DOING BUSINESS IN REPUBLIC OF MACEDONIA

STARTING A BUSINESS

 

FOUNDING A COMPANY

The Constitution of the Republic of Macedonia guarantees the equal treatment of all participants on the market, and the right of foreign investors to freely bring and export investments, capital and profit.

According to the Company Law (Official Gazette No. 28/2004) of the R.of Macedonia there are two types of legal entities:

• Sole Proprietors (physical entity who executes some of the trade activities as part of his/her occupation)
• General Partnership (legal entity in which one or more persons invest money, objects, and/or rights which they exercise for joint working, and share the profit and the loss o f the work).

Depending on the form the companies can take, they can be divided into the following types:

• Limited liability company (Ltd);
• Joint stock company (JSC);
• Limited Partnership;
• Publicly traded company.

FORM OF TRADE COMPANY (TYPES OF TRADE COMPANIES)

The highest number of registered legal entities in the R. Macedonia belongs to the group of limited liability companies (DOO). A Limited Liability Company (DOO) is a company where one or more physical and/or legal entities participate with one share, according to the previously agreed basic capital of the company. A Ltd. can be established by one or several physical and/or legal entities (up to total of 50). When a limited liability company is established by a single legal, or one pshical entity, it is called a limited liability company established by a sole individual (DOOEL).

In the legal exchange with third persons, the founders of the company are not personally responsible for the liabilities of the company, but they take the risk for the functioning of the company up to the threshold of their share in it. In a legal exchange with third persons the limited liability company accounts for its liabilities with all its property.

Another form of legal entity which is most frequently present is the individual trader, where a physical entity is personally responsible for its liabilities, with all his/her property.

STEPS FOR REGISTERING A COMPANY

Necessary documents for registering a company

The introduction of the one-stop-shop system in the R. Macedonia for registration ensures the unity of all legally relevant status data for the start of working and realization of the rights of the business subjects.

In order to register a company in the R. Macedonia, a person has to submit a request using a prescribed existing form in order to register the company at the Central Register of the R. Macedonia.

In cases, when the founder is a legal entity, there is a need of a verified copy of the registration document of the legal entity, and in cases when the founder is a physical entity, a verified copy of a proof of identity (ID car d) also needs to be submitted.

The limited liability company (DOO) can be established by a founding agreement of the company. In the case where the founder is a single individual, then the company is formed with a statement.

The agreement, the statement, and the other accompanying documents (as envisaged by the Company Law) should be prepared by a lawyer (registration agent), and the same need to be submitted at the Central register of R. Macedonia.

Before the start of the preparation of the documents for registration, it is necessary to define the name of the company (and to check whether the name is already taken by another company at the Central Register), the head office, the manager of the company to conduct an assessment of the founding investment, and to determine in which bank the company will open a bank account.

Submitting the documentation

The registration form of the company, accompanied by all the necessary documents is submitted to the Central Register of R. Macedonia, or to some of its branch offices present in the bigger cities throughout the R. Mac edonia. The subjects who are expected to submit a registration form at the trade register, are obliged, in a period of 15 days, from the day of fulfilling the conditions for submitting a registration form for registration at the trade register, to submit the form, unless stated otherwise in accordance with the Company Law, or any other law. In case these procedures are not followed, after the expiration of three months, counting from the day of fulfilling the conditions for submitting the registration form, the Central register will not accept the data, and will reject the registration form, unless stated otherwise, in accordance with the Company Law.

As a new service, the Central Register provides electronic submission of documents or e-Registration. The procedure can be completed in three steps: obtain a certificate, prepare documentation and submit registration. The registration is done without any costs to the Central Register. One can use authorized registration agents for finalizing the procedure for e-registration of the company.

Duration of the registration procedure

In accordance with the information found on the web site of the Central Register the duration for registering a legal entity last 3 days through one-stop-shop system.

Costs for registering a legal entity

The cost for registering a Limited Liability Company DOO/DOOEL in average is about 12.000 MKD. Administrative tax for registering a Limited Liability Company DOO/DOOEL in paper form through the registration offices of Central Register is 2.399 MKD .

Compensation for the assessor of the conducted assessment of the founding capital, whose price is not fix ed, depends on the type of basic means which are being assessed.

Notary fees depend on the number of founders.

Making a stamp – 500-1000 MKD .

The compensation for the legal service conducted by an authorized person – lawyer – is not fixed and depends on the type of company that is being registered, the number of founders, and the specificities connected to the organizational purpose of the company. At the one-stop-shop system you can check whether there is already a company with the same, or a similar name. The procedure lasts one day. After you complete all the procedures, you will need to open a bank account at the bank of your choice. The founder and manager of the company should meet the requirements of the Company Law.

The electronic registration of legal entity through the system e-Registration is free of charge for all types of legal entities.

Necessary permissions for starting a business and authorized institutions to issuing them

In the Republic of Macedonia there is a National classification of activities which encompasses all the activities with standardized names and codes. The majority of activities do not require special licences or certificates, but there are exceptions for which you need a licence to do the job issued by an authorized institution. The best source for information with regards to obtaining licences can be acquired at the Central Register, the relevant ministries, and the Law offices.

Documents received after registration

The introduction of the one-stop-shop system in the Republic of Macedonia made the procedure for registration of legal entities faster and easier. After completing the procedure for registration at the Central Register, the new established legal entities receive the following:

• ID number of the company (EMBS)
• Tax number of the company (DB)
• Document for customs record
• Document for registered primary (main) activity in accordance with the national classification of activities
• Bank account number in a bank of your choice.

In adition to these documents, the for-profit entities should register for Value Added Tax (VAT).

REQUIRED CAPITAL FOR THE INITIAL INVESTMENT

The principal capital of the company (which consists of the sum of the primary shares) cannot be lower than 5.000 EUR, in denar counter-value according to the median rate of exchange of the National Bank of the Republic of Macedonia.

The investment contributed during the founding of the company can comprise of money (monetary investment), movable and immovable property (non-monetary investment) and rights which can be assessed and expressed in money, depending upon the choice of the founder. The vehicle, owned by the founder can be part of the initial investment, and the same is reffered to as equipment.

The non-monetary investment registered during the founding of the company must be assessed (in order to determine its value in money) by an authorized court assessor. The fee for the conducted assessment is the amount of 50 EUR, in accordance with the value of the investment that is being assessed.

The founding investment can be noted before submitting the registration form for the company at the Central Register. In such a case the monetary investments are paid to the temporary account of the company, and the non-monetary investment is assessed by an authorized court assessor.

In accordance with the latest amendments to the Company Law, the co-partner can complete the investment within a period of one year, starting from the day of registration. Hence, before submitting the statement for registration of the company the co-partner has no liability to complete both the monetary and non-monetary investment.

STRUCTURE OF THE COMPANY

Director of the company

The director of the company can be any physical entity enaged with a work contract. The manager can be a national or a foreign person.

A direcor cannot be a person, against whom there has been an effective court procedure, by which he/she is partially or completely forbidden to perform duties of the director’s position, whilst this decision is still valid.

Nominal managing structure in accordance with the law

In line with the Company’s Law obligatory bodies at the Limited Liability Company are:

• The board of co-partners that consists of all co-partners (founders) to whom all decisions refer to (every founder has a right to vote, in accordance with his/ her investment); and
• The director who represents the company in the relationship with third persons.

Compulsory registration of companies in the country

In the R. Macedonia in order to be able to conduct any business activity, the company needs to be registered in accordance with the Company Law.

Foreign companies and foreign individual traders can conduct business activity in the R. Macedonia through their branch offices (registered at the Central register) which in the business, act on behalf of the foreign company.

Laws referring to foreign companies

The foreign companies in R. Macedonia (active through their registered branch offices) function according to the laws of the R. Macedonia, and in their manner of conducting business are equal to domestic physical and legal entities, unless stated otherwise according to certain international agreements.

In cases where a foreign physical or legal entity is a founder of a company in the R. Macedonia, after the completion of the procedure for registration and receiving the decision of the Central Register, the newly formed company acquires the status of a domestic legal entity, which functions in accordance with the Macedonian legal regulations.

Modes of closing a company, and restoring invested means

The required period for closing up a company in normal procedure in the Central Register lasts 22 days.

The company can stop working:

• after the expiry date for which it was founded;
• by a decision of the co-partners; and
• by a decision of the court.

In such cases, a procedure for liquidation of the company is conducted. The liquidation procedure is conducted when the company is solvent and lasts between 4 and 5 months.

The property which remains after closing all liabilities is distributed among the co-partners (founders) in accordance with the share they held in the company.

When the company is insolvent, bankruptcy proceedings are conducted. The bankruptcy proceedings last between 2 months and 1 year, depending on the type, the property, and the debts of a company.