Published on 15.08.2022

DDK Attorneys at law once again is ranked as Tier 1 law firm in North Macedonia in the categories ‘Finance and Banking’ and one of the leading law firms in ‘Project Development’ on the 2022 IFLR1000 rankings.

Professionalism, ambition, and hard work makes us for many years one of the top leading law firms in North Macedonia, recognized by clients and confirmed by their trust in DDK.

IFLR1000 researches and ranks the best financial and corporate law firms across the globe by surveying client referees for their opinion on the performance of the law firms.  We are proud to be part of the IFLR1000 research cycle and to be recognised as Tier 1 law firm in North Macedonia based on our clients’ opinion. There is no greater acknowledgment of our work than the one of our clients.

More information about IFLR1000 2022 rankings is available on the link: North Macedonia – Jurisdiction Rankings | IFLR1000

Published on 08.08.2022

The general framework for donations and sponsorships in Republic of North Macedonia is regulated by the Law on Donations and Sponsorships in Public Activities, where the main and basic goal is to improve the personal and common life of the citizens, citizens’ associations and foundations, as well as legal entities and individuals, through realization of the public interest, which also contributes to their economic well-being and social justice. Additional benefit exercised by the donors and sponsors are certain tax incentives.

The realization of the public interest through donations and the manner of using tax incentives in the sports is specially regulated by the Law on Sports, the Rulebook on the manner of using the means of tax incentives and the Law on Profit Tax. Namely, the Agency for youth and sports issues a voucher for using tax exemptions funds (which consists of reduction of the calculated profit tax for the amount of the donated funds, but not more that 50% of the calculated tax) on behalf of a certain sports entity, on the basis of which the donor is entitled to make donation of financial resources in the amount up to the amount determined in the voucher on a special purpose account of that particular sports entity. The use of the right to reduction of the calculated profit tax excludes the right to tax incentive of the profit tax in accordance to the Law on Donations and Sponsorships in Public Activities for donations in the sports.

The donor as tax payer that uses this tax exemption can donate to one sports entity of same type of sport. As an exception, the donor can donate to two sports entities of the same type of sport, only if one entity is a national sports federation and the other is a sports club or an active athlete competing in individual sports.

Published on 04.07.22

The new Data Protection Law (“DPL”) has been adopted and announced in 2020, following, almost the whole content of the General Data Protection Regulation Directive (“GDPR”), especially regarding the territorial scope of the law, the obligation for DPO appointment, the obligations of data controllers and data processors, the performance of data impact assessment, the notification upon data breach, etc..

Similar as GDPR, the DPL has determined for the data controllers and data processors, an 18-month period for compliance to its provisions. In addition, the same period has been aimed for adoption of the by-laws, so the Data Protection Agency (the legal successor of the Data Protection Directorate) (the “Agency”) has adopted such acts during May 2020, so the legal framework in this field has been completed. Changes to DPL has been adopted at the end of December 2021, but the same were aimed for terminologically compliance to the current provisions. In the same period, standard contractual clauses for the processing agreements concluded between controller-processor, as well as clauses for the purposes of data transfer towards third countries have been adopted by the Agency.

The prescribed period for compliance with the DPL has expired on August, 24 2021, and afterwards as announced by the Ministry of Justice of RNM, the same period has been extended for additional six months period when the targeted controllers and processors have not been subject of imposing fines by the Agency, in events then the Agency is aware (by its own initiation or as a result of filed request by third parties) that some of them are not in compliance to the provisions of DPL.

Published on 04.07.22

The “squeeze-out” of the minority shareholders in the companies in the Republic of North Macedonia will soon become a reality. The amendments to the Company Law, which plan to enable the compulsory purchase and sale of shares, as well as more detailed regulation of the holding and concern, are entering a new phase.

The proposed changes provide for the regulation of the compulsory purchase and sale of shares or the so-called “squeeze-out” in joint stock companies with a dominant and concentrated ownership structure where one majority shareholder owns over 95% of the voting shares, a matter that has not been regulated so far, except in the Law on Takeover of Joint Stock Companies where the “squeeze-out” can occur only after a successfully completed takeover procedure (only in a certain period of time). The regulation of the compulsory purchase and sale of shares in the Law is necessary to be done, primarily because, as a result of the concentrated ownership structure of certain joint stock companies there is low liquidity of their shares on the stock exchange, as well as there is a small share of publicly owned shares. According to the amendments, in the process of “squeeze-out” the obligations of the dominant shareholder are clearly prescribed and defined, which includes an obligation for compulsory purchase of shares of minority shareholders, i.e. properly prescribing the rights of minority shareholders to request compulsory sale of their shares to the dominant shareholder in a legal procedure that ensures fair, transparent and correct treatment.

The proposed changes also regulate in detail the holding, i.e. the concern as forms of relation between companies, due to the perceived need to regulate details and specifics for the functioning of the holding companies, i.e. the concerns, primarily from the aspect of their management, by concluding appropriate agreements between the companies, appropriate changes in the tax regulations, all in order to practically effect the benefits of the holding, following the example of the countries in the region, but also of the European Union.

Published on 09.06.22

The long-announced Law on Payment Services and Payment Systems was finally adopted and published in the Official Gazette of the Republic of North Macedonia No. 90 on April 12, 2022. This law primarily harmonizes domestic legislation with the EU Payment Services Directive (2015/2366 / EC) known as the “PSD2” Directive, as well as other current EU directives on electronic money and payment operations.

This law liberalizes the market for payment services by enabling the entry of payment institutions, which are not banks, and which, like the banks, will perform certain services in the payment operations and issuance of electronic money. On the Macedonian market, made upon EU standards, will be able to enter foreign payment institutions that already operate on the European market, but this will also encourage the establishment of domestic payment institutions, which will strengthen market competition and increase the supply of various innovative electronic payment services.

In view of the intensification of the use of electronic payment, the law provides specific rules for enhanced consumer authentication in order to reduce the risk of abuse and fraud.

Among other novelties, the law provides for new payment services such as a service for initiating payments and a service for providing information on payment accounts. The rights of consumers to be informed about the conditions for using the services are strengthened. Card payment schemes are regulated, and interbank fees with payment cards are limited.

The law enters into force on 01.01.2023 after which the Macedonian market of payment services is expected to be driven by the presence of new players, and thus the positive effects to be felt in other business segments.

Published on 09.06.22

Following the latest amendments to the Company law from April 2022, an extension to the debt-to-equity swap possibility in course of a procedure for increasement of the share capital of a LLC was introduced, previously such being exclusively available only to the loans provided by the single shareholder in a single shareholder LLC (while in practice, shareholders in a LLC with more than a single shareholder, were deprived of such possibility).

With the new changes, this opportunity is now presented also to third parties – investors i.e. lenders, providing them the possibility to become a shareholder of a LLC through a debt-to-equity swap procedure, by transforming the loans they have provided to the company, into a contribution in the company.

Such right of third parties to transform the provided loans to the company into contribution in the same will be limited to a term of three years as of the date of such loan agreement, and it will be subject to certain additional formalities as a precondition for conducting such debt-to-equity swap procedure. In any event, it remains to be seen how this new mechanism will affect the investment climate and the financing of companies in North Macedonia, especially the investor’s approach in respect to start-up companies.