AmCham Macedonia Summer 2016 (issue 50) - Page 19

ADVOCACY Summer 2016 / Issue 50 Foreign Investors Satisfied with Employees, Suppliers & Tax Policy in Macedonia By: Vlatko Stojanovski, Foreign Investors Council Coordinator, Economic Chamber of Macedonia F oreign investors are satisfied with doing business in Macedonia and 84% of those surveyed would invest again here, if given the opportunity. This is the conclusion of the latest survey conducted by the Foreign Investors Council, on which 52% of its members responded in the period from March to April 2016 . Survey results were presented by the Council President, Stefan Peter, at a press conference held on May 23, 2016. “Proof that these are not empty words is the decision of Van Hool to open a second production line, as well as the announcement of Johnson Controls to build another factory in Strumica,” said Peter. According to the managers, key factors for doing business in Macedonia are: a qualified workforce, the level of business expenses, tax policy, legal stability, a stable business environment , the geostrategic location of Macedonia and its proximity to the EU, as well as its political and macro-economic stability. According to the survey, 68% of companies managed to meet planned business activities, 72% do not expect any changes in the implementation of their business plans, and 20% expect improvement. Only 8% predicted their economic performance to worsen in the coming period, but they, as Peter said, are mainly export-oriented and their business depends on contracts for foreign markets. Peter underlined that foreign investors are satisfied with the tax policy in Macedonia, high-quality workforce and stable business environment, but they continue to face, as reported in the survey, a lack of legal, social and political stability. Problems include administrative procedures, frequent changes in legislation and an insufficient fight against corruption. For this reason, 84% of foreign investors believe that Macedonia’s membership in the EU would significantly improve its business environment. Foreign investors assessed that the protracted political crisis in the country will have long term consequences on the Macedonian economy. “It is possible for foreign companies to postpone investment plans, which is expected. But if the political environment stabilizes quickly, it will not only attract new investments, but will also help the current investments to expand their business activities,” noted Peter. The Foreign Investors Council has 118 members and marked a decade of existence this year. Work & Residency Permit Process Reform on Paper Only? A mCham has closely monitored the expat visa, work and residence permit process for several years now, since it directly impacts a number of our members and is an important part of the country’s efforts to attract FDIs. A new Law on Work and Employment of Foreigners (LWEF) was adopted and published in November 2015 and technically came into force on June 19th, 2016. The amended law introduces a single permit process, merging the separate work and residence permits processes of today. Disappointingly, though the law is technically now in force, the process has yet to undergo any noticeable improvements since institutional rulebooks, procedures and forms have yet to be issued. International companies are extremely interested in the full implementation of the new law because the current expat visa and work permit process is unnecessarily bureaucratic and inflexible. As detailed in the summer 2015 issue of this magazine, this is largely due to a lack of public investment in modern IT infrastructure to support modern and efficient processing of payments and applications; a lack of process transparency and predictability; and an equally defensive approach to all types of visa and work permit applications out of step with the country’s FDI attraction goals. The general hope among internationally-oriented businesses is that – once fully implemented – the new process is going to significantly reduce and simplify the process of obtaining permission to live and work here. Specifically, Expats will only need to apply for a single “work and temporary residence permit” in one place: the Ministry of Interior (MoI); MOI must approve/deny applications within 15 days; MoI (not the applicant) will obtain an opinion from the Employment Agency; and The Employment Agency must issue an opinion within 5 days, if not, silence is approval. AMCHAM MAGAZINE 19