The rise in foreign investment in Moldova and joint projects with local investors means that supervisory boards must often be instituted in Moldovan joint-stock companies (JSC). This leads to effective and operative control over the company's management. This article deals with the questions of whether foreign citizens may be appointed as members of supervisory boards and whether there any impediments to ensuring compliance with Moldovan legislation.


Under the Moldovan Joint-Stock Companies Act No. 1134/1997 (Act No. 1134), the decision to institute and appoint a supervisory board1 in a JSC rests exclusively with the general shareholders' meeting. Having a supervisory board in a JSC rests exclusively with the general shareholders meeting. having a supervisory board in a JSC is optional.

Moldovan legislation does not prohibit foreign citizens from exercising the mandate of a supervisory board member, including that of chairman. There is no norm prohibiting non-Moldovan speakers from exercising the mandate of supervisory board member.

Nevertheless, the general rules of law regarding impediments/ restrictions are relevant. For instance, pursuant to Art. 66(5) of Act No. 1134, the JSC's employees2 can be elected as supervisory board members, but cannot constitute more than half of the members, except when the employees are also the JSC's shareholders. A representative of the Moldovan state cannot be appointed to more than one supervisory board.

The following people cannot be elected supervisory board members: (i) those lacking full legal capacity; (ii) those having outstanding convictions for fraud, theft, false testimony, bribery, other economic criminal acts; (iii) members of five supervisory boards of other JSC registered in Moldova3; (iv) members of a JSC's executive board or a representative of a company administering the JSC (organizatia gestionara a societatii); (v) the internal auditor of a JSC; (vi) other situations as provided in the JSC's articles of association (eg to possess a particular background, language skills, etc.).

Becoming a supervisory board member

The members of a JSC's supervisory board are elected by the cumulative vote of the general shareholders' meeting for a period that cannot exceed four years (Art. 66 of Act No. 1134). A single member can be reelected to the same supervisory board an unlimited number of times. Should the shareholders so require, for opposability purposes the names of supervisory board members can be included into the State Register of Companies (Registrul de Stat al persoanelor juridice) – ie, the trade register. While offering the position of a supervisory board member, the JSC may request that the candidate present a written declaration by which he: (i) presents his consent to the appointment; (ii) declares that there are no impediments to exercising the mandate; and (iii) discloses sufficient information to track possible conflict of interest situations in advance.

Unless the JSC's statute provides otherwise, rules of mandate must apply in the legal relationship between the JSC and the members (Art. 66(14) Act No. 1134). Accordingly, a member can be revoked at any time with or without reason by the general shareholders' meeting. In practice, the JSC executes either a mandate or management agreement with its supervisory board member (a labour agreement is also possible).


According to Art. 66(12) of Act No. 1134, the supervisory board's powers are considered terminated as of the day of: (i) announcement of the decision of the general shareholders' meeting on approval of a new list of supervisory board members; (ii) announcement of the decision of the general shareholders' meeting on revocation of the supervisory board members before expiry of their mandate without appointing new members; (iii) expiry of the mandate; or (iv) decrease in the number of supervisory board members by more than half.

Pursuant to Art. 50(3) of Act No. 1134, the general shareholders' meeting sets the amount (if any) of retributions, remunerations and compensations payable by the JSC to its supervisory board members. Payment of retribution is not compulsory (except when a labour agreement is in place).

Under Moldovan Act No. 199/1998, supervisory board members are considered insiders. In this respect, supervisory board members are obliged to duly disclose complete information to the JSC (as many times as necessary, but at least once per year) that would enable the JSC to pinpoint potential conflicts of interest in advance (Art. 85(3) Act No. 1134).

For situations in which foreign supervisory board members intend to reside in Moldova while exercising their offices (eg for EU citizens, for periods exceeding 90 days in a six-month period), they will need to obtain a temporary residence permit that will enable a longer stay. Due to the specifics of Moldovan legislation, labour/immigration/ resident permits are issued only to foreigners exercising labour activities in Moldova. A labour agreement would therefore need to be executed between the supervisory board member and the JSC.

Liability of supervisory board members

Pursuant to Art. 74(2) of Act No. 1134, supervisory board members are liable, including materially, if they intentionally lead the JSC to bankruptcy, spread unreliable or misleading information, use other methods in order to change the price of securities prejudicing the JSC, or fail to disburse dividends or other mandatory payments.

The supervisory board members are jointly and severally liable for any decision that they took causing a prejudice to the members before the JSC. Supervisory board members may be assisted by advisors (eg, lawyers) while exercising their mandate.

This article was originally published in the schoenherr roadmap`11 - if you would like to receive a complimentary copy of this publication, please visit:


1 Moldova applies the one-tier system of corporate governance. Accordingly in Moldova the legal notion of "council" (consiliul), as used by the local legislator, is the closest legal meaning to the notion of "supervisory board" as used in countries that apply the two-tier system of corporate governance.

2 Members of the JSC's executive board are also its employees. Note that a member of the executive board cannot be a member of its supervisory board at the same time.

3 The sixth appointment cannot be exercised, whereas the person has to return the amounts received while exercising the mandate to the respective JSC. Claims against such members can be raised by any shareholder and the competent Moldovan authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.