North Macedonia - Nimrod Yaron Albania

Inheritance, Estate and Gift Tax in North Macedonia

BananaBlitz — Tue, 09 Jul 2024 15:45:01 +0000

North Macedonia’s legislation on inheritance, estate and gift taxes is based on the property law. The rules determine how assets are valued and analyse the relationship between the donor and the recipient. This article provides an analysis of the regulations for individuals, businesses and anyone interested in North Macedonia’s inheritance and gift tax policy.

Tax Liability

In North Macedonia, the obligation to pay inheritance or gift tax rises when the market value of assets such as cash, securities, or other movable properties, surpasses the average annual salary in the country, as settled by the State Statistics Office.

Tax Residents: Natural persons and legal entities residing in North Macedonia are liable for the inheritance and gift tax if they inherit a property, as regulated by Article 10 of the Property Taxes Law, either within the country or abroad.

Foreign Tax Residents: individuals in North Macedonia are liable for the inheritance and gift tax if they inherit or are gifted immovable and movable properties located within the territory of the country.

Calculation of Tax Base

The tax base for inheritance and gift tax is determined by the market value of the property at the time the tax obligation rises. This amount is then adjusted for any debts and costs associated with the property.

Inheritance and Gift Tax Rates

Inheritance and gift tax rates are proportional and depend on the relationship to the deceased or giver. Those in the first order of succession are exempt from paying these taxes. Beneficiaries in the second order are taxed at rates between 2% and 3%. For those in the third order, or unrelated beneficiaries, the rates range from 4% to 5%.

Policy of Exemptions

The North Macedonian law provisions certain exemptions from inheritance and gift tax. Here are the categories that qualify for these exemptions:

Beneficiaries within the first hereditary order are exempt.
Second hereditary order beneficiaries are exempt for one inherited or gifted apartment or family residential building, under the condition of cohabitation with the decedent for a minimum of one year prior to their death or the moment of gift receipt, and absence of ownership of other residential properties.
Beneficiaries within the second hereditary order, whose primary occupation is agriculture, are exempt for inherited or gifted agricultural land and structures, provided they meet similar cohabitation requirements.

It is important to understand North Macedonia’s inheritance and gift tax laws when managing estates and other assets. Our firm specializes in international taxation, and our team is ready to assist with any related matters. If needed, we can connect you with top professionals to support your business activities in North Macedonia. Please feel free to contact us.

הפוסט Inheritance, Estate and Gift Tax in North Macedonia הופיע לראשונה ב-Nimrod Yaron Albania.

Tax Benefits in North Macedonia

BananaBlitz — Tue, 09 Jul 2024 15:39:08 +0000

North Macedonia offers attractive tax benefits, low personal and corporate tax rates to investors. In addition, it has established special investment zones with additional financial incentives. This article provides an overview of the tax benefits in North Macedonia and analyzes how they can enhance investment potential in the country.

Why Invest in North Macedonia?

North Macedonia offers one of the most appealing tax regimes in Europe with low rates and simple regulations supporting the growth of the companies. It has expanded its trade policy by signing numerous agreements that give local industries unrestricted access to European and global markets, enhancing its reputation as a competitive export leader. These agreements, including three multilateral and two bilateral, offer duty free access to a market of more than 650 million consumers.

Low Tax Rates

North Macedonia’s tax rates are competitive, with personal and corporate taxes levied both at a fixed rate of 10%. The value-added tax (VAT) varies with a general 18% and a reduced rate of 5% or 10% for certain products and services, such as food, beverages, software, craft-related, catering services, etc.

Estate taxes range from 0.1% to 0.2%, while real estate transfer taxes are between 2% to 4%. Additionally, inheritance and gift taxes are minimal, ranging in between 0% to 5%.

Application of Tax Deductions

North Macedonian legislation provides different fiscal incentives in the form of deductions for different types of taxpayers. Individuals in North Macedonia are entitled to full tax deductions for compulsory payments to health, pension, unemployment and associated insurance. Additionally, the Personal Income Tax Law provides an annual tax exemption for employees, which is set at MKD 114,480.

On the other hand, businesses can deduct documented expenses related to their operations, such as employee benefits (like transport, training, and accommodation) and insurance contributions. Net operating losses can be carried forward for up to three years, and losses specifically from 2020 and 2021 can be extended up to five years.

You can learn more on the incentives in North Macedonia by clicking here.

National Incentives

Free Zones Incentives

Land in free zones is available for long-term lease at concessional rates. Additionally, investors are exempt from utility taxes and land building permit fees, and they receive free connections to essential utilities. The government also supports capital investments by refunding 10% of costs spent on new machinery, equipment, buildings, or land.

Employees working for employers in Technological Industrial Development Zones are exempt from tax on their salaries for a period of ten years from the month when the employer begins paying wages.

Corporate Tax Incentives

North Macedonia’s tax benefits include a foreign tax credit and a reinvestment credit. Taxpayers can claim credits for taxes paid on overseas income if there is a Double Tax Treaty in place. In addition, the Corporate Income Tax Law offers a reduction in the tax base for profits generated in business reinvestment which applies to both tangible and intangible assets, except those used for administrative purposes. As a condition to benefit from this reduction, the assets must be held for at least, five years, otherwise the associated corporate income tax becomes payable.

North Macedonia’s tax system mainly taxes income from profits and gains, and includes numerous reliefs and exemptions. To avoid fines and penalties, companies might benefit from tax specialists to help them manage the complex tax implications. Our firm specializes in international taxation, and our team is ready to assist with any related matters. If needed, we can connect you with top professionals to support your business activities in Bulgaria. Please feel free to contact us.

הפוסט Tax Benefits in North Macedonia הופיע לראשונה ב-Nimrod Yaron Albania.

Personal Income Tax in North Macedonia

BananaBlitz — Tue, 09 Jul 2024 15:29:56 +0000

In the early 1990s, North Macedonia changed its economic system and updated its tax system. The new system is based on principles like private property rights, economic independence, and fair taxation, ensuring no special treatment for certain sectors.

This article provides an overview of the personal income tax implications in North Macedonia, offering insights on the particularities of the taxation rules.

Residency for tax purposes in North Macedonia

Individuals are considered tax residents of North Macedonia if they stay in the country for 183 days or more within any 12-month period. Personal income tax is levied on both residents and non-residents in North Macedonia. Residents are taxed on their income from all over the world, while non-residents are only taxed on income earned in North Macedonia.

Tax Rates on Personal Income

In North Macedonia, personal income includes all income from employment and can come in forms like cash, vouchers, receipts, shares, goods, or any other form of monetary value.

Residents of the Republic of North Macedonia are liable for personal income tax on both domestic and foreign income. The taxable amount includes all forms of income, minus social insurance contributions, a personal exemption, and allowable costs. Except gambling income, personal income tax is levied at 10%, while gambling income is taxed at 15%.

Personal income includes various sources:

Salaries and allowances from employment.
Reimbursements of work-related costs and other allowances as per labor laws and agreements.
Pension payments.
Compensation for members of management and supervisory bodies.
Payments to officials, deputies, advisors, and others in public roles.
Earnings of professional athletes, including premiums and transfers.
Compensation for elite athletes.
Payments during sick leave or absence from work.
Compensation for work as lay judges, skilled individuals, or insolvency administrators.
Payments for members of academic institutions like the Macedonian Academy of Sciences and Arts.
Income earned abroad based on employment originating in the country.
Any income generated individually through temporary service contracts with legal entities or individuals.

Starting January 1, 2023, capital gains from the sale of securities and shares issued by an investment fund will be taxed at 0% if the taxpayer has held them for more than two years.

Reporting and Calculating the Personal Income Tax in North Macedonia

According to the Personal Income Tax Law, the Public Revenue Office prepares and sends draft annual tax returns by April 30th. Taxpayers must review or modify these drafts by May 31st, while Individuals with business income must file their reports by March 15th of the following year.

For salary payments, bonuses, and other income, the taxpayer must calculate the monthly tax separately for each recipient and submit the details electronically to the Public Revenue Office by the 10^th of the following month using the MPIN form.

Additionally, for certain types of income, like labor compensation exceeding legal limits, payments to public officials, professional athlete earnings, has to prepare an electronic tax calculation for each recipient. This must be sent to the Public Revenue Office for approval before paying the tax and issuing the net income. The payer also needs to give the taxpayer a copy of the tax calculation for each payment.

If you are considering moving, and in North Macedonia, consulting with experts is crucial. Our firm specializes in international taxation, and our team is ready to assist with any related matters. If needed, we can connect you with top professionals in North Macedonia to support you. Please feel free to contact us.

הפוסט Personal Income Tax in North Macedonia הופיע לראשונה ב-Nimrod Yaron Albania.

Corporate Income Tax in North Macedonia

BananaBlitz — Tue, 04 Jun 2024 13:18:54 +0000

The Republic of North Macedonia offers advantageous tax opportunities, featuring one of the world’s lowest corporate income tax rates. The country possesses multiple Investment Zones where corporations enjoy various tax benefits. In this article, we will provide a comprehensive overview of the main characteristics of the corporate income tax regime in North Macedonia.

Corporate Tax Residency

A company is considered a tax resident in North Macedonia if it is established or has its headquarters in the country. Foreign companies with headquarters abroad are non-residents for tax purposes, but their branches in North Macedonia must pay taxes on any profits made within the country if they are classified as a Permanent Establishment (PE). A Permanent Establishment (PE) is usually a fixed location where a company’s business is conducted, either directly or through a dependent agent.

Application of Corporate Income Tax and Tax Rates

Corporate income tax holds significant importance in Macedonia’s tax system. It stands at a rate of 10%, which is among the lowest in Europe. This tax is applied to resident companies on their worldwide income. For foreign companies operating in Macedonia, corporate income tax is applied only on income generated within the country.

The tax base for the corporate income tax is determined by the profit realized for the current fiscal year adjusted for non-deductible expenses incurred during that period. Taxpayers must cover losses from previous years before distributing profits.

Non-profit organizations, including NGOs, religious and humanitarian groups, trade unions, and political parties, are taxed on income from their business activities. If their annual earnings exceed 1 million MKD, they pay a corporate income tax of 1% on their total yearly business revenue, after subtracting the 1 million MKD tax exemption.

Reductions, Retentions, and Exemptions from Corporate Tax

In North Macedonia, businesses enrolled in the simplified tax regime are obligated to remain within it if their total annual earnings over three consecutive years fall within the designated bracket. This regime offers relief from corporate income tax for companies earning up to MKD 3 million annually. Such businesses are subject to a 1% corporate income tax on their total income from all sources, as reported in their income statement and financial records for the respective calendar year. It is worth noting that this exemption excludes companies involved in banking, financial, insurance, or gambling activities.

Tax exemptions are provided to certain groups of taxpayers, including:

Protective companies that employ disabled individuals, as outlined in the Law on Employment of Disabled Persons;
Economic entities within institutions enforcing sanctions and juvenile correctional facilities, governed by the Law on enforcement of sanctions;
Technological Industrial and Development Zones, which enjoy tax exemptions for a period of 10 years, subject to conditions and procedures specified in the Law on Technological Industrial and Development Zones.

If you are considering investing in North Macedonia, consulting with experts is important. Our firm specializes in international taxation, and our team is ready to assist you with any relevant matters. If necessary, we can connect you with the relevant professional to support you for any information needed on corporate income taxes. Please feel free to contact us and schedule an introductory meeting.

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Establishing a company in Macedonia

BananaBlitz — Wed, 21 Feb 2024 16:19:56 +0000

Types of companies in Macedonia

Branch Office – Foreign companies may set up branch or representative offices in Macedonia. They must provide evidence of their legal incorporation and scope of legal capacity if challenged. They have the same rights and conditions as domestic companies, with a limit of one branch office for foreign sole proprietors.
Representative Office – Foreign companies authorized to do business in their home country can establish a non-commercial representative office in Macedonia. The office won’t have legal status or engage in commercial activities. The Macedonian government will define the registration process and requirements.
Limited Liability Company (DOO) – A Limited Liability Company is a trade company where one or more persons or entities contribute a pre-determined basic capital. Members are not liable for company liabilities, but must fulfill obligations as stated in the articles of association. The business name must contain “limited liability company” or “DOO”. For a single-member company, the business name must contain “single-member limited liability company” or “DOOEL”.
General Partnership (JTD) – A general partnership is a trade company formed by two or more individuals or legal entities. All partners are jointly and severally liable for the company’s debts. To establish a general partnership, the founders must sign articles of association.
Joint – Stock Company (AD) – A joint-stock company is a trade company where shareholders contribute to the basic capital, which is divided into stocks. Shareholders are not liable for the obligations of the company. The minimum basic capital is €25,000 for simultaneous incorporation and €50,000 for successive incorporation. The nominal amount of the stock cannot be less than €1.
Limited Partnership – A trade company is formed by at least two partners – one general and one limited. The general partner is personally liable for the company’s obligations with their entire assets, while the limited partner is only liable up to the entered contribution of the company. The general partners must contribute at least one-fifth of the total amount of the contributions.
Limited Partnership with Stocks – A trade company with stocks has partners who are liable for the company’s liabilities and others who are not liable beyond their contributions. There must be at least three partners. The legal relations between partners and third parties are governed by the law regarding limited partnerships. The provisions of the law concerning joint-stock companies apply to the limited partnership with stocks except for those regulating management.
Sole Proprietor – Individuals that conduct business operations are required to register as sole proprietors. The individual is fully and unlimitedly liable with all his assets to the creditors.

Company registration procedure

The registration process is streamlined through the One-Stop-Shop system, and companies can complete the registration within four hours. The registration process is inclusive and allows individuals of any citizenship or nationality to become directors or shareholders. After registration, companies can obtain their official seal using the provided certificate of registration, which allows authorized representatives to act on behalf of the founders.

Steps for Registering a Company in Republic of Macedonia:

Fill out a prescribed form to register the company at the Central Register of Macedonia.
Provide necessary documents, including a verified copy of the legal entity’s registration document or the founder’s proof of identity.
For a Limited Liability Company (DOO), establish through a founding agreement or statement, prepared by a lawyer (registration agent).
Define the company’s name, head office, manager, assess founding investment, and determine the bank for opening an account.
Submit the documentation to the Central Register, either physically or through e-Registration.

During the registration process, founders are required to submit copies of their passport and utility bills. Once registered, the company’s registration information is added to the Central Register of the Republic of Macedonia. Foreign residents can easily establish employment in the Republic of Macedonia, after getting an appropriate visa or permit.

The company registration process in Macedonia typically takes just one week to complete when all required documents and procedures are accurately followed. Our firm provides comprehensive assistance for establishing companies in Macedonia, along with expertise in various other fields. Please feel free to contact us, and we would be pleased to schedule an introductory meeting at your convenience.

Benefits of registering a company in Macedonia

North Macedonia serves as a prime gateway for businesses aiming to penetrate European markets, thanks to its strategic location at the crossroads of two crucial European transport corridors. This positioning, combined with its advanced road and railway network, allows for rapid transit across the country, reaching any inhabited location in under three hours. The nation’s liberal foreign trade regime enhances its appeal by offering unrestricted access to the EU and additional markets via numerous bilateral treaties, positioning it as an attractive base for production and export activities.

Furthermore, North Macedonia boasts a favorable tax framework, highlighted by one of the world’s lowest corporate profit tax rates, tax-free income for up to 10 years in Investment Zones, and competitive personal and corporate income tax rates at 10%, alongside a standard VAT rate of 18%. The efficient administrative processes in the country, including a swift 4-hour company registration system and extensive tax incentives for investors in Free Zones, including a decade-long tax holiday, further amplify its attractiveness. The country’s active participation in global trade is underscored by its membership in the World Trade Organization since 2003 and its engagement in three multilateral and several bilateral Free Trade Agreements, including with Turkey and Ukraine, enhancing its international trade connections.

If you require assistance or have any inquiries regarding our services, we warmly invite you to reach out to our office. Our dedicated team is here to provide you with expert guidance and support tailored to your specific needs. Whether you’re seeking information, need professional advice, or wish to discuss how we can assist you further, please do not hesitate to contact us.

הפוסט Establishing a company in Macedonia הופיע לראשונה ב-Nimrod Yaron Albania.

Business activity in Macedonia

BananaBlitz — Thu, 15 Feb 2024 14:24:55 +0000

Overview of business landscape

Strategically positioned at the intersection of two key European transport corridors, North Macedonia offers an ideal geographical location for businesses seeking efficient access to European markets. The country boasts a well-developed road and railway infrastructure, ensuring swift access to every inhabited place in less than three hours, enhancing connectivity for businesses.

North Macedonia’s highly-liberalized foreign trade policy, coupled with numerous bilateral agreements, grants local producers’ free access to the EU and other markets. This positions the country as a highly-competitive production and export platform, fostering economic growth.

The stability of North Macedonia’s monetary environment, featuring one of the lowest inflation rates in the region, adds to its attractiveness for international businesses. The stable currency further contributes to the favorable business climate.

A favorable tax environment further sweetens the deal, with low corporate income tax rates, among the lowest globally. Investment Zones offer a remarkable 10-year tax holiday covering corporate profits, employment income, VAT, custom duties, and more. Personal income tax stands at 10%, corporate income tax at 10%, and general VAT rates at 18%.

The country prides itself on a skilled and competitive workforce, supported by investor-friendly government policies that create a conducive work environment. Fast company registration through an efficient one-stop-shop system within four hours facilitates quick and hassle-free business setup.

Additional incentives and benefits include a 10-year tax holiday for investors in free zones, a 100% reduction of personal income tax for up to a decade, exemption from value-added tax for import and trade of goods in free zones, and long-term leases of land for up to 99 years at concessionary prices.

Innovative Economic Centers: TIDZs & Growth Sectors

North Macedonia’s Technological–Industrial Development Zones (TIDZs) serve as hubs for concentrated and highly productive clean manufacturing activities and the development of new technologies. Beyond the standard benefits associated with free economic zones, the country provides additional incentives to foster growth in TIDZs. Investors in these zones enjoy a 10-year exemption from personal and corporate income taxes, as well as relief from value-added tax and customs duties on goods, raw materials, equipment, and machines. Financial incentives, potentially reaching up to €500,000, are granted based on the investment’s value and employee count. Land within a TIDZ is available for long-term lease, extending up to 99 years.

Further advantages encompass developed infrastructure, facilitating free access to natural gas, water, electricity, and a main international road network. Investors are also exempt from fees related to construction site preparation, while streamlined registration procedures in TIDZs contribute to reduced setup costs. The government places a special emphasis on production activities, IT-related endeavors, scientific research, and environmentally-conscious technologies within TIDZs, offering additional benefits for these sectors. Notably, investors in these areas are relieved from the requirement to provide collateral guarantees for any customs arrears. Overall, North Macedonia’s TIDZs present a compelling environment for investors seeking favorable conditions and support for innovative and sustainable ventures.

Workforce

North Macedonia presents a workforce that’s not only educated, highly qualified, and ethical but also enthusiastic about welcoming foreign investors. The country’s technical higher educational institutions align with Western standards, offering workers opportunities for continuing education and lifelong learning, often through customized vocational training. The Government actively supports investors by participating in labor force training programs.

Education

Mandatory elementary and high school education, along with English language education from the first grade of elementary school, is a cornerstone of North Macedonia’s educational system. The various vocational high schools in each city, alongside standard high schools, provide students with opportunities to learn diverse trades.

The workforce in North Macedonia is exceptionally talented and technically trained, especially in the areas of software development and information technology. Since a large number of the nation’s youth are highly educated and proficient in English, businesses find it simpler to compete internationally.

There are 22 universities in the nation in addition to over 80 high schools that prioritize science, math, and language education.

Salary and social contributions

The labor costs in North Macedonia are relatively low compared to Western European countries, which makes it an attractive destination for outsourcing activities. The average monthly salary is2023 is €925 which includes the net salary, personal income tax, and social contributions for pension and disability insurance, health insurance, and employment insurance. In the past few years, the Government of the Republic of North Macedonia has actively reduced social security contributions.

North Macedonia presents an attractive business ground comprising of two properties advantages; a favorable location ideal for trade activities, preferential treatment in the trading process which is reflected by freedom from special grants contributing to foreign investments and stable financing policies. From the Investment Zones to TIDZs, every part provides various lanes for development and imagination thanks to an encouraged workforce. The focus in the education system is on technical skills and languages which guarantee a labor supply of capable professionals to meet the requirements for driving industry needs. Feel free to Contact us to explore the possibilities and unlock the potential of your business in North Macedonia.

הפוסט Business activity in Macedonia הופיע לראשונה ב-Nimrod Yaron Albania.

Opening a bank account in Macedonia

BananaBlitz — Wed, 31 Jan 2024 21:11:39 +0000

The banking system of Macedonia consists of fifteen banks. Of these, fourteen are privately owned, and only one, MBDP, is state-owned. A significant portion, eleven banks, feature foreign ownership capital. In contrast, four banks, including MBDP, are domestically owned. This sector is marked by the presence of self-sufficient and stable pan-European banks, such as NBG, NLB, and Erste/Sparkasse. This aspect highlights Macedonia’s integration into wider financial networks.

Banking Services in Macedonia

Banking services in Macedonia offer a mix of stability and adaptability tailored to individual and corporate financial needs. Those include:

24/7 online banking and telephone support in English.
Comparatively low banking fees and non-withdrawal ATM fees.
Acceptance of international credit cards.
Facilitation of international deposits and transfers.
Ability to manage accounts in foreign currencies EUR; GBP; USD.
Different type of loans (corporate, students, auto, etc.)

Types of bank accounts in Macedonia

Most common bank accounts in Macedonia are:

Personal Account
Business Account
Trade Account
Deposits
Loan Account

Choosing a bank to manage an account in Macedonia

In North Macedonia, where the economy is both small and open, vulnerabilities to external shocks, especially from the European Union, the nation’s largest trading partners, are apparent. Additionally, the potential repercussions of a political crisis could impact households in terms of savings and corporations in terms of investments. The ongoing liberalization of financial services adds another layer of significance to the role of banks. As competition intensifies among domestic banks and non-bank financial institutions, choosing the right bank becomes a focal point.

Beyond the traditional functions of stability and security, the selected bank must demonstrate adaptability through substantial investments in IT and human capital, fostering continuous innovation of business models. With banks at the centre of this evolving financial landscape, their role is pivotal. Choosing a bank that not only safeguards financial interests but also strategically positions itself to withstand competition and potential sector restructuring is paramount for individuals and corporations alike in North Macedonia.

Opening a private bank account in Macedonia

If a non-resident wants to open a bank account in Macedonia, the bank will need to inform them about the specific regulations that apply to them as a foreign individual. This is particularly relevant for those who have a temporary residence in Macedonia, obtained through a work visa or any other type of visa that permits them to stay for longer than six months.

The bank first informs the individual, identified by a travel document such as a passport or ID card, about the regulations for foreign residents with temporary stay based on specific visas. and proof of address, such as a utility bill or rental agreement. Some banks may also require a tax identification number (TIN) or personal identification number (PIN), and an initial deposit amount that varies depending on the bank and the type of account being opened. Authorized persons need to present a personal ID and a written authorization signed by the account holder.

The bank is permitted to open accounts in Macedonian denars (MKD) and various foreign currencies for a non-resident, ensuring compliance with local banking regulations. Remote access to the account is generally available via online banking and mobile apps, allowing for convenient management of finances.

It’s important to note that the requirements and procedures can vary between banks. Therefore, it’s recommended to check with the specific bank for their exact requirements and process. Many banks in Macedonia require a physical presence for identity verification and do not offer the possibility of opening a bank account entirely online.

Opening a business bank account in Macedonia

To initiate the process of opening a bank account for a foreign legal entity or any other foreign organization, the necessary documentation includes:

Submission of a formal request for the bank account opening.
Provision of a Specimen Signatures Card.
Submission of the Certificate of Incorporation, Extract from the Trade Register, or from any other registry where records pertaining to legal entities in the country of registration are maintained.
A notarized Power of Attorney signed by the legal representative.
Submission of passports or other valid personal identification documents for all individuals designated as authorized signatories.

When choosing a bank account in Macedonia

Within the dynamics of North Macedonia’s compact and open economy, susceptibility to external shocks and the repercussions of potential political upheavals accentuate the critical role played by banks, emphasizing the need for meticulous selection based on adaptability, stability, and strategic positioning amid escalating competition and sectoral transformations.

Here’s a list of banks licenced by the National Bank of the Republic of North Macedonia:

Silk Road Bank AD Skopje
Halk bank AD Skopje
Sparkasse Banka AD Skopje
Capital bank AD Skopje
Komercijalna banka AD Skopje
Development Bank of North Macedonia AD Skopje
NLB banka AD Skopje
ProCredit bank AD Skopje
Centralna kooperativna banka AD Skopje –
Stopanska banka AD Bitola
Stopanska banka AD Skopje
Univerzal investment bank AD Skopje
TTK Banka AD Skopje

הפוסט Opening a bank account in Macedonia הופיע לראשונה ב-Nimrod Yaron Albania.

Real Estate in North Macedonia

BananaBlitz — Wed, 24 Jan 2024 11:09:20 +0000

North Macedonia is a country located in the Balkan Peninsula in Southeast Europe, which has achieved notable progress in both social and economic development, solidifying its reputation as a secure, steady, and prosperous nation. Real estate investments in North Macedonia are presently undergoing substantial growth and development, attracting the attention of foreign investors and individuals.

Primarily, the country is experiencing an extraordinary trend of urbanization, as more individuals migrate from rural regions to urban centers in pursuit of better employment opportunities and an improved quality of life. Consequently, urban areas, specifically Skopje, are witnessing increased housing demand.

Furthermore, North Macedonia’s strategic location at the crossroads of Europe and Asia, as well as its affordable property prices, has attracted growing interest from foreign investors, leading to a rise in real estate transactions, particularly in the commercial and tourism sectors. Below is a comprehensive overview of the key aspects of real estate in North Macedonia.

The eligibility of foreign citizens to acquire real estate in North Macedonia

Residents of member states of the European Union (EU) and the Organization for Economic Cooperation and Development (OECD) enjoy the same rights as local residents when leasing or acquiring apartments, residential buildings, construction land, or property in North Macedonia. Non-EU and non-OECD residents, on the other hand, must adhere to reciprocity terms for property ownership. Reciprocity agreements between nations allow their citizens to buy property in each other’s countries. Furthermore, non-citizens from countries outside the EU and the OECD can inherit ownership rights to real estate in the Republic of Macedonia under reciprocity conditions. Meanwhile, citizens of the member states of the EU and OECD can gain ownership rights over immovable property through inheritance in the Republic of Macedonia under the same conditions as those applicable to Macedonian citizens. It’s important to note that ownership of agricultural land is not permitted for foreign residents. However, foreign investors can obtain property rights for business-related buildings and full ownership rights over construction land by establishing a locally registered company, granting them similar privileges to domestic companies.

Applicable Taxes on Real Estate transactions in North Macedonia

If you own real estate in North Macedonia or you are currently going through investments or transactions, you should take into consideration the applicable taxes. Following we have given some of the important taxes that are imposed on property owners either individual or legal entities.

Property Tax: Real estate owners are required to pay property tax annually, covering both land and buildings (residential or commercial). The responsible party for this tax can be either an individual owner or a legal entity. The tax is calculated based on the market value of the property, determined using government-prescribed methods.

Property tax rates are proportional, ranging from 0.1% to 0.2% with some exceptions. These rates may vary depending on the property type.

Transfer Tax: Transfer tax is applicable when the ownership right to real estate is transferred, either with or without compensation, among legal entities or individuals. The individual responsible for paying the transfer tax is the seller of the real estate. However, under special circumstances outlined in the sale and purchase agreement, the buyer may also be designated as the taxpayer. The rates for transfer tax are proportionate, ranging from 2% to 4%, and are decided by municipal councils through a formal decision-making process.

Certain exemptions from transfer taxes exist for specific cases, such as the transfer of shares, the sale of securities, and the initial sale of residential premises within the first five years from the completion of their construction.

Capital Gain Tax: Capital gains represent the profit earned by a taxpayer from the sale of various assets, including real estate, securities, capital shares, shares from investment funds, and other movable or immovable properties. Capital gain is calculated as the positive difference between the selling price and the purchase price of the asset. For tax purposes, the taxable amount is determined as 90% of the realized capital gain from the sale of securities, capital shares, shares from investment funds, and immovable property where the taxpayer has resided for at least one year before the sale.

High areas for real estate investment and prices in North Macedonia

Skopje, the capital of Macedonia, offers a rich variety of options for real estate investment prospects. With opportunities ranging from residential properties in Aerodrom to commercial spaces in the Center, vacation rentals in Old Bazaar to luxury apartments in Vodno, the city caters to a diverse range of investor preferences.

Both Skopje and Ohrid have the priciest real estate in North Macedonia. The pricing of apartments is influenced by factors such as the location, construction quality, accessibility, and infrastructure.

In the central area of Skopje, the average cost of homes is approximately MKD 100,000 (US$1,768) per square meter. In contrast, house prices in other regions of Macedonia are roughly 25% lower than the national average, at MKD 75,000 (US$1,326) per square meter.

Incentives for ownership of real estate for foreign citizens in North Macedonia

The growing demand for real estate in North Macedonia from both foreign and domestic investors in the construction industry has also increased the demand for construction workers. In response to this growing demand, the Macedonian government has implemented various regulations to simplify and expedite the procedures for hiring qualified foreign individuals in the construction sector.

North Macedonia has several Investment Zones with 10 years of tax holidays for corporate profits, employment income, VAT, customs duties, and others. Investors are relieved from the obligation to pay utility taxes to the local municipality and fees for land building permits. Free connection to natural gas, water, and sewage networks is also provided. Moreover, the Government may support the growth of capital investments and income with a return of 10% of investment costs in buildings and land.

Furthermore, as an incentive, temporary residence permits in North Macedonia, lasting up to one year, may be granted to a resident of a Member State who has obtained the right to own real estate (apartment, apartment building, or house) in the country, meeting specified legal conditions and requiring an investment of at least EUR 40,000.

It’s important for individuals considering purchasing real estate to be aware of the legal and financial procedures. Consulting with a tax and legal professional can be beneficial in navigating the complexities. Our firm offers comprehensive tax services in North Macedonia, among other areas. Please contact us, and we would be delighted to arrange an introductory meeting with you.

In conclusion, the real estate sector in North Macedonia is witnessing substantial growth, and foreign citizens, particularly from EU and OECD states, enjoy favorable property rights. The country offers diverse investment opportunities, and the Macedonian government provides incentives and simplified procedures, encouraging foreign ownership and investment in real estate, further promoting economic growth and development.

הפוסט Real Estate in North Macedonia הופיע לראשונה ב-Nimrod Yaron Albania.