Investment Climate and Role of Technological Industrial Development Zones in Direct Foreign Investment Inflow in North Macedonia

Abstract

This article investigates the establishment of Technological Industrial Development Zones (TIDZ) in North Macedonia. These zones are aimed at attracting Foreign Direct Investment (FDI) and represent an innovative strategy to promote business relations that were previously unavailable in North Macedonia. If their output is sold to international markets, companies operating within the TIDZ benefit from incentives and subsidies. In addition to the legally announced incentives available to investors within the TIDZ, the government offers extra incentives on a case-by-case basis, in agreements with significant overseas partners. Since the introduction of this approach, the government has made a public display of its benefits. The consequences of the implemented strategy for FDI attraction deserves an effort for its analysis by all available means. Using the available data and sources from relevant documents, the focus in the paper will be put on the impact of the creation of such zones on the FDI inflow. North Macedonia is an attractive investment destination for international investors because of the fiscal, economic, and financial benefits provided by the actual law, as well as the excellent business climate, as measured by the ‘Doing Business’ indicator.