As the world becomes more interconnected, businesses continue to expand their operations internationally. One popular method for such expansion is through the establishment of foreign subsidiaries. In this blog post, we will discuss the key legal requirements and obligations for operating a foreign subsidiary in the Republic of North Macedonia.

1. Ensuring Compliance: Pre-registration Prohibitions Before a foreign company is permitted to conduct business through a subsidiary in North Macedonia, it must first register the subsidiary in the commercial register. Prior to this registration, the foreign company may not operate through its intended subsidiary.

2. Updating the Commercial Register: Reporting Changes The subsidiary is required to report any changes or additions to the data recorded in the commercial register. This includes any changes or updates that occur within the parent foreign company or the individual foreign trader organizing the subsidiary.

3. Designating a Macedonian Head Office If a foreign company establishes multiple subsidiaries in North Macedonia, the main subsidiary (Macedonian head office) must be indicated during the registration process. Other subsidiaries are considered subsidiaries of the main subsidiary, and their order is indicated by their serial number.

4. Adhering to Market Regulations: Subsidiary Representation The subsidiary must conduct legal transactions on behalf of the foreign company or individual foreign trader. This includes using the company name and headquarters of the foreign company or individual foreign trader, as well as the name of the subsidiary itself.

5. Liability for Legal Transactions The parent foreign company or individual foreign trader is held responsible for all obligations arising from the subsidiary’s operations. If the foreign company or individual foreign trader has been registered in their home country for less than two years at the time of the subsidiary’s organization, the founders are also held jointly and unlimitedly liable for the subsidiary’s obligations until two years have passed.

6. Appointing Agents For each subsidiary, the foreign company or individual foreign trader must appoint one or more representatives to oversee operations in North Macedonia. These representatives can be appointed to multiple subsidiaries, and in some cases, the representatives of the main subsidiary may also represent other subsidiaries.

7. Maintaining Trade Books The foreign company or individual foreign trader must maintain commercial books for their operations in North Macedonia through the subsidiary. Additionally, the subsidiary is required to publish an annual account and audit report, along with any changes in the commercial register or other relevant annotations that may impact the financial position of the foreign company or individual foreign trader.

By understanding and adhering to these legal requirements, foreign businesses can successfully establish and operate subsidiaries in North Macedonia.

Our experienced legal team at Lalicic & Boskoski Law Office from Skopje, North Macedonia, is well-equipped to guide clients through this process, ensuring compliance with all applicable laws and regulations. 

Learn more about the investment conditions in North Macedonia, on the following link: Invest North Macedonia

Note: The above does not constitute legal advice and in no way can be accepted or understood as an instruction to act in a specific case. Each legal situation has its own characteristics that should be reviewed at separately, and for that reason we recommend that you contact a professional – a lawyer – for legal advice.