The Ministry of Economy has published a draft Law on the Incentivization of Individual Investors – Business Angels (the “Draft Law”).
The primary objectives of the Draft Law include:
- Establishing a clear legal framework that defines the role of business angels, thereby enhancing legal certainty and encouraging increased investment activity; and
- Introducing tax incentives aimed at stimulating investments in startup entities.
Under the provisions of the Draft Law, qualified individual investors (business angels) are eligible for the following tax benefits:
- Dividend Tax Relief: A 50% exemption from Personal Income Tax on dividends derived from participation in the profits of the investee company, applicable for a period of five years from the date of share acquisition.
- Capital Gains Tax Relief:
- A full (100%) exemption from Personal Income Tax on capital gains realized from the sale of the investment (angel share), up to a threshold of EUR 100,000 (in Macedonian denar equivalent), provided the investor retains the share for a minimum of three years.
- A 50% exemption on the portion of capital gains exceeding EUR 100,000 (in Macedonian denar equivalent), subject to the same holding period condition.
- Cumulative Cap: The total cumulative value of tax-exempt amounts under the above provisions shall not exceed EUR 250,000 (in Macedonian denar equivalent).
The specific procedures for implementing these Personal Income Tax exemptions will be determined by the Minister of Finance, in coordination with the Minister of Economy and Labor.
For any questions, please feel free to contact KPMG.