Macedonia

Macedonia@odilaw.com
T +389 (0)2 31 31 286
F +389 (0)2 31 31 286

Dane Krapchev 13, 1000 Skopje

ODI Macedonia

Our Macedonia office focuses on complex and high value domestic and multi-jurisdictional deals. Leading global companies and financial institutions particularly value the expertise of ODI’s Macedonia office in corporate/M&A, competition, employment, banking & finance, restructuring, dispute resolution and regulatory work.

Market Snapshot

Macedonia is a candidate country for accession to NATO and the EU. Ever since that candidacy arose, its southern neighbour Greece, citing the fact that its northern region is also called Macedonia has been using its right to veto to block the country’s accession in these organizations. Following a historic agreement with Greece in June 2018 (known as the “Prespa Agreement”), however, Macedonia and Greece have ended the decades-long dispute over the name. In its enlargement report of May 2019, the European Commission repeated its unconditional recommendation for the opening of accession negotiation, and the country is now expecting to receive a date for commencement of the accession negotiations.

In the meantime, Macedonia is investing in infrastructure – it has allocated 850 million euros in the first quarter of 2019 for infrastructure projects involving the construction of express roads and bridges as well as the rehabilitation of over 700 kilometres of national and regional routes. The Corridor X motorway was completed in 2018, and the construction of European Corridor 8 is ongoing. In addition, the restructuring of the privatized tobacco company Tutunski Kombinat AD Prilep, a strategic partner with Philip Morris, is pending. The government has not yet privatized composite material producer Eurokompozit AD Prilep and has decided not to privatize the ELEM electricity producer.

Macedonia adopted framework legislation in line with the EU’s third energy package in gas and electricity. Its electricity and gas markets are now open for competition, and the appropriate market players have been identified. The electricity and gas transmission and distribution are formally unbundled. The unbundling of the electricity distribution system operator is complete, and the electricity transmission system operator is in the process of completing its restructuring by spinning-off the market operator in a new entity as a first step in establishing of the organized market operator and coupling it with a neighbouring market. A supplier of last resort and a supplier providing the overall service in the government’s competitive public tendering procedure should be appointed soon.

The postal services market liberalization is pending, with 1 January 2020 as the new deadline for abolishing the reserved area or postal monopoly of the universal service. At this time, AD Macedonian Post provides for universal service, covering more than 90% of the postal market. In 2018, 37 licensed postal service providers were actively operating on the postal market, possessing licenses for different types and scopes of services and geographic operating areas.

The government drafted a new law on payment services aligned with the second Payment Services Directive (PSD2). The new law, which should be enacted in the second half of 2019, allows businesses and consumers to give third-party providers permission to retrieve their account data from their banks. This opens up space for third-party providers to disrupt the payment services market, as they will be allowed to initiate payments for the users directly from their bank accounts. The liberalization of the payment services market will effectively break the banks’ monopoly on the payment services market and facilitate greater competition and innovation in the financial sector. Against this backdrop, it is worth noting that ICT is the fastest growing industry in North Macedonia, as ICT businesses had a growth rate of 47% over the last five years. The ICT market is dominated by several large international players and many smaller companies who mainly act as value-added resellers and solution providers and offer outsourcing services. International software companies have contributed to the general rise of the level of this sector through their know-how, modern standards, and education.

Macedonia is the only country in the Western Balkans that allows the cultivation and export of cannabis for medicinal purposes. The country has decided to take a free-market approach to cannabis cultivation, distribution, and sale, allowing private companies to cultivate and distribute the plant in their country on the basis of a license issued by the government. The licensing process requires companies to fulfil a number of criteria regarding staff, facilities, and security of the facilities for the cultivation, storing, and processing of cannabis. The legalization of cannabis has sparked the interest of entrepreneurs and investors, and there are currently 28 licensed companies in the cannabis sector.


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