Investing

Macedonia wins by investing in itself

Macedonia’s highway infrastructure is currently undergoing an 800 million euro ($900 million) upgrade that will add 106 miles of new road. The massive improvement project probably wouldn’t be happening if not for the republic’s decade-long transformation into a go-to location for automotive suppliers.

Since 2007, parts makers such as Delphi, Adient, Lear, Johnson Matthey, Kostal, Kemet and Key Safety Systems have opened factories in Macedonia. The country, formerly part of Yugoslavia and roughly the size of Vermont, also is currently negotiating with more than 15 existing and new suppliers about future investments, according to Viktor Mizo, CEO of Macedonia’s Directorate for Technological Industrial Development Zones.

Auto components accounted for nearly half of Macedonia’s 4.3 billion euros in exports last year. Macedonia has lured suppliers with its availability of skilled, affordable workforce, its proximity to key European markets and tax incentives. Those perks include a 10 percent corporate and personal income tax, which is among the lowest in Europe, and a 0 percent tax for both reinvested earnings and for companies that open a factory in one of Macedonia’s technological industrial development zones.

To help expedite business in the country, Macedonian officials promise that a company can move from business registration to the start of operations in just four hours, with only three steps necessary to obtain a construction permit, down from 21 previously.

The efforts have gained notice around the world. In 2006, the World Bank’s annual Ease of Doing Business ranking counted Macedonia 94th out of 175 economies for its business climate. This year, it has risen to 10th out of 190.

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