FireShot Capture 87 - Angelov bankingnewsAmbassador of Republic of Macedonia to Greece, HE Mr. Darko Angelov, gave an interview for the Greek website (16.02.2016). English translation of the interview is bellow.

So, ambassador, what advantages you think your country has… What makes your country an investment opportunity for the Greek businesses and we have some inside information that you are about to organize a campaign targeting Greek investments. Could you kindly inform our readers what levels are the corporatе income tax rate, the capital gains tax rate and the value tax rate.

Ok thank you, so in a way it’s a very easy question because it’s very simple, everything is 10%. All of those taxes you mentioned, not the VAT, for which there are several rates, depending on the product, 5-18%, but in most cases it is only 5% such as for IT equipment, food, medicine, etc. But the corporate income tax, the personal income tax, all those are 10%. And this is one of the most attractive points in doing business in the Republic of Macedonia, regardless whether you are a domestic company or any foreign investor in the country. It is a very simple, a straightforward, taxation system, which has been there for almost 10 years, so the additional added value is that it is stable and predictable, in essence it’s a flat rate tax system. But on top of it there are additional incentives for investors which are in the manufacturing sector and which are export oriented. These additional benefits are for investors in the so called free economic zones, where only export oriented manufacturing is located. In these zones, the taxes are not even 10%, but actually 0%. Even more, the import duties for any raw materials a company might need, which cannot be acquired in the country, the customs rate is 0%, but only if it’s used for production within those zones and then the products are exported. But going back to the general taxation environment, as I mentioned, generally the flat rate is 10%, but if a company retains its profit or reinvests it into its capital base you don’t pay even those 10%, so it’s 0%.

As a bonus?

As a bonus, even those 10% flat tax, irrespective whether you are in the free zone or not, if you retain or reinvest your profits you don’t pay those 10% tax. So we think this is the most attracting selling point for any investor in the country and we have received quite an increased share of domestic and foreign investors in the past years. It’s not the best time to seek for any investments nowadays, but we are getting gradually increasing amounts of investments. This was combined with an aggressive campaign, but this was not tailor made for Greece, it is a global campaign. So far it has not been anything to do with Greece in particular, first because it’s not a specific campaign for any country, but then it’s very easily problematic because of obvious reasons since Greece has the issue with our name. So we have all the possible brochures, but as you can see, our motto is “Invest in Macedonia.” It was hard to combine and organize our campaigns in Greek media. Anyhow, Greek companies continue to operate in the country with profit and usually it’s a rarity if one decides to cease its operation. In most cases, the Greek owned companies in my country outperform their mother companies or other sister companies within its own group. Greek banks in the Republic of Macedonia, and there are two, Ethniki and Alpha, also perform well and continue to be quite active on the retail and corporate credit market. In general, our banking sector is very stable, which of course has a very positive effect on the investment environment. Despite the global and European crisis, banks continued to have very active credit portfolios.

Almost on a daily basis Greeks cross the border to buy goods from your country. Do you hold any specific data about that?

I cannot give you an exact number as we are talking about individual shoppers. In any case, having much lower taxes makes our products cheaper than those in Greece, thus the interest for Greek citizens to shop or do some medical or other services across the border. When it comes to the overall trade between the two countries, it is relatively stable, however, in the past year we have witnessed a drop, presumably to do with the Greek financial crisis. In 2015, the trade amounted to 665 million US dollars of which our exports into Greece 165.7 and import from Greece around 500 million dollars, which means that Greece has a positive balance with the Republic of Macedonia, with oil being a major segment of this since we import most of our oil through Greece and this ends up on the Greek side of the trade balance. In 2014 the trade amounted to 894 million USD. so you see last year there was a significant drop. Now Greece is our fourth biggest trading partner after Germany, Serbia and Great Britain and when it comes to investments the accumulative number of Greek investments in the past 20 years has been 437 million Euros, which is about 10% of the overall foreign investments in my country, making Greece the third biggest investor after the Netherlands and Austria.

Do you have any requests on your desk from Greek companies that want to invest in your country?

There are, but not very often since Greek companies already know our market quite well and they can always seek for advice from the many Greek owned business that already operate in the country.

Is your country’s economy dependent of Greece’s economy and if yes could you tell at what level in conjunction with GDP.

Statistics can explain part of it but let’s say overall our biggest partnership or our biggest relationship with Greece, which is really strategic, is logistical as the port of Thessaloniki is the main port of export and import of goods for us, but then also I think this dependence is mutual especially for northern Greece since we are the biggest individual consumer of the port of Thessaloniki. Moreover, we are the main, shortest point of transit for goods from the Greek ports bound for Central and even some Western European markets. So, logistics is the biggest mutual economic relationship and even we can say, interdependence.

Nikola Gruevski has stated last week in the Greek newspaper “to Vima” specifically that he signs with two hands that your country does not have territorial plans towards Greece and does not ask for the exclusive use of the term Macedonia. Do you think that the two sides are ready to solve the name dispute?

I think it’s not proper for me to say whether now Greece is ready to solve the name issue or not. But I can reaffirm the already known fact that we are ready to engage in a meaningful dialogue to solve the issue which Greece has with our name in a mutually acceptable way by which no essential interest of any side is undermined. For us this is the issue of our identity and its expression. Seeking no exclusivity over the name of Macedonia and having no territorial ambitions towards any of our neighbors has always been our very clear position, made explicit even in our constitution. Something which is easily forgotten here in Greece is that the name dispute is a completely asymmetrical, misbalanced situation, where Greece objects that my country is called the Republic of Macedonia, that we are Macedonians speaking the Macedonian language, whereas my country has never raised any objections to Greece’s use of the name Macedonia in all possible contexts, from naming three of its provinces, a university, airport, etc. Moreover, the asymmetry is also seen in the fact that we are not an EU and NATO member state, which we want to join, whereas Greece is and is using all possible leverage of that over us. 

One last question about the refugee crisis. Your borders are transit point for migrants moving towards Europe, so this brings you in discussion with the EU. In what ways can your country cooperate with the Greek government so it would be in the interest of both sides?

In a way we are in the exact situation as Greece is, being affected by a situation beyond our control. However, there is an essential difference, us not being an EU and Schengen member state and a country smaller than Greece, with limited resources and abilities to seek institutional assistance from the EU and NATO. We are in the most awkward situation where we have to keep safe a border from an influx of migrants coming from the territory of an EU and Schengen member state, without having access to any of the databases or means of institutional assistance. At the beginning of the crisis, especially last summer and early autumn, our cooperation was not at the appropriate level, obviously still burdened by the many past years where the name issue was used by Athens as a precondition for any kind of cooperation. However, I am glad that in recent weeks and couple of months the communication between our ministries of interior has intensified and gained on quality. What is central to our approach to the migrant crisis is that we do not take any unilateral actions, but simply follow the policies of the countries north from us and we are always the last to implement any restrictions of movement. The Republic of Macedonia will do everything possible to continue enabling an efficient and humane passage of all refuges from Syria, Afghanistan and Iraq, but our security will be under no compromise. Therefore we have built a fence at one segment of our mutual border to prevent the increasing number of illegal crossing and to streamline the flow to the legal crossing point of Gevgelija where the proper security checks and registration takes place. 

From ancient Greece is there any specific philosopher that you admire? Have you read any ancient history?

I am more of recent or modern history admirer and then I would choose Ioannis Kapodistrias as the Greek I admire the most, although primarily remembered as a diplomat and statesmen, he was essentially a great thinker and visionary.

Have you visited Parthenon?

Of course, even before I came here as a diplomat. Just last year there have been 1.1. million individual touristic visits from the Republic of Macedonia to Greece and this is from a country of 2 million. So, we know Greece and all its historical and touristic sites quite well.

Does Alexander the Great belong to history and everyone?

Your question contains my answer: he belongs to history and everyone. I strongly believe that his legacy is first and foremost universal and belongs to all of the modern states that are now on the territory of what used to be ancient Macedonia. Our approach of not seeking any exclusivity over the name of Macedonia is all about this perception. 

Do you want to leave us with a last, additional message?

Business relations between our two countries have always been strong, even in the times when politics was not. Businesses know each other and already have the channels of communication for which we as governments have not much else to do. However, the two states should continue working on making the business interactions across the border even easier by opening new border crossings, reopening the Bitola to Florina railway track by which a secondary rail link with the port of Thessaloniki will be established, but also to connect the natural gas systems of both countries for which we are hoping to start discussions soon.