DOING BUSINESS IN MACEDONIA

Today the Republic of Macedonia is considered a country with an intermediary-developed industry, with continuing growth, albeit slow, of the industrial production. The process of transition in the economy was triggered in 1995. The government has signed arrangements with the IMF (International Monetary Fund) and World Bank. It has an open economy that is integrating into international trade, with a total trade-to-GDP ratio of 79.5%. The most important sectors are agriculture and industry. The service sector also grew in the past few years. The work force has competitive education and skills, but lacks adequate jobs. The country's economic policy is to attract foreign investments and to increase employment. One of the biggest features of the country's economy is the fiscal discipline which maintained a stable currency for a long period. The country also makes efforts to develop the Small and Medium-Sized Enterprise sector.

For further information visit: www.economy.gov.mk

REGISTRATION OF COMPANIES

One-stop-shop system

Macedonia has introduced a one-stop-shop system that enables investors to register their businesses within 4 hours. One can register a company in Macedonia by visiting one office, obtaining the information from a single place, and addressing one employee. This significantly reduces administrative barriers and start-up costs.

The one-stop-shop system operates within the Central Register via 32 electronically integrated offices located throughout Macedonia. With the development of e-government services, company registration will soon be available online.

Taxes and Rates

The lowest flat corporate and personal income tax rates Macedonia has recently become a tax heaven in Europe. The new Government introduced a flat tax of 10% for corporate and personal income. In 2007, the corporate rate is 12%, reducing to 10% thereafter.

• * As of 2008. 12% in 2007.
• ** Includes computer software and hardware
• *** 2-3% for the taxpayer in the 2nd order of succession and 4-5% for the taxpayer in the 3rd order of succession or not related to the testator

With the recent economic reforms, Macedonia has created the most attractive tax package in Europe.

For further information visit: www.economy.gov.mk

INVEST IN MACEDONIA

Macedonia is a small, but rather diversified economy, and there have been identified a number of sectors with investment and export potentials. The sectors that are considered with potential for FDI attraction include:

• automotive components
• information communications technology
• agribusiness and food processing industry
• clothing, textiles and leather
• tourism
• metals and metal products
• healthcare products (pharmaceuticals and medical devices)
• chemicals
• energy sector
• construction and mineral resources
• tobacco and cigarettes
• real estate

Technological Industrial Development Zones (TIDZ)

Technological–Industrial Development Zones (TIDZ) is centers in which highly productive manufacturing activities are concentrated and new technologies are being developed. Macedonia offers additional incentives for TIDZ development, in addition to those normally associated with free economic zones.

Public Investment Program 2007-2009

In accordance with the Work Program of the Government of the Republic of Macedonia, the Public Investment Program 2007 – 2009 was prepared. The program addresses the investment projects in the public infrastructure and tracks the process of monitoring.

Small and medium sized enterprises (SME)

The data for SME (2005), gathered by the Central Registry (CR), show that the number of active enterprises in the Republic of Macedonia is 44,424 There of, 43,877 enterprises (or 98.8%) are small and the rest belongs to the categories of medium and large enterprises.

For further information visit:www.investinmacedonia.com