DOING BUSINESS IN NORTH MACEDONIA IN 2023
North Macedonia is a financially stable country in Eastern Europe with one of the easiest company formation processes in the world. In addition, North Macedonia’s excellent trade climate allows for great access to most European markets and low tax rates make investment desirable. However, North Macedonia’s growth has been consistently stable, but never exceptional, with only a few industries showing substantial growth. Thus, North Macedonia is recommended for any entrepreneur looking for a safe place to invest with the potential for moderate growth.
Since 2003, Healy Consultants Group has assisted our Clients with business registration in North Macedonia. Our services include i) North Macedonia company incorporation ii) government license registration iii) corporate bank account opening in North Macedonia iv) employee recruitment v) visa strategies and vi) office rental solutions in North Macedonia.
|Compare different Macedonia entities||LLC||Free zone LLC||Joint stock company||Limited partnership||ICT company|
|Also known as||DOO||TIDZ DOO||AD||KD||DOO|
|Best use of company?||All products and services||Manuf/ export trading||To get pub. funding||Professional services||Telecommunication|
|How soon to invoice Clients?||3 weeks||3 weeks||4 weeks||3 weeks||4 weeks|
|How soon can you hire staff?||3 weeks||3 weeks||4 weeks||3 weeks||4 weeks|
|How soon can you sign a lease agreement?||1 week||1 week||1 week||1 week||1 week|
|How long to supply corporate bank a/c?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|How long to supply co. reg / tax numbers?||3 weeks||3 weeks||4 weeks||3 weeks||4 weeks|
|Corporate tax rate on annual net profits?||10%||0%||10%||0%||10%|
|Limited liability entity?||Yes||Yes||Yes||Yes||Yes|
|Government grants available?||Yes||Yes||Yes||Yes||Yes|
|Govt approval required for foreign owners?||No||No||No||No||No|
|Res. director/partner/ legal rep. required?||No||No||No||No||No|
|Minimum paid up share capital?||€ 5,000||€ 25,000||€ 25,000||€ 1||€ 5,000|
|Can bid for Government contracts?||Yes||Yes||Yes||Yes||Yes|
|Corporate bank account location?||Komercijalna Banka||Stopanska Banka||NLB Banka||Ohridska Banka (Societe Generale)||Halkbank|
|Can secure trade finance?||Yes||Yes||Yes||Yes||Yes|
|VAT payable on sales to local customers?||18%||0%||18%||18%||18%|
|Average total business set up costs?||€ 16,000||€ 15,050||€ 16,600||€ 16,000||€ 16,000|
|Average total engagement period?||3 months||3 months||4 months||3 months||4 months|
North Macedonia business setup summary
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Advantages and disadvantages
Advantages of North Macedonia company registration
- The Republic of North 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;
- North 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 North 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 North Macedonia Limited Liability Company (LLC) is the most common type of company. North Macedonia company formation requires only a single shareholder and one director;
- A North 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;
- North Macedonia has favorable tax rates for corporations, with a flat tax rate of 10% on corporate profits, capital gains and dividends;
- North Macedonia is positively ranked as the 17th easiest country to do business by the World Bank and the 78th easiest country for starting a business, with high ranks also awarded for protecting investors and ease of paying taxes;
- North Macedonia was positively ranked as the 33rd freest economy in the Heritage Foundation’s 2019 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;
- North 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 North Macedonia company registration
- The North 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;
- North Macedonia is negatively ranked as the 93rd least corrupt country in the world, according to the 2018 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians;
- North Macedonia is negatively ranked as the 82nd most competitive economy in the world in the Global Competitiveness Report 2019;
- Opening global corporate bank accounts to assist North 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 North Macedonia which further hinders the networking and distribution of products for businesses;
- North 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 a North Macedonia companyNorth Macedonia 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 North Macedonia iii) free repatriation of profits and dividends and iv) VAT exemptions on supplies purchased for use within the country.
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Useful links for North Macedonia
Government and public authority websites:
- North Macedonia Tax System
- Central Bank of North Macedonia
- North Macedonia Stock Exchange
- North Macedonia Chamber of Commerce
- North Macedonia airports
- Deloitte tax highlight 2019: FYR Macedonia
- Corporate Governance in North Macedonia
- Stimulating Investment in the Western Balkans