North Macedonia - Country Commercial Guide
Investment Climate Statement (ICS)
Last published date:

The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption. 

Executive Summary 

The Republic of North Macedonia, an EU candidate country, and a NATO member since March 2020, continues to be receptive to U.S. commercial investments. The COVID-19 pandemic has deeply impacted North Macedonia’s economy and delayed foreign direct investment inflow. The government’s COVID stimulus measures helped limit the economic drop to 6.1 percent in 2020, and assisted the recovery in 2021, which saw four percent GDP growth.  Government support also cushioned the impact of the crisis on the labor market, with unemployment falling to 15.7 percent in 2021 and then to 15.2 percent in Q1 of 2022.  In its Growth Acceleration Plan, the government set targets to double average annual GDP growth rate from 2.5 percent to 5 percent in the period 2022-2026, create 156,000 new jobs, and reduce unemployment to 8.6 percent.  It also committed to “green growth” by accelerating the energy transition and reducing greenhouse gas emissions in accordance with the Declaration on Green Agenda signed November 2020.  Although economic effects of the pandemic linger, Russia’s aggression in Ukraine is exacerbating the energy crisis and supply chain woes. 

While doing business is generally easy in North Macedonia and the legal framework is largely in line with international standards, corruption is a consistent issue. Large foreign companies operating in the Technological Industrial Development Zones (TIDZ) generally report positive investment experiences and maintain good relations with government officials. However, the country’s overall regulatory environment remains complex, and frequent regulatory and legislative changes, coupled with inconsistent interpretation of the rules, create an unpredictable business environment conducive to corruption. The government generally enforces laws, but there are numerous reports that some officials remain engaged in corrupt activities. Transparency International ranked North Macedonia 87th out of 180 countries in its Corruption Perceptions Index in 2021, 24 spots higher from the prior year, with a score of 39/100 in absolute terms. 

The Office of the Deputy Prime Minister for Economic Affairs continues to coordinate government activities related to foreign investments.  The government made limited efforts in 2021 to attract new investment, focusing instead on economic recovery from the pandemic. However, the government did court foreign companies and investors for public projects in transportation and energy infrastructure.  The State Commission for the Prevention of Corruption has opened number of corruption-related inquiries, including several involving high-level officials, and the government appointed a new Deputy Prime Minister for Good Governance, who will focus on structural and procedural changes to reduce opportunities for corruption. 

Fitch Ratings reaffirmed North Macedonia’s previous credit rating of BB+ with a negative outlook, and Standard & Poor’s reaffirmed its credit rating at BB- with a stable outlook. 

There are several areas to watch in 2022. In 2021, Embassy Skopje identified digitalization and green energy as areas ripe for U.S. investment due to the government’s growing commitment to invest in these strategic sectors. North Macedonia’s location, at the crossroads of pan-European transport corridors VIII and X, is an advantage as companies consider “near-shoring” their production to be closer to consumption centers in Europe as fallout from the pandemic and Russia’s invasion of Ukraine continue to snarl global supply chains. 

To access the ICS, visit the U.S. Department of State Investment Climate Statements website.