CHISINAU, Moldova -- In the late 1980s, Kurt Poglitsch was among the first wave of Western businessmen to go east to exploit the opportunities which came out of the crumbling of the Soviet bloc. After spending several years in Hungary and Ukraine, the Austrian business consultant chose Moldova as his next business stop.


"This country is different from other Soviet republics," said Poglitsch, who matches Western investors with local companies. "The reforms just recently began, but the government is very serious about foreign investment. Opportunities abound here, and you feel safe on the street."


Poglitsch, who has now spent seven months in Moldova, is one of the few Western businesspeople who know well this small country nestled between Ukraine and Romania. So far.


Moldova thinks that in its case, small means beautiful. Moldova is the only CIS country with a currency which has remained stable for the last two years, and legislation promising 50 percent tax breaks for five years to foreign investors who put money into some strategic areas of the country's economy.


Foreigners are allowed to buy up to 100 percent of local companies being privatized.


"When I first came here 20 months ago, there was no foreign investment whatsoever," said a Western expert in Chisinau, who asked not to be named. "Since that time Germans and the British are doing wine deals, the Spanish are building a $30 million sports shoe factory. Clearly, there is a momentum building that was not here before."


Most foreigners who come to Chisinau stay at a former Communist Party hotel now turned into a four-star Western-style establishment by the Swiss Seabeco company.


Seabeco arrived on the scene in 1991, the first major foreign investor in Moldova, and has put $25 million into the economy, mostly in agricultural, banking and telecommunications projects, said Vladimir Kolesnichenko, general director of Seabeco-Moldova.


Experts say the biggest opportunities for investors lie in Moldova's agriculture, which accounts for two-thirds of national income. With some of the most fertile land in Europe, the country is famous for its wines, and produces tobacco and a variety of other crops.


The European Bank for Reconstruction and Development has recently provided Moldova's wine industry with a $30 million loan to build a local bottling and corking plant. The target is to sell 25 million bottles in the West by 1997.


"Moldova is famous for its rich land," said Seabeco-Moldova's Kolesnichenko. "One can have three harvests a year in this country. This is the reason we decided to invest in agriculture."


Seabeco introduced Western technology to eight rundown sovkhoz (state farms) that recently began producing quality chicken, turkey and pork meat for export. In an effort to upgrade Moldova's banking services, the company created the Exim Bank, the first bank in the country with foreign capital.


Success does not necessarily come easy in Moldova. Foreign investors may face several unfamiliar problems here, said Dmitry Chubashenko, deputy director of the Infotag news agency in Chisinau.


"There is still a lot of red tape and questions about legislation," said Chubashenko. "The country still lacks the banking infrastructure the Westerners are used to."


There are no foreign banks accredited in Moldova, and no Moldovan bank is connected to the SWIFT system. Foreigners are not allowed to have more than a 35 percent share in a bank. Land ownership is another major obstacle. "Many potential investors leave because they cannot buy land in the countryside," said Chubashenko. "Why would they invest in agriculture if they cannot own the land?"


Moldova needs to upgrade its accounting practices and its management and marketing techniques, business consultant Poglitsch said.


Reform is a process, and interest in Moldova has been growing alongside government efforts to introduce market mechanisms, privatize most of industry, and create more favorable conditions for foreign investors.


"The government is taking all the right steps," said Sergei Kostrikov, economic and legislative manager with Price Waterhouse in Chisinau. "They have a liberal foreign investment law, they have enacted tax concessions, they tried to build a securities market infrastructure that make a foreign investor feel at home."


Since unification with Romania was rejected in 1992, the political life in Moldova has calmed down. Guns remain silent in the Transdnestr region three years after a bloody conflict between Moldovans and the Russian-speaking population. Meanwhile the country is rapidly moving to capitalism.


Tight-money policies have shown better results in Moldova than in most post-communist countries, Western experts in Chisinau say. Inflation was reduced to about 10 percent this year from 2,000 percent three years ago.


In addition, the government has cut its budget deficit to 3.6 percent from 23.4 percent. The International Monetary Fund predicts the Moldovan economy will grow 1.5 percent this year -- the first growth in three years.


The government has identified 39 enterprises, mostly in light industry, electronics, textiles and leather, in which up to 60 percent will be sold to foreigners, privatization minister Ceslav Chobanu said. The land on which plants and factories stand may also be purchased


Special tax breaks are one of the tools to attract more foreign money. Foreign businesses with capital of $250,000 that receive at least 50 percent of their income from sales of products and services are entitled to a 50 percent tax break for a five-year period.


Almost 500 joint ventures already exist. They are mainly in food processing, textile production and leather processing.


In the first six months of 1995, exports grew by 25 percent and imports grew 13 percent, according to government statistics. While Russia continues to dominate Moldova's foreign trade with its 50 percent share, ties with the Ukraine (17 percent) and Romania (11 percent) are growing, as well as trade with Western countries, notably the United States, Germany, Austria, Switzerland and Turkey.