In this guide Boshnjakovski Law Office presents the history of regulation and reform of companies in the Republic of North Macedonia, as well as the main forms and characteristics of companies in the state.
Companies have been one of the key inventions of capitalism. Without them we could not even start imagining any largescale investment endeavors or the functioning of businesses that go beyond your regular mom-and-pop shop. Companies allow us to pool huge funds from various investors. Also, the safety net of “limited liability” gives us confidence to undertake entrepreneurial risks because we know that if our business goes bust, this will not endanger everything we own. Last but not least, the clear delineation of rights and responsibilities makes it possible to entrust the running of the business to professional managers that are different from the shareholders of the company. Simply said, if there were no companies we wouldn’t enjoy the riches, mobility, globalization, and other benefits that modern capitalism offers today.
I. History of company regulation and reform in the Republic of North Macedonia
After its transition from a centrally planed economy to a free market economy, the Republic of North Macedonia has adopted a modern regulatory framework for company forms, incorporation, and governance. The first attempts to do this were done in the late 1980s when Macedonia was till part of Yugoslavia, which at that time was trying to reform its failing socialist state. The Law on enterprises of 1988 was however short lived and was soon replaced by the first Law on companies of 1996, which the first genuine capitalist law on companies in our state.
Still however, the need to fully integrate in the increasingly globalizing world and moved by the strategic decision to access the highly regulated European Union, pushed the Republic of North Macedonia to adopt the wholly new Law on companies in 2004. This last law has established in the Republic of North Macedonia a system of company regulation that can be seen in any modern continental European State, with the characteristic company forms, distribution of responsibilities, management structures etc. Since then, the law has been changed on numerous occasions to better incorporate the experiences of our new state, as well as the recommendations of leading global and European institutions. In 2010 our state even enacted the Law on European companies, which will be applicable after the accession of the country in the EU.
Hand in hand with the reform of the system of company regulation our state has invested serious efforts in simplifying the procedures for company establishment and rising the efficiency of the Central Registry in which all companies are registered. Also, our state has conducted serious reforms of the tax system, thereby making it a state with one of the lowest taxes and simplest tax system in Europe. All in all, this has contributed the Republic of North Macedonia to continuously receive praises for its business-friendly environment, as it is confirmed its ranking on the 17th place in 2020 Doing Business Report of the World Bank.
II. Types of companies in the Republic of North Macedonia
As said the Law on trade companies of 2004 established in the Republic of North Macedonia a system of company regulation that can be seen in any modern continental European State. Our model of regulation may be considered closest to the German legal tradition of company’s regulation. In the following text, we will introduce the readers with the company forms in our state, as well as their key characteristics such a minimal share capital, modes of governance and supervision, responsibilities, and rights etc. Also, we will say a few words on related institutes such as sole proprietorship, branch office and representation office.
For more information check out our articles on tax, residency and other business services, write to us (firstname.lastname@example.org) or call us (+38970257879).
The guide was prepared by Vladimir Boshnjakovski and Bojan Spirovski in December 2021.