auto

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. North 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.

North 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 North Macedonia supply to the European, Russian, Turkish and African markets, amongst others. Investors in North 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.

The country 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. North Macedonia off­ers a particularly cost competitive operating environment for automotive components manufacturing. The operating costs for the automotive components sector in North 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 North Macedonia can rely on an ample source of trained and qualified professionals to contribute to the growth of their business.

Operating Costs and Taxes

North Macedonia o­ffers a particularly cost competitive operating environment for automotive components manufacturing. The operating costs for the automotive components sector in North Macedonia are among the lowest in Central and Eastern Europe.

Labor Costs

North Macedonia has a sustainable supply of young, highly skilled labor at a competitive cost. The average gross salary in 2018 was €580 per month across all sectors, while in manufacturing the average gross salary in 2018 was €490 per month. Excess capacity and low average wages put North Macedonia in an excellent position compared to other Central and Eastern European economies.

 

Average Gross Monthly Salary in euro

 

 salary

 Source: Trading Economics, 2019

 

 Transportation costs and delivery times from Skopje

With Macedonia’s world-class transportation infrastructure, it takes less than a day to deliver goods to Central 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)

Kraguevac, Serbia 320 6 1 670€
Pitesti, Romania 730 8 2 1050€
Budapest, Hungary 800 11 2 1000€
Gebze, Turkey 850 12 2 1100€
Ljubljana, Slovenia 950 15 3 1000€
Vienna, Austria 1200 14 2 1250€
Ostrava, Czech R. 1300 16 2 1550€
Munich, Germany 1370 17 2 1400€
Aksaray, Turkey 1470 18 2 1600€
Milan, Italy 1500 19 3 1350€
Stuttgart, Germany 1600 19 2 1450€
Frankfurt, Germany 1700 20 2 1500€
Cologne, Germany 1900 24 2 1600€
Batilly, France 2000 26 2 1700€

Source:Kuehne-Nagel,ViaMichelin, Dec. 2018

 

Unbeatable Fiscal Benefits 

 

Personal Income Tax (%)

 personal income tax

Source: Trading Economics, 2019

*A personal income tax rate of 18% will be applied to the portion of the tax base exceeding MKD 90,000 per month (MKD 1,080,000 a year). The amount up to MKD 90,000 per month will continue to be taxed with 10%. Effectively, the tax reform introduces an additional tax bracket taxed with extra 8% for the part of the income exceeding MKD 90,000 per month.

 

Corporate Income Tax (%)

  corporate income tax

Source: Trading Economics, 2019

 

General VAT Rates (%)

 vat

Source: Trading Economics, 2019