DOING BUSINESS IN MACEDONIA IN 2019
Macedonia is a financially stable country in Eastern Europe with one of the easiest company formation processes in the world. In addition, Macedonia’s excellent trade climate allows for great access to most European markets and low tax rates make investment desirable. However, Macedonia’s growth has been consistently stable, but never exceptional, with only a few industries showing substantial growth. Thus, Macedonia is recommended for any entrepreneur looking for a safe place to invest with the potential for moderate growth.
Since 2003, Healy Consultants Group PLC has assisted our Clients with business registration in Macedonia. Our services include i) Macedonia company incorporation ii) government license registration iii) corporate bank account opening in Macedonia iv) employee recruitment v) visa strategies and vi) office rental solutions in Macedonia.
Macedonia company registration summary
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Advantages and disadvantages
Advantages of Macedonia company registration
- The Republic of Macedonia has grown rapidly from one of the poorest countries in Europe to one of the strongest in the Balkan area with growth rates averaging 3 – 7% since 1998, with the economy expected to continue expanding over at least the coming years;
- Macedonia offers incentives to investors who would like to set up businesses in the Technological–Industrial Development Zones (TIDZs) including i) personal and corporate income tax exemption for the first 10 years ii) exemption from payment of value added tax and customs duties for goods, raw materials, equipment and machines and iii) long-term lease of land within the TIDZs for a period of up to 99 years;
- The Macedonian economy is led by strong construction and mining industries, which have consistently grown rapidly with the largest industrial sector contributing to the country’s export in 2014 being chemicals and related products at 21.4%, followed by the machinery and transport equipment sector at 21.1% in foreign trade;
- A Macedonia Limited Liability Company (LLC) is the most common type of company. Macedonia company formation requires only a single shareholder and one director;
- A Macedonia LLC can be entirely foreign owned, with no restrictions on foreign shareholders. There is no minimum share requirement for this type of company. Company formation is uncomplicated and quick, requiring an average of only 2 days to fully complete incorporation;
- Macedonia has favorable tax rates for corporations, with a flat tax rate of 10% on corporate profits, capital gains and dividends;
- Macedonia is positively ranked as the 12th easiest country to do business by the World Bank and the 2nd easiest country for starting a business, with high ranks also awarded for protecting investors and ease of paying taxes;
- Macedonia was positively ranked as the 47th freest economy in the Heritage Foundation’s 2016 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets. Low public debt, high monetary stability and broad trade freedom were responsible for the high rank;
- Macedonia has proven to be of strategic and competitive importance to foreign entrepreneurs willing to invest in the automotive industry. This is majorly due to the i) excellent geographical position of the country giving it access to a huge consumer market of more than 650 million people in Europe, Russia, Turkey and Africa; ii) affordable and skilled labour force; iii) access to the tax incentives offered by the free zones; and iv) low operating costs for manufacturing of auto-components.
Disadvantages of Macedonia company registration
- The Macedonian economy is not recession proof, as it retracted significantly during both the 2001 and 2009 recessions. Political instability has also hurt the economy at times, with the 2001 recession worsened by an Albanian insurgency;
- Macedonia is negatively ranked as the 66th least corrupt country in the world, according to the 2015 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians;
- Macedonia is negatively ranked as the 60th most competitive economy in the world in the Global Competitiveness Report 2015 – 2016;
- Opening global corporate bank accounts to assist Macedonia company formation can be difficult. Healy Consultants works with internationally recognised banks to provide corporate bank account services;
- There is inadequate supply of proper infrastructural facilities in Macedonia which further hinders the networking and distribution of products for businesses;
- Macedonia could not qualify to be a part of the European Union (EU) or the NATO and benefit from its various tax treaties and incentive programs due to EU’s partnership with other nations. The reason is the age-old dispute with Greece regarding the name of the nation.
Best uses for an Macedonia companyMacedonia is an ideal location to set up either i) a Holding Company, ii) a Logistics Company or iii) a Trading Company as the government offers incentives such as i) 10 years’ tax holidays for companies carrying out business in industrial development zones ii) reduced tax base for profits reinvested in tangible assets used to expand the business in Macedonia iii) free repatriation of profits and dividends and iv) VAT exemptions on supplies purchased for use within the country.
- Time to incorporate: Three weeks
- Cost to set up: €15,000
- Minimum capital: €5,000
- Physical office required: No
- Shareholders: 1
- Directors: 3
- Company secretary: No
- Resident director: No
- Corporate tax rate: 10%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: D.O.O. limited company
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Useful links for Macedonia
Government and public authority websites:
- Macedonia Tax System
- Central Bank of Macedonia
- Macedonia Stock Exchange
- Macedonia Chamber of Commerce
- Macedonia airports
- Guide to Doing Business and Investing in Macedonia
- Investment in Macedonia – KPMG
- Corporate Governance in Macedonia
- Tax Card 2013
- Stimulating Investment in the Western Balkans