Kosovo – An investment opportunity

The Republic of Kosovo enjoys a highly strategic geographical location in Southeast Europe. This unique location serves as a link between countries in central and southern Europe, boosting Kosovo’s attractiveness for foreign investments.

For the past years, Kosovo has undertaken many reforms that have positively contributed to the development of the economy. The positive growth rates over the last decade have enabled Kosovo to outperform its neighbors. The Euro was adopted as official currency in 2002, bypassing any risk from currency and exchange rate. This shift has given Kosovo an advantage over its neighbors through gained financial and macroeconomic stability.

Demographically, Kosovo is one of the youngest countries in Europe. Being youngest, in the context of Kosovo means two things: young in terms of the declaration of its independence and young in terms of population. Around 70 percent of Kosovo’s population is under 35 years old. As a result, there are around 30,000 youngsters who enter the market each year. Kosovo offers some of the most attractive labor wages in the region (approx. 550€ net) and favorable income taxes (0-10%). Also, in terms of contributions, only pension contributions are paid at a rate of 5% by employer and employees out of total gross wages paid.

Kosovo has worked hard on improving its business environment. The skilled labor force and flexible labor market, coupled with cost-efficient labor cost, make Kosovo an attractive country to invest in. The high unemployment rate, coupled with the high number of youngsters entering the labor market each year, enable Kosovo to ensure sufficient stream of labor for any business activity. Kosovo also has a well-established tax system and tax burden is fairly low. Corporate income tax is 10% and value-added tax is 18%. In terms of setting up a company, Kosovo has improved the infrastructure enabling the registration either online or at any of the 29 municipality business centers across the country within 5 days maximum.

Kosovo is ranked 12th in World Bank “Doing Business 2018 Report” and provides opportunities for investment in multiple sectors. The most strategic sectors are Information and Communication Technology (ICT), Agriculture, Wood Processing, Mining and Energy, Agribusiness Food Processing and packaging, Textile and Leather, etc. Its abundance with natural resources, low cost structures and skilled and productive labor force, make Kosovo the country to invest in.

Kosovo has a very liberal trade regime. It has signed several trade agreements that have improved the overall exporting possibilities for its companies, enhanced the investment environment and improved relations with partner countries. Currently, Kosovo profits from the preferential agreement with EU allowing for customs free access of Kosovo goods and services in the European market. The CEFTA agreement, signed with Albania, Bosnia and Herzegovina, Croatia, Kosovo, Moldova, Montenegro, North Macedonia, and Serbia allows duty-free access to an additional market of around 25 million costumers.

Kosovo has done many reforms in improving its infrastructure for attracting foreign investors and boosting economic activity. A detailed snapshot of Kosovo’s current business infrastructure and environment, is provided in the brochure “Investing in Kosovo”.