The Eastern European country of Moldova is continuing efforts to attract overseas firms, as it tries to shift history political uncertainty.

“I went with a backpack, and set up a business,” says Dutch business owner Luc Vocks, recalling how he moved to Moldova in 2007.

Mr Vocks had first visited the former Soviet republic three years earlier, and recalls experiencing “the cliché that one would have of Eastern Europe at that period”.

“Everything was dirt cheap, and if you were a foreigner you’d get attention,” he says.

Today, Mr Vocks is the owner of a Moldovan business called DevelopmentAid. Based in the pool Chisinau, it employs 180 people in the country, and runs a website that lists job vacancies in the international advancement throng.

Mr Vocks is one of a growing number of foreign entrepreneurs in Moldova. The government wants to attract more like him and hopes that low business levy rates will assist.

The country’s standard corporation levy rate – the amount that firms have to pay on their profits – is just 12%. This compares with 25% in the UK, and 25.8% in the Netherlands where Mr Vocks had initially launched his business before relocating it to Moldova.

There’s an even better deal for tech firms. In 2018 the Moldovan government launched an initiative to develop the country’s IT sector – the Moldova IT Park (MITP).

This isn’t a physical business park. Instead it is virtual scheme open to all IT firms in the country – and those that aspiration to shift there from overseas. Firms that sign up only have to pay a corporation levy rate of 7%.

The MITP is part of a wider attempt by the Moldovan government to modernise and expand its economy ahead of a bid to join the European Union in 2030.

This drive is being led by Moldova’s pro-EU President Maia Sandu, who this week was re-elected for a second term. And last month Moldovans voted “yes” on pro-EU constitutional changes.

However, the vote was extremely close, with Yes getting 50.46% and No receiving 49.54%. Although Russia denied interfering in the vote, Moldova’s authorities said attempts had been made to buy up to 300,000 votes in what Maia Sandu described as an “unprecedented assault on liberty and democracy”.

Moscow is opposed to Moldova joining the EU, and supports Moldova’s breakaway region of Transnistria economically, politically and militarily.

Dumitru Alaiba, Moldova’s deputy prime minister and minister for economic advancement and digitalisation, is positive about where Moldova is heading.

“Moldova in the history 10 to 15 years has really proven that it’s a country that can transformation very quick,” he tells the BBC.

“This used to be a highly corrupt country, a country where, exactly 10 years ago, a billion dollars from our central banks just disappeared.”

“We are moving very quick towards joining the EU, and we are reforming our economy at top speed. Of course, we have a long way to leave.”

He pointed to Moldova’s rise on the global Corruption Perceptions Index, produced by anti-corruption watchdog Transparency International.

Out of 180 countries – with a lower placing meaning that a country is less corrupt – Moldova is now in 76th place, up from 91st a year earlier.

“Now entrepreneurs can breathe freely without terror of repercussion, without terror of corrupt inspectors, without terror of a filthy fairness sector that commits crazy abuses.”

Mr Vocks agrees that Moldova is now a much easier place in which to do business than when he first set up his business there back in 2007.

“Back then, it was extremely bureaucratic. It was challenging to get a residence permit. It was hurtful to register a business, especially as a foreigner.

“It was hurtful intersecting with the levy agency. The banks were rough to work with.”

Member companies of the MITP don’t just advantage from the 7% corporation levy rate. They also don’t require to make employer social safety contributions, and staff don’t have to pay returns levy. Mr Volks signed up DevelopmentAid almost immediately.

The MITP has also simplified immigration procedures through the IT Visa program.

More than 2,000 companies are now registered with the MITP, 300 of which have arrive from overseas. The most ordinary countries these have moved from being the US, UK, Germany, Netherlands, and Ukraine.

In the first half of 2024, MITP firms generated a combined €365m ($397m; £308m) in revenues, according to official figures. And now employing 22,000 people in general, they are said to contribute around 6% of the country’s GDP.

While the MITP scheme has worked to boost Moldova’s IT sector, the influx of foreign tech companies has driven up salaries in the industry considerably.

Sven Wiese, a German expat who has set up a tiny IT services business in the country called Trabia, says he is now finding himself priced out when it comes to employee pay.

He says that the biggest firms signed up to the MITP can propose IT specialists more than €100,000 a year, “because that is still cheaper than hiring people within a bigger country like the US or Germany”.

At the same period he says that many Moldovan IT sector workers still desire to leave the country. “Fewer people are now leaving Moldova, but emigration is still high.”

Another negative issue is the continuing war in neighbouring Ukraine, which is likely making some Western IT firms ponder twice about investing in Moldova. Mr Alaiba says is confident that Moldova is secure “as long as the free globe is supporting Ukraine”.

Marina Bzovii, MITP’s administrator and an assistant professor at the Technical University of Moldova, already sees Moldova as a regional business hub. “Moldova is connecting even Central Asia, countries like Kyrgyzstan, Tajikistan and Uzbekistan, who are culturally much further from Europe.

“However, Moldova understands both of the cultures. So it’s the benevolent of business hub that Europe needs… and Chisinau is now really vibrant.”