Some signs of political instability on the path to European Union accession for North Macedonia, rising inflation, and several interesting upcoming legislative changes are on the ticket for the Balkan country, according to Lalicic & Boskoski Partner Martin Boskoski.
“The political environment and its overall stability are often the cornerstone of the business landscape in a country – and North Macedonia is no different,” Boskoski begins. “The country has been trying really hard to enter formal negotiations for entering the EU and, following the resolution of the name dispute with Greece, we thought that it would come soon, but it was not to be,” he says.
The ongoing friction with Bulgaria is, according to Boskoski, blocking a smooth transition toward the EU for North Macedonia. “The German chancellor was visiting this week, with the aim to help in reaching a mutual understanding with Bulgaria, to solve any potential friction points that still linger, given the history of our countries,” he says. “We are very eager to begin the negotiations process as all of us who operate in business law feel that it would help our work greatly.” However, Boskoski shares that the citizens of North Macedonia are not as optimistic. “Everybody believed that the accession process would speed up following the name change, but it seems that did not suffice – it would appear a new cause for political instability manifests itself every six months.”
Still, Boskoski reports that there are positive legislative changes in the pipeline that should help out the business sector. “Firstly, there is the proposed mandatory lawyer training which would take place every couple of years, if the requisite legislation is enacted,” he says. “This would be very beneficial and would improve the overall quality of legal work.”
Further, Boskoski reports that there were changes to the “Company Law in the area of convertible loans, which would make it easier for start-ups to be able to pursue investors, by having loans converted into a direct investment into the company.” Additionally, there are proposed changes to the VAT framework, with regards to “specifying where the VAT ought to be charged for services offered abroad. This is most important for IT companies who work for foreign clients, seeing as how this would specify the place of doing business.” Boskoski predicts that this will be enforced by the end of 2022. “Lately, it would appear that every third new client we work with is from the IT sector, so I feel that this would trickle down beneficially to the lawyers as well,” he adds.
Finally, Boskoski reports that “the overall levels of business are getting back to normal, regardless of the high inflation – which hit 7.7% for the first quarter of 2022.” However, he believes that North Macedonia is yet to experience the inflation peak and that “it remains to be seen how this gets passed on down to clients.”