Category: North Macedonia

North Macedonia does not have a foreign investment screening regime comparable to those now emerging in the European Union in light of the EU FDI Screening Regulation, but operates a single-sector authorisation system specifically covering the defence sector. Additionally, there is mandatory registration of all direct investments made by non-residents.

Legal basis

The Foreign Exchange Operations Act (Official Gazette of RM, nos. 34/2001, 49/2001, 103/2001, 51/2003, 81/2008, 24/2011,  135/2011,  188/2013,  97/2015,  153/2015,

23/2016, and Official Gazette of RNM, no. 110/2021) and the Act on Development, Production and Trade of Military Goods (Official Gazette of RNM, no. 298/21).

Filing requirement

The filing regime in the defence sector encompasses investments into a company active in the development and production of military equipment, by a foreign legal entity.

Regarding the mandatory registration of direct investments, which is administrative / statistical in nature, the following is considered a direct investment as per the Foreign Exchange Operations Act:

• incorporating a company or increasing the registered capital of a company in full ownership of the investor, establishing a subsidiary or acquiring full ownership over an existing company;
• participation in a new or already existing company if the investor holds or acquires more than a 10 % share in the registered capital of the company, exceeding 10 % of the voting rights;
• a long-term loan of five or more years of maturity, if the loan from the investor is intended for a company that it owns in full; and
• a long-term loan with five or more years of maturity, if the loan is intended to establish lasting economic relations if granted among entities associated in a mutual economic venture.

Relevant sectors

Approval is necessary for all foreign investments that concern investments into a company active in the development and production of military equipment.

Registration is mandatory for all direct investments as defined above, as well as for modifications of existing investments.

Process and timetable

Competent authority: Ministry of Economy for investments into the defence sector. Registration is carried out by the Registry for Direct Investments (“RDI”).

Mandatory filing requirement: Yes

Filing deadline: There is no deadline prescribed for the submission of a request to the Ministry of Economy. The deadline for notifying a direct investment is 60 days from the date of the transaction which constitutes the legal basis for making the direct investment.

Responsibility for filing: The responsibility for making a filing regarding investments in the field of development and production of military equipment lies with the foreign investor. The obligation to register the foreign direct investment lies upon the resident company in which the foreign investor has invested.

Sanctions: Failure to obtain approval for investments in the field of development and production of military equipment entails the following penalties:

• EUR 4,000 to EUR 8,000 for a resident that enables a foreign investment without previous approval from the Ministry of Economy;
• EUR 500 to EUR 1,000 for the responsible person within the resident company;
• a one- to five-year ban on carrying out production and trade of military equipment for the company, i.e. a one- to five- year ban for the responsible person; and
• confiscation of the objects with which the misdemeanour was committed.

Failure to register a direct investment with the RDI entails the following penalties:

• a fine ranging from EUR 250 to EUR 15,000 for the resident company;
• a fine ranging from EUR 100 to EUR 800 for the manager of the resident company.

Also, the transfer of profit, as well as the transfer of financial resources generated from the sale of shares held in the Macedonian company (or its liquidation), is conditioned by previous appropriate registration of the foreign investment with the RDI.

Length of the proceedings: Regarding investments into the defence sector, the Ministry of Economy is obliged to carry out the review and issue a decision at the latest within 60 days from the date of a complete request. There is no deadline prescribed for the RDI to issue a decision.

FDI Screening in Moldova.

FDI Screening in Poland.

FDI Screening in Czech Republic.

FDI Screening in Austria.

FDI Screening in Bosnia & Herzegovina.

FDI Screening in Croatia.

By Danijel Stevanovic, Partner at Moravcevic Vojnovic i Partneri in cooperation with Schoenherr

ODI Law has advised Cine Grand on its long-term lease agreement with the East Gate Mall for a 3,000 square-meter space for operating a cinema within the mall in Skopje. Reportedly, solo practitioner Zekir Zekiri advised the lessor.

According to ODI Law, “the refurbishment of the space is already in progress, and the cinema is due to be opened in the last quarter of 2022.”

Cine Grand is a cinema exhibition company founded in June 2010. It operates under the Cine Grand and Cine Globe brands.

ODI’s team included Partner Gjorgji Georgievski and Associates Fani Dimoska and Iva Djugumanova.

The development of road infrastructure is important for the Macedonian authorities. The Government of the Republic of North Macedonia (RoNM) analyzed and undertook different approaches for the realization of infrastructure projects in the past. During the last few years, the Assembly of the RoNM (Assembly) has adopted two laws that stipulated additional regimes for the realization of infrastructure projects.

The Law on Strategic Investments (LSI) entered into force on January 20, 2020, and it stipulates criteria, conditions, and procedure application for obtaining the status, selection, preparation, and the realization of strategic investment projects (SIP).

The LSI prescribes that a project would be considered a SIP if it fulfills one or more of the goals defined in the LSI and would be realized with an investment amounting to: at least EUR 100 million if the investment would be made by two or more municipalities; at least EUR 50 million if the investment is made in municipalities with a seat registered in any city and the City of Skopje; and at least EUR 30 million if the investment is made in a municipality organized in a village.

Additionally, projects would also be considered as SIP if realized based on agreements between countries, realized and financed in cooperation with the EU, the Ministerial Council of the Energy Community, and international financial institutions, if those projects are led by a state body, public enterprise, trade company, or other entity incorporated or fully owned by RoNM or its municipalities. In such cases, the amount of the investment is not a criterion.

The LSI explicitly stipulates that the realization of strategic projects is a public interest. SIPs may be private, public-private, or completely public projects. We understand that infrastructure projects in which RoNM or an entity established by RoNM is usually a project leader may be realized as a public-private SIP, in accordance with the legislation for public-private partnerships, or as a public SIP, when led by any of the state bodies and institutions in the above paragraph.

Furthermore, the LSI stipulates that a special regime for obtaining the necessary documents would be applicable for the realization of each SIP, which may put projects on a fast track. Namely, the necessary approvals, permits, consents, licenses, authorizations, certificates, and other documents which need to be issued in accordance with applicable laws would be issued within deadlines provided in the law for the realization of SIPs.

The status of SIP would be granted through a government decision. The government should also provide consent for the SIP’s draft agreement (which would be prepared by a special Commission for SIPs) and prepare the draft law for that particular SIP’s realization. The LSI stipulates detailed rules and deadlines for the issuance of a decision granting SIP status, however, the deadlines for concluding the SIP’s agreement and the adoption of the law for its realization are not prescribed. Hence, the period needed for completing the necessary statutory steps and obtaining effective SIP status cannot be determined.

Additionally, the Assembly adopted a special law for the realization of an infrastructure project in 2021 (Infrastructure Project Law), with which the public interest was determined and a contractor, i.e., strategic partner was nominated for the construction of certain routes along Corridors 8 and 10D. Based on the Infrastructure Project Law, the realization of this project would be supported by a special regime for: the working hours of employees, employment of foreigners, obtaining licenses for exploration and exploitation of minerals necessary for the construction of state roads, exemption from VAT legislation, and exemption from legislation for public procurement. For the needs of managing the projecting, construction works, and preparation of necessary project documentation, separate construction agreements would be concluded between the strategic partner, the Public Enterprise of State Roads (as an investor), and the Ministry of Transport and Communications, after successful negotiations.

Clearly, the above laws are a result of the Macedonian Government’s dedication to increasing capital investments in infrastructure projects. Nonetheless, noting that there is no infrastructure project yet realized under these laws, the effects of this new legislation should be assessed over the following years.

By Marija Filipovska, Partner, and Aleksandar Josimovski, Attorney-at-Law, CMS Skopje

This Article was originally published in Issue 9.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Financial technology is in its early stages in North Macedonia. The ability of alternative finance companies to utilize technology and provide products and services to underserved individuals enabled them to successfully penetrate the retail lending market and become the most embedded subsector in the fintech space. Incumbent banks, aware of the growing competition, are developing fintech solutions such as better credit scoring solutions, the digitalization of products and services, and facilitating peer-to-peer payments. Fintech players and incumbent banks alike are also experimenting with big data analytics, cloud computing, and artificial intelligence. There are no initiatives in blockchain and distributed ledger technology.

The focus of the fintech space is currently on payment services following the adoption of the highly anticipated Payment Services and Payment Systems Act (PSPA) in April 2022. The previous payment services regulations did not allow fintech players to access payment systems that banks could exclusively access. The PSPA, modeled on EU legislation, including the Second EU Payment Services Directive, will change this. Indeed, the principal objective of the PSPA is to open up the payment services market, currently dominated by complex pricing structures, difficulties in comparing products and consumer switching, and disproportionately high charges for consumers. To that end, the PSPA envisages liberalization of the market for payment services, the introduction of new forms of payment services, greater security of electronic payments, enhancement of consumer rights, and a basic payment account. The liberalization of the payment services market will present a myriad of challenges for both incumbent banks and fintech players.

Incumbent banks will need to re-think their pricing models and devise strategies to respond to the competition in the market. They will be faced with the challenge to provide a better customer experience at lower prices. Their principal advantages are their well-developed IT financial services infrastructure and a network of physical points of sales (branches) throughout the country. Under the PSPA, they will be required to allow access to their IT financial services infrastructure for fintech players, which will open many issues. There is a consensus among all stakeholders in the fintech space that fintech will expose the financial system to higher levels of cybersecurity threats, financial crime, money laundering, and, potentially, terrorism financing. Another concern is that, if fintech players do not comply with the regulations, they might expose the financial system to loss of trust by consumers.

Fintech players will look to break the banks’ hegemony in the payment services market by providing greater access to the financial system at lower prices. They will focus on the new millennial and generation Z customers who demand new technology channels to carry out their financial services transactions. These customers will expect competitive pricing, increased responsiveness, and the ability to purchase products and services on a pay-as-you-go basis. However, a less sophisticated or more traditional customer base will still expect old physical channels to be available. They will not trust online transactions carried out solely by machines. Fintech players will have to decide whether to rely on the incumbent banks’ IT financial services infrastructure or develop their own, for example, by deploying distributed ledger technology. Most of them will likely choose to rely on the incumbent banks’ infrastructure, as that will be more cost-efficient than developing their own.

Ensuring compliance with the applicable regulatory framework will be challenging for new fintech players. They will have to ensure compliance with competition, data protection, cybersecurity, money laundering, consumer protection, and other relevant regulations which apply to them. They might find it challenging to operate in an environment where enforcement of the applicable regulations by regulators is inconsistent – which might be the case here, as Macedonian state agencies and authorities have little to no experience in fintech.

The liberalization of payment services will provide an impulse to the growing fintech space in North Macedonia. The market will likely welcome many new fintech players, particularly in peer-to-peer lending, peer-to-peer payments, cryptocurrency, e-wallets, robo-advice, and regtech. Whether the increased competition will drive innovation and efficiencies in the market to the benefit of consumers remains to be seen.

By Gjorgji Georgievski, Partner, and Fani Dimoska, Associate, ODI Law

This Article was originally published in Issue 9.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

An in-depth look at Kristijan Polenak of the Polenak Law Firm covering his career path, education, and top projects as a lawyer as well as a few insights about him as a manager at work and as a person outside the office.

Career:

Polenak Law Firm, Managing Partner, 2007-present

Polenak Law Firm, Partner, 2001-2007

Polenak Law Firm, Associate, 1997-2001

Polenak Law Firm, Trainee, 1995-1997

Education:

Ministry of Justice of the Republic of North Macedonia, Certificate for Passed Judicial Exam, 1997

St. Cyril and Methodius University, Iustinianus Primus Faculty of Law, LLB Degree, 1991-1994

Favorites:

Out of office activity: Spending time with friends, Social clubs’ humanitarian activities, Walking and hiking

Quote: “It’s better to be safe than sorry”

Favorite book: Quo Vadis by Henryk Sienkiewicz

Movie: Empire of the Sun by Steven Spielberg

Top 5 Projects:

Advising the EBRD in the pre-privatization of the Macedonian Power Company.

Advising TAV in the build–operate–transfer structured concession of Macedonian airports, which is one of the largest effective concession agreements;

Advising the M6 group in the sale of Skopje Brewery shares to Coca-Cola and Brau Union. The most compelling parts were managing the client’s interests prior to the transaction and the very challenging negotiations;

Advising Hyprop Investments Limited in the acquisition of the Skopje City Mall, at that time the largest mall in North Macedonia. This is still one of the largest M&A transactions on the market;

Advising GSOL in the acquisition through reorganization of a large ferro-nickel production plant, in a court-governed insolvency procedure. A huge legal challenge, representing the largest restructuring process on the market.

What would you say was the most challenging project you ever worked on and why?

Polenak: Many of the projects in the last 25 years may be considered challenging, but I believe the privatization of Stopanska Banka AD Skopje takes the lead. It was a very complex privatization of the country’s largest bank at that time. We worked for the International Finance Corporation and the European Bank for Reconstruction and Development which, along with the National Bank of Greece, acquired 85% of the shares from the Bank Rehabilitation Agency. The government was pursuing a policy to restructure the financial sector and considered the restructuring and privatization of the bank as an important national goal and prerequisite to strengthening the financial sector and the national economy. It had, therefore, agreed to take certain steps with regard to this bank, by way of an act of Parliament, and the Central Bank agreed to take additional actions. We worked alongside the Ministry of Finance in drafting the guarantee law of this strategic investment, along with the local bank in collecting and grouping the shareholding in the Bank Rehabilitation Agency, as well as together with our clients on the transactional documents.

And what was your main takeaway from it?                    

Polenak: My main takeaway was regarding the capacity and ability of the State to carry out painful projects, to achieve the targets set in its existing policies and political agenda, while the main benefit for me was the amount of experience collected during the process. Following the passage of time, this transaction may now seem obscure but, back then, it was immensely important to stabilize the banking sector and reduce the risks of high NPLs within the largest bank of the country.

What is one thing clients likely don’t know about you?

Polenak: My love for music. There is hardly a moment when I do not have a nice, smooth jazz tune playing in the background when I work on documents.

Name one mentor who played a big role in your career and how they impacted you.

Polenak: Clearly, being a third-generation lawyer, the role of my father as my mentor has the most significant place in my professional growth. I rarely worked with him, as he was a litigator and criminal lawyer, his moral code and dedication to excellence were embedded into my psychological profile.

What is the one piece of advice you’d give yourself fresh out of law school?

Polenak: Go and complete another master’s in economics or IT. The combination would give you a distinct edge and competitive advantage.

 

This Article was originally published in Issue 9.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

ODI Law Partner Gjorgji Georgievski, EY Law North Macedonia Manager Jana Nikodinovska, CMS Partner Marija Filipovska, Popovski & Partners Partner Ognen Martinov, and Lalicic & Boskoski Partner Vedran Lalicic talk about what practices have been keeping their firms busy and their outlook.

The Champ: Corporate/M&A

In Corporate/M&A seems to have been the busiest practice in North Macedonia, throughout the year, with Georgievski and Lalicic believing this trend is strongly connected to the COVID-19 pandemic. According to Georgievski, “post-pandemic attractive valuation levels and tax considerations” were the primary reasons for the increase in M&A. ODI Law advised on a few M&A deals in that regard, he says, including “the owner of retail chain operator Kit-Go on the sale of the company to Viva Fresh,” as well as “Kin and Carta on the Macedonian law aspects of the acquisition of software development company Melon Group.”

Lalicic, on the other hand, explains that the dynamic growth of M&A was related to the easing of the COVID-19 measures. As a result of it, he says, “many new investors were encouraged to start their business in North Macedonia. Also, many existing businesses were encouraged to expand their business activities.” According to him, in 2021, Lalicic & Boskoski “had numerous cases of founding new companies, especially in the IT sector.” As for the specific deals, he says the firm was involved in the sale of City Connect to Transcom, as well as in the acquisition of the shares of Eltek Explosives by Mashinokop.

Martinov believes that foreign investments played a crucial role in North Macedonian M&A. “Increase in foreign investments locally gave a boost in legal business from a corporate/M&A perspective,” he says. As an example of that, he points to Fortenova Grupa’s EUR 615 million sale of its frozen food business to Nomad Foods, in which Popovski & Partners represented the seller. EY Law’s Nikodinovska also points to North Macedonia as an attractive destination for foreign investors due to “the stabilization coming from NATO membership in 2020,” but also highlights “legislative developments with new regulations and regulatory compliance requirements imposed on Macedonian companies” pushing the market to develop in this direction.

Lastly, Filipovska explains the M&A pipeline has been fueled by leapfrogging in renewable energy projects. “In the past decades, North Macedonia was not developing renewables when compared to the region and the EU countries,” she says, but “it is my pleasure to see that the government has seen the need for more sustainable and green energy.” The CMS Partner reports that “North Macedonia adopted a strategy for energy development until 2030, which introduces the ambitious plans to go green in a very short span.”

The Runner-Up: Data Protection

Several lawyers also pointed to a spike in data protection work in North Macedonia. “Our practice in the GDPR area was driven by the changes in Macedonian legislation,” Lalicic says, explaining that “the new data protection law was adopted in February 2020 (effective from August 2021) in order to align the national data protection legislation with EU legislation.” 

Nikodinovska agrees, adding that “the regulatory landscape in North Macedonia set forth regulatory compliance challenges for Macedonian companies coming from the alignment of Macedonian laws with the EU regulations within the EU accession process, in particular, GDPR and AML regulations. Accordingly, a portion of our services during 2021 was focused on helping Macedonian companies meet data privacy requirements.”

The input follows Georgievski’s Hot Practice interview with CEE Legal Matters in 2021, in which he highlighted that data protection was the firm’s busiest practice, “primarily as a result of the looming end of the transition period of the new data protection law in the country.”

Time to Refocus?

Martinov expects that their corporate practice will “still be one of the busiest practices,” with Filipovska being equally confident since she expects the “positive trend of numerous energy projects will continue, and that sustainability and renewables projects will be increased and well supported by the authorities and the local market.” Similarly, while acknowledging that the practice “has slightly slowed down, due to our clients’ justified fear that arose from the outbreak of the war in Ukraine,” Lalicic stresses they “are very optimistic that in 2022 our practice will increase its activity compared to the past two years.”

Others are more reluctant in their positive outlook with Georgievski saying that “M&A activity could be well decreased in 2022 due to several factors, including the uncertainty arising out of the war in Ukraine, high valuations, and rising inflation. Another issue for some investors might be a rise in the cost of capital and potential tax increases.”

The bleakest of outlooks was offered by Nikodinovska: “the war in Ukraine at the beginning of 2022 and the associated economic crisis gave the final shock to the Macedonian economy, leading to frozen M&A deals.” She does see opportunities elsewhere though. While Martinov expects a rise in litigation work, Nikodinovska believes that, in the future, they will see an increased demand for compliance and governance services, “taking into consideration the challenges companies are facing from the constant change in the economic and legal environment and the associated risks.”

This Article was originally published in Issue 9.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

In a 2020 CEE Legal Matters article, Karanovic & Partners Partner Veton Qoku wrote that “in 2016 the Republic of North Macedonia made changes to its Law on the Control of Narcotic Drugs and Psychotropic Substances, defining the terms ‘hemp,’ ‘hemp seed oil,’ and ‘cannabis/hemp oil’ for the first time as well as regulating the procedure for cultivation and production of hemp.” CEELM spoke with Qoku to check in on the development of this young sector in the country.

Promising Growth Opportunities

“North Macedonia is one of the few countries in the region which has legalized cannabis for medical use, together with Croatia,” Qoku says, while pointing out that Slovenia has also allowed “certain CBD drugs for medicinal use.”

The country currently has, according to him, “67 registered companies who have been granted approval for cultivation of cannabis for medical purposes, and around 35 of these companies are active.” He reports that a number of active companies use technologically advanced solutions to extract and produce medicinal cannabis. “Companies investing in the cannabis business in North Macedonia come from different countries, including but not limited to the US, Germany, Israel, Bulgaria, Australia, the Netherlands, Canada, and Poland.”

While the CBD sector is still novel, to an extent, there are ample opportunities for growth and development. The industry is “slowly, but surely growing. The number of companies which have obtained approval for the cultivation of cannabis is expected to go up,” Qoku stresses, citing the “welcoming business climate of North Macedonia and the openness to introduce changes in the existing legislation” as a reason. Cannabis has even made a list of top ten priorities in the Action 21 – for European Standards at Home plan, made by the previous prime minister.

“Furthermore, the previous prime minister expressed the intention to introduce a more serious debate around the topics of decriminalization and total legalization of cannabis,” Qoku continues. “In December 2020, he issued a statement predicting that North Macedonia could gain around EUR 250 million, in 2021 alone, from the export and production of medical cannabis.” However, the prediction was contingent on the passing of the proposed draft of the new law, which did not occur.

Willingness to Advance Legislation but Little Progress

The main challenge the cannabis industry is facing growth-wise is legislation, according to Qoku. “In 2016, with the amendments of the existing Law on the Control of Narcotic Drugs and Psychotropic Substances, the procedures for cultivation and production of hemp were regulated for the first time,” he reports. Qoku states that the law has been facing a number of challenges and that it requires “refinement and clarification,” specifically when it comes to approvals and marketing. “A better control mechanism should be introduced for other narcotic drugs and psychotropic substances, which emerge rapidly and pose a challenge to public health,” he adds.

Still, the law is yet to be amended or substantially updated, with Qoku reporting that, after attempted amendments to it in 2018, it was determined that an entirely new law was needed. The draft for the new law “entered into parliamentary procedure twice, in 2019 and 2020. However, both attempts to adopt this legislation ended unsuccessfully.” The proposed draft aimed, among other novelties, to enable dry flower exports, which would allow local companies to access the global markets. It also sought to establish an “Agency for Cannabis for Medical and Scientific Purposes of the Republic of North Macedonia, as a special body intended to conduct the administrative and expert works related to the control of cannabis cultivation, extraction, and production for medical and scientific purposes.”

“While major stakeholders, including the government, have expressed their willingness to further regulate this matter and thus provide new opportunities for the industry, little has been achieved in adopting the necessary legislation,” Qoku says. A working group was formed in 2021, with the purpose of preparing suggestions for legislative updates and changes, yet “even after several held meetings, nothing came to fruition in terms of passing the relevant legislation.”

A Need to Develop Capabilities

Furthermore, Qoku reports challenges with the “institutional workforce, especially within public institutions,” where there is a clear need for a higher number of trained employees that could be “keeping up with international and domestic practices in the field of cannabis cultivation and production.” He says that public institutions lack the requisite resources to enable the efficient monitoring of the cannabis industry.

Additionally, he reports that the personnel issues extend to cannabis producers as well. According to applicable legislation, these producers must “employ expert employees in the field of pharmacy with a specialization in pharmaceutical technology and specialists for examination and control of medicines. Qualified candidates are few on the local workforce market and some of them are close to retirement,” he explains. If the number of prescribed expert employees is not met, approvals and permits could easily be revoked.

Finally, Qoku reports that one of the biggest threats to the cannabis industry in the country is a “lack of general knowledge about this industry and the benefits which it might offer. This includes, among others, the health benefits and the economic benefits, considering that the cultivation and production of cannabis for medical purposes has become a lucrative business in recent years.” He feels that educating the public and introducing more debates between the government and the private sector would be beneficial for the further prosperous development of the cannabis industry in North Macedonia.

Worth the Trip

Ultimately, “the medical cannabis market has proven to be a fertile ground for companies looking to invest in the business,” Qoku reports. Despite being strictly regulated, the market is expected to grow in the years to come, “especially since the government is eager to encourage investors to settle down in North Macedonia with their cannabis cultivation and production businesses.” And this is compounded by the fact that, as Qoku explains, growth opportunities are not related solely to the cultivation of cannabis for medical purposes and the production and trade of cannabis extracts. They “also extend to entities involved in the sector dealing with industry equipment and facilities and the services sector providing technical, legal, commercial, and other services to licensed companies working with cannabis for medical purposes in the country.”

This Article was originally published in Issue 9.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

ODI Law has advised REDI Development on a EUR 1 million term loan to microcredit foundation Horizonti Skopje. Dentons Luxembourg reportedly advised REDI as well.

REDI Development, incorporated in Luxembourg, is an investment vehicle with a specific focus on Roma entrepreneurs in Romania, Bulgaria, North Macedonia, and Serbia. According to ODI, “REDI Development has an investment capacity of EUR 5 million and the ability to provide loans and risk-sharing to financial intermediaries, as well as know-how related to the Roma culture.”

Horizonti is a specialist microfinance provider in North Macedonia, founded in 2000.

ODI’s team was led by Partner Gjorgji Georgievski and included Associate Ema Tasevska.

ODI could not provide additional information on the matter.

ODI Law has advised NeoGames on the acquisition of Aspire Global through a recommended public offer. Reportedly, Latham & Watkins, Herzog Fox & Neeman, Hannes Snellman, Allen & Overy, and Camilleri Preziosi advised NeoGames as well. Baker McKenzie reportedly advised Aspire Global.

According to ODI, “the offer is funded through a combination of newly issued NeoGames shares and cash. NeoGames will issue approximately 7.6 million shares (in the form of Swedish depository receipts) to shareholders of Aspire Global as payment for the equity component of the offer.” NeoGames is also paying approximately USD 264 million related to the cash component of the offer.

According to the firm, NeoGames, incorporated in Luxembourg, is a “technology-driven innovator and a global provider of iLottery solutions for national and state-regulated lotteries. NeoGames’ full-service solution combines proprietary technology platforms with the experience and expertise required for successful iLottery operations.”

Aspire Global is a B2B provider of iGaming solutions. The B2B offering includes a technical platform, proprietary casino games, a proprietary sportsbook, and a game aggregator. The group operates in 31 regulated markets spanning Europe, America, and Africa, including countries like the US, UK, Netherlands, Denmark, Portugal, Spain, Ireland, Nigeria, Colombia, and Mexico.

ODI’s team was led by Partner Gjorgji Georgievski and included Associate Ema Tasevska and Junior Associate Elena Stefanovska.

Some signs of political instability on the path to European Union accession for North Macedonia, rising inflation, and several interesting upcoming legislative changes are on the ticket for the Balkan country, according to Lalicic & Boskoski Partner Martin Boskoski.

“The political environment and its overall stability are often the cornerstone of the business landscape in a country – and North Macedonia is no different,” Boskoski begins. “The country has been trying really hard to enter formal negotiations for entering the EU and, following the resolution of the name dispute with Greece, we thought that it would come soon, but it was not to be,” he says.

The ongoing friction with Bulgaria is, according to Boskoski, blocking a smooth transition toward the EU for North Macedonia. “The German chancellor was visiting this week, with the aim to help in reaching a mutual understanding with Bulgaria, to solve any potential friction points that still linger, given the history of our countries,” he says. “We are very eager to begin the negotiations process as all of us who operate in business law feel that it would help our work greatly.” However, Boskoski shares that the citizens of North Macedonia are not as optimistic. “Everybody believed that the accession process would speed up following the name change, but it seems that did not suffice – it would appear a new cause for political instability manifests itself every six months.”

Still, Boskoski reports that there are positive legislative changes in the pipeline that should help out the business sector. “Firstly, there is the proposed mandatory lawyer training which would take place every couple of years, if the requisite legislation is enacted,” he says. “This would be very beneficial and would improve the overall quality of legal work.”

Further, Boskoski reports that there were changes to the “Company Law in the area of convertible loans, which would make it easier for start-ups to be able to pursue investors, by having loans converted into a direct investment into the company.” Additionally, there are proposed changes to the VAT framework, with regards to “specifying where the VAT ought to be charged for services offered abroad. This is most important for IT companies who work for foreign clients, seeing as how this would specify the place of doing business.” Boskoski predicts that this will be enforced by the end of 2022. “Lately, it would appear that every third new client we work with is from the IT sector, so I feel that this would trickle down beneficially to the lawyers as well,” he adds.

Finally, Boskoski reports that “the overall levels of business are getting back to normal, regardless of the high inflation – which hit 7.7% for the first quarter of 2022.” However, he believes that North Macedonia is yet to experience the inflation peak and that “it remains to be seen how this gets passed on down to clients.”