to operate independently. It offers a fast and cost-efficient way to legally perform services or sell goods.
Who Should Choose This Structure
A Sole Proprietorship is a good option if you:
- are a freelancer (IT, design, marketing, copywriting);
- are a craftsman or service provider (repairs, production on demand, etc.);
- work in consulting or education;
- want to test a business idea with minimal initial costs.
Advantages of Sole Proprietorship
- Quick registration. Typically completed within one business day via ASP.
- Minimal bureaucracy. Fewer documents than for an LLC.
- Lower accounting costs. Simplified bookkeeping if few operations.
- Direct access to profits. Income after taxes goes directly to the owner.
Disadvantages & Risks
- Unlimited personal liability. Business debts can affect personal property (e.g., home, car, savings).
- Lower business credibility. Banks and large clients tend to trust LLCs more.
- Limited growth potential. Harder to bring in partners or investors.
- Social contributions (CAS/CNAM) may increase as business grows or employees are hired.
💡 Accountant’s tip: Sole Proprietorship is ideal for low-risk activities and a fast start but consider switching to an LLC when turnover and liabilities grow.
What Is an LLC in Moldova?
A Limited Liability Company (LLC) is a separate legal entity from its owner(s), with its own registration ID, assets, bank account, and legal obligations. Owners’ personal assets are protected.
Who Should Choose an LLC
An LLC is the right fit if you:
- work with other companies (B2B) or participate in tenders;
- plan to hire employees and scale operations;
- consider loans, investments, or business partners;
- run an e-commerce business, production company, or IT service;
- deal with import/export activities.
Advantages of LLC
- Personal asset protection. Liability is limited to the company’s assets.
- Higher credibility. Better standing with banks and business clients.
- Investment-friendly structure. Easy to distribute or transfer ownership shares.
- Supports long-term expansion.
Disadvantages of LLC
- More complex registration process;
- Full bookkeeping and administrative compliance required;
- Higher operational costs than a Sole Proprietorship;
- Director’s salary and related CAS/CNAM obligations.
💡 Accountant’s tip: If your goal is real growth, registering an LLC from the start is usually the correct strategic choice.
Sole Proprietorship vs LLC: Detailed Comparison
| Criteria | Sole Proprietorship | LLC |
|---|---|---|
| Legal Status | Individual business owner | Independent legal entity |
| Liability | Unlimited personal liability | Limited liability |
| Market credibility | Suitable for micro-businesses and freelancers | Preferred in B2B and by banks |
| Investment opportunities | Very limited | Partners and investors can join |
| Employees | Possible but requires more accounting effort | Standard business practice |
| Corporate Tax | Typically ~12% of profit (standard regime) | Typically ~12% of profit (standard regime) |
| Special tax regimes | Depends on specific business profile | Possible in certain industries (within legal rules) |
| VAT (TVA) | Mandatory if revenue exceeds ~1.2M MDL/year | Same VAT threshold rules apply |
| CAS/CNAM contributions | Depending on chosen tax regime & employees | Required for employees & administrator |
| Participation in tenders | Rarely possible | Common requirement |
| Bank account | Optional | Mandatory |
| Closing the business | Fast and inexpensive | Requires formal liquidation process |
Taxes: Practical Examples
Assuming a simple model:
- Annual revenue: 300,000 / 1,000,000 / 3,000,000 MDL
- Business expenses: 50% of revenue
| Revenue | Estimated Profit | Profit Tax (12%) |
|---|---|---|
| 300,000 MDL | 150,000 MDL | 18,000 MDL |
| 1,000,000 MDL | 500,000 MDL | 60,000 MDL |
| 3,000,000 MDL | 1,500,000 MDL | 180,000 MDL |
⚠️ Exact tax regime depends on your business activity and legal setup and should be verified with current legislation.
💡 Accountant’s tip: The right decision isn’t based on a fixed tax rate in an article, but on calculating the full real tax burden: profit tax, VAT, CAS, CNAM & other contributions.
Checklist: Which Structure Should You Choose?
| Question | If YES — better option: |
|---|---|
| Do you want a quick and inexpensive start? | Sole Proprietorship |
| Are you planning to hire staff? | LLC |
| Do you work with large companies? | LLC |
| Do you work alone with low risk? | Sole Proprietorship |
| Do you need investors or credits? | LLC |
| Do you want to protect your personal assets? | LLC |
Examples by Business Type
Freelancer (design, IT, marketing) → Sole Proprietorship
Online store → LLC
Production workshop → LLC
B2B consulting → LLC
Cost of Business Administration
| Cost category | Sole Proprietorship | LLC |
|---|---|---|
| Accounting | Lower initial costs | Higher — full bookkeeping required |
| CAS / CNAM | Depends on activity & employees | Mandatory for employees & administrator |
| Reporting mistakes & fines | Fewer reports but higher personal risk of errors | More reporting, but lower risk with a proper system |
How to Register a Sole Proprietorship in Moldova
- Select CAEM activity codes;
- Prepare ID and necessary documentation;
- Apply at ASP (online or in person);
- Receive registration certificate and IDNO;
- Open a bank account if needed.
How to Form an LLC in Moldova
- Select company name, ownership structure and founders;
- Prepare articles of incorporation and founding decision;
- Provide legal address;
- Register at ASP;
- Open a corporate bank account;
- Deposit share capital;
- Set up accounting, payroll (CAS/CNAM) and VAT if applicable.
FAQ — Common Questions
Which is more advantageous in Moldova: LLC or Sole Proprietorship?
For small-scale services and freelancing — Sole Proprietorship.
For scalable business with employees and large contracts — LLC.
Can I start as a Sole Proprietorship and later convert to an LLC?
Yes — this is a common and recommended route when the business grows.
When do I need to register for VAT (TVA)?
When the business exceeds the VAT threshold (e.g., 1.2M MDL in the last 12 months).
Which structure protects personal assets better?
LLC — because business liabilities remain within the company.
What are typical accounting costs?
It depends on the number of transactions and staff. LLCs typically require higher accounting costs due to compliance.
Final Advice from a Professional Accountant
- Sole Proprietorship — great for a simple, low-risk, one-person start.
- LLC — best for building a long-term and scalable company with asset protection.
Need help choosing and registering the right structure?
Before registering your business in Moldova, it’s essential to estimate taxes and liabilities for 1–2 years.
Buhgalter.md will help you:
- Choose the optimal legal structure for your business;
- Calculate accurate tax burden including VAT, CAS, CNAM;
- Register a Sole Proprietorship or LLC and set up accounting properly.
👉 Get a free consultation with our accountant today — and start your business in Moldova with the right legal structure and clear financials.