Transcript Slide 1

MINISTRY OF FOREIGN AFFAIRS OF THE
REPUBLIC OF MACEDONIA
REPUBLIC OF MACEDONIA:
BUSINESS CLIMATE
Minister, H.E Nikola Poposki
January 2013
Why Macedonia?
Competitive
Location
Excellent
Infrastructure
Competitive
& Educated
Workforce
Investment
Incentives
Investor friendly
Government
Higher Profits & Increased Competitiveness
Location and Transport Infrastructure
• 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 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
3rd BEST REFORMER
IN THE WORLD
3rd BEST REFORMER
IN THE WORLD
World Bank’s Doing Business 2012 Report
World Bank’s Doing Business 2010 Report
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
5th MOST TAX FRIENDLY
COUNTRY IN THE WORLD
4th IN TOTAL TAX RATE
EASE OF PAYING TAXES 2012
Forbes Magazine
PwC and World Bank Group Study
Ease of Doing Business 2012
Global Rank
125
37
48
51
Slovakia
Hungary
56
59
62
64
Montenegro
Bulgaria
Poland
Czech
Republic
71
72
Turkey
Romania
80
92
22
Macedonia
Slovenia
Croatia
Serbia
Bosnia and
Herzegovina
2012 Index of Economic Freedom
World Rankings
119
43
Macedonia
57
61
Albania
Bulgaria
69
72
Slovenia
Montenegro
83
Croatia
89
Serbia
Greece
Ease of Paying Taxes 2012
Total Tax Rate World Rankings
137
102
54
4
21
28
Macedonia Montenegro Bosnia and
Herzegovina
PwC and World Bank Group Study
63
112
143
119
68
36
Bulgaria
Croatia
Serbia
Slovenia
Turkey
Poland
Romania
Czech
Republic
Hungary
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
Economic Indicators
GDP GROWTH(%)
5.0
6.1
INFLATION
Low inflation: avg < 2% annually over the last 10 years
5.0
2.9
-0.9
2006
2007
2008
2007: 2.3%; 2008: 8.3%; 2009: -0.8%; 2010: 1.6%; 2011: 3.9%
3.1
-1.4
2009
2010
2011
Q1.2012
EXPORT BY YEAR (US$ bn)
3.4
CURRENCY
Macedonian Denar pegged to the DM/€
for the last 15 years (€1= MKD 61.3)
AVERAGE GROSS SALARY IN 2011
4.4
4.0
2.7
3.3
€ 497 per month
0.9
2007
2008
2009
2010
2011
Q1.2012
FDI BY YEAR (US$ m)
CREDIT RATINGS 2011
Standard & Poor’s: BB
Fitch: BB+
699
587
BUDGET DEFICIT & STATE DEBT
410
2007
2008
197
208
2009
2010
Source: National Bank of the Republic of Macedonia
92
2011
H1.2012
Budget Deficit, 2011: 2.6 % of GDP
State Debt, Q2.2012: 29 % of GDP
Unbeatable Fiscal Benefits
•
•
•
•
•
•
•
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
Corporate Income Tax
Macedonia*
10%
Romania
16%
Personal Income Tax
(highest rate)
General VAT Rates
Macedonia* 10%
Macedonia
18%
Czech R.*
Turkey
18%
15%
Czech Republic*
19%
Romania*
16%
Slovakia
20%
Slovakia
19%
Hungary
16%
Czech Republic
20%
Poland
19%
Ukraine
Ukraine
20%
Hungary
19%
Slovakia
Turkey
20%
Poland
Croatia
20%
Turkey
Ukraine
21%
Croatia
* Flat rate
Source: PricewaterhouseCoopers (Taxes at a glance 2012), National Investment Promotion Agencies
17%
Poland
19%
32%
Romania
Croatia
35%
40%
Hungary
23%
24%
25%
27%
Social Security Contributions
Macedonia - Social Security Contributions
21.2%
1.6% 0.5%
9.2%
32.5%
2008
7.5%
19.0%
1.4% 0.5%
28.4%
2009
18.0%
7.3%
1.2% 0.5%
18.0%
7.3%
1.2% 0.5%
18.0%
7.3%
1.2% 0.5%
27%
2010
27%
2011
2012
27%
Pension Insurance
Health Insurance
Employment Insurance
Additional Health Insurance
Comparison - Social Security Contributions
Macedonia
Turkey
Poland
Serbia
Croatia
Hungary
Czech Republic
27%
33.5%
31.2% - 34.1%
37.2%
37.2%
44%
45%
Slovakia
Ukraine
Romania
Source: PricewaterhouseCoopers (Taxes at a glance 2011), National Investment Promotion Agencies
48.6%
39.8% - 49.7%
44.5% - 55.7%
Average Gross Monthly Salary
Average gross monthly salary (€) in selected
countries of Central and Eastern Europe in 2011
€1,525
€989
€649
€497
€512
Macedonia
Serbia
€722
Bosnia and Montenegro
Herzegovina
€763
€786
Hungary
Slovakia
Average gross monthly salary (€)
Source: The Vienna Institute for International Economic Studies (wiiw)
€825
€831
Poland
Estonia
Czech
Republic
€1,043
Croatia
Slovenia
Competitiveness for Investments in Macedonia
Price Level Index for Investments
54
Macedonia
61
62
65
65
Serbia
Romania
Bulgaria
Turkey
72
73
Hungary
Croatia
80
81
85
Poland
Czech
Republic
Slovakia
88
Slovenia
100
EU27
Average
Price Level Index for Construction
100
35
39
44
47
47
Macedonia
Serbia
Romania
Bulgaria
Turkey
Source: Eurostat, December 2010
58
61
Hungary
Croatia
69
71
76
Czech
Republic
Poland
Slovakia
83
Slovenia
EU27
Average
Sustainable Work Force Supply
• 41.5% of population under 30
• High 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 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
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
Cooperative institutions
• Business oriented Government
• Welcoming and decisive government ready to serve
investors
Governmental Agency “Invest 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!
Thank You
AT
MINISTRY OF FOREIGN AFFAIRS OF THE REPUBLIC OF MACEDONIA
DIRECTORATE OF ECONOMIC DIPLOMACY
Filip II Makedonski 7
1000 Skopje
Tel. 389 2 3 123 044
YOUR SERVICE
AT YOUR SERVICE
Fax. 389 2 3 115 790
E-mail: [email protected]
web: www.mfa.gov.mk
AGENCY FOR FOREIGN INVESTMENTS AND EXPORT PROMOTION OF THE
REPUBLIC OF MACEDONIA
Nikola Vapcarov 7
1000 Skopje
Tel.: + 389 2 3100 111
Fax: + 389 2 3122 098
e-mail: [email protected]
web: www.investinmacedonia.com