There are many foreign companies active in Kosovo, in a wide range of business sectors. According to the Kosovo Business Registration Agency, there were more than 5.000 companies of foreign and of mixed ownership operating in the country in 2013. These include investment pioneers such as ProCredit Bank and Raiffeisen Bank, as well as European market leaders and entrepreneurs such as Ebbers Metalworks (Netherlands), Meadowbrook Farms/Rinda Agriculture (Netherlands/Kosovo), Wertheim/Rrota (Austria), Kolm Pfluger/Etlinger (Austria), NewCo Ferronikeli, IPKO/Telekom Slovenia (Slovenia), Xella International, Turkie Is Bankasi A.S (Turkey), BNP Paribas (France), Zinkunie BV (Netherlands), Limak/Çalık Holding (Turkey), Limak/Aeroports de Lyon (Turkey/France), ASSECO Group, Gorenje Group (Slovenia), Pivovarna Lasko (Macedonia), STRABAG (Austria), Banka Kombëtare Tregtare (Albania), AgricoKosova (Netherlands/Kosovo), Witsenburg Natural Products (Netherlands), EOX Chemicals (Netherlands) and KIVO (Netherlands).

According to data from the Central bank of Kosovo (CBK), the amount of gross foreign direct investment in the country in 2015 was 338 million EUR, compared to 151 million EUR in 2014, 280 million EUR in 2013 and 229 million EUR in 2012. As a result of the global financial crisis, FDI in relation to the GDP has continuously decreased since 2008, however 2013 recorded improvement.

FDI in real estate has seen a continuous increase, and is the most dominant sector in the FDI structure of 2013. FDI in the transport and the telecommunications sector, financial services, energy and trade sectors also increased, while FDI in the construction and manufacturing sector declined.

The largest FDIs in 2015 are from Switzerland (22.49 percent), followed by Turkey (20.41 percent), Albania (12.13 percent) and United Kingdom (10.36 percent).

Free Market Access

Investing in Kosovo provides free access to a market of 650 million customers, through three multilateral agreements:

  • The Stabilization and Association Agreement (SAA): The SAA establishes an area of free trade and is designed to integrate Kosovo into the EU’s single market. The SAA contains provisions on European standards on state aid, intellectual property rights and competition.
  • The Central European Free Trade Agreement (CEFTA): The CEFTA enables producers to access the regional market comprising of 28 million consumers, free of any customs duties. In 2012 the total export with CEFTA members from Kosovo was 102.6 million and import 844.6 million;
  • The EU Autonomous Trade Preference Regime: Kosovo benefits from nonreciprocal, duty-free trade to the EU market based on the EU Autonomous Trade Preference Regime EU Council Resolution (ATP) (2007/2000). In 2012 the total export to EU was 107.4 million and import 978.1 million.

Furthermore, Kosovo enjoys duty-free trade to the US market, a free trade agreement with Turkey and trade connections with Japan and Norway.

Tax Incentives

A Value Added Tax (Law No.03/L- 146) is applied to all importers and businesses with an annual turnover in excess of 50.000 EUR. The VAT rate stands at 16 percent and is levied on all goods and services, with an exemption for specific agricultural and capital goods (on which VAT is 0 percent). Exporters receive full VAT reimbursement for exported goods. Corporate profit tax rate is 10 percent.

Ease of starting-up a business

An investor can register a business in two days, free of charge with zero chartered capital (for LLCs). Kosovo has moved six places up to the 75th position in the World Bank’s 2015 edition of the Doing Business report, with highly positive scores for obtaining credit, registering property and starting a business.

 

Sources:
Central Bank of Kosovo
Kosovo Business Registration Agency
Kosovo Investment and Enterprise Support Agency
World Bank Group & PwC

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