family business successful succession · family business successful succession, lays the...

Family Business Successful Succession An Overview of the Environment

for Family Businesses

in the Former Yugoslav Republic of Macedonia

National Report

Project number: 2016-3-EL02-KA205-002673

This project has been funded with support from the European Commission.

This publication [communication] reflects the views only of the author, and the

Commission cannot be held responsible for any use which may be made of the

information contained therein.

FABUSS – An Overview of the Environment for Family Businesses in FYR Macedonia

CEFE Macedonia and NYCM – June 2017

Preface

The FABUSS partnership appreciates the usefulness of acquiring and presenting a

comprehensive understanding of the environment for Family Businesses in each

partner country. There is therefore a need for checking, updating and enriching

information presented and analysed in various other sources and for a customised

screening of each partner country institutional environment’s particularities and

weaknesses, as these affect family businesses. The Report in hand, presents the

situation prevailing in the FYR Macedonia

Family businesses in FYR Macedonia may be the oldest form of business, but the

issues about them are new, unknown, and under-researched. With this report we

want to see what family businesses ecosystems look like around the country. This

report can be used to discover insights and learn more about family businesses

ecosystem, as well as to find recommendations on how to strengthen the ecosystem

in the country.

Author of this report is Ms. Natasha Chavdarovska, Consultant to the Association of

citizen CEFE Macedonia. For the preparation of the report was assisting Ms. Simona

Mladenovska, Consultant to the National Youth Council of Macedonia. Research team

conducted both desktop and field research, in order to understand the current state

of the family businesses in FYR Macedonia. The desktop research included: identifying

and analyzing relevant publications, reports, data on the explored subjects, from,

academic, civil sector, international and national organizations; analyzing current and

past relevant legal documents and state mechanisms; identifying and analyzing

relevant media reports. Field research included interviews or survey with family

businesses. The total number of interviews conducted is 63 with representatives of

family businesses. Guidelines for the survey’s structure and content were prepared by

the lead applicant of the FABUSS project (Athens Chamber of Commerce and

Industry). A contributor in preparation of the report is Jovan Stalevski, president of

CEFE Macedonia.

Date: June 27, 2017

Signature CEFE Macedonia: Jovan Stalevski, President

Signature National Youth Council of Macedonia: Blazen Maleski, President



Executive Summary

There are limited data in the FYR Macedonia for family businesses. This results from

the limited amount of research on this topic, the limited number of policies and

measures that relate exclusively to family businesses, and the limited interest and

opportunities for the formation of associations, foundations or other types of

organizations that would address challenges and needs related to family businesses in

the country. The survey of the environment of family businesses in the FYR

Macedonia, as well as the field research in the framework of the FABUSS Project -

Family Business Successful Succession, lays the foundations in the country for further

focusing on the expert and wider public knowledge regarding family businesses. At

the same time, this research provides conclusions, guidelines and recommendations

that should significantly promote the family businesses in the public and to help them

with their survival, growth and development. The majority of the data contained in

this report refers to small and medium-sized enterprises (SMEs) in the country, and

indirectly to family businesses, because according to previous research and data, most

of the family businesses in the country are small and medium enterprises, which

continue to be an important segment of the overall economic activity in FYR

Macedonia. The report also mentions the basic characteristics of family businesses in

the country, and some of the problems that owners and managers face in succession.

This report also lists the institutions, programs and organizations (international and

national) that support SMEs in FYR Macedonia. The Association of Citizens CEFE

Macedonia and the National Youth Council of Macedonia (NYCM), as partner

organizations in the FABUSS Project, will endeavor to strengthen awareness and

information about family businesses to different target groups in the future, and will

also address substantive topics such as a unified definition of family businesses in the

country, mapping family businesses, offering mentoring and financial support to

family businesses, creating measures and programs that would allow solving of issues

related to succession, conflict and communication in family businesses, and more.

CEFE Macedonia and NYCM are especially grateful to the FABUSS project team for the

opportunity to be part of this project. Sharing information and experiences with other

partner organizations through the activities of the project will be of great importance

for the future improvement of the environment for the family businesses in the

country.



Извршно резиме

Во ПРЈ Македонија постојат лимитирани податоци за семејните бизниси. Тоа го

покажуваат недоволниот број на истражувања на оваа тема, недоволниот број

на политики и мерки кои се однесуваат ислучиво на семејните бизниси, како и на

недоволниот интерес и можности за формирање на здруженија, фондации или

друг вид на организации кои би адресирале различни предизвици и потреби

поврзани со семејните бизниси во земјата. Истражувањето на окружувањето на

семејните бизниси во ПЈР Македонија, како и теренското истражување во

рамките на проектот FABUSS - Family Business Successful Succession, е одличен

почеток за поставуавње на основи во земјава запонатамошно фoкусирање на

експертската и пошироката јавност на семејните бизниси. Истовремено, ова

истражување дава заклучици, насоки и препораки кои значително би требало да

ја раздвижат јавноста во однос на семејните бизниси и да им помогнат во нивиот

опстанок, раст и развој. Најголемиот број на податоци кои се содржани во овој

извештај се однесуваат на малите и средни претпријатија во земјава, а

индиректно и на семејните бизниси, затоа што според досегашните истражувања

и податоци, најголем број од семејните бизниси во земјава се токму мали и

средни претпријатија. Малите и средните претпријатија и понатаму

претставуваат важен сегмент во вкупната економска активност во ПЈР

Македонија. Во извештајот, исто така, се споменуваат основните карактеристики

на семејните бизниси во земјава, а се наведуваат и дел од проблемите со кои се

соочуваат сопствениците и менаџерите при сукцесијата. Овој извештај ги

наведува и институциите, програмите, како и организациите (меѓународни и

национални) кои даваат поддршка за мали и средни претпријатија во ПЈР

Македонија. Здружението на граѓани ЦЕФЕ Македонија и Националниот

младиски совет на Македонија (НМСМ), како партнерски организации во

Проектот FABUSS, ќе настојуваат и во иднина да се зајакне свеста и

информираноста за семејните бизниси кај различни целни групи, но и да

адресираат суштински теми за дискусија како на пример постоење на

унифицирана дефиниција за семејни бизниси во земјава, мапирање на семејните

бизниси, нудење на менторска и финансиска поддршка за семејните бизниси,

креирање на мерки и програми кои би овозможиле разрешување на проблеми

поврзни со сукцесијата, конфликтот и комуникацијата во семејните бизниси и

друго. ЦЕФЕ Македонија и НМСМ се особено благодарни до тимот на Проектот

FABUSS за можноста да се биде дел од овој проект. Размената на информации и

искуства, пак, со останатите партнерски организации преку активностите на

проектот, ќе бидат од голема важност за идно подобрување на окружувањето за

семејните бизниси во земјава.



Table of Contents

Preface ……………………………………………………………………………………………………………….....2

Executive Summary in English .…………………………………………………………………………......3

Executive Summary in Macedonian ………………………………………………………………………..4

1.Social and Economic significance of Family Business in FYR Macedonia …………..…..6

1.1. Legal framework for family business in FYR Macedonia………………………………..6

1.2. Importance of family businesses in FYR Macedonia.…………………………………......7

1.3. Characteristics of family businesses FYR Macedonia ……………………………………..9

1.4. A closer look at family businesses in FYR Macedonia……………………………………..9

2. Policies for Succession and Transfer of Family Business …………………………………….11

3. Problems identified in Succession and Transfer of Family Business …………………..16

4. Organisations providing support to Family Businesses ………………………………………18

5. Identified Good Practices of Family Business Succession …………………………………..19

6. Concluding remarks ………………………………………………………………………………………….22

Annex A: Bibliographical references …………………………………………………………………..25

Annex B: Sources of information ………………………………………………………………………..25

Annex C: Organisations supporting Family Businesses ……………………………………….26



1. Social and Economic significance on Family Business in the FYR

Macedonia

Key findings:

The legal framework of the country does not have a law that defines the

term family business.

Family businesses in FYR Macedonia are usually associated with small and

mediumsized enterprises.

Important characteristic of family business in FYR Macedonia is their short

life cycle.

Typically, family businesses in FYR Macedonia are active in the trade sector.

It is expected that in the near future, other services and sectors will witness

a rise of the family business model including, for example, tourism,

consulting services, fashion and design, as well as software development

and other services in the IT sector.

1.1 Legal framework for family business in FYR Macedonia

The legal framework of the countrydoes not have a law that defines the term family

business.

Family businesses in FYR Macedonia are usually associated with small and

mediumsized enterprises. According the Handbook “Overview of Family Business

Relevant Issues – FYR Macedonia possible definitions for family businesses in the FYR

Macedonia are:

1. Family members involved in a certain type of business activity within a legalentity

can be considered as the most common (widespread) definition for family business in

FYR Macedonia.

2. A family business can also be a legal entity, which has been directly owned or

controlled (withat least 51%), by a single family no matter which size (in terms of

turnover or employees) this entity is.

3. A single – person enterprise (company owned and managed by a single individual,

without other employees) can beconsidered a family business only if the area of

activity of the enterprise is in the fieldsof agriculture, wholesale and retail trade,

providing services of hotels and restaurants, catering, and similar sectors of the

economy. Despite this, another important preconditionis that this person should have

the main supporting role regarding thefinancial assets of the family.

4. Sole proprietors can also be considered as family business but onlywhen most of

the family members are employed in the company.

5. Companiesowned by a single individual and employing more than one person can

be considered a family business if most of the family members are employed in



thecompany and have senior management positions.

It can be safely assumed that the majority of all legal entities in the country are what

can be considered family businesses. Family businesses are rarely stakeholder

companies. If they are quoted on the market, the family typically owns a great

majority of shares. This is the difference compared to non-family businesses, as family

owned businesses tend to keep control of the shares in their own hands. For this

reason, companies that are attractive to investors are rarely family owned companies.

Non-family businesses have many unrelated shareholders and are easier to buy at the

stock exchange. The relationships within families are much stronger and resilient to

take- over bids.

1.2 Importance of family businesses in the FYR Macedonia

It can be safely assumed that currently, in FYR Macedonia, most family businesses are

small and medium sized enterprises, although precise information regarding this issue

is unavailable. The importance of SME’s is confirmed through their participation in

total number of enterprises with 99.7%, as well as through absorption of 80.5% of

total number of employees.1

The country’s Development Plans, in the medium and long term, as well as in the

annual macroeconomic policies recognizes small businesses as an important factor for

increasing employment and production. They contribute to employment, increase

GDP (gross domestic product), and bring additional financial means for family

members involved in their activities. The great significance of small business

development confirms the research related to the development possibilities of the

country, the experience and practice of developed market-oriented countries and

countries in transition. The State Statistical Office (SSO) mainly reports on the basis of

number of employees.

According to SSO, there were 70,659 active business entities in 2014, out of which

64,187, or 90.8%, were enterprises with up to 9 employees. The share of registered

individual entrepreneurs is rather small, about 15% of total business entities.

Enterprises with 10–49 and 50–249 employees had a share of 7.0% and 1.8%,

respectively. SMEs accounted for 99.7% of total number of enterprises in 2014. In

2014, the SME sector accounted for 75.6% of total employment11 (micro – 33.3%,

small – 22.5%, medium – 19.7%)2. Family business also creates a tradition for the

future generations and over time opens the possibility to build a stronger brand,

which can be recognized on the domestic as well as on the foreign markets, by

1 Ministry of finance of the Republic of Macedonia (January 2014), The 2014 – 2016 Pre-accession

Economic Programme 2 BFC – Business and Financing Consulting (August 2016), Assessment of financing needs of SMEs in

the Western Balkans countries,Country Report: Macedonia



protecting its traditional heritage and following the technical and technological

developments overtime.

Table 1: Comparison of national and EU definition of SMEs

EU Definition Law on Trade Companies (2004)

Micro

Up to 10 employees Up to 10 employees

Annual turnover ≤ € 2 million Annual turnover < € 50.000

Balance sheet total ≤ € 2 million Not more than 80% of the gross income

should come from one client

Small


Annual turnover ≤ € 10 million Annual turnover < € 2 million

Balance sheet total ≤ € 10 million Balance sheet total < € 2 million

Medium


Annual turnover ≤ € 50 million Annual turnover < € 10 million

Balance sheet total ≤ € 43 million Balance sheet total < € 11 million

Source: Ministry of Economy

After it successfully organized a conference on family businesses in 2015, which was

attended by more than 120 visitors, ClearView Business Training Center, for the

second time organized the only conference of its kind on June 29, 2016, titled

“Challenges of Transition of Family Business”. The conference discussed the impact of

the founder of the company culture, what knowledge should successors have before

inheriting management of the company and how to get fresh capital into family-

owned companies. During the conference were present business owners which

together represented a total turnover of more than 3.5 trillion Macedonian Denars,

with a total staff of more than 1220 employees by 2015. During the first conference,

ClearView Business Training Center and Adizes South East Europe surveyed 60

involved business owners from across the region for the most common reasons for

not rewarding professional managers a share of ownership in the family company.

Table 2: Result of the survey by ClearView

Type Percentage

No interest among key people / managers to take share. They do not see

the value in the share, and feel more responsibility and connection to the

business

8% of respondents

Obstacles of a legal nature concerning the transfer of ownership 17% of respondents

Incompetence of the business owners in running the company 29%of respondents

Conflicts of interest with members of the family 4% of respondents

Heavy dependence on the family 8% of respondents

Complexity of establishing and maintaining a stable management system 29% of respondents

Other reasons 5% of respondents

1.3 Characteristics of family businesses in FYR Macedonia



The conditions for establishing a business in FYR Macedonia are very difficult,

especially at the present time. Some potential obstacles to starting up a (family)

business:

- Institutional weaknesses (example: slow and complex administration, limitations in

the administration of justice and the insufficient development in land and property

registration)

- High taxes

- Difficult market approach

- Difficulty obtaining small business loans

- Limited entrepreneurial culture among the people

- Not having a strategy for creating lobby groups of interest

- Corruption beside the government efforts

Owing to these factors, the business climate does not encourage families and

individuals to startup their own business.

Typically, family businesses in FYR Macedonia are active in the trade sector, primarily

small neighborhood shops prevalent in many cities, towns and villages. Agricultural

work is also traditionally done by family members in one business. Many clothing-

producing firms are also started and later managed as family businesses. Restaurants,

especially in smaller towns and villages, are also often a family business affair. It is

expected that in the near future, other services and sectors will witness a rise of the

family business model including, for example, tourism, consulting services, fashion

and design, as well as software development and other services in the IT sector.

Another very important characteristic of family business in FYR Macedonia is their

short life cycle. Going in and out of business is a very common feature for this

segment of the economy. In non-family businesses, the worker’s interest is different

from the family business with respect to working hours, dedication, and the will to

finish work tasks, the quality of work and the covering of absent workers. In the family

business, all of these are addressed with greater harmony that provides higher quality

and unique character.

1.4 A closer look at family businesses in the FYR Macedonia

In 2011, research was done in the Pelagonija region by Natasha Chavdarovska, to

identify family businesses, to see how they deal with conflict, and whether they have

succession plans. Due to the country's aspirations to join the European Union, the

research revealed whether and how companies from the Pelagonia region think about

competing in the enlarged market or they would continue to prioritize the domestic

market. The questionnaire was distributed to 100 potential responders, micro, small

and medium enterprises in Pelagonia. The following data was derived from 76

respondents who completed the survey:



74% of respondents said that the family company was managed by the first

generation

24% of respondents said that the family company was managed by second generation

1% of respondents said that the family company was managed by third generation

1% of respondents said that the family company is managed by fourth generation

(mostly in crafts).

75% of respondents said that the ownership is in the hands of several family members

and 25% of respondents said that the ownership is in the hands of only one family

member.

97% of respondents said that the manager comes from the family

3% of respondents said that the manager is not a family member or is a professional

manager from outside the family.

93% of family businesses do not have governing bodies such as supervisory board,

board of directors, management board etc., for those who do have these governing

bodies in 3% of enterprises family members predominate, in 2% management bodies

are of mixed character, and only 1% of management bodies consist of external

members. The owner is the manager in 84% of cases. It was noted that 67% of

respondents believe that the manager or CEO should be exclusively a family member

while 33% believe that it must be so.

76% stated that they do not possess any institutions (family assembly, family council,

family office, committees etc.). 11% hold family council, 3%family assembly,

committee for education 2%, and 8% family office.

55% of the enterprises have working meetings daily

4% meet several times a week

9% meet once a week

4% meet monthly

1% of family businesses said they meet once every three months

14% said they meet as needed

One part of the research concerns the perspectives of family businesses related to

future membership of the FYR Macedonia in the European Union.

54% of respondents are informed and known of the programs of the European Union

for business sector in their country, but didn’t try to apply

5%of respondents have tried to apply



39% of responders are not familiar with these programs

34% want cooperation with a related company or partner of a Member State of the

European Union

32% are already cooperating with companies or partners from Slovenia, Greece,

France, Italy, Bulgaria, and Czech Republic

46% do not think about it. As justification, they say that they are small companies, or

more interested in markets such as Turkey or Russia

Asked what they expect for their business if FYR Macedonia is part of the European

Union, the largest percentage (33%) does not expect anything. While 24% expect

modest revenue growth, 12% feel that accession will only intensify competition and

other changes will not happen. 5% believe that access to finance will remain limited,

30% expect more transparent business practices on the domestic market (rules on

competition, state aid, public procurement, higher standards, etc.)

67% of enterprises of this research have no information about family businesses in

the country, 12% have partial information, while 12% know about family businesses.

But 17% said that they need consulting services on the subject.

2. Policies for Succession and Transfer of Family Business



Key findings:

In the FYR Macedonia there is lack of national Policies or measures that are

referring to the family businesses.

Most of the policies and measures are for SMEs. The lack of legislative and

support directly for family businesses, is making the environment for this

type of companies difficult.

Government efforts to provide increased access to capital and other

activities are based on the conclusion that SMEs are crucial for economic

development and increased employment.

In the FYR Macedonia there is lack of national Policies or measures that are referring

to the family businesses. Most of the policies and measures are for SMEs. Having in

mind the fact that most of the family businesses are small and medium sized

enterprises, and then we can say that most of those policies and measures are

indirectly applicable for the family businesses. However, the lack of legislative and

support directly for family businesses, is making the environment for this type of

companies difficult.

The criterion for defining small, medium and large businesses in FYR Macedonia is

defined by an established legal framework for small and medium enterprises (SMEs).

The operations and activities of SMEs are defined in several laws. These laws regulate

separate activities of entrepreneurs and SMEs, and therefore in certain situations

have their own direct or indirect holding. There are 65 laws that define the operation

of enterprises. However, none of them applies only to SMEs (or family businesses).

Some of these laws relate to the financial performance of companies, others for

employment, human resources and labor relations, while the rest relate to the proper

definition of undertakings or steps for registration and commercial operations of the

enterprises. The legal framework which regulates SMEs is represented in the legal

provisions of the law on trade companies, law on craftsmen, law on consumer

protection, laws on tourism and catering, public procurement law, the law on foreign

investors, law of bankruptcy, law on the National Bank of the FYR Macedonia,

industrial property rights and many other provisions which regulate establishing,

operation and termination of small businesses. Many of the legal regulations do not

contain criteria for the classification of businesses.

In his article "Business in Family Property - a choice of legal structure," Costa

Jovcevski, shared the results of a study conducted in 20 companies in the country.

Characteristic of the family businesses is that they started as a small business based

solo ownership (craftsmen, sole traders, limited companies founded by one person,

etc.) and with growth of the business, eighteen of them had transformed into limited



liability companies, some form of partnership organization, or into joint stock

companies. The most common form of transformation of companies started with solo

ownership was into a limited liability company or a partnership in which close family

members play an active role. More recently observed are transformations into joint

stock companies.

After 2013, the implementation of the Program for competitiveness, innovations and

entrepreneurship continued, through realization of activities for support of

entrepreneurship and competitiveness of SME’s, support of implementation of quality

standards (ISSO, HACCP, HALAL), support of women entrepreneurship, craft

promotion, support of authentic hand crafts, support of young entrepreneurs by

selection of best business plan and financial support of newly established enterprises,

promotion of business angels etc. In the period 2014-2016 activities were directed to

strengthen the institutional infrastructure for SME and craft support, improvement of

business environment and competitiveness and innovation according to the Small

Business Act principles and according to the Craft strategy 2012-2020. Through the

implementation of the SEE Strategy 2020 (project financed by EC, in organization of

the Regional cooperation council from Sarajevo, Charter for investment), a

counterpart to EU 2020 Strategy and the Regional strategy for research, development

and innovations, support of regional cooperation, improvement of competitiveness

and realization of the common vision for EU integration was to be achieved. Of great

importance for the SME’s sector is the OECD project “Next Generation

Competitiveness Initiative”, financed through IPA. Within this project three sectors

from the region are to be identified, and a detailed analysis made of their conditions,

perspectives, possibilities for value chain creation, identification of barriers for

creation of these relations. Also, a pilot project for each sector was developed with

activities towards elimination of certain barriers and for support of mutual

cooperation in creation of a regional value chain.

According to the preliminary findings from the most recent Small Business Act (SBA)

Assessment Report (2015), limited progress can be observed in the institutional

support framework for SMEs. The country has, however, strengthened the

institutional, regulatory and operational environment for SMEs, e.g. measures have

been taken to facilitate company registration and e-government services. Two main

web portals provide an overview of all e-services – the website of the MoISA informs

about the e-services that are offered, a central government website informs about e-

government policy, however, information on the different types of licenses and

permits that are required, cannot yet be found on one single website. However, this is

not perceived by SMEs as a major constraint to “doing business”.

Table 3: Policy description in the FYR Macedonia



Description of policy 2013 2014 2015 2016

Programme for Competiveness, Innovation and Entrepreneurship

A. Implementation profile* x

B. Net direct budgetary impact (if any) -- 15,690,000 20,000,000 20,000,000

B.1 Direct impact on budgetary revenues -- 0 0 0

B.2 Direct impact on budgetary expenditures -- 15,690,000 20,000,000 20,000,000

IPA (2009) “Capacity building for the implementation of the industrial policy”

A. Implementation profile* x x

B. Net direct budgetary impact (if any) 7,915,050 8,523,900 1,826,550

B.1 Direct impact on budgetary revenues 71,235,450 76,715,100 16,438,950

B.2 Direct impact on budgetary expenditures 79,150,500 85,239,000 18,265,500

IPA (2009) “Support of the Commission for protection of Competition for state aid control”

A. Implementation profile* x

B. Net direct budgetary impact (if any) 307,500

B.1 Direct impact on budgetary revenues 5,842,500

B.2 Direct impact on budgetary expenditures 6,150,000

IPA (2010) “Harmonization of legislation and capacity building in the field of consumer protection”


B. Net direct budgetary impact (if any) -- 3,185,700 1,162,350 3,487,050

B.1 Direct impact on budgetary revenues -- 28,671,300 10,461,150 387,450

B.2 Direct impact on budgetary expenditures -- 31,857,000 11,623,500 3,874,500

Export promotion activityes


B. Net direct budgetary impact (if any) 492,000 3,690,000 -- --

B.1 Direct impact on budgetary revenues 0 0 -- --

B.2 Direct impact on budgetary expenditures 492,000 3,690,000 -- --

Total net budget impact

Total impact on budgetary revenues 5,842,500 99,906,750 87,176,250 16,826,400

Total impact on budgetary expenditures 6,642,000 130,387,500 116,862,500 42,140,000

“X” mark Indicates the starting year and where applicable, ending year for measure

Source: Ministry of Economy and Commission for Protection of Competition

Government efforts to provide increased access to capital and other activities are

based on the conclusion that SMEs are crucial for economic development and

increased employment. Table 3 shows the levels at which the Government, though

different programs and projects, supports entrepreneurship and SME’s, and

improvement of the business climate, as well as the estimated economic impact of

these efforts.

Innovation Strategy - Innovation is a key driver of economic growth and the

development of an innovation policy is considered as one of the cornerstones of the

economic strategy of the Government. With this in mind, the aim of the Innovation

Strategy is to initiate the transformation of the country into a knowledge-based

economy, which is able to compete on international markets, through its skilled

labour and innovative companies. The document articulates a vision that the Strategy

will drive competitiveness and economic development based on knowledge and

innovation thereby creating high value employment and prosperity for Macedonian

citizens. It is intended that by 2020, the FYR Macedonia will have an effective national

innovation system, created by all stakeholders, and open to the world. In order to



fulfill this vision, four strategic objectives were defined:

Objective 1 – enhancing the business sector’s propensity to innovate;

Objective 2 – strengthening human resources for innovation;

Objective 3 – creating a regulatory environment which will be supportive of

innovation;

Objective 4 – increasing knowledge flows between innovation actors.

Industrial Policy - The Industrial Policy 2009-2020, prepared by the Ministry of

Economy and adopted by the Government in June 2009, is a national strategic

document for enhancing the competitiveness of Macedonian industry and the

economy in general. The Policy focuses on knowledge, innovation and research, as the

drivers of industrial development, stimulating a more conducive business and

investment climate and supporting enterprises to improve their competitive

capabilities through the acquisition of new technologies and new markets. The Policy

focuses on five areas of intervention as the key pillars for enhancing the

competitiveness of endogenous industry:

International cooperation and FDI [Foreign Direct Investment]stimulation;

Applied research, development and innovations;

Eco - friendly products and services for sustainable development;

Development of SME and entrepreneurship;

Collaboration in clusters and networks.

The approach and objectives of the Industrial Policy are consistent with the

Innovation Strategy for 2012 - 2020. One of the main tenets of the document is that

industrial policy is not a stand-alone policy, and therefore requires integration of all

relevant policies that relate to the competitiveness enhancement of industry. A

detailed Action Plan has also been developed to allow for a successful implementation

and coordination of the Policy.

The National Economic Reform Programme (NERP) was submitted to the European

Commission in January 2015. It covered the period 2015-2017 and is a successor to

the previous Pre-accession Economic Programmes (PEPs). It is updated annually on a

three-year rolling basis. The document is comprised of two parts: the first relates to

the medium-term macroeconomic and fiscal framework, whilst the second presents

the sectoral structural reforms that are necessary for promoting competitiveness and

growth. The Economic Reform Programme 2017-2019 is the third such document

prepared in accordance with guidelines provided by the European Commission (EC).

Revised National Strategy for Small and Medium-sized Enterprises - Although this

strategy (originally prepared by the Ministry of Economy in March 2007) has been out

of date since 2013, many elements remain valued today. The vision of the SME

strategy is to contribute to an overall increase of employment in the SME sector, and

to the Gross Domestic Product. Its Goals are to:



Increase the number of SMEs;

Increase employment in SMEs;

Increase the contribution of SMEs to GDP.

The focus of the Strategy, which took into account the renewed Lisbon Agenda, the

European Charter for Small Enterprises, and the Governmental Programme (all of

which are now superseded, such as by the Small Business Act), is directed at achieving

the following objectives:

Enhancing policy making;

Simplifying the legal and regulatory environment;

Simplifying taxation;

Improving access to finance;

Fostering ICT;

Enhancing science, technology, and innovation;

Promoting entrepreneurship in education and training;

Encouraging internationalization;

Improving Business Development Services; and

Strengthening public-private dialogue.

The Ministry of Economy is obliged to prepare a new Strategy for the Development of

SMEs in FYR Macedonia. The Strategy should include the establishment of an

integrated system of performance management, and also take into consideration the

2015 report on the Small Business Act. The new strategy is reportedly in the process

of being created.

3. Problems identified in Succession and Transfer of Family Business



Key findings:

Family businesses tend to have many weaknesses which make them

unsustainable in the long-run.

The most important reasons for their lack of sustainability are: poor

management (because of complex interpersonal relationship that exists

between the company personnel (private and professional), lack of

discipline, etc.), problems with access to finance for further development

and inadequate cost controls.

Big number of family businesses has not begun the process of planning.

Access to finance is considered as a major obstacle to “doing business” in FYR

Macedonia. The share of SMEs in total private sector lending is estimated at only 35%,

yet they constitute almost 99% of all businesses. Smaller companies in particular

struggle with accessing loans, and this is reflected in the high number of enterprises

who solve their financing needs with internal funds and retained earnings

(approximately 80%). Part of the problem, is the relatively high collateral

requirements (approximately 150%), combined with the banks’ heavy reliance on

immovable assets, together with a credit history assessment, as part of their loan

decisions. The Government has supported lending to SMEs with different

programmes provided by the Macedonian Bank for Development and Promotion. The

extent to which this “access to finance” problem has limited the establishment of new

businesses, and restricted the growth of existing businesses, has yet to be explored.

Business support services are another area which requires attention, as many smaller

and microenterprises lack important skills in terms of business planning and financial

management. This skills gap lessens their growth potential, and restricts their ability

to access finance through normal banking channels. Training courses to help start-ups

and growth enterprises are offered by various national and international sources, and

it is suggested, that online training should be explored as a possible innovative option.

Legal support services are also available through the Information Centre of the State

Office of Industrial Policy; however, few advances have been made in the

dissemination of SME related information. Although information about private

business support services is provided online, this is not currently available through a

single SME portal. The SME Observatory is the natural repository for this information

but is not operational. The monitoring and evaluation of business support services is

still in the early stages of development, and further efforts should be made to

enhance the effectiveness of both the evaluation and the feedback mechanisms.

The National Development Strategy for SMEs 2011 – 2013 has expired, and although

work has started on a new strategy for the sector, it has not yet been finalised, and



policy coordination without a strategy remains weak. Therefore, the adoption of an

SME strategy, based on the latest SBA Report (2015), as the main strategic document

for continuous reforms and support to SMEs is a priority. The strategy will identify

concrete steps to resolving outstanding challenges in the institutional and operational

environment, including enhanced SME support services, strengthened consultation

mechanisms with the private sector, and expanding the breadth and depth of

statistical data collection amongst SMEs. The SME sector should be strongly and

actively involved in the preparation of this strategy. In general, the government

allocated budget for the Ministry of Economy, the SME Agency, and service provision,

needs to be enhanced for full-scale project implementation. As an example, the SME

Agency for the Promotion of Entrepreneurship (APPRM), which should be the main

organisation for developing the sector, currently employs only 11 people, and has a

limited operational budget. The Agency provides a basic range of support services,

under its “Support Programme for Entrepreneurship, Competitiveness and Innovation

of SMEs 2015. These include programmes on “investment readiness”, consultancy,

training, and mentoring, but are limited by resource implications. Consequently, SME

owners/managers and their representatives chambers maintain that their sector has

been somewhat neglected over the past number of years and that a greater share of

the country’s scarce economic development resources should be allocated towards

enterprise development. Additionally, the awareness of SME policy implementation,

within the SME community, is moderate, and that consultation mechanisms with the

private sector are in need of strengthening.

It should be pointed out that family businesses tend to have many weaknesses which

make them unsustainable in the long-run. The most important reasons for their lack

of sustainability are the following: poor management (because of complex

interpersonal relationship that exists between the company personnel (private and

professional), lack of discipline, etc.), problems with access to finance for further

development and inadequate cost controls.

According the research conducted by Natasha Chavdarovska in 2011, no respondents

from the family businesses that were targeted had a written agreement to succeed

the business manager, while 25% responded that they had an oral agreement that

regarding succession in the business. Four percent of family businesses have formal

rules or statutes, while 6% have an informal set of rules and customs. Twenty-nine

percent responded that they have a business plan, 6% a family strategic plan, 3%a

property plan, none have a written plan for succession, and 39% have no regulations.

On the question whether children want to inherit the family business 47% responded

"yes", while 11% responded "no" and added that "it is too early to know" or "they

should". Only 32% have started to plan succession, and 62% have not begun the

process of planning. Asked what are the views of children for becoming involved in



the family business, 9% said that the children have no interest in business, 4% that

business does not allow them to use their training, 1% that the business does not

allow them use of their talent, 1% responded that children are not interested in

business careers, 4% the business is too small, while 7% of respondents say that

children could earn more elsewhere, and therefore decided not to get involved in the

family business.

In those cases where transfer of the ownership or business is already committed,

according some responses, this reflected with no change in the business, and

according other responses, this reflected growth and business development.

4. Organisations providing support to Family Businesses



Key findings:

Some of the projects for SME development belong to the financial services

group, such as credits, investment, grants etc., and some involve training,

technical assistance, campaigns, consulting services, etc.

This development corresponds to the transformation of the Agency for

Privatization into the Agency for Promotion of Entrepreneurship (APE),

which started its activities in May 2004.

The APE is an institution owned by the state, established to support

entrepreneurship and the competitiveness of small businesses in FYR

Macedonia, as well as implementation of other programs related to

entrepreneurship and small businesses.

The APE is a major player on the national level for the implementation and

coordination of national and international support for the SME sector.

In FYR Macedonia in the period 2000 - 2001 there were more than 30 projects, along

with an additional number of sub-projects and separate activities in SME

development, financially supported by various donors. Some of the projects belong to

the financial services group, such as credits, investment, grants etc., and some involve

training, technical assistance, campaigns, consulting services, etc. This development

corresponds to the transformation of the Agency for Privatization into the Agency for

Promotion of Entrepreneurship (APE), which started its activities in May 2004. The

APE is an institution owned by the state, established to support entrepreneurship and

the competitiveness of small businesses in FYR Macedonia, as well as implementation

of other programs related to entrepreneurship and small businesses. The APE is a

major player on the national level for the implementation and coordination of

national and international support for the SME sector.

Active bilateral donors from EU member states include France, Germany, Italy, the

Netherlands and the United Kingdom. Other large donors from outside of the EU

include Switzerland and the USA. Multilateral donors active in the themes covered by

the strategy include: the Council of Europe; the Organisation for Security and

Cooperation in Europe (OSCE); and, the United Nations. The main International

Financial Institutions operating in the country are: the European Investment Bank

(EIB); the European Bank for Reconstruction and Development (EBRD); and the World

Bank Group (WB).

Detailed description of the public and private sector organizations is given in Annex C.

5. Identified Good Practices of Family Business Successful Succession



Key findings:

Although in international practice there are many examples where the big

enterprises are family businesses, this cannot be considered a reality in the

economy of FYR Macedonia.

The concentration in certain industries as well as the size of the family

businesses is changing mainly due to economic factors as well as social

factors including the average salary, labour supply etc.

Although in international practice there are many examples where the big enterprises

are family businesses, this cannot be considered a reality in the economy of FYR

Macedonia. Yet, the concentration in certain industries as well as the size of the

family businesses is changing mainly due to economic factors as well as social factors

including the average salary, labour supply etc. For example, in the retail sector,

companies such as Tinex or Kam-market have grown to dominate the market. The

family company Bujoto develops fast within the furniture making business. In the

wine sector, the following companies: Popova Kula, Popov winery and others are also

rapidly growing. To some extent Tikvesh winery can also be considered as a family

business (the question is whether we consider the nuclear or the extended family

members as owners). These businesses tend more toward larger businesses than

SMEs.

Bushi hotel – The history of this family business begins in 1955, when the father of

the family started producing shoes and slippers. This business developed, and by 1992

the whole family worked together. In the 1980s the eldest son in the family started

with an uncle to learn the goldsmith craft. In 1990 they decided to become

independent and to open a shop for gold in the Old Bazaar in Skopje. It was a small

shop, about 16 square meters, but over the years, the business slowly expanded. In

1995 they opened the first factory for the production of gold. Then they opened

“Bushi Fashion" boutiques and clothing shops, organized fashion shows, and created

knitted gowns patterned after world brands. In 2008 they became the first

representatives of "Swarovski element" in FYR Macedonia. Today they run a hotel, spa

and resort center in the Old Bazaar in Skopje, and are planning to open a factory for

marble. The hotel has 75 employees, 22 people work in the quarry, about 20 in the

shops, and they plan to employ approximately 50 workers in the marble. Asked how

they evaluate the business climate in FYR Macedonia, they answer “I think that more

space should be given to domestic investors. Attracting foreign companies is one

thing, but the support for domestic companies is necessary. There are successful

people who should be supported. Foreigners come, invest, but the earnings go back

to their home. With the domestic business, every penny is spent here in the country.



So we need to think in that direction, to support the Macedonian companies.

Especially in terms of administrative procedures, since the state can at least help us in

that area. Macedonia has great potential; it just needs to find the right way”.

LD Dama - in 1992 a domestic private enterprise was founded, establishing a

Macedonian brand for the production of tights. The successful family business story of

LD brings together two generations of family Atanasov - parents seriously devoted

building and developing the foundation of the firm, and their children modernizing

the image by entering a fresh spirit and visionary approach to the extension of story.

Mara Atanasova decided to leave her job at a public company, and together with her

husband Cyril established a business to produce tights. The company started with 3

products and today has 16 products on the Macedonian market and dozens more in

the final phase of development. In 2010 Ljubica Atanasova joined the family business

by taking over marketing and sales, and in 2012 her brother Dimitar joined the team

focusing the attention to the operation of the company and establishing a new brand

name - La Dama, a new logo, new packaging, website, and other corporate identity

materials. They plan expansion of the sales network in FYR Macedonia and abroad,

and are thinking about opening their own retail facility.

Vitalia - The story of "Vitalia" began two decades ago, in 1993, with the opening of

the first shop in Skopje in which consumers can buy dietary, macrobiotic and

vegetarian products, whole grains, soy products, refined sugars and other such foods.

Following the needs of consumers they soon began their own production, creating

competitive products available to the general population. A successful development

strategy that included innovation, quality and professional service created a strong

and established brand which is positioned for leadership not only in FYR Macedonia

but also throughout the region. Today the successful team of "Vitalia" has 150

employees, who are fully committed to customer satisfaction and are working

vigorously to develop and live the values of the brand. "Vitalia" is a remarkable

example of how a professional approach to work, honesty and commitment can

succeed in realizing dreams and goals. Their portfolio of 240 items covering 11

categories of healthy products makes “Vitalia” a leader in the production of healthy

food in the region. Their future goal is to strengthen that position, and expand into

new foreign markets by establishing a successful export company under the Vitalia

brand. Development inevitably requires new investments in production and

expanding the range of products which are outstanding in their innovation and

originality.

ANDROS FARM DOO - is a company that produces products in the field of chemistry,

overall home connectivity, cosmetics, liquid detergents, fabric softeners, candles, car



cosmetics, disinfectant, PET and PVC packaging products. In their production activities

they use knowledge and technologies of German companies. They use raw materials

mostly from European manufacturers, creating products to European standards for

the protection of man and nature. ANDROSFARM has one of the largest capacities in

the Balkans. The domestic market quickly recognized their quality and every year their

production is increased by 20 to 30%. The company is also present in the markets of

Serbia, Kosovo, Albania and Montenegro. The company was founded in 1993, initially

dealing in trade of food products, and over time began to work within the industry

and introduced its own production. The company began working with just 4

employees, and today they have 35 employees. One of the advantages of running

their own businesses cited by family members is the personal satisfaction that is

acquired in operation, independence and flexibility in decision-making about the

course of their own employment, self-employment and employability. The company

believes that running a small business brings with it certain disadvantages such as

limited financial support, access to credit, uncertainty among banks and creditors as

well as the risk in collection of receivables.The company is in the third stage of its life

cycle, and is in the process of expanding the number of employees and scope of sales

in the markets of the Balkans and central Europe.

PANORAMA D.O.O.E.L. is a producer and processor of all types of nuts, berries, seeds,

dried fruits, spices and wheat berries. The business was created in 1989 as a trading

company, and now has its own distribution in cities around the country. The company

has developed more than 200 products, and is constantly working to expand the

range of its offerings. The products belong to the category of Healthy Foods, and are

exported to many countries such as the former Yugoslav republics, European Union

and United States. The business was launched with only two employees. The whole

family participates in managing of production, the adoption of new decisions and

developing ideas for expanding capacity and entering new markets. Currently the

company has 20 employees and is in the phase of growth and expansion.

APIMELL – DOOEL - is a company that markets therapeutics made from bee products.

Based on many years of experience in the field of skin infections and conditions and

the requirements of a large number of patients and acquaintances, Dr. Petar Bacevski

and his team have developed products to meet their needs and expectations. The

family opened “Dr. Bacheff” in 1992 to produce natural products based on honey and

pollen. Its line of products includes various kinds of propolis ointments, lotions and

creams. There were initially only 5 employees, and today the company has 12

employees. According to the company, running their own business has several

disadvantages such as weak financial support and high costs in operation and main



advantage is operational independence.

6. Concluding remarks

Future public policy in FYR Macedonia regarding family business should be



directed towards stronger promotion of family business in hopes of promoting

further development, fostering the country’s economic growth, and

consequently reduced levels of unemployment, opening the possibility for

presenting our national ‘treasure’ (culture, heritage, tradition) etc. In addition,

we believe that the scale and the scope of the active measures followed by the

Government for supporting this segment of the economy, such as supporting

access to low-interest financing, will be increased in the future.

The current state of affairs requires dramatic changes, to increase public

awareness about family businesses and their economic and social significance.

National experts expect that while currently family businesses are focused on

traditional sectors (trade, gastronomy, agriculture) in the near future other

services and sectors will witness the rise of family businesses, such as tourism,

consulting services, fashion and design as well as software development and

other services in IT sector.

A major problem that remains in analysis and research on family businesses in

the EU and in FYR Macedonia is the lack of a clear definition of the term

“Family Business”. The absence of such a common definition does not

facilitate formulation of well-focused initiatives and policies at the European

and national level.

The national policy concerning family business should be directed towards

stronger promotion of this segment of the economy, which will bring further

development and promote economic growth of the region and the country,

resulting in lowering unemployment, opening the possibility for the broader

presentation of national resources (culture, heritage, tradition).

In the EU there are national family business associations. If FYR Macedonia

were to organize a similar association it might better protects the interests of

this business group and offers members opportunities to exchange

experiences.

More concrete policies and measures that are focused on family businesses

are needed from the government. At present, only the general policies and

measures for small and medium enterprises apply to this type of businesses.

However, policies and measures that offer consultancy, mentoring, financial or

other support for family businesses can encourage expansion of these

businesses in the long term.

Annex A: Bibliographical references

Stoilkovska, Aleksandra (2011): The chalenges of a family business, UTMS Journal of

Economics, ISSN 1857-6982, Vol. 2, Iss. 2, pp. 181-187



CPRM (2008): Overview of Family Business Relevant Issues – Macedonia

Chavdarovska, Natasha (2012): Challenges and perspectives of the family businesses

in Pelagonija region, Faculty of economics, Skopje

Poliksena, Buleska (2014): Situation and perspectives for developing small business,

Municipality of Ohrid, Ohrid

Institute of Economics, Skopje (2003): Proceedings of Economics and regional

economic development, family businesses and association, page 133

Ministry of Finance of the Republic of Macedonia, Skopje, (2014): Pre-accession

Economic Programme 2014-2016

Competitiveness Strategy and Action Plan of the Republic of Macedonia 2016-2020,

January 2016

Small Enterprise Development in Macedonia, May 2007

Ministry of finance of the Republic of Macedonia (January 2014), The 2014 – 2016

Pre-accession Economic Programme

BFC – Business and Financing Consulting (August 2016), Assessment of financing

needs of SMEs in the Western Balkans countries,Country Report: Macedonia

Annex B: Sources of information

http://stat.gov.mk/

http://stat.gov.mk/



http://vlada.mk/node/6124?language=mk

http://www.mrfp.org.mk/mk/

(http://www.mkd.mk/makedonija/ekonomija/ne-e-lichno-za-biznis-se-raboti-vo-

familijarniot-biznis-sekogash-e-lichno)

http://www.utrinski.mk/?ItemID=2E568CA44B2AC64C974C2EE55BEE27B2

http://republika.mk/170840

http://fashionel.mk/intervju/l-d-kolant-semejna-biznis-prikazna-vo-koja-timskiot-duh-

i-upornosta-se-garancija-za-uspeh

www.vapilica.com

https://www.youtube.com/watch?v=hfdQU5rM06s

Annex C: Organisations supporting Family Businesses

Agency for Promotion of Entrepreneurship of the Republic of Macedonia (APERM)

http://www.apprm.gov.mk/about_us.asp

http://vlada.mk/node/6124?language=mk


http://www.mkd.mk/makedonija/ekonomija/ne-e-lichno-za-biznis-se-raboti-vo-familijarniot-biznis-sekogash-e-lichno

http://www.mkd.mk/makedonija/ekonomija/ne-e-lichno-za-biznis-se-raboti-vo-familijarniot-biznis-sekogash-e-lichno

http://www.utrinski.mk/?ItemID=2E568CA44B2AC64C974C2EE55BEE27B2

http://republika.mk/170840

http://fashionel.mk/intervju/l-d-kolant-semejna-biznis-prikazna-vo-koja-timskiot-duh-i-upornosta-se-garancija-za-uspeh

http://fashionel.mk/intervju/l-d-kolant-semejna-biznis-prikazna-vo-koja-timskiot-duh-i-upornosta-se-garancija-za-uspeh

http://www.vapilica.com/

https://www.youtube.com/watch?v=hfdQU5rM06s

http://www.apprm.gov.mk/about_us.asp



This is a state-owned institution established to implement SME policies and other

related projects/programmes adopted by the Government for support of

entrepreneurship, competitiveness and innovation. It supports sustainable economic

growth, regional development and increased employment, helping Macedonian

enterprises to start, grow and reach technology levels needed to competitively enter

international markets. The Agency acts as intermediary between policy makers and

SMEs through permanent communication and cooperation with all partner

institutions dealing with entrepreneurship promotion and SME support.

CEED Macedonia

http://ceed-macedonia.org/

CEED Macedonia is part of an international network of entrepreneurial centers

operating in Southeastern Europe. Their office in the country started in 2007. CEED

benefits entrepreneurs who want sophisticated yet practical training, connections to

finance and access to new markets. Most entrepreneurs in the CEED network have

successfully grown their businesses in their local markets but have faced many

challenges along the way. Through the Micro and Small Enterprise Project, supported

by USAID and Swiss Embassy, CEED Macedonia has secured an Acceleration

Investment Fund in total amount of $30.000, to be invested in selected start-ups. The

unique CEED Business & Learning Club, which is comprised of about 250

entrepreneurs, owners of successful businesses in FYR Macedonia, provides the

opportunity for entrepreneurs and managers to increase their sales and to improve

the management of their companies through the exchange of experiences and

information with other experienced entrepreneurs and executives from the country.

CEFE Macedonia

http://cefe.mk/

CEFE Macedonia is an organization founded in 2008 in Skopje, Macedonia and works

mainly with youth and organizations for promoting and raising entrepreneurship and

self employability skills. Their main activities are trainings, consultancy and

workshops. CEFE areas of expertise are private sector development, creation of

entrepreneurial environment, education and development of the labor market,

empowering youth. CEFE has the following services: providing adequate expert or

partner organization support; customized trainings, team building trainings,

facilitating of retreat events; full project management.

Macedonian Enterprise Development Foundation (MEDF)


MEDF was established in late 1998 in response to the problems of unemployment and

http://ceed-macedonia.org/

http://cefe.mk/




difficult access to sources of micro loans in the banking sector. The Dutch Government

approved 4 million euros in support of Macedonian companies through MEDF. In its

first 15 years, through loans amounting to over 37 million, MEDF supported 10,165

farmers and entrepreneurs. Thus, they were supported and 3.977 16,797 existing

jobs. The majority of loans, 51% were made in the agriculture sector, 44% in rural

areas and 45% of the loan holders are women. MEDF created new financial services:

guarantee mechanism, loans for beginners, tourism, organic production, IT ideas and

pre-financing of IPARD projects. Through financial support, training and study visits

the Foundation supported development of the capacity of financial intermediaries

Tutunska Bank, Halkbank, the Savings Opportunities and Horizons Foundation, over

which MEDF placed loans. Besides financial support, MEDF participates in other

segments of the development of entrepreneurship. Since 2007 it has been one of the

main organizers of the event "Entrepreneur of the Year". Since 2008 MEDF has been

part of the national team that conducted the largest study of entrepreneurship in the

world - Global Entrepreneurship Research. MEDF is one of the promoters of the

concept of Corporate Social Responsibility in the country.

European Bank for Reconstruction and Development (EBRD)

http://www.ebrd.com/where-we-are/fyr-macedonia/overview.html

The Bank has been operational since 1993. As of 30 November 2012, the Bank has

signed 80 projects with net cumulative business volume of EUR 1.1 billion, and it

mobilised additional investment in the same amount. The Bank will continue to assist

in attracting and supporting foreign investment, thereby promoting productivity

improvements through new skills and processes. In parallel, the Bank will seek to

assist local corporates in improving their competitiveness. Private sector involvement

in the municipal sector and the provision of utility services is essential to attracting

investment and improving quality of services, and the Bank will seek to enable greater

participation by the private sector, as well as adoption of best industry practices

across the municipal sectors.

Youth Entrepreneurial Service (YES) Foundation

http://www.yes.org.mk/Default.aspx?r=6&l=54&c=22

YES Foundation exists for stimulating entrepreneurship and raising the level of

employment among young people through strengthening their skills and

competencies to start their own businesses. YES Foundation stands for supporting

them through many activities and subventions in order to help the local development

of the currently most productive sector – SMEs. YES Foundation with its main

component, business incubator for supporting micro, small and medium enterprises

in the ICT field, offers access to services for accelerating their growth and

http://www.ebrd.com/where-we-are/fyr-macedonia/overview.html

http://www.yes.org.mk/Default.aspx?r=6&l=54&c=22



development.

Invest Macedonia

http://www.investinmacedonia.com/

This is the primary government institution which is in charge of attracting new foreign

investments in the country and supporting the expansion of foreign companies with

already established operations. In addition to the investment function, Invest

Macedonia is also engaged in promoting the Macedonian companies in foreign

markets and supporting them in the process of increasing their exports abroad. The

primary aim of Invest Macedonia is to be recognized by the companies and all other

partners not only as a government institution but also as a professional and proactive

service organization oriented towards meeting the requirements of the business

community.

Ministry of Economy

http://www.economy.gov.mk/

The Ministry of Economy coordinates activities related to the development of the

concept of corporate social responsibility and development of the CSR Strategy 2014-

2020 with a two-year action plan. There is large contribution here by the National

Coordination Body for Social Responsibility of Companies, as a permanent working

body of the Economic and Social Council, with a mission to mobilize companies and all

stakeholders to exercise social responsibility as a key strategy in operations. For six

years, the Ministry of Economy in cooperation with the National Coordination Body

for Social Responsibility of Companies has made the National Award for best

corporate social responsibility practices of Macedonian enterprises, and this event will

continue to be organized in the future.To enable improved transparency and

awareness of the business community for all programsand measures that are

designed to support companies, their continuous informing and education, the

Ministry of Economy created a web portalwww.konkurentnost.mk, where

Government programs that are implemented by various ministries, European and

donor projects and programs, many strategic documents, international reports and

relevant publications etc. are presented at one place.

Ministry of Finance

http://www.finance.gov.mk/en/view/naslovna

SME Development Programme - The objective of the SME strategy and programme is

to support the small and medium-sized enterprise sector, through creating a new and

strengthening the existing institutional infrastructure, improving the legal

environment and providing non-financial and financial services. The SME

http://www.investinmacedonia.com/

http://www.economy.gov.mk/

http://www.finance.gov.mk/en/view/naslovna



Development Programme is based on the general perception of the role of

Government in the creation of a favourable business climate, and within this

framework to prepare a policy for support of entrepreneurship and the development

of SMEs. The programme identifies the measures and instruments for the

implementation of the main goals and development priorities in this area, which are

necessary for the economic development of the country.Program to encourage family

businesses in rural areas -the Government has committed to at least 15 million EUR

that will be used for financial support and create new jobs. If there is more interest, it

is intended the Government will increase the amount of funds required to finance this

program. Financial support will then cover 50% of the total cost of the investment

business.The focus is on creation of new jobs, and projects that achieve this have

priority.Financial support for creation and development of micro and small family

businesses will be provided for the following activities: activities related to food

processing activities that are not related to food production, introduction of new

alternative agricultural production and the provision of agricultural services,

supporting the development of traditional crafts and rural tourism.

Fund for innovation and technology development

http://www.fitr.mk/cooperation/?lang=en

The Fund for innovation and technology development in cooperation with the

Ministry of Education and Science is implementing the Skills Development and

Innovation Support Project. The project aims to improve the transparency of the

allocation of resources and promote accountability in higher education, to improve

the relevance of secondary technical and vocational education and to support the

innovation capacity in the country. The objective of the Project is to improve

transparency of resource allocation and promote accountability in higher education,

enhance the relevance of secondary technical vocation education, and support the

innovation capacity of the country. The Project, with total funding of 17.7 million

euro, consists of the following parts:

Part 1: Improving Transparency of Higher Education

Part 2: Modernization of Secondary Technical Vocational Education and Training

Part 3: Improving the Innovative Capacity of Enterprises and Collaboration with

Research Organizations

Part 4: Project Management and Monitoring and Evaluation

The Instrument for Pre-accession Assistance II (IPA II)

https://ec.europa.eu/neighbourhood-enlargement/instruments/overview_en

The IPA funds build up the capacities of the countries throughout the EU accession

http://www.fitr.mk/cooperation/?lang=en

https://ec.europa.eu/neighbourhood-enlargement/instruments/overview_en



process, resulting in progressive, positive developments. The funding allocation for

FYR Macedonia under IPA II for 2014 – 2020 is € 664.2 million, and the priority sectors

for receipt of this funding are:

Democracy and governance;

Rule of Law and fundamental rights;

Environment and climate change;

Transport;

Social development;

Agriculture and rural development;

Regional and territorial cooperation;

Competitiveness and Innovation.

Under the above umbrella, financial assistance from IPA II funds can be used for the

following: improving economic competitiveness; increasing productive investment;

foreign direct investment; diversifying exports; creating conditions for sustainable

economic growth and EU convergence; strengthening the business framework (legal

and institutional), including by implementing the EU single market law.

Other EU Funds are available though the following programs: Eureka, Eurostars,

COSME, HORIZON2020, etc.

IME Program

http://www.swisscontact.org/en/country/macedonia/home.html

Increasing Market Employability (IME) programme aims to create jobs and increase

incomes for unemployed and underemployed women and men, with a particular

focus on youth. Increasing Market Employability (IME) is a programme of the Swiss

Agency for Development and Cooperation, implemented by Swisscontact with the

assistance of PREDA Plus Foundation for Sustainable Economic Development. The IME

programme is working to strengthen the business sector, improve the quality of

products and services offered, expand markets and create an enabling environment in

three selected sectors: Tourism and Hospitality; Creative Industries and Green

Economy. The first phase of the programme is being implemented from 01 April 2015

to 01 April 2019 with a budget of 6.25 million Swiss Franks. IME is implementing

activities that contribute to the increased income of men and women, youth in

particular, by increasing the competitiveness of farmers and small businesses in key

sectors. It is important that the focus is placed on ensuring systemic changes which

are sustained. This allows for youth and women to access markets generate income

and adopt system dynamics in the mid- to-long term. The programme seeks to

encourage change across the sectors, utilising a market-based approach, one that

incorporates effective stakeholder platforms providing the direction required to

http://www.swisscontact.org/en/country/macedonia/home.html



achieve sustainable change. The expected key results of the programme are to create

more than 2,000 jobs, with special consideration to employment opportunities for

youth and women, and increase the net income of more than 1,000 companies by

€1.5 million over a period of 4 years.

Macedonian Chamber of Information and Communication Technologies - MASIT

http://masit.org.mk/

This is a volunteer, non-profit chamber of commerce. The chamber was founded in

2000 as an initiative of the top 15 Macedonian IT companies and was operating as an

Association within the Economic Chamber of Macedonia. In April 2007, on the Annual

Assembly of MASIT, the legal transformation of MASIT from Association to Chamber

of commerce was agreed. Today, MASIT is the voice of the Macedonian ICT industry.

The chamber represents companies of the ICT sector including: software and IT

services companies, hardware companies and distributors, carrier and other telecom

companies, as well as training providers and ICT consulting companies.

Macedonian Bank for Development Promotion (MBDP)

http://www.mbdp.com.mk/index.php/en/

MBDP was created in 1998 as the only state-owned bank in the country, with a

mission to improve SMEs’ access to finance. It is a development bank modeled on the

German KfW, and the scope of its activities includes financing start-ups, providing

medium- and long-term loans to SMEs, financing exports, extending export credit

insurance, and the management and implementation of international credit lines.

The Economic Chamber

https://goo.gl/VEDEJ8

Since December 2004 with the Law on the Economic Chamber, the Chamber is a

business and professional association which reconciles, represents and protects the

interests of its members. The Economic Chamber is a referent institution of the

business in our country with around 15.000 members on voluntary bases out of which

most are small and medium enterprises. Members of the Economic Chamber have

dominant participation in establishing of all the macroeconomic indicators on state’s

level (GDP, foreign trade exchange, employment, settlement of obligations towards

the state, etc.).

European Enterprise Network

http://www.een.mk/

The Enterprise Europe Network is the largest network of contact points providing

http://masit.org.mk/

http://www.mbdp.com.mk/index.php/en/

https://goo.gl/VEDEJ8

http://www.een.mk/



information and advice to EU companies on EU matters. Launched in 2008 by the

European Commission, the network consists of nearly 600 local partner organizations

(universities, chambers of commerce, agencies, foundations, associations) in more

than 50 countries, promoting competitiveness and innovation. The Enterprise Europe

Network in the country is represented through the European Information and

Innovation Centre.

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