North Macedonia has experienced fluctuating yet gradually rising FDI inflows over the past decade as the country pursued economic reforms and integration with Western markets. Total FDI stock reached $8.5 billion in 2020 compared to just $2 billion in 2010.
North Macedonia had a successful year in 2021 for attracting foreign direct investment (FDI)— with 79% of FDI investments being new projects. This is significantly above the global average for attracting new projects. North Macedonia has been a NATO member since March 2020 and has increased its appeal to foreign investors.
The country has also been devoting significant resources to attracting foreign investment through policy incentives and marketing. North Macedonia performs impressively in Investment Monitor’s 2022 Inward FDI Performance Index— which measures a country’s inward investment levels against its gross domestic product (GDP) using which tracks greenfield projects. This means that North Macedonia – with a score of 11.5 – received more than 11 times its fair share of inward greenfield FDI.
Key sectors attracting foreign capital include manufacturing, energy, and infrastructure. Major global automakers like Johnson Controls, Johnson Matthey and Valmet Automotive have established production plants, leveraging North Macedonia’s strategic location at the crossroads of Southeast Europe and access to regional trade agreements.
The country also offers attractive incentives for greenfield and brownfield manufacturing investments such as tax exemptions, cash grants and employee training subsidies. Special economic zones provide world-class industrial infrastructure and plug-and-play facilities. As a result, electronics assembly and food processing have emerged as new hubs.
Beyond manufacturing, energy infrastructure is a priority area – over $2 billion FDI has flowed into hydroelectric projects and transmission lines modernization in recent years. Telecoms and logistics also present opportunities as North Macedonia upgrades digital connectivity and transport links.
Enhancing technical and vocational skills – streamlining bureaucratic procedures and strengthening intellectual property protection can help maximize FDI’s developmental impact. Targeted promotion of the IT/BPO sector also holds promise. Overall, the reformist policy environment augurs well for continued foreign investment.
Foreign Direct Investment in Macedonia decreased by -4.43 EUR Million in September of 2023. Foreign Direct Investment in Macedonia averaged 31.35 EUR Million from 2003 until 2023, reaching an all-time high of 344.80 EUR Million in November of 2006 and a record low of -62.66 EUR. Therefore, while North Macedonia has been successful in attracting FDI in recent years, there have been fluctuations in FDI inflows.
