A close look into draft Law on Foreign Direct Investment Screening in North Macedonia

On 15 July 2026, the Government of the Republic of North Macedonia adopted draft Foreign Direct Investments Notification and Screening Act (Предлог на закон за пријавување и проверка на странски директни инвестиции) ("FDI Screening Act").

The proposed legislation is a localized version of the Regulation (EU) 2019/452 of European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union. Notably, the draft FDI Screening Act contemplates the screening of all qualifying foreign investments, including those originating from EU Member States. Upon adoption, the FDI Screening Act will remain in place until North Macedonia joins EU.

Competent Authorities

The draft establishes a two-tier institutional framework for FDI screening. The Ministry of Foreign Affairs and Foreign Trade (MFA) will act as a central authority and national contact point for cooperation with foreign investors, the European Union and its Member States. The Ministry will be responsible for reviewing FDI notifications and preparing draft decisions. The Government of the Republic of North Macedonia will issue decisions on notified investments.

Scope of the Legislation

FDI

According to the draft FDI Screening Act, foreign direct investment potentially subject to screening is "investment of any kind as aimed at establishment or maintenance of a lasting direct or indirect link between a foreign investor and a company with its registered seat in the Republic of North Macedonia, for the purpose of carrying out an economic activity, through initial or any subsequent direct or indirect acquisition of at least 10% of share capital or voting rights, thereby ensuring effective participation or control".

The formulation suggests that both the establishment of a company and acquisition of shares in an existing company qualify as investment. It is, however, unclear whether the definition sets an irrebutable presumption that 10% of share capital or voting rights ensures effective control or 10% of share capital or voting rights and effective control are cumulative conditions in the presence of which an investment may be scrutinized.

Origin of FDI

Investment originating from any country other than North Macedonia may be subject to screening, other conditions being present.

Financial Threshold

No turnover threshold Is prescribed. Instead of the turnover requirement, the threshold is set in the form of minimum value of investment, this being merely EUR 50,000.

Sectors

The screening regime applies to investments in one of the following strategically sensitive sectors: defense and militaryequipment; critical infrastructure, including energy, transport, water, healthcare, communications, media, data processing or storage, aviation, defense, electoral and financial infrastructure, as well as sensitive sites, land and real estate critical to the operation of such infrastructure, and other infrastructure that may be designated as critical by the Government, upon the proposal of the Ministry of Defense; cybersecurity; sensitive technologies and dual-use goods and technologies; supply of critical inputs, including energy and raw materials; food security; companies having access to sensitive information, including personal data; and audio and audiovisual media services, including broadcasters and providers of on-demand audiovisual media services, video-sharing service and platform providers, and operation of public electronic communications networks.

FDI in other sectors and activities may also be subject to discretionary screening if the investment concerns projects or programmes of interest to the European Union which could potentially threaten security, public order or strategic interests, as designated by the MFA.

Procedure

Phase I - Notification

Foreign investor into one of the designated sectors, or the local target, must notify the intended foreign investment to MFA. The minimum content of the notification is to be regulated by secondary legislation. MFA must complete preliminary assessment of whether the notified FDI falls within the ambit of the screening legislation within 15 days from the receipt of the notification.

Phase II - Approval

If MFA notifies the foreign investor that the investment requires screening, the investor must submit an application for FDI approval. The application must include information on the foreign investor and the Macedonian target, including their ownership structure, beneficial owners, affiliated companies and subsidiaries; source of funds; business activities and significant markets in which the foreign investor and the target are active, details of the investment, business plan, objectives and expected implementation date; information on the investment's potential impact on national security, public order and strategic interests of the country; information on whether foreign investor is subject to any sanctions and an affidavit that the foreign investor and its ultimate shareholder are not subject to EU or UN sanctions; and audited financial statements for the preceding three years for the foreign investor and the target.The application requirements and supporting documentation are supposed to further prescribed by MFA.

Within seven days from the receipt of the application, MFA will assess whether the application and supporting documentation are complete and issue a certificate of completeness. The review by MFA should be completed within 60 days from the issuanceof the certificate of completion. The 60-day period may be extended for an additional 30 days due to the complexity of the investment, status change (merger, acquisition or demerger) of a company with a significant impact on the market, or the need for additional assessments and consultations with other authorities. The deadline is suspended during negotiations on conditional approval. In any event, there is no apparent consequence if the deadline for review by MFA is exceeded.

As part of the screening process, MFA is required to obtain opinions from a number of other ministries and state institutions. The addressed authorities must provide a written reasoned opinion within 30 days from the receipt of the request. This deadline is extendable for a maximum of 15 days.

MFA may also hold meetings and interviews with the foreign investor and the representatives of the target. Where further clarification is required, MFA may request additional written explanations and supporting evidence from the foreign investor, which must be provided within 15 days of receipt of the request.

Further details on the review process are supposed to be regulated by secondary legislation.

If, during the screening process, MFA receives an opinion from the relevant authorities and institutions that the FDI should be subject to conditions, it will negotiate conditional approval with the foreign investor before submitting the draft decision to the Government. The negotiations may not exceed 30 days. Upon expiry of this period, the Ministry must submit the draft decision to the Government, regardless of the outcome of the negotiations.

Standstill

A transaction subject to approval may not be implemented before clearance is obtained.

Types of Decisions

Upon proposal of MFA, the Government of North Macedonia may approve the investment, conditionally approve the investment, or deny approval to the investment if it determines the investment represents genuine and serious threat to national security, public order and strategic interests of the country and such threat cannot be alleviated or minimized by a conditional approval. No deadline is described for the Government's decision following the MFA's review and proposal.

The Government's decision is final and not subject to appeal. However, the foreign investor has the right to challenge the decision before the Administrative Court.

Post-approval Obligations

The foreign investor who obtained approval and implemented the investment is required to notify MFA of any subsequent change of control over itself.

Call-in power

The MFA may review even an investment which was not subject to notification and screening when implemented, if there are indications that the investment threatens the national security, public order or strategic interests of the Republic of North Macedonia. Such retroactive screening may be initiated within five years from the date of completion of the foreign investment. The date of completion is the later of date of the conclusion of the agreement representing the legal basis for the foreign investment, the date on which effective control is acquired, or, in case of greenfield investment, the date on which the economic activity commences.

Enforcement

In case of a failure to notify the investment and obtain approval or in case of non-compliance with the Government’s decision, the Government may impose measures, including prohibition of further investment, restriction of ownership or voting rights and divestment orders.

Failure to notify an FDI, the submission of inaccurate or incomplete information in the notification, and breach of standstill obligation each constitute an infraction subject to a monetary fine the amount of which depends on the size of the company and the type of the breach, the highest fine being EUR 30,000.

Entry into Force and Implementation

If adopted, the legislation will enter into force within eight days from its publication in the Official Gazette but will become applicable 18 months after the date of entry into force. Secondary legislation must be enacted within further three months.

Although the precise implementation commencement date is still unknown, prospective investors should consider the proposed new regime when planning their investment timelines.

Given the novelty of the screening mechanism and the generality of statutory provisions, initial screenings are expected to present challenge, necessitating careful planning and piloting.