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Macedonia

4. Industrial Policies

Investment Incentives

Both the Law on Customs and the Law on Profit Taxes offer incentives to foreign investors. Foreign investors are eligible for profit tax exemptions for profits generated during the first three years of operation in proportion to the amount of foreign investment; all profits reinvested in the company; profits invested in environmental protection; and profits invested in “underdeveloped” regions of the country. Companies with at least 20 percent foreign capital are exempt from customs duties for the first three years after their registration. The following additional benefits are also available to foreign investors: a 10 percent flat tax for corporate profits and personal income; guaranteed relief from local taxes and fees; a tax exemption for duties on imported goods, raw materials, and equipment/machines; a symbolic land lease rate; and direct state aid in the amount of up to EUR 500,000 (USD $562,375).

Foreign Trade Zones/Free Ports/Trade Facilitation

Macedonia currently has 15 free economic zones in various stages of development throughout the country. The Directorate for Technological Industrial Development Zones (TIDZ) (http://www.dtirz.com/ ) is responsible for developing and supervising 14 of them, including two fully operational TIDZ in the capital (Skopje 1 and 2) and one in Stip (the largest town in eastern Macedonia). The Tetovo TIDZ is a public-private partnership; a privately owned company founded that zone and is responsible for its development and operation. U.S. companies operate in TIDZs throughout Macedonia: Cap-Con Automotive Technologies, Delphi Automotive, Kemet, Key Safety Systems (Kichevo), Gentherm (Prilep), Lear (Tetovo), and Adient (Stip and Strumica).

Performance and Data Localization Requirements

Macedonia does not impose any performance requirements (such as mandating local employment or domestic content in goods or technology) as a condition for establishing, maintaining, or expanding an investment.

Foreign investors in the special free economic zones may employ staff from any country. Many companies temporarily assign existing employees from other foreign operations to start their branches in Macedonia. In 2016 the Government of Macedonia simplified the procedure for expatriates to obtain permission to live and work in the country.

There is no discriminatory export or import policy affecting foreign investors. Almost 96 percent of total foreign trade is unrestricted. Current tariffs and other customs-related information are published on the website of the Customs Administration, http://www.customs.gov.mk/en/DesktopDefault.aspx .

Macedonia does not impose a forced localization policy for data. The government does not prevent or unduly impede companies from freely transmitting customer or other business-related data outside the country. Post is not aware of any requirements for foreign IT providers to turn over source code and/or provide access to encryption.

Investment Climate Statements
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The Lessons of 1989: Freedom and Our Future