Executive Summary

The Republic of North Macedonia, an EU candidate country, and a NATO member since March 2020, continues to be receptive to U.S. commercial investments. The COVID-19 pandemic has deeply impacted North Macedonia’s economy and delayed foreign direct investment inflow. The government’s COVID stimulus measures helped limit the economic drop to 6.1 percent in 2020, and assisted the recovery in 2021, which saw four percent GDP growth.  Government support also cushioned the impact of the crisis on the labor market, with unemployment falling to 15.7 percent in 2021 and then to 15.2 percent in Q1 of 2022.  In its Growth Acceleration Plan, the government set targets to double average annual GDP growth rate from 2.5 percent to 5 percent in the period 2022-2026, create 156,000 new jobs, and reduce unemployment to 8.6 percent.  It also committed to “green growth” by accelerating the energy transition and reducing greenhouse gas emissions in accordance with the Declaration on Green Agenda signed November 2020.  Although economic effects of the pandemic linger, Russia’s aggression in Ukraine is exacerbating the energy crisis and supply chain woes.

While doing business is generally easy in North Macedonia and the legal framework is largely in line with international standards, corruption is a consistent issue. Large foreign companies operating in the Technological Industrial Development Zones (TIDZ) generally report positive investment experiences and maintain good relations with government officials. However, the country’s overall regulatory environment remains complex, and frequent regulatory and legislative changes, coupled with inconsistent interpretation of the rules, create an unpredictable business environment conducive to corruption. The government generally enforces laws, but there are numerous reports that some officials remain engaged in corrupt activities. Transparency International ranked North Macedonia 87th out of 180 countries in its Corruption Perceptions Index in 2021, 24 spots higher from the prior year, with a score of 39/100 in absolute terms.

The Office of the Deputy Prime Minister for Economic Affairs continues to coordinate government activities related to foreign investments.  The government made limited efforts in 2021 to attract new investment, focusing instead on economic recovery from the pandemic. However, the government did court foreign companies and investors for public projects in transportation and energy infrastructure.  The State Commission for the Prevention of Corruption has opened number of corruption-related inquiries, including several involving high-level officials, and the government appointed a new Deputy Prime Minister for Good Governance, who will focus on structural and procedural changes to reduce opportunities for corruption.

Fitch Ratings reaffirmed North Macedonia’s previous credit rating of BB+ with a negative outlook, and Standard & Poor’s reaffirmed its credit rating at BB- with a stable outlook.

There are several areas to watch in 2022. In 2021, Embassy Skopje identified digitalization and green energy as areas ripe for U.S. investment due to the government’s growing commitment to invest in these strategic sectors. North Macedonia’s location, at the crossroads of pan-European transport corridors VIII and X, is an advantage as companies consider “near-shoring” their production to be closer to consumption centers in Europe as fallout from the pandemic and Russia’s invasion of Ukraine continue to snarl global supply chains.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 87 of 180 http://www.transparency.org/
Global Innovation Index 2021 59 of 132 https://www.globalinnovationindex.org/
U.S. FDI in partner country ($M USD, historical stock positions) 2020 USD 12 https://apps.bea.gov/international/
World Bank GNI per capita 2020 USD 5,750 https://data.worldbank.org/indicator/

Policies Towards Foreign Direct Investment

Attracting FDI remains one of the government’s main pillars of economic growth and job creation, although the COVID-19 pandemic prevented government officials from greater engagement with potential investors in 2021. There are no laws or practices that discriminate against foreign investors. In March 2018, the government passed its “Plan for Economic Growth” ( https://vicepremier-ekonomija.gov.mk/?q=node/275 ), and in 2021 it amended the Law on Financial Support of Investments ( https://vicepremier-ekonomija.gov.mk/sites/default/files/dokumenti/Izmeni%20i%20dopolnuvanja%20ZFPI%202021.pdf ), which provides substantial incentives to foreign companies operating in the 15 free economic zones. The incentives include a variety of measures such as job creation subsidies, capital investment subsidies, and financial support to exporters. North Macedonia is a signatory to multilateral conventions protecting foreign investors and is party to a number of bilateral investment protection treaties, though none with the United States.

Since August 2020, the office of the Deputy Prime Minister for Economic Affairs ( https://vicepremier-ekonomija.gov.mk ) has coordinated the government’s activities related to foreign investments. Invest North Macedonia—the Agency for Foreign Investments and Export Promotionis the primary government institution in charge of facilitating foreign investments. It works directly with potential foreign investors, provides detailed explanations and guidance for registering a business in North Macedonia, produces analysis on potential industries and sectors for investing, shares information on business regulations, and publishes reports about the domestic market. The North Macedonia Free Zones Authority, http://fez.gov.mk/  , a governmental managing body responsible for developing free economic zones throughout the country, also assists foreign investors interested in operating in the zones. It manages all administrative affairs of the free economic zones and assists foreign investors to identify appropriate investment locations and facilities. North Macedonia does not maintain a “one-stop-shop” for FDI, requiring investors to navigate through several bureaucratic institutions to implement their investments.

The government maintains contact with large foreign investors through frequent meetings and formal surveys to solicit feedback. Large foreign investors have direct and easy access to government leaders, whom they can contact for assistance to resolve issues. The Foreign Investors Council, https://www.fic.mk/Default.aspx?mId=1 , advocates for foreign investors and suggests ways to improve the business environment.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign investors can invest directly in all industry and business sectors except those limited by law. For instance, investment in the production of weapons and narcotics remains subject to government approval, while investors in sectors such as banking, financial services, insurance, and energy must meet certain licensing requirements that apply equally to domestic and foreign investors. Foreign investment may be in the form of money, equipment, or raw materials. Under the law, if assets are nationalized, foreign investors have the right to receive the full value of their investment. This provision does not apply to national investors. North Macedonia does not have a national investment screening mechanism in line with international standards. Invest North Macedonia conducts screening and due diligence reviews of foreign direct investments in a non-standard, non-public procedure and on an ad-hoc basis. The main purpose of the screening is to ensure the investment will bring economic benefits for the country and to protect national security. The process does not disadvantage foreign investors. More information about the screening process is available directly from Invest North Macedonia, at https://investnorthmacedonia.gov.mk/. U.S. investors are not disadvantaged or singled out by any of the ownership or control mechanisms, sector restrictions, or investment screening mechanisms.

Other Investment Policy Reviews

The World Trade Organization’s (WTO) latest review of North Macedonia’s trade policy (2019) is available at https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/TPR/S390R1.pdf&Open=True . The most recent United Nations Conference on Trade and Development (UNCTAD) investment policy review on North Macedonia, from March 2012, is available at https://unctad.org/en/PublicationsLibrary/diaepcb2011d3_en.pdf . A 2017 regional investment policy review of South-East Europe covering seven economies, including North Macedonia, is available at https://unctad.org/en/PublicationsLibrary/diaepcb2017d6_en.pdf . The Organization for Economic Cooperation and Development (OECD) has not done an investment policy review on North Macedonia to date. The International Monetary Fund (IMF) and the World Bank have mentioned aspects of the government’s policies for attracting foreign investment in their regular country reports but have not provided specific policy recommendations. There have been no useful reviews of investment policy and practice from domestic or third country civil society organizations.

Business Facilitation

All legal entities in the country must register with the Central Registry of the Republic of North Macedonia (Central Registry). Foreign businesses may register a limited liability company, single-member limited liability company, joint venture, or joint stock company, as well as branches and representative offices. There is a one-stop-shop system which enables investors to register their businesses within a day by visiting one office, obtaining the information from a single place, and addressing one employee. Once the company is registered with the Central Registry, the registration is valid for all other agencies. In addition to registering, some businesses must obtain additional working licenses or permits for their activities from relevant authorities. More information on business registration documentation and procedures is available at the Central Registry’s website, http://www.crm.com.mk . All investors may register a company online at http://e-submit.crm.com.mk/eFiling/en/home.aspx . Applications must be submitted by an authorized registration agent. The online business registration process is clear, complete, and available for use by foreign companies.

Outward Investment

The government does not restrict domestic investors from investing abroad, but it does not promote or provide incentives for outward investments. The publicly reported total stock of outward investments is small, worth approximately $138 million, the majority of which is in production facilities, pharmaceuticals, metal processing, and wholesale and retail trade in the Balkan region, the Netherlands, Germany, and Russia.

North Macedonia does not have a bilateral investment or double taxation treaty with the United States.

North Macedonia has concluded an Agreement for Promotion and Protection of Foreign Direct Investments with the following countries: Albania, Austria, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, China, Croatia, the Czech Republic, Egypt, Finland, France, Germany, Hungary, India, Iran, Italy, Luxembourg, Malaysia, Montenegro, the Netherlands, North Korea, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Taiwan, Turkey, and Ukraine.

North Macedonia is a signatory of three multilateral Free Trade Agreements: The Stabilization and Association Agreement (SAA) with EU member-states, giving North Macedonia duty-free access to 650 million consumers; the European Free Trade Agreement (EFTA) with Switzerland, Norway, Iceland, and Liechtenstein; and the Central European Free Trade Agreement (CEFTA) with Albania, Bosnia and Herzegovina, Moldova, Montenegro, Serbia, and Kosovo. Bilateral Free Trade Agreements are in force with Turkey and Ukraine.

North Macedonia is a member of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting and has joined the Statement on a Two-Pillar Solution to address the challenges arising from digitalization of the economy.

There are no recent changes to the tax regime which will concern foreign investors. No U.S. companies operating in North Macedonia have raised tax concerns with Post.

Transparency of the Regulatory System

The government has made progress adopting reform priorities called for by the EU, NATO, and other bodies, leading to well-defined laws, institutional structures, and regulatory legal frameworks. However, laws are not regularly drafted based on data-driven evidence or assessments and, at times, move through parliament using shortened legislative procedures. While laws are in place, enforcement and universal implementation of laws and regulations are generally lacking and can be a problem for businesses and citizens.

North Macedonia has simplified regulations and procedures for large foreign investors operating in the Technological Industrial Development Zones (TIDZ). While the country’s overall regulatory environment is complex and not fully transparent, the government is making efforts to improve transparency. The government is implementing reforms designed to avoid frequent regulatory and legislative changes, coupled with inconsistent interpretations of the rules, which create an unpredictable business environment that enables corruption. The current government has published all incentives for businesses operating in North Macedonia, which are standardized and available to domestic and international companies. However, companies worth more than $1 billion that want to invest in North Macedonia can negotiate terms different from the standard incentives. The government can offer customized incentive packages if the investment is of strategic importance.

Rule-making and regulatory authorities reside within government ministries, regulatory agencies, and parliament. Almost all regulations most relevant to foreign businesses are on the national level. Regulations are generally developed in a four-step process. First, the regulatory agency or ministry drafts the proposed regulation. The proposal is then published in the Unique National Electronic Register of Regulations (ENER: https://ener.gov.mk/ ) for public review and comment. After public comments are considered and properly incorporated into the draft, it is sent to the central government to be reviewed and adopted in an official government session. Once the government has approved the draft law, it is sent to parliament for full debate and adoption. The public consultation process has improved, with businesses, the public, and NGOs having an increasing role in commenting on draft regulations and proposing changes through ENER.

There is no single centralized location which maintains a copy of all regulatory actions. All newly adopted regulations, rules, and government decisions are published in the Official Gazette of the Republic of North Macedonia after they are adopted by the government or parliament or signed by the corresponding minister or director. Public comments are neither published nor made public as part of the regulation, and limited information is available in English.

North Macedonia accepts International Accounting Standards, and the legal, regulatory, and accounting systems used by the government are consistent with international norms. North Macedonia has aligned its national law with EU directives on corporate accounting and auditing.

The government has systems in place to regularly communicate and consult with the business community and other stakeholders before amending and adopting legislation, through ENER and through dialogues with businesses, the civil sector, and academia. Interested parties, including chambers of commerce, can review the legislation published on ENER. The online platform is intended to facilitate public participation in policymaking, increase public comment, and provide a phase-in period for legal changes to allow enterprises to adapt. Key institutions influencing the business climate publish official and legally-binding instructions for the implementation of laws. These institutions are obliged to publish all relevant laws, by-laws, and internal procedures on their websites; however, some do not make regular updates. The government makes significant efforts to ensure respect for the principles of transparency, merit, and equitable representation.

The government continued to implement the Strategy for Public Administration Reform and Action Plan (2018-2022), and the National Plan for Quality Management of Public Administration, which focus on policy creation and coordination, strengthening public service capacities, and increasing accountability and transparency, in close coordination with the EU. The Open Data Strategy (2018-2020) and Transparency Strategy (2019-2021) put forth measures to encourage the release and use of public data as an effective tool for innovation, growth, and transparent governance and contributed to greater transparency of government bodies, both at the central and local levels. In 2022, Prime Minister Dimitar Kovachevski introduced a new Deputy Prime Minister for Good Governance Policies, who is responsible for good governance, anticorruption policies, and the digitalization of government services. The DPM’s office will replace the previous Cabinet for the Fight Against Corruption and Crime, Sustainable Development and Human Resources.  The new DPM is expected to oversee the implementation of the Public Administration Reform Strategy under development by the Ministry of Information Society and Administration during 2022.

Public finances and debt obligations are fairly transparent. The Ministry of Finance publishes budget execution data monthly; public debt figures, including contingent liability, quarterly; and the fiscal strategy is updated annually.

International Regulatory Considerations

As a candidate country for accession to the EU, North Macedonia is gradually harmonizing its legal and regulatory systems with EU standards. As a member of the WTO, North Macedonia regularly notifies the WTO Committee on Technical Barriers to Trade of proposed amendments to technical regulations concerning trade. North Macedonia ratified the Trade Facilitation Agreement (TFA) in July 2015, the 50th out of 134 members of the WTO to do so. In October 2017, the government formed a National Trade Facilitation Committee, chaired by the Minister of Economy, which includes 22 member institutions. The Committee identified areas which need harmonization with the TFA and is working toward implementation.

Legal System and Judicial Independence

North Macedonia’s legal system is based on the civil law tradition, with increasing adversarial-style elements, and includes an established legal framework for both commercial and contract law. The Constitution established independent courts to rule on commercial and contractual disputes between business entities, and court rulings are legally executed by private enforcement agents. Enforcement actions may be appealed before the court. The enforcement procedure fees were lowered and simplified in 2019. Commercial disputes up to €15,000 require mediation as a precondition to initiating legal action within the courts. Cases involving international elements may be decided using international arbiters. Ratified international instruments are considered an integral part of national legislation and cannot be altered by a national law, per the Constitution.

Throughout 2021, businesses complained that lengthy and costly commercial disputes adjudicated through the court system created legal uncertainty. Businesses, however, have not been inclined to use mediation, despite it being a swifter and often less costly way to resolve disputes. In December 2021, Parliament adopted a new and improved Mediation Law providing for broader use of mediation as a voluntary, contract-based, or legally-mandated alternative prior to addressing a matter in court. Numerous international reports note rule of law remains a key challenge in North Macedonia, pointing to undue executive, business, and political interference in the judiciary, and poor funding for and management of administrative courts. These obstacles often result in lengthy and costly trials. The government continued major reforms throughout 2021 to improve judicial independence and impartiality, but contract enforcement and a perceived lack of transparent public procurement practices remain challenges for businesses.

Laws and Regulations on Foreign Direct Investment

There is no single law regulating foreign investments, nor a “one-stop-shop” website which provides all relevant laws, rules, procedures, and reporting requirements for investors. Rather, the legal framework is comprised of several laws including the Trade Companies Law, the Securities Law, the Profit Tax Law, the Customs Law, the Value Added Tax (VAT) Law, the Law on Trade, the Law on Acquiring Shareholding Companies, the Foreign Exchange Operations Law, the Payment Operations Law, the Law on Foreign Loan Relations, the Law on Privatization of State-owned Capital, the Law on Investment Funds, the Banking Law, the Labor Law, the Law on Financial Discipline, the Law on Financial Support of Investments, and the Law on Technological Industrial Development Zones (free economic zones). An English language version of the consolidated Law on Technological Industrial Development Zones is available at https://fez.gov.mk/wp-content/uploads/2018/01/law-in-tidz-eng.pdf , and additional information at https://www.worldfzo.org/Portals/0/OpenContent/Files/487/Macedonia_FreeZones.pdf . No new major laws, regulations, or judicial decisions related to foreign investments were passed during the past year; however, some existing laws were amended slightly.

Competition and Antitrust Laws

The Commission for the Protection of Competition (CPC) is responsible for enforcing the Law on Protection of Competition. The CPC issues opinions on draft legislation which may impact competition. The CPC reviews the impact on competition of proposed mergers and can prohibit a merger or approve it with or without conditions. The CPC also reviews proposed state aid to private businesses, including foreign investors, under the Law on Control of State Aid and the Law on State Aid . The CPC determines whether the state aid in question gives economic advantage to the recipient, is selective, or adversely influences competition and trade. More information on the CPC’s activities is available at http://kzk.gov.mk/en  . There were no significant competition cases in 2021.

Expropriation and Compensation

The Law on Expropriation ( http://www.mioa.gov.mk/sites/default/files/pbl_files/documents/legislation/zakon_za_eksproprijacija_konsolidiran_032018.pdf ) states the government can seize or limit ownership and real estate property rights to protect the public interest and to build facilities and carry out other activities of public interest. According to the Constitution and the Law on Expropriation, property under foreign ownership is exempt from expropriation except during instances of war or natural disaster, or for reasons of public interest. Under the Law on Expropriation, the state is obliged to pay market value for any expropriated property. If the payment is not made within 15 days of the expropriation, interest will accrue. The government has conducted a number of expropriations, primarily to enable capital projects of public interest, such as highway and railway construction, for which the government offered market value compensation. Expropriation procedures have followed strict legal regulations and due process. The government has not undertaken any measures that have been alleged to be, or could be argued to be, indirect expropriation, such as confiscatory tax regimes or regulatory actions that deprive investors of substantial economic benefits from their investments.

Dispute Settlement

ICSID Convention and New York Convention

North Macedonia is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) and the European Convention on International Commercial Arbitration. Additionally, North Macedonia has either signed, or has inherited by means of succession from the former Yugoslavia, a number of bilateral and multilateral conventions on arbitration, including the Convention Establishing the Multilateral Investment Guarantee Agency (MIGA); the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards; the Geneva Protocol on Arbitration Clauses from 1923; and the Geneva Convention on Enforcement of Foreign Arbitration Decisions.

In April 2006, the Law on International Commercial Arbitration came into force in North Macedonia. This law applies exclusively to international commercial arbitration conducted in the country. An arbitration award under this law has the validity of a final judgment and can be enforced without delay. Any arbitration award decision from outside North Macedonia is considered a foreign arbitral award and is recognized and enforced in accordance with the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral awards.

Investor-State Dispute Settlement

North Macedonia accepts binding international arbitration in disputes with foreign investors. Foreign arbitration awards are generally recognized and enforceable in the country provided the conditions of enforcement set out in the Convention and the Law on International Private Law (Official Gazette of the Republic of North Macedonia, No. 87/07 and No. 156/2010, https://www.slvesnik.com.mk/ ) are met. So far, the country has been involved in six reported investor-state disputes resolved before international arbitration panels. None of those cases involved U.S. citizens or companies. Local courts recognize and enforce foreign arbitration awards issued against the Government of North Macedonia. The country does not have a history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

North Macedonia accepts international arbitration decisions on investment disputes. The country’s Law on International Commercial Arbitration is modeled on the United Nations Commission on International Trade Law (UNCITRAL) Model Law. Local courts recognize and enforce foreign arbitral awards and the judgments of foreign courts. Alternative dispute resolution mechanisms are available for settling disputes between two private parties but seldom utilized. A Permanent Court of Arbitration, established in 1993 within the Economic Chamber of Macedonia (a non-government business association), has the authority to administer both domestic and international disputes. North Macedonia requires mediation in disputes between companies up to €15,000 ($16,476 per 03/23/2022 exchange rate) in value before companies can go to court.

There is no tracking system for cases involving State Owned Enterprises (SOEs) in investment disputes in North Macedonia, and post is not aware of any examples.

Bankruptcy Regulations

North Macedonia’s bankruptcy law governs the settlement of creditors’ claims against insolvent debtors. Bankruptcy proceedings may be initiated over the property of a debtor, be it a legal entity, an individual, a deceased person, joint property of spouses, or a business. However, bankruptcy proceedings may not be implemented over a public legal entity or property owned by the Republic of North Macedonia. The Government of North Macedonia’s suspension of bankruptcy proceedings for the duration of the COVID-19 crisis continued throughout 2021. The 2020 World Bank Doing Business Report ranked North Macedonia 30th out of 190 countries for resolving insolvency.

The Macedonian Credit Bureau ( https://mkb.mk/en/ ), commercial banks, and the National Bank of the Republic of North Macedonia serve as credit monitoring authorities.

Investment Incentives

Both the Law on Technological Industrial Development Zones (TIDZ) and the Law on Financial Support of Investments offer incentives to investors. Investors in the TIDZ are eligible for tax exemptions for a period of up to 10 years of operation in proportion to the size of investment and number of employees. Investors in the TIDZ are exempt from paying duties for equipment and machines as well as from municipality construction taxes. The land lease rate is so low as to be merely symbolic, and investors are eligible for a grant equal to 10 percent of the cost of plant construction and new machinery, as well as a grant for improving competitiveness. North Macedonia’s legislative framework for FDI is generally harmonized with EU state aid regulations.

The salaries of employees working for TIDZ employers are exempt from personal income tax for a period of up to ten years after the first month in which the employer starts paying out salaries.

The government does not issue guarantees or jointly finance foreign direct investment projects. Depending on the industry and size of the investment, the government may decide to cover up to 50 percent of eligible investment costs over a period of 10 years.

To date, the government has not announced any incentives to stimulate clean energy investments.

Foreign Trade Zones/Free Ports/Trade Facilitation

North Macedonia currently has 15 free economic zones in various stages of development throughout the country. The Directorate for Technological Industrial Development Zones ( HYPERLINK “http://fez.gov.mk/” h http://fez.gov.mk/) is responsible for establishing, developing, and supervising 14 of them, including seven fully operational TIDZ: Skopje 1 and 2, Prilep, Stip, Kicevo, Struga, and Strumica. The Tetovo TIDZ is a public-private partnership. U.S. companies operate in TIDZ throughout North Macedonia, including automotive components manufacturers ARC Automotive (Skopje 1), Adient (Stip and Strumica), Aptiv (Skopje 1), Gentherm (Prilep), Lear (Tetovo), and Dura Automotive and Dura Structures & Extrusion (Skopje 2), and electronic component manufacturer Kemet (Skopje 1).

Performance and Data Localization Requirements

North Macedonia does not normally impose performance requirements, such as mandating local employment (working level or management level) or domestic content in goods or technology, as a condition for establishing, maintaining, or expanding an investment. Foreign investors in the TIDZ may employ staff from any country. In 2016, North Macedonia simplified the procedure for expatriates to obtain permission to live and work in the country.

North 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 or provide access to encryption. However, based on the new EU General Data Protection Regulation (GDPR), which came into force in May 2018, North Macedonia’s Directorate for Personal Data Protection adopted in February 2020 amendments to the Law on Personal Data Protection to harmonize North Macedonia’s laws with the new EU regulations.

Depending on the sector and type of investment, various government authorities oversee and assess the fulfillment of investment promises made by foreign investors. Government entities include the Agency for Foreign Investments and Export Promotion (Invest North Macedonia), the Directorate for Technological Industrial Development Zones , and the Ministry of Economy.

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 ( https://customs.gov.mk/index.php/en/ ).

Real Property

Laws protect ownership of both movable and real property, but implementation of these laws remains inconsistent. Mortgages and liens are regularly utilized, and the recording system is reliable. Highly centralized control of government owned “construction land,” the lack of coordinated local and regional zoning plans, and the lack of an efficient construction permitting system continue to impede business and investment. However, the government has improved the cadaster system by fully digitalizing all investment and holdings records, which has increased the security and speed of real estate transactions.

Land leased or acquired by foreign and/or non-resident investors is regulated by the Law on Ownership and Other Real Rights. EU and OECD residents have the same rights as local residents in lease or acquisition of construction land or property, whereas for non-EU and non-OECD residents, property ownership is regulated under terms of reciprocity. Foreign residents cannot acquire agricultural land in North Macedonia. Foreign investors may acquire property rights for buildings used in their business activities, as well as full ownership rights over construction land through a locally registered company. If a foreign company registers a local company in any form (subsidiary, local partner, or joint venture representation office), it can acquire land with full ownership rights similar to a domestic company.

Purchased land belongs to the owner and, even if it remains unoccupied, cannot revert to other owners such as squatters. The exception to this is agricultural land granted by the government as concessions. If the consignee does not use the land per the agreement, then the government can cancel the concession and take back possession of the land.

Intellectual Property Rights

Responsibility for safeguarding intellectual property rights (IPR) is distributed among numerous institutions. The State Office of Industrial Property governs patents, trademarks, service marks, designs, models, and samples. A unit within the Ministry of Culture administers the protection of authors’ rights and other related rights (e.g., music, film, television). The State Market Inspectorate is responsible for monitoring markets and preventing the sale of counterfeit and pirated goods. The Ministry of Interior is responsible for IPR-related crimes committed on the internet. The Customs Administration has the right to seize suspect goods to prevent their distribution pending confirmation from the rights holder of the authenticity of the goods. The National Coordination Body for Intellectual Property, which previously organized interagency raids to seize counterfeit products, usually focused on small sellers in open-air markets and mostly targeted trademark infringements. The body has been inactive for the past three years.

As North Macedonia awaits a date to begin EU accession negotiations, it continues to harmonize its IPR laws and regulations with EU standards, but still needs to demonstrate adequate enforcement of those laws. The European Commission’s 2021 report on North Macedonia noted progress in raising awareness in the fight against counterfeiting, smuggling, and the importation of counterfeit goods, as well as an increase in seized goods. The EU report noted the creation of an information platform for law enforcement institutions to exchange data on IPR, but said it needs to be fully functional in order to create a credible enforcement record and gather reliable statistics on the institutional handling of IPR infringements. The EU also noted the need for further improvement of the legal framework on IPR, notably the collective rights management system, by aligning with the Collective Rights Management Directive, and industrial property rights, by aligning with the Enforcement Directive and the Trade Secrets Directive.

The new draft National Intellectual Property Strategy and Action Plan 2022-2026 was prepared in December 2021 and is pending adoption by the Government. The Strategy proposes transfer of competences for all tasks related to the protection of copyright and all related rights from the Ministry of Culture to the State Office of Industrial Property, incorporating all IPR segments into one regulatory institution. The strategy also anticipates better coordination with other government agencies on the mapping and cataloging of autochthonous agricultural products.

While North Macedonia has many laws in place to protect IPR, infringement is frequent, and the court system should be improved. Prosecutors and judges for both civil and criminal cases are aware of IPR but lack adequate experience due to the small number of IPR cases. There are no specialized courts to handle IPR cases. Many rights holders do not pursue legal action since IPR violators usually lack the financial resources to pay damages. Courts are sometimes reluctant to find accused IPR violators guilty due to stiff mandatory minimum sentences for small-time distributors of counterfeit goods. The penalties for IPR infringement range from 30 to 60 days closure of businesses, monetary fines of up to €5,000 ($5,492), or a prison sentence of up to five years. North Macedonia does not track and report cumulative statistics on IPR infringement or seizures of counterfeit goods, and therefore lacks a credible enforcement record. North Macedonia is not included in the U.S. Trade Representative’s Special 301 Report or the Notorious Market List.

North Macedonia is a member of the World Intellectual Property Organization (WIPO) and party to a number of its treaties, including the Berne Convention, the Paris Convention, the Patent Cooperation Treaty, the WIPO Copyright Treaty, and the WIPO Performances and Phonograms Treaty.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

Capital Markets and Portfolio Investment

The government openly welcomes foreign portfolio investors. The establishment of the Macedonian Stock Exchange (MSE) in 1995 made it possible to regulate portfolio investments, although North Macedonia’s capital market is modest in turnover and capitalization. Market capitalization in 2021 was $4.3 billion, a 22.2 percent increase from the previous year. The main index, MBI10, increased by 30.8 percent, reaching 6,153 points at year-end. Foreign portfolio investors accounted for an average of 10.5 percent of total MSE turnover, 2.9 percentage points more than in 2020. The current regulatory framework does not appear to discriminate against foreign portfolio investments.

There is an effective regulatory system for portfolio investments, and North Macedonia’s Securities and Exchange Commission (SEC) regulates the market and licenses all MSE members to trade in securities. In 2021, the total number of listed companies was 96, four less than in 2020, and total turnover increased by 56.8 percent. Compared to international standards, overall liquidity of the market is still modest for entering and/or exiting sizeable positions. Individuals generally trade on the MSE as individuals, rather than through investment funds, which have been present since 2007.

There are no legal barriers to the free flow of financial resources into the products and factor markets. The National Bank of the Republic of North Macedonia (NBRNM) respects IMF Article VIII and does not impose restrictions on payments and transfers for current international transactions. A variety of credit instruments are provided at market rates to both domestic and foreign companies.

Money and Banking System

In its regular report on Article IV consultations, published January 2021, the International Monetary Fund noted that North Macedonia’s banking system was well-capitalized and profitable, but emphasized the need for continued vigilance. It assessed the monetary policy as appropriately accommodative and encouraged the Central Bank to stand ready to tighten monetary policy if inflation were expected to become persistently higher than in the euro area, or if sustained pressure on foreign currency reserves materialized.

Besides their own cash flow, domestic companies secure their financing mostly from bank loans due to the lack of corporate bonds and other securities as credit instruments.

Financial resources are almost entirely managed through North Macedonia’s banking system, consisting of 13 banks and a central bank, the National Bank of the Republic of North Macedonia (NBRNM). The number of banks dropped by one with the merger of Austrian-owned Sparkasse Bank with French-owned Ohridska Bank, completed in July 2021. The banking sector is highly concentrated, with three of the largest banks controlling 58.2 percent of the banking sector’s total assets of about $11.7 billion and collecting 71 percent of total household deposits. The largest commercial bank in the country had total assets of $2.8 billion, or 27.3 percent of the banking sector’s total assets. The seven smallest banks, which have individual market shares of less than 5 percent each, accounted for 12.7 percent of total banking sector assets. Foreign banks or branches are allowed to establish operations in the country on equal terms as domestic operators, subject to licensing and prudent supervision from the NBRNM. In 2021, foreign capital was present in 12 of North Macedonia’s 13 banks, and was dominant in 9 banks, controlling 71.1 percent of total banking sector assets, 81.8 percent of total loans, and 69.1 percent of total deposits.

According to the NBRNM, the banking sector’s non-performing loans at the end of Q3 of 2021 ( were 3.6 percent of total loans, increasing by 0.2 percentage points on an annual basis. Non-performing loans remained low despite the lifting of the NBRNM’s anti-COVID crisis measures in March 2021, which for almost a year allowed temporary postponement of loan installment payments. Total profits at the end of Q3 of 2021 reached $138 million, 22.1 percent higher than the same period in 2020.

Banks’ liquid assets at the end of Q3 of 2021 were 31.6 percent of total assets, 1.7 percentage points higher than in the same period in 2020, remaining comfortably high. In 2021, the NBRNM conducted different stress-test scenarios on the banking sector’s sensitivity to increased credit risk, liquidity shocks, and insolvency shocks, all of which showed the banking sector is healthy and resilient, with a capital adequacy ratio remaining above the legally required minimum of eight percent. The actual capital adequacy ratio of the banking sector at the end of Q3 of 2021 was 17.3 percent, 0.4 percentage points higher than the same period in 2020, with all banks maintaining a ratio above 15 percent.

There are no restrictions on a foreigner’s ability to establish a bank account. All commercial banks and the NBRNM have established and maintain correspondent banking relationships with foreign banks. The banking sector lost no correspondent banking relationships in the past three years, nor were there any indications that any current correspondent banking relationships were in jeopardy. There is no intention to implement or allow the implementation of blockchain technologies in banking transactions in North Macedonia. Alternative financial services do not exist in the economy. The transaction settlement mechanism is solely through the banking sector.

Foreign Exchange and Remittances

Foreign Exchange

The Constitution provides for free transfer, conversion, and repatriation of investment capital and profits by foreign investors. Funds associated with any form of investment can be freely converted into other currencies. Conversion of most foreign currencies is possible at market rates on the official foreign exchange market. In addition to banks and savings houses, numerous authorized exchange offices also provide exchange services. The NBRNM operates the foreign exchange market but participates on an equal basis with other entities. There are no restrictions on the purchase of foreign currency.

Parallel foreign exchange markets do not exist in the country, largely due to the long-term stability of the national currency, the denar (MKD). The denar is convertible domestically but is not convertible on foreign exchange markets. The NBRNM is pursuing a strategy of pegging the denar to the euro and has successfully kept it at the same level since 1997. Required foreign currency reserves are spelled out in the banking law.

Remittance Policies

There were no changes in investment remittance policies, and there are no immediate plans for changes to the regulations. By law, foreign investors are entitled to transfer profits and income without being subject to a transfer tax. All types of investment returns are generally remitted within three working days. There are no legal limitations on private financial transfers to and from North Macedonia. Remittances from workers in the diaspora represent a significant source of income for North Macedonia’s households. In 2021, net private transfers amounted to $2.2 billion, accounting for 16.2 percent of GDP.

Sovereign Wealth Funds

North Macedonia does not have a sovereign wealth fund.

There are about 120 State Owned Enterprises (SOEs) in North Macedonia, the majority of which are public utilities, predominately owned by the central government or the 81 local governments. The government estimates about 8,600 people are employed in SOEs. SOEs operate in several sectors of the economy, including energy, transportation, and media. There are also industries such as arms production and narcotics in which private enterprises may not operate without government approval. SOEs are governed by boards of directors, consisting of members appointed by the government. All SOEs are subject to the same tax policies as private sector companies. SOEs are allowed to purchase or supply goods or services from the private sector and are not given non-market-based advantages, such as preferential access to land or raw materials.

There is no published registry with complete information on all SOEs in the country.

The government has yet to implement broad public administration reform, which would also include SOEs, especially addressing their employment policies and governance. North Macedonia is not a signatory to the OECD Guidelines on Corporate Governance for SOEs. In February 2018, the government sent its bid to the World Trade Organization to upgrade its status from observer to a full member of the Government Procurement Agreement (GPA). The negotiation process is still ongoing.

Privatization Program

North Macedonia’s privatization process is almost complete, and private capital is dominant in the market. The government is trying to resolve the status of one remaining state-owned loss-making company in a non-discriminatory process through an international tender. Foreign and domestic investors have equal opportunity to participate in the privatization of the remaining state-owned assets through an easily understandable, non-discriminatory, and transparent public bidding process. Neither the central government nor any local government has announced plans to fully or partially privatize any of the utility companies or SOEs in their ownership.

Responsible business conduct (RBC) is a nascent concept in North Macedonia, and the number of enterprises which contribute to sustainable development is very limited. The government has not taken any major measures to encourage RBC and has not defined RBC or policies to actively promote or encourage it. The government has not conducted a “National Action Plan” on RBC and does not factor RBC policies into its procurement decisions.

There have not been any high-profile controversial instances of private sector impact on human rights or resolution of such cases in the recent past. Previously, the government has failed to fully enforce laws related to labor rights, consumer protection, environmental protection, and other laws and regulations intended to protect individuals from adverse business impacts.

North Macedonia passed the Law on Trade Companies in 2004 and the Securities Law in 2005, which regulate corporate governance. Together these laws provide a clear distinction between the rights and duties of shareholders versus the operations and management of the company. Shareholders generally cannot be held liable for the acts or omissions of the company. The American Chamber of Commerce in North Macedonia had a committee on Community Engagement and Responsible Business Conduct, which, beginning in 2015, organized seminars on relevant topics and maintained a database of corporate social responsibility activities carried out by over 260 companies. The government does not take any measures to encourage adherence to the OECD Due Diligence Guidance for Responsibility Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. North Macedonia does not participate in the Extractive Industries Transparency Initiative.

Additional Resources

Department of State

Department of the Treasury

Department of Labor

Climate Issues

The Government of North Macedonia adopted the Long-Term Strategy (LTC) for Climate Action and Action Plan in September 2021, and set its Nationally Determined Contributions (NDCs) to reduce national emissions and adapt to the impacts of climate change, per the Paris Agreement. The majority of North Macedonia’s emissions come from energy generation, buildings, and transportation.

North Macedonia has set ambitious climate goals, including a 51% reduction in GHG emissions by 2030, compared to 1990 levels, but has been slow to roll out policies to that effect.

There are no environmental or green growth considerations in public procurement policies, nor are there regulatory incentives for investments.  However, all infrastructure projects require environmental impact assessments. In addition, every polluting industry must obtain an Integrated Prevention and Pollution Control Permit (IPPC), issued by the Ministry of Environment and Physical Planning or the municipality where the facility will be located, depending on its size and expected emissions.  The IPPC is regulated by the Law on Environment.

North Macedonia has laws intended to counter bribery, abuse of official position, and conflicts-of-interest, and government officials and their close relatives are legally required to disclose their income and assets. However, enforcement of anti-corruption laws has often been weak and selectively targeted government critics and low-level offenders. There have been credible allegations of corruption in law enforcement, the judiciary, and many other sectors.

In April 2021, Parliament adopted the 2021-2025 National Strategy for the Prevention of Corruption and Conflict of Interest and related Action Plan, consolidating the country’s commitment to prevent corruption and sanction corrupt behavior. The State Commission for the Prevention of Corruption (SCPC) ( https://www.dksk.mk/index.php?id=home ), was proactive in opening and following up on number of corruption-related inquiries focused on high-level officials from across the political spectrum for alleged nepotism and conflict of interest. The cases initiated by the former Special Prosecutor’s Office (SPO) (which emanated from a wiretapping scandal which revealed extensive abuse of office by former public officials and corruption involving public tenders) continued to move forward through the court system. A number of cases were subject to final rulings resulting in prison sentences, and new cases were opened on the basis of investigative material from the former Special Prosecutor’s Office. Transparency International ranked North Macedonia 87th out of 180 countries in the 2021 Corruption Perceptions Index, a climb of 24 places, for a lack of government efforts to combat corruption and conflict of interest in public administration.

To deter corruption, the government uses an automated electronic customs clearance process, which allows businesses to monitor the status of their applications. In order to raise transparency and accountability in public procurement, the Bureau for Public Procurement introduced an electronic system which allows publication of notices from domestic and international institutions, tender documentation previews without registering in the system, e-payments for system use, electronic archiving, and electronic complaint submission ( https://www.e-nabavki.gov.mk/PublicAccess/Home.aspx#/home). 

The government does not require private companies to establish internal codes of conduct prohibiting bribery of public officials. A number of domestic NGOs focus on anti-corruption and transparency in public finance and tendering procedures. There are frequent reports of nepotism in public tenders. The government does not provide any special protections to NGOs involved in investigating corruption. North Macedonia has ratified the UN Convention against Corruption and the UN Convention against Transnational Organized Crime and has signed the OECD Convention on Combating Bribery.

Many businesses operating in North Macedonia, including some U.S. businesses, identified corruption as a problem in government tenders, in efforts to secure licenses, and in the judiciary. No local firms or non-profit groups provide vetting services of potential local investment partners. Foreign companies often hire local attorneys, who have knowledge of local industrial sectors and access to the Central Registry and business associations, who can provide financial and background information on local businesses and potential partners.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

State Commission for the Prevention of Corruption
Ms. Biljana Ivanovska, President
Dame Gruev 1
1000 Skopje, North Macedonia
+389 2 321 5377

Contact at a “watchdog” organization:

Organized Crime and Corruption Prosecution Office
Ms. Vilma Ruskovska, Chief
Boulevard Krste Misirkov BB, Sudska Palata
1000 Skopje, North Macedonia
+389 2 321 9884

Ministry of Interior
Organized Crime and Corruption Department
Mr. Lazo Velkovski, Head of the Department
Dimce Mircev bb
1000 Skopje, Macedonia
+ 389 2 314 3150 + 389 2 314 3150

Transparency International – Macedonia
Ms. Slagjana Taseva, President
Naum Naumovski Borce 58
P.O. Box 270
1000 Skopje, North Macedonia
+389 2 321 7000

North Macedonia generally has been free from political violence over the past decade, although interethnic relations have been strained at times. Public protests, demonstrations, and strikes occur sporadically, and often result in traffic jams, particularly near the center of Skopje.

Following 2016 parliamentary elections, an organized group of protestors leveraged ongoing protests and eventually stormed the parliament building on April 27, 2017, in reaction to the change of government and the election of Talat Xhaferi as Speaker of Parliament, the first ethnic Albanian to assume that post since the country’s independence. More than 100 people were injured, including several members of the government and seven MPs. On March 18, 2019, 16 individuals were convicted and given lengthy prison sentences for their involvement in the attack, including the former head of the Public Security Bureau (who had previously served as Minister of Interior) and former security officers. On July 26, 2021, in the so-called Parliament Violence Organizers’ case, the trial court issued roughly six-year prison sentences against the former VMRO-DPMNE Speaker of Parliament Trajko Veljanoski, former Minister of Education and Science Spiro Ristovski, former Minister of Transport and Communications Mile Janakieski, and former Administration for Security and Counterintelligence Director Vladimir Atanasovski, for organizing the attack on Parliament.  Prosecutor and defense appeals were pending before the appellate court as of March 8, 2022. The related cases against the former VMRO-DPMNE Prime Minister Nikola Gruevski and former counter-intelligence official Nikola Boshkoski, both fugitives, were ongoing.

There is neither widespread anti-American nor anti-Western sentiment in North Macedonia. A poll released February 2022 showed that 45.2 percent of all respondents saw the United States as the most influential foreign actor in country. There have been no incidents in recent years involving politically motivated damage to U.S. projects or installations. Violent crime against U.S. citizens is rare. Theft and other petty street crimes do occur, particularly in areas where tourists and foreigners congregate.

North Macedonia has been a member of NATO since 2020. The country has been an EU candidate country since December 2005 and, in March 2020, the General Affairs Council of the European Union decided to open accession negotiations with North Macedonia, which was endorsed by the European Council the following day. However, Bulgaria refused to approve North Macedonia’s EU negotiating framework in November 2020, effectively blocking the official launch of EU accession talks. In January 2022, the new governments of North Macedonia and Bulgaria re-launched efforts to resolve outstanding bilateral issues through intensified talks with a view to lifting Bulgaria’s veto.

Foreign investors, especially those in labor-intensive industries, find North Macedonia’s competitive labor costs and high number of English speakers attractive. The average net wage in December 2021 was MKD 29,943 ($534) per month. Тhe minimum net wage for April 2021 through March 2022 was set to MKD 15,194 ($270) per month. In January 2022, the government raised the minimum wage to 18,000 MKD ($321), effective April 2022.

In the fourth quarter of 2021, North Macedonia’s labor force consisted of 934,482 people, of which 795,276 (84.8 percent) were officially employed and 142,206 (15.2 percent) were officially unemployed. North Macedonia’s employed labor force is roughly 60.4 percent male and 39.6 percent female. The largest number of employees are engaged in manufacturing (20 percent), trade (15.9 percent), and agriculture (11 percent). The total unemployment rate for youth ages 15 to 24 years old is 30.9 percent. About 18 percent of the unemployed have a university education. Informal sectors of the economy, including agriculture, are estimated to account for 22 percent of employment.

According to the IMF and domestic experts, the informal economy is estimated at approximately 40 percent of the overall economy. In 2019 the government adopted an Action Plan for Combating the Informal Economy 2020-2021 which includes priorities such as improving, measuring and monitoring, raising public awareness of the negative impact to society, and strengthening the tax code.

Despite the relatively high unemployment rate, foreign investors report difficulties in recruiting and retaining workers. Positions requiring technical and specialized skills can be especially difficult to fill due to a mismatch between industry needs, the educational system, and graduates’ aspirations. Many well-trained professionals with highly marketable skills, such as IT specialists, outsource to foreign companies or choose to work outside the country. To address shortages of factory workers, the government encourages the dispersal of labor-intensive manufacturing investments to different parts of the country, and companies often bus in workers from other areas. The Operational Plan for Active Programs and Measures for Employment and Services in the Labor Market for 2021 defines active government measures, programs, and services for self-employment and employment to stimulate job creation. The Plan also provides subsidies for new and existing jobs, internships, specialized skills training, vocational training for unemployed persons, and re-qualification or retraining. The Labor Law and accompanying measures do not discriminate against gender, rase or ethnicity.

Relations between employees and employers are regulated by individual employment contracts, collective agreements, and labor legislation. The Law on Working Relations regulates all forms of employment relations between employees and employers to include retirement, lay-offs, and union operations. Severance and unemployment insurance are also covered by the same law. Most labor-related laws are in line with international labor standards and generally align with recommendations of the International Labor Organization (ILO). Labor laws apply to both domestic and foreign investments, including those in the free economic zones, and employees under each are equally protected.

The Employment Agency ( http://www.av.gov.mk/home.nspx ) provides professional, organizational, administrative and other services related to employment and unemployment insurance and provides support, assistance and services to all stakeholders in the labor market.

Employment of foreign citizens is regulated by the Law on Employment and Work of Foreigners: http://mtsp.gov.mk/content/pdf/zakoni/Zakon_vrabotuvanje_stranci_21715.pdf .

There is no limitation on the number of employed foreign nationals or the duration of their stay. Work permits are required for foreign nationals, and an employment contract must be signed upon hiring. The employment contract, which must be in writing and kept on the work premises, should address the following provisions: description of the employee’s duties, duration of the contract (finite or indefinite), effective start and termination dates, workplace location, hours of work, rest and vacation periods, qualifications and training, salary, and pay schedule. The law establishes a 40-hour work week with a minimum 24-hour rest period, paid vacation of 20 to 26 workdays, and sick leave benefits. Employees may not legally work more than an average of eight hours of overtime per week over a three-month period, or 190 hours per year. According to the collective agreement for the private sector between employers and unions, employees in the private sector have a right to overtime pay at 135 percent of their regular rate. In addition, the law entitles employees who work more than 150 hours of overtime per year to a bonus of one month’s salary. Although the government sets occupational safety and health standards for employers, those standards are not enforced in the informal sector.

The Law allows free associating in trade unions if workers agree to organize themselves in such a format. Trade unions are interest-based, legally autonomous labor organizations. Membership is voluntary, and activities are financed by membership dues. About 22 percent of legally employed workers are dues-paying union members. Although legally permitted, there are no unions in the factories operating in the free economic zones. Most unions, with exception of a few local branches, are generally not independent of the influence of government officials, political parties, and employers.

There are two main associations of trade unions: The Union of Trade Unions and the Confederation of Free Trade Unions. Each association is comprised of independent branch unions from the public and private sectors. Both associations, along with representatives from the Organization of Employers of North Macedonia and relevant government ministries, are members of the Economic – Social Council. The Council meets regularly to discuss issues of concern to both employers and employees, and reviews amendments to labor-related laws.

The rights of workers in industrial divisions are regulated by National Collective Bargaining Agreements, and there are two on the national level—one for the public sector and one for the private sector. Only about 25 percent of the labor force is covered by these agreements. National collective agreements in the private sector are negotiated between representative labor unions and representative employer associations. The national collective agreement for the public sector is negotiated between the Ministry of Labor and Social Policy and labor unions. Separate contracts are negotiated by union branches at the industry or company level. Collective bargaining agreements are most prevalent in the metal industry, private sector education, and court administration.

An out-of-court mechanism for labor dispute resolution was introduced in 2015 with ILO assistance. North Macedonia’s labor regulations comply with international labor standards and are in line with the ILO. In 2018, the government adopted a number of changes to the Law on Labor relations, most of which related to workers’ rights in procedures for termination of work contracts, severance pay, and apprenticeships. http://www.mtsp.gov.mk/content/pdf/zakoni/2018/ZRO%20izmeni%202018.pdf

Financing and insurance for export, investment, and development projects are made possible through agencies such as the U.S. Trade and Development Agency (USTDA); the U.S. Export-Import Bank (EX-IM); the U.S. International Development Finance Corporation (DFC); the European Bank for Reconstruction and Development (EBRD); the International Bank for Reconstruction and Development (World Bank); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the Southeast Europe Equity Fund (SEEF). Most funding for major projects is acquired through co-financing agreements, especially for transportation and energy infrastructure development.

Political risk insurance and project financing have been available to investors in North Macedonia since 1996, first through OPIC and now through the DFC. The DFC focuses on debt financing, political risk insurance, equity investment, and supporting private equity investment funds, though the DFC office in Belgrade still lacks a full-time representative. MIGA provides investment guarantees against certain non-commercial risks (i.e., political risk insurance) to eligible foreign investors who make qualified investments in developing member countries.

Although its primary focus is export assistance, including direct loans and capital guarantees aimed at the export of non-military items, EX-IM also provides insurance policies to protect against both political and commercial risks. USTDA, SEEF, the World Bank, and the EBRD focus more directly on financing agreements

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) 2021 $13,879 2020 $12,264 www.worldbank.org/en/country
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2021 $160 2020 $12 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) 2019 $-1.3 2020 $-2 BEA data available at
Total inbound stock of FDI as % host GDP 2021 53.4% 2020 59.5% UNCTAD data available at

* Source for Host Country Data: State Statistical Office (SSO) publishes data estimates on GDP; National Bank of the Republic of North Macedonia (NBRNM) publishes data on FDI. Data is publicly available online and is published immediately upon processing with a lag of less than one quarter. End-year data for previous year is usually published in March of current year.

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 7,186 100% Total Outward 121  


Austria 1,002 13.9% Serbia 85 70.2%
United Kingdom 933 9.4% Slovenia 49 40.5%
Greece 674 9.4% Netherlands 42 34.7%
Netherlands 624 8.7% Bosnia and Herzegovina 16 13.2%
Slovenia 495 6.9% Kosovo 12 9.9%
“0” reflects amounts rounded to +/- USD 500,000.

Arben Gega
Commercial Specialist
U.S. Embassy – Skopje
Samoilova 21
1000 Skopje, Republic of North Macedonia
Tel: +389 2 310 2403
E-mail: gegaa@state.gov

On This Page

  1. Executive Summary
  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Antitrust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
    1. Additional Resources
    2. Climate Issues
  10. 9. Corruption
    1. Resources to Report Corruption
  11. 10. Political and Security Environment
  12. 11. Labor Policies and Practices
  13. 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
  14. 13. Foreign Direct Investment Statistics
  15. 14. Contact for More Information
2022 Investment Climate Statements: North Macedonia
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