Invest in Macedonia by liaoqinmei


									Table of contents

Macedonia At a Glance            3

Macroeconomic Indicators 2008    4

Setting Up a Business            5

Education & Workforce            7

Operating Within Macedonia      10

Taxes                           16

Banking & Finance               17

TIDZs                           18
Macedonia At a Glance
Official Name           Republic of Macedonia
Capital                 Skopje
Other Major Cities      Kumanovo, Bitola, Tetovo, Veles, Prilep, Shtip, Ohrid
                        2.1 million
                        Median age: 34.4 years
                        45% under 30 years
                        Life expectancy at birth: 74.2 years
Area                    25,713
                        Multi-party parliamentary democracy.
                        Legislative: unicameral Assembly with 120 MPs with four-year terms; members
                        are elected by popular vote from party lists based on the percentage of the
Political System        overall vote the parties gain in each of six electoral districts.
                        Executive: president elected by popular vote for a five-year term; prime minister
                        and cabinet elected by the Assembly following legislative elections.

                                                                                                              Frequently Asked Questions
                                                                                   road distances


Geographic Location                                                                                 500km


                        Temperate continental in the North, Mediterranean in the South
Climate                 Warm, dry summers and autumns.
                        Relatively cold and snowy winters.
Time Zone               GMT + 1
Labor Force             919,424
Literacy rate           98%
                         Macedonian Denar (MKD)
                         €1 = MKD 61.3
Country Phone Code      + 389
Internet Country Code   .mk

Macroeconomic Indicators 2008


Annual inflation                                                                   %        8.3

Real GDP growth rate                                                               %        5.0

FDI                                                                             m US$     598.5

Import                                                                          m US$   6,851.6

Export                                                                          m US$   3,978.2

Trade balance                                                                   m US$   -2,873.4

Industrial production growth rate                                                  %        5.5

                                                                                                   Frequently Asked Questions
Gross salaries real growth                                                         %        0.3

Exchange rate, average                                                         MKD/1$      41.9

Exchange rate, average                                                         MKD/1€      61.3

Source: State Statistical Office, National Bank of the Republic of Macedonia

Setting Up a Business
1. How do I register a company?

You can register a company in Macedonia by visiting a single counter and addressing a single
employee. The one-stop-shop system for registering a company operates within the Central Register
via 32 electronically integrated offices located throughout Macedonia.

2. How long does it take to register a company?

You can register a business in Macedonia in just 4 hours.

3. How much does it cost to register a company?

The Central Register fee for registering a limited liability company is €42. You can expect minimal
additional expenses for court translations and notary certifications of the required documents
(around €5 per page).

4. Are there any additional mandatory fees before I can begin doing business in Macedonia?

                                                                                                       Frequently Asked Questions
Minor fees are incurred to obtain mandatory licenses before operation of the business can begin in
the country. After registering with the Central Register you do not have to pay any additional fees.

5. What types of companies can I register in Macedonia?

The most common types of companies are limited liability companies, joint stock companies,
representative offices and branches.

6. What documents do I need to register a company?

When registering a company as a physical entity, the following documents are required before you
go to the Central Register:

• copy of your passport certified by a notary
• court translation of your passport in Macedonian certified by a notary

All other necessary documents will be provided at the Central Register. We suggest that you
arrive prepared with several different names for the company, in case your first preference is not

When registering company as a legal entity the following documents are required:

• the registration of the mother company certified by a notary
• court translation of the registration of the mother company certified by a notary

7. Do I need to hire a lawyer to register my company?

No, you are not obliged to hire a lawyer to register a company. The Central Register provides free
on-site legal assistance. However, a lawyer would be helpful as your business grows in Macedonia.

8. What is the minimum capital requirement for registering a company in Macedonia?

You do not have to deposit any money to establish a company. The minimum capital requirement of
€5,000 for a limited liability company has to be deposited within one year of founding in one of two ways:

• Monetary contribution through remittances in domestic commercial banks in temporary accounts
• In-kind contribution appraised by an authorized Macedonian appraiser

9. How do I open a bank account in Macedonia?

To open a bank account in a commercial bank in Macedonia you need the following documents,
in original or notary certified:

• written request for opening the account
• certificate from the company register not older than 6 months
• evidence of assigned tax number

Neither the owner nor the manager of the company needs to be personally present at the bank
when opening the account.

                                                                                                             Frequently Asked Questions
For persons authorized to use the account you need:

• identification document
• written authorization signed by the legal representative

10. What cases warrant additional approvals for operating within Macedonia?

To operate in certain fields, such as pharmaceuticals, banking, insurance, and educational
activities, the company registration process is followed by a licensing process with the relevant
authorities. The employees in the Central Register are trained to direct newly registered
companies to the appropriate licensing authorities.

11. What is Macedonian government policy regarding overseas companies doing
business in Macedonia?

Тhe Constitution and the Law on Trade Companies guarantees equal treatment for domestic and
foreign entities. Additionally, one of the Government’s top priorities is to attract foreign direct
investments in the country. One Minister, responsible for foreign investments, and Invest Macedonia
through its economic promoters stationed around the world, target companies in priority countries
to meet potential investors.

12. Which law regulates company registration?

The Law on Trade Companies (Official Gazette no. 28/2004, 84/2005, 25/2007) governs the
establishment and organization of a company. The Law on Trade Companies is fully harmonized with
EU directives and regulations. There are numerous local legal firms specialized in corporate law
which are readily available for help.

Education & Workforce
1. What is the average monthly gross salary? What is it comprised of?

The average monthly gross salary in Macedonia is €430, one of the lowest in Europe.
This amount includes the net salary, personal income tax (10%) and social contributions for:
     • pension and disability insurance
     • health insurance
     • employment insurance
     • additional health insurance

2. What portion of the average monthly gross salary is for social security contribution?

                Macedonia - Social Security Contributions

    2008                                        21,2%                                        9,2%           1,6%   32%

Current                                         19%                                   7,5%           1,4%          27,9%

                                          16,5%                                  7%           1,2%
    2010                                                                                                           24,7%

                                                                                                                           Frequently Asked Questions
    2011                                  15%                               6%        1%                           22%

                      Pension Insurance          Health Insurance       Employement Insurance

3. On average, what is the skill set that a candidate would possess?

The average Macedonian worker possesses good linguistic, interpersonal, and teamwork skills.
In general, Macedonian education is concentrated on providing a broad set of knowledge to the
future workforce.

4. What percentage of the population speaks English? What other languages are in use?

Every child in Macedonia begins to learn English in the first grade of primary school. In the sixth
grade a second foreign language is introduced as mandatory, and a third as optional. Two foreign
languages are mandatory in high school as well: English, and one of German, French, or Russian.
Also, the system of higher education entails two years of professional English. Regional languages
(Serbian, Bulgarian, Albanian, Greek, Turkish) are widely understood and spoken.

5. What is the availability of skilled labor in Macedonia?

Unemployed labor force by level of education, 2008 (in %)
University level education                                                                                         12.0%
Higher education                                                                                                    3.4%
4 years of secondary education                                                                                     41.2%
3 years of secondary education                                                                                     12.7%
Primary and lower secondary education                                                                              25.4%
Incomplete primary and lower secondary education                                                                    4.4%
Without education                                                                                                   0.9%
Source: State Statistical Office

Unemployed population
by age group                                                                                   15-24 years
                                                 21%            17%

 Unemployed population = 305,271
                                                                                               25-49 years


                                            Source: State Statistical Office                   50-64 years

Graduated students 2003-2007              2003               2004              2005    2006            2007
Graduated Students                       4,404               5,010             5,397   6,213           8,360
Technical Fields                          940                 976              1,103   1,288           1,521

                                                                                                               Frequently Asked Questions
Source: State Statistical Office

6. Are there any international schools in Macedonia?

Numerous private international educational institutions exist in Macedonia, both European and
American, starting from pre-school all the way to university. The Ministry of Education maintains
a listing of accredited educational institutions.

7. How do I find the right Macedonian staff for my business?

Numerous HR companies and recruitment agencies operate in Macedonia. Invest Macedonia can
provide relevant contacts upon request.

8. Who can I work with to train staff?

Universities in Macedonia are open and willing to collaborate with incoming investors in meeting
the investors’ particular skills needs by co-creating and implementing customized training programs.
Invest Macedonia can provide appropriate contacts. Also, training programs can be implemented
through HR and training agencies.

9. What do I need to be aware of when hiring staff?

All issues related to employment are regulated by the Labor Relations Law, the respective collective
agreements, other legal acts, and the individual contract between the employer and the employee
that should be in accordance with the Law.

10. What are the different modes of employment in the country?

There are two general forms of the employment contract:
• Permanent employment – for a period of time that has not been previously determined
• Temporary employment – for a period of time that has previously been determined

11. How fast can I hire employees in the country?

According to the Labor Relations Law, an employer can hire employees through a public announcement
registered with the Agency for Employment and/or published in a newspaper. The legally prescribed
minimum period for the public announcement of a new position is 5 working days.

12. What leave periods are employees entitled to?

Employees are entitled to the following leave periods:
• Annual leave between 20 and 26 working days
• Sick leave with notice within 24 hours

                                                                                                     Frequently Asked Questions
• Maternity leave of nine months compensated by the Health Insurance Fund
• Up to seven days paid leave, in cases of marriage, death of close family members,
  and professional examinations

13. What are the national holidays in Macedonia?

• Jan 1, New Year’s Day
• Jan 7, Orthodox Christmas
• May 1, Labor Day
• May 24, Sts. Cyril and Methodius
• Aug 2, Day of the Republic
• Sep 8, Independence Day
• Oct 11, National Uprising Day
• Oct 23, Macedonian Revolutionary Struggle Day
• Dec 8, St. Clement of Ohrid
• Two days for Orthodox Easter, depending on the Orthodox calendar
• Ramazan Bajram, depending on the Muslim calendar

In addition, there are many ethnic specific and religious holidays.

14. In which cases does the employer have the right to terminate the employment contract?

According to the Law on Labor Relations, employment can be terminated in the following cases:
• By agreement between the employer and employee
• Upon expiry of a fixed–term of employment
• When enforced by law
• By notice, supplied either by the employer or the employee
• Due business reasons (e.g. restructuring)

Operating Within Macedonia
1. Which multinationals are already working in Macedonia?

Johnson Controls, Johnson Matthey, Lukoil, Duferco, ArcelorMittal, Deutsche Telecom, Telekom
Slovenije, Mobilkom Austria, EVN, Societe Generale, Steiermarkische Bank und Sparkassen AG,
ProCredit Holding AG, Nova Ljubljanska Banka, Hypo Alpe Adria Leasing, Soravia, ERA Group, etc.

2. Do I need an entry visa for Macedonia?

The citizens of the European Union member states and Schengen Convention signatories can fulfill
the right to enter Republic of Macedonia with legitimate and not expired ID issued by the legal
authorities of the country of origin.

Republic of Macedonia also fully liberalizes the visa regime with all the countries on the White
List of the European Union. The citizens of these countries will have the right to enter Republic
of Macedonia the following year without any visas. Each foreign citizen who owns a legitimate
Schengen C visa will be permitted admittance to the Republic of Macedonia without possessing a
Macedonian visa, and the length of the stay will be limited by the Schengen visa conditions.

                                                                                                           Frequently Asked Questions
For a complete list of all countries, please visit

3. How can I reach Macedonia by plane?

Macedonia is well connected to the entire world through direct flights to Skopje Alexander the Great
airport from: Vienna, Rome, Zurich, Dusseldorf, Cologne, Prague, Budapest, Ljubljana, Zagreb,
Belgrade, Sarajevo, Sofia, Tirana, and Istanbul. Another international airport is located in the city of
Ohrid, in the southwest.

4. How do I get authorization for working in Macedonia?

Foreign citizens can apply for work visas at the relevant Embassy or Consular office of the Republic
of Macedonia. Once a work visa is obtained, upon your arrival you may apply for a work permit at
the Employment Agency of the Republic of Macedonia.

5. Can foreign investors acquire rights to real estate in Macedonia?

Foreign entities can directly own or lease property in Macedonia, according to the Law on
Construction Land (Official Gazette of the Republic of Macedonia No. 82/08 from 08.07.2008).

6. What sort of help can I expect to receive in choosing a business premise?

Invest Macedonia can help in identifying a suitable real estate agency in Macedonia. Also, based on
your specifications, we can identify adequate state-owned parcels and buildings.

7. What is the cost of renting office space?

Rents on office space range from €7.5 – €22.5 /m2/month, depending on the class of the building
with an average of €12.5 - €15 /m2/month in Skopje.

8. What is the cost of construction land in Macedonia?

State owned construction land is sold or leased through a public tender procedure. Minimum bidding
prices are set by the Ministry of Transport and Communications in compliance with the Construction
Land Price Determination Methodology.
The minimum bidding prices differ across municipalities and according to the intended purpose of
the construction land, and range between €2/m2 and €100/m2.

 Table 1/2
 Purpose /
                                                                                         Commercial and
 Municipality (prices                Housing              Apartment Buildings                                      Production Facilities
                                                                                          Office Centres
 in Euro/m2)*
                                       40.73                       73.32                       107.54                       42.36
                                       35.85                       65.18                        97.76                       34.23
 Kisela Voda

                                                                                                                                             Frequently Asked Questions
 Bitola                                30.96                       58.66                        87.99                       29.33
                                        6.52                        11.34                        16.3                        4.89

 Table 2/2
 Purpose / Municipality                                                                                               Infrastructural
                                                          Public Buildings            Sport and Leisure
 (prices in Euro/m2)*                                                                                                    Buildings
                                                                29.33                         35.85                         30.96
                                                                24.44                         30.96                         26.07
 Kisela Voda
 Bitola                                                         21.18                         26.07                         21.18
                                                                 3.26                          3.26                         3.26

Note: The above prices are extracted from the bylaws and law for transformation of the ownership of state owned construction land and
represent the minimal prices for public bidding procedure. The data stated here can be subject to change. For further information on state
owned construction land please contact a representative of Invest Macedonia.

9. How much does a square construction meter cost?

On average, a square construction meter for a construction shell costs around €170-225/m2.

10. What is the average monthly gross salary?

The average gross monthly salary is €430, one of the lowest in Europe.

11. What is the transportation cost for a 20t truck?

                                                                                                    Cost (€)
 Destination                     Distance km2             Days               Borders
                                                                                                 (20 ton truck)
                                    1,370                 2                    2                    1,200
                                    1,700                 3                    2                    1,300
                                    1,600                 3                    2                    1,400
                                    1,900                 3                    2                    1,450
                                    1,200                 1-2                  2                    1,200
                                    1,500                 2                    2                    1,300

                                                                                                                  Frequently Asked Questions
                                    850                    2                   2                    1,000
                                    1,470                 2                    2                    1,400
                                    730                   1-2                  2                       950
                                    1,300                  3                   2                    1,400
                                    800                   1                    2                       850
Source: Kuehne-Nagel, Via Michelin, 2009

12. What freight companies can I use?

In addition to excellent local companies, numerous multinationals also operate in Macedonia. For
further details refer to

13. What is the cost of electricity?

The price of electricity is determined by the Energy Regulatory Commission of the Republic of

                                                                  Tariff costs (€) (18% VAT not included)
Measure                      Unit           Tariff time                      High voltage users
                                                                 35 kV                         10 kV

Power                         kW                                 11.81                          9.11
Energy                       kWh                HT               0.0347                        0.0383
                                                LT               0.0180                        0.0188
                            kvarh               HT               0.0089                        0.0084
                                                LT               0.0043                        0.0051

14. What is the cost of water?

Water charges are determined at the local level and thus vary from one municipality to another
These are some examples for prices of industrial water in Euro per m3:
 City                                                                  € per m3
 Skopje                                                                  1.07
 Bitola                                                                  0.43
 Stip                                                                    0.99
 Ohrid                                                                    1.1
 Kriva Palanka                                                           0.45
 Gostivar                                                                0.64

                                                                                                     Frequently Asked Questions
15. What is the cost of gas?

The cost of 1m3 natural gas for consumers directly connected to the distribution system is €0.39
(18% VAT included in the price).
The price of natural gas is determined by the Energy Regulatory Commission of the Republic of

16. What is the cost for telephone installation?

Initial connection fee for a standard (PSTN) line: ~ €10
Initial connection fee for a digital (ISDN 2) line: ~ €20

17. What is the price per minute for international phone calls?

Pricing varies according to the country dialled. Some examples are:

                                            Fixed Telephony                 Mobile Telephony
 Germany                                         €0.28                            €0.49
 Russia                                          €0.16                            €0.49
 UK                                              €0.16                            €0.62
 USA                                             €0.16                            €0.33
 France                                          €0.16                            €0.49
 Austria                                         €0.16                            €0.49

An alternative when making international calls are the international pre-paid calling cards, which
are somewhat cheaper.

18. How much would a monthly Internet connection cost?

Private users
Download/upload speed                                                            4096/768 Kbps
Transfer (download and upload)                                                            10 GB
Yearly contract (approximately)                                                      €10/month
Open-end contract (approximately)                                                    €15/month

Download/upload speed                                                            5120/768 Kbps
Transfer (download and upload)                                                            25 GB
Yearly contract (approximately)                                                      €20/month

                                                                                                         Frequently Asked Questions
Open-end contract (approximately)                                                    €30/month

19. What would I expect to pay for postal and courier services?

All the major delivery companies operate in Macedonia. The average price for a 24 hour delivery
of documents to Stuttgart is €34 and to Vienna €35. Documents shipped to reach New York in the
fastest possible time, costs around €46.

20. Can I export to Europe/overseas?

Macedonia has signed free trade agreements with the EU, EFTA and CEFTA countries, as well as
Turkey and the Ukraine. These provide free access to over 650 million consumers. Macedonia was
officially admitted to the World Trade Organization in 2003.

21. What are the average duty levels in Macedonia?

Industrial products: 7%
General average: 9.25%
For the equipment necessary to conduct the activities of the company, unused equipment and spare
parts (except cars and office furniture) can be imported duty free. For companies in the Technological
Industrial Development Zones, this includes used equipment as well.

22. I am looking for a business partner – who can I contact?

The most important business associations in Macedonia are:

Economic Chamber of Macedonia

Macedonian Chambers of Commerce

Economic Chamber of North-West Macedonia

Macedonian ICT Chamber of Commerce (MASIT)

                                                                                                            Frequently Asked Questions

23. Is intellectual property rights protection effective in Macedonia?

The Intellectual Property Protection Rights, including copyrights, are regulated by the Law on
Copyright and Related Rights, and industrial property rights are regulated by the Law on Industrial
Property. A department within the Ministry of Culture is responsible for the protection of copyrights
and other related rights, while the Industrial Property Protection Office (IPPO) is responsible for
industrial property rights.

24. What auditing standards does my company need to abide by?

The central law regulating auditing in Macedonia is the Company Law. Company auditing is carried out in
accordance with IFAC’s International Standards of Auditing as published by the Ministry of Finance in the
Official Gazette of the Republic of Macedonia, updated on an annual basis.

25. What accounting standards does my company need to abide by?

Financial reporting is carried out in accordance with the International Accounting Standards
published in the Official Gazette of the Republic of Macedonia. The most recent annually updated
IAS/IFRS are the valid financial reporting standards in the Republic of Macedonia.

  Tax                                                                                                                            Tax Rate
 Corporate Income Tax                                                                                                                  10%
 Personal Income Tax                                                                                                                   10%

                                                                                                                18% general tax rate
 Value Added Tax
                                                                                                            5% preferential tax rate*

 Property Taxes
   • Property Tax                                                                                                              0.1%-0.2%
   • Inheritance and Gift Tax                                                                                             2-3% or 4-5%**
   • Sales Tax on Real Estate and Rights                                                                                              2-4%

* Includes computer software and hardware
** 2-3% for the taxpayer in the 2nd order of succession and 4-5% for the tax payer in the 3rd order of succession or not related to the testato

                                                                                                                                                  Frequently Asked Questions

Banking & Finance
1. Which banking institutions, according to total assets, are operating in Macedonia?

Largest: Komercijalna banka AD Skopje, Stopanska banka AD Skopje and NLB Tutunska banka.

Mid-sized: Alfa banka AD Skopje, Izvozna i kreditna banka AD, Skopje, Investbanka AD Skopje, Ohridska
banka AD Ohrid, Prokredit banka AD Skopje, Stopanska banka AD Bitola, TTK banka AD Skopje, and
UNI banka AD Skopje.

Smallest: Eurostandard banka AD Skopje, Ziraat banka AD Skopje, Kapital banka AD Skopje,
Makedonska banka za poddrska na razvojot AD Skopje, Poshtenska banka AD Skopje, Starter banka
AD Skopje, and Centralna kooperativna banka AD Skopje.

2. How can I obtain information about purchasing securities?

The official stock exchange market of the Republic of Macedonia is the Macedonian Stock Exchange.
Members of the Macedonian Stock Exchange may only be legal entities - brokerage houses and
banks, registered and licensed in the Republic of Macedonia.

                                                                                                        Frequently Asked Questions
3. What are the brokerage houses in Macedonia?

The legal entities that perform activities of trading with securities and that are official members
of the Macedonian Stock Exchange, Inc. Skopje, can be found on the web site of the Securities and
Exchange Commission of the Republic of Macedonia,

4. What kinds of securities are traded on the Macedonian Stock Exchange?

Shares (both common and preferred), as well as bonds, are two types of securities that are traded
on the MSE.

5. What is the MSE index?

The official index of the Macedonian Stock Exchange is MBI-10, a weighted index of the 10 most liquid
shares on the MSE. Two other indices are the MBID, the index of publicly held companies, and the MBI,
the bond index.

6. Are there restrictions for transferring funds to and from Macedonia?

There are no restrictions for transfers of funds from a current account based on an invoice or other
type of agreement or appropriate document. Profits and dividends from inward investments can be
freely transferred abroad after taxes are paid.

Also, there are no regulatory restrictions on foreign investments by non-residents in Macedonia.
Credit transactions between residents and non-residents can be freely arranged and have to be
registered at the Central Bank. Non-residents can freely open non-resident accounts in Macedonian

1. What are the Technological Industrial Development Zones in Macedonia and where
   are they located?
                                                          SRB                    Bulgarian
                                                                       coast line ~ 550km
                             KOS                                         Turkey ~ 450km
Austria ~ 1,000km
Italy ~ 1,000km
Germany ~ 1,250km
France ~ 1,750km
                                     Skopje                                              BGR

Albanian coast

                                                                                               Frequently Asked Questions
line ~ 150km

                                                                    Greek coast line ~ 100km

                                         Greek coast line ~ 100km

    TIDZ Skopje              TIDZ Skopje 2             TIDZ Stip                TIDZ Tetovo

2. What are the incentives offered for projects operating in the TIDZs?

The investment incentives offered to companies operating in the TIDZs include:
• No corporate tax for 10 years, 10% thereafter
• 5% personal income tax for 5 years, 10% thereafter
• No VAT and customs duties for export production
• Free connection to piped natural gas, electricity, water and sewage
• Immediate access to main international airport, railroad and vital road corridors
• Land lease for up to 99 years at attractive concessionary rates
• Special incentives for construction of facilities valued at €500,000, denominated in
  MKD, depending on the value of the investment and number of employees expected
  to be employed
• Benefit package for eligible investors will be approved within 10 business days

3. What kinds of companies can be established in the TIDZs?

The Technological Industrial Development Zones have been established to host high-tech clean
industry production that is export-oriented.

4. What infrastructure solutions are offered in the Zones?

Companies operating out of the TIDZs are offered free connection to natural gas, water, electricity,
and access to a main international road network.

5. Who is already present in the TIDZ?

At the moment, Johnson Controls is fully operational in the TIDZ. Great Britain’s Johnson Matthey is
in the process of installing equipment in their plants. Production is expected to begin in the second
half of 2009.

                                                                                                        Frequently Asked Questions
The Government of the Republic of Macedonia has already signed a MoU (Memorandum of
Understanding) with: Turkey’s Sisecam and Borteknik Otomotiv, Italy’s Orlandi, Slovenia’s Iskra,
France’s Montupet, and Triview and Haier, which have entered into a joint venture partnership.


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