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January 2013January 2013
MINISTRY OF FOREIGN AFFAIRS OF THEMINISTRY OF FOREIGN AFFAIRS OF THEREPUBLIC OF MACEDONIAREPUBLIC OF MACEDONIA
Minister, H.E Nikola PoposkiMinister, H.E Nikola Poposki
REPUBLIC OF MACEDONIA:REPUBLIC OF MACEDONIA: BUSINESS CLIMATEBUSINESS CLIMATE
Why Macedonia?Why Macedonia?
InvestmeInvestment nt
IncentiveIncentivess
CompetitivCompetitive & e &
EducatedEducatedWorkforceWorkforce
Excellent Excellent InfrastructuInfrastructu
rere
Investor - Investor - friendlyfriendly
GovernmenGovernmentt
CompetitivCompetitivee
LocationLocation
Higher Profits & Increased Competitiveness
Location and Transport Location and Transport InfrastructureInfrastructure
• Two Pan-European corridors:
– East-West Corridor 8
– North-South Corridor 10
• Road network: 4,370 km
• Railway network: 925 km
• Two international airports:
– Skopje
– Ohrid
• International ports*:
– Thessalonica (Greece): 80 km
– Durres (Albania): 150 km
* Distance from Border
Political and Economic OutlookPolitical and Economic Outlook
• Political, monetary and macroeconomic stability
• Strategically located for future business expansion
• First country in SEE to sign a SAA with the EU in 2001
• EU and NATO candidate country
• FTAs with numerous countries
BEST CONSECUTIVE REFORMER OVER THE LAST THREE YEARS IN SOUTH EASTERN EUROPE
Based on the World Bank’s Doing Business Reports in 2010 , 2011 and 2012
BEST CONSECUTIVE REFORMER OVER THE LAST THREE YEARS IN SOUTH EASTERN EUROPE
Based on the World Bank’s Doing Business Reports in 2010 , 2011 and 2012
3rd BEST REFORMERIN THE WORLD
World Bank’s Doing Business 2010 Report
3rd BEST REFORMERIN THE WORLD
World Bank’s Doing Business 2010 Report
5th MOST TAX FRIENDLYCOUNTRY IN THE
WORLDForbes Magazine
5th MOST TAX FRIENDLYCOUNTRY IN THE
WORLDForbes Magazine
4th IN TOTAL TAX RATEEASE OF PAYING TAXES
2012PwC and World Bank Group Study
4th IN TOTAL TAX RATEEASE OF PAYING TAXES
2012PwC and World Bank Group Study
3rd BEST REFORMERIN THE WORLD
World Bank’s Doing Business 2012 Report
3rd BEST REFORMERIN THE WORLD
World Bank’s Doing Business 2012 Report
Ease of Doing Business 2012 Global Rank
2012 Index of Economic Freedom
World Rankings
Ease of Paying Taxes 2012
Total Tax Rate World Rankings
PwC and World Bank Group Study
Foreign Investment RegimeForeign Investment Regime
• Macedonian Constitution guarantees fair treatment of foreign investors
• Complete protection of the ownership rights of foreign investors
• Republic of Macedonia is member of MIGA
(Multilateral Investment Guarantee Agency)
• Investment protection treaties with numerous countries
• 100% foreign ownership of a company allowed
• No restrictions for repatriation of profits
Economic IndicatorsEconomic Indicators
AVERAGE GROSS SALARY IN AVERAGE GROSS SALARY IN 20112011
€ 497 per month
CURRENCYCURRENCY
Macedonian Denar pegged to the DM/€
for the last 15 years (€1= MKD 61.3)
EXPORT BY YEAR (US$ bn)
INFLATIONINFLATION
Low inflation: avg < 2% annually over the last 10 years
2007: 2.3%; 2008: 8.3%; 2009: -0.8%; 2010: 1.6%; 2011: 3.9%
Source: National Bank of the Republic of Macedonia
CREDIT RATINGS 2011CREDIT RATINGS 2011Standard & Poor’s: BB
Fitch: BB+
BUDGET DEFICIT & STATE DEBTBUDGET DEFICIT & STATE DEBTBudget Deficit, 2011: 2.6 % of GDPState Debt, Q2.2012: 29 % of GDP
FDI BY YEAR (US$ m)
GDP GROWTH(%)
Unbeatable Fiscal BenefitsUnbeatable Fiscal Benefits
Corporate Income Corporate Income TaxTax
Personal Income Tax Personal Income Tax ((highest rate)highest rate)
General VAT General VAT RatesRates
* Flat rateSource: PricewaterhouseCoopers (Taxes at a glance 2012), National Investment Promotion Agencies
• 10% Corporate & Personal income tax (among lowest in Europe)• 0% Tax on retained earnings• Double taxation treaties with many European countries• 0% tax for operation in a Technological Industrial Development
Zone• Real estate taxes at 2% - 4%• VAT at 18%, with 5% on specific items• FTAs with EU, EFTA, CEFTA countries; Turkey and the Ukraine;
providing access to over 650m customers
Romania
Czech Republic*
Macedonia*
Slovakia
Ukraine
Poland
Hungary
Turkey
Croatia
Czech R.*Romania*
Slovakia
Ukraine
Poland
Hungary
TurkeyCroatia
Macedonia*
Macedonia
Turkey
Romania
Slovakia
Czech RepublicUkraine
Poland
CroatiaHungary
Social Security ContributionsSocial Security Contributions
Macedonia - Social Security ContributionsMacedonia - Social Security Contributions
Comparison - Social Security Comparison - Social Security Contributions Contributions
Source: PricewaterhouseCoopers (Taxes at a glance 2011), National Investment Promotion Agencies
2727%%
2727%%
28.428.4%%
32.532.5%%
2727%%
2727%%
31.2% - 31.2% - 34.1%34.1%
48.648.6%%
37.237.2%%
44.5% - 44.5% - 55.7%55.7%
33.533.5%%
44%44%
39.8% - 39.8% - 49.7%49.7%
45%45%
37.237.2%%
Average Average Gross Gross Monthly SalaryMonthly Salary
Source: The Vienna Institute for International Economic Studies (wiiw)
Average gross monthly salary (€)
Average gross monthly salary (€) in selected countries of Central and
Eastern Europe in 2011
Competitiveness for Investments in Competitiveness for Investments in MacedoniaMacedonia
Price Level Index for Construction
Price Level Index for Investments
Source: Eurostat, December 2010
Sustainable Work Force SupplySustainable Work Force Supply
• 41.5% of population under 3041.5% of population under 30
• High intellectual capitalHigh intellectual capital
– 65% increase in total number of undergraduate degrees in 2009 compared to 2006
– 85+% of high school graduates enrolled in universities in 2008
– Multiple vocational high schools in each city
• Tailor-made training programsTailor-made training programs through Vocational Schools or Universities
• 6% of GDP spent on education6% of GDP spent on education
Number of enrolled students Number of enrolled students in Colleges and Universities in Colleges and Universities
Number of graduates Number of graduates in Colleges and Universities in Colleges and Universities
Excellent Language SkillsExcellent Language Skills
• Every child in Macedonia begins to learn English in the first grade of primary school
• Two foreign languages are mandatory in high school: English, and either German, French, or Russian
• English is also taught for two years at University level
• Regional languages (Serbian, Croatian, Bulgarian, Albanian and Greek) are widely spoken
Foreign Languages Foreign Languages StudiedStudied
Students in Students in Primary Schools, % Primary Schools, %
of Totalof Total
Students in Students in Secondary Schools, Secondary Schools,
% of Total% of Total
English 98% 96%
French 18% 32%
German 6% 21%
Italian - 2%
Russian 1% 2%
Turkish 3% 2%Source: State Statistical Office of the Republic of Macedonia (Education 2009/2010) and Ministry of Education and Science
• Business oriented Government
• Welcoming and decisive government ready to serve investors
Cooperative institutions Cooperative institutions
Governmental Agency “Invest Governmental Agency “Invest Macedonia” at Your Service…Macedonia” at Your Service…
• One-stop shop and project management approach
• VIP Investment tour
• Locations
• HR Companies, construction, real estate, tax advisory and consulting
• Universities and Reference Company visits
• Creating linkages with local and central Governments
• Navigate the legal requirements
• Ensure success!
T h a n k Y o uT h a n k Y o u
MINISTRY OF FOREIGN AFFAIRS OF THE REPUBLIC OF MINISTRY OF FOREIGN AFFAIRS OF THE REPUBLIC OF MACEDONIAMACEDONIA
DIRECTORATE OF ECONOMIC DIPLOMACYDIRECTORATE OF ECONOMIC DIPLOMACYFilip II Makedonski 7Filip II Makedonski 7
1000 Skopje1000 SkopjeTel. Tel. 389 2 3389 2 3 123 044 123 044Fax. Fax. 389 2 389 2 3 115 7903 115 790
E-mail:E-mail: ded@mfa.gov.mkweb:web: www.mfa.gov.mk www.mfa.gov.mk
AGENCY FOR FOREIGN INVESTMENTS AND EXPORT AGENCY FOR FOREIGN INVESTMENTS AND EXPORT PROMOTION OF THE REPUBLIC OF MACEDONIAPROMOTION OF THE REPUBLIC OF MACEDONIA
Nikola Vapcarov 7Nikola Vapcarov 71000 Skopje1000 Skopje
Tel.: Tel.: + 389 2 31+ 389 2 3100 11100 111Fax: + 389 2 3122 098Fax: + 389 2 3122 098
e-mail: e-mail: fdi@investinmacedonia.comfdi@investinmacedonia.comweb: web: www.investinmacedonia.comwww.investinmacedonia.com
AT YOUR SERVICEAT YOUR SERVICE AT YOUR SERVICEAT YOUR SERVICE
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