The Republic of Macedonia is emerging  with strong potential for overseas investors to earn high profits on property investment, with lOW tax rates and steady tourism growth .

A NUMBER of initiatives  launched  both at the governmental and ambassadorial level, to help open up Macedonia to tourism INDUSTRY, and attract international investors. tourism is a growth industry in the region, and has the potential to play a major role in the future of the Macedonian economy.

Tourism numbers have grown impressively over recent years, with figures from the World Tourism Organisation registering around 200,000 in 2005, to almost 500,000 in 2006 according to the Republic of Macedonia State Statistical Office. This represents an impressive increase of around 250%. The rising popularity was underlined by the fact that neighbouring Bulgaria, named Macedonia as the most desirable destination in 2006. Macedonia Travel & Tourism is expected to generate US$ 706.1 million of economic activity in 2007, doubling to US$ 1,367.4 million by 2017. Ballooning popularity will naturally be reflected in a rising demand for property, driving up capital gains and rental yields.

"Overall, the Macedonian property
market has shown an average
annual growth of around 9%."

For such a relatively new state, Macedonia has a strong and steady economy, with average inflation below 2%, and a very stable currency. One of the key drivers of this stability is a very competitive tax environment. Corporate income tax, already relatively low at just 15%, is to be reduced to 12% in 2007 and just 10% in 2008, creating one of the lowest corporate tax rates in the world.

The government of Macedonia continues to take steps to attract foreign direct investment (FDI), enacting legislation that ensures equal rights for foreign investors, while also providing numerous incentives. As a result of this, FDI inflows have been rising steadily since 2002, with 2005-2006 showing rapid growth (Source: PricewaterhouseCoopers).

The strong economy has led to equally strong growth in the real estate market, with typical apartment prices rising from around €700 per square metre in 2003 to €1,113 per square metre in 2006, according to the International Union of Tenants / Global Property Guide. Overall, the Macedonian property market has shown an average annual growth of around 9%.

Alongside this steady capital growth lie impressive rental yields. Apartments in the capital Skopje return between 7% and 10.5% per annum, with houses generating slightly more, with rental yields of 8.4% to 11.25%. The Global Property Guide lists the typical monthly rental price at around €700 per month, with larger properties attracting up to €1,600. Furthermore, rental yields are rising at around 7% per year.

forward-thinking government investment, Imminent membership of the EU  and generous tax conditions present an attractive climate for overseas property investors, and vastly increase the potential for good returns.

The government of Macedonia continues to take steps to attract foreign direct
investment (FDI), enacting legislation that ensures equal rights for foreign investors,
while also providing numerous incentives. As a result of this, FDI inflows have
been rising steadily since 2002, with 2005-2006 showing rapid growt.

Macedonia offers investors the rare chance to enter at the start of an emerging
economy, just as it’s opening up to foreign investment and tourism. These
opportunities are built on the solid foundations of a steady, growing economy
which enjoys international support, reducing the risks. Imminent membership of
the EU, forward-thinking government investment and generous tax conditions
present an attractive climate for overseas property investors, and vastly increase
the potential for good returns.