Doing Business In NORTH MACEDONIA: Opportunities And Risks

North Macedonia is a small country in the middle of the Balkan peninsula.

The country is landlocked, and a large part of it is covered by hills and mountains (the average height is 750m).

The population is small (2.1 million inhabitants) and most of them are living in the area of Skopje, the capital city (around 40%).

North Macedonia was part of the former Yugoslavia, and it became independent in 1991 peacefully.


First opportunity: taxation

Macedonia has a very good fiscal environment: VAT is 18% (average value in Europe), however, the personal tax and the corporate income tax are extremely low, the rate for both is 10%.

But it is not over here, Macedonia has created 15 special free trade zones. These areas were created to attract foreign investments in North Macedonia and there are special incentives. The most important ones are:

  • No local partner needed. The ownership can be 100% foreign (so, no joint-venture, etc)
  • 10 years tax holiday: no personal tax, the company tax, and the VAT
  • No import duties on certain goods: in particular on various types of machinery needed to run the factory.
  • Incentives for rent lands at a symbolic price
  • Additional funds on some kind of projects, if they are particularly interesting for the country

If you follow Globartis, you know that many countries have developed “special economic zones” (they are called with different names, but it is the same concept). However, the ones of North Macedonia are some of the most favorable to attract investment from outside.

Second opportunity: local currency and Euro

The Macedonian Dinar is pegged with the Euro (1€ = 61,86 MKD), due to that it is a stable currency and the exchange risk is zero for companies from the Euro area.

Moreover, the Euro is commonly used inside the Country especially in business transactions.

The price of many goods inside North of Macedonia are indicated by both Macedonian Dinar and Euro (for example prices of cars).

Despite the accession of Macedonia to the European Union is not likely to happen in a few years (we will speak about it later), in some aspects North of Macedonia is already very integrated with the EU in several ways.

Third opportunity: labour cost

Salaries in the North of Macedonia are among the lowest in Europe.

The average gross salary is less than $ 500, it may vary considerably from the capital to rural areas. Just to give an idea: the value is 10-20% lower than Bulgaria (that has the cheapest workforce inside the European Union).

From a business perspective, it could be an opportunity for companies that are looking to delocalize labor-intensive activities but do not want to establish them too far.

Fourth opportunity: investment in infrastructures

North of Macedonia is covered by hills and mountains and water is abundant.

What does it mean? 37% of the energy produced in North Macedonia is made thanks to hydroelectric plants. However, only 25% of the hydroelectric capacity is exploited and new hydropower stations are in construction because North Macedonia would like to be a relevant exporter of electricity in neighboring countries (e.g. Bulgaria and Greece).

Macedonia investments are also made in other construction projects, like new roads and rails. Thanks to its position, in the middle of the Balkan peninsula, some important roads cross the country.

The most important project is the railway that will link the Greek port of Piraeus to Budapest.

Source of the picture: The Financial Times

Fifth opportunity: internet users

70% of the inhabitants of North Macedonia use the internet. 70% is a high value for a country with such a level of GDP per capita and low salaries.

It is extremely important from a business perspective because if you want to reach the Macedonian market you can use online marketing to reach potential customers.

The cost of Facebook Ads and Google Ads are way cheaper than Western Europe.


First risk: small internal market

The population of North Macedonia is small: only 2.1 million of inhabitants and the GDP per capita is around $ 15.000  (like Brazil or Argentina to give a term of comparison).

Due to that, the Macedonia economy and the internal market are small.

Macedonia has some characteristics that are common to almost all the economies of central and east of Europe:

  • Growing GDP, but not at sky-high levels of Asian economies in the far east
  • Quite an old population, stable or slightly decreasing

We forecast that the internal market will be more or less stable in the next years. If you invest in Macedonia, you should not expect a huge increase in consumption.

Second risk: the European Union

North of Macedonia is not part of the European Union.

The country asked to enter in 2004, but Greece put the veto. Why?

It is a long story, that we cannot explain in Globartis since it is not the focus of this blog.

In short terms: when North of Macedonia became independent in 1991 from Yugoslavia, the new country named itself “Macedonia”. However, Macedonia is also the northern region of Greece.

Greece was contrary to the fact that the new state of Macedonia could identify itself with that name, which is historically very important. In fact, Macedonia was the country of Alexander The Great, and from the Greek perspective “the new country of Macedonia” has no right to present itself as the heir of such a prestigious past.

There is abundant literature on this subject if you are interested in deepening. As far as we are concerned Greece decided to put the veto to the entry of Macedonia in the European Union due to that.

In 2019, after a referendum Macedonia changed the name of the country in “North of Macedonia” and Greece took off the veto. The procedure for joining the European Union has started, but it is a long process. It will take years and it is not clear when it will be completed. Recent conflicts inside the European Union should slow the process further.

Macedonia is a country that can take strong advantages to be part of the European Union because it should be a strong beneficiary of European development funds.

Third risk: high corruption

North of Macedonia is the most corrupted country in the Balkans and the juridical system is also slow.

This is a strong constraint for the Macedonia business expansion.

Fourth risk: a small fragmented population

This is not exactly a risk, but it could impact business activities in some ways.

As we wrote previously, the population of North of Macedonia is quite small (2.1 million of inhabitants).

The population is not uniform: 25% of the population is Albanian and is concentrated in the west and north-west of the country, near the borders of Kosovo and Albania.

The Albanian minority speak Albanese that is a quite different language from the Macedonian.

You have to take into account that if you want to do business in the North of Macedonia, you have to deal with more than one language. And also from a marketing perspective on some kind of products the Albanian minority has different preferences in the choice of products.

If you are planning to export your products in the North of Macedonia, it could be very useful to have an experienced local partner that knows different customers and optimize the marketing strategies for different group targets (especially in B2C products).

Fifth risk: high dependency on the European Union

Despite North of Macedonia is not part of the EU, its economy is strongly correlated with it, in particular with the German one.

The country suffered the global financial crisis (2008-2009), but also the sovereign public debt (2011, that was more a European crisis). Especially in recent years, in which the European Union GDP growth is slowing down, North of Macedonia could suffer it directly.

Not only because exports decrease, but also because the country receives a large number of foreign investments, especially from German companies that delocalize the production here.


We think Macedonia is an extremely interesting country from a production perspective. It is geographically very close to the European Union, and the workforce is considerably cheaper than central European countries (Poland, Czech Republic, Hungary, and Slovakia). You should look for a manufacturing partner, or you should decide to delocalize directly in the North of Macedonia. In the last option, keep in mind Macedonian free trade zones are extremely advantageous.

If you want to export, the North of Macedonia is a small market, but it could be interesting because even some multinationals did not explore the potential of the country.

Other info about North Macedonia in Country Data page: North Macedonia Business Report

Link to data source: The World Factbook (CIA)

Globartis Research

If you are looking for manufacturers and distributors in North of Macedonia, I would suggest visiting our b2b portal there are dozens of business announcements of Macedonian companies.