Republic of Macedonia
BUSINESS CLIMATE
AND INVESTMENT
OPPORTUNITIES
June, 2013
2
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Why Macedonia?
Investment
Incentives
Compe...
3
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Location and Transport Infrastructure
• Tw...
4
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
• Political, monetary and macroeconomic st...
5
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Foreign Investment Regime
• Macedonian Con...
6
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
BEST CONSECUTIVE REFORMER
OVER THE PAST TH...
7
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Ease of Doing Business 2013
Global Rank
23...
8
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Best Countries for Business 2012
Forbs Mag...
9
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
2012 Index of Economic Freedom
World Ranki...
10
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Ease of Paying Taxes
2012
Total Tax Rate ...
11
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
AVERAGE GROSS SALARY IN 2012
€ 498 per mo...
12
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
27%
25%
24%
23%
20%
20%
20%
18%
18%
40%
3...
13
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
21.2%
19.0%
18.0%
18.0%
18.0%
9.2%
7.5%
7...
14
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Source: The Vienna Institute for Internat...
15
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Competitiveness for Investments in Macedo...
16
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Sustainable Work Force Supply
• 41.5% of ...
17
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Excellent Language Skills
• Every child i...
INVESTMENT
OPPORTUNITIES
19
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Machine and Automotive components
ICT
Med...
20
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
• Existing engineering and manufacturing ...
21
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
• Best telecommunication networks in the
...
22
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
• Existing pharmaceutical industry export...
23
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
• Unique combination of Continental and S...
24
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Investment Opportunities
Textile sector
•...
25
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Summer Destinations
• Numerous tectonic, ...
26
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Historical and Culture Heritage
• 4,293 a...
Investment Opportunities
Technological Industrial Development
Zones - TIDZs
28
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Free Zone Tetovo
Area Size: 95 ha;
Distan...
29
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Infrastructure Benefits
• Electrical grid...
30
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
• Free connection to utilities
• Subsidy ...
31
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
TIDZ “Skopje 1”
JOHNSON CONTROLS
• $40mn ...
32
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
TIDZ “Stip”
PROJECT SCOPE
• 2nd project i...
33
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
Investment Projects outside of TIDZs
SIZE...
34
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
“Macedonia offers the company just-in-tim...
AT YOUR SERVICE
36
Agency for Foreign Investments
and Export Promotion www.investinmacedonia.com
• One-stop shop and project management ap...
Thank You!
AGENCY FOR FOREIGN INVESTMENTS
AND EXPORT PROMOTION
OF THE REPUBLIC OF MACEDONIA
ul.Nikola Vapcarov br. 7
1000,...
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Business Climate and Investment Opportunities in the Republic of Macedonia

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  • Инфраструктурни поволности во ТИРЗ
  • Business Climate and Investment Opportunities in the Republic of Macedonia

    1. 1. Republic of Macedonia BUSINESS CLIMATE AND INVESTMENT OPPORTUNITIES June, 2013
    2. 2. 2 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Why Macedonia? Investment Incentives Competitive Workforce Excellent Infrastructure Investor - friendly Government Competitive Location Higher Profits & Increased Competitiveness
    3. 3. 3 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Location and Transport Infrastructure • Two Pan-European corridors: – East-West Corridor 8 – North-South Corridor 10 • Road network: 9,205 km • Railway network: 900 km • Two international airports: – Skopje – Ohrid • International ports*: – Thessalonica (Greece): 250 km – Durres (Albania): 300 km * Distance from Skopje
    4. 4. 4 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com • 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 • Business oriented Government • Welcoming and decisive government ready to serve investors Political and Economic Outlook
    5. 5. 5 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Foreign 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
    6. 6. 6 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com BEST CONSECUTIVE REFORMER OVER THE PAST THREE YEARS IN SOUTH EASTERN EUROPE Based on the World Bank’s Doing Business Reports in 2011, 2012 and 2013 4th IN TOTAL TAX RATE EASE OF PAYING TAXES 2012 PwC and World Bank Group Study 3rd BEST REFORMER IN THE WORLD World Bank’s Doing Business 2010 Report 5th BEST IN STARTING A BUSINESS RANKINGS World Bank’s Doing Business 2013 Report 3rd BEST REFORMER IN THE WORLD World Bank’s Doing Business 2012 Report
    7. 7. 7 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Ease of Doing Business 2013 Global Rank 23 35 46 51 54 55 65 66 71 72 84 86 126 Macedonia Slovenia Slovakia Montenegro Hungary Poland Czech RepublicBulgaria Turkey Romania Croatia SerbiaBosnia and Herzegov
    8. 8. 8 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Best Countries for Business 2012 Forbs Magazine Global Rankings 23 37 38 41 43 45 46 47 49 52 60 85 90 Slovenia Macedonia Poland Czech RepublicSlovakia Montenegro Hungary Croatia Bulgaria Turkey RomaniaBosnia and HerzegovinaSerbia
    9. 9. 9 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 2012 Index of Economic Freedom World Rankings 43 57 61 69 72 83 89 119 Macedonia Albania Bulgaria Slovenia Montenegro Croatia Serbia Greece
    10. 10. 10 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Ease of Paying Taxes 2012 Total Tax Rate World Rankings 4 21 28 36 54 63 68 102 112 119 137 143
    11. 11. 11 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com AVERAGE GROSS SALARY IN 2012 € 498 per month CURRENCY Macedonian Denar pegged to the DM/€ for the last 15 years (€1= MKD 61.3)EXPORT BY YEAR (US$ bn) INFLATION Low inflation: avg < 2% annually over the last 10 years 2008: 8.3%; 2009: -0.8%; 2010: 1.6%; 2011: 3.9%; 2012:3,3% Source: National Bank of the Republic of Macedonia CREDIT RATINGS 2011 Standard & Poor’s: BB Fitch: BB+ BUDGET DEFICIT & STATE DEBT Budget Deficit, 2011: 2.6 % of GDP State Debt, 2012: 32.1% of GDP FDI BY YEAR (US$ m) GDP GROWTH(%) Economic Indicators 5.0 6.1 5.0 -0.9 2.9 2.8 0,3 2006 2007 2008 2009 2010 2011 2012 699 587 197 211 410 132 2007 2008 2009 2010 2011 2012
    12. 12. 12 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 27% 25% 24% 23% 20% 20% 20% 18% 18% 40% 35% 32% 19% 17% 16% 16% 15% 10% 21% 20% 20% 19% 19% 19% 19% 16% 10% Unbeatable Fiscal Benefits Corporate Income Tax Personal Income Tax (highest rate) General VAT Rates • 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 Turkey Croatia Macedonia* Macedonia Turkey Romania Slovakia Czech Republic Ukraine Poland Croatia Hungary
    13. 13. 13 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 21.2% 19.0% 18.0% 18.0% 18.0% 9.2% 7.5% 7.3% 7.3% 7.3% 1.6% 1.4% 1.2% 1.2% 1.2% 0.5% 0.5% 0.5% 0.5% 0.5% 2008 2009 2010 2011 2012 Pension Insurance Health Insurance Employment Insurance Additional Health Insurance Macedonia Turkey Poland Serbia Croatia Hungary Czech Republic Slovakia Ukraine Romania M2 Social Security Contributions Macedonia - Social Security Contributions Comparison - Social Security Contributions Source: PricewaterhouseCoopers (Taxes at a glance 2012), National Investment Promotion Agencies 27% 27% 28.4% 32.5% 27% 27% 31.2% - 34.1% 48.6% 37.2% 44.5% - 55.7% 33.5% 44% 39.8% - 49.7% 45% 37.2%
    14. 14. 14 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Source: The Vienna Institute for International Economic Studies (wiiw) Average gross monthly salary (€) in selected countries of Central and Eastern Europe in 2012 Average Gross Monthly Salary €498 €508 €660 €727 €771 €800 €846 €889 €993 €1,048 €1,525 Macedonia Serbia Bosnia and Herzegovina Montenegro Hungary Slovakia Poland Estonia Czech Republic Croatia Slovenia
    15. 15. 15 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Competitiveness for Investments in Macedonia Price Level Index for Construction Price Level Index for Investments Source: Eurostat, December 2012 56 59 62 63 66 70 72 81 85 85 88 100 Macedonia Romania Bulgaria Serbia Turkey Croatia Turkey Poland Czech Republic Slovenia Slovakia EU27 Average 39 42 42 46 49 56 61 73 74 74 80 100 Macedonia Serbia Romania Bulgaria Turkey Croatia Hungary Poland Slovakia Czech Republic Slovenia EU27 Average
    16. 16. 16 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Sustainable Work Force Supply • 41.5% of population under 30 • High intellectual capital – 85+% of high school graduates enrolled in universities in 2008 – Multiple vocational high schools in each city • Tailor-made training programs through Vocational Schools or Universities • 6% of GDP spent on education Number of enrolled students in Colleges and Universities Number of graduates in Colleges and Universities 8,360 10,839 10,232 11,197 9,802 2007 2008 2009 2010 2011 64,254 63,437 57,894 64,779 58,747 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012
    17. 17. 17 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Excellent 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 Studied Students in Primary Schools, % of Total Students in Secondary Schools, % 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
    18. 18. INVESTMENT OPPORTUNITIES
    19. 19. 19 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Machine and Automotive components ICT Medical Devices and Pharmaceuticals Agribusiness and Food Processing Energy sector Real Estate & Construction Textile Tourism Investment Opportunities Target Sectors
    20. 20. 20 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com • Existing engineering and manufacturing tradition • Legacy of skills available to new investors • Component production started in the 1960’s to supply Zastava, Serbia • Companies primarily supply the aftermarket • Johnson Controls, Johnson Matthey, Kemet, Teknohose, (Free Economic Zones), Kromberg & Schubert, Hi-Tech to supply OEM’s • Markets are Europe, Russia, Turkey, Africa • Most companies have ISO 9001 / TS 16949 quality certification Investment Opportunities Machine and Automotive Components Industry
    21. 21. 21 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com • Best telecommunication networks in the region – the system is 100% digital • Leading multinational hardware and software suppliers (Microsoft, HP, IBM) have local sales and support services in Macedonia • 100,000 PCs for every school child; free internet sessions provided by the government • IT skills shortage in Western economies and growing demand for outsourcing services – Macedonia can be your solution! • Availability of well-educated staff at competitive costs • Quality assurance and standardization procedure intitialized Investment Opportunities ICT Sector
    22. 22. 22 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com • Existing pharmaceutical industry exports to over 30 countries worldwide • Strong educational system, with an abundance of medical and pharmacy graduates • Supportive regulatory environment • Licensing arrangements in place with many of world’s leading pharmaceutical companies • Availability of serviced industrial sites • Manufacturing tradition Investment Opportunities Healthcare Sector, Medical Devices and Pharmaceuticals
    23. 23. 23 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com • Unique combination of Continental and Sub- Mediterranean climates • Environmentally friendly production practices • Technologies for food processing • Excellent access to regional markets • Strong reputation for quality food products The greatest investment opportunities: • fruits and vegetables – production, storage distribution and processing industries • wine production • sheep and goat cheese production Investment Opportunities Agribusiness and Food Processing Industry
    24. 24. 24 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Investment Opportunities Textile sector • Esteemed reputation of Macedonian textile producers on the European Union market • High flexibility and readiness to adapt to the demands of foreign markets • Exceptional relation between product quality and costs • Modern equipment • 1-2 days distance to European Union markets • Foreign investment welcomed in the ready- made clothing and knit production industries
    25. 25. 25 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Summer Destinations • Numerous tectonic, glacial and man-made lakes, 50 in total • Large Ohrid, Dojran and Prespa lakes • Wartersports, archeological, wine, eco and rural tourism • In 2011, increase in foreign tourists from EU of 38% Winter Destinations • Over 45 mountain peaks over 2.000m • Around 70% of the territory is mountainous, many locations have more than 100 days of snow • Opportunities for development and enhancements of hotels and resorts on many locations Investment Opportunities Tourism
    26. 26. 26 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Historical and Culture Heritage • 4,293 archeological sites • 992 churches and monasteries • 23,000 icons (2nd most valuable collection in the world) • 228 mosques, inns, Turkish baths and old bazaars, • 47 towers and fortresses Spa tourism • Territory rich with geothermal waters • More than 60 thermal springs • Identified locations for construction of new spa centers and hotels Investment Opportunities Tourism
    27. 27. Investment Opportunities Technological Industrial Development Zones - TIDZs
    28. 28. 28 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Free Zone Tetovo Area Size: 95 ha; Distance from Skopje - 35 km Free Zones Skopje 1 & 2 Area Size: 145 + 95 ha; E-75 Highway; Next to the Int’l Airport Free Zone Stip Area Size: 208 ha; The largest Free Zone; Excellent logistic support Free Zone Radovis Area Size: 10 ha; Main Road M6 Free Zone Strumica Area Size: 23 ha; Free Zone Gevgelija Area Size: 50 ha; 85 km from the port of Thessaloniki Free Zone Prilep Area Size: 68 ha; Between Prilep and Bitola (4th and 2nd largest city) Free Zone Struga Area Size: 30 ha; Next to the Int’l Airport; 170 km from Durres port Free Zone Kicevo Area Size: 30 ha Free Zone Rankovce Area Size: 40 ha; Corridor 8 Investment Opportunities Technological Industrial Development Zones - TIDZs
    29. 29. 29 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Infrastructure Benefits • Electrical grid outlet, new power substation in place • Telecommunications network • Central heating • Lighting • Fire safety system - Airport Fire Department minutes away • Security monitoring system • Water, sewage and waste treatment plant • Gas pipeline, etc. Investment Opportunities Technological Industrial Development Zones - TIDZs
    30. 30. 30 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com • Free connection to utilities • Subsidy of up to €500,000 towards building costs • Green Customs Channel available at border for rapid export from Zone to EU countries • Land in a TIDZ in Macedonia is available under long-term lease for a period of up to 99 years Investment Opportunities Technological Industrial Development Zones - TIDZs TAX TAX RATES TIDZs Outside TIDZs Corporate tax 0% for the first 10 years 10% Personal income tax 0% for the first 10 years 10% Value added tax 0% 18% Property tax 0.1% - 0.2% 0.1% - 0.2% Excise taxes 0% 5% - 62% PRODUCT CUSTOMS DUTY TIDZs Outside TIDZs Raw materials 0% Up to 15% Equipment 0% 5% - 20% Fiscal Benefits
    31. 31. 31 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com TIDZ “Skopje 1” JOHNSON CONTROLS • $40mn automotive components plant; • 150 employees initially – increasing to 500; • Integrated circuits JOHNSON MATTHEY • €55mn investment • over 500 employees • catalyst production TEKNOHOSE ANNOUNCING BEGINNING OF CONSTRUCTION WORK IN TIDZ “SKOPJE 1” KEMET SIGNING OF THE AGREEMENT PRODIS GROUP ANNOUNCING BEGINNING OF CONSTRUCTION WORK IN TIDZ “SKOPJE 1” VAN HOOL ANNOUNCING BEGINNING OF CONSTRUCTION WORK IN TIDZ “SKOPJE 2”
    32. 32. 32 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com TIDZ “Stip” PROJECT SCOPE • 2nd project in Macedonia • $20mn Investment • 1400 employees • Construction of cut & trim plant for car seats CONSIDERED COUNTRIES • Macedonia, Moldova and Tunisia
    33. 33. 33 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com Investment Projects outside of TIDZs SIZE OF INVESTMENT • €20mn • 2000 employees • Production of cable installations • Start of operations Q2 2012 SIZE OF INVESTMENT • over $4mn • 150 new full time jobs + 300/350 new seasonal jobs • Tobacco facility in Kavadarci
    34. 34. 34 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com “Macedonia offers the company just-in-time delivery and minimal freight costs.” Philippe Simon VP of Global Electronics Johnson Controls “We are very satisfied with the support provided by the Macedonian Government and its institutions and Bitola municipality. The decision for investment in Macedonia represents an important step in our expansion as part of the strategy for international output.” Martin Passern Managing Director Kromberg & Schubert “This will be JM‟s „mega-European plant‟ and the largest ever single investment project.” Colin Jaffray, Director, Strategic Planning Johnson Matthey PLC “Macedonia was chosen because of its international competitiveness, because of our positive existing corporate experience here and above all because of the support and professionalism that we have received from all Government institutions during the analysis process.” Steven Meylemans Project Manager Johnson Controls What They Said
    35. 35. AT YOUR SERVICE
    36. 36. 36 Agency for Foreign Investments and Export Promotion www.investinmacedonia.com • 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! Invest Macedonia at Your Service…
    37. 37. Thank You! AGENCY FOR FOREIGN INVESTMENTS AND EXPORT PROMOTION OF THE REPUBLIC OF MACEDONIA ul.Nikola Vapcarov br. 7 1000, Skopje Republic of Macedonia Tel.: + 389 2 3100 111 Fax: + 389 2 3122 098 fdi@investinmacedonia.com www.investinmacedonia.com

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