Overview
On 7 October 2026, North Macedonia adopted the Law on Notification and Screening of Foreign Direct Investments (the “Law”), introducing the country’s first comprehensive foreign direct investment (“FDI”) screening regime. The Law entered into force on 21 October 2026 and will become applicable in April 2028, after an 18-month transition period.
As discussed in our previous publication, North Macedonia Proposes New Foreign Direct Investment Screening Regime, the proposed regime is intended to protect national security, public order and the country’s strategic interests, while bringing the domestic framework closer to the EU FDI screening framework.
The adopted Law retains the main features outlined in the draft Law, including the investment thresholds, the broad range of sectors covered, the screening powers of the Government of the Republic of North Macedonia and the potential consequences of non-compliance. It also sets out procedural deadlines for notification and screening, which investors should consider when planning transactions.
Key Features of the Adopted Law
As outlined in our previous publication on the draft Law, the regime covers FDI involving the first or any subsequent direct or indirect acquisition of at least 10% of the share capital or voting rights of a company registered in North Macedonia (including a branch of a foreign company), in an amount of at least EUR 50,000 in MKD equivalent, where the investment is made in a company, sector or critical infrastructure listed in the Law. The regime also covers arrangements conferring effective participation or control, including through financial agreements, board membership, mergers, divisions and takeovers.
The Law covers a broad range of sensitive sectors, including critical infrastructure, defence, digital infrastructure, sensitive information and sensitive or dual-use technologies, such as artificial intelligence, cybersecurity and semiconductors. By way of exception, investments in other sectors connected with projects or programmes of EU interest may also be screened where they could threaten security, public order or strategic interests.
The Ministry of Foreign Affairs and Foreign Trade (“MFA”) administers the screening process. Following the review, the Government may approve an investment, approve it subject to conditions or prohibit it. The adopted Law provides for an initial assessment of up to 15 days, while substantive screening may take up to 60 days, extendable by 30 days in exceptional cases. The overall screening period, from confirmation of completeness to submission of the proposed decision to the Government, including negotiations, may not exceed 90 days, or 120 days in exceptional cases. The regime also allows the MFA to review ex officio completed investments that fall outside the sectors listed in the Law where there are indications of threats to national security, public order or strategic interests. Where the investor has not previously consulted the MFA, such a review may be initiated within five years of completion.
Non-compliance may result in fines of up to EUR 30,000 for legal entities, depending on the misdemeanour and the size of the legal entity. Separate fines apply to responsible persons within the legal entity, and courts may also impose a ban on performing a particular activity or duty for up to one year. Further consequences may include a prohibition on further investment, a prohibition or restriction on ownership or voting rights or, where these measures are insufficient, an order to sell the target company, asset or shares.
What Should Investors Do Now?
Investors should assess whether planned transactions may fall within the screening regime and consider potential approval requirements at an early stage. Transaction parties should also identify filing responsibilities, prepare the necessary ownership and financing information, and account for screening timelines in transaction documentation, including through appropriate conditions precedent. Although the Law will not become applicable until April 2028, investors should use the transition period to prepare for the new requirements and monitor any implementing measures.
Frequently Asked Questions
1. When will the Law become applicable?
The Law entered into force on 21 October 2026 and is scheduled to become applicable in April 2028, following an 18-month transition period.
2. Which investments may be subject to screening?
Generally, foreign investments of at least EUR 50,000 involving the acquisition of at least 10% of a company’s share capital and/or voting rights, subject to the statutory conditions. Indirect acquisitions and arrangements conferring control or influence may also be covered.
3. Which sectors are covered by the Law?
Covered sectors include critical infrastructure, defence, digital infrastructure, sensitive information and sensitive or dual-use technologies, including artificial intelligence, cybersecurity and semiconductors. Certain EU-interest projects may also be covered.
4. How long does the screening process take?
The initial assessment takes up to 15 days. Substantive screening may take up to 60 days, extendable by 30 days in exceptional cases. The overall period for submitting the proposed decision to the Government is generally 90 days, or 120 days in exceptional cases.
5. Can the Government prohibit an investment?
Yes. The Government may approve an investment, impose conditions or prohibit it. Its decision may be challenged before the Administrative Court, but the challenge does not automatically suspend enforcement.
6. Can completed investments be reviewed?
Yes. Certain completed investments may be reviewed where they pose potential threats to national security, public order or strategic interests. If the investor has not previously consulted the MFA, the review may be initiated within five years of completion.
7. What are the consequences of non-compliance?
Consequences may include fines of up to EUR 30,000, restrictions on business activities or ownership and voting rights, a prohibition on further investment and, where necessary, divestment.
8. What should investors do before the Law becomes applicable?
Investors should assess potential filing obligations, prepare the required documentation, account for approval requirements in transaction documents and monitor implementing measures ahead of April 2028.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
