The legal framework and its influence on the scope and the structure of the FDIs – the case of the R. of Macedonia

Abstract The Foreign Direct Investments (FDI) is a form of venture capital which provides the foreign investor acquiring rights to ownership, control and management on the basis of invested capital. The experience has undoubtedly affirms the fact that FDI is one of the fundamentals that enables and accelerates the economic development of a national economy. Among other things, each national economy must have adequate legislation that will enable smooth attracting of foreign capital. The core motivation for conducting this research paper is analysis of the changes in legislation and their impact on the scope and structure of the FDI in the Republic of Macedonia during the last decade. The crucial aim of the paper is to look upon the legal aspects for attracting the FDI. However, to some extent the paper covers the institutional mechanisms that profiled the framework for doing business. The subject of the research are the laws that regulate this area, also the laws related to the fiscal sector, foreign trade, foreign exchange operations, the area of labor relations, etc.. The results of research done lead to the conclusion that the legal framework, as a significant factor of the business environment in a country, has a very strong influence on the intensity and the structure of the FDI in the Republic of Macedonia. Оver the last decade Republic of Macedonia has achieved significant results in this field, but there is a need for further improvement of the relevant legislation yet. This is more important considering the insufficient volume of FDI. Key words: Foreign Direct Investments (FDI), Legal Framework, Republic of Macedonia