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To gain a competitive advantage in a highly uncompromising auto -motive market driven by cost-cuts, take advantage of our strategic location with its proximity to assembly plants in Central and Eastern Europe and Turkey, and duty-free access to the European market. Macedonia is sure to be the ideal location for corporations looking to set up or relocate their business, with its winning combination of a cost-competitive environment, educated and accessible workforce, and unbeatable incentives offered in the Free Economic Zones.
Macedonia has had a history of auto component manufacturing. In the recent privatization process, a number of companies have been bought by overseas investors and continue to produce a range of components for cars, buses, trucks and locomotives.
Existing component manufacturers in Macedonia supply to the European, Russian, Turkish and African markets, amongst others. Investors in Macedonia can freely export to a market of over 650 million people. The automotive industry in these markets is particularly buoyant as global players over the last ten years have invested over €20 billion in car manufacturing in Central and Eastern Europe alone, and further investment is anticipated.
Macedonia offers a particularly cost-competitive operating environment for auto component manufacturing. The labor force is well educated, flexible and has a strong work ethic. The educational system is willing to collaborate with incoming investors in finding ways to meet their skills needs, as demonstrated by one of the major universities training 165 students in Java and C++ in anticipation of the needs of Johnson Controls, which has constructed a $40 million facility outside Skopje to manufacture electronic automotive components.
Availability of Workforce
Central European economies increasingly experience over-investment, leading to tight labor markets, rapidly growing costs and outbound labor migration. Macedonia offers a particularly cost competitive operating environment for automotive components manufacturing. The operating costs for the automotive components sector in Macedonia are among the lowest in Central and Eastern Europe due to its excess capacity and low average wages. With nearly half of the population under 30 years of age, companies operating out of Macedonia can rely on an ample source of trained and qualiﬁed professionals to contribute to the growth of their business.
Operating Costs and Taxes
Macedonia offers a particularly cost competitive operating environment for automotive components manufacturing. The operating costs for the automotive components sector in Macedonia are among the lowest in Central and Eastern Europe.
Macedonia has a sustainable supply of young, highly skilled labor at a competitive cost. The average net salary in 2014 was €353 per month across all sectors (see Graph 1), while in manufacturing the average gross salary was €378 per month (in October 2015, see Graph 2). Excess capacity and low average wages put Macedonia in an excellent position compared to other Central and Eastern European economies.
Graph 1: Average Net Monthly Salary in Selected Countries in CEE in 2014
Source: The Vienna Institute for International Economic Studies (wiiw)
Graph 2: Gross Monthly Salary in Manufacturing in Macedonia
Source: State Statistical Ofﬁce of the Republic of Macedonia
Transportation costs and delivery times from Skopje
With Macedonia’s world-class transportation infrastructure, it takes less than a day to deliver goods toCentral and Eastern Europe and Turkey, and a maximum of two days to Western Europe.
|Destination/origin||Distance (km)||Net Hours||Borders||
From Skopje (€)
(20 tons truck)
Source:Kuehne-Nagel, ViaMichelin, January2015
- 0% tax on retained earnings
- 10% corporate & personal income tax
- Sales tax on real estate and rights 2% - 4%; and 0.1%-0.2% property tax
- VAT at 18%, with 5% on specific items
- Double taxation and investment protection treaties withmany European countries
Personal Income Tax
Source:PricewaterhouseCoopers (Taxes at glance 2015), National IPAs
* Flat rate