Legislation Update

Law on Strategic Investments adopted in North Macedonia

The purpose of the recently adopted for Investments (“Law”) which is in line with the directives of the European Union, is to encourage, attract and create conditions for conducting strategic investments. This Law should encourage economic growth, employment and use of new technologies and innovations, increasing the competitive economic opportunities of , the export, and decrease the trade deficit, along with improving the wellbeing of citizens of overall.

The Law defines a strategic project as a project which fulfills one or more purposes as described above, and which realizes investments in the amount of:

  • at least EUR 100 million on the territory of at least two or more municipalities,
  • at least EUR 50 million in the municipalities with seat in a city, municipalities in the City of Skopje, and the City of Skopje, and
  • at least EUR 30 million in municipalities with a seat in a village.

 

As an exception, projects realized in the scope of agreements between countries, projects which are conducted and financed in collaboration with the European Union, Ministerial Council of the Energy Community (PECI – Project of Energy Community Interest; PMI – Project of Mutual Interest), as well as projects with international financial institutions are considered as strategic investment projects under this Law.

In order to obtain the status of a strategic investment project, the proposed investment:

(i)         must be in line with the environmental standards of North Macedonia,

(ii)        cannot be against the Constitution of North Macedonia and the ratified international agreements, and

(iii)       the public strategic projects must be in line with the strategic priorities of the Government of North Macedonia.

The strategic investment projects must be in one of the following areas:

–           Energy and infrastructure,

–           Transport and telecommunications,

–           Tourism,

–           Manufacturing,

–           Agriculture, forestry and water economy,

–           Food industry,

–           Healthcare,

–           Industrial and technological parks,

–           Wastewater and waste management,

–           IT zones,

–           Sport,

–           Science and education, and

–           Construction of large multifunctional construction complexes of construction buildings that cover more than one of the areas mentioned above.

If the investment is over EUR 150 million, it can be granted the status of a strategic investment project even if it is not in the areas mentioned above.

The Government publishes a public call for applications for determining the status of a strategic investment project. A Commission for Strategic Investment Projects formed by the Government decides upon the applications. Once the Government grants a project this status, it proposes a draft law for the implementation of the strategic investment project to the Assembly of North Macedonia. After the Assembly adopts this law, the Government concludes an agreement with the strategic investor. The agreement with the Government, among others, should contain the assumed rights and obligations of the parties and deadlines for their realization including any and all state aid, subsidies, tax breaks, etc.

In any case, any granted state aid must be in accordance with the Law on State Aid Control, which regulates the procedure for control of the following forms of state aid: subsidies, write-off or takeover of debts, exemption, reduction or postponement of payment of public taxes, granting loans and guarantees under favorable conditions, lower return rate of investments given by state aid grantors and reduction of prices of goods and services by state aid grantors, in particular in the case of sale of stocks, buildings or land owned by state aid grantors.

 

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.