ENVIRONMENT FOR BUSINESS IN REPUBLIC OF MACEDONIA

LEGAL FRAMEWORK FOR DOING BUSINESS

LEGAL FRAMEWORK FOR ACTIVITIES AND STRUCTURE OF LEGAL ENTITIES

The Company Law (Official Gazette No. 28/2004) is the primary law regulating the activities and the structure of the legal entities. The law regulates different types of companies, outlining the procedures of their establishment and registration, the size of their primary capital, the period of existence, the manner of management and representation, the rights, the obligations and the liabilities of the founders, as well as their mutual relations, the manner of allocation of the profit along with the coverage of an eventual loss, the obligation to have accountancy, the obligation to have company books, the obligation to prepare annual accounting and financial reports, the keeping of company books, accounting documents, the manner in which the company can be deregistered, and other important issues for the organization and the work of the companies.

ASSETS OF TRADE COMPANIES

The registered company as a legal entity, can acquire rights and undertake liabilities, can also acquire ownership of movable (vehicles, computers) and immovable things (business premises, land), as well as to acquire other rights that have property value.

TREATMENT OF A FOREIGN LEGAL ENTITY UPON REGISTRATION

A company (established by foreign physical or legal entities) with the registration at the Central Registry acquires a status of a national legal entity. Macedonian legislation is fully applied to the newly formed company.

REGULATION OF THE OWNERSHIP, AND THE OWNERSHIP RIGHTS FOR FOREIGN CITIZENS IN REPUBLIC OF MACEDONIA

The right to ownership can be acquired by all domestic and foreign physical and legal entities, in accordance with the conditions of the Law on Property and other ownership rights (Official Gazette of R. Macedonia No. 18/2001).

• Foreign physical and legal entities can acquire the right to ownership of immovable things under the conditions applicable for the national physical and legal entities;
• Foreign physical entities can acquire the right to ownership by inheriting immovable property in R. Macedonia, under reciprocity conditions. Foreign legal entities can acquire the right to ownership of immovable property in R. Macedonia, by inheriting on the basis of will, under reciprocity conditions.
• Foreign physical and legal entity can acquire the right to ownership of living and business premises in R. Macedonia under reciprocity conditions.
• Foreign physical and legal entity can acquire the right to a long-term lease (but not ownership) of construction and agricultural land, under reciprocity conditions, previously obtained permission by the Ministry of Justice, opinion of the authorized ministry (the Ministry for Agriculture, Forestry and Water and the Ministry for Transport and Communications), and the Ministry of Finance.

As previously stated, the company acquires a status of national legal entity, and loses the status of foreign legal entity upon completing the registration.

PRICE REGULATED GOODS AND SERVICES

There is a small number of price regulated products and services. In this group belong products, such as energy products, whose price is regulated by an independent regulatory body, i.e. the Regulatory Commission for Energy of Republic of Macedonia [5] established in 2002, by the Law on Amending the Energy Law (Official Gazette No. 94/02). The Commission decides on the price on the basis of its own calculations and methodologies.

PROTECTION OF COMPETITION

The legal entities which work in contradiction to the legal provisions and do not abide by the principles of consciousness and trustworthiness (by submitting unrealistic statements for the origin of products, the process of production, etc.) can be prohibited to conduct their activities, and might be required to pay a compensation for the damage, in order to prevent unfair competition. These provisions are in accordance with the Law against Unfair Competition (Official Gazett e 80/99). The law for the protection of competition (Official Gazette 4/2005) ensures free competition on the domestic market and defines the forms of limitations and infringement of competition.

REGISTERING PRODUCTS AND ITS PROTECTION FROM ILLEGAL PRODUCTION AND IMPORT

The protection of the products of illegal import (acquiring of the rights to industrial property) is conducted on the basis of the procedure prescribed in the Law on Industrial Property. The State Agency for Industrial Property in Skopje is authorized to protect the rights for industrial property. The rights of industrial property include: patent, model and sample, trade and service trademark, and label of origin of the product.

• The patent is legal and industrial property which ensures the protection of the innovation (solution for a particular technical problem);
• Industrial design (change of look, picture, drawing) is the right to the protection of the design of the product by legal means;
• Trademark is a right to industrial property which protects the trademark (the graphic part);
• The label of origin of the product is the right to industrial property which protects the geographical name and origin (the country, region from where the product originates)

This law guarantees the rights to industrial property and no person is allowed to use them without authorization.

ACCOUNTING PROCEDURES

The Republic of Macedonia applies the International Accounting Standards (IAS) published in Official gazette of R. Macedonia No. 159/2009, 164/2009, 107/201

SUBMITTING FINANCIAL REPORTS

Annual financial reports are submitted up to the end of February of the current year for the previous year, and they include: balance of the account, balance of success, tax statement and other special information.

ACCOUNTANT, AUDITOR AND/OR LAWYER SERVICES

The accountants and auditors in Republic of Macedonia join different associations. The Association of Chamber of Commerce of Macedonia, as a seventh chamber commerce, established the Chamber of Accountants in order to improve the work, and to alleviate the problem solving of the accountant bureaus, providing professional help and other business services to the member companies. Contacts of registries of authorized auditors, as well as registries of associations for auditing and authorized auditors – individual tradesmen, can be found at the Institute for Authorized Auditors.

The lawyers are grouped under the Macedonian Lawyers Association which has a registry of all lawyers in the country. Besides these associations, information can be obtained at other trade, local registries, as well as at the offices for local economic development of municipalities.

EXTERNAL AUDITING

External auditing is obligatory for medium and small companies. Small companies with less than 50 employees are not obliged to external auditing.