Macedonia Market Entry

Macedonia Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

A frequently used form of applying imported goods (and services) on the local market is through local representatives (this is a remnant from the days of Yugoslavia, when by law foreign companies had to use the services of domestic representatives). In this area, there is a very tough fight between local companies to obtain representation from (any) foreign client. The significance of this form of application on the market is not negligible, as in local conditions, long-term personal, often family ties and relationships of representatives with potential customers play an important role. On the other hand, final consumers resist the use of intermediary services, as this increases the final price of goods. Foreign companies most often resort to providing representation to local representatives for a limited period of time, which is further extended if both parties are satisfied. During this time, the pressure of local companies to grant exclusive representation usually eases, which is usually connected with the realization of their own limitations (financial, organizational, technical), or the size of the market (local companies often operate only in a certain specific territory). With the continued stabilization of the economy in Macedonia and the expected growth in the coming years, more and more companies are deciding to establish a subsidiary in North Macedonia.

Forms and conditions of operation on the market

Due to the relatively small Macedonian market, the standard distribution and sales network for goods of domestic origin and imported goods usually covers the territory of the entire country. Local distribution channels are created for some items, especially consumer goods. The majority of distribution and sales activities are carried out by small and medium-sized companies. Large wholesale and retail chains are relatively underrepresented in North Macedonia. A significant part of agricultural production is sold in markets. A popular form of selling goods (and services) on the market is the representation of foreign companies by local representatives. Strong competition is felt in this area when looking for representation of a foreign client. The importance of this form of application is not negligible, in local conditions long-term personal,

Possible legal forms of business companies in North Macedonia include:

public company,

Limited partnership,

limited liability company a

joint-stock company.

Marketing and communication

The most widespread form of promotion, advertising and advertising campaigns is the use of state and private commercial television channels and local commercial radio stations in the FM band. Periodicals are also widely used for promotional purposes. The use of large-scale advertising (“billboards”) on a nationwide scale is rather limited. The use of public transport and sports facilities for advertising purposes is also frequent. Advertising campaigns in the form of one-off or long-term sponsorship of sports teams and social events are also applied. Of course, if the product or service targets the younger generation, it is cheapest to do a marketing campaign via Facebook, which is relatively widespread in the country. There are a large number of advertising and marketing agencies in North Macedonia. Check smber for agriculture and fishing facts of Macedonia.

Issues of intellectual property protection

The issue of intellectual property protection is dealt with by the Intellectual Property Protection Act and other legal provisions. The Ministry of Culture is responsible for this issue. Violation of intellectual property is not a major problem in North Macedonia, however, it can occur from time to time as in any other country.

Lawyers competent in this field:

Gavrilovska & Gavrilovski Law Office, Industrial Property Protection, phone: + 389 2 30 60 690,

Intellectual Property Protection Company, phone: +389 75 421 842, Čakmakova ADVOCATES phone: +389 2 311 52 05

Or other companies here.

Other legislation: Rule on the form and content of the request for permission from the customs authorities and the related required documentation and the application form for the extension of the deadline for the customs authority’s actions (2015), Decision on the amount of one-off compensation for copying in private use (2011), Regulation on professional examination Industrial Property Representatives and Register of Representatives (2009), Product Origin and Geographical Indication Regulation (2009), Industrial Design Regulation (2009), Patent Regulation (2009), Trademark Regulation (2009).

Public procurement market

The legal framework for public procurement in North Macedonia is essentially at the standard European level (which does not apply to the scope of exceptions and the precision of the authorities’ powers). However, problems occur in its application. Institutions that are supposed to supervise the smooth running of public tenders are underfunded.

From January 1, 2019, the new Public Procurement Act, harmonized with the legislation of the European Union, is in force, which is supposed to ensure the reasonable spending of state money, free and fair economic competition and transparency in the awarding of public contracts. The previous law was based on the European Union’s Public Procurement Directives of 2004 and has undergone numerous changes since then, separating it from European legislation. For this reason, the new law brings a fundamental and comprehensive change in line with current European practices. The law stipulates the so-called open procedure (отворена procedure) as a standard way of selecting a supplier in public tenders. In the case of foreign participants in the tender, the tenderer must check the correctness of the submitted documents, which have confirmation from the competent authorities of the country where the tender participant is registered.

Payment terms, payment ethics and resolution of commercial disputes

Standard payment conditions of a credit nature are used when implementing larger business cases. In the period after 1995, commercial courts were abolished and their powers were taken over by standard courts. However, their capacity has not been increased much, and therefore they are relatively busy and slow. Moreover, these are often complex legal cases to which standard courts cannot and do not always know how to respond appropriately.

It is strange that, on the one hand, specialized commercial courts were abolished, but on the other hand, Macedonian judiciary knows specialized judiciary in other legal areas (for example: Administrative Court and Higher Administrative Court). The real reason for the abolition of the commercial (economic) judiciary remains open, given that the abolition occurred at a time when the country was transitioning to a market economy, creating market entities and privatizing state property.

The resolution of disputes, if they arise, depends on the wording of the terms in the business contract. With some important companies, it is possible to negotiate the resolution of potential disputes abroad according to different commercial law. We recommend trying to resolve disputes out of court and think about it already under the conditions set in the contract.

Regarding payment terms and institutions such as bank letters of credit, the restructuring and privatization of the banking sector has already been completed in North Macedonia, and thanks to this, standard rules apply here. However, as always, caution is required. However, the Macedonian environment is not particularly problematic if the basic rules of prudence in the payment system are observed (do not make early payments and deliveries).

Visas, fees, specific conditions for traveling to the territory

As of December 19, 2009, the visa requirement for all countries of the Schengen area, including the Czech Republic, was abolished for Macedonian citizens by the facilitation agreement with the EU. This decision only applies to holders of passports with biometric identification data. On the Macedonian side, the visa requirement for Czech citizens was abolished earlier. Since mid-2009, Czech citizens can also use a valid identity card to travel to North Macedonia. Here, however, it is necessary to draw attention to the fact that if an EU citizen departs from a part of the airport that is not intended only for the EU, but also for other international connections, then the visa authorities at the airport may require the presentation of a passport. Therefore, we recommend that you always travel with your passport. Every foreigner must also register their stay longer than 24 hours at the local police department. For persons staying at the hotel, this information obligation is ensured by the hotel. Until recently, failure to fulfill this obligation could result in a short-term prison sentence (usually up to 7 days), a disciplinary fine and expulsion from the country as part of the proceedings at the misdemeanor court. Before leaving the country, it is necessary to register with the police, however, the accommodation facility does this for the traveler as well. For these reasons, we recommend that you always have accommodation secured in advance when traveling to the territory.

Employment of citizens from the Czech Republic

If an employment relationship is concluded with a citizen from another country, the provisions of the Act on Employment with Foreigners are used. Foreigners can be employed and can work in North Macedonia if they have a work permit and are registered here according to the corresponding article of the law. A work permit can be issued to a foreigner who has a permanent or temporary residence permit or other document in accordance with the law. A foreigner who has a work permit in North Macedonia can only perform the work for which he received the work permit. A work permit is issued for a fixed period and its duration depends on the purpose for which it is issued. Work permits are issued by the Labor Office of North Macedonia in cooperation with the Border Police of North Macedonia.

Useful links: www.e-rabota.av.gov.mk and www.mtsp.gov.mk

A work permit is not required for short-term services (less than 90 days) provided by foreigners (creative services in the field of culture – services for fairs, short-term services provided by foreigners, work performed by foreigners residing in the Republic of North Macedonia for study purposes).

Employing foreigners is less common and legislatively and administratively quite demanding. Amended by the Act on Employment and Work of Foreigners (Collection of Laws/Služben vesnik RSM no. 70/2007, 5/2009, 35/2010, 148/2011 and 84/2012) and its amendments according to the decision of the Constitutional Court (Služben vesnik no. 152/ 2008 and 98/2010). The consolidated version of the Law can be found in Macedonian on the website of the Ministry of Labor and Social Affairs. Foreigners who would like to be employed in North Macedonia, want to work in their company or do business here, must first obtain a residence permit and a work permit, the employer must register their work as a foreigner’s work. An employment contract without processing a residence permit is invalid. All costs related to obtaining a work permit and other requirements should be covered by the employer.

Fairs and events

The only fair organization in Macedonia is the company “Skopski Saem” (“Skopje Fair”), which is located in Skopje.

Skopski Saem (Skopje Fair) Belasica bb, POBox 356 1001 Skopje Republic of Macedonia

phone: +389 2 3218-388 fax. +389 2 3218-375 http: www.eragrupa.mk E-mail: [email protected]

For the last three years, no fairs have been organized due to the dislocation and reconstruction of the fair.

Another important event is the Prilep beer festival, which is one of the largest regional beer events and which can serve as a springboard for Czech companies interested in exporting beer to this region. (http://pivofestival.mk)

Macedonia Market Entry