Overview of the main Government socio-economic measures in response to the Covid-19 outbreak

As per 21 April 2020

The outbreak that started in Wuhan, China has quickly evolved from a local issue to a global crisis. Apart from the tragic human consequences, the disease is having and will continue to have a profound economic impact.

On March 18, 2020, North Macedonia, declared the state of emergency and postponed all preparations for parliamentary elections in April. On, April 17th, 2020 the President of North Macedonia declared an additional 30-days state of emergency. During the state of emergency, the Government adopts Decrees with power of law. New measures are introduced on daily basis in an attempt to mitigate the economic damage from Covid-19.

So far, the Government of North Macedonia adopted two sets of socio-economic measures to ensure liquidity in businesses and prevent layoffs.

Measures to limit the spread of the Coronavirus

Paid leave from work

As the Government posed strict measures and closed schools and pre-schools, starting from March 10th, 2020, the Government allowed one parent to be released from work due to:

  • care for children up to 10 years and

  • care for children with developmental disabilities up to 26-year-old. This leave is treated as justified by 100% salary compensation.

    Also, the release of work obligations of persons in mandatory self-isolation or quarantine was introduced, with the right of compensation in the amount of 50% of the regular net salary. However, each case of self-isolation or quarantine must be analysed on a case by case basis.
    The use of the measures also envisages release from work obligations of pregnant women and people with chronic diseases.

    In addition, the Government allowed paid absence from work due to pregnancy, birth, adoption and parenting, the employment continues, and the salary allowance until the termination of the State of emergency.

Mandatory use of annual leave

The workers employed in the private sector covered by the Government’s measures against the spread and prevention of Coronavirus (pregnant women, people with chronic diseases, parents of a child under 10 years), should use the unused days of annual leave for 2019 by May 31, 2020. This is conditioned with prior approval of the employer and the employer should maintain regular work process in the company. Regarding the annual leave for 2020, in duration of two uninterrupted working weeks, should be used until June 30, 2020, and the employer should maintain regular work process in the company.



Tackling rising unemployment

Monetary compensation for citizens with terminated employment due to the crisis, according to years of service through the Employment Agency

Citizens who lost their employment as a result of the Coronavirus crisis, have the right to monetary compensation in the amount of 50% of the average monthly net salary of the employee in the past 24 months.

An unemployed person who has been employed for at least 9 months continuously, or 12 months with a break in the last 18 months, has the right to monetary compensation. The unemployed person should apply for this compensation to the Employment Agency in the place of residence, within 30 days from the date of termination of employment.

Care for people in the informal economy and were left without income - financial assistance to households and energy allowance for social protection beneficiaries

The minimum guaranteed aid shall be determined based on the total average amount of all income of all household members on all grounds, counting only last month, instead of three months. This measures shall be valid for April and May 2020.

Social protection beneficiaries will receive an additional payment of energy allowance in the amount of MKD1,000 plus, in April and May.

The payment of the educational allowance continues, in the amount of MKD 700 per child in primary education and MKD 1,000 per child in secondary education.

Compensation for sportspersons and artists

The Government shall provide a minimum salary of 14,500 MKD for the months of April and May for all sports workers employed in the sports associations and artists.

State subsidies for employers

Financial support for payment of salaries for April and May for companies struck by the crisis

Direct aid of 14,500 MKD (approximately 250 euros) per month for the employee proportionally to the effective hours spent at work in the period April-May for every employee in the private companies that are affected by the crisis;

Private-sector employers who apply for financial support will need to fill out several conditions in order to use the measure:

  • Should not pay out dividends to the owners, as well as bonuses, annual awards, awards for business success etc., to the employees and members of the management and supervision bodies within the employer until it pays salary for June 2020.
  • To have at least 30% decrease in incomes compared to the average of last year i.e. the seasonal average for employers who perform seasonal activity.
  • For the month for which financial support is sought, the average of part of the highest net salaries of 10% of the number of employers should not be more than 120,000 MKD monthly per employee.


The financial support does not refer to those employees who for the months December 2019, January and February 2020 had net salary higher than 39,900 MKD.

The employers who will receive financial support from this measure are obligated to maintain the same number of employees they had at the moment of application until September 2020.

The financial support will not be returned by employers who had shown a loss for 2020 whereas the others are limited up to 50% of the profit before taxation and increased by the expenditures subject to tax. whereas the others are limited up to 50% of the profit before taxation and increased by the expenditures subject to tax. 

Subsidizing 50% of contributions to salary

The state covers 50% of social contributions (health, pensions) for the employees in the private sector in the period April, May and June 2020. This is an alternative to the first measure and companies can choose to use only one of them;

For each insured employee, for April, May and June 2020 the state shall subsidize contributions for mandatory social insurance in the amount of 50%. Thereby, the calculated amount cannot be higher than 50% of the contributions for mandatory social insurance calculated on the average gross salary per employee in the Republic of North Macedonia, according to the data of the State Statistical Office published for January 2020.

Subsidizing 50% of contributions for employees in companies in the tourism, transport and catering sectors and other companies affected by the Coronavirus*

The measure is aimed directly at helping companies achieve lower financial results in 2020 as a result of the coronavirus situation. The companies will return the funds from the contribution subsidies in 2021 when calculating the profit tax for 2020, but mostly up to the amount of 50% of the realized profit before taxation.

Conditions for the company to receive subsidies are:

  • The company should not reduce the number of employees below the number of employees in February 2020 from the day of using the measure
  • The company does not pay dividends during 2020, until the day of submission of the annual account
  • The company has not paid the prize-bonus after the entry into force of the measure

A company that uses the measure to subsidize contributions due to salary increase to MKD 6,000 per month will have to choose whether to use the measure to subsidize contributions for employees in companies affected by coronavirus with a salary subsidy per employee up to 50% of average salary, paid in 2019 or will use the existing measure to subsidize contributions due to salary increase to MKD 6,000 per month, and the choice will be for each employee who meets the requirements for both measures.

Direct aid to self-employed people (all craftsmen such as mechanics, hairdressers and others) and subsidies of up to 14,500 MKD per person;

For the payment of financial aid to natural persons acting independently affected by the crisis caused by Covid -19, the Government provided a minimum salary of 14,500 MKD for April and May 2020.

Financial support cannot be realized by a natural person performing an independent activity who is taxed according to real income and who in 2019 annually has realized net income before tax for more than MKD 478,800, i.e. natural persons who perform independent activity and are taxed according to determined annual lump sum net income and which in 2019 has determined annual lump sum net income greater than MKD 478,800. 

Moratorium on loan and leasing repayments

Postponing loans with the banks

The National Bank of the Republic of North Macedonia (NBRNM) had changed the Decision for Methodology on Credit Risk Management in order to adopt special provisions due to alleviating the consequences of COVID-19.
In order to conduct the activities adopted in the Decision and referring to activities of the banks for postponing of repayments, reprogramming and agreements between the banks and their clients during the crisis caused by COVID-19, the Ministry of Finance and NBRNM, in cooperation with the Macedonian Banking Association, had prepared a Regulation on the method of changing the contractual conditions of loan exposure within banks and saving banks, that defines the method of conducting the changes. This Regulation was adopted on a governmental session that took place on 26.03.2020.

This regulation enables the banks to easy and simply postpone the loans of their clients without annexes or physical presence in the banks.

The banks will provide the legal entities with beneficial terms, such as postponement of repayments, reprogramming, grace period, beneficial interest rate etc., while with the individuals, the banks will postpone repayments of instalments from 3 to 6 months.
Each bank will adopt a decision with their supervisory boards and will inform their clients. National bank, Government and commercial banks agreed to simplify the legal framework in order to allow commercial banks to postpone and reprogram the repayment of loans of their debtors.

Decrease in the instalment and reprograming the loans within financial companies and leasing companies

This measure foresees reprograming the loans of individuals by decreasing the instalments in the following three months by 70% of the instalment and continuation of the repayment deadline by at least 90 days as of the moment it became due.

For the loans of legal entities, decisions will be made individually by proposing the most appropriate benefits in pursuance with the needs of the companies. New agreements for loans to be approved with 3 months of grace period. The legal penalty interest that so far was 51% is now decreased to 31% whereas the other costs which the companies collect are limited to 20% of the approved loan.

To postpone payment of lease for users of social homes

The payment of lease for social homes will be postponed for all users, as well as the payment of lease for the citizens. Regarding the companies, a separate decree will be adopted.

Additional measures

All elected and appointed officials will have a minimum salary of 14,500 MKD in the months April and May 2020 

All elected and appointed officials on a national and local level will receive a minimum net salary (as of December 2019) in the amount of 14,500 MKD for April and May 2020.

This means: the presidents of the state, of the assembly and the Government, all ministers, deputy ministers, elected secretaries, directors of national institutions, members of the parliament, mayors and all other elected and appointed officials.

The provisions of this regulation do not refer to appointed persons in pursuance with the law in public health institutions.

The Presidents and the members of the management and supervisory boards of public institutions will not receive compensation for the duration of the crisis

The Presidents and the members of the management and supervisory boards of public institutions from executive and local government, as well as the presidents and members of the municipal councils and presidents and members of commissions established by the executive and local government who, at the same time, are employed, will not receive any compensation for the duration of the crisis. This decision will be valid until the Government adopts a decision for its termination.

This measure does not refer to people who are unemployed and for whom this is the single source of income.

The Law on Enforcement is suspended until the end of June

The Law on Enforcement is suspended until the end of June 2020. The enforcement agents are obligated to stop undertaking any executive actions except: 

  • in cases of claims based on legal support;
  • allocating the funds received on their special accounts, provided that the legal requirements are met;
  • actions that follow the collection of the funds from the debtor, via successful public biddings or direct settlement sales;
  • receiving request for enforcement and electronic recording of such requests;
  • preparation of requests for data and information in order to examine the economic condition of the debtor, as well as electronic submission to the appropriate institutions;
  • preparing order for enforcement against real estate and electronic submission to the public book of real estates for pre-registration of the order;
  • preparation of order for prohibition of disposal and encumbering the securities and electronic submission to the Central Securities Depository;
  • in enforcement procedures, initiated until 31 March 2020, on bank account's receivables of natural persons;
  • in enforcement procedures, initiated until 31 March 2020, on available funds on legal entity's account(s) with holders of payment operations; and
  • preparing and submitting of conclusion for stopping the enforcement procedure, if the debtor has paid the debt.

Specific social and educational payments are exempted from the enforcement procedures until the end of June 2020, as well as funds paid as a financial support or subvention to the legal entities and natural persons for eliminating the consequences COVID-19. The debtor is entitled to electronically apply for postponement of the enforcement from such funds in order for the enforcement agent to notify the commercial banks for the postponement until 30 June 2020.

Bankruptcy procedure

During the Coronavirus crisis and 3 months after it, bankruptcy procedures shall not be initiated. Already initiated bankruptcy proceedings are postponed during the state of emergency, as well as three months after the termination of the state of emergency.

Financial support measures

Additional non-interest loans for companies of new 8 million EUR

The Development Bank of North Macedonia beside 5.7 million will issue another 8 million non- interest loans for micro, small and medium enterprises for which the company may apply depending on the number of employees.

The loans will be approved with a repayment deadline of up to 3 years, grace period included of 12 months for the purpose of working capital. The repayment of the loan by the loan-user will be made quarterly.

The loans bear no interest and no administration costs. The loans will be secured with a B/E availed by one of the owners of the loan-user in the form of notary act and with an executive clause.

50 million EUR loans from the Development Bank of the Republic of North Macedonia placed throughout the commercial banks for protection of liquidity of the companies

Within the frames of the ongoing agreement for a loan between the DVRNB and the EIB, we enable the use of beneficial loans intended for small and medium enterprises.
The primary objective of this credit line is to secure fresh capital for support of new projects, new jobs, increased liquidity of the economy and increased export. The Development Bank places this credit line through the business banks to the end-users i.e. small and medium enterprises and companies with medium market capitalization.

Within the frames of this Agreement, the Development Bank has an opportunity to withdraw the unused part of the credit line in the amount of 50 million EUR with a low-interest rate in pursuance with applications delivered by the business banks. In order to overcome the problems arising from the situation of COVID-19 that directly hits the work of small and medium enterprises, the country hereby undertakes a measure to subsidize the interest rate of the Development Bank towards EIB, as well as the administrative cost of 0.5% which will be calculated by the Development Bank for the commercial banks that will be used to place the funds of this credit line.

Using this measure the Development Bank of the Republic of North Macedonia will offer an interest rate of 0% to the business banks which for this line will use lower margins and will be able to offer interest rates of about 1.5% for the loans.
This document provides an overview of the main measures taken by North Macedonia to mitigate the economic damage on the economy. It is prepared for the general information of our clients and other interested persons. It is not, and does not attempt to be, comprehensive. Due to the general nature of its content, it should not be regarded as legal advice.

The date of the latest update is indicated at the beginning of the document, and we will endeavour to update this overview as new measures are announced and/or come into effect. However these are fast-changing developments, and the application process for each measure vary depending on the measure.


Arlind Zeqiri, M.A., Managing Partner at LANSKY, GANZGER + partner North Macedonia and Member of the LGP Senior Expert Council