ENVIRONMENT FOR BUSINESS IN REPUBLIC OF MACEDONIA

WORKFORCE

EMPLOYING PEOPLE IN A COMPANY

Legal basis

The work relationship and employment in R. Macedonia is regulated in accordance with the Law on Labor Relations (cleared text, Official Gazette, No. 158.2010); Law on Employment and Work of Foreigners (Official Gazette No. 92/07); Law on Protection of Personal Information (Official Gazette No. 7/05 and 103/08); by collective agreement and other legal acts.

The legal provisions regulate the observation of the rights, obligations and responsibilities of the employee and the employer, which refer to concluding an agreement, modification or termination of employment contract; working hours; leave and holidays; work discipline; compensation for damage, special protection for certain categories of employees, etc. One of the main goals of the Macedonian legislation for employment is to create a minimum level of protection for the employees.

Types of working arrangements

The employment contracts must be in writing. The employer is obliged to inform the Employment Agency in writing, within a period of one day after signing the contract as well as within a period of eight days for the stopping of the contract, starting from the stopping of the mandate. The employment contracts can be temporary (for responsibilities which envisage a specific time frame, and have a fixed deadline) or permanent (for responsibilities which do not envisage a definite time for their execution). The most common and most generally accepted employment contract in Republic of Macedonia is the contract for an indefinite time which ensures a better protection of the employee’s rights and their interests. The employment contract for an indefinite period cannot be transformed into temporary contract without the written permission of the employee. In accordance with the legal provisions it covers seasonal employment, trial work period, etc.

Registration of employees

After completing the registration of the company, preceding the start of the activities, all the employees must be registered at the Employment Agency of Republic of Macedonia.

Necessary time for registration of employees

The registration procedure can be completed in one day.

Minimum number of registered employees

The manager must be registered as an employee (that is the minimal legal obligation) and depending on the needs of the company all engaged persons must be registered as employees.

Minimal obligations of the employer towards his employees

The employer must provide a gross salary for the employee which consists of:

• Post-tax salary (minimum amount of which is calculated on monthly basis, by the Statistics Office in accordance with the registered activity);
• Personal income tax, up t o 30% of the salary;
• Contributions for health insurance, up to 7.32%, and pension insurance up to 18% of the salary;
• Other small compensations (employment contribution up to 1.2%, additional health insurance to the amount o f 0.5%).

All contributions make up to 30% of the total post-tax salary.Сите придонеси заедно изнесуваат околу 27% од бруто-платата.

Amount of average salary on national level

The average monthly, post-tax salary per employee in October 2013 was to the amount of 21.247 MKD.

REGISTRATION OF INDIVIDUAL FARMERS

Agricultural activity can be performed by a physical person whose workload does not exceed the agricultural activity of small-scale (small-scale activity is agricultural activity in person by the farmer and up to ten employees, including members of his family, and most five seasonal workers).

The individual farmer should be registered in the individual farmers in the local unit of the Ministry of Agriculture, Forestry and Water Management.

If the individual farmer exceeds the agricultural activity of the smaller scale is obliged to be registered as a sole proprietor or as a company. For the registration of sole proprietor and company you should go in the register of the Registry of RM - regional offices.

EMPLOYMENT OF FOREIGN CITIZENS

Employment of foreign citizens is regulated under the Law on Employment and Work of Foreigners. A foreigner may be employed in the Macedonian company based on previously obtained residence permition and a work permition issued by the Agency for Employment of a written request submitted by the employer or the foreigner.

A foreigner may be employed or self-employed in the Republic if possessed:

• work permition; and
• has legal residence in the country.

The types of work permitions and procedures for obtaining them are regulated by the Law on Employment and Work of Foreigners (Official Gazette no. 70/07).

There are three types of work permits:

• Personal work permition of the foreigner has free access to the labor market (employment, self-employment) regardless of the employer;
• Employment permition (with this kind of permission foreigner can be employed only by the employer who filed the application for his work permition); and
• Work permition which is issued for a specific defined purpose.

Entrance, exit and residence of foreigners is regulated by the Foreigners Law (Official Gazette no. 35/06) under which a foreigner may receive:

• residence up to three months;
• temporary residence; and
• permanent residence.

A foreigner who founded the company in Macedonia could get a temporary residence, and after five years and fulfillment of other legal requirements can obtain a permanent residence permition.