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Macedonia2025 Weekly Op-Eds: FDI Landscape in Macedonia

By Tuesday December 4th, 2018Announcements


After a poor 2017, growth looks like it might be picking up again in 2018. But when we look at FDI more closely we can see that these results are not being driven by new investment (direct investment) but instead are being driven by existing foreign companies’ reinvestment of earnings and debt income (graph 1). Our estimates shows that foreign investment in new companies in Macedonia has been trending down over the last four years. Foreign investment in new companies generally delivers the strongest benefit to the economy through new capital works and new jobs.

Graph 1:


Existing FDIs continually tell us of the importance of after-care. This is not only important in keeping existing foreign investors happy but also in attracting new foreign investors. Any serious new foreign investor asks existing foreign investors about their investment experience in Macedonia. One of the best ways we can improve the experience of foreign investors is by improving investor after-care.

Related to after-care but also connected to the initial engagement with FDIs in Macedonia is that there are too many ministers and government organizations operating in the FDI space. During our 2018 Summit, Andrew Wrobel from the ‘Emerging Europe’ magazine reported that some potential investors in Macedonia were confused about who in the government to deal with and were left with a very poor impression when different government bodies began openly arguing about who was meant to help them. We have documented similar reports from a number of potential and existing investors. Macedonia needs to provide a clear path for FDI engagement. We need to know clearly which minister and body is responsible for which area, country, industry, etc. so that we can approach the right person when the time comes.


Another observation is that we could be more proactive in seeking FDIs by ensuring we have up-to-date and relevant promotional materials to give to interested parties.  It would be highly beneficial if the country develops standardized documents as guidelines on issues such as: what the key strategic sectors are, data on skilled workers, how many students graduate at, etc. The civil sector doesn’t always have the resources to compile such comprehensive research so it needs to be made a priority. We are fully aware and supportive of the goal of the government to attract high tech, smart companies that provide highly paid jobs. However we’d like to hear more on the “how” we will be positioning and promoting the country as such a destination.


During our meetings with different government institutions and civil servants; the feedback has been different and it usually depends on the competences of the individuals that work at the government and their willingness to help. However, there should be a transparent mechanism and a process of how can we raise concerns and where, and how we escalate problems that aren’t being progressed.


Macedonia2025 is an international non-for-profit organization. Since the incorporation, 10 years ago, we have worked on attracting FDIs to Macedonia, including investors from the Macedonian Diaspora. We are an independent organization that aims to be the voice of the business community, especially of the FDIs and the Diaspora investors. We act as an independent broker in summarizing the needs of the business sector and then in undertaking initiatives to publicize those needs and resolve the problems.

We have undertaken a number of initiatives, such as the promotion of the benefits of the FDIs, the potential negative impact from the proposed increase in personal income tax, the retroactive VAT charges to BPO companies for oversees services, the lack of proper investor after-care for small investors, the needs of providing the business diaspora with a one-stop-shop system of getting all the documents that they need in order to come back and invest, etc.


Biljana Markovic Stamenova, Executive Director

Brendan Filipovski, Research Manager

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