GOVERNMENT OF THE REPUBLIC OF MACEDONIA
Directorate for Technological
Industrial Development Zones
LAW ON TECHNOLOGICAL INDUSTRIAL
DEVELOPMENT ZONES
Skopje, February 2007
I. GENERAL PROVISIONS
Subject of the Law
Article 1
This Law shall regulate the incentives for investing in
technological industrial development zones, the conditions,
the manner and procedure of establishment, the development
and operation of technological industrial development zones,
the activities performed in the technological industrial
development zones and the specific conditions for their
performance, the application of the customs regulations in
the technological industrial development zones as well as
the termination of operation of the technological industrial
development zones and of the user of the technological
industrial development zones.
This Law is a State Aid scheme pursuant to the State Aid
legislation.
Purpose of the Law
Article 2
The purpose of this Law shall be acceleration of the
economic development by attracting foreign and domestic
capital for the development of new technologies and their
application in the national economy, increasing the
competitiveness and increasing the level of employment.
Public Interest
Article 3
The construction and performance of the activities
pertaining to the establishment and operation of the
technological industrial development zones shall be of
public interest.
Definitions
Article 4
(1)
The terms used in this Law
shall have the following meaning:
1)
“Tax
payer” shall mean a person who is defined as such, pursuant
to the Law on Tax Procedure;
2)
“Tax authority” shall mean a state administrative body which
performs administrative responsibilities as defined in the
Law on the Public Revenue Office;
3)
"Domestic goods"
shall mean
goods:
- Fully obtained in the customs area of
the Republic of Macedonia pursuant to Article 22 of the
Customs Law, not incorporating goods imported from other
countries. The goods obtained from goods placed under
suspension procedure shall not be deemed to have the status
of domestic goods.
- Imported from other countries and
released into free circulation and
- Obtained or produced in the customs
area of the Republic of Macedonia, whether from the goods
referred to only in indent 2 or from the goods referred to
in indents 1 and 2 of this item;
4)
“State Aid” shall be any aid, granted by the State Aid
provider, in any form whatsoever, favouring certain
enterprises, or the production of certain goods or the
delivery of certain services;
5)
“Aid Intensity” shall be the aid amount expressed in
percentage of the eligible investment expenditures or amount
expressed in percentage of the wage costs of employees on
newly created jobs”;
6)
“State Aid provider” is the Government of the Republic of
Macedonia and the state administrative bodies;
7)
“User of the Technological Industrial Development Zone”
shall mean any domestic or foreign natural or legal person
registered for performing activities pursuant to the Company
Law and who for the purpose of using the technological
industrial development zone has signed an agreement with the
founder of the technological industrial development zone;
8)
“Small-sized enterprise” shall be enterprise with less than
50 employees and an annual turnover less than EUR 7 million
in MKD counter value or which annual balance-sheet total
does not exceed EUR 5 million in MKD counter value;
9)
“Founder
of a technological industrial development zone” shall be the
Government of the Republic of Macedonia or a domestic or a
foreign legal person. Founder of a technological industrial
development zone may also be a legal person who shall
perform the activity of a founder in accordance with the
public-private partnership contracts;
10)
“Initial
Investment” means an investment in material and immaterial
assets relating to the:
- setting–up of a new establishment;
- extension of an existing establishment;
- diversification of the output of an establishment into new
additional products and
- diversification of the output of an establishment into new
additional products and
Replacement
investment is not considered as initial investment;
11)
“Material assets” means assets relating to land, building
and plant/machinery. In case of acquisition of an
establishment, only the costs of buying assets from third
parties should be taken into consideration, provided the
transaction has taken place under market conditions;
12)
“Immaterial assets”
means assets entailed by the transfer of technology through
the acquisition of patent rights, licences, know-how or
unpatented technical knowledge;
For SMEs, the full
costs of investments in intangible assets by the transfer of
technology through the acquisition of patent rights,
licences, know-how or unpatented technical knowledge may
always be taken into consideration. For large companies,
such costs are eligible only up to a limit of 50% of the
total eligible investment expenditure for the project;
13)
“Firm in difficulty” shall
be a firm with increasing losses, diminishing
turnover,
growing stock inventories, excess capacity, declining cash
flow, mounting debt, rising interest charges and failing or
nil net asset value, and, in the case of a company where at
least some members have unlimited liability for the debt of
the company, where more than half of the capital as shown in
the company accounts has disappeared and more than one
quarter of that capital has been lost in the previous twelve
months, as well as in every other cases where the conditions
for opening of bankruptcy procedure are met, according to
the bankruptcy regulations. In any event, a firm in
difficulty is eligible only where, demonstrably, it cannot
recover through its own resources or with the funds it
obtains from its owners/shareholders or from market sources;
14)
"Regional Aid” shall be aid corresponding regional policy
goals of the Republic of Macedonia, supporting productive
initial investment or job creation, which is linked to
investments;
15)
“Job creation” means a net increase in the number of
employees directly employed in a particular establishment
compared with the average over the previous 12 months. Any
jobs lost during that 12 month period must therefore be
deducted from the apparent number of jobs created during the
same period. The amount of aid must not exceed a certain
percentage of the wage cost of the person hired, calculated
over a period of two years. The percentage is equal to the
intensity allowed by law prescribing the conditions and
procedure for granting employment aid;
16)
“Medium-sized Enterprise” shall be an enterprise which
employs less than 250 persons and which annual turnover does
not exceed EUR 40 million in MKD counter value or annual
balance sheet total does not exceed EUR 27 million in MKD
counter value, and is not owned by 25% or more in capital or
voting rights by an enterprise, or jointly by several
enterprises that are not covered by the definition for the
small and medium-sized enterprises;
17)
“Placing
goods for inspection to the customs authority” shall mean a
notification to the customs authority, in a prescribed
manner, about the arrival of the goods at the customs
authority or any other place designated and approved by the
customs authority;
18)
“Foreign
goods” shall be goods different form those referred to in
item 3 of this paragraph. Domestic goods taken out of the
customs area shall obtain the status of foreign goods;
19)
“Technological Industrial Development Zone" (hereinafter
referred to as: the Zone) shall be part of the territory of
the Republic of Macedonia as part of the customs area,
separated from the remaining part of the customs area,
separately fenced and marked area representing a functional
entity in which activities are performed under terms and
conditions prescribed by this Law and other laws and in
which the customs and tax incentives determined by this Law
and other laws apply. The technological industrial
development zone shall be established with a view to the
development of highly propulsive and modern technologies by
introducing economically profitable production and efficient
utilization of the resources by application of the highest
environmental standards. The technological industrial
development zone shall be a free zone from the aspect of the
customs and tax laws;
20)
“Wage
costs” means the total amount actually payable by the
beneficiary of the aid in respect of the employment
concerned, comprising the gross wage, before tax, and the
compulsory social security contributions;
21)
“Customs
permitted activities or use of goods” shall mean:
a) Placing goods under a customs procedure;
b) Entry of goods in a zone or a free warehouse;
c) Re-export
of goods from the customs area;
d) Destruction of goods; and
e) Renouncing of goods for the benefit of the state;
22)
“Customs
debt” shall be an obligation of a person to pay the amount
of import duties (customs debt on import) or export duties
(customs debt on export), prescribed for certain goods
according to the regulations of the Republic of Macedonia;
23)
“Customs
control" shall mean performance of the specific activities
such as: examination of goods; verifying the existence,
reliability and accuracy of the documents; examination of
accounting books and other records; examination and search
of means of transportation; examination and search of
personal baggage and other goods that persons carry with or
on themselves; enforcement of official procedures and other
similar activities with a view to observing customs
regulations, and when necessary, other regulations
applicable for goods subject to customs supervision;
24)
“Customs
supervision” shall mean general measures undertaken by the
customs authority for the purpose of ensuring application of
the customs regulations, and when necessary, of other
regulations applicable for goods subject to customs
supervision;
25)
“Customs
authority" shall be an organizational unit of the Customs
Administration laid down by law which is competent for the
application of the customs or other regulations where some
or all the prescribed formalities may be carried out;
26)
“Customs
procedures” shall be:
- Releasing of goods into free circulation;
- Transit;
- Customs warehousing;
- Inward processing;
- Processing under customs control;
- Temporary import;
- Outward processing; and
- Export;
27)
“Customs
regulations” shall be the Customs Law and bylaws adopted on
the basis of this law.
(2)
For the purposes of this
Law, the use of singular shall also include plural, while
plural may also refer to singular, except when with the
words “only” or “except” plural or singular is excluded.
Article 4-a
(1) The users of the zones
shall be granted State Aid in the form of regional aid,
pursuant to the conditions laid down by this Law. Regional
aid may be granted for initial productive investment in
capital as well as in immaterial assets (patents, licenses,
know-how or unpatented technical knowledge).
(2)
Regional aid, within the
terms of this Law, shall not be granted to an enterprise in
difficulty.
(3)
The contribution of the aid
recipient should be at least 25% of the eligible investment
expenditures; however, this contribution must not be a
product of State Aid.
(4) The maximum intensity of
the regional aid shall amount up to 50% of the eligible
investment expenditures or of the salary expenditures for
the newly created jobs in the period of two years.
(5)
The maximum intensity of the
regional aid shall amount up to 70% for small-sized
enterprises and up to 60% for medium-sized enterprises of
the eligible investment expenditures or of the salary
expenditures for the newly created jobs in the period of two
years.
(6)
The enterprises in the
technological industrial development zones that are State
Aid beneficiaries cannot be granted any other type of
regional aid.
(7)
The Agency for Foreign Investment of the Republic of
Macedonia, on behalf of the Government of the Republic of
Macedonia as a State Aid provider, concludes a contract,
which specifies the State Aid granted to the User in line
with this Law.
(8)
Pursuant to this Law, every
year until 28 February the State Aid providers shall submit
information regarding the state aid granted during the
previous year to the Directorate for Technological
Industrial Development Zones.
(9)
The Directorate for
Technological Industrial Development Zones shall keep
records on the State aid granted and on behalf of the State
Aid provider; it shall submit an annual report to the
Commission for Protection of Competition once a year, not
later than 31 March of the current year for the previous
year.
II. INCENTIVES FOR INVESTING IN THE TECHNOLOGICAL
INDUSTRIAL DEVELOPMENT ZONE
Tax Exemptions and
Relieves and Procedures
Article 5
(1) The tax payer, user of the zone shall be eligible for
exemptions and relieves from payment of:
1) Profit Tax for the period
of 10 (ten) years, as of the date of the business activity
commencement in the Zone, under conditions stipulated by
this Law; and
2)
Personal
Income Tax on the basis of employees’ salaries in the amount
of 50% for the period of 5 (five) years, as of the date of
the business activity commencement in the Zone, under terms
and conditions stipulated by this Law.
(2)
The trade in goods and
services in the technological industrial development zones,
except the trade intended to the end use, shall not be
subject to Value Added Tax.
(3) The imports of goods in the
technological industrial development zones shall be exempted
from Value Added Tax, provided that the goods are not placed
in free circulation, i.e. are not intended to the end use.
Customs Exemptions and
Relieves
Article 6
(1)
The user of the Zone shall
be eligible for customs exemptions and relieves pursuant to
the provisions of the Customs Law, unless otherwise
stipulated by this Law.
(2) The user of the zone carrying out
production activities and Information Technology related
activities (software development, hardware assembly, digital
recording, computer chips, etc.), scientific research
activities and production based on new technologies with
high environmental standards shall be exempt from the
obligation of submitting a guarantee as a security
instrument for the customs debt incurring or that may incur
after the determination of the customs allowed procedure or
use of the goods.
(3)
The exemptions or relieves
referred to in paragraph (1) of this Article shall not apply
to alcohol and alcoholic beverages, as well as to tobacco
and tobacco products.
(4)
The user of the Zone may
use the incentive for import of equipment pursuant to
Article 42 of this Law.
Aid for Training and Improvement
Article 6-a
(1)
The user of the Zone shall
be eligible for aid for training which may be anticipated
for eligible costs for education in the form of special or
general professional improvement of workers.
1) Special improvement from paragraph (1) of this Article is
anticipated for the acquisition of theoretical and practical
knowledge usable at the present or future work
post at the enterprise that is the beneficiary of aid.
2) General improvement from paragraph (1) of this Article is
anticipated for the acquisition of general knowledge usable
at the present or future work post at the enterprise, which
is the beneficiary of aid, but also at other enterprises or
in order activities and which significantly improves
employment prospects of the worker.
(2) The aid regulated by this
Article may be granted in an amount up to 50% of the
eligible costs in the event of general improvement and up to
25 % of the eligible costs in the event of special
improvement.
(3) The amount of aid from
paragraph (2) of this Article may be increased:
- by 10% of the eligible costs for the purpose of special
improvement and by 20% of the eligible costs for the purpose
of general improvement in small and medium-sized
enterprises;
- by 10% of the eligible costs in the territory of Republic
of Macedonia;
- by 10% of the eligible costs in the professional
improvement is to be undertaken by persons who have
difficulties in finding employment.
(4) The amounts of aid from
paragraph (3) of this Article may be cumulated.
(5)
The eligible
costs for the purpose of improvement by paragraph (1) of
this Article are:
- the costs of the instructor;
- travel expenses of the instructor and persons undergoing
professional improvement;
- other recurring costs;
- the costs connected to the write-off of machines and
equipment in accordance with the scope of their use for the
purpose of professional improvement; and
- the costs of consulting regarding the professional
improvement project
- the costs of participants in the professional improvement
project up to the amount of all eligible costs from the
paragraph (5) of this Article.
Article 7
The user of the zone shall realize the exemptions and relieves laid down
in Article 5 and 6 of this Law for
performing:
1)
Production activities;
2)
Activities related to
information technology (software development, hardware
assembly, digital recording, computer chips, etc.),
scientific research activities and production based on new
technologies with high environmental standards and
3)
Services directly related
to the import of goods which enter the Zone, provided that
the goods are not intended for end use.
Other Incentives
Article 8
(1) The user of the zone carrying out any of the activities laid
down in Article 7 of this Law, shall also be eligible for
the following incentives:
1)
By way of derogation from
the provisions of the Law on Construction Land, the users of
the Zone is exempted from paying a fee for regulation of the
construction land;
2)
The fee for regulation of the construction
land, of which the users of the Zone are exempted, shall be
compensated by the Government of the Republic of Macedonia
for the benefit of the local self-government units;
3) By
way of derogation from the provisions of the Law on
Protection and Rescue, the user of the Zone shall be
exempted from the obligation to build a shelter during
construction of facilities within the Zone, as well as from
paying a contribution fee for the construction, maintenance
and equipping of the shelter;
4)
The Government of the Republic of Macedonian may participate
in the expenditures for construction of facilities by the
user of the Zone in the amount of EUR 500,000 in MKD counter
value, under the following criteria:
- EUR 100,000 in MKD counter value – for the investments in
the amount of EUR 1 to 2 million in MKD counter value, or 20
new employments;
- EUR 200,000 in MKD counter value – for the investments in
the amount of EUR 2 to 5 million in MKD counter value, or 40
new employments;
- EUR 300,000 in MKD counter value – for the investments in
the amount of EUR 5 to 10 million in MKD counter value, or
60 new employments;
- EUR 400,000 in MKD counter value – for the investments in
the amount of EUR 10 to 15 million in MKD counter value, or
80 new employments, and
- EUR 500,000 in MKD counter value – for the investments in
the amount of more than EUR 15 million in MKD counter value,
or 100 new employments.
The Government of
the Republic of Macedonia shall decide on the fulfilment of
the conditions referred to in paragraph (1) item 4 of this
Article, upon a proposal from the Directorate for
Technological Industrial Development Zones, no later than 30
days from the date of submitting the proposal.
(2) By way of derogation from the provisions of the Law on
Construction Land, the founder of the Zone is exempted from
paying a fee for regulation of the construction land. The
fee for regulation of the construction land, for which the
founder is exempted, shall be compensated by the Government
of the Republic of Macedonia for the units of local
self-government.
(3)
The land for founding of
the Zone shall be leased to the founder of the Zone for a
period of up to 99 years;
(4)
The land in the zone shall
be leased by the founder of the zone to the users for a
period of up to 99 years;(5)
The lease period for the
land and the amount of rent for the leased land for the
founders of the Zone as well as for the users of the Zone in
cases when the Government of the Republic of Macedonia is
the founder, shall be determined by the Government of the
Republic of Macedonia for each individual case.
(6)
The user of the Zone shall
be obliged to start construction on the land granted for use
within nine (9) months from the signing of the lease
contract, and to finish construction and start production
within thirty (30) months at the latest.
(7)
The lease contract for the
land may be unilaterally terminated if the lessee of the
land does not start construction on the production facility
within nine months from the date of signing the lease
contract and if production does not start within 30 months.
Terms, Conditions and
Procedures for Exercising Tax Exemptions and Relieves
Article 9
(1) The user of the
Zone shall exercise tax exemptions and
relieves, if:
1)
Performs a new activity, but does not
transfer the activity from another area of the Republic of
Macedonia into the Zone;
2)
Does not have unsettled levied tax or
customs obligations, and
3)
Is not under a bankruptcy
procedure.
(2) For the purpose of exercising tax exemptions and relieves
referred to in Article 5 paragraph (1) items 1 and 2 of this
Law, the user of the Zone shall submit a tax return request
to the responsible tax authority through the Directorate for
Technological Industrial Development Zones until 31 March of
the following year.
(3)
Pursuant to paragraph (2)
of this Article, the user of the Zone shall submit the
following document supporting the tax return request:
1) Contract for performing activity with the founder of the zone;
2)
The decision referred to in Article 29 paragraph (4), or the
decision referred to in Article 33 paragraph (3) of this
Law;
3)
The annual
account and tax balance sheet for the previous year, in
addition to the standard form (SRA -Structure of Revenues by
Activities);
4) Proof from the Central Register on its current state of solvency, not
older than 6 months;
5)
Certificate issued by a competent authority that the user of
the Zone has no levied and unsettled tax and customs
obligations;
6)
Certificate
issued by a competent court and the Central Register that
the user of the Zone is not under a bankruptcy or
liquidation procedure;
(4)
On the basis of the
decision of compatibility regarding the granted State Aid
adopted by the Commission for Protection of Competition,
pursuant to this Law the tax authority delivers decision on
tax relief.
(5) The
proofs referred to in paragraph (3) items 1, 2 and 4 of this
Article shall be submitted within 15 days after receiving
the decision to commence operation from the Directorate for
Technological Industrial Development Zones.
(6)
The proofs referred to in
paragraph (3) items 3, 5 and 6 of this Article shall be
submitted each year of the operation in the Zone, not later
than 31 March of the current year.
(7)
If the terms and conditions
of this Article have been met, the tax authority shall
implement the decision of the Commission for Protection of
Competition and shall issue to the user a decision on an
applicable tax exemption / relief within 30 days from the
day the request was submitted. It shall also submit the same
to the Directorate for Technological Industrial Development
Zones within eight days of its adoption.
III. TERMS, CONDITIONS AND MANNER OF ESTABLISHING A TECHNOLOGICAL
INDUSTRIAL DEVELOPMENT ZONE
General
Terms and Conditions of
Establishing a Technological Industrial Development Zone
Article 10
(1) The Zone shall be established if:
1) The spatial, energy, technical and other conditions prescribed for
performing activities in the Zone are provided;
2)
Manufacturing and
technological processes, production and storage of goods,
i.e. providing services that are harmful to the environment
and to the nature are not performed and
3)
The founder of the Zone
provides the required funds for establishing the Zone.
(2)
The terms and conditions
for establishing the Zone referred to in paragraph (1) item
1 of this Article up to the borders of the Zone shall be
provided by the Government of the Republic of Macedonia.
(3)
The founder of the Zone
shall provide the funds for establishing and commencing
operation of the Zone, as well as appropriate spatial,
infrastructural, environmental, energy, technical and other
conditions for performing activities in the Zone, and shall
adopt the act for establishment of the Zone.
(4) The founder of the Zone, except when the founder is the Government of the
Republic of Macedonia, shall register a trade company
performing economic, technical, administrative and other
activities related to the performing of activities in the
Zone.
Spatial Conditions for
Establishing a Technological Industrial Development Zone
Article 11
(1)
The Zone shall be
established on an area designated by a spatial or urban
plan/urban project of land owned by the Republic of
Macedonia as a site of public interest. The Zone may be
established inside or outside of an urban area.
(2)
The Zone may consist of
several separate parts of the territory of the Republic of
Macedonia, each of which constitute an economic and
functional entity and each shall be fenced and marked.
IV. DIRECTORATE FOR TECHNOLOGICAL INDUSTRIAL DEVELOPMENT
ZONES
Competences of the
Directorate for Technological Industrial Development Zones
Article 12
(1) The activities related to the establish | 
