Macedonia

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Macedonia is located at the crossroads of south eastern Europe, which makes it an ideal transit and distribution center for European markets. The developed road and railway infrastructure, in combination with the country’s small area, enables access to every inhabited place in Macedonia in less than three hours. The two large pan-European corridors – Corridor 8 (east-west) and Corridor 10 (north-south) – are now being upgraded. There are two international airports, in Skopje and in Ohrid, with regular direct connections to several large European transportation hubs. In 2006, Macedonia elected a new government that is heavily focused on creating incentives and opportunities for foreign investors.

Investment Incentives

• Low flat corporate and personal income taxes:
  The new flat tax rate of 10% is one of the most attractive tax packages in Europe. The 0% corporate tax on re-invested profit is additional stimulation for foreign and domestic investments.
  
  
• Technological–Industrial Development Zones (TIDZ):
  Fortune Global 500 and Business Week 1,200 companies receive co-financing from the Macedonian government for the construction of business facilities. Investors in the TIDZ are entitled to a 10-year profit tax exemption and a 50% reduction of personal income tax for a period of five years.
  
  
• Fast company registration:
  To reduce administrative barriers and start-up costs, the government introduced a one-stop-shop system that enables investors to register their businesses within three days.
  
  
• Ample educated labor force:
  An educated, technically competent and qualified labor force is available to investors in Macedonia. At just r370, the average gross monthly salary is highly competitive vis-à-vis other European and Balkan countries. In the larger cities, investors may hire a competitive and technically competent labor force. Educational standards at technical faculties in Macedonia are of a similar standard to the developed world and English is widely spoken among college graduates.
  
  
• Access to a 650-million consumer market:
  Macedonia has signed three multi-lateral free trade agreements with the European Union countries, European Free Trade Association (EFTA) and Central European Free Trade Agreement (CEFTA), as well as eight bilateral agreements. These agreements enable Macedonia to access 650 million consumers throughout Europe.
  
  
• Macroeconomic stability:
  The Macedonian economy has a stable GDP growth of around 4%, a low average inflation rate of 2-3%, fiscal discipline and a well-functioning co-ordination between fiscal and monetary policy.
  
  
• EU and NATO candidate country:
  Macedonia was the first country in south east Europe to sign the Stabilization and Association Agreement with the European Community and its Member States on 9th April 2001 in Luxembourg. In addition, Macedonia is an aspiring partner country to the North Atlantic Treaty Organization (NATO) and was included in the NATO Membership Action Plan (MAP) in 2006.

Sector-Specific Opportunities

• Multinationals are establishing manufacturing plants in Macedonia

  Automotive components:
  Macedonia is already manufacturing and exporting a range of automotive components mainly to Europe, Russia, Turkey and Africa. The country is suitable for manufacturing high value and labor-intensive products such as safety systems (seat belts, airbags), electronics (controllers, sensors) and precision plastic products.
  
  
• Information communications technology (ICT):
  Macedonia has a high availability of welleducated low-cost employees. A software engineer with 1-2 years experience costs from r400-500 per month. English is widely spoken and most people can speak other regional languages such as Bulgarian, Croatian, Serbian, Slovenian, Albanian and Greek.
  
  
• Agribusiness and food processing industry:
  Agribusiness and food processing is one of the strongest sectors in Macedonia and is highly supported by the Macedonian government. In addition, Macedonia’s EU accession process will involve substantial technical assistance and investment support funds dedicated to the sector. The sector’s numerous competitive advantages include a unique combination of Continental and Sub- Mediterranean climates, environmentally friendly production practices, sound food processing technologies, highly qualified labor available throughout rural areas, very good access to regional markets and a reputation for quality food products.
  
  
• Healthcare products:
  Macedonia has a well-established pharmaceutical industry exporting generic products to more than 30 countries. The country has a strong educational bias towards the medical and healthcare professions with a surplus of qualified medical doctors and pharmacists emerging from the education system every year.
  
  
• Clothing, textiles and leather:
  The sector is heavily export-oriented and contributes around 20% to GDP. Macedonia mainly produces cotton thread, wool yarn, and knitted fabric. The sector offers many outsourcing opportunities with the numerous local well-established companies.

Contact Information

American Chamber of
Commerce in Macedonia
Dimitrija Cupovski #2
Floor IV
Pelagonija Building
1000 Skopje
Macedonia
Tel: +38 92 321 6714
E-mail: info@amcham.com.mk
Website: www.amcham.com.mk

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