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Macedonia

 
   
Executive Summary
The Republic of Macedonia is situated on the Balkan peninsula in the South-Eastern part of Europe, and covers a total are of 25,333 sq km. It has declared independence from Yugoslavia in 1991, and it adhered to the UNO in 1993. It is a landlocked country. Serbia, Kosovo, Bulgaria, Albania and Greece are its neighbours.  Skopje is the capital of Macedonia, and Macedonian is its official language.

Today Macedonia is a parliamentary democracy with a unicameral parliament to which legislative power belongs; government has executive power. The president is elected for the term of five years.

Since independence Macedonia has undertaken a number of actions in terms of the economic reforms, achieving good results and performing evident development year by year. Trade brings more than 90% of income to the country’s economy. However, it still has a big unemployment rate and hidden economy is a big problem of Macedonia. More than a half of the exports is represented by textiles; steel, iron and vegetables are other goods exported from Macedonia. Industrial and agricultural sectors are smaller, but still important fields of the country’s economy.

The Macedonian Denar (MKD) is the national currency of Macedonia.

Geography
Macedonia has a beautiful landscape with more than 50 lakes and sixteen mountains that exceed height of 2,000 metres above the sea level. The country is vulnerable to earthquakes which have significantly damaged it  in the past.

Macedonia’s climate is classified as transitional from Mediterranean to continental. Summers are usually hot, and winters are rather cold, the temperature significantly varies within the territory of the country due to difference in altitude of various zones.

Map, Flag and Coat of Arm


Types of Company

Limited Liability Company

On shareholder may incorporate this company, which has a limited liability and must have a minimum capital (the amount of which depends on the number of shareholders). Shareholders must hold a meeting at least once a year and their voting rights are directly proportional to the amount of contribution into a company. No citizenship and residence requirements are specified for company’s managers.

Branch of a Foreign Company
A foreign company may establish its branch in Macedonia by submitting all the required documents. The registration procedure is similar to a domestic company’s registration.

General Partnership
Two or more partners, private persons or corporate entities, may form a general partnership, to the debts and obligations of which they are fully, jointly and severally liable.

Limited Partnership
There must be at least one general (or active) partner with unlimited liability and at least one limited partner with liability limited up to the capital invested (it is also referred to as a silent partner).

Taxation

Personal

Taxation regime of Macedonia is still being in a transformation process, which is  partially based on ex Yugoslavia’s practice as well as on local innovative laws. It was the main idea of the new independent government to make the taxation regime attractive to foreign investors.

A resident is a person who spends in Macedonia at least six months in a year; such a person must pay income tax on local and international source of income. Non-residents are liable to pay taxes only on income derived from activities conducted on the territory of the country.

Persons are liable to pay income tax on income derived from employment, disability pensions, self-employment activities, financial activities, property and others. Certain income categories and awards are not fully taxed or are not taxed at all. Social security contributions are payable by employers and employees.

Corporate
Companies are liable to corporation tax at a rate of 10%. Companies, partially or fully owned by foreign shareholders, receive significant reliefs and discounted rates for corporate tax purposes. Capital gains are taxed as a part of income tax. No withholding taxes are levied.

Foreign investors can be granted tax incentives or exemptions for a period up to 3 years. Custom tax with Turkey is 0%.

VAT is levied at a rate of 18%, some goods and services are applied with a discounted VAT rate of 5%. Excise duties are applied at varying rates to certain products, such as coffee, alcohol, tobacco, fuel and others. Land and buildings are taxed on the annual basis at a rate of 0.1% of the market value of the property.

 
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