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Ease of Doing Business in

Macedonia, FYR

Macedonia, FYR Download Profile (1749.8KB, pdf)
Region Europe & Central Asia
Income Category Upper middle income
Population 2,078,453
GNI Per Capita (US$) 5,140
City covered Skopje

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 10 16 up
6
81.74 79.19 down
2.55
Starting a Business 4 3 down
1
98.14 98.14
-
Dealing with Construction Permits 11 12 up
1
81.71 81.34 up
0.37
Getting Electricity 29 44 up
15
84.51 81.33 up
3.18
Registering Property 48 48
-
74.05 74.02 up
0.03
Getting Credit 16 42 up
26
80.00 65.00 up
15.00
Protecting Minority Investors 13 22 up
9
73.33 68.33 up
5.00
Paying Taxes 9 8 down
1
91.67 91.67
-
Trading across Borders 27 27
-
93.87 93.87
-
Enforcing Contracts 36 27 down
9
67.79 70.46 down
2.67
Resolving Insolvency 32 39 up
7
72.38 67.73 up
4.65

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

48

DB 2016 Rank:

48

Change in Rank:

0

DB 2017 DTF (% points):

74.05

DB 2016 DTF (% points):

74.02

Change in DTF (% points):

up0.03

STANDARD PROPERTY TRANSFER
Property value MKD 13,157,529
City Skopje
Indicator Macedonia, FYR Europe & Central Asia OECD high income
Procedures (number) info_outline 7 5.3 4.7
Time (days) info_outline 30 20.6 22.4
Cost (% of property value) info_outline 3.2 2.5 4.2
Quality of the land administration index (0-30) info_outline 24.5 19.8 22.7
  • Measure of efficiency
    No. Procedure Time to Complete Associated Costs
    1

    Obtain a non-encumbrance certificate on the property

    Agency: Agency for Real Estate Cadastre, Notary

    With the Law on Amendments and Addenda to the Law on Real Estate Cadastre (‘Official Gazette of RM’ No. 74/12 - 13.06.2012) all the information on encumbrances over land and property are included in the Title Deed. Thus, parties need to obtain only a copy of the Title deed in order to check for encumbrances. The Title deed except from the Cadastre Agency, also can be obtained at the notary offices, municipalities and geodetic companies.

    With an upgrade of the electronic services provided by the Agency for Real Estate Cadastre ( e-counter), apart from the availability to obtain a title deed from the Department of Cadastre and registration of real estate, the title deed can be obtained from the closest municipality, notary office or in the offices of private geodetic firms.

    Less than a day (online procedure) MKD 180 (Title deed) + MKD 50 (administrative tax)
    2

    Lawyer drafts the sale-purchase agreement

    Agency: Lawyer

    Although hiring a lawyer for the purpose of property transfer in Macedonia is not required under the law, in order to avoid any unwanted legal consequences use of lawyers services is a common practice. Furthermore,assistance of the lawyer in this process is very important when drafting sales contract is done for a complex cases with multiple parties involved for a property with encumbrances.

    1 day Lawyers charges can vary from MKD 7000 to MKD 17,500 (equivalent of EUR 200-500)
    3

    Obtain Certificates for current condition, Certificates of bankruptcy and Certificates of liquidation from the Central Registry

    Agency: Central Registry

    Prior to referring to a public notary for verification and notarization parties are required to obtain three certificates from the Central Registry. These Certificates are required by the Notary in order to compile the Notary act. Pursuant to article 47 of the Notary Law the notary public shall determine the identity of the parties (seller and buyer) - legal entities based on a certificate issued by a competent authority (Certificate for current standing). Further, pursuant to article 44 of the same Law "while compiling a notary act, the notary public must examine whether the parties are capable and authorized for undertaking such activities (transfer of a property)......" (Certificate of bankruptcy and Certificate of liquidation).

    Less than a day (online procedure) MKD 256 (Certificate for current conditions) + MKD 257 (Certificate of bankruptcy) + MKD 257 (Certificate of liquidation)
    4

    Submit application for assessment of sale property tax and obtain the tax decision

    Agency: Municipality

    Tax liability incurs on the date of conclusion of the agreement for transfer of ownership. The base of tax on sales of real estate is the market value of the real estate at the moment of the tax liability. Previously paid to the Public Revenue Authority, the payment of this tax moved from the Revenue Authority to the Municipalities in 2005. According to the Law on Property Taxes (Official Gazette of the Republic of Macedonia, No. 61, dated September 13th 2004), the tax rates are determined by each Municipality, and the Municipality administration is authorized to determine and collect the property taxes as per the location of the real property. The Mayor should pass and deliver the decision for the amount of property tax within 10 days from the day when the taxpayer submitted the application. The rate of tax on sale of real estate is proportional and equals 2-4% of the determined market value of the property. If the two parties are companies registered for VAT, the seller will pay 18% VAT on the determined purchase price.

    3 weeks MKD 300 (administration fee)

    5

    Pay property sales tax and obtain a stamped payment order at the bank

    Agency: Commercial bank and Municipality

    Seller makes a wire transfer or pays in person at the bank. To confirm the tax payment seller obtains stamped payment order from the bank and submits this document to the Municipality. Given that Municipalities cannot verify whether money have reached their account, stamped payment order must be submitted to get Municipality's seal on the draft sales-purchase agreement.

    1 day 2-4% from the market value of the real estate at the moment the obligation ocurred
    6

    Notary solemnizes draft sales-purchase agreement or prepares a Notary act

    Agency: Public Notary

    The notary prepares and notarizes the sale contract agreement.

    The following documents are required by the notary:

    • Title Deed from AREC;

    • Current condition of the legal entities (where the names and data of the legal representative(s) of the Companies authorized to sign the agreement are stipulated)-obtained by the notary online

    • Decision for sale of the warehouse adopted by the owner(s) of the Company - Seller;

    • Decision for buying of the warehouse adopted by the owner(s) of the Company - Buyer;

    • Certificates that both Companies are not under bankruptcy and liquidation Procedure;

    • Certificate for non-encumbrance for the warehouse. According to the Law on Notary Public, a notary public is obliged to submit these documents to the Cadastre in order to inform the Cadastre about the change in ownership;

    • Seller: must produce a certificate showing that the Company has not initiated the bankruptcy Procedure;

    Purchaser: must issue a Decision for buying the warehouse, signed by the Company’s Manager.

    3 days Sale/purchase agreement according to the new notary fee that is on force:

    -if the property value is from MKD 300,001 up to MKD 3,000,000 the fee is MKD 2,000;

    -from 3.000.001 MKD to 5.000.000,00 MKD, the fee is 10.000,00 MKD;

    -from 5.000.001,00 MKD to 9.000.000,00 MKD, the fee is 12.000,00 MKD;

    -from 9.000.001,00 MKD to 20.000.000,00 MKD, the fee is 20.000,00 MKD;

    -from 20.000.001,00 MKD to 60.000.000,00 MKD, the fee is 30.000,00 MKD; and -up to 60.000.000,00 MKD, the fee is 60.000,00 MKD.


    This fee applies if the Notary prepares the contract in form of Notary Act and also verifies it. In case if the sale contract is prepared by Attorney at Law and the Notary Public only verifies the contract (makes Solemnization-confirmation of the contract) the fee is 50% of the above amounts. The changes in the fee are due to a reform of the Tariff for the Notary services dated from 22.01.2011 However, according to Article 16 of the Notary Tariff Act the notary fee is 50% of the fee stipulated in Article 11.
    7

    Registration in the Cadastral Office

    Agency: The Agency for Real Estate Cadastar

    Parties submit a request for changing the title to the Cadastral Office.

    A lawyer or the buyer obtains from the Cadastre a new Title Deed in which the new owner will be registered. Ownership right over real estate is established at the moment of registration of that right in the Public Book at the Cadastre, though in practice documentation would be required to resell or use the property to obtain a loan.

    According to the Article 186 from the Law on Real Estate Cadastre (Official Gazette of RM 55/2013), the time limit for Real Estate Cadastre to register required application is set at 15 working days. The documentation shall include: the sale contract approved by public notary (obtained in Procedure 3).

    E-lodging is now being introduced in Macedonia: the E-Counter application for professional users (available at www.katastar.gov.mk ), enables submission of applications for data and changes electronically, using electronic signature. The fee for the service and the administrative tax can be paid by credit card via the virtual POS terminal. In order to use this service, the professional users must sign a contract with the AREC and must have internet access, scanner, digital signature issued by an authorized body, and payment card. With the E-Counter, the citizen via the Notaries can conduct purchase or sale of the property and can quickly record a mortgage, without coming to the AREC front desk in person.


    3 days MKD 300 (for change of ownership) + MKD 50 (administrative tax)

  • Measure of quality
    Answer Score
    Quality of the land administration index (0-30) 24.5
    Reliability of infrastructure index (0-8) 8.0
    What is the institution in charge of immovable property registration? Agency for Real Estate Cadastre
    In what format are the majority of title or deed records kept in the largest business city—in a paper format or in a computerized format (scanned or fully digital)? Computer/Fully digital 2.0
    Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)? Yes 1.0
    In what format are the majority of maps of land plots kept in the largest business city—in a paper format or in a computerized format (scanned or fully digital)? Computer/Fully digital 2.0
    Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)? Yes 1.0
    Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases? Single database 1.0
    Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties? Yes 1.0
    Transparency of information index (0–6) 3.5
    Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city? Freely accessible by anyone 1.0
    Is the list of documents that are required to complete any type of property transaction made publicly available–and if so, how? Yes, online 0.5
    Link for online access: http://www.katastar.gov.mk/en/Page.aspx?Id=205
    Is the applicable fee schedule for any property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how? Yes, online 0.5
    Link for online access: http://www.katastar.gov.mk/userfiles/file/tarifnici/TARIFNIK_za_promeni_vo_...
    Does the agency in charge of immovable property registration commit to delivering a legally binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Yes, online 0.5
    Link for online access: http://www.katastar.gov.mk/en/Page.aspx?Id=206
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration? No 0.0
    Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency? No 0.0
    Number of property transfers in the largest business city in 2015:
    Who is able to consult maps of land plots in the largest business city? Anyone who pays the official fee 0.5
    Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5
    Link for online access: http://www.katastar.gov.mk/mk/Page.aspx?id=155&m=1501
    Does the cadastral or mapping agency commit to delivering an updated map within a specific time frame—and if so, how does it communicate the service standard? No 0.0
    Link for online access:
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency? No 0.0
    Geographic coverage index (0–8) 6.0
    Are all privately held land plots in the economy formally registered at the immovable property registry? No 0.0
    Are all privately held land plots in the largest business city formally registered at the immovable property registry? Yes 2.0
    Are all privately held land plots in the economy mapped? Yes 2.0
    Are all privately held land plots in the largest business city mapped? Yes 2.0
    Land dispute resolution index (0–8) 7.0
    Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties? Yes 1.5
    Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5
    Is there a specific compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Yes 0.5
    Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)? Yes 0.5
    If yes, who is responsible for checking the legality of the documents? Notary.
    Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5
    If yes, who is responsible for verifying the identity of the parties? Notary.
    Is there a national database to verify the accuracy of identity documents? Yes 1.0
    For a standard land dispute between two local businesses over tenure rights of a property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the first instance? First instance Court Skopje 2
    How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)? Between 1 and 2 years 2.0
    Are there any statistics on the number of land disputes in the first instance? Yes 0.5
    Number of land disputes in the largest business city in 2015: 78 cases
    Equal access to property rights index (-2–0) 0.0
    Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0
    Do married men and married women have equal ownership rights to property? Yes 0.0