April, 2010
Why Macedonia? Investment Incentives Competitive Workforce Excellent Infrastructure Investor - friendly Government Competi...
Location and Transport Infrastructure <ul><li>Two Pan-European corridors: </li></ul><ul><li>- East-West Corridor 8, and </...
Political and Economic Outlook <ul><li>Political, monetary and macroeconomic stability </li></ul><ul><li>Strategically loc...
Improved Business Climate <ul><li>Regulatory Guillotine – Flagship project for improving the country’s business environmen...
4 th  BEST REFORMER IN THE WORLD World Bank’s Doing Business 2008 Report BEST EUROPEAN ECONOMIC DEVELOPMENT REGION 2008 In...
Ease of Doing Business  Global Rank
Index of Economic Freedom  World Rankings
Foreign Investment Regime <ul><li>Macedonian Constitution guarantees fair treatment of foreign investors </li></ul><ul><li...
Economic Indicators €  430 per month Macedonian Denar pegged to the DM/€  for the last 10 years (€1= MKD 61.3) Low inflati...
Unbeatable Fiscal Benefits Corporate Income Tax MACEDONIA* POLAND SLOVAKIA 10% 19% 19% 20% CROATIA 20% CZECH R. ROMANIA 16...
Social Security Contributions Macedonia - Social Security Contributions Comparison - Social Security Contributions Macedon...
Average Monthly Gross Salary Source: The Vienna Institute for International Economic Studies (wiiw), Calculations  * Avera...
Sustainable Work Force Supply <ul><li>45% of population under 30 </li></ul><ul><li>High intellectual capital </li></ul><ul...
Excellent Language Skills <ul><li>Every child in Macedonia begins to learn English in the first grade of primary school </...
INVESTMENT OPPORTUNITIES
Investment Opportunities Target Sectors <ul><li>Machine and Automotive components </li></ul><ul><li>ICT </li></ul><ul><li>...
Investment Opportunities Machine and   Automotive Components Industry <ul><li>Existing engineering and manufacturing tradi...
Investment Opportunities ICT Sector <ul><li>Best telecommunication networks in the region – the system is 100% digital </l...
Investment Opportunities Healthcare Sector  Medical Devices and Pharmaceuticals <ul><li>Existing pharmaceutical industry e...
Investment Opportunities Agribusiness and Food Processing Industry <ul><li>Unique combination of Continental and </li></ul...
Investment Opportunities Textile sector <ul><li>Esteemed reputation of Macedonian textile producers on the European Union ...
<ul><li>Historical and Culture Heritage </li></ul><ul><li>4,293 archeological sites  with rare antiquities of great spirit...
Investment Opportunities  Energy sector Strategic Projects 2009-2014  New Mines Capacities  Thermo Power Plants Hydro Powe...
Investment Opportunities  Transport sector Strategic Projects 2009-2014 Roads  Railways Number of Projects: 12 Types of pr...
Investment Opportunities Technological Industrial Development Zones - TIDZs
<ul><ul><li>Electrical grid outlet, new power substation in construction </li></ul></ul><ul><ul><li>Telecommunications net...
<ul><li>Free connection to utilities </li></ul><ul><li>Subsidy of up to €500,000 towards building costs </li></ul><ul><li>...
JOHNSON MATTHEY TIDZ “Skopje 1” Signing of the Memorandum of Understanding between Mr. Majus, CFO and Prime Minister Gruev...
TIDZ “Skopje 1” Signing of the Memorandum of Understanding between Mr. Atik  and Prime Minister Gruevski September 2008 TR...
AT YOUR SERVICE
Invest Macedonia at Your Service… <ul><li>One-stop shop and project management approach </li></ul><ul><li>VIP Investment t...
Thank You AGENCY FOR FOREIGN INVESTMENTS  OF THE REPUBLIC OF MACEDONIA   Tel.:  +  1 312 846 1027 Fax: + 1 312 846 1072 e-...
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2010 Invest In Macedonia

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2010 Invest In Macedonia

  1. 1. April, 2010
  2. 2. Why Macedonia? Investment Incentives Competitive Workforce Excellent Infrastructure Investor - friendly Government Competitive Location Higher Profits & Increased Competitiveness
  3. 3. Location and Transport Infrastructure <ul><li>Two Pan-European corridors: </li></ul><ul><li>- East-West Corridor 8, and </li></ul><ul><li>- North-South Corridor 10 </li></ul><ul><li>Road network: 9,205 km </li></ul><ul><li>Railway network: 900 km </li></ul><ul><li>Two international airports: </li></ul><ul><li>- Skopje </li></ul><ul><li>- Ohrid </li></ul><ul><li>International ports*: </li></ul><ul><li>- Thessalonica (Greece) : 250 km </li></ul><ul><li>- Durres (Albania) : 300 km </li></ul><ul><li>* Distance from Skopje </li></ul>
  4. 4. Political and Economic Outlook <ul><li>Political, monetary and macroeconomic stability </li></ul><ul><li>Strategically located for future expansion </li></ul><ul><li>First country in SEE to sign a SAA with the EU in 2001 </li></ul><ul><li>EU and NATO candidate country </li></ul><ul><li>FTAs with numerous countries </li></ul><ul><li>Business oriented Government </li></ul><ul><li>(re-elected in June 2008 with a 4 year term) </li></ul><ul><li>Welcoming and decisive government ready to serve investors </li></ul>
  5. 5. Improved Business Climate <ul><li>Regulatory Guillotine – Flagship project for improving the country’s business environment </li></ul><ul><li>“ Silence is consent”, “Cutting red tape” </li></ul><ul><li>Reduced administration fees, time limits, documentation </li></ul><ul><li>&quot;One-Stop-Shop&quot; system for company registration </li></ul><ul><li>&quot;One-Stop-Shop&quot; for cross border trading </li></ul><ul><li>Modernized electronic real estate cadastre </li></ul><ul><li>Foreign companies and foreign citizens can directly own construction land in Macedonia   </li></ul><ul><li>Electronic payment of taxes </li></ul><ul><li>A cut in social contributions </li></ul><ul><li>Liberalization of visa regime </li></ul>
  6. 6. 4 th BEST REFORMER IN THE WORLD World Bank’s Doing Business 2008 Report BEST EUROPEAN ECONOMIC DEVELOPMENT REGION 2008 Institute of Transport Management, UK BEST CONSECUTIVE REFORMER OVER THE LAST THREE YEARS IN SOUTH EASTERN EUROPE Based on the World Bank’s Doing Business Report 2008 , 2009 and 2010 3 rd BEST REFORMER IN THE WORLD World Bank’s Doing Business 2010 Report 5 th MOST TAX FRIENDLY COUNTRY IN THE WORLD Forbes Magazine 2009 Tax Misery & Reform Index
  7. 7. Ease of Doing Business Global Rank
  8. 8. Index of Economic Freedom World Rankings
  9. 9. Foreign Investment Regime <ul><li>Macedonian Constitution guarantees fair treatment of foreign investors </li></ul><ul><li>Complete protection of the ownership rights of foreign investors </li></ul><ul><li>Republic of Macedonia is member of MIGA </li></ul><ul><li>(Multilateral Investment Guarantee Agency) </li></ul><ul><li>Investment protection treaties with numerous countries </li></ul><ul><li>100% foreign ownership of a company allowed </li></ul><ul><li>No restrictions for repatriation of profits </li></ul>
  10. 10. Economic Indicators € 430 per month Macedonian Denar pegged to the DM/€ for the last 10 years (€1= MKD 61.3) Low inflation: avg <2% annually over the last 10 years (2003: 1.2%, 2004: -0.4%, 2005: 0.5%, 2006: 3.2%, 2007: 2.3%, 2008: 8.3%) 2003 2004 2005 2006 2007 2008 FDI BY YEAR (US$ m) Year EXPORT BY YEAR (US$ bn) Year 2008 REAL GDP GROWTH RATE (%) 2003 2004 2005 2006 2007 Year 2008 1.4 1.7 2.0 2.4 3.4 3.9 117.8 323.0 97.0 424.2 699.1 587.0 2.8 4.1 4.1 4.0 5.0 5.9 2007 CURRENCY AVERAGE GROSS SALARY IN 2008 INFLATION
  11. 11. Unbeatable Fiscal Benefits Corporate Income Tax MACEDONIA* POLAND SLOVAKIA 10% 19% 19% 20% CROATIA 20% CZECH R. ROMANIA 16% Personal Income Tax ( highest rate ) MACEDONIA* CZECH R.* 10% 15% 35% ROMANIA* 16% 32% TURKEY SLOVAKIA 19% 45% CROATIA POLAND General VAT Rates CZECH R. MACEDONIA CZECH R. ROMANIA POLAND 18% 19% 19% 22% CROATIA 22% SLOVAKIA 19% *Flat rate Source: PriceWaterhouseCoopers (Taxes at a glance 2009), National Investment Promotion Agencies 20% TURKEY TURKEY 18% HUNGARY 16% + 4% 36% HUNGARY HUNGARY 20% 25% UKRAINE 30% UKRAINE UKRAINE 20% <ul><li>10% Corporate & Personal income tax (among lowest in Europe) </li></ul><ul><li>0% Tax on retained earnings </li></ul><ul><li>Double taxation treaties with many European countries </li></ul><ul><li>0% tax for operation in a Technological Industrial Development Zone </li></ul><ul><li>Real estate taxes at 2% - 5% </li></ul><ul><li>VAT at 18%, with 5% on specific items </li></ul><ul><li>FTAs with EU, EFTA, CEFTA countries; Turkey and the Ukraine; providing access to over 650m customers </li></ul>
  12. 12. Social Security Contributions Macedonia - Social Security Contributions Comparison - Social Security Contributions Macedonia 27% Poland 31.2% - 34.1% Slovakia 48.6% 37.2% Croatia Romania 41.2% - 52.4% Czech R. 45% 18% 15% 19% 7.5% 7.3% 6% 1.4% 1.2% 1% 28.4% 27% 22.5% 2009 Current 2011 Pension insurance Health insurance Employment insurance 21.2% 9.2% 1.6% 32.5% 2008 Turkey 33.5% 49% Hungary Ukraine 40.4% - 53.3% Source: PriceWaterhouseCoopers (Taxes at a glance 2009), National Investment Promotion Agencies 0.5% 0.5% 0.5% 0.5% Additional health insurance
  13. 13. Average Monthly Gross Salary Source: The Vienna Institute for International Economic Studies (wiiw), Calculations * Average gross monthly salary in manufacturing industry Average gross monthly salary € change y-o-y in % Average monthly gross salary in selected countries of Central and Eastern Europe in 2008
  14. 14. Sustainable Work Force Supply <ul><li>45% of population under 30 </li></ul><ul><li>High intellectual capital </li></ul><ul><li>> 35% increase in total number of undergraduate degrees in 2007 compared to 2006 </li></ul><ul><li>> 85% of high school graduates enrolled in universities in 2008 </li></ul><ul><li>> Multiple vocational high schools in each city </li></ul><ul><li>Tailor-made training programs through Vocational Schools or Universities </li></ul><ul><li>6% of GDP spent on education </li></ul>
  15. 15. Excellent Language Skills <ul><li>Every child in Macedonia begins to learn English in the first grade of primary school </li></ul><ul><li>Two foreign languages are mandatory in high school: English, and either German, French, or Russian </li></ul><ul><li>English is also taught for two years at University level </li></ul><ul><li>Regional languages (Serbian, Croatian, Bulgarian, Albanian and Greek) are widely spoken </li></ul>Source: State Statistical Office of the Republic of Macedonia (Education 2008/2009) Foreign Languages Studied Students in Primary Schools, % of Total Students in Secondary Schools, % of Total English 91% 94% French 22% 32% German 13% 21% Italian - 2% Russian 1% 2% Turkish - 1%
  16. 16. INVESTMENT OPPORTUNITIES
  17. 17. Investment Opportunities Target Sectors <ul><li>Machine and Automotive components </li></ul><ul><li>ICT </li></ul><ul><li>Medical Devices and Pharmaceuticals </li></ul><ul><li>Agribusiness and Food Processing </li></ul><ul><li>Energy sector </li></ul><ul><li>Real Estate & Construction </li></ul><ul><li>Textile </li></ul><ul><li>Tourism </li></ul>
  18. 18. Investment Opportunities Machine and Automotive Components Industry <ul><li>Existing engineering and manufacturing tradition </li></ul><ul><li>Legacy of skills available to new investors </li></ul><ul><li>Component production started in the 1960’s to supply Zastava, Serbia </li></ul><ul><li>Companies primarily supply the aftermarket </li></ul><ul><li>Johnson Controls, Johnson Matthey, Montupet, Iskra, V.Orlandi, Borteknik Otomotiv (Free Economic Zone), Hi-Tech to supply OEM’s </li></ul><ul><li>Markets are Europe, Russia, Turkey, Africa </li></ul><ul><li>Most companies have ISO 9001 / TS 16949 quality certification </li></ul>
  19. 19. Investment Opportunities ICT Sector <ul><li>Best telecommunication networks in the region – the system is 100% digital </li></ul><ul><li>Leading multinational hardware and software suppliers (Microsoft, HP, IBM) have local sales and support services in Macedonia </li></ul><ul><li>100,000 PCs for every school child; free internet sessions provided by the government </li></ul><ul><li>IT skills shortage in Western economies and growing demand for outsourcing services – Macedonia can be your solution ! </li></ul><ul><li>Availability of well-educated staff at competitive costs </li></ul><ul><li>Quality assurance and standardization procedure intitialized </li></ul>
  20. 20. Investment Opportunities Healthcare Sector Medical Devices and Pharmaceuticals <ul><li>Existing pharmaceutical industry exports to over 30 countries worldwide </li></ul><ul><li>Strong educational system, with an abundance of medical and pharmacy graduates </li></ul><ul><li>Supportive r egulatory environment </li></ul><ul><li>Licensing arrangements in place with </li></ul><ul><li>many of world ’ s leading pharmaceutical </li></ul><ul><li>companies </li></ul><ul><li>Availability of serviced industrial sites </li></ul><ul><li>M anufacturing tradition </li></ul>
  21. 21. Investment Opportunities Agribusiness and Food Processing Industry <ul><li>Unique combination of Continental and </li></ul><ul><li>Sub-Mediterranean climates </li></ul><ul><li>Environmentally friendly production practices </li></ul><ul><li>Technologies for food processing </li></ul><ul><li>Excellent access to regional markets </li></ul><ul><li>Strong reputation for quality food products </li></ul><ul><li>The greatest investment opportunities: </li></ul><ul><li>fruits and vegetables - production, storage, distribution and processing industries </li></ul><ul><li>wine production </li></ul><ul><li>sheep and goat cheese production </li></ul>
  22. 22. Investment Opportunities Textile sector <ul><li>Esteemed reputation of Macedonian textile producers on the European Union market </li></ul><ul><li>High flexibility and readiness to adapt to the demands of foreign markets </li></ul><ul><li>Exceptional relation between product quality and costs </li></ul><ul><li>Modern equipment </li></ul><ul><li>1-2 days distance to European Union markets </li></ul><ul><li>Foreign investment welcomed in the ready-made clothing and knit production industries </li></ul>
  23. 23. <ul><li>Historical and Culture Heritage </li></ul><ul><li>4,293 archeological sites with rare antiquities of great spiritual significance </li></ul><ul><li>992 churches and monasteries, 150,000 m 2 fresco painting, 23,000 icons (4-th most valuable collection in the world), 240 iconostases, and other church items carved in wood </li></ul><ul><li>228 mosques, inns, Turkish baths and old bazaars </li></ul><ul><li>47 towers and fortresses </li></ul><ul><li>Land of Lakes </li></ul><ul><li>Around 1,100 water springs and more than 60 thermal springs tapped at several spas </li></ul><ul><li>Most attractive rivers: Vardar flows to the Aegean sea, Crn Drim flows to the Adriatic see, Radika, Crna Reka, Lepenec, Pcinja and others </li></ul><ul><li>Three larger lakes (Ohrid, Dojran and Prespa) and a number of smaller lakes </li></ul><ul><li>Ski Resorts </li></ul><ul><li>Biggest ski resorts: Mavrovo, Popova Shapka, Kozuf </li></ul>Investment Opportunities Tourism
  24. 24. Investment Opportunities Energy sector Strategic Projects 2009-2014 New Mines Capacities Thermo Power Plants Hydro Power Plants Gasification High Voltage Power Lines Renewable Energy Number of Projects: 9 Types of projects: new mines capacities Number of Projects: 8 Types of projects: - revitalisation and improvement of the capacities of existing TPPs, - construction of new TPP, NPP and GPP Number of Projects: 6 Types of projects: - revitalisation of existing HPPs, - construction of new HPPs Number of Projects: 2 Types of projects: - Construction of new HV power lines - Development of existing HV power lines Number of Projects: 2 Types of projects: - construction of windmills - construction of small HPPs Number of Projects: 1 Types of projects: - construction of gasification network Financial sources: Concessions, PPP’s and credits secured by sovereign guarantees
  25. 25. Investment Opportunities Transport sector Strategic Projects 2009-2014 Roads Railways Number of Projects: 12 Types of projects: - reconstruction and construction of regional roads - reconstruction and construction of local roads - design and construction of motorways Number of Projects: 4 Types of projects: - construction of rail line towards Bulgaria - design and construction of rail line towards Albania - revitalisation, modernization and upgrade of rail lines Financial sources: State budget, Concessions, IBRD, EBRD, EIB
  26. 26. Investment Opportunities Technological Industrial Development Zones - TIDZs
  27. 27. <ul><ul><li>Electrical grid outlet, new power substation in construction </li></ul></ul><ul><ul><li>Telecommunications network </li></ul></ul><ul><ul><li>Central heating </li></ul></ul><ul><ul><li>Lighting </li></ul></ul><ul><ul><li>Fire safety system - Airport Fire Department minutes away </li></ul></ul><ul><ul><li>Security monitoring system </li></ul></ul><ul><ul><li>Water, sewage and water treatment plant </li></ul></ul><ul><ul><li>Gas pipeline, etc. </li></ul></ul>Infrastructure Benefits Investment Opportunities Technological Industrial Development Zones - TIDZs
  28. 28. <ul><li>Free connection to utilities </li></ul><ul><li>Subsidy of up to €500,000 towards building costs </li></ul><ul><li>Green Customs Channel available at border for rapid export from Zone to EU countries </li></ul><ul><li>Land in a TIDZ in Macedonia is available under long-term lease for a period of up to 99 years </li></ul>Investment Opportunities Technological Industrial Development Zones - TIDZs Fiscal Benefits 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% Up to 1% Excise taxes 0% 5% - 62% PRODUCT CUSTOMS DUTY TIDZs Outside TIDZs Raw materials 0% Up to 15% Equipment 0% 5% - 20%
  29. 29. JOHNSON MATTHEY TIDZ “Skopje 1” Signing of the Memorandum of Understanding between Mr. Majus, CFO and Prime Minister Gruevski May 2008 Signing of the Memorandum of Understanding between Prime Minister Gruevski and Mr.Sesok, CEO May 2008 JOHNSON CONTROLS <ul><li>$ 40m automotive components plant; </li></ul><ul><li>150 employees initially – increasing to 500; </li></ul><ul><li>First phase production – mainly integrated circuits for German and French markets. </li></ul><ul><li>€ 55 million investment </li></ul><ul><li>over 500 employees </li></ul><ul><li>catalyst production </li></ul>
  30. 30. TIDZ “Skopje 1” Signing of the Memorandum of Understanding between Mr. Atik and Prime Minister Gruevski September 2008 TRIVEW HIT CO, LTD Signing of the Memorandum of Understanding between Mr. Machelin and Prime Minister Gruevski September 2008 Signing of the Memorandum of Understanding March 2009 <ul><li>€ 9 million investment </li></ul><ul><li>100 employees initially – increasing to 300 </li></ul><ul><li>Production: LCD monitors and TVs , computers </li></ul>
  31. 31. AT YOUR SERVICE
  32. 32. Invest Macedonia at Your Service… <ul><li>One-stop shop and project management approach </li></ul><ul><li>VIP Investment tour </li></ul><ul><li>Locations </li></ul><ul><li>HR Companies, construction, real estate, tax advisory and consulting </li></ul><ul><li>Universities and Reference Company visits </li></ul><ul><li>Creating linkages with local and central Governments </li></ul><ul><li>Navigate the legal requirements </li></ul><ul><li>Ensure success! </li></ul>
  33. 33. Thank You AGENCY FOR FOREIGN INVESTMENTS OF THE REPUBLIC OF MACEDONIA Tel.: + 1 312 846 1027 Fax: + 1 312 846 1072 e-mail: [email_address] web: www.investinmacedonia.com 121 W Wacker Dr suite 2036 Chicago, IL 60601

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