FROM THE AMERICAN PEOPLE YOUTH EMPLOYABILITY SKILLS NETWORK Град Скопје

CITY OF GUIDE FOR INVESTORS

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Skopje, 2015 City of Skopje Proposer: Koce Trajanovski, The Mayor of the City od Skopje Preparation: Sector fot Local Economic Development Representative: Slobodan Kosev, Head of the Sector for Local Economic Development Design and print: Evropa 92 Skopje,2015

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This publication has been fi nanced by the American people, through the United States Agency for FROM THE AMERICAN PEOPLE International Development – USAID Macedonia, within YOUTH EMPLOYABILITY SKILLS NETWORK the Youth Employability Skills Network (YES Network) Project , implemented by the Education Development Center (EDC). The authors’ views expressed in this publication do not necessarily refl ect the views of the United States Agency for International Development or the United States Government. Table of contents Forewords...... 6 1. Profile of the Republic of Macedonia...... 7 2. Profile of the City of Skopje...... 8 2.1. Geographic data...... 8 2.2. Demographic data...... 9 2.3. Economic and investment climate...... 9 2.3.1. Economic situation in the Republic of Macedonia...... 9 2.3.2. Investment benefits in the City of Skopje ...... 10 3. Opportunities for investment in the City of Skopje...... 11 3.1. Automotive industry...... 11 3.2. Information and Communication Technologies ...... 12 3.3. Health, medicine equipment and pharmacy...... 12 3.4. Agribusiness and the food processing industry ...... 13 3.5. Textile industry...... 13 3.6. Metals and metal products...... 13 3.7. Film industry...... 13 3.8. Chemical industry...... 14 3.9. Energy sector...... 14 3.10. Construction...... 14 3.11. Tourism...... 14 4. Successful foreign investments in the city...... 15 5. Conditions for doing business...... 15 5.1. Types of companies in the Republic of Macedonia...... 15 5.2. Procedure for establishing a company...... 15 3 5.2.1. Work visas/work permit ...... 17 5.2.2. Access to information on potential partners and suppliers...... 17 5.3. Taxes...... 18 5.4. Institutions that support investments...... 19 5.4.1. Agency for foreign investments...... 19 5.4.2. Directorate for technological industrial development zones...... 20 5.5. City of Skopje investment-supporting policies...... 20 5.5.1. Fund for Innovations and Technology Development (FITD)...... 20 5.5.2. Employment-supporting measures...... 21 5.5.3. State aid stipulated with the current legal acts of R.M...... 21 5.6. Banks and financial institutions...... 22 5.7. Labor market...... 23 5.7.1. Education...... 23 5.7.2. Activity of the population...... 25 5.7.3. Average salary in the Republic of Macedonia...... 25 5.7.4. Expenditures of employers...... 27 6. Infrastructure...... 28 6.1. Road infrastructure...... 28 6.2. Railway infrastructure...... 29 6.3. Airports...... 29 6.4. Maritime traffic...... 30 6.5. Telecommunications...... 30 6.6. Energy...... 30 6.7. Oil and gas pipelines...... 30 6.8. Water supply...... 31 6.9. Construction permit cost...... 31 7. Locations for investments in the City of Skopje...... 32 7.1. Locations for greenfield investments...... 32 7.1.1 Technological industrial development zone – TIDZ 1 Skopje...... 32 7.1.2 Technological industrial development zone – TIDZ 2 Skopje...... 32 7.2. Locations for brownfield investments...... 33 8. Useful addresses for investors...... 35 Annex 1: Investment locations in the City of Skopje...... 36

List of tables

4 Table 1. Taxes in the Republic of Macedonia...... 18 Table 2 Duty rates in the Republic of Macedonia...... 18 Table 3 Banks with branch offices in Skopje...... 22 Table 4 Savings houses in Skopje...... 23 Table 5 Students who finished secondary education by school preparation...... 24 Table 6 Active population according to education...... 25 Table 7 Population activity rates...... 25 Table 8 Calculated amount of 50% of the average monthly salary per employee...... 26 Table 9 Annual average of expenditures per employee...... 27 Table 10 Distances and prices of transport of a 20-tonne truck from Skopje...... 28 Table 11. Cost for preparation of construction land / expressed in Eur/м2...... 31 Table 12 Cost of premises in the City of Skopje...... 31 Table 13 Locations for brownfield investments on the territory of the City of Skopje...... 34 Dear investors,

The profitable locations and high-quality and educated workforce available to Skopje are going to have a direct contribution to the growth and development of your company. The favorable business environment and infrastructure, as well as the lowest taxes in Europe will additionally enhance your productivity and at the same time reduce your operational costs. By choosing Skopje as your future business and investment destination, you will have chosen the best partner in the heart of the Balkans, to take care of you and simultaneously guide you through the investment process. In order to accelerate your activities and to ensure the normal functioning of your business, my team amd I will work directly with the that comprise the City, as well as with the competent bodies of the central government. As your activities grow, so will our engagement and timely recognition and fulfillment of your true needs, all with the goal to ensure even faster growth and development, while observing the code of confidentiality and the highest standards of business ethics. I sincerely hope that this Guide will provide you with sufficient information and necessary data to invoke your interest and to make you seriously consider the possibility for the City of Skopje to be your future investment destination, i.e. part of your business activities. Johnson Controls, Johnson Matthey, T-Mobile, EVN, Arcelor Mittal, LUKOIL and many others have already chosen us. Check why. We are expecting you. 5 Yours Sincerely,

Koce Trajanovski Mayor of the City of Skopje 1. Profile of the Republic of Macedonia

Official name Republic of Macedonia Capital city Skopje Area 25.713km2 Other larger towns: Куманово, Битола, Тетово, Велес, Прилеп, Штип Political system Multiparty system of parliamentary democracy Assembly with 123 Members of Parliament with a 4-year mandate; Members of Parliament are elected on party lists in elections in six electoral districts Executive government: president with a five-year mandate; Prime minister and ministers elected in the Parliament by members of parliament elected by the people Population 2.1 million Average age 35 41% under the age of 30 Average life expectancy 74.6 years Workforce 938,294 Literacy 96.1% Climate Moderate continental in the north, Mediterranean in the south Hot and dry summers Relatively cold and snowy winters Average temperature 12.7°С Average high temperature 17.75 °С Average low temperature 5.5 °С National currency Macedonian denar 1 euro = 61.5 denars 6 CITY OF SKOPJE GUIDE FOR INVESTORS

2. Profile of the City of Skopje Population 506,926 citizens GDP per capita 314,531 MKD GDP as % of the National GDP 45.6% Surface area 571km2 Location 21°26' east geographic longitude and 42° north geographic latitude Altitude 240m 7 Climate Average annual temperature 12.4°C. Long hot dry summers, Relatively cold winters with many foggy days Monthly salary 506EUR average gross salary Unemployment rate 29.3% 2.1. Geographic data The City of Skopje, as the capital city of the Republic of Macedonia, represents the most important administrative, economic, cultural and educational center in the country, and has high potential and favorable conditions for establishing and running of businesses. The City of Skopje, as a separate unit of the local self-government is comprised of ten municipalities: Aerodrom, , Gazi Baba, Gjorche Petrov, Karposh, , Saraj, Centar, Chair and Shuto Orizari. In the City of Skopje, the largest by area is Saraj, with surface of 229km2, whereas Chair is the smallest one with 4 km2. The City of Skopje is situated in the central part of the Skopje basin. It stretches over 1818 km², or 9 km in width and 23 km in length. The Skopje basin, in which the City of Skopje is situated, stretches in the upper part of the River. The Skopje basin is surrounded by mountains , Karadzica, Osoj, Zheden and . The basin stretches north-west to south-east. The surface of the basin is 2,100 km2. The highest point of the basin is on the Jakupica Mountain (2,450m), whereas the lowest part lies at an altitude of 225 to 340m. The deep gorges and the high and wide cliffs provide for good communication conditions with the neighboring areas. Macedonia abounds in great natural riches, represents a cradle of culture and the birth land of Mother Teresa. Macedonia represents a crossroad of civilizations, a unique mix of the antique and the modern, a country which offers a rich multicultural experience. The main symbol of the capital city, Skopje, is the medieval fortress from where one can see the city center, as well as the which arches across the Vardar River. Both key landmarks date back to the time of the Byzantine emperor Justinijan I, when Macedonia was a principal district of the Eastern 8 Roman Empire. The Stone Bridge was built by the Turks on the site of a Roman bridge. The bridge gives access to the old part of the city, where the Turkish bazaar is. It represents one of the best preserved specimens of Ottoman urban architecture in the Balkans. In the Turkish bazaar, one can visit the Daut Pasha Hamam (public bath, 15 century, now and an art gallery), the Kurshumli Han (16 century), the Clock tower (16 century), etc. The rich natural and cultural heritage makes the City of Skopje an attractive destination for tourists and investors from all corners of the world. CITY OF SKOPJE GUIDE FOR INVESTORS

Picture 1. Location of the City of Skopje in R. Macedonia

2.2. Demographic data According to the data of the State Statistical Office of the Republic of Macedonia from the 2002 Census, the total number of citizens of the City of Skopje, according to the 2004 administrative and territorial organization is 506,926 citizens. The density of the population varies in different parts of the City, and on average it is 888 inhabitants / km2. The greatest part of the population in the City of Skopje is of Macedonian ethnic origin (67%), and then come the (20%), the Turks and the Roma. The remaining nationalities in the City are represented by a smaller percentage. Regarding the age structure of the population, the age group of 20-24 includes the greatest number of inhabitants of the City of Skopje, followed by the age groups of 30-34 and 50-54 years of age. 9 This datum represents a great comparative advantage of the city in terms of the available working population which can be hired as workforce by the future investors. 2.3. Economic and investment climate

2.3.1. Economic situation in the Republic of Macedonia The growth of the Gross Domestic Product – GDP, which represents an important indicator for the economy in a country, in the year 2014 was 3.8%, and in the year 2015, in the first quarter registers a decline and is 2.2%1. The Republic of Macedonia is a signatory of several free trade agreements, including: 1) Central European Free Trade Agreement (CEFTA 2006) CEFTA 2006 was signed on December 19th, 2006 in Bucharest, and it entered into force on November 22nd, 2007. Agreement signatories are: the Republic of Macedonia, Albania, Bosnia and Herzegovina, Croatia, Moldova, Montenegro and UNMIK for the territory. Apart from liberalization of trade of goods, CEFTA 2006 opens up space for increased cooperation among its members in the following areas as well: trade of services, public procurement, investments and protection of intellectual property. 2) EFTA Agreement EFTA is a multilateral agreement concluded between the Republic of Macedonia and the Swiss Confederation, the Kingdom of Norway, the Republic of Iceland, and the Principality of Liechtenstein, on June 19th, 2000 in Zurich. In November 2001, the Parliament of the Republic of Macedonia ratified the Agreement (Official Gazette of RM, No. 89/2001), and it was enforced on May 1st, 2002. The Agreement provides an asymmetric approach to the trade in industrial and agricultural foodstuffs, in the interest of the Republic of Macedonia. Thus, Macedonian industrial products are freely, duty-free, exported on the markets of EFTA countries, responding to the needs of 12 million citizens. On the other hand, trade in industrial products in case of import from the EFTA countries in Macedonia shall be performed in different transition periods, individually for every EFTA country, in a period of four, seven and nine years. 10 In the tenth year of application of the Agreement, exchange in both directions shall be performed duty- free. 3) Free Trade Agreement between the Republic of Macedonia and Ukraine The Free Trade Agreement between the Republic of Macedonia and Ukraine is a legal framework which regulates the bilateral trade cooperation between the two countries, and is applicable as of September 10th, 2001. 4) Free Trade Agreement between the Republic of Macedonia and the Republic of Turkey The Free Trade Agreement between the Republic of Macedonia and the Republic of Turkey regulates the trade between the two countries and is applicable as of September 1st, 2000.

1 Source: NBRM, Basic economical indicators for Republic of Macedonia CITY OF SKOPJE GUIDE FOR INVESTORS

5) Stabilization and Association Agreement The Stabilization and Association Agreement with the European communities and their countries – members (SAA) is the existing legal framework which regulates the relations of the Republic of Macedonia and the European Union. The Republic of Macedonia signed the SAA on April 9th, 2001 in Luxemburg, and the Agreement entered into force on April 1st, 2004. The sections of SAA regulating trade and trade issues were enforced on June 1st, 2001, with the special Interim Agreement on Trade and Trade-related Matters between the Republic of Macedonia and the European Community. This agreement provided for asymmetrical approach to trade with industrial and agricultural foodstuffs in the interest of the Republic of Macedonia. Thus, Macedonian industrial products are freely, duty-free, exported to EU markets, and trade in industrial products imported from the EU, according to projection, shall be gradually liberalized in a period of 10 years. In the tenth year of application of the Agreement (2011), exchange in both directions shall be performed duty-free.

2.3.2. Investment benefits in the City of Skopje The total number of registered companies in the City of Skopje is 39,391, of which 2,736 were established by foreign nationals or foreign legal entities. The established 125 subsidiaries and 91 representative offices of foreign companies present in the region confirm the increased interest in investment and commercial representation. The key advantages of the City of Skopje compared to similar cities from the neighboring countries are: • The advantageous geographic position and the developed logistical and transport infrastructure enable easy and fast access to European markets, • Access to skilled workforce at competitive prices in comparison with the neighboring countries, • Access to workforce with a command of several languages, 11 • Opportunities for using the developed networks of suppliers in several industrial clusters, • Opportunities for using investment capital from European rural development support funds, • The City of Skopje is in the Zone (GMT +1), and it is a good destination for outsourcing of services to local companies by companies from Europe. The time zone enables simple communication with the staff from the country of origin, • The developed banking sector and the presence of banks providing electronic payment allow easy management of transactions in a short period of time, • The estimated collaterals in case of using a real estate mortgage provides a high level of security for the assets, • Access to areas for growing and processing of organic products. Investors in the Technological Industrial Development Zones enjoy special benefits: • 0% tax on profits in the first 10 years (further 10%, only on distributed profits) • Up to 10 years of exemption from income tax payment • Exemption from the obligations for Value Added Tax and customs duties on exported products except for products considered as final consumption products • Concession of land use for 99 years with minimal annual fees • Free connection to water supply, sewage and electricity infrastructure. Investors interested in greenfield or brownfield investments outside of TIRZ in the Skopje region have an option to. • invest in municipal investment zones (Butel, Gazi Baba, Gjorche Petrov) • utilize public private partnership instruments for gaining access to agricultural land in Saraj • invest in luxury residential housing in Karposh municipality or residential areas in .

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3. Opportunities for investment in the City of Skopje The progress in the political and macroeconomic stability and the conditions for constant growth in the Republic of Macedonia and the City of Skopje have contributed to the creation of favorable conditions for investing and starting of businesses and attracting numerous domestic and foreign investments. The progress in the country has been recognized by the World Bank Report on Doing Business in Macedonia. The key advantage of Skopje planning region for investors interested in investing in the processing industry is the availability of a large number of highly skilled unemployed and unemployed with secondary education who are experienced in large processing facilities which do not operate anymore, such as the Kozhara tannery, Godel, Ohis, FAS 11th October and others. Special incentives per employee may apply for investors who would hire a significant number of employees (over 50) in the Technological Industrial Development Zones. According to the Agency for Foreign Investments and Export Promotion of the Republic of Macedonia, there are opportunities for investment in the following sectors: 3.1. Automotive industry The City of Skopje, with its strategic location and proximity of similar industries in Central and Eastern Europe and Turkey, as well as the duty-free access to the European market, offers opportunities which should be used, especially in conditions when it is exceptionally important to achieve a competitive advantage on the uncompromising automotive industry market. The auspicious conditions for cost reduction, the educated workforce, and the exceptionally favorable measures for supporting the industrial zones make the City of Skopje an ideal location for companies interested in starting a business or relocating their businesses. 13 Indicators for the successful functioning of the automotive industry are the following: • Fifty companies operate in this area in the Republic of Macedonia • There is a tradition of engineering and production • Educated workforce • The production of automotive parts for Zastava, , started in 1960 • Companies primarily cater for postproduction • Companies present nowadays in Skopje TIRZ 1 and TIRZ 2: Johnson Matthey; Kemet; Teknohose; Van Hool; Visteon; Protek; Mensan Otomotiv; Mediterr Shock Absorbers as well Cap –Con and Baracuda FX. • The markets are: Europe, Russia, Turkey, Africa, USA • Most of the companies have quality management systems ISO 9001/TS 16949 3.2. Information and Communication Technologies The Macedonian information technologies market had a significant growth of 7.7% in 2009, reaching 164.5 million euro. Over the next years, there was also continuous growth. This growth has been motivated by the great investments of the government and the telecommunication companies in the information and internet technologies, the continuous spending in the finance sector, the decrease of the price of IT equipment and the reducing of VAT for equipment. A large number of the companies from this sector are located in the City of Skopje. The advantages of investing in such businesses are the following: • The fastest-growing ICT market in the Adriatic region. • The best telecommunication networks in the region – 100% digital system. • Leading hardware and software producers have local branch offices for sales and services • Professional and cheap labor force • Initiated procedures for standardization and quality assurance • Government measures for support 3.3. Health, medicine equipment and pharmacy There are many institutions and services related with health, medicine and pharmacy in the City of Skopje. The City of Skopje and the Republic of Macedonia in general have a well established pharmaceutical industry and they supply a large number of countries in the region and in the world with generic products. Except for that, there is a highly qualified and educated workforce, the salaries are significantly lower in comparison with the other European countries, and medicinal tourism is in constant growth. It is especially important for investors in these sectors that the regulation connected with investments in the health sector is very favorable. 14 • The existing pharmaceutical industry exports to more than 30 countries in the world • A strong educational system with a large number of graduated pharmacy and medicine students • Favorable legislative climate • Signed contracts with world’s leading pharmaceutical companies • Available locations in the industrial and free economic zones • Tradition of production 3.4. Agribusiness and the food processing industry Agricultural production and the agribusiness are the most important economic sectors in Macedonia. The auspicious natural conditions, the tradition, the knowledge and skills create a range of opportunities in the agricultural sector. The agribusiness sector in Macedonia is one of the fastest growing sectors, with more than 10% of CITY OF SKOPJE GUIDE FOR INVESTORS

growth over the past 3 years. By introducing the European standards for food quality and safety, opportunities for expanding towards new markets were created for this sector. The advantages for investing in such businesses are the following: • The combination of continental and sub-Mediterranean climate • Ecological production practices • Excellent access to regional markets • High reputation of high-quality products The highest investment potential resides in the following subsectors: • Fruit and vegetables: production, storage, processing industries (logistical centers) • Wine production • Production of sheep and goat cheese 3.5. Textile industry The excellent connections and the proximity of the City of Skopje as the capital of Macedonia to the fast-growing textile industries in Central Europe, Eastern Europe and Turkey contribute to a geographical advantage for investments in this sector as well. The geographical connectedness and the proximity to these markets contribute to low distribution expenses and timely delivery of products. The clothing industry has the greatest contribution in the economy of Macedonia and is one of the most important industries with regard to the number of companies and the number of employees in this sector. This type of industry offers the investors a large number of benefits: • Favorable conditions for establishing and running of a business • High quality workforce and low expenses for salary • Good geographical location and connections with European markets 15 • Favorable economic conditions • High reputation of Macedonian textile producers on the European Union markets • Great flexibility and willingness to adapt to the requirements of the foreign markets • Exceptionally favorable products quality and costs ratio • Up-to-date equipment • Proximity to European markets • Recommended investments in ready-made clothing and knitting 3.6. Metals and metal products Investments in the metal and metal products industry are advantageous from the aspect of export potential. With the increasing of the foreign investments the export of these producst increases as well. This sector comprises of 9202 active business entities and employes more than 16 0003 people and is almost entirely owned by foreign investors. The main products include rolled sheet steel, aluminum profiles, ferrous alloys, lead, zinc, copper, gold and silver. 3.7. Film industry Macedonia offers great natural treasures; it is a cradle of culture and the birth land of Mother Teresa. Macedonia represents a crossroad of civilizations, a unique mix of the antique and the modern, a country which offers a rich multicultural experience. The huge cultural, historical and natural treasure of the city make Skopje a very interesting and auspicious location for film-making. Other advantages for the development of the film industry in Skopje and in Macedonia in general are: • Low taxes • 280 sunny days per year • Low operation costs • Unparalleled landscapes and a range of excellent locations for filming (valleys, mountains, fortresses, rivers, lakes, waterfalls, an island, a small desert, etc.) • Available production companies and staff. The Macedonian Film Agency, with its seat in Skopje, offers different types of stimulating measures for making films in Macedonia. 3.8. Chemical industry Macedonia has a substantial chemical industry with a well-developed capacity for the production of basic chemicals, synthetic fibers, polyvinyl chloride, as well as detergents, fertilizers, polyurethane foams and fibers. 16 In addition to opportunities for greenfield investments in the City of Skopje, existing capacities for chemicals production, including cosmetics products, have good growth potential which foreign investors can benefit from. 3.9. Energy sector The energy sector development is a priority of Macedonia. There are numerous investment opportunities in this sector, and the Government encourages investment in both traditional and renewable energy projects. Data important for investing in this sector: • National strategy based on diversification of sources and types of energy use • Focus on completing the strategy for using renewable energy sources (measuring wind potential,

2 Source: State statistical office, Industry 2009 - 2014 3 Source: State statistical office, Statement –Active population in the Republic of Macedonia, Results from the Survey for workforce, II quarter year 2015 CITY OF SKOPJE GUIDE FOR INVESTORS

preparation of a feasibility study) • Reliability study on the electro-energy sector and connection of windmill power plants • Potential for use of solar energy: annual solar radiation amounts to 1385 kWh/m2 • Climatic characteristics – continental climate with hot and dry summers and high intensity of solar radiation 3.10. Construction Macedonia has a well-developed construction industry recognized internationally for its skilled personnel and use of modern technology. Construction labor from Macedonia is used in Central and Eastern Europe, the Middle East and Russia. The largest construction companies are located in the City of Skopje and most construction activities take place there. The growth of the real-estate prices in the central city areas, the positive assessment of the collateral by commercial banks, as well as the Government measures for subsidized interest rates for loans for youth with monthly earnings up to 900 euro are expected to lead to significant investments in the construction sector. 3.11. Tourism A large number of monuments and landmarks are located in the City of Skopje, making it a true treasury of culture and art. From the cultural-historical heritage in Skopje, the archaeological site Skupi, the Kale fortress, the Aqueduct, the Old Bazaar in the City of Skopje, numerous churches and monasteries especially stand out for their tourist potential. The project is of exceptional importance for the city, in the frames of which over 70 monuments, fountains, sculptures and new buildings of institutions have been realized. Cultural heritage, in combination with the moderate climate, the beautiful landscapes and the 17 unparalleled hospitality are preconditions for the City of Skopje to have a high potential of becoming a top destination for foreign visitors. Taking into consideration the potential for tourism development of the City of Skopje, investments are in particular expected in tourism-related businesses. 4. Successful foreign investments in the city As a result of the auspicious geographical and business climate, the interest of foreign investors in the City of Skopje has increased over the past years. Part of the important investments in the city are: Johnson Matthey (United Kingdom), Mobilkom Austria (Austria), EVN (Austria), Deutsche Telecom (Germany), Van Hool (Belgium), Societe Generale (France), Johnson Controls (USA), KEMET Corporation (USA), the National Bank of Greece (Greece), Hellenic Bottling Company S.A. (Greece), QBE Insurance Group Limited (Great Britain), Mittal Steel (The Netherlands), Duferco (Switzerland), Titan Group (Greece), Coficab (Tunisia), Mensan Otomotiv (Turkey), Endava (Great Britain), Istem Medical (Turkey), KPME (Ukraine), Teknohose (Italy), Prodis (Russia), VPTEX (The Netherlands), Protek (Russia), Telekom Slovenije (Slovenia), Steiermarkische Bank und Sparkassen AG (Germany), Prokredit Holding AG (Germany), Hypo Alpe Adria Leasing (Austria), Nova Ljubljanska Banka (Slovenia), ERA Group (USA), Soravia (Austria), ODW Electric (Germany).

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5. Conditions for doing business 5.1. Types of companies in the Republic of Macedonia The Company Law is the basic law that regulates the business activity in Macedonia, and it defines the types of companies, the procedures and regulations for their establishment and operation. Foreign investors receive the same rights and privileges as Macedonian citizens. The law is fully harmonized with the EU directives and regulations. In the City of Skopje, there are numerous local legal representative offices which are specialized in the sphere of trade law and are willing and available to provide assistance. 5.2. Procedure for establishing a company The procedure for establishing a company in the Republic of Macedonia is fairly simple, by visiting only one counter, through the one-stop-shop system for registering a company at the Central Registry of the Republic of Macedonia in Skopje, but also through 28 electronically integrated branch offices located throughout Macedonia. Foreign companies have been also able to register companies electronically starting from 2012. This reform enables registration of companies directly from the investor’s country, thus eliminating the need for being physically present in Skopje and in Macedonia in the process of registration of the company. The time needed for registration of a company is four hours. In practice, it can take up to 1-2 business days the most. This significantly decreases the administrative barriers and costs for starting a business. The fee at the Central Registry for registering a Limited liability company is around 40 euro. Apart from this fee, other minimal additional costs are possible, such as the costs for sworn translation and certification of the necessary documents by a notary public, which costs around 3 to 5 euro per page. 19 The necessary documentation for registering a company at the Central Registry is the following: • Application for registration; • A contract for the company, or a statement establishing the company, including all addenda including the power of attorney for the authorized person, certified by a notary public; • Copy of passport or ID if a physical person is the founder, of another document for determining the identity which is valid in the person’s country, proof for registration if a legal entity is the founder; • Evidence from a bank authorized for doing payment operations that each founding member has paid at least a third of the monetary deposit; • Evidence that at least half of the basic capital has been paid; • If non-monetary deposits are deposited – the contracts which determine and execute them; • The decision for appointing of a manager; • Statement by each manager of the company that they accept the appointment – certified by a notary public; • The decision for appointing members of the supervisory board; • Evidence for ownership in which an entry in a public registry book for registering immovable property has been made, and if movable property is introduced, for which by law a requirement for registering has been stipulated, evidence for ownership over the movable property; • Permit or another act of a state body or another authorized body if that liability has been stipulated with a law for registering the company in the company registry; • Statement of the legal representative of the legal person, or a statement of the natural person, certified by notary, i.e. submitted evidence that there are no legal obstacles for them to be the founder of the company as stated in Article 29 of the Company Law; • Statement in which the activities undertaken in order to properly establish a company are listed and in which the founders claim that they founded the company in accordance with the law and that the data contained in the addenda (the documents and the evidence) which they are attaching to the application for registration of the establishing of the company into the company registry are truthful and in accordance with the law. The statement can be given in writing or in an electronic form through the one-stop shop system pursuant to the Law on electronic data and electronic signature, the Law on the Central Registry of the Republic of Macedonia and the regulations for the one-stop shop system. It shall be certified by a notary public, whereas it shall not be certified when it is submitted electronically through the one-stop shop system. (Article 32 from the Company Law); • The manager, or the persons who according to the contract for the company, are authorized to represent it, deposit their signatures – certified by a notary public. The foreign nationals can deposit a signature certified by the competent authority in the country of their nationality. The 20 signature shall not be certified by a notary public if it is submitted electronically pursuant to the Law on electronic data and electronic signature; • The addenda may be submitted electronically pursuant to the Law on electronic data and electronic signature and the Law on the one-stop shop system and on the company registry and the registry of other legal entities The founding capital of the company consists of the sum of the deposits of the co-founders. The deposit of the co-founder can be monetary and non-monetary. The non-monetary deposits are fully deposited before the submission of the application for registration of the establishing of the company. The minimal capital necessary for a limited liability company, registered as direct foreign investment, during one year from the establishing is 5,000 euro monetary contribution on temporary accounts in some of the national banks. For activities in certain fields such as pharmacy, banking, insurance and educational activities, the CITY OF SKOPJE GUIDE FOR INVESTORS

process for registration of a company is followed by licensing by the relevant authorities. The central registry employees are trained to guide the newly registered companies to the appropriate bodies or institutions for their licensing.

5.2.1. Work visas/work permit Foreign citizens can easily be employed in the Republic of Macedonia, after getting an appropriate visa or permit from the Ministry of Foreign Affairs, i.e. the diplomatic-consular representative offices abroad. Nationals of EU member-states, as well as nationals of the state-parties to the Schengen agreement may enter the Republic of Macedonia presenting a valid identity card issued by the competent authorities of the EU member-states or of the state-parties to the Schengen agreement. Issuance of visas to foreign citizens • Visas shall be issued only at the embassies or consulates of the Republic of Macedonia abroad; • The validity of the passport or other travel document of the applicant has to be minimum 3 (three) months; • The application may be submitted to the embassy/consulate of the Republic of Macedonia by post or by fax, in which case the applicant must collect the visa in person; Using the list of diplomatic and consular missions of the Republic of Macedonia abroad, which can be found at the Ministry of Foreign Affairs, the visa applicants can choose the most convenient embassy/ consulate to submit the visa application. Foreign nationals in the Republic of Macedonia can obtain two types of permits: • Work permit and • Residence permit. 5.2.2. Access to information on potential partners and 21 suppliers With the development of the principles of transparency and availability, the Government enables economic entities to have access to substantial and accurate data on potential business partners. The Central Registry hosts an easily accessible database of companies, which is connected with the European Business Register. Unambiguous identification of companies is provided by granting a unique registration number of registered entities, a code and title of the registered main activity according to the National classification of activities, a code of the organizational form of the registered entry, a provision of a unique tax number, and entry of a bank account chosen by the registered entity. 5.3. Taxes In accordance with the general process of decentralization in the Republic of Macedonia, one of the key dimensions is the fiscal decentralization, i.e. fiscal autonomy in the competence of the local self- governments. Apart from transfers from the budget of the central government, which are payable in accordance with the Law on financing of the units of the local self-government, part of the other laws and the supporting regulations also enable the units of the local self-government to have financial autonomy in the determining of the height of the following taxes and fees on the local level:: • Immovable property, presents and heritage tax (Law on property taxes) • Utilities fees for connection and use of all types of communal infrastructure (Law on communal fees), and • Administrative fees (Law amending the law on administrative fees)

Table 1 Taxes in the Republic of Macedonia Taxes Tax rates TIDZ (TIRZ) Outside of TIDZ (TIRZ) Profit tax 0% for the first 10 years 10% Personal income tax 0% for the first 10 years 10% Value added tax 0% 18% Property tax 0% 0.1% - 0.2% Excise tax 0% 5% - 62%

Table 2 Duty rates in the Republic of Macedonia Product Duty rates TIDZ (TIRZ) Outside of TIDZ (TIRZ) 22 Raw materials 0% Up to 15% Equipment 0% 5% - 20% No duty or value added tax are paid for imported raw materials, equipment or construction materials. The height of the locally defined taxes and fees, the efficiency in their defining and issuing of permits and documentation for starting of new businesses, as well as the expansion of the activity or the scope of the existing businesses (companies) are some of the key factors of the advantageous business ambience in the City of Skopje. CITY OF SKOPJE GUIDE FOR INVESTORS

5.4. Institutions that support investments

5.4.1. Agency for foreign investments The Agency for foreign investment and export promotion of the Republic of Macedonia was established in order to secure increased influx of foreign direct investments and export promotion, thus motivating economic growth and development in the Republic of Macedonia. Among other services, the Agency offers the following services to investors: • provision of highly professional services to investors in the process of pre-investment, investment and re-investment, and highly professional services related to export promotion; • incorporating an identification strategy in the frames of the investment and export promotion strategy, in those sectors which represent the best perspectives for maximizing the net economic benefit for Macedonia; • provision of services to investors and exporters; • professional presenting of sector-specific and operational benefits which the Republic of Macedonia offers to investors and exporters, in the electronic and printed media; • development and implementation of innovative and more active promotional appearances at the target markets; • establishing of an effective partnership between the public and the private sector for extensive promotion of the Republic of Macedonia and developing a database of target companies and monitoring systems in order to assist the identification and ensuring the investment; • promotion of the regions in the Republic of Macedonia and utilizing every opportunity for motivating foreign investors to use products and services of the Macedonian companies; • analyzing the conditions for investing and export and suggesting amendments to the legal framework in terms of improving the investment and export climate; 23 • assessing and motivating development initiatives such as stimulating the growth of greenfield investments and technological industrial development zones in order to increase competitiveness of the Republic of Macedonia as a location for investment; • concluding a contract on behalf of the Government of the Republic of Macedonia, as state aid provider, in which the state aid provided to the user of the zone is determined, pursuant to the Law on technological industrial development zone, regarding which contract the Government of the Republic of Macedonia has previously provided clearance; • provision of informative services to exporters from the Republic of Macedonia regarding external trade, export procedures, duties, taxes and the legal regulation, as well as assistance in the provision of all administrative licenses and permits; • securing of information for access to international markets for the purpose of assisting exporters in finding foreign business partners; The Agency has its branch offices in USA, United Kingdom, Belgium, The Netherlands, Germany, Switzerland, Italy, Poland, Sweden, Serbia, Turkey, Albania, Austria, Russia, France, Norway, China.

5.4.2. Directorate for technological industrial development zones As a representative authority of the Government of the Republic of Macedonia, the Directorate for Technological Industrial Development Zones manages the Technological Industrial Development Zones in the Republic of Macedonia. The Government of the Republic of Macedonia has established four Technological Industrial Development Zones: TIDZ Skopje 1, TIDZ Skopje 2, TIDZ Shtip, and TIDZ . Simultaneously, the Government of the Republic of Macedonia is working on the development of seven more Technological Industrial Development Zones on the territory of the Republic of Macedonia intended to achieve a balanced economic development in the whole region. The Directorate for Technological Industrial Development Zones strives to become an international business hub of South-Eastern Europe by providing world-class infrastructure supported by highest quality services and incentives unparalleled anywhere in the region and wider. The benefits offered by the TIDZ are: 100% foreign ownership, 0% tax and customs duties, no labor restrictions, no municipality taxes, symbolic land lease rate and direct State Aid in amount up to 500,000 EUR are only one segment of the proposed package of benefits that provides the most competitive investment destination in the region and beyond. The Directorate for TIDZ is establishing a service center within each of the Technological Industrial Development Zones, which, through the administrative units of the Directorate for TIDZ and the Customs Authority of the Republic of Macedonia field offices, provides administrative consultation and services and efficient clearing through customs for the Users of the Zones. 24 The Directorate for TIDZ undertakes the development of the Zones as its proud mission, and adjusts according to the needs of the investor, and in the practice strives to raise the quality of the services to the highest level possible in order to guarantee success for the investor. 5.5. City of Skopje investment-supporting policies

5.5.1. Fund for Innovations and Technology Development (FITD) The Fund for Innovations and Technology Development promotes innovations by securing additional sources of financing for the innovations, in order to build a competitive knowledge-based economy, which will contribute to the creation of jobs. The priorities of the Innovation Fund are: CITY OF SKOPJE GUIDE FOR INVESTORS

• improved access to financial services for innovations and technological development; • promoted and enhanced innovation activity. FITD achieves its goals through instruments of co-financed grants for start-up, spin off companies and innovations, co-financing grants and conditional loans for commercialization of innovations, co- financing grants for technology transfer, technical assistance through business-technology accelerators, technical assistance for companies, equity and mezzanine investments. The FITD works on the development of acceptable financial instruments to support innovation and technology development. The FITD builds partnerships with other relevant stakeholders for the accomplishment of common goals.

5.5.2. Employment-supporting measures The employment strategies and policies of the Government of the Republic of Macedonia contribute to the realization of the determinations stemming from the Global Jobs Pact4 and the European Strategy for smart, sustainable and inclusive growth – Europe 2020. The operational plan for active employment programs and measures for 2014 includes employment programs and measures with the aim of activating the labor market and creating jobs through stimulating the demand on the labor market, harmonizing the supply and demand of workforce in accordance with the need of the labor market, improving the supply of workforce, as well as decreasing of the grey economy. Macroeconomic, microeconomic and employment policies have been determined. The operational plan programs include the following programs and measures: 1. Program for self-employment 2. Program for financial support of legal entities (micro and small enterprises and artisans) for opening of new jobs 3. Program for subsidized employment 3.1 Subsidizing employment 25 3.2 Subsidizing employment of children without parents 3.3 Subsidizing employment of persons with disabilities 3.4 Subsidizing employment of youth up to the age of 29 4. Program for subsidizing the usufructuary of state-owned agricultural land. 5. Program for preparation for employment 5.1 Training with known employer 5.2 Training with known employer with subsidy 5.3 Training for meeting the required profiles on the labor market 5.4 Training for advanced IT skills 5.5 Practical work (internship)

4 Adopted by the International Labor Conference, at the 98th session, Geneva, 19th June 2009 5.6 Education for starting a business 5.7 Motivational training cycles 6. 6. Survey for job vacancies 7. Socially beneficial work program 8. Pilot program for employment of representatives of the Romani ethnic community 9. Pilot program – incubator for artisans So as to have a successful implementation of the employment programs/measures foreseen in the Work program of the Government of the Republic of Macedonia, the Operational annual plans define the type of the programs and the active employment measures, the target groups, the necessary means and the sources of the means, as well as the concrete activities and deadlines for the subjects responsible for their implementation.

5.5.3. State aid stipulated with the current legal acts of R.M. The Law on state aid of the Republic of Macedonia stipulates the opportunities for state aid for development of the regions and small and medium-sized companies in the following forms: Regional aid (1) Aid for regional development can be granted in the form of subsidies, soft loans, state guarantees or tax incentives. (2) The aid intensity may be up to 50% of the investment or at the amount of salaries for new jobs over two years period. (3) The investment and the newly created jobs must be maintained for at least five years. (4) Conditions and procedure for granting regional aid will be determined by the Government of the Republic of Macedonia. 26 (5) The maximum limit of the aid under paragraph (2) of this article is subject to revision within a four years period from the date of entering into force of the Interim Agreement for trade and trade issues between Macedonia and the European Communities.

Assistance for small and medium-sized enterprises The assistance aimed at promoting the activities of small and medium-sized enterprises by supporting investments in liquid and illiquid assets are up to 30% of the favorable investment or the amount of salary for a two years period. It can be compatible, and the intensity of total provided aid shall not exceed 75% of investment costs. The assistance aimed at providing advisory services to small and medium enterprises, which is not a continuous activity, and the aid supporting the company’s first participation in fairs and exhibitions can be compatible up to 50% of the cost of participation. CITY OF SKOPJE GUIDE FOR INVESTORS

5.6. Banks and financial institutions The City of Skopje is the seat of a large number of banks and financial institutions owned by citizens and legal entities from the Republic of Macedonia, but also owned by foreign nationals and companies.

Table 3 Banks with branch offices in Skopje Bank Ownership Website Eurostandard Banka AD Skopje Nikolche Petrovski, Zoran Nikolovski www.eurostandard.mk Alfa Bank AD Skopje Alfa Bank, Greece www.alphabank.mk Central Cooperative Bank AD Skopje Central Cooperative Bank, Bulgaria www.ccbank.mk Halkbank AD Skopje 4 Halk Bankasi, Turkey www.halkbank.mk Capital Bank AD Skopje Alfa Group, Bulgaria www.capitalbank.mk Komercijalna Banka AD Skopje Maja Stevkova Shterieva, M.A., www.kb.mk Bulgaria, Hari Kostov, Ilija Iloski Stater Banka AD Kumanovo Central Cooperative Bank, Bulgaria www.staterbanka.mk (93.72%) Macedonian Bank for Support of Assembly of the Republic of www.mbdp.mk Development Macedonia NLB Tutunska Banka AD Skopje NLB Group, Slovenia www.nlbtb.mk Ohridska Banka AD Skopje Société Générale, France www.ohridskabanka.mk Poshtenska Banka AD Skopje Macedonian post office www.postbank.mk Procredit Bank AD Skopje Procredit Group, Germany www.procreditbank.mk Sparkasse Bank AD Skopje German public bank, Germany www.sparkasse.mk Stopanska Banka AD Bitola Pavle Cvetanovski, www.stbbt.mk Natasha Nestorovska www.stbbt.mk www.stb.mk Stopanska Banka AD Skopje National Bank of Greece, Greece www.stb.mk TTK Banka AD Skopje Dragoljub Arsovski, Peter Heinz www.ttk.mk Molders 27 Univerzalna Investiciona Banka AD Skopje First Investment Bank, Bulgaria www.unibank.mk Ziraat Bank Ad Skopje Ziraat Bankasi, Turkey www.ziraatbank.mk

The largest number of banks active in the region are present in Skopje as well and actively participate in the financing and the offering of loan products for business entities in the city.

Table 4 Savings houses in Skopje Savings house Website Fulm www.fulm.com.mk Mozhnosti www.moznosti.com.mk Horizonti www.horizonti.org.mk Mak-BS- Skopje www.makbs.com.mk The savings houses Fulm, Mozhnosti, Horizonti and Mak-BS-Skopje also have their branch offices in the city. 5.7. Labor market The Republic of Macedonia and especially Skopje, as its capital, is the home of educated, highly qualified and ethical workforce which is available to investors. The average monthly paid gross-salary per employee in June 2015 ammounts 32 309 denars, respectively 527 euros5. (this sum includes: net salary, personal tax and social contributions for pension and health insurance). Minimal salary is defined for each occupation with collective agreements. The educational standards of the higher education technical institutions are the same as in the Western European countries. Employees support the continued education and lifelong learning and successfully complete specialized trainings. The government also supports the process of continuous training of the workforce, thus helping investors. The recently adopted Labor Law, prepared in line with the European Union standards, enables conditions for greater flexibility and offers the opportunities for diverse and flexible agreements, as well as flexible working hours. Also, the reforms in this area include the introduction of training programs, support to entrepreneurship, and improving the business climate in the country in general. Collective agreements, concluded at the state level, regulate employment rights, as well as the responsibilities and liabilities of the employers and the employees. The Law on employment and work of foreigners regulates the employment of foreign nationals in the Republic of Macedonia. According to the provisions of this law, foreign nationals or persons without a nationality can be employed in Macedonia after securing a work permit. The Employment Agency of the Republic of Macedonia issues the work permit upon the submission of a request by the employer.

5.7.1. Education In the educational system of Macedonia, primary and secondary education are mandatory, and the 28 English language is studied from the first grade. Apart from the standard secondary schools, there are also vocational schools where students acquire education in most diverse vocations. There are four state and a large number of internationally recognized private universities and colleges. Both vocational schools and universities offer training programs in accordance with the needs of the companies investing in Macedonia. Over the past several years, on average, 6% of the GDP of the country are invested in education, an average higher than the one in most countries part of the Organization for Economic Co- operation and Development (OECD). Each year, approximately 80% of the students who finish secondary education enroll in a faculty. In Macedonia, 45% of the population is under the age of 30, which represents an offer of a young, educated and specialized workforce.

5 State statistical office, Statement: Average monthly gross-salary, August, 2015 CITY OF SKOPJE GUIDE FOR INVESTORS

The City of Skopje, as the capital of the Republic of Macedonia, represents the most important educational center which has in its offer most diverse educational institutions. In the City of Skopje, there are 100 state primary schools, 31 secondary schools, one state university with 22 faculties, 9 private universities, 6 other higher education institutions and 3 international universities. In 2014 in Macedonia have graduated 9863 students, of whom 7 746 at from the state university, 2 094 from the private universities and 23 from the religious faculties6 . The profile of students graduated from the state university is presented in the following chart:

Picture 2 Students graduated from the state university in Skopje in 2014

The number of regular secondary schools in the City of Skopje totals 31, in which in the academic year 2013/2014 26,998 students enrolled organized in 1,006 classes. The number of students who finished the secondary school is given below, by the vocation they have been trained in. Table 5 Students who finished secondary education by school preparation 29

*Source: State Statistical Office

6 State Statistical Office, Graduated students at the Schools and faculties, 17.06.2015 From the chart, one can see that more than 60% of the students who finished secondary education in the City of Skopje have been trained in vocational education: • Health stream • Textile and leather processing stream • Agricultural-veterinary stream • Forestry-wood processing stream • Economic-legal and trade stream • Catering-touristic stream • Chemical-technological stream • Construction-geodesy stream • Construction stream • Mechanical stream • Traffic stream • Electro-technical stream • Automotive technology stream • Food production stream Furthermore, 5 private educational institutions offering curricula in more languages and different degrees of education were identified with the analysis of the educational system, and they are: 1. Nova international schools – educational activities for children from 3 to 5 years, primary and secondary education – English 2. QSI International School of Skopje – preschool, primary and secondary - English 3. 5th private high school - secondary education - Macedonian, Albanian and English 30 4. International high school – Skopje - secondary education - Macedonian and English 5. Private – secondary education - Macedonian and English Taking into consideration the aforementioned, it can be concluded that from the educational aspect, in the City of Skopje there are no barriers for foreign and domestic investors.

5.7.2. Activity of the population According to the data of the State Statistical Office, in the IV quarter of 2014, the active population in the Republic of Macedonia totaled 916,416 persons, of whom 696,046 were employed, and 265,370 were unemployed. The activity rate in this period was 57.4%; the employment rate was 41.5%, while the rate of unemployment amounted to 27.6%. CITY OF SKOPJE GUIDE FOR INVESTORS

Table 6 Active population according to education Active population according to education Education Active population Employed Unemployed

2014/IV 2014/IV 2014/IV Total 961 416 696 046 265 370 Without education 5 312 (2871) (2442) Unfinished primary 20 490 13 521 6 969 education Primary education 204 101 144 258 59 843

3-year secondary 88 751 59 066 29 685 education 4-year secondary 432 530 310 507 122 024 education College education 23 981 18 824 (4796) 5 157 186 251 146 999 39 251 Higher education 186 251 146 999 39 251

Inclusive of 31 March 2015, 21,230 unemployed persons were registered at the Employment Service Agency of the Republic of Macedonia in the City of Skopje. The following chart gives the structure of the unemployed persons by education.

Picture 4 Structure of unemployed persons by education

31

The following table lists the rates of activity, employment and unemployment for the Skopje region for 20147.

7 Source: Statistical data base Table 7 Population activity rates Activity rate 55.3 Employment rate 39.1 Unemployment rate 29.3

5.7.3. Average salary in the Republic of Macedonia According to the data from the State statistical office, the index of the paid average monthly net-salary per employee, in June 2015, in regards to June 2014, is 103.7. This increasing is due, primarily, to the increasing of the paid average monthly net-salary per employee in the sectors: Arts, entertainment and recreation (23.6%), Other service activities (11.5%) and Mining and rock extraction (8.6%). Decreasing of the paid average monthly net-salary per employee, in regards to the previous month, is noticed in the sectors: Professional, scientific and technical activities (7.0%), Supply with electrical energy, gas, steam and air conditioning (7.0%) and Activities related to real estate (5.0%). The paid average monthly net-salary per employee in June 2015 is 22 025 denars. According to the data of the State Statistical Office, the calculated amount of 50% of the average monthly salary per employee for the month of April 2015 at the sector level totals:

Table 8 Calculated amount of 50% of the average monthly salary per employee 01. Crop and animal production, hunt and related service occupations 9,771 02. Forestry and forest exploitation 11,886 03. Fishing and aquaculture 7,698 05. Mining of coal and lignite 14,339 32 07. Mining of metal ores 18,759 08. Other mining and quarrying 14,571 09. Support activities for mining 13,213 10. Manufacture of food products 12,206 11. Manufacture of beverages 15,501 12. Manufacture of tobacco products 14,538 13. Manufacture of textiles 9,381 14. Manufacture of wearing apparel 8,377 15. Manufacture of leather and related products 7,795 16. Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles 9,154 of straw and plaiting materials 17. Manufacture of paper and paper products 12,370 18. Printing and reproduction of recorded media 12,672 19. Manufacture of coke and refined petroleum products 11,010 CITY OF SKOPJE GUIDE FOR INVESTORS

20. Manufacture of chemicals and chemical products 20,451 21. Manufacture of basic pharmaceutical products and pharmaceutical preparations 27,983 22. Manufacture of rubber and plastic products 10,912 23. Manufacture of other non-metallic mineral products 19,032 24. Manufacture of basic metals 16,029 25. Manufacture of fabricated metal products, except machinery and equipment 14,957 26. Manufacture of computer, electronic and optical products 15,431 27. Manufacture of electrical equipment 12,442 28. Manufacture of machinery and equipment n.e.c. 11,867 29. Manufacture of motor vehicles, trailers and semi-trailers 11,117 30. Manufacture of other transport equipment 19,292 31. Manufacture of furniture 9,089 32. Other manufacturing 19,883 33. Repair and installation of machinery and equipment 14,796 35. Electricity, gas, steam and air conditioning supply 26,958 36. Water collection, treatment and supply 14,229 37. Sewerage 10,772 38. Waste collection, treatment and disposal activities; materials recovery 13,542 39. Remediation activities and other waste management services 6,445 41. Construction of buildings 11,337 42. Civil engineering 14,967 43. Specialized construction activities 14,007 45. Wholesale and retail trade and repair of motor vehicles and motorcycles 16,451 46. Wholesale trade, except of motor vehicles and motorcycles 16,488 47. Retail trade, except of motor vehicles and motorcycles 11,866 49. Land transport and transport via pipelines 12,309 51. Air transport 31,209 52. Warehousing and support activities for transportation 26,336 33 53. Postal and courier activities 16,842 55. Accommodation facilities 12,097 56. Food and beverage service activities 9,263 58. Publishing activities 16,265 59. Motion picture, video and television program production, sound recording and music publishing 18,308 activities 60. Broadcasting activities 16,030 61. Telecommunications 31,875 62. Computer programming, consultancy and related activities 30,949 63. Information service activities 23,096 64. Financial service activities, except insurance and pension funding 29,149 65. Insurance, reinsurance and pension funding, except compulsory social security 26,548 66. Activities auxiliary to financial service and insurance activities 28,111 68. Real estate activities 17,893 69. Legal and accounting activities 23,725 70. Activities of head offices; management consultancy activities 19,974 71. Architectural and engineering activities; technical testing and analysis 17,306 72. Scientific research and development 20,514 73. Advertising (commercials and propaganda) and market research 24,130 74. Other professional, scientific and technical activities 21,338 75. Veterinary activities 11,436 77. Rental and leasing activities 14,916 78. Employment activities 10,581 79. Travel agency, tour operator, reservation service and related activities 12,551 80. Security and investigation activities 9,147 81. Services related to building maintenance and landscape arrangement and landscape maintenance 9,523 activities 82. Office administrative, office support and other business support activities 12,905 84. Public administration and defense; compulsory social security 19,176 85. Education 16,305 86. Human health activities 19,312 87. Social work activities with accommodation 13,720 88. Social work activities without accommodation 12,073 90. Creative, arts and entertainment activities 15,885 91. Libraries, archives, museums and other cultural activities 15,088 92. Gambling and betting activities 12,071 93. Sports activities and amusement and recreation activities 13,093 94. Activities of membership organizations 24,264 95. Repair of computers and personal and household goods 16,668 96. Other personal service activities 11,797 34 The monthly personal exemption totals 7,320 denars.

5.7.4. Expenditures of employers The monthly average of the expenditure of the employer per employee in the Republic of Macedonia 2008 was 26,523 denars8 . The highest monthly average of expenditures of the employer per employee in the Republic of Macedonia is recorded in the sector financial intermediation and it totals 57,065 denars. In 2008, the annual average of the expenditures of the employer per factually executed hour, in the Republic of Macedonia totaled 173 denars. The total annual average of factually executed hours per employee in the Republic of Macedonia totals 1,845 hours.

8 Source: State statistical office, Statement, Expenditures of employer per employee, 2010 CITY OF SKOPJE GUIDE FOR INVESTORS

Table 9 Annual average expenditures per employee Mining and quarrying 444,389 Processing industry 252,277 Electrical energy, gas and water supply 490,371 Construction 251,506 Wholesale and retail trade, repair of motor vehicles and motorcycles and objects for personal use and 250,686 household use Hotels and restaurants 240,457 Traffic, storage and communications 374,374 Financial intermediation 684,786 Real estate activities, leasing and business activities 362,300 Public management and security, compulsory social security 449,601 Education 338,175 Health and social work 341,852 Other communal, cultural, general and personal services activities 315,284 Average 318,273

6. Infrastructure All roads in South-Eastern Europe cross in the Republic of Macedonia, which makes it an ideal transit and distribution center for products for the European market. The developed road and railway infrastructure, in combination with the small area of the country enables access to every inhabited place in Macedonia in less than 3 hours. The City of Skopje, as the capital of the country, has an excellent road, railway and airway connectedness with all European countries.

6.1. Road infrastructure 35 The Republic of Macedonia is characterized by a well developed road network with total length of 14.199 km, including motorways, national roads, regional and local roads. The main axes of the state road network are the two Pan-European corridors, Corridor VIII (east-west) and Corridor X (north- south). The state continuously invests in its road infrastructure in accordance with the National transport strategy, prepared by the Ministry of Transport and Communications, assisted by the EU. New projects and maintenance of the network are done in accordance with the annual program for public investments. According to the current legislation, the Public Enterprise for State Roads is the authority responsible for managing, construction, reconstruction, maintenance and protection of the state roads in the Republic of Macedonia. At the moment, the total length of the road network in the country is 14,199 km9 , of which 259 km are classified as motorways, 908 km are national roads, 3,778 km are regional roads, 553 km are international roads, and 9,513 are local roads. Just like in other countries, in the Republic of Macedonia, the road transport has the largest share in the total transport of goods and passengers. In the structure of goods transport which is done on the roads in the Republic of Macedonia, the national transport dominates over international and transit transport. Road transport also prevails over railway transport. The road network in the Skopje region is consisted of: national, regional and local roads. The national and regional roads have a total combined length of 361.46 km, of which 339.74 km with asphalt, 5.17 km are macadam roads, and the remaining 16.55 km are dirt roads or have not been opened. Regarding the infrastructure, the City of Skopje is located at the axis of one of the most important international traffic and communications corridors, the Pan-European Corridor 10 (north-south). The table below gives an overview of the distances and the prices for transportation from the City of Skopje to different destinations in the region and in Europe.

Table 10 Distances and prices of transport of a 20-tonne truck from Skopje Destination Distance (km) Hours Borders From Skopje EUR Kragujevac, Serbia 320 6 1 670 Pitesti, Romania 730 8 2 1,050 Budapest, Hungary 800 11 2 1,000 Gebze, Turkey 850 12 2 1,100 Ljubljana/Novo Mesto, Slovenia 950 15 3 1,000 Vienna, Austria 1,200 14 2 1,250 Ostrava, Czech Republic 1,300 16 2 1,550 Munich, Germany 1,370 17 2 1,350 36 Aksaray, Turkey 1,470 18 2 1,600 Milan, Italy 1,500 19 3 1,350 Stuttgart, Germany 1,600 19 2 1,450 Frankfurt, Germany 1,700 20 2 1,500 Cologne, Germany 1,900 24 2 1,550 Batilly, France 2,000 26 2 1,700

9 Statistical annual publication of the Republic of Macedonia, 2015 CITY OF SKOPJE GUIDE FOR INVESTORS

6.2. Railway infrastructure The railway infrastructure in the Republic of Macedonia was established in 1873 with the first railway track from Skopje to Thessaloniki in Greece. Today the railway network in Macedonia is about 900 km. The railway network in Macedonia is connected to the north and to the south with the railway networks of Serbia and Greece. The total length of the railway infrastructure of the Corridor VIII (east-west) is around 306 km on the territory of Republic of Macedonia and 154 km (or 50%) of the railway line have been constructed and operational. The remaining 89 km or 29% of the total length remain to be built and to be connected with Bulgaria. 63 km or 21% of the total length of the link with Albania remain to be built. Railway traffic is managed by the public enterprise “Makedonski Zheleznici [Macedonian Railways]”, and at the moment, the company is the sole provider of railway services in the country. The modernization of the building of railway infrastructure is based on the national program and the three-year business plan of the Public Enterprise MZh Infrastruktura Skopje. The company has a significant park of its own wagons available, which enable: • Conventional transport of goods in opened and closed wagons; • Transport of bulk goods (wheat, triturated ore, etc.) • Transport of liquid fuels in specialized wagons; • Transport of goods in containers on special plateau wagons; • Transport of goods in regular scheduled trains; • Transport of special shipments; • Transport of live animals; • Transport of dangerous materials.. M.Zh.Transport has a container terminal in Skopje Tovarna, which has the appropriate technical 37 equipment, which enables the loading and unloading of loaded and empty containers. Container transport can be done to every station of M.Zh.Transport, open for freight traffic if the loading and unloading operations of the container are done on the wagon itself. M.Zh.Transport offers logistical services in the area of conventional transport of wagons and containers along the railways in Macedonia and abroad. Through the Corridor 10 (Tabanovci – Gevgelija, on the Macedonian territory), in the south there is a connection with the Thessaloniki port, and in the north there is a connection with the Balkan countries and Europe. 6.3. Airports There are two international airports in the Republic of Macedonia: in Skopje and in Ohrid. Through these airports, Macedonia and the City of Skopje are connected with regular direct connections to several larger European transport centers: London, Vienna, Rome, Zurich, Dusseldorf, Prague, Budapest, Ljubljana, Zagreb, , , etc. The Turkish company “TAV” has been the new operator and manager of the Macedonian airport system since 2008, following the granting of a 20-year concession from the Macedonian government. Under the concession, “TAV” is to modernize the international airports Alexander the Great in Skopje and St. Paul in Ohrid, and to build a new cargo airport in Shtip. The proximity of the Alexander the Great Airport, which is at a distance of only 20 km, is of great importance for the City of Skopje. The Alexander the Great Airport, apart from transport of passengers, offers the following services as well10: • Cargo handling for passenger aircraft, • Cargo handling for cargo aircraft, • Road feeder service (RFS) for air and other cargo. All these activities are carried out in accordance with IATA standards. • Handling cargo and mail, • Handling special shipments (DG, VAL, AVI, etc.). • Document preparation, • X-ray examination of goods, • Customs control, • Border inspection control, • Servicing of transit shipments by truck/aircraft, • other services by arrangement. 38 The Cargo Operations carries out logistics services before and after air transport (landside handling): • Preparation of shipments for air transport, • Customs warehousing, • Repackaging of goods. 6.4. Maritime traffic Macedonia is a land-locked country. The access to the neighboring ports is enabled through the roads and railway links. The closest ports are in Thessaloniki, at about 100 km from the border crossing with Greece in Gevgelija, and in Durres, at about 150 km from the border crossing with Albania in . Passenger transport exists on the Lake Ohrid with smaller ships, from 25 to 150 seats.

10 Source: http://skp.airports.com.mk/default.aspx?ItemID=433#sthash.5m3ib5JQ.dpbs (website of Alexander the Great Airport) CITY OF SKOPJE GUIDE FOR INVESTORS

6.5. Telecommunications The Macedonian telecommunications sector is considered as one of the most liberalized ones. At the moment, landline telephone services are offered by eight companies, while mobile telephony is in constant development. The presence of three mobile operators guarantees quality and availability of services. Macedonia pursues international trends in the development of its Internet communications and enables easy and fast Internet access via numerous Internet providers. In order to provide telecommunication services and to realize telephone connections on the territory of the City of Skopje, there is a developed and contemporary telecommunications network. The mobile phone network on the territory of the city is fully covered by all mobile operators, and at the same time there is internet access (cable, ISDN, wireless) on the whole territory. 6.6. Energy In the City of Skopje and in Macedonia in general, there is a broadly developed network for distribution and supply of electrical energy. EVN Macedonia is the company which conducts the distribution and supply of electrical energy. In 2006, the company entered the Macedonian market as a part of the EVN group. Energy sector development is a priority in Macedonia, especially taking into consideration the fact that 70% of the technically available hydro-potential is open for current and future investors. 6.7. Oil and gas pipelines Gas pipelines The gas pipeline system, with a capacity of 800 million m³ annually, is part of Corridor 8. The length of the main gas pipeline is around 98 km, and it runs from the border with Bulgaria to Skopje. The distribution network already in place is 26 km long and the city network is 31.5 km long. 39 Planned development of the gas pipeline network in the Republic of Macedonia is centered on constructing new facilities for the production of electric and/or heating power, including direct supply to potential consumers, as well as upgrading the gas pipeline network in the region and beyond. Oil pipeline The Thessaloniki (Greece) – Skopje (Macedonia) 212.6 km oil pipeline is used for transport of raw oil from the port of Thessaloniki to the Skopje refinery. The oil pipeline was built in 2002 along Corridor 10 and its capacity is 360 m³/h, which represents 2.5 million tons annually. 6.8. Water supply The City of Skopje is supplied with spring water using the city water supply system and has a full coverage with water supply network. PE “Water Supply and Sewerage” is an enterprise which manages water supply and sewerage of waste water in the City of Skopje, i.e. the main activities of the enterprise are: collection, treatment and supply of water and removal of waste water. 6.9. Construction permit cost When greenfield investment is considered, the purchasing land prices range from 1 Euro/m2 in rural areas up to 1000 Euro/m2 when purchased from private owners, depending on location and type of investment. In case of municipality or state ownership of the land, the bidding price starts from 1Eur/ m2. The investor must pay fees for connection to the communal infrastructure and water supply.

Table 11 Cost for preparation of construction land / expressed in Eur/м2 Municipality Zone Residential Commercial building building City of Skopje 1 (Centar, Karposh, part of Kisela Voda, part of 129 153 Aerodrom) 2 (part of K. Voda, part of Aerodrom, part of Gazi Baba, 113 137 part of Chair) 3 (part of Gazi Baba, part of Cair) 100 113 4 (part of G.Petrov, Shuto Orizari, part of Butel) 93 97

Butel suburban 2,5 10

Gjorce Petrov suburban 10 15

Saraj 1 Raovikj, Panicar 0 0 40 2 Bojane, Kopanica, Semeniste, Bukovikj, Gorna Matka, 5 8 Dorce, 3 Sisevo, Glumovo, Krusopek, Grcec, Rasce, Radusa, 8 11 4 Saraj, , Kondovo 10 15,5 *Source: Agency for foreign investments and export promotion. CITY OF SKOPJE GUIDE FOR INVESTORS

Costs for commercial space lease in Skopje range from 10 euro to 12 euro per m2 per month, depending on the type of the building and the location of the venue.

Table 12 Cost of premises in the City of Skopje Purpose/Municipality (prices in EUR/m2) Karpos Centar Aerodrom Kisela Voda Housing 97.6 97.6 65 65 Residential space 130.08 130.08 55.28 55.28 Commercial and business centers 97.6 90 81.3 73.2 Production facilities / halls 1 1 1 1 Public buildings 22.8 22.8 19.5 19.5 Sport and recreation 71.54 71.54 24.70 20.80 Infrastructural buildings 71.54 71.54 52 42.28 *Source: Agency for foreign investments and export promotion.

7. Locations for investments in the City of Skopje 7.1. Locations for greenfield investments

7.1.1 Technological industrial development zone – TIDZ 1 Skopje The total surface area of the TIDZ Skopje 1 is 140 hectares. TIDZ Skopje 1 occupies a first class location - 10 km east of the capital Skopje, on the crossroad of the Corridors 8 and 10. TIDZ Skopje 1 has direct highway exchange with highway E-871 and is just 3.3 km away from an E-75 Highway access road. Alexander the Great International Airport is 10 km away from the TIDZ Skopje 1 (1 km distance by air). 41 The airport is suitable for passenger and cargo transport, as well as for intercontinental flights. The nearest national rail station is in , at a distance of 6.5 km from the Zone. For the purpose of maritime transport, the nearest sea port is in Thessaloniki, 220 km away from TIDZ Skopje 1. Specifications of property

Location 10 km to the east of the City of Skopje (at the crossroad of 140 хектари Corridors 8 and 10) Size 140 hectares Ownership 100% state-owned Municipality Type of land Construction land/Greenfield Transport

Road network Direct access to E-871 highway 3.3 km distance from E-75 highway 10 km, меѓународен аеродром Александар Велики (1 km воздушна оддалеченост) Air traffic 10 km, international airport Alexander the Great (1 km air distance) 220 km, Солун Railway traffic 6.5 km, railway station Miladinovci Maritime traffic 220 km, Thessaloniki

Utilities Electricity provider: EVN Macedonia.

Electricity costs and tariffs for medium voltage users (denars) Medium Voltage Users Measure Unit Tariff time 35kV 20 kV or 10 kV or 6 kV Power kW 1003.53 773.98 Energy kWh HT 2.95 3.25 LT 1.52 1.59 kVARh HT 0.77 0.71 LT 0.37 0.44 Water provider: PE Vodovod - Ilinden The price of water is 48 MKD/m3, and 5% VAT is not applicable. Water is bacteriologically clean and tested twice a month by the Institute for Health Protection. Note: This price is determined by the Public Enterprise “Vodovod” of . 42 Gas provider: Directorate for TIDZ The price of gas is 29,277 MKD/Nm³, and 18% VAT is not applicable. Note: This gas price is for October 2014, and it is revised every month by the Energy Regulatory Commission of the Republic of Macedonia. Telecommunications Most of the telecommunication companies present on the Macedonian market offer their services in the TIDZ Skopje 1. The operators provide the following services: · Voice services · Data services CITY OF SKOPJE GUIDE FOR INVESTORS

· Internet · Additional services 7.1.2 Technological industrial development zone – TIDZ 2 Skopje The total surface area of TIDZ Skopje 2 is 95 hectares. TIDZ Skopje 2 is located immediately right next to TIDZ Skopje 1, 10km to the east of the City of Skopje, on the crossroad of the Corridors 8 and 10, only 4.6 km away from the access road to the E-75 Highway. Alexander the Great International Airport is 11 km away from the TIDZ Skopje 2 (2 km air distance). The airport is suitable for passenger and cargo transport, as well as intercontinental flights. The nearest railway station is Miladinovci, which is located 7.8 km from the zone. For the purposes of maritime transport, the nearest sea port is in Thessaloniki, 220 km away from TIDZ Skopje 2. Specifications of property

Location 10 km to the east of the City of Skopje (at the crossroad of Corridors 8 and 10) Size 95 hectares Ownership 100% state-owned Municipality Ilinden Type of land Construction land/Greenfield Transport

Road network Direct access to E-871 highway 4.6 km distance from E-75 highway Air traffic 11 km, international airport Alexander the Great (2 km air distance) Railway traffic 7.8 km, railway station Miladinovci Maritime traffic 220 km, Thessaloniki 43

Utilities Electricity provider: EVN Macedonia.

Electricity costs and tariffs for medium voltage users (denars) Medium Voltage Users Measure Unit Tariff time 35kV 20 kV or 10 kV or 6 kV Power kW 1003.53 773.98 Energy kWh HT 2.95 3.25 LT 1.52 1.59 kVARh HT 0.77 0.71 LT 0.37 0.44 Water provider: PE Vodovod - Ilinden The price of water is 48 MKD/m3, and 5% VAT is not applicable. Water is bacteriologically clean and tested twice a month by the Institute for Health Protection. Note: This price is determined by the Public Enterprise “Vodovod” of Ilinden Municipality. Gas provider: Directorate for TIDZ The price of gas is 29,277 MKD/Nm³, and 18% VAT is not applicable. Note: This gas price is for October 2014, and it is revised every month by the Energy Regulatory Commission of the Republic of Macedonia. Telecommunications Most of the telecommunication companies present on the Macedonian market offer their services in the TIDZ Skopje 2. The operators provide the following services: • Voice services • Data services • Internet • Additional services

The detailed list of locations for greenfield investments is provided as addendum 1 to the Guide. 7.2. Locations for brownfield investments The City of Skopje has a large number of locations available for interested domestic and foreign investors 44 in the City of Skopje. On the web page of the Agency for foreign investments and promotion of export in the Republic of Macedonia (http://www.investinmacedonia.com/) exists a base with locations for brownfield which regurarly is updated and where the latest data can be found.

Table 13 Locations for brownfield investments on the territory of the City of Skopje Purpose Number of buildings Surface area of Total surface area (m2) buildings (m2) Industrial hall 1 930 9 710 Textile factory 1 / 2400 Wholesale market 1 / 70 000 Factory 1 / 3 339 Administrative building 1 / 43 145 CITY OF SKOPJE GUIDE FOR INVESTORS

Construction land and production 4 3 150 3 943 buildings, Lesnina Struzanka textile factory One floor 13 21 Administrative building, AD Gazela 1 / 804 AD Mavrovo, service, workshop, 10 2045 2044 warehouse AD Mavrovo Offices 5 / / AD Mavrovo; car service, workshop, 10 9148 9148 garage Mechos, administrative building / / 177 К-15 Production, administrative 1 / 262 building Urban Group, administrative building, 1 142 961 hotel AGD Tehnika, administrative building 1 / 939 Euro Aktiva, warehouse 1 3890 13420 Prvomajska, multi-purpose building 1 3800 3500 Maliot princ, multi-purpose building 1 2920 2920 Vuchko, multi-purpose building 1 3700 3500 Prototip, office premises 2 2855 / Building, multi-purpose building 1 1500 400 Magistrala, multi-purpose building 1 1200 3500 Vizbegovo, multi-purpose building 1 1100 1850 Office space 1 168 / Office space 1 721 721 Office space – exhibition room 1 427 1398 Office space – surgery 1 532 / Tehnobravarija, office space, service 1 73 / Former salon of MAZDA, 1 669 2138 45 Sales and servicing of cars 1 669 2138 State inspectorate for urban planning 1 1341 760 Office space / 222 / Lottery of Macedonia, office space 1 / 26 House with a garden, housing space 1 213 901 Storage space 1 1641 1827 Office space, storage / 31 / Office space with additional 6 1473 3792 warehouse halls Mill, production facility 1 817 1972 Office space, apartments 1 54 / Hemteks site 2 1478 5727 Storage space and production facility 10 28230 58928 Mak Vozila DOOEL 1 533 532 Industry, trade, catering 2 1478 5727 Tehnobravarija, office space 1 73 73 Office space at Bit Pazar clinic 1 533 532 Office space MAZDA, 1 / 939 Sales and servicing of cars 1 669 2138 Office space 1 722 721 Business building / / 177 Production facility 3 79 132 AGD Tehnika Skopje, administrative 1 / 939 building Urban Group, Hotel 1 142 961 Administrative building 1 / 262 Mechos, Business space / / 177 Lesnina, Construction land, 4 3150 3943 administrative space and production facility Mavrovo Inzenering, administrative 1 / 1193 building Factory M & A Beverages, 1 1858 8916 administrative building, production facility and boiler room Business building, administrative 1 2891 14754 part, sales space, presentation hall, shop and office furniture *Source: Agency for foreign investments and export promotion.

46 More detailed information for each of the proposed locations for investments is listed on the website of the Agency for foreign investments of the Republic of Macedonia at the link: http://brownfields.investinmacedonia.com/index.php/list?view=allproperties&ipquicksearch=1. CITY OF SKOPJE GUIDE FOR INVESTORS

8. Useful addresses for investors Website Institution/organization http://www.investinmacedonia.com/index.php Agency for foreign investments and export promotion of the Republic of Macedonia http://www.skopje.gov.mk/ City of Skopje www.roads.org.mk Public enterprise for roads http://skp.airports.com.mk/default. Alexander the Great Skopje Airport aspx?ItemID=345#sthash.FSCCs0IS.dpbs http://mztransportad.com.mk/index.php Macedonian railways (Makedonski zheleznici transport AD Skopje) http://www.stat.gov.mk/ State Statistical Office of the Republic of Macedonia http://www.msi.gov.mk/ Cabinet of the minister without portfolio responsible for attracting foreign investments http://www.fez.gov.mk/doma.html Directorate for technological industrial development zones www.avrm.gov.mk Employment Service Agency of the Republic of Macedonia

http://fondzainovacii.mk/ Innovations fund https://www.crm.com.mk/DS/ Central Registry http://www.filmfund.gov.mk/ Film Agency of the Republic of Macedonia

47 Annex 1: Investment locations in the City of Skopje

INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF AERODROM Location: Industrial zone B CP number 2.6 - Land area – construction parcel: 2795 m2 - Plan of construction area: 1045 m2 - Maximal construction surface area of all floors: 8360 m2, H=23.2m, G+6+A - Basic purpose: Light Industry G2 - At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure. CP number 2.7 - Land area – construction parcel: 1297 m2 - Plan of construction area: 548 m2 - Maximal construction surface areas of all floors: 4384 m2, H=23.2m, G+6+A - Basic purpose: Light Industry G2 - At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure. 48 Location: Nearby the Jane Sandanski Sports Hall

- 1 construction parcel with D3 purpose – sport and recreation (next to the Jane Sandanski Sports Hall) CITY OF SKOPJE GUIDE FOR INVESTORS

INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF BUTEL Industrial zone “Rasadnik” offers 95 locations for facilities for development of small businesses and light industries

The Skopje-Veles Northern Bypass (Ring road) highway passes through this area connecting it with the City of Skopje and the surrounding areas, as well as with the rest of the country. The basic advantages 49 of the site are the proximity of the City of Skopje, the good traffic connection with the city and the surrounding regional and national roads. The terrain is flat and easily accessible. INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF GAZI BABA Location: Industrial zone East – Skopje Fair

Area: 23.38 ha Period for preparation of complete technical documentation: 6 months Construction period: 48 months Distance from the center of Skopje: 2km Distance from the Skopje railway station: 1.5km

50 Commercial and business facilities:14.02 ha Wholesale: 6.5 ha Hotel complex: 2.10 ha CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Municipality building and part of the area around the faculties

Area: 13.95 ha Period for preparation of complete technical documentation: 6 months Construction period: 24 months Distance from the center of Skopje: 2km Distance from the Skopje railway station: 1.5km Public institutions: 4.63 ha Infrastructure: 3.82 ha 51 Protected greenery: 6.30 ha Location: Sports and recreation center Zhelezara

ПArea: 15.04 ha Period for preparation of complete technical documentation: 6 months Construction period: 48 months Distance from the center of Skopje: 2km Distance from the Skopje railway station: 1.5km Accommodation capacities (hotels): 70,392 m2 Health institutions: 9.850 m2 Sports and recreation: 97,657 m2 52 Parking: 11,769 m2 CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Madzari Hipodrom 2 – settlement

Area: 35.93ha Period for preparation of complete technical documentation: 6 months Construction period: 48 – 72 months Distance from the center of Skopje: 10.5km Distance from the Skopje railway station: 10km Accommodation in houses and apartments: 15.1 ha Commercial and business facilities: 0.46 ha Public institutions: 4,080 m2 53 Religious buildings: 335 m2 Location: Sports and recreation center Hipodrom

ПArea: 42.23 ha Period for preparation of complete technical documentation: 6 months Construction period: 48 months Distance from the center of Skopje: 10.5km Distance from the Skopje railway station: 10km Accommodation, temporary (hotels): 0.86 ha Commercial and business facilities: 2.81 ha Sports and recreation: 61,968 m2 54 CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Industrial zone – Highway Interchange

Area: 270 ha Distance from the center of Skopje: 15 km Distance from the Skopje railway station: 15 km Distance from the airport: 10 km Production, distribution and services: 135.28ha Commercial and business facilities: 72.41 ha

55 Location: Sports and recreation center Smilkovsko Lake

Area: 68,31ha Distance from the center of Skopje: 15 km Distance from the Skopje railway station: 15 km Distance from the airport: 10 km Hotel complex: 8.40 ha Accommodation (camps): 7.41ha Sports and recreation: 18.90 ha

56 CITY OF SKOPJE GUIDE FOR INVESTORS

Location: House of Culture – Chento

Area: 2,975 m2 Total construction area: 8,540 m2 Period for preparation of complete technical documentation: 6 Construction period: 48 months Distance from the center of Skopje: 7 km Distance from the Skopje railway station: 6 km Small commercial facilities, shops, administration, sports

57 INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF GJORCHE PETROV

Location: M3 Deksion UM1

The surface area of the location totals 3088m2, the construction area plan is 1248m2 in size, and the total surface area of the floors is 3744m2. The height of the building from the protected sidewalk to the maximal height of the cornice is 10.35m, and the floor structure for the building is G+2. At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure.

58 CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Sharplaninska Street

There are 10 locations with different surface areas, dimensions and number of floors. Their total surface area is 36,875 m2, and at the locations in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure. Location: South 3

59

ПThe surface area of the site totals 212,320m2, the building plan surface area is 106,160m2, whereas the total surface of floor area is 212,320m2. The height of the building from the protected sidewalk to the maximal height of the cornice is 10.20m, and the floor structure for the building is G, G+1, G+2. At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure. INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF KARPOSH Location: Zajchev Rid

60

At this location, buildings with the following purpose have been foreseen: • Family house with garden (construction area 2,131.80m2) • Commercial and business building (construction area 17,976.86m2) • Collective housing buildings (construction area 4,676.58 m2) • Family house with garden (construction area 1,284.20m2) CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Zhdanec

61 Location: Central complex by the Vardar River

62

The “Central complex near Vardar” site is a residential complex next to the Vardar River, close to the center of the City of Skopje. In its vicinity, there is the Aleksandar Palace Hotel on five floors with 160 rooms and a commercial part. CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Central City Park block 1

63 Location: 1-block 1 “Karposh 3”

64 CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Krivi Dol

65 INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF KISELA VODA Location: Crniche 2 – Sport terrains zone – Urban block 22

66 - Number of construction parcel BP 22.72; 22.721 and 22.722 - Total surface area of the construction parcel 18,900.00 m2 (of which: ownership of the Republic of Macedonia 2,209 m2, ownership of the Kisela Voda Municipality 12,255 m2, ownership of the Assembly of the Kisela Voda Municipality and FAS Slavija 1,066 m2, private ownership 1,854 m2, and private ownership with the right to use until sequestration 1,441 m2) - Purpose of the land (basic class) – Sport and recreation - Numbers of cadastre parcels contained in the construction parcel: CP 1895/1, CP 1895/2, CP 1895/3, CP 1895/4, CP 1895/5, CP 1895/6, CP 1895/7, CP 1895/8, CP 1911/3 and CP 1911/4 - Urbanized – outside of the central city area, - Access to existing infrastructure, - Period of preparation of complete documentations – 4 to 6 months, - Period of construction – 1 year. CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Drachevo Village – block: Sports terrain zone – block V

- Number of construction parcel Block V - Total surface area of the construction parcel 36,000.00 m2 (ownership of the Republic of 67 Macedonia 36,000.00 m2) - Purpose of the land (basic class) – Sport and recreation - Numbers of cadastre parcels contained in the construction parcel: CP 9959 - Building surface: According to the architectural and urbanistic design plan prepared by AD for UAI “ZUAS” from Skopje - Urbanized – outside of the central city area, - Access to existing infrastructure, - Period of preparation of complete documentations – 6 to 8 months, - Period of construction – 18 months Location: Sports terrains zone

- Sports terrains D3 – FCU Usje - Number of construction parcel BP 22.72; 22.721 and 22.722 - Total surface area of the construction parcel 6.975,00 m2 (ownership of the Republic of Macedonia) - Purpose of the land (basic class) – Sport and recreation - Numbers of cadastre parcels contained in the construction parcel: CP 3675/13 - Urbanized – outside of the central city area, - Access to existing infrastructure, - Period of preparation of complete documentations – 6 months, - Period of construction – 1 year. 68 CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Tourist complex “Tri krushi”

- Purpose: small commercial and business activities - Dracevo CP No. 5074 /2 - Surface in m2 3,500

69 Location: Construction parcel UB1-A4

- Number of construction parcel UB1-А4 - Total surface area of the construction parcel 5,000.00 m2 (ownership of the Republic of Macedonia 5,000 m2) - Purpose of the land (basic class) – Temporary accommodation - Purpose of the land (description) – outside an urban area А4 - Numbers of cadastre parcels contained in the building parcel: CP 5169/2, CP 7644/2, CP 7644/3 and CP 7644/4 - Surface area for construction - Gross developed surface area 70 - Percentage of construction area 2.75% - Coefficient of land utilization - Maximal permitted height from 3.20 to 11.70 m - Floor structure G+2+A - Not urbanized outside of the central area - Period of preparation of complete documentation: 1 year - Period of construction: 2 years CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Construction parcel – Urban block 1

Information on construction parcel – Urban Block 1 - Number of construction parcel UB1-D3 - Total surface area of the construction parcel 3,500.00 m2 (ownership of the Republic of Macedonia 3,500 m2) - Purpose of the land (basic class) – small commercial and business activities - Purpose of the land (description) – outside an urban area use B1 - Numbers of cadastre parcels contained in the building parcel: CP 5074/2 - Surface area for construction - Gross developed surface area 71 - Percentage of construction area 1.10% - Coefficient of land utilization / - Maximal permitted height from 3.20 to 11.70 m - Floor structure G+2+A - Not urbanized outside of the central area - Period of preparation of complete documentation: 1 year - Period of construction: 2 years Information on construction parcel – Urban Block 1 - Number of construction parcel UB1-D3 - Total surface area of the construction parcel 9,997.00 m2 (ownership of the Republic of Macedonia 9,997 m2) - Purpose of the land (basic class) – Sport and recreation - Purpose of the land (description) – outside of an inhabited place D3 - Numbers of cadastre parcels contained in the building parcel: CP 5074/3 - Not urbanized outside of the central area - Period of preparation of complete documentation: 6 to 8 months - Period of construction: 18 months Information on construction parcel – Urban Block 1 - Number of construction parcel UB1-D3 - Total surface area of the construction parcel 560,260.00 m2 (of which: ownership of the Republic of Macedonia 560,079 m2 and private ownership 181 m2) - Purpose of the land (basic class) – Sport and recreation - Purpose of the land (description) – outside of an inhabited place D3 - Numbers of cadastre parcels contained in the building parcel: CP 5075/2, CP 5166/2, CP 7644/2, CP 5135/4, CP 5135/5, CP 5135/6 and CP 5135/7 - Not urbanized outside of the central area - Period of preparation of complete documentation: 18 months - Period of construction: 2 to 3 years Information on construction parcel – Urban Block 1 - Number of construction parcel UB1-D1 - Total surface area of the construction parcel 15,179.00 m2 (ownership of the Republic of Macedonia 15,179 m2) - Purpose of the land (basic class) – Parks and greenery 72 - Purpose of the land (description) – outside of an inhabited place D1 - Numbers of cadastre parcels contained in the building parcel: CP5074/2 - Not urbanized outside of the central area - Period of preparation of complete documentation: six to seven months - Period of construction: 2 years CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Construction parcel – Urban block 3

Information on construction parcel – Urban Block 3 - Number of construction parcel UB3-А4 - Total surface area of the construction parcel 155,000.00 m2 (of which: ownership of the Republic of Macedonia 137,379 m2 and private ownership 17,621 m2) - Purpose of the land (basic class) – Temporary accommodation – hotel complex А4 - Purpose of the land (description) – outside of an inhabited place А4 - Numbers of cadastre parcels contained in the building parcel: CP 5075/4, CP 6517, CP 6514/2, CP 6520, CP 6521, CP 6522, CP 6523, CP 6524, CP 6527/2, CP 6528, CP 6529, CP 6530, CP 6531/2, 73 CP 6532, CP 6533, CP 6534, CP 6535, CP 6536, CP 7647/2, CP 7647/2, CP 7606/2, CP 6493/2, CP 6493/3, CP 6487/2, CP 6504/3, CP 6504/3, CP 6505/2, CP 6515/2, CP 6518, CP 6519 и CP 6525, - Percentage of construction area 45% - Coefficient of land utilization C=0.67 - Maximal permitted height 8.70 m - Floor structure G+1+A - Not urbanized outside of the central area - Period of preparation of complete documentation: 2 years - Period of construction: 5 years INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF SARAJ Location: Sports – Recreation Center “Saraj”

The sports-recreational center Saraj is located at the entrance of the municipality. There is a football, a handball, a volleyball pitch and a tennis court. In the frames of the center, there is solid infrastructure for accompanying service and catering activities.

Location: Recreational lake “Treska”

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The Treska Recreational Lake is one of the more beautiful artificial lakes in the Skopje region. Its location, accessibility, the accompanying service and catering facilities make it of exceptional importance and CITY OF SKOPJE GUIDE FOR INVESTORS

attract a large number of visitors and investors interested in additional development and modernization of the lake.

Location: Industrial zone 402

The industrial zone is being developed into a modern space in which a dairy factory and a purchase center for fruit and vegetables operate. Additionally, there is a factory from the light industry for processing and repackaging of oils and lubricants. In this region, there are opportunities for additional development of the light industry, as well as production of vegetables.

INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY 75 OF CENTAR

Location: The Prolet site is located in the Municipality of Centar. It is located in the central part of the municipality and the City of Skopje. Very close to the site, there are the international railway and bus stations, very close to it is the Skopje clinical center and a large number of commercial, service and catering facilities. At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure. Location: Presveta Bogorodica

The Presveta Bogorodica site is located in the Municipality of Centar. It is located in the central part of the municipality and the City of Skopje. Very close to the site, there are numerous commercial, service and catering facilities, as well as a large number of scientific and educational institutions. At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure.

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Location: Bunjakovec 1

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Location Bunjakovec 1 is in the municipality of Centar. It is located in the central part of the municipality and the City of Skopje. In the immediate vicinity of the site, there are numerous commercial, service and catering facilities. At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure. Location: Mal Ring

Location “Mal Ring” is in the municipality of Centar. It is located in the central part of the municipality and the City of Skopje. In the immediate vicinity of the site is the Skopje square as well as numerous commercial, service and catering facilities. The mentioned location has existing infrastructure for: water, rainwater and sewage, electricity and telecommunications.

Location: Golem Ring Istok – Business Towers

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Location “Golem Ring Istok - Business Kuli” is in the municipality of Centar, located in the central part of the municipality and the City of Skopje. In the immediate vicinity of the site is the Skopje square as well as numerous commercial, service and catering facilities. CITY OF SKOPJE GUIDE FOR INVESTORS

At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure.

Location: Kapishtec – Geoloshki zavod Location Kapistec – Geoloshki Zavod is in the municipality of Centar, located in the central part of the municipality and the City of Skopje. In the immediate vicinity of the site is the Skopje Clinical Center as well as numerous commercial, service and catering facilities.

Location: Mirche Macan

79 Location “Mirce Macan” is in the municipality of Centar. It is located in the central part of the municipality and the City of Skopje. In the immediate vicinity of the site, there are the International Railway and Bus Stations, the Skopje Clinical Center is very close, as well as numerous commercial, service and catering facilities. At the location in question, there is existing infrastructure – water supply, atmospheric drainage, sewerage, electroenergetic and telecommunications infrastructure. INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF CHAIR Location: Skopje Sever Central part - East Urban module 25 CP 25.5 – Chair

- Number of construction parcel : CP 25.5 - Total surface area of the construction parcel: 2,721m2 - Purpose of the land (basic class): - Communal housing facility (CHF) Purpose of the land (description): - Class of purpose A2 communal housing facility - Compatible class of purpose commercial and business purposes B1 80 - Construction land not built on out of the central area subzone B - Numbers of cadastre parcels contained in the construction parcel: CP 1056/4, CP 2543/2, CP 1070/2, CP 1070/2, CP 1071/2 C.M. Chair - Surface of the parcel: 2,721 m2 - Construction surface: 964 m2 - Gross developed area: 4,820 m2 - Percentage of construction area: 35.0 % - Coefficient of land utilization: 1.8 C - Maximum allowed height: 16.20 m - Floor structure: / CITY OF SKOPJE GUIDE FOR INVESTORS

Location: part of contact zone – Mavrovka of monument ensemble SSCH

Urban module 1 CP 1.4 – Chair

- Number of construction parcel: GP 1.4 - Total surface area of the construction parcel: 155m2 - Purpose of the land (basic class): - Class of purpose B1 – small commercial and business Purpose of the land (description): 81 - Construction land not built on out of the central area subzone B - Numbers of cadastre parcels contained in the construction parcel: CP 8891/1 C.M. Centar 1 - Surface of the parcel: 155m2 - Construction surface: 155m2 - Gross developed area: 155m2 - Percentage of construction area: According to the rulebook of standards - Coefficient of land utilization: According to the rulebook of standards - Maximum allowed height: 4.0 m - Floor structure: / Location: Skopje Sever Central part - East Urban module 7 CP 7.1 – Chair

- Number of construction parcel: GP 7.1 - Total surface area of the construction parcel: 1,415 m2 - Purpose of the land (basic class): B – Communal housing facilities (CHF) Purpose of the land (description): - Communal housing facilities (CHF) - Purpose of the land (description): 82 - Class of purpose A2 communal housing facilities - Compatible class of purpose commercial and business purposes B1 - Construction land not built on out of the central area subzone B - Numbers of cadastre parcels contained in the construction parcel: CP 3110/2, CP 3125/2, CP 3127/2, C.M. Chair - Construction surface: 572 m2 - Gross developed area: 2288 m2 - Percentage of construction area: 40% - Coefficient of land utilization:1.6 C - Maximum allowed height: 13.2 m - Floor structure: / - Parking spaces: 23 CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Saat Kula (Clock Tower) Urban module 6 CP 6.5 – Chair

- Number of construction parcel: GP 6.5 - Total surface area of the construction parcel: 1,189 m2 - Purpose of the land (basic class): - B2 Health and social protection Purpose of the land (description): - Numbers of cadastre parcels contained in the construction parcel: CP 7559, CP 7561/2, CP 7557/2, C.M. Centar 1 83 - Construction surface: 452 m2 - Gross developed area: 1,356 m2 - Percentage of construction area: 38% - Public institution health and social protection - Coefficient of land utilization: - Maximum allowed height: 10.2 m - Floor structure: G+2 Location: Skopje Sever Central part - East

Urban module 6 GP 6.6 – Chair

- Number of construction parcel: GP 6.6 - Total surface area of the construction parcel: 732 m2 - Purpose of the land (basic class): B3 Kultura (Library) Purpose of the land (description): - Public institution Kultura - Library

84 - Numbers of cadastre parcels contained in the construction parcel: CP 7558, CP 7557/2, CP 7554/2, CP 7557/3 C.M. Centar 1 - Construction surface: 248 m2 - Gross developed area: 744 m2 - Percentage of construction area: 34% - Coefficient of land utilization: - Maximum allowed height: 10.2 m - Floor structure: / CITY OF SKOPJE GUIDE FOR INVESTORS

Location: Skopje Sever Central part - East Urban module 18 CP 18.4 – Chair

- Number of construction parcel: GP 18.4 - Total surface area of the construction parcel: 1369 m2 - Communal housing facility (CHF) Purpose of the land (description): - Class of purpose A2 communal housing facility 85 - Compatible class of purpose commercial and business purposes B1 - Construction land not built on out of the central area subzone B - Numbers of cadastre parcels contained in the construction parcel: CP 2723/2, CP 2813, CP 2814/2, CP 2816/2, CP 2817/2, C.M. Chair - Construction surface: 530 m2 - Gross developed area: 2120 m2 - Percentage of construction area: 39% - Coefficient of land utilization: 1.5 K - Maximum allowed height: 13.2 m - Floor structure: / - Parking places: 21 INVESTMENT OPPORTUNITIES IN THE MUNICIPALITY OF SHUTO ORIZARI In the Municipality of Shuto Orizari, there is no state-owned land as investment opportunity.

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