5th February 2019, Skopje – Legal entities and natural persons may invest in real estate and securities abroad with the country’s transition to the second phase of the Stabilization and Association Agreement (SAA).Accessing the second phase of the SAA provides not only for greater investment opportunities for natural persons and legal entities, but also for higher level of integration of the domestic financial market with the international financial markets. It also provides for issuing and registering foreign securities in the country, as well as domestic securities abroad.
Investments in foreign financial markets should be made upon numerous information, upon which the expectations of the economic entities are based. Therefore, it is assumed that the residents, in particular natural persons who will decide to invest abroad, are well-informed about the potential effects from their decisions, having clear expectations about the yields and the level of risk, also being familiar with their tax liabilities.
Residents should have into account, as well as adhere to the liabilities under the Law on Foreign Exchange Operations, referring to registration and reporting on the transactions. Ban for opening accounts of legal entities and natural persons in foreign banks remains to be applied, except for the cases stipulated under the Decision on the manner and the terms, under which residents, which are not authorized banks, may open and hold accounts abroad.
By signing SAA, our country committed itself to adhering to one of the basic principles upon which the EU Single Market is based – free movement of the capital, meaning full but gradual liberalization of the capital and financial account. Most of the capital transactions, such as credit operations, foreign direct investments, investments of non-residents in securities and real estate, were also previously liberalized. Accessing the second phase of SAA means full liberalization of the capital flows.
On 25th January 2019, “Decision on Transition to the Second Phase of Association between the Republic of Macedonia and the European Community and Its Member States” (Official Gazette of the Republic of Macedonia”, no. 17 as of 25th January 2019) was published. Provisions referred to in paragraph 1 of Article 11, paragraph 2 of Article 13, paragraphs 4, 5, 6 and 7 of Article 14 and paragraph 3 of Article 15 of the Law on Foreign Exchange Operations, which have so far limited the investment opportunities of domestic natural persons and legal entities abroad, cease to be valid as a result of this novelty, in line with the Stabilization and Association Agreement.
At the same time, the Council of the National Bank of the Republic of Macedonia, on 31st January this year, reached The Decision On Cessation of the Validity of The Decision on the Requirements for Securities in which an Authorized Bank May Invest Abroad. Adoption of this Decision is aimed at further liberalization of the capital and financial account.
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