Foreign companies looking to establish a presence in North Macedonia without forming a separate local legal entity can do so through a foreign subsidiary (branch office). Operating a subsidiary comes with specific legal obligations under the Law on Trade Companies — from registration before commencing operations through to ongoing reporting and accounting requirements. This page is part of our practice in business and corporate law. For an alternative structure, see our guide on opening a branch office in North Macedonia and our overview of LLC registration.

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.

The experienced legal team at Lalicic & Partners 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 at Invest North Macedonia.

Practical Checklist

Before and during the operation of a foreign subsidiary in North Macedonia, verify the following: (1) Register before operating — the subsidiary must be registered in the commercial register before any business activity begins. Operating without registration is not permitted. (2) Report all changes promptly — any change to the data in the commercial register — including changes within the parent company — must be reported without delay. (3) Designate a head office if opening multiple subsidiaries — if you plan more than one subsidiary in North Macedonia, identify the main subsidiary (head office) during registration. Additional subsidiaries are numbered in sequence. (4) Check the two-year founder liability rule — if the parent company was registered in its home country less than two years before opening the subsidiary, the founders bear joint and unlimited personal liability for the subsidiary’s obligations until the two-year mark is reached. (5) Appoint at least one authorized representative — each subsidiary must have one or more designated representatives in North Macedonia. Ensure their details are registered in the commercial register. (6) Maintain commercial books and publish annual accounts — the subsidiary must maintain trade books and publish an annual account and audit report. 

Frequently Asked Questions

Can a foreign company start operating in North Macedonia before registering a subsidiary?

No. The Law on Trade Companies requires the subsidiary to be registered in the commercial register before any business operations begin. Operating through an unregistered subsidiary is not permitted.

Who is liable for the subsidiary’s obligations?

The parent foreign company or individual foreign trader bears full responsibility for all obligations arising from the subsidiary’s operations. Additionally, if the parent company was registered in its home country for less than two years at the time of establishing the subsidiary, the founders are jointly and unlimitedly liable for the subsidiary’s obligations until the two-year period has elapsed.

What happens if the parent company changes its details?

Any changes to the data of the parent foreign company must be reported to the commercial register and updated without delay. This includes changes to the company name, address, management structure or other registered details.

Can the same representative act for multiple subsidiaries?

Yes. Representatives can be appointed to multiple subsidiaries. In certain cases, the representatives of the main subsidiary may also represent other subsidiaries of the same foreign company in North Macedonia.

What accounting obligations does the subsidiary have?

The subsidiary must maintain commercial books for all operations in North Macedonia and publish an annual account and audit report. Any changes in the commercial register or annotations that may affect the financial position of the parent company must also be published. A licensed accountant must be engaged for these purposes.

Need legal guidance?

If you need assistance establishing or managing a foreign subsidiary in North Macedonia, the team at Lalicic & Partners is at your disposal. Contact us through our website.