The Government has announced that three new contracts with foreign investors will be signed this autumn: one from Germany, one from the United States, and one expansion of an existing investment. Behind every such announcement stands the same mechanism: state financial support for investments. It is not reserved only for large factories. Mid-sized companies investing in production, technology or new jobs use it as well, domestic and foreign alike. Here is how the system works and what a company should know before applying.
What support does the state offer for investments?
The state provides cash support covering part of the eligible costs of an investment, as well as support for new employment and for infrastructure, regulated by the Law on Financial Support of Investments and the annual economic growth plans. In addition to direct grants, investors in the technological industrial development zones (TIDZ) benefit from tax and customs relief under a separate law. In practice, a company can receive a grant covering part of the costs of equipment, buildings or new jobs, and in return it assumes precisely defined contractual obligations.
Who can obtain financial support?
Domestic and foreign legal entities registered in the Central Registry can apply, provided they carry out an initial investment or an expansion of an existing activity. The conditions depend on the specific measure and are published with a public call, but they almost always include a minimum investment volume, the creation of a certain number of new jobs, and an obligation to maintain the investment and the employment for a defined period. State aid rules also set limits on the intensity of support and on combining it with other measures.
What do the support measures look like?
The package is published every year and the measures vary, but they most commonly include:
| Measure | For what | How it is awarded |
|---|---|---|
| Support for an initial investment | Part of eligible costs for buildings and equipment | Public call and a contract with the state |
| Support for new employment | Costs tied to the new jobs | After realised employment, with evidence |
| Support for infrastructure | Connections and infrastructure to the site | Project basis, with the competent institutions |
| TIDZ relief | Tax and customs advantages inside the zones | Zone user status |
How does the procedure to a state aid contract work?
The procedure is not automatic: support is obtained upon application, with an assessment and a contract. In practice, the process looks like this:
- monitoring the public call and a detailed check of the conditions and application deadlines
- preparing a business plan and complete documentation on the investment and the investor
- assessment of the application by the competent institution, with possible supplementation
- negotiations and signing of a state aid contract
- implementation of the investment, regular reports and monitoring of compliance with the obligations
The most common mistake is for a company to apply after it has already incurred the costs. Under most measures, costs are recognised only if incurred after the application is filed, so the order of steps is decisive.
What obligations does the investor assume under the contract?
A state aid contract is not a gift but an exchange: financial support for concrete, measurable obligations. The investor commits to realising the investment within the agreed deadline and scope, to opening and maintaining the new jobs for a defined period, and to reporting regularly on progress. If the obligations are not met, the state can reduce or withdraw the support and demand repayment of the disbursed funds. That is why the contract is read and negotiated with the same seriousness as any other commercial contract.
What should a company check before applying?
- whether the activity, location and volume of the investment fit the measure
- whether the figures in the business plan are realistic and sustainable over the entire contractual period
- compliance with state aid rules: aid intensity and the ban on doubling measures
- the contractual obligations: deadlines, maintaining employment, reporting, sanctions
- the overall tax and customs effect of the project, including possible TIDZ status
Planning an investment or an expansion in North Macedonia?
For domestic and foreign investors we assess eligibility for state support, prepare the documentation, follow the application and manage the contract with the state. Book a consultation to discuss your project.
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This text is general legal information and does not constitute legal advice for a specific case. For advice tailored to your situation, consult an attorney.