Macedonia: new investment opportunities
In this article, we will analyze Macedonia’s economy and trade. We will take a closer look at the characteristics of this country and the most profitable economic sectors.
North Macedonia is a strongly developing country. It has an area of 25213 m2 and a population of 1,832,696. The currency used is the Macedonian dinar and its geographic location is strategic; it is located in the middle between Serbia, Albania, Greece and Bulgaria and allows it to easily reach many countries and trade with them. It has a highly developed line of roads and railways, two international airports and is close to two international ports, the Albanian and Greek ports.
As far as the population is concerned, 41.5% are people under 30 years of age with a high level of schooling, which represents high intellectual capital. 85% of high school graduates go to university. There are also numerous vocational schools and tailor-made training programs in the country.
Other competitive advantages of Macedonia apart from its location and young workforce are its excellent infrastructure, unbeatable tax advantages, monetary stability and investment incentives. All this guarantees high profits and increased competitiveness.
The fiscal and monetary environment is stable and taxes are very low:
– 0% tax on reinvested profits,
– 0% tax on activities in technological industrial development zones;
– VAT of 18% and 5% on specific items;
– 0.1%-0.2% property tax;
– 10% corporate tax;
– 10%-18% personal income tax.
Talking about economic indicators, there has been low inflation averaging 2% per year for the past 18 years, except in 2022 when it reached higher levels due to the world situation (19.5% in October), but now in 2023, it is falling again.
It boasts free trade agreements and thus free access to markets in 40 countries with 600 million consumers, for example, 27 EU countries.
It has been a member of NATO since 2020 and is a candidate country for EU membership.
The implementation of regulatory and administrative reforms is continually updated. Speaking of the real estate market, foreigners are free to purchase real estate and building land. Furthermore, a simplification of the procedures for obtaining building permits from 21 to 3 steps has been adopted. Investors also enjoy some tax benefits such as free connection to utilities, they are exempted from paying consumption taxes to the municipality and fees for land construction permits, and there is a green customs channel available at the border for quick export to EU countries.
There are 15 free zones (TIDZ) where taxes are 0% and land is available for a long-term lease for up to 99 years (0.10 euro/m2).
Sectors in which there are numerous business opportunities:
– Automotive machinery and components industries;
– Agro-industry and food processing;
– Health sector, particularly medical devices and pharmaceuticals;
– Energy and mining sector;
– Textile and clothing sector;
– Financial sector;
– Real estate and construction sector;
– Tourism, developed in both summer and winter.
The agri-food sector is one of the fastest growing, with a 10% increase in the last three years. More than 400,000 people derive all or part of their income from agricultural activities. The sector accounts for 16% of the national GDP. The unique combination of continental and sub-Mediterranean climates together with new technologies greatly encourage the production of quality food products.
Regarding energy, the government is strongly committed to developing the energy sector through public and private investments. Renewable energy sources are being developed, particularly solar-photovoltaic plants, wind, water and biofuels.
Another essential sector is mining, as Macedonia owns metallic, non-metallic and water mineral resources.
The financial sector is safe, strong and profitable. The structural liquidity of the banking system is sufficient and, according to the latest stress tests of the National Bank, provides solid reserves to withstand severe deposit outflow shocks.
Sources: meeting on renewable energy sources and investment opportunities in Macedonia held at Czech Trade, Prague.
