Kosova Investors Guide 2011 | Kosovo | Taxes

INVESTING IN

KOSOVO
REPUBLIC OF KOSOVO
Ministry of Trade and Industry
Investor Guide
May 2011
INVESTING IN
KOSOVO
4
Legal Notice and Information
Status of information: May 2011. Changes reserved.
Publisher:
Investment Promotion Agency of Kosovo - IPAK
Contacts:
Ministry of Trade and Industry
Muharrem Fejza Street n.n.
Lagja e spitalit
10000 Prishtinë, Kosovo
Tel: +381 (0) 38 512 164
Fax: +381 (0) 38 512 798
Web: www.mti-ks.org
Investment Promotion
Agency of Kosovo
Muharrem Fejza Street n.n.
Lagja e spitalit
10000 Prishtinë, Kosovo
Tel: +381 (0) 38 200 36 527
+381 (0) 38 200 36 542
Fax: +381 (0) 38 212 807
Email: info@invest-ks.org
Web: www.invest-ks.org
Disclaimer
Te information provided in this brochure was correct at the time it went to press, May 2011. However, legislative
changes and changes in interpretation by the authorities and courts can generally occur frequently. Tis brochure contains
information that is summarized and, in part, simplifed. It does not substitute for specifc legal and tax advice. Despite
attempting to exercise care in compiling this brochure, the authors can not warrant the accuracy, completeness, or up-
todate character of its contents. Any liability on the part of IPAK and the Government of Kosovo is therefore excluded.
5

6 1. General Data
7 2. Declaration of the Government on attracting foreign investment
8 3. Principal industrial and business sectors
9 3.1 Agriculture
10 3.2 Wood processing
11 3.3 InformationTechnology and Telecommunications
12 3.4 Construction
13 3.5 Automotive components industry
13 3.6 Mining and energy
14 3.7 Textiles
15 3.8 Tourism
16 4. Investment Climate
17 4.1 FDI Inflows
18 4.2 Success stories
19 4.3 Key economic indicators
20 4.4 Incentives regime
22 5. Currency and the banking system
24 6. Labour and education
25 6.1 Labour market
26 6.2 Educational system
28 7. Trade and customs
29 7.1 Trade regime
30 7.2 Customs regime
31 7.3 Transport and distribution
32 8. Setting up a business in the country
33 8.1 Business types
33 8.2 Legal framework
35 8.3 Taxation
37 8.4 Land acquisition and related matters
37 8.5 Industrial parks
38 8.6 Utility costs and availability
40 9. Quality of life
42 10. About Investment Promotion Agency in Kosovo and its office in Vienna
44 11. Websites of Institutions
45 11.1 Websites of Institutions
45 11.2 Websites of International Institutions in Kosovo
46 11.3 Business support Institutions
Table of contents
6
1
General
Data
Economic Description
Currency: EURO
Gross Domestic Product (GDP): In 2010: € 4.259 bil-
lion, Per capita: € 2,366.
Inflation: On average 3.1 % per annum over the past
fve years.
Financial Sector: Two tier banking system consisting
of Central Bank of the Republic of Kosovo and eight
private Banks, 11 Insurance companies and two
pension schemes.
Enterprises: over 45,000 active SMEs in 2010, app.
50 % of total SMEs engaged in trade industry. 500
Socially Owned Enterprises of which 400 already
privatized.
Budget: In 2011 totalling app. € 1.434 billion.
Tariff duties: 10 % customs duties on imports, no
duties on capital and intermediary goods, and selected
raw materials; Excise tax on fuel, tobacco alcohol and
luxury goods. No duties and taxes on exports.
Tax System: VAT 16 %, Corporate Proft Tax 10 %,
Personal Income Tax progressive max. 10 %.
Free trade: Customs-free access to the EU market
based on the EU Autonomous Trade Preference (ATP)
Regime, Central European Free Trade Agreement –
CEFTA and preferential treatment of exported goods in
the US market.
Labour market: Average labour cost 330 Euro in
2010, skilled and well educated work force.
Location factors: Competitive, well educated and
young workforce, enviable natural resources (mining,
agriculture), low taxes and a transparent tax system,
customs free access to the markets of CEFTA, EU and
USA, Euro as ofcial currency.
Geography
Land area: 10,908 km²
Terrain: Low food plains throughout central
Kosovo, surrounded by mountains to
the north, west and south.
Land Use: 52 % agriculture, 39 % forests
Capital: Prishtina - est. population 200,000
Population
Population: approximately 1.8 million
Ethnic
composition: 90 % Albanians, 5 % Serbs,
2 % Muslim Slavs (Bosniaks, Gorans),
2 % Roma and 1 % Turks
Distribution: 42 % urban, 58 % rural
Diaspora: over 500,000 people living abroad
Languages: Albanian, Serbian, English.
Legal Framework
Applicable Law: Laws passed by the Kosovo Assem-
bly enacted on 15 June 2008 and thereafter; Regula-
tions enacted by the United Nations Interim Admin-
istration in Kosovo (UNMIK) between 10 June 1999
and 14 June 2008; Laws dated prior to 22 March 1989,
enacted before the abolishment of Kosovo’s autonomy
within the Social Federal Republic of Yugoslavia; and
laws dated between 22 March 1989 and 10 June 1999,
enacted after the abolishment of Kosovo’s autonomy,
provided that they are not discriminatory and are re-
quired to fll a legal gap.
Regulations available at: www.assembly-kosova.org
7
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Dear Investor,
The Government of Kosovo’s Vision for the next three years foresees a deep and thorough reform on five vital economic
development areas. These Five key strategic areas which will enable the Government to achieve a steady economic grow-
th including maintaining macro-fiscal stability; investments and support to the private sector; development of the public
infrastructure; re-vitalizing agriculture and development of the human capital.
During the next three years the Government of Kosovo aims to achieve a steady annual economic growth of 7 to 8%. The
Government will increase the efficiency of the public expenditures and will ensure the continuous increase of the revenu-
es. The tax policy in Kosovo is the best in the region. Income taxes are between 0-10% and corporate taxes are 10%. Value
added tax is 16%, the lowest in the region. Labor force is the most cost-efficient in the region with the average wage in
2010 around €280 per month. From 2007 Kosovo averaged an economic growth of about 5%.
The Government of Kosovo has recognized that increasing investments and support to the development of the private
sector represents the basis for a sustainable economic development of the country.
Kosovo is a place which provides many investment opportunities. It has a good strategic position, it is the lowest cost
country in the Eurozone, it has the youngest population in Europe and it has low taxes and cost-efficient labor force. The
banking system is one of the most stable in the Region, and privatization of the publicly owned enterprises is in progress
which brings lots of great opportunities for foreign Investors. Today, Kosovo has more than 3,000 companies of foreign
and mixed ownership. This investment is spread across a wide range of business sectors as well as investment in publicly-
owned assets sold by the Government as part of its privatization program.
In addition, Kosovo enjoys recently renewed customs-free access to European Union and the United States through EU
Autonomous Trade Preferences and Generalized System of Preferences respectively. This allows all investors to export to
EU and US without any customs tariff.
We have identified some of our strongest potential sectors for investors. We believe that Kosovo will be an important
market for foreign investors in several sectors, including Business Process Outsourcing (BPO), food processing, energy
and mining, wood processing, metals and metal processing, textiles, information technology, tourism and construction.
We have already started to address the issues of business registration, construction licenses, registration of property,
the issue of financial loans, investor protection, taxes, reducing the procedures for imports and exports, enforcement of
contracts and closing of businesses. In the short term, we have managed to open 22 ‘one stop shops” throughout Kosovo.
These municipal business centers will ease the procedure and shorten the time for business registration. In the mid-term,
by 2014, we aim to cut all business licenses by at least 50%.

This reform, certainly, will be accompanied by a legal reform which we create all the necessary conditions for it to happen.
Recently we passed the law on Business Associations and Internal Trade which allows potential investors to start a busi-
ness in just a few days. The government has also drafted a package of 12 basic laws for this year which will set the stage for
the deep economic and trade reforms. These laws will amend the Customs Code to harmonize it with the EU Law; regulate
internal and external trade of Kosovo; will improve execution procedures and registration of the property rights and will
regulate the notary, cadaster, financial reporting.
We assure you that the Government of Kosovo will remain focused in further improving the business climate and in spee-
ding up the regional and European integration of Kosovo. We will provide full support for your business and investment
activities in our country and we sincerely welcome you in Kosovo.
Mimoza Kusari-Lila
Deputy Prime Minister for Economy
Minister of Trade and Industry
3
Principal industrial
and business sectors
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3.1 Agriculture
Kosovo is well endowed with agricultural
land. Out of a total surface of 1.1 million ha
app. 588,000 ha or 53 % is cultivable land.
Currently some 260,000 ha is used as agricul-
tural land in the diferent felds as illustrated
in graph 1.
With some 60 percent of the population
living in rural areas and mostly working in
agriculture, Kosovo has a long agricultural
tradition. Currently, the sector of agriculture
contributes 18 percent to the GDP and is the
main source of income for the majority of the
population. It is one of the most important
employment providers in Kosovo and it ac-
counts for 13 percent of the value of exports.
Some 70 percent of the local market demand
for the agricultural products and processed
foodstuf is still being fulflled by imports.
Te arable land in Kosovo is considered to be
of good quality. Combined with the temper-
ate climate that prevails throughout the coun-
try, very good conditions for the agricultural
production exist. Tis constellation, together
with sufcient natural irrigation possibili-
ties, enables Kosovar farmers to achieve high
yields per ha in every sub-sector of agricul-
ture. In comparison to other countries, Ko-
sovo additionally ofers a very fexible and
cost efective labour force and, due to trade
liberalization within the CEFTA region, free
access to the regional market consisting of 30
million consumers. In addition, Kosovo en-
joys a preferential market access to the EU and
US markets, with only few products exempted
from this prefrential treatment.
Based on the area and average yield per ha,
certainly the most important felds of agri-
culture in Kosovo are the vegetable and grain
sectors. In October 2009 the US Agency
for International Development (USAID),
through Booz Allen, conducted a study that
revealed new opportunities for growth. Giv-
en the natural resource characteristics of the
climatic zones that exist in the country, the
study showed that a total of 105 crops can fea-
sibly be grown. Further evaluation of factors
such as highest production value, economic
feasibility and attractiveness, investment, ease
of production and ease of market access, has
given a list of top 10 agricultural products for
Kosovo. Tis list is shown in table 1.
Kosovo is already well known as a producer
of diferent types of grapes. It has substantial
acres of vineyards largely dedicated to the
production of Amselfelder branded wine for
sale in Germany. Cabernet Franc, Merlot,
Prokupac and Gamay are all planted here.
Te continental climate and the height of
300-400 meters above sea level provide ideal
conditions for vineyards and the development
and growth of grapes for wine. Tere are more
than 200 sunny days annually to help ripen
the grapes, on par with some well known wine
production regions. Tese advantages create
very good conditions for the qualitative wine
production in Kosovo.
Graph 1: Use of
agricultural land in
Kosovo
51% Arable land and
kitchen gardens
37% Meadows
8% Uncultivated
2% Pastures
2% Orchards
0.1% Greenhouses
0.2% Vineyards
Graph 2: Structure of
crop area in ha
108,358 Fodder crops
102,364 Grains
4,886 Fruits
17,704 Vegetables
O Bulbs (flower) O Cucumbers/gherkins
O Lettuce/chicory O Currants/
gooseberries
O Asparagus O Saffron
O Apples O Cranberries/bilberries
O Table grape G Kiwi fruit
Table 1: Top 10 strategic crops
10
Due to its geographical composition, Kosovo
also ofers very good conditions for livestock
farming. Although, still experiencing a live-
stock recovery process, farming in this sector
has made great strides in recent years – both
in numbers and yield.
In particular, there are two main factors in
favour of livestock investments in Kosovo.
Firstly, the country ofers very good natural
and climatic conditions for various types of
livestock farming. Secondly, market demand
for livestock farming products is currently
much higher than domestic production. Te
planned revitalisation of the food processing
industry will furthermore create greater op-
portunities for livestock farming in the future.
Currently, the most signifcant obstacle re-
maining for Kosovo’s meat processing com-
panies is the reopening of export markets.
With Kosovo’s geographical location and its
close proximity to non-EU countries such as
Albania, Montenegro, Bosnia and Herzego-
vina, Croatia and Turkey, a short-term prag-
matic approach could be to initially focus on
meat exports to these destinations, with the
possibility of expanding into EU markets in
the next stage.
Tere are numerous agro-industries in Koso-
vo with high market potential, ofering poten-
tial investors immediate access to suppliers of
primary products, substantial inherited capi-
tal, technical capability and promising market
prospects. Te highly competitive workforce
and the custom and tax incentives, further
underscore the opportunities available in this
business feld in Kosovo.
Also taking into consideration the low prices
of primary products, this feld is very proft-
able and has the potential to expand into for-
eign markets. Recognising the potential, some
foreign companies have already started to co-
operate with local partners and are taking ad-
vantage of Kosovo’s friendly tax and customs
systems allowing them to ofer competitive
products in European markets.
In order to improve the competitiveness of the
agricultural and food processing sector and
consequently stimulate the local production,
the Government of Kosovo has recently in-
troduced diferent incentives for farmers and
processors. Te zero percent customs rate for
most agricultural inputs and capital goods, to-
gether with VAT exemption on a wide range
of agricultural inputs, have been designed to
strengthen local production and enable it to
further compete with foreign products.
Te promotion of the processing businesses,
support for exports and simple access to fa-
vourable fnancial means are some additional
steps that, together with sufcient investor
interest, will turn around this segment of Ko-
sovo’s economy and lead to the creation of a
large export business.
3.2 Wood processing
Forests and similarly covered surfaces make
up around one third of the total territory of
Kosovo and represent a resource of special
importance for the country’s economy. With
the annual value of wooden products and oth-
er benefts produced by forests reaching EUR
50 – 75 million, this sector represents a liveli-
hood for 10 percent of the Kosovar popula-
tion.
Graph 3: Livestock in
Kosovo
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000
Sheep and Goats 151,813
Horses and Donkeys 6,152
Poultry 2,278,129
Pigs 39,591
Cattle 321,624
Graph 4: Forestry -
growing stock in
1,000 m
3
0 5,000 10,000 15,000 20,000
Picea Abies 1,402
Pinus ssp 2,019
Other coniferous 223
Abies Alba 1,577
Other Broadleaves 9,690
Fagus 15,963
Quercus 9,675
11 Principal industrial and business sectors
Due to the sufcient availability of inputs,
Kosovo ofers great investment possibilities
in every single wood processing cycle. Te an-
nual allowable amount of felling is currently
slightly below 1 million m³ with Beech and
Oak being the main species. Potential for for-
eign investors ranges from doors and windows
to a variaty of furniture production. Tere is
currently a large pool of companies in Kosovo
that would make good outsourcing partners.
A large amount of traditionally gained expe-
rience, great knowledge in wood processing,
and a cost efective labour force make the Ko-
sovar wood industry particularly well suited
for the manufacturing of hand made luxury
products. In addition, most sawmills in Ko-
sovo only saw logs into rough, mixed grade
lumber, and are not yet exploring the potential
value of waste products, i.e. sawdust and wood
chips.
Taking into consideration all these benefts,
Kosovo’s wood processing industry has ex-
perienced signifcant developments during
the past years. Due to better organisation and
sufcient service-providing clusters, Kosovar
producers have been able to increase the qual-
ity and product range, thereby allowing ex-
pansion into foreign markets. Currently, Ko-
sovar wood processors supply furniture both
for the domestic and international markets
(for example hotels) to companies in Ger-
many, the Netherlands, Switzerland and also
neighbouring countries.
Trough the eforts and engagement of the
members of the rich institutional environ-
ment of the wood industry, Kosovo ofers
various incentives that aim to further pro-
mote and facilitate primary and secondary
wood production. Te Kosovar Government
has recently approved a zero customs rate for
the imports of selected machinery and capi-
tal goods related to this sector, while further
negotiations for the exception of wood raw
material from VAT and customs are currently
underway.
3.3 Information Technology
and Telecommunications

The IT sector in Kosovo, including Internet
Service Providers, has experienced a remark-
able development since 1999. From being in-
existent 10 years ago, Kosovar companies in
the IT sector ofer today high quality services
and the latest technologies to their customers
both local as well as to foreign companies who
want to outsource their software development
and/or call and support centres.
Kosovo has the youngest population in Eu-
rope. It is both skilled and multilingual, with
English being only just short of an ofcial
language due to a high international presence.
In addition, many Kosovars who have studied
abroad are now returning to Kosovo, bringing
with them skills and know-how. Today, pub-
lic and private education institutions in the IT
feld, supported by companies such as CISCO
or Microsoft, provide education to thousands
of young Kosovars while the demand for this
form of training is still rising.
Be it the outsourcing of software develop-
ment, data management, establishment of
call and support centres or other consulting
services, Kosovar companies ofer high quality
services at low costs. Te recent acquisition of
the largest IT company in Kosovo, Pronet, by
the Assecio SEE is proof of high opportunities
in this sector in Kosovo.
Graph 6: Precentage of
individials regularly
using internet
0%
10%
20%
30%
40%
50%
60%
70%
80%
EU-27 Kosovo Monte-
negro
Albania Serbia Macedonia Croatia
Þ Female Þ Male
Graph 5: Annual felling
allowance in m
3.
Picea Abies 26,000
Pinus ssp 49,000
Fagus 436,000
53%
58%
62%
71%
54%
31%
40%
47%
53%
54%
66%
45%
29%
25%
Abies Alba 42,000
Other Broadleaves 129,000
Other coniferous 6,000
Quercus 212,000
12
Kosovo has two mobile telephone operators
and two virtual mobile operators. Te state-
owned mobile telephony operator VALA, has
currently over 1,200,000 users, while the sec-
ond private owned mobile telephony operator
IPKO – Telekom Slovenian, serves approxi-
mately 300,000 users and has a territory cov-
erage of 99 percent. Te state owned mobile
telephony operator will soon enter the pri-
vatisation process and represents an attractive
investment opportunity for well established
Western telecom companies.
In addition, great opportunities for foreign
investors are available for fxed telephony,
VoIP, cable TV, etc.
3.4 Construction
During recent years the construction in-
dustry has become one of the most important
sectors contributing to Kosovo’s economic
growth. Te construction sector in Kosovo has
so far utilised several hundred million Euro
that were primarily used for the construction
of new homes, or for the rehabilitation and
development of the road infrastructure.
Te construction industry remains a sec-
tor with highly promising economic poten-
tial for Kosovo. Roughly estimated, in order
to meet the existing market demand, in the
next few years Kosovo will need some 50,000
new apartments, including the associated
infrastructure, such as roads, kindergartens,
schools, leisure facilities, restaurants etc.
A further factor which is helping to boost the
development of this sector is the demand for
road and highway construction. Te Govern-
ment of Kosovo has set itself a goal to connect
the country in three main directions with the
most important international road corridors
in Macedonia, Albania and Serbia. Te con-
struction of a highway, which will connect the
northern and central parts of Kosovo with
Skopje (Macedonia), is a mid-term goal of the
Government. A much more important project
represents the building of a highway between
Merdare-Kukës-Durrës, which will connect
Kosovo with the sea port of Durrës, Albania.
Tis highway will become a part of the Trans
European Corridor X that will connect the
Adriatic Sea with the Western Europe. Te
construction work for this highway began in
May 2010.
In addition, as a result of an accelerated eco-
nomic development Kosovo is facing an in-
creased demand for commercial premises
such as production facilities, ofce space and
hotels.
Graph 7: Precentage of
enterprises which have
internet access
0%
20%
40%
60%
80%
100%
120%
EU-27 Kosovo Serbia Macedonia Croatia
Þ Small Þ Medium Þ Large
97%
93%
94%
81%
81% 81% 81% 81% 81% 81% 81% 81% 77%
99%
98% 98%
90%
92%
98%
100%
99%
98% 98%
13 Principal industrial and business sectors
3.5 Automotive
components industry
The origins of the automotive components
industry in Kosovo date back to the 1960’s,
when the frst large scale auto components
manufacturing companies were founded. Al-
though these manufacturing units were pri-
marily established to supply diferent parts
for the production of Yugoslav vehicles, they
very quickly penetrated foreign markets and
cooperated with well-known European and
American automotive component manufac-
turers. Te two best known fagships of au-
tomotive component industrialization in Ko-
sovo were the Ramiz Sadiku, which produced
primarily car seats and small vehicle parts, and
the Shock Absorber Factory Prishtina, which
produced shock absorbers for various well-
known brands such as British Armstrong,
German Susta as well as French Peugeot
among others. Between 1989 and 1990 the
Shock Absorber Factory produced 3.3 mil-
lion units each year and employed over 1,500
workers.
With the loss of foreign markets as a result of
political circumstances during the 1990’s, the
Kosovar car component manufacturers were
faced with immense fnancial problems and
consequently many of them had to rethink
their business philosophy in order to survive
in the global market. Although the current
output of these enterprises is still considered
to be low, re-established links with the tra-
ditional partners bode well for a prospective
development of this sector. Te existing tech-
nology, large capacities and ample knowledge
allow the automotive component industry to
produce and support any Original Equipment
Manufacturer [OEM] with parts at a competi-
tive cost.
Furthermore, the trend of shifting produc-
tion to Central and Eastern Europe makes
the Kosovar automotive component industry
even more interesting for investors wishing to
beneft from increasing opportunities in the
region.
3.6 Mining and energy
Kosovo has an enviable endowment of nat-
ural resources. At 14.7 million tonnes, Kosovo
possesses the world’s ffth-largest proven re-
serves of lignite. Tis mineral is of outstand-
ing importance for the country, representing
in the long term one of the important factors
for the generation of power.
Taking into consideration the high demand
for energy in the local and regional markets,
the Government of Kosovo is currently fnal-
izing major projects regarding new lignite
exploitation and power generation facilities.
Tese projects will ofer unique opportunities
for companies willing to engage in the energy
and/or mining sector(s) in Kosovo.
Apart from lignite fred energy generation ca-
pacities, Kosovo can also ofer vast opportuni-
ties in the renewable energy sector. Currently
some 98 percent of electrical energy is pro-
duced through thermal power plants. How-
ever consistent with the obligations of the
Energy Community Treaty for South-East
Europe, where Kosovo is a signatory party,
Kosovo will have to cover eight percent of the
electrical energy consumption with renewable
energy resources by 2016. Te Ministry of
Energy and Mining of the Republic of Ko-
sovo has already conducted a pre-feasibility
study for numerous sites where hydro power
plants can be constructed. Te expression of
interest for these HPPs will be internation-
ally disseminated. In addition, feed-in tarifs
Graph 8: Kosovo lignite
reserves compared to
the rest of the World (in
billion tonnes)
0
5
10
15
20
25
30
35
40
45
50
Rest CIS Kosovo China US Australia Germany
42
38
33
19
14.7
11
32
Graph 9: Theoretical
renewable energy
resources in Kosovo
in GWh/year
Agriculture 1,200
Livestock 1,363
Wood 2,812
Solar 2,880
Solid waste 1,229
14
for diferent renewable energy generation ca-
pacities have been put in place. Te Kosovo
resources for renewable energy are shown in
table 2 below.
In order to improve the efciency of the dis-
tribution system, the Government of the Re-
public of Kosovo is planning further invest-
ments in distribution capacities, as well as
the privatisation of the currently state-owned
energy distribution company which has al-
ready been unbundled from the state-owned
Kosovo Energy Corporation.
Type of resource Resource
Biomass, wood 0,9 million m
3
Biomass, livestock 322000 cattle, 152000
sheep/goats
Biomass, agriculture 0,3 million tonnes straw
Solid waste 0,44 million tonnes
Solar energy 1500 - 1650 kwh/m
2
/
year
Wind energy Unknown
Table 2: Resources in Kosovo for renewable energy
In the mining sector, and in addition to lig-
nite, base-metal mining has been a mainstay
of Kosovo’s economy since pre-Roman times.
Modern mining in this feld began in the
1930’s, when the mining complex Trepça was
revamped by the British Company “Selection
Trust”. Zinc, lead, silver, gold, cadmium and
bismuth are exploited along Trepça’s mineral
belt.
Te lead and zinc reserves of Kosovo are esti-
mated to be around 48 million tonnes, those
of nickel to 16 million tonnes. Chrome re-
serves amount to 89 million tonnes and baux-
ite reserves to 13.2 million tonnes.
Tere are diferent mines that can either be
acquired through the ongoing privatisation
procedures or can be revamped by entering
joint ventures with private owners. For details
regarding the specifc mining possibilities
within the privatisation process please check
the web-site of the Privatisation Agency of
the Republic of Kosovo at www.pak-ks.org.
3.7 Textiles
With over 200 years of tradition, textiles
were the second largest industrial sector in
Kosovo, after mining. In the past, products
from Kosovar manufacturers targeted the lo-
cal market, as well as other markets through-
out the former Yugoslavia, Western and East-
ern Europe and the United States. At its peak
in around 1990, each of the 15 socially owned
enterprises (SOEs) engaged in textile produc-
tion employed more than 1,000 people and
sales totalled some 35 million Euro.
Recent developments in the region have fro-
zen the primary trading links of the textile
industry, causing lower production rates and
resulting in a lack of competitiveness with
foreign products. As a result, a major share
of former SOE workers has become redun-
dant. A minor part has, however, established
private textile companies. Currently there are
over 450 private companies engaged in tex-
tile production, out of which 90 percent are
fnal product manufacturers. Although the
textile industry has experienced a signifcant
recovery during the past years, the majority
of businesses are still small and take the form
of micro enterprises. Consequently, they cater
solely for the Kosovo market and are primar-
ily geared towards a niche market.
Analysis indicates that some 55 to 65 million
Euro in exports could be reached, assuming
that trading links with former partners can
be re-established. Tere is considerable scope
in this sector for investors to recreate a verti-
cally integrated manufacturing cluster so that
Kosovo would once again produce fnished
clothing from thread.
In particular, Kosovo ofers three major bene-
fts for investors wishing to revamp one of the
existing SOEs or found a new textile manu-
facturing company. Tese are:
• Acostefective,wellskilledandexperi-
enced work force
• Asolidbaseoftechnologythatcanbe
acquired through the ongoing privatisa-
tion process
• Numeroussubcontractingandoutsourc-
ing possibilities
With the existing know-how, cost efective la-
bour force and other comparative advantages
that the country ofers, including the friendly
business and investment environment, the
textile industry in Kosovo has therefore the
15 Principal industrial and business sectors
potential to become highly competitive inter-
nationally.
3.8 Tourism
The natural wealth of Kosovo represents
high quality tourism resources. Te descrip-
tion of Kosovo’s potential in tourism is closely
related to its geographic position. Kosovo’s
position in south-eastern Europe, with a cen-
tral location in the Balkan Peninsula, repre-
sents a crossroad which historically dates back
to Illyrian and Roman times.
Te mountainous south of Kosovo has great
potential for winter tourism. One of the most
interesting opportunities for foreign inves-
tors in this sector is the ski resort Brezovica
in the Sharr Mountains. Te resort, situated
between 1,700 and 2,500 meters above sea
level. It ofers excellent weather and snow
conditions, as well as long ski seasons from
November to May.
Assets of Brezovica include three hotels with
680 rooms, two restaurants and nine ski lifts
with the capacity to transport 10,000 skiers
per hour. Trough its proximity to Prishtina
Airport (60 km) and Skopje Airport (70 km),
the resort is a possible destination for in-
ternational tourists and has the potential to
become the most favourable winter tourism
destination in the Balkans.
Also in the Sharr Mountains in the very
south of the country, bordering Macedo-
nia and Albania, Kosovo is ofering about
22,000 hectares of largely untouched land in
the mountainous area, belonging to the SOE
“Sharrprodhimi” for privatisation. Te region
ofers excellent tourism opportunities, such
as skiing, eco-tourism, paragliding, moun-
tain biking, rock climbing, trekking, kayak-
ing, horse riding, etc. Te Sharrprodhimi land
in the municipality of Dragash is stunningly
beautiful. It is clearly a remarkable property
for eco-tourism, and will only be sold to a
proven investor who is committed to a sus-
tainable and rational development program
which will have strong local support.
Apart from the above-mentioned tourism
resorts, Kosovo is generally rich with moun-
tains, artifcial lakes and rivers and therefore
also ofers prime possibilities for hunting and
fshing.
Te area of wellness in Kosovo also ofers
great potential for development. Te numer-
ous thermal springs of Kosovo are well known
in the region for their healing efects. Foreign
investors in this feld will fnd high demand in
the regional and domestic market.
Te widespread production of rare artisan
crafts in Kosovo, such as the Filigree (silver),
represents an attraction for foreign tourists. In
addition, Kosovo has the potential to develop
cultural tourism with numerous religious and
other sites with extraordinary cultural and
historical value.

16
4
Investment
Climate
17
4.1 FDI Inflows
Taking into consideration the favourable
business climate, stable macroeconomic en-
vironment and the excellent opportunities
across diferent business sectors, Kosovo is
increasingly becoming an attractive place for
doing business. As a result, the interest of
foreign investors has been increasing steadily
throughout recent years. Kosovo has attracted
over 1 billion Euro of FDIs in the past three
years. After a peak in 2007 with 440 million
Euro of FDI, a slight decrease has been seen in
2008 and 2009, this mainly due to the impact
of the global fnancial downturn. In 2010
Kosovo had positive growth of FDI infows
reaching 314.16 million Euro.
Apart from investment pioneers such as the
Raifeisen Bank and Procredit, which entered
the Kosovar market at the beginning of the
transition phase, there are many other for-
eign companies engaged in a wide range of
business sectors. According to the Business
Registry data for 2010, there are 3,523 com-
panies of foreign and mixed ownership that
have already used the opportunity to invest in
Kosovo. Te large amount of foreign compa-
nies operating in Kosovo is living proof of the
opportunities and benefts that the country
ofers, and also represents a base of quality
products and a successful service-providing
community.
Graph 10: FDI Inflow in
million Euro
0
100
200
300
400
500
2010 2009 2008 2007 2006
294.8
440.7
366.5
291.5
314.1
Foreign companies in Kosovo
18
4.2 Success stories
ConstruCtion
Xella International
Xella International Group, part of Haniel
Corporation, is the market leader in construc-
tion materials with production facilities on all
six continents.
Xella Group opened a silicate production
factory in Lipjan, near the Kosovar capital
Prishtina in 2006. Te value of this Green-
feld investment has reached 12 million Euro
and represents the most important project of
the Xella Group in the Balkan region. Xella
Kosovo supplies the entire region with silicate
products under the brand name “Silka”.
IT
Wertheim / Rrota
Te Austrian company Wertheim has out-
sourced the development of a new software
package to Kosovo. Tis investment foresees
the development of a sophisticated software
package for managing safe deposit boxes pro-
duced by Wertheim. Te project is also sup-
ported by the Austrian Development Coop-
eration (ADC), which will take over a part of
the investment.
Over 400 branches of banks in Austria, Swit-
zerland, Croatia and Slovakia use Wertheim
safe deposit boxes, while the software will
from now on be developed by Rrota in Ko-
sovo.
Agriculture
Kolm Pfuger / Etlinger
Kolm Pfuger, an Austrian company produc-
ing several varieties of salads and tinned veg-
etables, as well as supplying trade chains in
Austria, has outsourced the production and
packing of chilli (Pfeferoni) and other vege-
tables to Kosovo. Te investment is situated in
central Kosovo in Shtimlje. Tis investment is
worth 500,000 Euro and is supported by the
Austrian Development Cooperation (ADC);
more than 150 new jobs have been created in
Kosovo.
Mining
Ferronickeli
Newco Ferronikeli is a part of Cunico Re-
sources N.V, a multinational mining and
metals company. Cunico Resources N.V is the
largest manufacturer of ferronickel in Europe
with production plants in Kosovo and Mac-
edonia.
Te total investment in Kosovo plant exceeds
EUR 100 million. NewCo Ferronikeli is the
most successful story of the privatization in
Kosovo and as a company plays a crucial role
in Kosovo’s economy employing more than
1000 employees. Te products of Newco Fer-
ronikeli are exported to the European Union
and Asia and are contributing substantially to
Kosovo exports.
Banking and Insurance
Raifeisen Bank
Raifeisen Bank entered Kosovo market in
2001 through acquisition of the American
Bank of Kosovo. Te Raifeisen Bank Kosovo
has grown to be one of the main actors in the
fnancial system of Kosovo, contributing sub-
stantially to the increased fnancial interme-
diation at all levels.
Currently Raifeisen Bank Kosovo is the sec-
ond largest bank in Kosovo with total assets
amounting over 680 Million. Raifeisen Bank
Kosovo employs more than 650 employees.
Telecommunication
IPKO / Telekom Slovenia
Telekom Slovenia acquired the local company
IPKO Net, which was the frst internet service
provider in Kosovo, in 2006. IPKO Net ofers a
wide range of telecom services to its custom-
ers. According to the market share for GSM
services it is the second largest telecom com-
pany in Kosovo after the state owned telecom.
In addition to GSM, the company ofers also
fxed telephony and internet services, and is
the market leader in cable TV.
19 Investment Climate
4.3 Key economic indicators

The real development of the economy meas-
ured by the gross domestic product (GDP) has
been favourable in the past years, showing a
positive and continuously increasing trend.
Despite the efects of the international fnan-
cial crisis, Kosovo was one of the few coun-
tries in Europe that experienced positive eco-
nomic growth in recent years.
As donor support decreases, the private sector
consumption and investments are becoming
the most important factors behind economic
growth. Tese investments are mainly being
driven by the fast expanding fnancial sec-
tor. Moreover, the Kosovo Government runs
a stable and forward-looking fscal policy.
Te tax revenue base has been widened, thus
enabling the Government expenditures to in-
crease and in turn support economic growth.
Apart from the favourable economic perfor-
mance, Kosovo runs a very stable monetary
policy. Kosovo is one of the few counties
outside the EU-zone that has introduced the
Euro as its ofcial currency. Te use of the
Euro has provided the grounds for low in-
fation and a stable macroeconomic environ-
ment. By eliminating the exchange rate risk,
transaction costs have been reduced, thus fa-
cilitating the promotion of trade and invest-
ment. Due to the absence of monetary in-
struments resulting from the use of the Euro,
Kosovo does not run any monetary policy risk
either. Prices are expected to remain stable in
the future.
Graph 11: Real GDP in billion Euro and GDP growth
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2010 2009 2008 2007 2006
2%
3%
4%
5%
6%
7%
2010 2009 2008 2007 2006
3.464 3.792 4.259 3.182
4.0%
3.8%
4.0%
5.4%
5.0%
3.724
Graph 12: Inflation in Kosovo
-4
-2
0
2
4
6
8
10
2010 2009 2008 2007 2006
0.6%
4.4%
9.4%
-2.4%
3.5%
Graph 14: Unemployment rate
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2008 2007 2006 2005
43%
40%
42%
47%
45%
Graph 13: Budget balance
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2010 2009 2008 2007 2006
2.4%
7.0%
-0.2% -0.1%
-2.0%
20
4.4.5 Investment guarantees
1. Te Multilateral Investment Guarantee
Agency MIGA (a member of the World
Bank Group) guarantees investments
in Kosovo up to the value of 20 million
Euro.
2. Te US Overseas Private Investment
Corporation (OPIC) also provides politi-
cal risk insurance for foreign investors in
Kosovo.
3. For investment and credit guarantees
from Austria please contact the Austrian
Kontrollbank (OeKB) and for Germany
the Euler Hermes Kreditversicherung.

4.4 Incentives regime
The existing legal framework in Kosovo
allows incentives for foreign and local inves-
tors. Tey are up to date and promote the
growth of the SME-Sector. Additional incen-
tives that enable Kosovo to cope with devel-
opments in the region are in preparation and
will be introduced soon.
Current incentives cover the following issues:
4.4.1 Carrying forward of losses
Based on the Law Nr.03/L- 162 on Corpo-
rate Income Tax, tax and capital losses can be
carried forward for up to seven successive tax
periods and shall be available as a deduction
against any income in those years.
4.4.2 Special Allowances of new assets
In accordance with the Corporate Income Tax
Law Nr.03/L-16, if a taxpayer purchases new
capital goods for the purpose of the taxpayer‘s
economic activity between 1 January 2010
and 31 December 2012, a special deduction
of ten percent (10%) of the cost of acquisi-
tion of the asset shall be allowed in the year in
which the asset has been frst placed into ser-
vice. Tis deduction is available in addition to
the normal allowable depreciation deduction.
4.4.3 Avoiding Double Taxation
Based on the Law Nr.03/L-16 on Corporate
Income Tax, a resident taxpayer who receives
income from business activities outside of
Kosovo through a permanent establishment
outside of Kosovo, and who pays tax on that
income to any state, shall be allowed a tax
credit under this regulation in an amount
equal to the amount of tax paid to such state.
Any tax credit under the present section is
limited to the amount of tax that would be
paid under this regulation on the income
made in such state.
Any applicable bilateral agreement on the
avoidance of double taxation shall supersede
the provisions above.
4.4.4 Customs
In order to promote local production, the new
Kosovo customs and excise code No. 03/L-
109 applies a reduced rate of zero percent
customs duty on certain capital goods, raw
materials and agricultural production inputs.
For more details visit: www.dogana-ks.org/
tarik/. A zero tarif rate is also applied to the
export of goods and services.
21
22
5
Currency and
the banking system
23
K
osovo adopted the Euro as its of-
fcial currency on 1 January 2002.
With the use of this stable currency
as an ofcial mean of payment, the prereq-
uisites for the development of an efcient f-
nancial sector and stable macroeconomic en-
vironment were in place. Benefts arising from
the introduction of the Euro in Kosovo have
been obvious and resulted in low infation
rates and strict fnancial discipline. In particu-
lar, the Euro has given Kosovo a considerable
advantage over its competitors in the region
by making it more attractive to foreign invest-
ment, due to low transaction costs as well as
the elimination of exchange rate and currency
risk.
Te absence of traditional monetary policy
instruments also enabled the establishment
of a very strict and efcient regulatory frame-
work, upon which a sound banking system
has been developed.
Achievements in the banking sector in Ko-
sovo have been signifcant in the last fve
years. Tey have resulted in the improvement
of public confdence in the banking sector and
the strengthening of the intermediation func-
tion of banks in the Kosovo economy.
Kosovo introduced a two-tier banking system
back in 1999. Te Central Bank of the Re-
public of Kosovo also embodies the charac-
teristics of an integrated fnancial supervisory
agency. Its responsibilities cover licensing,
regulation and the supervision of fnancial in-
termediaries, and it ensures the proper func-
tioning of the payment system.
Te fnancial sector in Kosovo is bank-based
and all of Kosovo’s banks are private. Tere
are eight registered banks, of which six are
in foreign ownership. Te Pro Credit Bank
established at the initiative of several leading
International Financial Institutions, and the
Raifeisen Bank of Austria, hold the largest
market share in the sector.
With banking sector assets accounting for 55
percent of GDP at the end of 2010, Kosovo
ranks well with the countries of the region.
Loans granted by the banking sector of Ko-
sovo for the same period accounted for 33
percent of GDP.
In addition, the lowering of interest rates
and the shift from short-term to long-term
fnancing in the banking sector of Kosovo has
had a very positive impact on overall econom-
ic growth enabling intensive long term capital
investments.
Graph 15: Structure of
loans by maturity
0%
20%
40%
60%
80%
100%
2010 2009 2008 2007
Þ Over 2 years
Þ Up to 1 year
Þ Over 1 and up to 2 years
24
6
Labour and
education
25
6.1 Labour market
Kosovo is blessed with a young, skilled,
multilingual and motivated labour force with
a strong entrepreneurial spirit.
With 70 percent of the population being
under the age of 35, Kosovo is considered
to have the youngest population in Europe.
Tis young population has a high literacy of
foreign languages. Albanian and Serbian are
both ofcial languages, and given the long-
term presence of a large international com-
munity, English has been established as a
de-facto third ofcial language. Owing to the
large Kosovar Diaspora, German and other
European languages are frequently heard.
Taking into consideration the high availabil-
ity of the work force and the liberal labour law
that governs the local labour market, hiring
employees in Kosovo is both time saving and
simple. According to the “Doing Business
2011” of the World Bank, Kosovo can outper-
form most of its neighbouring countries when
it comes to the simplicity of hiring new em-
ployees. Te same applies to the cost of mak-
ing workers redundant which, equal to a sal-
ary of 7.2 weeks, is below the regional average.
Furthermore, the highly fexible labour mar-
ket ofers a sufcient work force with varied
skills and levels of education and training.
Although according to the data covering job-
seeker statistics the main part of the labour
market supply consists of basic skilled labour,
there are sufcient quantities of highly edu-
cated jobseekers as well.
Te main advantage of the Kosovo labour
force remains its low cost. With the average
monthly labour cost estimated at EUR 330 it
is the most competitive in the region.
Country Average monthly labour
cost (euro)
Kosovo 330
Macedonia 490
Serbia 566
Croatia 1055
Bosnia and
Herzegovina
480
Table 3: Overview of the monthly
labour cost in the region - 2010
Furthermore, personal income tax in Kosovo
is very low at only four percent of the average
gross salary, and the wages are unburdened by
costly social contributions, unlike the salaries
in most neighbouring countries. Te only
mandatory contributions on total gross wages
paid are those for individual pension savings
accounts, fnanced by the employer (5 per-
cent) and the employee (5 percent).
Graph 16: Difficulty of
hiring index (0-100)
Graph 17: Redundancy
costs (week salary)
Graph 18: Registered
jobseekers (2011)
0 20 40 60 80 100
0 5 10 15 20 25 30
0 50000 100000 150000 200000 250000
Kosovo 0
Kosovo 7.2
University 3.779
Montenegro 0
Croatia 7.2
College 2.154
Albania 44
Serbia 7.7
Secondary school 88.172
Bosnia and Herzegovina 56
Bosnia and Herzegovina 7.2
Qualified 28.395
Croatia 61
Macedonia 8.7
Semi-qualified 12.511
Serbia 78
Albania 10.6
Unqualified 201.352
Montenegro 26
26
Working in Kosovo as a foreigner
Natural persons, who are not citizens of Ko-
sovo, when wanting to work in Kosovo for
more than three months, must apply for a
work permit, which is issued by the Ministry
of Labour and Social Welfare. Together with
the request for the work permit, the employer
should also submit a copy of the residence
permit, or proof of possessing a valid visa is-
sued by the Kosovo authorities.
6.2 Educational system
The compulsory school and higher educa-
tion systems in Kosovo are beeing reformed
continuously while landing great impor-
tance to their quality, and thus creating the
basic preconditions for the development of
a knowledge-based society out of the young
population. With the ratifcation of the new
university law by the Government back in
2004, Kosovo’s higher education authority
has introduced educational levels in accord-
ance with the Bologna Declaration.
Great importance has been given to estab-
lishing a privately-driven educational system.
Currently Kosovo has two state universities
and several private universities and colleges,
with worldwide known educational institu-
tions among them. As part of the educational
reforms, the Ministry of Education, Science
and Technology has founded the Public Uni-
versity of Prizren. Te curricula of the study
felds ofered by the University of Prizren are
developed based on the mid-term needs of
the local economy.
With approximately 40,000 students at the
two state universities, and at least 10,000 stu-
dents at the private universities and colleges,
a sufcient stream of highly educated labour
is guaranteed. Te number of graduates is
increasing continuously, with social science
graduates over-performing those studying the
natural sciences.
Country Employee Employeer Total
Kosovo 5% 5% 10%
Macedonia 0% 26.5% 26.5%
Serbia 17.9% 17.9% 35.8%
Croatia 20% 17.2% 37.2%
Bosnia and Herzegovina 31% 10.5% 41.5%
Montenegro 12% 8% 20%
Table 4: Overview of the
social contribution rates
in the region -2010
Graph 19: Number of
students in Prishtina
University - by year
Graph 20: Graduated
students by field and
year
0
10000
20000
30000
40000
2009/2010 2008/2009 2007/2008 2006/2007
0 200 400 600 800 1000
353
601
103
101
80
74
69
89
52
346
368
55
140
141
151
170
185
156
627
249
660
719
801
786
472
657
617
136
417
647
27,274
Education
Physical Culture (Sports)
Mining and Metallurgy
Agriculture
Arts
Medicine
Machinery
Electrical Eng. and Computers
Construction and Architecture
Economics - Peja
Economics
Law
Philology
Mathematic-Natural Science
Philosophy
28,757 29,051
Þ 2008/2009 Þ 2006/007
37,839
27
28
7
Trade and
customs
29
7.1 Trade regime
Kosovo has a liberal trade regime and de-
rives three major benefts from trade liberali-
sation, namely improved export possibilities,
a better investment environment, and stable
relations with its neighbours.
Committed to establishing principles for the
stable development of a pure market economy,
since a very early stage of development, Ko-
sovo’s government has been working towards
establishing a system for the free movement
of goods and services throughout the coun-
try’s borders. As a result, Kosovo currently
enjoys free trade within Central European
Free Trade Agreement – CEFTA, enabling its
businesses and producers of goods to access
the regional market comprising of 30 million
consumers, free of any customs duties.
In addition, Kosovo benefts from non-recip-
rocal, customs-free access to the EU market
based on the EU Autonomous Trade Prefer-
ence (ATP) Regime. Quantitative and quali-
tative restrictions remain in force only for a
very limited number of goods. Furthermore,
a signifcant number of goods produced in
Kosovo enjoy a preferential treatment in the
US market.
Kosovo is still an import-based economy. Im-
ports have been increasing steadily in recent
years (as the fgure shows) reaching some 2.14
billion Euro at the end of 2010. Te main im-
porting countries in Kosovo are EU-countries
followed by CEFTA-members. Even though
local production is increasing steadily, Kosovo
is still forced to import goods and raw materi-
als that are not ofered by the local market.
Te main imports of commodity goods range
therefore from transport means, chemical
products and base metals to machinery and
mineral products.
Recognising the opportunities that the lo-
cal market is ofering, and benefting from
various cross-sector incentives introduced by
the Government, local production has grown
exponentially in recent years. Not only does
local demand continuously rely on local pro-
duction but Kosovo is increasing its exports
to its main trade partners, EU-countries and
CEFTA-members. At the end of 2010, exports
reached 294 million, an increase of 81 pre-
cent in comparison to 2009. Te main exports
of Kosovo comprise mainly base metals and
mineral products, as well as vegetables and
prepared foodstuf.
Given that the country has a very favourable
business climate, a modern legal framework
and a cost efective work force, and taking
into consideration that there is still immense
opportunity for local producers to fulfl mar-
ket demand and also approach the regional
market, local production as well as exports are
expected to increase further in the future.
Graph 21: Imports in Kosovo
– by year in million Euro
Graph 22: Top 6 Imports
by commodity (2010) in
million Euro
Graph 23: Exports from
Kosovo – by year in
million Euro
0 500 1000 1500 2000 2500
2010
2009
2008
2007
2006
0 100 200 300 400
0 50 100 150 200 250 300
2010
2009
2008
2007
2006
1,305.9
1,576.2
110.8
Products of the chem. or allied indust 146.6
Base metals and artic. of base metal 190.0
Transport means 142.1
Prepared foodstuffs, bever. and tob. 261.7
Machinery, appliances, electrical, etc. 288.2
Mineral products 419.2
1,928.2
165.1
1,898.7
198.5
2,144.9
162.6
294.0
30
7.2 Customs regime
Kosovo is an independent customs entity
with a liberal trade regime.
Custom duties and border taxes are regulated
by the Customs and Excise Code of Kosovo,
Law No. 03/L-109.
• Customs:Afatrateof10percentis
imposed on imports and zero percent on
exports. Exemptions exist for imports
of raw materials, a range of capital and
intermediary goods, but also for pharma-
ceutical goods, which are zero rated.
• Excisetax:Isleviedasacertainpercent
of the value of the goods or represents
a fxed amount per specifed quantity, is
applied to cofee, soft drinks, beer, wines,
alcohol, spirits, liquors and other spirit
beverages, cigarettes, other tobacco prod-
ucts, cars, petrol, diesel for motor engines
and kerosene.
• Detailsoncustomsratesandexcisetaxes
applied to specifc goods can be found
under: www.dogana-ks.org/tarik/index.
htm
Te Customs Code is based on the EU cus-
tom code and is fully compliant with WCO
agreed rules on customs procedures and the
Harmonized Commodity Description and
Coding System. It additionally allows the use
of a number of business friendly trade-facili-
tating instruments such as:
• Boundedwarehousing–allowingstorage
in customs warehouses for non-domestic
goods, without import duties being im-
posed. Under this procedure the goods
may undergo any form of handling in-
tended to preserve them, improve their
appearance or marketable quality or pre-
pare them for distribution or resale.
• Inwardprocessingrelief–allowingnon-
domestic goods which are intended for
re-export from Kosovo to be used in
Kosovo in one or more processing opera-
tions without such goods being subject to
customs duties. Tis ofers a great oppor-
tunity for outsourcing projects.
• Processingundercustomscontrol-Te
procedure for processing under customs
control allows goods which are not do-
mestic goods to be used in Kosovo in
operations which alter their nature or
state, without being subject to import
duties or commercial policy measures,
and shall allow the products resulting
from such operations to be released for
free circulation at the rate of import duty
appropriate to them.
• Transit–permittingthemovementof
the goods, which do not originate in
Kosovo from one point within Kosovo to
another, without such goods being sub-
ject to customs duties.
• Temporaryadmission–allowingthe
use in Kosovo, with total or partial relief
from import duties, of goods which are
non-domestic goods and intended for
re-export without having undergone any
change except normal depreciation.
• Outwardprocessing–allowingfordo-
mestic goods to be temporarily exported
in order to undergo any processing
operations, with the products resulting
from such operations to be released for
free circulation with total or partial relief
from import duties.

For details concerning the import of goods
please contact Kosovo Customs at www.dog-
ana-ks.org.
Graph 24: Top 6 Exports
by commodity (2009) in
million Euro
0 20 40 60 80 100
Machinery, appliances, electrical, etc. 10.7
Mineral products 38.8
Vegetable products 12.1
Hides, skins, leather, articles thereof 9.7
Prepared foodstuff 11.4
Base metals and artic. of base metal 185.2
31 Trade and customs
7.3 Transport and
distribution
Located in the heart of the Balkans, Koso-
vo serves as a connecting bridge between the
countries of South Eastern Europe. Trough
its unique geographical position and its liberal
trade regime, it ofers instant access to the in-
teresting and growing market in the Balkans
and Central Europe, comprising 100 million
potential customers.
Kosovo’s capital Prishtina is within one hour’s
driving time to any neighbouring country
(Albania, Montenegro, Macedonia, and Ser-
bia), thereby providing a connection for all
countries in the region.
Road network
Te road network consisting of 630 km of
main roads has been rebuilt to a high extent
during the past years, but some completely
new roads have also been constructed. With
the construction of the highway that will con-
nect Kosovo with Albania on one side and
with Serbia on the other, Kosovo is becom-
ing an important gateway in the corridor that
will connect the Adriatic Sea with Western
Europe.
Railway
Te railway network in Kosovo has a com-
bined length of 330 km. It covers the entire
territory, connecting both the south with
north and east with west. On the south side as
well as the north side the railway line provides
access to the international railway network.
Te ongoing rehabilitation and modernisa-
tion of Kosovo railways provides a solid base
to satisfy the growing demand on logistical
services. Te project for the construction of
the new line that will connect the capital of
Kosovo, Prishtina, to the port of Durres in
Albania is under development.
Air communication
Besides the road and railway network, Kosovo
has a modern international airport. With over
one million passengers per year, Prishtina
International Airport is ranked among the
most frequented airports of the region, serv-
ing several international airlines and ofering
fights to the most important European cen-
tres. Prishtina Internationl Airport has been
given with concession to the Limak-Airport
de Lyon for a period of 20 years, in exchange
for Euro 100 million investments in mod-
ernisation and expansion of the Airport. Tis
should help the Prishtina Internation Airport
to become a regional hub in the near future.
Graph 25: Travelling
distances from Prishtina
to major regional
centres
32
8
Setting up a business
in the country
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8.1 Business types
Businesses operating in Kosovo must be
registered with the Ministry of Trade and
Industry’s Business Registration Unit (www.
arbk.org).
Registering a business in Kosovo is both sim-
ple and inexpensive. Te cost of registration
is 5 Euro for a personal business and 20 Euro
for all other business forms.
All business and trade names are listed with
the Registry of Business Organization and
Trade Names and the basic information re-
garding registered companies can be trans-
parently and freely accessed via the internet.
Six procedures are required to start a
business in Kosovo:
Step 1 Depositing the required capital
minimum
Step 2 Payment of the registration fees to
the commercial registry
Step 3 Application at the Business Registry
and issuance of the registration
certificate
Step 4 Application for municipality licence
Step 5 Obtaining the fiscal number from
the Kosovo Tax Administration
Step 6 Obtaining the VAT-number from the
Kosovo Tax Administration

With six steps needed to start a business, Ko-
sovo compares well with other countries in
South East Europe.
8.2 Legal framework
On 17 February 2008 Kosovo declared its
independence, becoming the latest state to
emerge following the disintegration of Yu-
goslavia. Te declaration of independence es-
tablished Kosovo as a democratic, secular and
multi-ethnic Republic promoting the rights
of all communities. In April 2008 the Assem-
bly of the Republic of Kosovo adopted the
country’s constitution that entered into force
in June 2008.
Kosovo’s legal system has been continuously
re-built since 1999. While other countries in
the region have to undergo the difcult and
complicated procedure of making more than
80,000 laws compatible with European Un-
ion regulations, Kosovo’s legislation is already
EU-compatible.
Te legislation in force in includes:
a) Laws and regulations issued by the As-
sembly of the Republic of Kosovo
b) Te regulations promulgated by the Spe-
cial Representative of the Secretary-Gen-
eral during the United Nations Interims
Mission in Kosovo;
c) Te law in force in Kosovo on 22 March
1989
Every law is available also in English
and can be found in electronic form at:
www.assemblyofkosovo.org
Protection of Foreign Investment
In order to put in place certain legal guaran-
tees that are necessary to encourage foreign
investment, in April 2006 the Government of
Kosovo promulgated a Law on Foreign In-
vestment (Law No. 02/L-33). According to
this regulation a foreign investor, defned as a
physical person who is not a habitual resident
of Kosovo or a business or other organization,
entity or association established under a juris-
diction other than Kosovo, is to be governed
by the principle of national treatment, mean-
ing that foreign enterprises will be treated no
less favourably than similar domestic enter-
prises. In particular the right vested to a for-
eign investor are:
• Non-discriminatorytreatment
• Constantprotectionandsecurity
• Compensationincaseofnationalization,
expropriation, including payment of in-
terest;
• Compensationincaseofviolationof
applicable law and international law at-
tributable to Kosovo
• Freelytransferableandotherwiseinan
unrestricted manner used income
• Protectionagainstretroactiveapplication
of laws
Public-Private-Partnerships and
Concessions
Te Law No. 03/L-090 on Public-Private-
Partnerships and Concessions provides the
legal framework for granting public-private
partnerships and concessions. Te law governs
the rights to utilize and/or exploit publicly
owned infrastructure and/or provide public
services in all economic and social sectors in-
cluding: energy, health, education, transporta-
tion, waste, production activities etc.
According to this law a public-private-part-
nership and/or concession can be granted
for a maximum of 40 years. Te duration of
such agreement for additional period can be
extended but cannot exceed more than one
34
quarter of the initial duration stated in the
agreement. Tere is a special unit “Partnership
Kosovo”, within the Ministry of Economy of
the Republic of Kosovo, which is responsibile
for Public-Private-Partnership. More details
can be found at: www.pppkosova.org.
Legal Forms of Enterprises
Similar to common practices in EU countries,
only certain types of business can be regis-
tered in Kosovo. According to the Law on
Business Organisation (Law No. 02/L-123)
these types are: a single person enterprise, a
general partnership, a limited liability com-
pany, a limited partnership and a joint stock
company. Te characteristics of each type are
listed in the table above.
In accordance with the clauses of the Foreign
Investment Law, foreign companies are per-
mitted to engage in any business activity open
to domestic business. Additionally, there is no
restriction regarding the share of capital that
foreign entities are allowed to hold. Terefore,
foreign entities may establish subsidiary en-
terprises and branches in the same manner
and to the same extent as similar domestic
business organizations.
Contracts Enforcement
Legal procedures concerning the enforce-
ment of contracts are regulated by the Law on
Contested Procedure (Civil Procedure Law)
and the Law on Execution. In general, the
municipal courts have jurisdiction to enforce
contracts, with the exception of matters fall-
ing within the jurisdiction of the Commercial
Court, which is responsible for enforcement.
Trade Marks
Te Law on Trademarks (Law No. 02/L-54)
provides the protection of trademarks and
commercial designations in accordance with
the requirements of international conventions
and the law and practice of the EU and its
member states.
Any signs, particularly words, including per-
sonal names, designs, letters, numerals, au-
dio marks, three-dimensional confgurations,
including the shape of goods or their wrap-
ping or other packaging, including colours,
or combinations of colours, that are capable
of distinguishing the goods or services of one
undertaking from those of other undertakings
may be protected as trademarks in Kosovo.
Trademarks are to be registered at the Patent
and Trademark ofce. Te proprietor of a reg-
single person
enterprise
general partnership limited partnership limited liability
company
joint stock
company
Start-up
requirements
None General partnership
memorandum
limited partnership
memorandum
Memorandum of
association
Memorandum of
association
Founding
documents
Registration form
Rent contract for
premises
Registration form
General partnership
Memorandum
Rent contract for
premises
Registration form
limited partnership
memorandum
Rent contract for
premises
Registration form
Charter
Rent contract for
premises
Registration form
Charter
Rent contract for
premises
Size Small - one owner Small - two or more
owners
Small- two or more
owners
Middle Large - unlimited
Minimum
capital
None None None ¤ 1,000 ¤ 25,500
Partners None At least 2 At least one general
and one limited
partner
Regardless Regardless
Liability Full liability Full liability General partner -
full liability
Limited liability or
fully liable to the
extent of unpaid
stocks
Limited liability or
full liability to the
extent of unpaid
stock
Table 5: Characteristics
of business types in
Kosovo
Graph 26: Enforcing
contracts in days
0 100 200 300 400 500 600 700
Kosovo 420
Montenegro 545
Croatia 561
Bosnia and Herzegovina 595
Serbia 635
Albania 390
35 Setting up a business in the country
istered trademark will after registration have
exclusive rights in relation to the goods or ser-
vices covered by the registration. In particular
these rights are:
a. to use the trademark;
b. to authorize another to use the trade-
mark;
c. to consent to the use of the trademark; or
d. to obtain judicial remedy for a violation
of the trademark

Industrial Design
Industrial Design can be protected in Kosovo
under the clauses of the Law on Industrial
Design (Law No. 02/L-45). Industrial design
is protected by the Law up to the point that it
is still an innovation, and has a specifc char-
acter. Te design of a product is considered to
be an innovation if not identical to a design
previously available to the public, and that the
design has a specifc character if the consum-
ers’ impression difers from the impression
left by any other design that was previously
available to the public.
Industrial design protection can be obtained
by issuing a decision on the industrial design
registration and the recording thereof in the
register. Application for industrial design reg-
istration is to be submitted to the Patent and
Trademarks Ofce. Protection of the indus-
trial design lasts fve years and can be extend-
ed to a maximum of 25 years.
Patents
Patent related matters in Kosovo are governed
by the Patent Law (No.2004/49). According
to this law, an invention shall be patentable
if it is new, involves a inventive step and is
industrially applicable. Patentable inventions
are protected by patents in accordance with
the provisions of the above mentioned Law.
A patent right is granted for the duration of
20 years.
Te application for a patent is to be submitted
to the Patent Ofce and shall contain:
a. a request for the grant of a patent,
b. a description of the invention,
c. one or more claims,
d. any drawings referred to in the descrip-
tion or the claims,
e. an abstract of the invention.
Standardisation
Te certifcation of products, processing,
services, quality and personnel systems, are
regulated by the Law on Standardisation (No.
03/L-144). Under this Law, the institution
responsible for the issuing, application and
determination of standards is the Kosovo
Standardisation Agency (KSA). Standards is-
sued by KSA are equally determined and ap-
plicable for all legal and physical, domestic
and foreign persons that do business within
the territory of Kosovo.
By implementing standards based on EU and
international practices, KSA aims to:
1. increase the level of safety for products
and processes, in the function of require-
ments to protect and improve the quality
of life, health safety, environment and
consumer protection, by ensuring com-
mon rules;
2. promote quality of products, processes
and diferent services according to de-
fned standards;
3. ensure rational use of materials and en-
ergy and efciency in performance;
4. help to abolish the technical barriers in
international trade.
8.3 Taxation
Kosovo’s tax policies are streamlined and
efcient. Unlike many other countries in the
region, Kosovo has laid out a taxation system
that is simple and that reduces the tax burden
for individuals and businesses. Compliance is
straightforward and taxes are few. Further-
more, the Government is introducing tax in-
centives to support domestic production.
Corporate tax
Depending on annual income, domestic legal
entities and permanent establishments of for-
eign legal entities are taxed as follows (Law
Nr.03/L- 162):
Annual income
¤ 0 - ¤ 5,000
37.5 ¤ / quarter
Annual income
¤ 5,001 - ¤ 50,000
3-10% of income
Annual income
¤ 50,000
10% of profit

Corporate income tax is paid quarterly in ad-
vance, based on quarterly net income or proft
predictions.
36
Value added tax
Value added tax (Law Nr.03/L- 146) is ap-
plied to all importers and businesses with an
annual turnover in excess of 50,000 Euro. Te
VAT rate stands at 16 percent and is levied
on all goods and services, with exemption
for certain agricultural and capital goods (on
which VAT is zero percent). Exporters receive
full VAT reimbursement for exported goods.
Personal income tax
Personal income tax (Law Nr.03/L-161) ap-
plies to natural persons receiving income from
Kosovo sources and also to foreign incomes,
received by Kosovo residents. Te rate of per-
sonal income tax depends on annual income
and ranges from zero percent to 10 percent.
Annual income
¤ 0 - ¤ 960
0%
Annual income
¤ 960 - ¤ 3,000
4% of the amount
over ¤ 960
Annual income
¤ 3,001 - ¤ 5,400
¤ 81.6 + 8% of the
amount over ¤ 3,000
Annual income
¤ 5,401 - above
¤ 273.6 + 10% of the
amount over ¤ 5,400
Specifc tax code on depreciation
According to article 15 of the Law Nr.03/L-
162 on Corporate Income Tax the amount
allowed as a depreciation deduction for the
tax period is to be determined by applying the
following percentages to the capital accounts
under the reducing balance method:
(a) Category 1: Buildings; fve percent (5%);
(b) Category 2: Vehicles and ofce equip-
ment; twenty percent (20%); and
(c) Category 3: Machinery and heavy trans-
port vehicles; ffteen percent (15%)
Property taxes
Property tax was introduced in 2003 and is
collected at the local government level by
Municipal administration.
Te Municipal Assembly of each municipal-
ity defnes tax rates on property on an annual
basis. Te tax rates range between 0.05 per-
cent and one percent of the market value of
the property for each of the following prop-
erty categories:
• Residentialproperty
• Commercialproperty
• Industrialproperty
• Agriculturalproperty
• Immovableabandonedpropertyand
uninhabited buildings

Accounting practices
Kosovo has a modern fnancial reporting
system based on International Accounting
Standards. In 2001, with the UNMIK Regu-
lation No.2001/30, the Board on Standards
for Financial Reporting was established and
to date, 18 accounting standards in conform-
ity with IAS have been issued. According to
this regulation, all business organisations with
an annual turnover in excess of 100,000 EUR
or total assets worth in excess of 50,000 EUR
are obliged to prepare four statutory fnancial
statements on an annual basis (Balance sheet,
income statement, cash fow statement, and
changes in equity, and accompanying notes,
along with a tax return). Businesses with a
turnover below 100,000 EUR are required
only to prepare a tax return.
Te overview of the comparison of the Ko-
sovo tax system with its neighbouring coun-
tries is shown in the table 6.
Te Government of Kosovo is currently pre-
paring tax incentives and tax breaks for for-
eign and local investors. More information
can be obtained by contacting the Investment
Promotion Agency of Kosovo.
Country VAT Corporate
profit tax
Personal
income Tax
Kosovo 16% 10% 0-10%
Macedonia 18% 10% 10%
Serbia 18% 10% 10-20%
Bosnia and Herzegovina 17% 10% 0-10%
Croatia 17% 20% 12-40%
Montenegro 17% 9% 9%
Table 6: Comparison of
Tax Systems in the
region - 2010
Graph 27: Registering
property in days
0 20 40 60 80 100 120
Kosovo 33
Montenegro 71
Croatia 104
Bosnia and Herzegovina 33
Albania 42
Serbia 91
37 Setting up a business in the country
8.4 Land acquisition and
related matters
Land in Kosovo is categorised as agricultural
or construction land.
Publicly owned land for construction can be
acquired for private development, only by the
decision of the municipality and/or Ministry
of Environment, or privatisation procedures.
In contrast, construction land that is not pub-
licly or socially owned can be acquired from
private individuals. IPAK runs on its web page
an online database of locations and buildings
available for foreign investors.
Registering property in Kosovo is both quick
and simple. Due to efcient property registers
and cadastral systems, the total duration for
registering a property is below the regional
average. A construction licence issued by the
respective Municipality is always required for
construction purposes.
Information on the particular Land and/or
existing pledges can be obtained from the
Municipalities where the property is regis-
tered in the municipal register. For details visit
www.komunat-ks.net
Land leasing
According to the Law on Local Self Govem-
nment Nr. 03/L-040, the municipalities in
Kosovo have the right to lease movable and
immovable property. Te lease can be granted
for a term of ten years with an extension op-
portunity of up to 99 years.
8.5 Industrial parks
Industrial property in Kosovo can be ac-
quired for business purposes in two diferent
ways. Foreign companies can freely buy land
and buildings through the ongoing privatisa-
tion procedures. For information on current
privatisation opportunities contact the Priva-
tisation Agency of Kosovo. Investors can also
freely obtain a lease for land from the respon-
sible municipality for a term of 10 years with
a long term extension opportunity (see www.
komunat-ks.net for details on 30 municipali-
ties across Kosovo).
Industrial Parks
Te industrial park initiative was launched by
the Ministry of Trade and Industry as a con-
crete measure to boost business in Kosovo.
It has been identifed that business growth is
hindered by a lack of good quality and reliable
amenities. Te concept of the industrial park
is relatively simple, aiming to provide high
quality facilities and infrastructure at a com-
petitive market price, from which businesses
can operate efectively and efciently.
In addition to providing a solid base from
which to operate, additional efects such as
business clustering may also take place thus
facilitating exchange of business knowledge
and transfer of know-how, and developing
synergies to further accelerate business devel-
opment and growth.
Te “Drenas Industrial Park” covers an area of
24 hectares, in which 781 local and foreign
enterprises will be placed. Tree sizes of plots
are available, 1,000m², 3,000m² and 6,000m².
Drenas Industrial Park is situated alongside
the highway connection between Prishtina
and Peja. It lies 21 km away from the Kosovo
capital Prishtina, fve km away from Prishtina
International Airport, seven km from the
nearest railway station and 280 km from the
port in Durres. Businesses that will be locat-
ed in this industrial park will therefore have
a unique possibility to serve the local mar-
ket from a very central position. In an area
populated with one million inhabitants, the
location can ofer a sufcient supply of labour
force. It further enables investors to enjoy the
bureaucracy of a small city and the services of
a big city.
In addition, due to the proximity of regional
roads, there is also a possibility to swiftly ac-
cess any neighbouring country by road trans-
port within one hour.
Details concerning industrial parks are avail-
able from the SME-Agency, which is a part
of the Ministry of Trade and Industry of the
Republic of Kosovo (www.sme-ks.org).
Photo: Drenas Industrial
Park
38
8.6 Utility costs and
availability

Fuel
Te fuel supply is sufcient in all regions of
Kosovo. Measured at a ratio of one fuel sta-
tion per 1,000 inhabitants, Kosovo has one of
the highest fuel station densities in Europe.
Tariffs for fuel
Description EUR/Lit
Diesel 1.24
Petrol 1.24
Prices: March 2011

Telecommunication
Te telecommunication sector in Kosovo is
dominated by the Post and Telecommunica-
tions of Kosovo (PTK). Te PTK was incor-
porated in 2005 and is still a fully state owned
enterprise. It provides various telecommuni-
cation services ranging from post and fxed
telephony to mobile telephony and internet.
Te PTK will be privatised soon and rep-
resents a great investment opportunity for
Western telecom companies.
Te fxed network currently consists of
135,000 telephone connections. Additionally,
there are 600 pay phones located in public ar-
eas as well as 470 in post ofces. A second
fxed phone licence was issued in 2006 to the
private company and internet provider Ip-
koNet.
GSM-services in Kosovo are provided cur-
rently by Vala, a subsidiary of PTK, and IPKO, a
company owned by Slovenian Telecom, which
has acquired the second mobile operator li-
cense in Kosovo and started operations in
late 2007. Vala has over 1,200,000 subscrib-
ers, mostly using the pre-paid system, where-
as IPKO has gained over 300,000 subscribers
within four years of its establishment.
In addition to the 120 post ofces belonging
to the PTK, Kosovo has a wide variety of in-
ternational courier service providers operating
in its territory (UPS, TNT, FEDEX, DHL).
As a consequence, quick and reliable shipping
possibilities to diferent international destina-
tions are available.
Kosovo has four licensed internet-providers
of which three are private (IPKO Net, Kujtesa,
VIP Trading) and one state owned (DardaNet,
a subsidiary of PTK). Te high competition in
this sector, caused in main by the high share
of privately owned businesses, has produced
a very wide internet coverage, comprehensive
product packages and low prices for internet
services. Te society of internet users is esti-
mated to have around 500.000 members.
Energy, water and sewage
Kosovo uses 220 V energy network and the
plug socket system corresponds to the Ger-
man standard.
A public water supply system as well as sew-
age services are established throughout the
country. Te cost for energy and water supply
can be taken from the table below:
Tariffs for Water Supply and Energy
Description Cost EUR
Water Supply 0.32 - 0.76 /m
3
Energy 0.046 - 0.084 Euro/
kWh
Sewage 0.04 - 0.09/ m
3
Prices: March 2011
Tariffs for Fixed telephone, Mobile, Internet
Description Within the
network
To other local International
Fixed telephone (PTK) 0.01 From 0.05 From 0.26
Mobile Phone (VALA) 0.02-0.09 From 0.18 From 0.36
Mobile phone (IPKO) 0.05-0.10 From 0.10 From 0.44
Fixed telephone (IPKO) 0.001 From 0.05 From 0.10
Prices: March 2011
Table 7: Tariffs for Fixed
telephone, Mobile,
Internet
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H
otels: Kosovo has plenty of hotels
spread throughout its territory. Te
hotels are usually two to four-star
rated and the prices range from between 30
and 100 Euro per night. Te most known ho-
tels of the capital Prishtina are Hotel Prishti-
na, Hotel Baci, Hotel Pejton, Hotel Emerald,
Hotel Afa, Hotel Royal, Hotel Victory and
Hotel Gorenje. Te newer and more modern
hotels usually operate at full capacity. Booking
prior to travel is therefore advisable.
Money: Te Euro is the ofcial currency in
Kosovo and the majority of payments are
usually made in cash. However, many major
shops, restaurants and hotels are equipped
with electronic payment devices, thus ena-
bling payments to be made with credit cards
and other means of electronic payment.
Tere is no restriction on the amount of cash
that may be imported into Kosovo. However,
amounts greater than 10,000 Euro must be
declared at the border.
Communication: Kosovo has a developed
telecommunication system. Tere are 600
pay phones located in the public areas as well
470 in the post ofces. GSM providers are
Vala, IPKO, D3 and Z-Mobile and roam-
ing is ofered for the majority of international
telephone service providers. For longer stays
in Kosovo the purchase of a local pre-paid
number is recommended. Prishtina and other
larger cities have numerous Internet Cafés.
Some parts of the city are also covered by a
WLAN network.
Trafc: Trafc in Kosovo keeps to the right,
and an EU driving licence is sufcient. Te
major and smaller roads are to a large extent
rehabilitated and ofer good connections to
neighbouring countries. Currently Kosovo is
also building a highway that will connect Ko-
sovo to Albania to the south side and Serbia
to the north. Tere are numerous “rental car”
companies and daily charges range from be-
tween 20 and 75 Euro depending on the class
of vehicle. Rental car companies with prem-
ises at Prishtina Airport are Europcar, Sixt,
Auto Shkodra and LTG. For travel in the city, a
taxi is recommended (EUR 1.5 - for 1km ride).
Te international green insurance card is still
not valid in Kosovo. Foreigners travelling by
car must therefore obtain additional insurance
at the Kosovo border crossover. No toll fees
are levied for the use of the road network.
Health care: Tere are six regional hospi-
tals situated in the major towns of Kosovo.
Tese are supported by health houses in each
of the 30 municipalities. Apart from the Pub-
lic Health System there are numerous private
hospitals. Due to the higher quality of their
equipment and sanitation, private health in-
stitutions are more favourable.
Adequately equipped pharmacies may be
found in every town throughout Kosovo,
some of which are open 24 hours.
Gastronomy: In restaurants, bistros, cafés
and hotels, a good variety of meals and bev-
erages are ofered (Balkans, Italian cuisine).
Furthermore, there are numerous restaurants
located in Prishtina and other larger towns
ofering international cuisine (Tai, Indian,
Chinese, Mexican, etc.). Te fsh restaurants
in Vërmicë and Istog with their unique trout
specialities are also major attractions.
Groceries: Te supply of groceries is very
good. Smaller shops can be found at each
street corner. Supermarkets with ever-in-
creasing assortments are usually located in the
suburbs.
Map material: Tere are several good road
maps and city plans, available at kiosks and
fuel stations.
Cultural attractions: Te cultural heritage in
Kosovo is very rich, especially in the south
and west of Kosovo, including the Dukagjin
region and towns of Peja, Gjakova, and Priz-
ren. Te small fortresses such as the Albanian
“Kullas”, mills and bridges, the mosques, the
Catholic and Orthodox churches, and the
Turkish baths, the castles and archaeological
settlements, all make up a part of the extraor-
dinarily rich history of the region.
Kosovo presents a rich ethno-cultural, mate-
rial and spiritual heritage treasure-house of
various historical periods. With their unique
characteristics, features, and qualities, each
culture has contributed its diverse values to
the cultural heritage of Kosovo.
In the fgurative-applicative establishment
(composition) of Kosovo, the infuence of
Illyrian, Byzantine, Helen, Roman, West-
ern and Eastern, and Ottoman cultures are
present.
For detailed attractions in Kosovar cit-
ies please visit www.kosovoguide.com and
www.visitkosova.org.
42
10
About Investment Promotion Agency
in Kosovo and its office in Vienna
43
Our vision, mission
and our services
The Investment Promotion Agency of Ko-
sovo was established as an Executive Agency
under the administration of the Ministry of
Trade and Industry, regulated by the Law on
Foreign Investments no 02/L-33, article 19.
In November 2006 the Economic Initiative
for Kosova (ECIKS), with fnancial support
from the Austrian Federal Ministry of For-
eign Afairs through the Austrian Develop-
ment Cooperation, opened the frst ofcial
representation of Kosovo abroad. Te Vienna
Ofce of the Investment Promotion Agency
of Kosovo provides existing and potential for-
eign investors from German-speaking coun-
tries (Austria, Germany, and Switzerland)
with free-of-charge services on a confdential
basis.
Vision
To support the economic development
of Kosovo by stimulating and facilitating
foreign direct investments which will have a
direct impact in reducing unemployment and
increasing the social welfare of our citizens.
Mission
Improve the image of Kosovo and attract
investments through a proactive market-
ing campaign and through ofering free-of-
charge information and services to foreign
potential investors.
Services
One stop shop for all investors - free of charge
services:
• Collectionanddisseminationofinforma-
tion and assistance during all phases of
investments
• Providingofinformationonthegeneral
business environment and specifc indus-
tries
• ProvisionofinformationonTaxation,
Employment, Customs, Real Estate and
other relevant laws and regulations Ad-
vice on business service providers: fnan-
cial, consulting etc
• Assistancewithregistration,licensing,
work permits, and other documentation
• LinkingpotentialinvestorstoBrown-
feld, Greenfeld, and JV opportunities,
including site visit organization
• Assistanceindealingwithadministration
on all levels
• Aftercareservices
Contact
Investment Promotion Agency of Kosovo
Muharrem Fejza Street. N.N.
Lagja e Spitalit
KS - 10000 Prishtina
Republic of Kosovo
Tel. & Fax: +381 38 200 36527
Email: info@invest-ks.org
Web: www.invest-ks.org
Investment Promotion Agency of Kosovo
Ofce in Vienna
Nussdorfer Strasse 20/23
A-1090 Vienna, Austria
Tel.: +43 (01) 890 50 26
Mob.: +43 676 338 09 35
E-Mail: info@ipak-vienna.org
Web: www.ipak-vienna.org
44
11
Key contacts –
Websites
45
11.1 Websites of Kosovo
Institutions

Assembly of the Republic of Kosovo
www.assembly-kosova.org
Te Ofce of the Prime Minister of the
Republic of Kosovo
www.kryeministri-ks.net
Ministry of Trade and Industry of the
Republic of Kosovo
www.mti-ks.org
Ministry of Economic Development of the
Republic of Kosovo
mem.rks-gov.net
Ministry of Finance of the Republic of
Kosovo
www.mef-rks.org
Ministry of Science, Education and
Technology of the Republic of Kosovo
www.masht-gov.net
Ministry of Agriculture, Forestry and Rural
Development of the Republic of Kosovo
www.ks-gov.net/mbpzhr
Ministry of Labour and Social Welfare of
the Republic of Kosovo
www.ks-gov.net/mpms
Ministry of Infrastructure of the Republic
of Kosovo
www.mtpt.org
Ministry of Environment and Spatial
Planning of the Republic of Kosovo
www.mmph-ks.org/
Ministry of Public Services
of the Republic of Kosovo
www.ks-gov.net/map
Ministry of Justice
www.md-ks.org
Central Bank of the Republic of Kosovo
www.bqk-kos.org
Te Kosovo Registry of Business
Organizations and Trade Names
www.arbk.org
Kosovo Privatisation Agency
www.pak-ks.org
Kosovo Customs
www.dogana-ks.org
Statistical Ofce of Kosovo
www.ks-gov.net/esk
Society of Certifed Accountants and
Auditors of Kosovo
www.scaak-ks.org
Te Kosovo Pension Saving Trust
www.kpst.org
Energy Regulatory Ofce
www.ero-ks.org
Telecommunication Regulatory Authority
www.art-ks.org
11.2 Websites of
International Institutions
in Kosovo
European Commission in Kosovo
www.delprn.ec.europa.eu
International Civilian Ofce / EU Special
Representative
www.ico-kos.org
EULEX Kosovo
www.eulex-kosovo.eu
World Bank - Kosovo
www.worldbank.org/kosovo
International Monetary Fond - IMF
www.imf.org/kosovo
United States Agency for International
Development – Prishtina Ofce
www.usaid.gov/kosovo
46
11.3 Business support
Institutions

Investment Promotion Agency of Kosovo
Muharrem Fejza Street. N.N.
Lagja e Spitalit
KS - 10000 Prishtina
Republic of Kosovo
Tel: +381 38 200 36 527
Fax: +381 38 212 807
Email: info@invest-ks.org
Web: www.invest-ks.org
Investment Promotion Agency of Kosovo
Ofce in Vienna
Nussdorfer Strasse 20/23
A - 1090 Vienna,
Austria
Tel: +43 1 890 50 26
Fax: +43 1 890 50 26 26
Email: info@ipak-vienna.org
Web: www.ipak-vienna.org
Economic Initiative for Kosova (ECIKS)
Nussdorfer Strasse 20/23
A - 1090 Vienna
Austria
Tel: +43 1 890 50 26
Fax: +43 1 890 50 26 26
E-Mail: info@eciks.org
Web: www.eciks.org
Kosovo Chamber of Commerce
Nëna Terezë Street 20
KS - 10000 Prishtinë
Republic of Kosovo
Tel: +381 38 224 741
Fax: +381 38 224 299
E-Mail: info@oek-kcc.org
Web: www.oek-kcc.org
American Chamber of Commerce Kosovo
Fehmi Agani 36/3
10000 Prishtinë
Republic of Kosovo
Tel: +381 38 246 012
Fax: +381 38 248 012
Email: info@amchamksv.org
Web: www.amchamksv.org
Aleanca Kosovare e Bizneseve
Dardania SB-6 6/6 B4
10000 Prishtinë
Republic of Kosovo
Tel/Fax: +381 38 551 311
Email: alenacakosovarebizneseve@gmail.com
Web: www.akb-ks.org
SME – Agency of Kosova
Muharrem Fejza Street n.n.
Lagja e Spitalit,
10000 Prishtinë
Republic of Kosovo
Tel: +381 38 200 360 07
Fax: +381 38 212 807
Email: naser.grajcevci@ks-gov.net
Web: www.sme-ks.org
Kosovo Private Enterprise Program
Radovan Zogovic Str, No.1
10000 Prishtinë
Republic of Kosovo
Tel: +381 38 233 006
Fax: +381 38 233 008
Email: administrator@usaidkpep.org
Web: www.usaidkpep.org
Investment Promotion Agency of Kosovo
Muharrem Fejza Street n.n.
Lagja e spitalit
10000 Prishtinë, Kosovo
Tel: +381(0) 38 200 36 527
+381(0) 38 200 36 542
Fax: +381(0) 38 212 807
Email: info@invest-ks.org
Web: www.invest-ks.org

Investor Guide

KOSOVO

INVESTING IN

May 2011

Legal Notice and Information Status of information: May 2011. Changes reserved. Publisher: Investment Promotion Agency of Kosovo - IPAK Contacts: Ministry of Trade and Industry Muharrem Fejza Street n.n. Lagja e spitalit 10000 Prishtinë, Kosovo Tel: +381 (0) 38 512 164 Fax: +381 (0) 38 512 798 Web: www.mti-ks.org Investment Promotion Agency of Kosovo Muharrem Fejza Street n.n. Lagja e spitalit 10000 Prishtinë, Kosovo Tel: +381 (0) 38 200 36 527 +381 (0) 38 200 36 542 Fax: +381 (0) 38 212 807 Email: info@invest-ks.org Web: www.invest-ks.org

Disclaimer The information provided in this brochure was correct at the time it went to press, May 2011. However, legislative changes and changes in interpretation by the authorities and courts can generally occur frequently. This brochure contains information that is summarized and, in part, simplified. It does not substitute for specific legal and tax advice. Despite attempting to exercise care in compiling this brochure, the authors can not warrant the accuracy, completeness, or uptodate character of its contents. Any liability on the part of IPAK and the Government of Kosovo is therefore excluded.
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3 8.6 3. Declaration of the Government on attracting foreign investment 3.3 Websites of Institutions Websites of International Institutions in Kosovo Business support Institutions 5 . Trade and customs 8.1 6.5 8.7 3.2 8.1 11.3 3.2 7. General Data 2.2 3.3 4.1 4. Currency and the banking system 6.2 7. About Investment Promotion Agency in Kosovo and its office in Vienna 11.8 4. Setting up a business in the country 9. Labour and education 6.Table of contents 6 7 8 9 10 11 12 13 13 14 15 16 17 18 19 20 22 24 25 26 28 29 30 31 32 33 33 35 37 37 38 40 42 44 45 45 46 1.6 Labour market Educational system Trade regime Customs regime Transport and distribution Business types Legal framework Taxation Land acquisition and related matters Industrial parks Utility costs and availability 7.4 8. Websites of Institutions 11.1 8.1 7. Principal industrial and business sectors 3.4 3. Quality of life 10.2 4.1 3.5 3. Investment Climate 5.3 8.2 11.4 Agriculture Wood processing InformationTechnology and Telecommunications Construction Automotive components industry Mining and energy Textiles Tourism FDI Inflows Success stories Key economic indicators Incentives regime 4.

58 % rural over 500. Legal Framework Applicable Law: Laws passed by the Kosovo Assembly enacted on 15 June 2008 and thereafter. Location factors: Competitive. 11 Insurance companies and two pension schemes. € 1. no Distribution: Diaspora: Languages: 2 % Muslim Slavs (Bosniaks. No duties and taxes on exports.org Tax System: VAT 16 %. Tariff duties: 10 % customs duties on imports. Regulations available at: www. approximately 1.434 billion.000 people living abroad Albanian. agriculture). duties on capital and intermediary goods. five years. Budget: In 2011 totalling app.8 million Financial Sector: Two tier banking system consisting of Central Bank of the Republic of Kosovo and eight private Banks. 10 %. enviable natural resources (mining. 5 % Serbs. EU and USA.000 active SMEs in 2010.est.366. customs free access to the markets of CEFTA. Regulations enacted by the United Nations Interim Administration in Kosovo (UNMIK) between 10 June 1999 and 14 June 2008. 2 % Roma and 1 % Turks 42 % urban. Population Population: Ethnic composition: 90 % Albanians. enacted before the abolishment of Kosovo’s autonomy within the Social Federal Republic of Yugoslavia. Excise tax on fuel. well educated and young workforce. Free trade: Customs-free access to the EU market based on the EU Autonomous Trade Preference (ATP) Regime.assembly-kosova. and laws dated between 22 March 1989 and 10 June 1999. and selected raw materials.908 km² Low flood plains throughout central Kosovo. west and south. enacted after the abolishment of Kosovo’s autonomy.1 % per annum over the past Land Use: Capital: 10. skilled and well educated work force. Per capita: € 2. 52 % agriculture. 500 Socially Owned Enterprises of which 400 already privatized. Corporate Profit Tax 10 %. Central European Free Trade Agreement – CEFTA and preferential treatment of exported goods in the US market. surrounded by mountains to the north. Euro as official currency. Serbian.1 General Data Geography Land area: Terrain: Economic Description Currency: EURO Gross Domestic Product (GDP): In 2010: € 4. 39 % forests Prishtina .000 lion. 6 . Personal Income Tax progressive max. population 200. provided that they are not discriminatory and are required to fill a legal gap. Enterprises: over 45. low taxes and a transparent tax system. tobacco alcohol and luxury goods. English. 50 % of total SMEs engaged in trade industry.259 bilInflation: On average 3. Laws dated prior to 22 March 1989. app. Gorans). Labour market: Average labour cost 330 Euro in 2010.

Kosovo is a place which provides many investment opportunities. In the short term. construction licenses. We have identified some of our strongest potential sectors for investors. During the next three years the Government of Kosovo aims to achieve a steady annual economic growth of 7 to 8%. Value added tax is 16%. The Government of Kosovo has recognized that increasing investments and support to the development of the private sector represents the basis for a sustainable economic development of the country. We assure you that the Government of Kosovo will remain focused in further improving the business climate and in speeding up the regional and European integration of Kosovo. These municipal business centers will ease the procedure and shorten the time for business registration. The tax policy in Kosovo is the best in the region. We have already started to address the issues of business registration. development of the public infrastructure. textiles. it is the lowest cost country in the Eurozone. taxes. wood processing. We will provide full support for your business and investment activities in our country and we sincerely welcome you in Kosovo. From 2007 Kosovo averaged an economic growth of about 5%. The Government of Kosovo’s Vision for the next three years foresees a deep and thorough reform on five vital economic development areas.2. In the mid-term. financial reporting. These Five key strategic areas which will enable the Government to achieve a steady economic growth including maintaining macro-fiscal stability. Declaration of the Government on attracting foreign investment Dear Investor. cadaster. This reform. The government has also drafted a package of 12 basic laws for this year which will set the stage for the deep economic and trade reforms. Labor force is the most cost-efficient in the region with the average wage in 2010 around €280 per month. by 2014. registration of property. investor protection.000 companies of foreign and mixed ownership. The banking system is one of the most stable in the Region. Income taxes are between 0-10% and corporate taxes are 10%. we have managed to open 22 ‘one stop shops” throughout Kosovo. including Business Process Outsourcing (BPO). Kosovo has more than 3. the issue of financial loans. It has a good strategic position. tourism and construction. investments and support to the private sector. the lowest in the region. and privatization of the publicly owned enterprises is in progress which brings lots of great opportunities for foreign Investors. food processing. information technology. We believe that Kosovo will be an important market for foreign investors in several sectors. re-vitalizing agriculture and development of the human capital. The Government will increase the efficiency of the public expenditures and will ensure the continuous increase of the revenues. This allows all investors to export to EU and US without any customs tariff. certainly. metals and metal processing. Kosovo enjoys recently renewed customs-free access to European Union and the United States through EU Autonomous Trade Preferences and Generalized System of Preferences respectively. reducing the procedures for imports and exports. it has the youngest population in Europe and it has low taxes and cost-efficient labor force. Recently we passed the law on Business Associations and Internal Trade which allows potential investors to start a business in just a few days. In addition. will improve execution procedures and registration of the property rights and will regulate the notary. Today. regulate internal and external trade of Kosovo. These laws will amend the Customs Code to harmonize it with the EU Law. energy and mining. will be accompanied by a legal reform which we create all the necessary conditions for it to happen. Deputy Prime Minister for Economy Minister of Trade and Industry Mimoza Kusari-Lila 7 . This investment is spread across a wide range of business sectors as well as investment in publiclyowned assets sold by the Government as part of its privatization program. enforcement of contracts and closing of businesses. we aim to cut all business licenses by at least 50%.

3 Principal industrial and business sectors © Samir Karahoda .

Kosovo enjoys a preferential market access to the EU and US markets. free access to the regional market consisting of 30 million consumers. Kosovo has a long agricultural tradition.000 ha is used as agricultural land in the different fields as illustrated in graph 1. with only few products exempted from this prefrential treatment.886 Fruits 102.358 Fodder crops 17.1 million ha app. Cabernet Franc. These advantages create very good conditions for the qualitative wine production in Kosovo. due to trade liberalization within the CEFTA region. This list is shown in table 1. through Booz Allen. Some 70 percent of the local market demand for the agricultural products and processed foodstuff is still being fulfilled by imports. The arable land in Kosovo is considered to be of good quality. It has substantial 51% Arable land and kitchen gardens 37% Meadows 0. Given the natural resource characteristics of the climatic zones that exist in the country. very good conditions for the agricultural production exist. 588.2% Vineyards 0. The continental climate and the height of 300-400 meters above sea level provide ideal conditions for vineyards and the development and growth of grapes for wine. Kosovo additionally offers a very flexible and cost effective labour force and.364 Grains 108. There are more than 200 sunny days annually to help ripen the grapes. Prokupac and Gamay are all planted here. ease of production and ease of market access. Based on the area and average yield per ha.3. has given a list of top 10 agricultural products for Kosovo.704 Vegetables acres of vineyards largely dedicated to the production of Amselfelder branded wine for sale in Germany. conducted a study that revealed new opportunities for growth. With some 60 percent of the population living in rural areas and mostly working in agriculture. enables Kosovar farmers to achieve high yields per ha in every sub-sector of agriculture. Combined with the temperate climate that prevails throughout the country. This constellation. In comparison to other countries. It is one of the most important employment providers in Kosovo and it accounts for 13 percent of the value of exports. the sector of agriculture contributes 18 percent to the GDP and is the main source of income for the majority of the population. Currently.1% Greenhouses 2% Orchards  Bulbs (flower)  Cucumbers/gherkins Graph 1: Use of agricultural land in Kosovo  Lettuce/chicory  Currants/ gooseberries  Saffron  Asparagus  Apples  Cranberries/bilberries  Table grape  Kiwi fruit Table 1: Top 10 strategic crops 4.1 Agriculture 8% Uncultivated 2% Pastures Kosovo is well endowed with agricultural land. Out of a total surface of 1. Graph 2: Structure of crop area in ha 9 . Currently some 260. the study showed that a total of 105 crops can feasibly be grown. In October 2009 the US Agency for International Development (USAID). together with sufficient natural irrigation possibilities. certainly the most important fields of agriculture in Kosovo are the vegetable and grain sectors. investment.000 ha or 53 % is cultivable land. Further evaluation of factors such as highest production value. In addition. Kosovo is already well known as a producer of different types of grapes. Merlot. economic feasibility and attractiveness. on par with some well known wine production regions.

Secondly. still experiencing a livestock recovery process.129 Horses and Donkeys 6. a short-term pragmatic approach could be to initially focus on meat exports to these destinations.000 2.000 2. substantial inherited capital.000 Graph 3: Livestock in Kosovo Due to its geographical composition.690 Fagus 15.577 Other Broadleaves 9. together with VAT exemption on a wide range of agricultural inputs. will turn around this segment of Kosovo’s economy and lead to the creation of a large export business.000 15.000. 0 5. Other coniferous 223 Pinus ssp 2.2 Wood processing Forests and similarly covered surfaces make up around one third of the total territory of Kosovo and represent a resource of special importance for the country’s economy.500.152 Sheep and Goats 151. Croatia and Turkey. Bosnia and Herzego- 10 .000 Graph 4: Forestry growing stock in 1. the most significant obstacle remaining for Kosovo’s meat processing companies is the reopening of export markets. the country offers very good natural and climatic conditions for various types of livestock farming. market demand for livestock farming products is currently much higher than domestic production. with the possibility of expanding into EU markets in the next stage.019 Picea Abies 1. Recognising the potential. With the annual value of wooden products and other benefits produced by forests reaching EUR 50 – 75 million.624 vina. some foreign companies have already started to cooperate with local partners and are taking advantage of Kosovo’s friendly tax and customs systems allowing them to offer competitive products in European markets. farming in this sector has made great strides in recent years – both in numbers and yield. this field is very profitable and has the potential to expand into foreign markets.Poultry 2. technical capability and promising market prospects.500.000 10. the Government of Kosovo has recently introduced different incentives for farmers and processors. Also taking into consideration the low prices of primary products.402 Abies Alba 1.813 Pigs 39. In particular. There are numerous agro-industries in Kosovo with high market potential.000 1.000 1. The zero percent customs rate for most agricultural inputs and capital goods.278. together with sufficient investor interest.000 20. Firstly.675 3. this sector represents a livelihood for 10 percent of the Kosovar population.963 Quercus 9. 0 500. there are two main factors in favour of livestock investments in Kosovo. offering potential investors immediate access to suppliers of primary products.591 Cattle 321. The promotion of the processing businesses.000. Kosovo also offers very good conditions for livestock farming. In order to improve the competitiveness of the agricultural and food processing sector and consequently stimulate the local production. support for exports and simple access to favourable financial means are some additional steps that. The highly competitive workforce and the custom and tax incentives.000 m3 Currently. Although. have been designed to strengthen local production and enable it to further compete with foreign products. The planned revitalisation of the food processing industry will furthermore create greater opportunities for livestock farming in the future. With Kosovo’s geographical location and its close proximity to non-EU countries such as Albania. Montenegro. further underscore the opportunities available in this business field in Kosovo.

000 Other Broadleaves 129. Kosovar producers have been able to increase the quality and product range. Potential for foreign investors ranges from doors and windows to a variaty of furniture production. many Kosovars who have studied abroad are now returning to Kosovo.Due to the sufficient availability of inputs. thereby allowing expansion into foreign markets. and a cost effective labour force make the Kosovar wood industry particularly well suited for the manufacturing of hand made luxury products. sawdust and wood chips. There is currently a large pool of companies in Kosovo that would make good outsourcing partners. Switzerland and also neighbouring countries. The annual allowable amount of felling is currently slightly below 1 million m³ with Beech and Oak being the main species.000 Pinus ssp 49. by the Assecio SEE is proof of high opportunities in this sector in Kosovo.e. great knowledge in wood processing. Kosovo’s wood processing industry has experienced significant developments during the past years. most sawmills in Kosovo only saw logs into rough. bringing with them skills and know-how. provide education to thousands of young Kosovars while the demand for this form of training is still rising. Picea Abies 26.  Male  Female 70% 71% 66% 62% 60% 50% 40% 30% 20% 10% 0% 58% 53% 47% 53% 54% 45% 40% 31% 29% 25% 54% Croatia Macedonia Serbia Albania Montenegro Kosovo EU-27 3. while further negotiations for the exception of wood raw material from VAT and customs are currently underway.000 both local as well as to foreign companies who want to outsource their software development and/or call and support centres. and are not yet exploring the potential value of waste products. Due to better organisation and sufficient service-providing clusters. mixed grade lumber. Currently. Kosovo has the youngest population in Europe. has experienced a remarkable development since 1999. In addition. Kosovo offers various incentives that aim to further promote and facilitate primary and secondary wood production. Pronet. Kosovar companies in the IT sector offer today high quality services and the latest technologies to their customers Be it the outsourcing of software development. supported by companies such as CISCO or Microsoft.000 Fagus 436. the Netherlands. 80% Graph 5: Annual felling allowance in m3. establishment of call and support centres or other consulting services. including Internet Service Providers. data management. public and private education institutions in the IT field. with English being only just short of an official language due to a high international presence. Kosovar wood processors supply furniture both for the domestic and international markets (for example hotels) to companies in Germany. The recent acquisition of the largest IT company in Kosovo. i. In addition. Kosovar companies offer high quality services at low costs. Graph 6: Precentage of individials regularly using internet Principal industrial and business sectors 11 . A large amount of traditionally gained experience.3 Information Technology and Telecommunications The IT sector in Kosovo. From being inexistent 10 years ago. The Kosovar Government has recently approved a zero customs rate for the imports of selected machinery and capital goods related to this sector. Today.000 Other coniferous 6. Taking into consideration all these benefits. It is both skilled and multilingual. Through the efforts and engagement of the members of the rich institutional environment of the wood industry.000 Quercus 212.000 Abies Alba 42. Kosovo offers great investment possibilities in every single wood processing cycle.

which will connect the northern and central parts of Kosovo with Skopje (Macedonia).4 Construction During recent years the construction industry has become one of the most important sectors contributing to Kosovo’s economic growth. serves approximately 300. office space and hotels. or for the rehabilitation and development of the road infrastructure. 3.000 new apartments. etc. which will connect Kosovo with the sea port of Durrës. cable TV. great opportunities for foreign investors are available for fixed telephony. This highway will become a part of the Trans European Corridor X that will connect the Adriatic Sea with the Western Europe. Small 120%  Medium  Large 99% 98% 98% 94% 92% 81% 77% 99% 98% 100% 97% 100% 98% 98% 93% 90% 81% 80% 60% 40% 20% 0% Croatia Macedonia Serbia Kosovo EU-27 the country in three main directions with the most important international road corridors in Macedonia. VoIP. Albania and Serbia. in order to meet the existing market demand. while the second private owned mobile telephony operator IPKO – Telekom Slovenian. The construction work for this highway began in May 2010. including the associated infrastructure. A much more important project represents the building of a highway between Merdare-Kukës-Durrës. has currently over 1. restaurants etc.200. Roughly estimated. Albania. The construction sector in Kosovo has so far utilised several hundred million Euro that were primarily used for the construction of new homes. is a mid-term goal of the Government. as a result of an accelerated economic development Kosovo is facing an increased demand for commercial premises such as production facilities.000 users and has a territory coverage of 99 percent. such as roads. schools. The Government of Kosovo has set itself a goal to connect 12 . leisure facilities. The state owned mobile telephony operator will soon enter the privatisation process and represents an attractive investment opportunity for well established Western telecom companies. The stateowned mobile telephony operator VALA. kindergartens. A further factor which is helping to boost the development of this sector is the demand for road and highway construction.000 users. The construction of a highway. The construction industry remains a sector with highly promising economic potential for Kosovo. In addition. in the next few years Kosovo will need some 50. In addition. Graph 7: Precentage of enterprises which have internet access Kosovo has two mobile telephone operators and two virtual mobile operators.

and the Shock Absorber Factory Prishtina.6 Mining and energy Kosovo has an enviable endowment of natural resources.7 11 Taking into consideration the high demand for energy in the local and regional markets. Between 1989 and 1990 the Shock Absorber Factory produced 3. 50 45 40 35 30 25 20 15 10 5 0 Germany Australia US China Kosovo CIS Rest 42 38 33 32 19 14. German Susta as well as French Peugeot among others. the Government of Kosovo is currently finalizing major projects regarding new lignite exploitation and power generation facilities. Although these manufacturing units were primarily established to supply different parts for the production of Yugoslav vehicles. With the loss of foreign markets as a result of political circumstances during the 1990’s.500 workers.3 million units each year and employed over 1.880 Agriculture 1. Currently some 98 percent of electrical energy is produced through thermal power plants.7 million tonnes. feed-in tariffs Graph 9: Theoretical renewable energy resources in Kosovo in GWh/year Principal industrial and business sectors 13 . large capacities and ample knowledge allow the automotive component industry to produce and support any Original Equipment Manufacturer [OEM] with parts at a competitive cost. At 14. The two best known flagships of automotive component industrialization in Kosovo were the Ramiz Sadiku.5 Automotive components industry The origins of the automotive components industry in Kosovo date back to the 1960’s. The expression of interest for these HPPs will be internationally disseminated. they very quickly penetrated foreign markets and cooperated with well-known European and American automotive component manufacturers. where Kosovo is a signatory party. These projects will offer unique opportunities for companies willing to engage in the energy and/or mining sector(s) in Kosovo. This mineral is of outstanding importance for the country. Kosovo possesses the world’s fifth-largest proven reserves of lignite.3. Apart from lignite fired energy generation capacities. The existing technology.200 Livestock 1. when the first large scale auto components manufacturing companies were founded. The Ministry of Energy and Mining of the Republic of Kosovo has already conducted a pre-feasibility study for numerous sites where hydro power plants can be constructed.229 Wood 2. In addition.812 Solar 2. the trend of shifting production to Central and Eastern Europe makes the Kosovar automotive component industry even more interesting for investors wishing to benefit from increasing opportunities in the region. which produced primarily car seats and small vehicle parts. representing in the long term one of the important factors for the generation of power. Kosovo can also offer vast opportunities in the renewable energy sector.363 3. re-established links with the traditional partners bode well for a prospective development of this sector. However consistent with the obligations of the Energy Community Treaty for South-East Europe. Graph 8: Kosovo lignite reserves compared to the rest of the World (in billion tonnes) Solid waste 1. the Kosovar car component manufacturers were faced with immense financial problems and consequently many of them had to rethink their business philosophy in order to survive in the global market. which produced shock absorbers for various wellknown brands such as British Armstrong. Kosovo will have to cover eight percent of the electrical energy consumption with renewable energy resources by 2016. Although the current output of these enterprises is still considered to be low. Furthermore.

Chrome reserves amount to 89 million tonnes and bauxite reserves to 13. as well as the privatisation of the currently state-owned energy distribution company which has already been unbundled from the state-owned Kosovo Energy Corporation. There are different mines that can either be acquired through the ongoing privatisation procedures or can be revamped by entering joint ventures with private owners. A minor part has. cost effective labour force and other comparative advantages that the country offers. Zinc.3 million tonnes straw 0. causing lower production rates and resulting in a lack of competitiveness with foreign products. base-metal mining has been a mainstay of Kosovo’s economy since pre-Roman times. There is considerable scope in this sector for investors to recreate a vertically integrated manufacturing cluster so that Kosovo would once again produce finished clothing from thread. Kosovo offers three major benefits for investors wishing to revamp one of the existing SOEs or found a new textile manufacturing company. At its peak in around 1990. out of which 90 percent are final product manufacturers. gold. they cater solely for the Kosovo market and are primarily geared towards a niche market. a major share of former SOE workers has become redundant. textiles were the second largest industrial sector in Kosovo. the majority of businesses are still small and take the form of micro enterprises. These are: • A cost effective. the textile industry in Kosovo has therefore the 322000 cattle. well skilled and experienced work force • A solid base of technology that can be acquired through the ongoing privatisation process • Numerous subcontracting and outsourcing possibilities With the existing know-how. however.org. assuming that trading links with former partners can be re-established.pak-ks. Type of resource Biomass. Consequently. Although the textile industry has experienced a significant recovery during the past years. and in addition to lignite. when the mining complex Trepça was revamped by the British Company “Selection Trust”. those of nickel to 16 million tonnes.44 million tonnes 1500 . livestock Biomass.000 people and sales totalled some 35 million Euro. In order to improve the efficiency of the distribution system. Analysis indicates that some 55 to 65 million Euro in exports could be reached. Currently there are over 450 private companies engaged in textile production. after mining. The lead and zinc reserves of Kosovo are estimated to be around 48 million tonnes.2 million tonnes. Western and Eastern Europe and the United States. established private textile companies. including the friendly business and investment environment. the Government of the Republic of Kosovo is planning further investments in distribution capacities. lead. silver. Modern mining in this field began in the 1930’s. The Kosovo resources for renewable energy are shown in table 2 below.for different renewable energy generation capacities have been put in place. In particular. As a result. cadmium and bismuth are exploited along Trepça’s mineral belt. as well as other markets throughout the former Yugoslavia. 14 . 152000 sheep/goats 0.9 million m 3 3. Recent developments in the region have frozen the primary trading links of the textile industry. products from Kosovar manufacturers targeted the local market.1650 kwh/m2/ year Unknown Table 2: Resources in Kosovo for renewable energy In the mining sector. In the past. For details regarding the specific mining possibilities within the privatisation process please check the web-site of the Privatisation Agency of the Republic of Kosovo at www. each of the 15 socially owned enterprises (SOEs) engaged in textile production employed more than 1.7 Textiles With over 200 years of tradition. wood Biomass. agriculture Solid waste Solar energy Wind energy Resource 0.

It offers excellent weather and snow conditions. such as skiing. In addition. It is clearly a remarkable property for eco-tourism. artificial lakes and rivers and therefore also offers prime possibilities for hunting and fishing. The Sharrprodhimi land in the municipality of Dragash is stunningly beautiful. The description of Kosovo’s potential in tourism is closely related to its geographic position. and will only be sold to a proven investor who is committed to a sustainable and rational development program which will have strong local support. Assets of Brezovica include three hotels with 680 rooms. The region offers excellent tourism opportunities. The mountainous south of Kosovo has great potential for winter tourism. as well as long ski seasons from November to May. kayaking. represents a crossroad which historically dates back to Illyrian and Roman times. such as the Filigree (silver).8 Tourism The natural wealth of Kosovo represents high quality tourism resources. One of the most interesting opportunities for foreign investors in this sector is the ski resort Brezovica in the Sharr Mountains. bordering Macedonia and Albania.000 skiers per hour.700 and 2. mountain biking. eco-tourism. Apart from the above-mentioned tourism resorts. Kosovo is offering about 22.000 hectares of largely untouched land in the mountainous area. trekking. The widespread production of rare artisan crafts in Kosovo. situated between 1. horse riding. paragliding. etc. The resort. Kosovo is generally rich with mountains. with a central location in the Balkan Peninsula. the resort is a possible destination for international tourists and has the potential to become the most favourable winter tourism destination in the Balkans. rock climbing. Also in the Sharr Mountains in the very south of the country. Principal industrial and business sectors 15 . belonging to the SOE “Sharrprodhimi” for privatisation. 3. The area of wellness in Kosovo also offers great potential for development. represents an attraction for foreign tourists. Foreign investors in this field will find high demand in the regional and domestic market. Kosovo’s position in south-eastern Europe.potential to become highly competitive internationally.500 meters above sea level. Kosovo has the potential to develop cultural tourism with numerous religious and other sites with extraordinary cultural and historical value. Through its proximity to Prishtina Airport (60 km) and Skopje Airport (70 km). The numer- ous thermal springs of Kosovo are well known in the region for their healing effects. two restaurants and nine ski lifts with the capacity to transport 10.

4 Investment Climate 16 .

4. In 2010 Kosovo had positive growth of FDI inflows reaching 314.1 FDI Inflows 500 Taking into consideration the favourable business climate. Kosovo is increasingly becoming an attractive place for doing business. As a result. this mainly due to the impact of the global financial downturn. 440.5 294. According to the Business Registry data for 2010. The large amount of foreign companies operating in Kosovo is living proof of the opportunities and benefits that the country offers. the interest of foreign investors has been increasing steadily throughout recent years. After a peak in 2007 with 440 million Euro of FDI. a slight decrease has been seen in 2008 and 2009. which entered the Kosovar market at the beginning of the transition phase.5 300 200 100 0 2006 2007 2008 2009 2010 Graph 10: FDI Inflow in million Euro Foreign companies in Kosovo 17 . stable macroeconomic environment and the excellent opportunities across different business sectors.16 million Euro.7 400 366. Kosovo has attracted over 1 billion Euro of FDIs in the past three years.8 314.523 companies of foreign and mixed ownership that have already used the opportunity to invest in Kosovo. there are many other foreign companies engaged in a wide range of business sectors. there are 3. Apart from investment pioneers such as the Raiffeisen Bank and Procredit.1 291. and also represents a base of quality products and a successful service-providing community.

The investment is situated in central Kosovo in Shtimlje. Xella Kosovo supplies the entire region with silicate products under the brand name “Silka”.000 Euro and is supported by the Austrian Development Cooperation (ADC). Currently Raiffeisen Bank Kosovo is the second largest bank in Kosovo with total assets amounting over 680 Million. Over 400 branches of banks in Austria. as well as supplying trade chains in Austria. 18 . Mining Ferronickeli Newco Ferronikeli is a part of Cunico Resources N. NewCo Ferronikeli is the most successful story of the privatization in Kosovo and as a company plays a crucial role in Kosovo’s economy employing more than 1000 employees. The total investment in Kosovo plant exceeds EUR 100 million. is the market leader in construction materials with production facilities on all six continents. part of Haniel Corporation. a multinational mining and metals company. the company offers also fixed telephony and internet services. which was the first internet service provider in Kosovo.4. has outsourced the production and packing of chilli (Pfefferoni) and other vegetables to Kosovo. The products of Newco Ferronikeli are exported to the European Union and Asia and are contributing substantially to Kosovo exports. Agriculture Kolm Pfluger / Etlinger Kolm Pfluger. This investment foresees the development of a sophisticated software package for managing safe deposit boxes produced by Wertheim. and is the market leader in cable TV. contributing substantially to the increased financial intermediation at all levels. near the Kosovar capital Prishtina in 2006. Croatia and Slovakia use Wertheim safe deposit boxes. This investment is worth 500. while the software will from now on be developed by Rrota in Kosovo. more than 150 new jobs have been created in Kosovo. The project is also supported by the Austrian Development Cooperation (ADC). Cunico Resources N. Raiffeisen Bank Kosovo employs more than 650 employees. IT Wertheim / Rrota The Austrian company Wertheim has outsourced the development of a new software package to Kosovo.2 Success stories ConstruCtion Xella International Xella International Group. Telecommunication IPKO / Telekom Slovenia Telekom Slovenia acquired the local company IPKO Net. Switzerland. Xella Group opened a silicate production factory in Lipjan. in 2006. an Austrian company producing several varieties of salads and tinned vegetables.V. which will take over a part of the investment. Banking and Insurance Raiffeisen Bank Raiffeisen Bank entered Kosovo market in 2001 through acquisition of the American Bank of Kosovo.V is the largest manufacturer of ferronickel in Europe with production plants in Kosovo and Macedonia. The value of this Greenfield investment has reached 12 million Euro and represents the most important project of the Xella Group in the Balkan region. In addition to GSM. According to the market share for GSM services it is the second largest telecom company in Kosovo after the state owned telecom. IPKO Net offers a wide range of telecom services to its customers. The Raiffeisen Bank Kosovo has grown to be one of the main actors in the financial system of Kosovo.

thus enabling the Government expenditures to increase and in turn support economic growth. transaction costs have been reduced.0% 4% 3.0% Graph 13: Budget balance 100% 90% 80% 70% 60% 50% 43% 40% 30% 20% 10% 2005 47% 40% 42% 45% 2006 2007 2008 2009 Graph 14: Unemployment rate Investment Climate 19 . Kosovo runs a very stable monetary policy. Apart from the favourable economic performance.0% 5% 4. The use of the Euro has provided the grounds for low inflation and a stable macroeconomic environment.4% 2006 2007 2008 2009 2010 Graph 12: Inflation in Kosovo 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% 2006 2007 2008 2009 2010 7. thus facilitating the promotion of trade and investment. As donor support decreases. These investments are mainly being driven by the fast expanding financial sector.4% 4.2% -0.6% 0 -2 -4 -2. The tax revenue base has been widened.4% -0.724 3. Kosovo is one of the few counties outside the EU-zone that has introduced the Euro as its official currency. Prices are expected to remain stable in the future.8% 4.1% -2. Kosovo was one of the few countries in Europe that experienced positive economic growth in recent years.259 3% 2006 2007 2008 2009 2010 2% Graph 11: Real GDP in billion Euro and GDP growth 10 8 6 9. Despite the effects of the international financial crisis. the Kosovo Government runs a stable and forward-looking fiscal policy. Kosovo does not run any monetary policy risk either.4. the private sector consumption and investments are becoming the most important factors behind economic growth.792 4. 4500 4000 3500 3000 2500 2000 1500 1000 500 0 7% 6% 5.4% 5. Due to the absence of monetary instruments resulting from the use of the Euro.0% 3.182 3. Moreover.0% 2.464 3.4% 4 2 3.3 Key economic indicators The real development of the economy measured by the gross domestic product (GDP) has been favourable in the past years. By eliminating the exchange rate risk.5% 0. showing a positive and continuously increasing trend.

A zero tariff rate is also applied to the export of goods and services.4 Customs In order to promote local production. tax and capital losses can be carried forward for up to seven successive tax periods and shall be available as a deduction against any income in those years. 03/L109 applies a reduced rate of zero percent customs duty on certain capital goods. Any tax credit under the present section is limited to the amount of tax that would be paid under this regulation on the income made in such state.2 Special Allowances of new assets In accordance with the Corporate Income Tax Law Nr. the new Kosovo customs and excise code No. 3. Additional incentives that enable Kosovo to cope with developments in the region are in preparation and will be introduced soon. For investment and credit guarantees from Austria please contact the Austrian Kontrollbank (OeKB) and for Germany the Euler Hermes Kreditversicherung.03/L-16 on Corporate Income Tax. raw materials and agricultural production inputs.3 Avoiding Double Taxation Based on the Law Nr. shall be allowed a tax credit under this regulation in an amount equal to the amount of tax paid to such state.03/L-16.4 Incentives regime The existing legal framework in Kosovo allows incentives for foreign and local investors.dogana-ks.4. They are up to date and promote the growth of the SME-Sector. if a taxpayer purchases new capital goods for the purpose of the taxpayer‘s economic activity between 1 January 2010 and 31 December 2012. For more details visit: www. Current incentives cover the following issues: 4.4. The US Overseas Private Investment Corporation (OPIC) also provides political risk insurance for foreign investors in Kosovo. 4. a special deduction of ten percent (10%) of the cost of acquisition of the asset shall be allowed in the year in which the asset has been first placed into service.162 on Corporate Income Tax. 2.1 Carrying forward of losses Based on the Law Nr. a resident taxpayer who receives income from business activities outside of Kosovo through a permanent establishment outside of Kosovo. 4.4. and who pays tax on that income to any state.5 Investment guarantees 1. 20 4.4.03/L.4. The Multilateral Investment Guarantee Agency MIGA (a member of the World Bank Group) guarantees investments in Kosovo up to the value of 20 million Euro.org/ tarik/. Any applicable bilateral agreement on the avoidance of double taxation shall supersede the provisions above. This deduction is available in addition to the normal allowable depreciation deduction.4. . 4.

21 .

5 Currency and the banking system 22 .

The Pro Credit Bank established at the initiative of several leading International Financial Institutions. and it ensures the proper functioning of the payment system.osovo adopted the Euro as its official currency on 1 January 2002. Achievements in the banking sector in Kosovo have been significant in the last five years. With banking sector assets accounting for 55 percent of GDP at the end of 2010. due to low transaction costs as well as the elimination of exchange rate and currency risk. regulation and the supervision of financial intermediaries. The financial sector in Kosovo is bank-based and all of Kosovo’s banks are private. In particular. of which six are in foreign ownership. and the Raiffeisen Bank of Austria. Kosovo introduced a two-tier banking system back in 1999. The Central Bank of the Republic of Kosovo also embodies the characteristics of an integrated financial supervisory agency. They have resulted in the improvement of public confidence in the banking sector and the strengthening of the intermediation function of banks in the Kosovo economy. the lowering of interest rates and the shift from short-term to long-term financing in the banking sector of Kosovo has had a very positive impact on overall economic growth enabling intensive long term capital investments. Its responsibilities cover licensing. Kosovo ranks well with the countries of the region. Graph 15: Structure of loans by maturity 23 . The absence of traditional monetary policy instruments also enabled the establishment of a very strict and efficient regulatory framework. K 100% 80%  Over 2 years 60% 40%  Over 1 and up to 2 years 20%  Up to 1 year 0% 2007 2008 2009 2010 In addition. upon which a sound banking system has been developed. the prerequisites for the development of an efficient financial sector and stable macroeconomic environment were in place. With the use of this stable currency as an official mean of payment. the Euro has given Kosovo a considerable advantage over its competitors in the region by making it more attractive to foreign investment. hold the largest market share in the sector. Benefits arising from the introduction of the Euro in Kosovo have been obvious and resulted in low inflation rates and strict financial discipline. Loans granted by the banking sector of Kosovo for the same period accounted for 33 percent of GDP. There are eight registered banks.

6 Labour and education 24 .

and given the longterm presence of a large international community.1 Labour market Kosovo 0 Montenegro 0 Albania 44 Bosnia and Herzegovina 56 Croatia 61 Serbia 78 0 20 40 60 80 100 Kosovo is blessed with a young. there are sufficient quantities of highly educated jobseekers as well. personal income tax in Kosovo is very low at only four percent of the average gross salary.779 College 2. With 70 percent of the population being under the age of 35.352 50000 100000 150000 200000 250000 Table 3: Overview of the monthly labour cost in the region .2 Bosnia and Herzegovina 7.511 Unqualified 201. Graph 18: Registered jobseekers (2011) 25 .2010 Furthermore. Furthermore.6 Montenegro 26 0 5 10 15 20 25 30 Graph 17: Redundancy costs (week salary) University 3. Albanian and Serbian are both official languages. Kosovo can outperform most of its neighbouring countries when it comes to the simplicity of hiring new employees. Although according to the data covering jobseeker statistics the main part of the labour market supply consists of basic skilled labour. unlike the salaries in most neighbouring countries. and the wages are unburdened by costly social contributions. According to the “Doing Business 2011” of the World Bank.2 weeks. The main advantage of the Kosovo labour force remains its low cost. skilled. English has been established as a de-facto third official language. The only mandatory contributions on total gross wages paid are those for individual pension savings accounts. With the average monthly labour cost estimated at EUR 330 it is the most competitive in the region.154 Secondary school 88. is below the regional average.7 Macedonia 8.172 Qualified 28.7 Albania 10. The same applies to the cost of making workers redundant which. Owing to the large Kosovar Diaspora. Taking into consideration the high availability of the work force and the liberal labour law that governs the local labour market. Country Kosovo Macedonia Serbia Croatia Bosnia and Herzegovina Average monthly labour cost (euro) 330 490 566 1055 480 0 Graph 16: Difficulty of hiring index (0-100) Kosovo 7.2 Croatia 7. multilingual and motivated labour force with a strong entrepreneurial spirit. the highly flexible labour market offers a sufficient work force with varied skills and levels of education and training.6. financed by the employer (5 percent) and the employee (5 percent). Kosovo is considered to have the youngest population in Europe.2 Serbia 7. German and other European languages are frequently heard. equal to a salary of 7. This young population has a high literacy of foreign languages.395 Semi-qualified 12. hiring employees in Kosovo is both time saving and simple.

who are not citizens of Kosovo. and at least 10.2% 10.000 students at the two state universities.Country Kosovo Macedonia Serbia Croatia Bosnia and Herzegovina Montenegro Table 4: Overview of the social contribution rates in the region -2010 Employee 5% 0% 17. or proof of possessing a valid visa issued by the Kosovo authorities. Together with the request for the work permit. Graph 19: Number of students in Prishtina University . with worldwide known educational institutions among them. with social science graduates over-performing those studying the natural sciences. 40000 6.8% 37. and Computers Construction and Architecture Economics . when wanting to work in Kosovo for more than three months. the Ministry of Education.2 Educational system 37. Science and Technology has founded the Public University of Prizren.051 20000 10000 0 2006/2007 2007/2008 2008/2009 2009/2010 The compulsory school and higher education systems in Kosovo are beeing reformed continuously while landing great importance to their quality. the employer should also submit a copy of the residence permit. With approximately 40. Currently Kosovo has two state universities and several private universities and colleges. and thus creating the basic preconditions for the development of a knowledge-based society out of the young population.757 29.839 30000 27. As part of the educational reforms.5% 35.5% 8% Total 10% 26. With the ratification of the new university law by the Government back in 2004. Great importance has been given to establishing a privately-driven educational system. a sufficient stream of highly educated labour is guaranteed. must apply for a work permit.Peja Economics 801 786 472 657 617 417 647 Law Philology 136 Mathematic-Natural Science Philosophy 800 1000 0 200 400 600 Graph 20: Graduated students by field and year 26 . The curricula of the study fields offered by the University of Prizren are developed based on the mid-term needs of the local economy. Kosovo’s higher education authority has introduced educational levels in accordance with the Bologna Declaration. The number of graduates is increasing continuously.9% 17. which is issued by the Ministry of Labour and Social Welfare.by year  2006/007  2008/2009 353 601 Education Physical Culture (Sports) Mining and Metallurgy Agriculture 103 101 80 74 69 89 52 156 346 368 55 140 141 151 170 185 249 627 660 719 Arts Medicine Machinery Electrical Eng.2% 41.000 students at the private universities and colleges.9% 20% 31% 12% Employeer 5% 26.5% 17.274 28.5% 20% Working in Kosovo as a foreigner Natural persons.

27 .

7 Trade and customs 28 .

namely improved export possibilities. chemical products and base metals to machinery and mineral products. Quantitative and qualitative restrictions remain in force only for a very limited number of goods.1 Trade regime 2006 Kosovo has a liberal trade regime and derives three major benefits from trade liberalisation. Graph 23: Exports from Kosovo – by year in million Euro 29 . 1. a modern legal framework and a cost effective work force.898.2 2009 1.9 2500 Graph 21: Imports in Kosovo – by year in million Euro Transport means 142. free of any customs duties. bever. and tob. local production has grown exponentially in recent years. Furthermore. Committed to establishing principles for the stable development of a pure market economy. In addition. Even though local production is increasing steadily.0 300 Given that the country has a very favourable business climate.305. customs-free access to the EU market based on the EU Autonomous Trade Preference (ATP) Regime. At the end of 2010. and taking into consideration that there is still immense opportunity for local producers to fulfil market demand and also approach the regional market. an increase of 81 precent in comparison to 2009. Kosovo is still forced to import goods and raw materials that are not offered by the local market. since a very early stage of development. of base metal 190. a better investment environment.2 0 100 200 300 400 Graph 22: Top 6 Imports by commodity (2010) in million Euro 2006 110. As a result. Kosovo’s government has been working towards establishing a system for the free movement of goods and services throughout the country’s borders.2 2008 1. Kosovo is still an import-based economy. 261. as well as vegetables and prepared foodstuff. EU-countries and CEFTA-members.7. exports reached 294 million.8 2007 165. The main exports of Kosovo comprise mainly base metals and mineral products. appliances.7 Machinery. The main importing countries in Kosovo are EU-countries followed by CEFTA-members. Kosovo currently enjoys free trade within Central European Free Trade Agreement – CEFTA. and stable relations with its neighbours.9 2007 1.1 Products of the chem.6 2010 0 50 100 150 200 250 294. Imports have been increasing steadily in recent years (as the figure shows) reaching some 2. Recognising the opportunities that the local market is offering.2 Mineral products 419. a significant number of goods produced in Kosovo enjoy a preferential treatment in the US market. local production as well as exports are expected to increase further in the future. etc. or allied indust 146.1 2008 198.576.5 2009 162.144. The main imports of commodity goods range therefore from transport means.6 Base metals and artic. electrical.14 billion Euro at the end of 2010. enabling its businesses and producers of goods to access the regional market comprising of 30 million consumers.7 2010 0 500 1000 1500 2000 2.928. and benefiting from various cross-sector incentives introduced by the Government.0 Prepared foodstuffs. Not only does local demand continuously rely on local production but Kosovo is increasing its exports to its main trade partners. 288. Kosovo benefits from non-reciprocal.

10. • Temporary admission – allowing the use in Kosovo. Custom duties and border taxes are regulated by the Customs and Excise Code of Kosovo. Under this procedure the goods may undergo any form of handling intended to preserve them. other tobacco products. cigarettes. • Inward processing relief – allowing nondomestic goods which are intended for re-export from Kosovo to be used in Kosovo in one or more processing operations without such goods being subject to customs duties.2 0 20 40 60 80 100 The Customs Code is based on the EU custom code and is fully compliant with WCO agreed rules on customs procedures and the Harmonized Commodity Description and Coding System. 03/L-109. liquors and other spirit beverages. with the products resulting from such operations to be released for free circulation with total or partial relief from import duties. articles thereof 9. • Processing under customs control - The procedure for processing under customs control allows goods which are not domestic goods to be used in Kosovo in operations which alter their nature or state.dogana-ks.7 Machinery. which are zero rated.org/tarik/index. alcohol.org. petrol. electrical. • Excise tax: Is levied as a certain percent of the value of the goods or represents a fixed amount per specified quantity. without being subject to import duties or commercial policy measures. htm 30 . • Outward processing – allowing for domestic goods to be temporarily exported in order to undergo any processing operations. For details concerning the import of goods please contact Kosovo Customs at www.1 Mineral products 38. This offers a great opportunity for outsourcing projects. which do not originate in Kosovo from one point within Kosovo to another.2 Customs regime Kosovo is an independent customs entity with a liberal trade regime. Law No. improve their appearance or marketable quality or prepare them for distribution or resale. diesel for motor engines and kerosene. • Transit – permitting the movement of the goods. is applied to coffee. a range of capital and intermediary goods. of goods which are non-domestic goods and intended for re-export without having undergone any change except normal depreciation. without import duties being imposed.4 Vegetable products 12. appliances. skins. and shall allow the products resulting from such operations to be released for free circulation at the rate of import duty appropriate to them. spirits.Hides. Graph 24: Top 6 Exports by commodity (2009) in million Euro 7. • Customs: A flat rate of 10 percent is imposed on imports and zero percent on exports. soft drinks. • Details on customs rates and excise taxes applied to specific goods can be found under: www. leather.8 Base metals and artic. but also for pharmaceutical goods.dogana-ks. It additionally allows the use of a number of business friendly trade-facilitating instruments such as: • Bounded warehousing – allowing storage in customs warehouses for non-domestic goods. beer. with total or partial relief from import duties. without such goods being subject to customs duties. of base metal 185.7 Prepared foodstuff 11. wines. Exemptions exist for imports of raw materials. cars. etc.

Kosovo has a modern international airport. in exchange for Euro 100 million investments in modernisation and expansion of the Airport. Prishtina International Airport is ranked among the most frequented airports of the region. Air communication Besides the road and railway network. Prishtina Internationl Airport has been given with concession to the Limak-Airport de Lyon for a period of 20 years. Kosovo serves as a connecting bridge between the countries of South Eastern Europe. On the south side as well as the north side the railway line provides access to the international railway network. Prishtina. With over one million passengers per year. Montenegro. Kosovo’s capital Prishtina is within one hour’s driving time to any neighbouring country (Albania. it offers instant access to the interesting and growing market in the Balkans and Central Europe. The project for the construction of the new line that will connect the capital of Kosovo. thereby providing a connection for all countries in the region. This should help the Prishtina Internation Airport to become a regional hub in the near future. Macedonia. serving several international airlines and offering flights to the most important European centres. Road network The road network consisting of 630 km of main roads has been rebuilt to a high extent during the past years. but some completely new roads have also been constructed. Railway The railway network in Kosovo has a combined length of 330 km. Kosovo is becoming an important gateway in the corridor that will connect the Adriatic Sea with Western Europe.7. The ongoing rehabilitation and modernisation of Kosovo railways provides a solid base to satisfy the growing demand on logistical services. to the port of Durres in Albania is under development.3 Transport and distribution Located in the heart of the Balkans. Graph 25: Travelling distances from Prishtina to major regional centres Trade and customs 31 . comprising 100 million potential customers. With the construction of the highway that will connect Kosovo with Albania on one side and with Serbia on the other. and Serbia). connecting both the south with north and east with west. It covers the entire territory. Through its unique geographical position and its liberal trade regime.

8 Setting up a business in the country © Samir Karahoda 32 .

expropriation. including payment of interest.000 laws compatible with European Union regulations. is to be governed by the principle of national treatment. The cost of registration is 5 Euro for a personal business and 20 Euro for all other business forms. secular and multi-ethnic Republic promoting the rights of all communities. entity or association established under a jurisdiction other than Kosovo. health.assemblyofkosovo. The law governs the rights to utilize and/or exploit publicly owned infrastructure and/or provide public services in all economic and social sectors including: energy. The duration of such agreement for additional period can be extended but cannot exceed more than one 33 Step 4 Step 5 Step 6 With six steps needed to start a business. c) The law in force in Kosovo on 22 March 1989 Every law is available also in English and can be found in electronic form at: www. Kosovo’s legal system has been continuously re-built since 1999. meaning that foreign enterprises will be treated no less favourably than similar domestic enterprises. Kosovo compares well with other countries in South East Europe.1 Business types Businesses operating in Kosovo must be registered with the Ministry of Trade and Industry’s Business Registration Unit (www. 02/L-33). 8. Kosovo’s legislation is already EU-compatible. While other countries in the region have to undergo the difficult and complicated procedure of making more than 80. According to this law a public-private-partnership and/or concession can be granted for a maximum of 40 years. In April 2008 the Assembly of the Republic of Kosovo adopted the country’s constitution that entered into force in June 2008. in April 2006 the Government of Kosovo promulgated a Law on Foreign Investment (Law No.org Protection of Foreign Investment In order to put in place certain legal guarantees that are necessary to encourage foreign investment. transportation. . The declaration of independence established Kosovo as a democratic. • Compensation in case of violation of applicable law and international law attributable to Kosovo • Freely transferable and otherwise in an unrestricted manner used income • Protection against retroactive application of laws Public-Private-Partnerships and Concessions The Law No. production activities etc. 03/L-090 on Public-PrivatePartnerships and Concessions provides the legal framework for granting public-private partnerships and concessions. Six procedures are required to start a business in Kosovo: Step 1 Step 2 Step 3 Depositing the required capital minimum Payment of the registration fees to the commercial registry Application at the Business Registry and issuance of the registration certificate Application for municipality licence Obtaining the fiscal number from the Kosovo Tax Administration Obtaining the VAT-number from the Kosovo Tax Administration The legislation in force in includes: a) Laws and regulations issued by the Assembly of the Republic of Kosovo b) The regulations promulgated by the Special Representative of the Secretary-General during the United Nations Interims Mission in Kosovo. education. becoming the latest state to emerge following the disintegration of Yugoslavia. defined as a physical person who is not a habitual resident of Kosovo or a business or other organization.org).8.2 Legal framework On 17 February 2008 Kosovo declared its independence. waste. In particular the right vested to a foreign investor are: • Non-discriminatory treatment • Constant protection and security • Compensation in case of nationalization. According to this regulation a foreign investor. All business and trade names are listed with the Registry of Business Organization and Trade Names and the basic information regarding registered companies can be transparently and freely accessed via the internet. Registering a business in Kosovo is both simple and inexpensive. arbk.

numerals. The characteristics of each type are listed in the table above. the municipal courts have jurisdiction to enforce contracts.pppkosova. which is responsible for enforcement. including the shape of goods or their wrapping or other packaging.two or more owners None Minimum capital Partners None ¤ 1.one owner Small . Trade Marks The Law on Trademarks (Law No. Therefore. There is a special unit “Partnership Kosovo”. In accordance with the clauses of the Foreign Investment Law. Contracts Enforcement Legal procedures concerning the enforcement of contracts are regulated by the Law on Contested Procedure (Civil Procedure Law) and the Law on Execution. Legal Forms of Enterprises Similar to common practices in EU countries. with the exception of matters falling within the jurisdiction of the Commercial Court. Additionally. According to the Law on Business Organisation (Law No. letters. three-dimensional configurations. within the Ministry of Economy of the Republic of Kosovo.000 ¤ 25. which is responsibile for Public-Private-Partnership.single person enterprise Start-up requirements Founding documents None general partnership limited partnership limited liability company Memorandum of association Registration form Charter Rent contract for premises Middle joint stock company Memorandum of association Registration form Charter Rent contract for premises Large . More details can be found at: www.unlimited General partnership memorandum limited partnership memorandum Registration form limited partnership memorandum Rent contract for premises Small.two or more owners None Registration form Rent contract for premises Registration form General partnership Memorandum Rent contract for premises Size Small . including personal names. Trademarks are to be registered at the Patent and Trademark office. In general. particularly words. a limited partnership and a joint stock company. designs. or combinations of colours. that are capable of distinguishing the goods or services of one undertaking from those of other undertakings may be protected as trademarks in Kosovo. foreign entities may establish subsidiary enterprises and branches in the same manner and to the same extent as similar domestic business organizations. 02/L-123) these types are: a single person enterprise. audio marks. 02/L-54) provides the protection of trademarks and commercial designations in accordance with the requirements of international conventions and the law and practice of the EU and its member states. a general partnership. only certain types of business can be registered in Kosovo. Any signs. foreign companies are permitted to engage in any business activity open to domestic business. including colours.500 None At least 2 At least one general and one limited partner General partner full liability Regardless Regardless Liability Full liability Full liability Limited liability or fully liable to the extent of unpaid stocks Limited liability or full liability to the extent of unpaid stock Table 5: Characteristics of business types in Kosovo quarter of the initial duration stated in the agreement. there is no restriction regarding the share of capital that foreign entities are allowed to hold.org. The proprietor of a reg- Graph 26: Enforcing contracts in days Albania 390 Kosovo 420 Montenegro 545 Croatia 561 Bosnia and Herzegovina 595 Serbia 635 0 100 200 300 400 500 600 700 34 . a limited liability company.

Under this Law. 4. any drawings referred to in the description or the claims. health safety. Furthermore. a description of the invention.000 37. to consent to the use of the trademark. services.istered trademark will after registration have exclusive rights in relation to the goods or services covered by the registration.000 Annual income ¤ 5.000 Annual income ¤ 50. help to abolish the technical barriers in international trade. to authorize another to use the trademark. 2. domestic legal entities and permanent establishments of foreign legal entities are taxed as follows (Law Nr. Industrial design is protected by the Law up to the point that it is still an innovation. the institution responsible for the issuing. or d. a request for the grant of a patent. Patents Patent related matters in Kosovo are governed by the Patent Law (No. Standards issued by KSA are equally determined and applicable for all legal and physical. d. In particular these rights are: a.5 ¤ / quarter 3-10% of income 10% of profit Corporate income tax is paid quarterly in advance. in the function of requirements to protect and improve the quality of life. ensure rational use of materials and energy and efficiency in performance.162): Annual income ¤ 0 . involves a inventive step and is industrially applicable. The design of a product is considered to be an innovation if not identical to a design previously available to the public. Standardisation The certification of products. Protection of the industrial design lasts five years and can be extended to a maximum of 25 years. environment and consumer protection. by ensuring common rules.¤ 5. one or more claims. application and determination of standards is the Kosovo Standardisation Agency (KSA). domestic and foreign persons that do business within the territory of Kosovo. processing. A patent right is granted for the duration of 20 years. an abstract of the invention. processes and different services according to defined standards. b. 03/L-144). to use the trademark. By implementing standards based on EU and international practices. Application for industrial design registration is to be submitted to the Patent and Trademarks Office. 3. quality and personnel systems.3 Taxation Kosovo’s tax policies are streamlined and efficient.001 .¤ 50.2004/49).03/L. b. Industrial design protection can be obtained by issuing a decision on the industrial design registration and the recording thereof in the register. the Government is introducing tax incentives to support domestic production. The application for a patent is to be submitted to the Patent Office and shall contain: a. and that the design has a specific character if the consumers’ impression differs from the impression left by any other design that was previously available to the public. c. to obtain judicial remedy for a violation of the trademark Industrial Design Industrial Design can be protected in Kosovo under the clauses of the Law on Industrial Design (Law No. KSA aims to: 1. Unlike many other countries in the region. Kosovo has laid out a taxation system that is simple and that reduces the tax burden for individuals and businesses. are regulated by the Law on Standardisation (No. based on quarterly net income or profit predictions. Setting up a business in the country 35 . Corporate tax Depending on annual income. According to this law. and has a specific character. Patentable inventions are protected by patents in accordance with the provisions of the above mentioned Law. an invention shall be patentable if it is new. increase the level of safety for products and processes. 8. 02/L-45). Compliance is straightforward and taxes are few. promote quality of products. c. e.

Businesses with a turnover below 100.6 + 10% of the amount over ¤ 5.000 Annual income ¤ 3. Personal income tax Personal income tax (Law Nr. Annual income ¤ 0 . and accompanying notes.Value added tax Value added tax (Law Nr.03/L.03/L162 on Corporate Income Tax the amount allowed as a depreciation deduction for the tax period is to be determined by applying the VAT 16% 18% 18% 17% 17% 17% Corporate profit tax 10% 10% 10% 10% 20% 9% Personal income Tax 0-10% 10% 10-20% 0-10% 12-40% 9% Country Kosovo Macedonia Serbia Bosnia and Herzegovina Croatia Montenegro Kosovo 33 Bosnia and Herzegovina 33 Albania 42 Montenegro 71 Serbia 91 Croatia 104 0 20 40 60 80 100 120 Graph 27: Registering property in days 36 . all business organisations with an annual turnover in excess of 100.000 ¤ 273.000 EUR are required only to prepare a tax return. The Government of Kosovo is currently preparing tax incentives and tax breaks for foreign and local investors.05 percent and one percent of the market value of the property for each of the following property categories: • Residential property • Commercial property • Industrial property • Agricultural property • Immovable abandoned property and uninhabited buildings Accounting practices Kosovo has a modern financial reporting system based on International Accounting Standards. cash flow statement.146) is applied to all importers and businesses with an annual turnover in excess of 50.¤ 3. along with a tax return).2001/30. five percent (5%). In 2001.400 following percentages to the capital accounts under the reducing balance method: (a) Category 1: Buildings. Exporters receive full VAT reimbursement for exported goods.¤ 5. The VAT rate stands at 16 percent and is levied on all goods and services. with the UNMIK Regulation No. and (c) Category 3: Machinery and heavy transport vehicles. received by Kosovo residents. According to this regulation. The tax rates range between 0.03/L-161) applies to natural persons receiving income from Kosovo sources and also to foreign incomes.000 EUR are obliged to prepare four statutory financial statements on an annual basis (Balance sheet. and changes in equity. with exemption for certain agricultural and capital goods (on which VAT is zero percent).401 .400 Annual income ¤ 5.000 EUR or total assets worth in excess of 50. More information can be obtained by contacting the Investment Promotion Agency of Kosovo. (b) Category 2: Vehicles and office equipment.001 . twenty percent (20%). fifteen percent (15%) Property taxes Property tax was introduced in 2003 and is collected at the local government level by Municipal administration.6 + 8% of the amount over ¤ 3.000 Euro. the Board on Standards for Financial Reporting was established and to date. income statement. 18 accounting standards in conformity with IAS have been issued. The overview of the comparison of the Kosovo tax system with its neighbouring countries is shown in the table 6.2010 Specific tax code on depreciation According to article 15 of the Law Nr.¤ 960 Annual income ¤ 960 . The rate of personal income tax depends on annual income and ranges from zero percent to 10 percent.above 0% 4% of the amount over ¤ 960 ¤ 81. The Municipal Assembly of each municipality defines tax rates on property on an annual basis. Table 6: Comparison of Tax Systems in the region .

It has been identified that business growth is hindered by a lack of good quality and reliable Setting up a business in the country . Drenas Industrial Park is situated alongside the highway connection between Prishtina and Peja. the location can offer a sufficient supply of labour force.000m². construction land that is not publicly or socially owned can be acquired from private individuals. 3. For details visit www. from which businesses can operate effectively and efficiently. A construction licence issued by the respective Municipality is always required for construction purposes. 03/L-040. In addition. in which 781 local and foreign enterprises will be placed. Industrial Parks The industrial park initiative was launched by the Ministry of Trade and Industry as a concrete measure to boost business in Kosovo. aiming to provide high quality facilities and infrastructure at a competitive market price. Three sizes of plots are available.4 Land acquisition and related matters Land in Kosovo is categorised as agricultural or construction land.5 Industrial parks Industrial property in Kosovo can be acquired for business purposes in two different ways. only by the decision of the municipality and/or Ministry of Environment.000m². Registering property in Kosovo is both quick and simple. In contrast. 1. additional effects such as business clustering may also take place thus facilitating exchange of business knowledge and transfer of know-how. or privatisation procedures. and developing synergies to further accelerate business development and growth.org). In an area populated with one million inhabitants.000m² and 6. Investors can also freely obtain a lease for land from the responsible municipality for a term of 10 years with a long term extension opportunity (see www.net Land leasing According to the Law on Local Self Govemnment Nr. five km away from Prishtina International Airport. komunat-ks. IPAK runs on its web page an online database of locations and buildings available for foreign investors. Foreign companies can freely buy land and buildings through the ongoing privatisation procedures. which is a part of the Ministry of Trade and Industry of the Republic of Kosovo (www. The lease can be granted for a term of ten years with an extension opportunity of up to 99 years. seven km from the nearest railway station and 280 km from the port in Durres. the total duration for registering a property is below the regional average. In addition to providing a solid base from which to operate. Businesses that will be located in this industrial park will therefore have a unique possibility to serve the local market from a very central position. It further enables investors to enjoy the bureaucracy of a small city and the services of a big city.sme-ks. Publicly owned land for construction can be acquired for private development. 37 Photo: Drenas Industrial Park 8.komunat-ks. It lies 21 km away from the Kosovo capital Prishtina. the municipalities in Kosovo have the right to lease movable and immovable property.net for details on 30 municipalities across Kosovo). The concept of the industrial park is relatively simple. The “Drenas Industrial Park” covers an area of 24 hectares. due to the proximity of regional roads. there is also a possibility to swiftly access any neighbouring country by road transport within one hour. Due to efficient property registers and cadastral systems. amenities. Details concerning industrial parks are available from the SME-Agency. For information on current privatisation opportunities contact the Privatisation Agency of Kosovo. Information on the particular Land and/or existing pledges can be obtained from the Municipalities where the property is registered in the municipal register.8.

Additionally. a company owned by Slovenian Telecom. The PTK will be privatised soon and represents a great investment opportunity for Western telecom companies. Vala has over 1.18 From 0.04 .8. there are 600 pay phones located in public areas as well as 470 in post offices. GSM-services in Kosovo are provided currently by Vala. Kujtesa. and IPKO.000 subscribers.000 inhabitants. Internet Description Fixed telephone (PTK) Mobile Phone (VALA) Mobile phone (IPKO) Fixed telephone (IPKO) Prices: March 2011 38 . whereas IPKO has gained over 300. comprehensive product packages and low prices for internet services.24 Telecommunication The telecommunication sector in Kosovo is dominated by the Post and Telecommunications of Kosovo (PTK).000 telephone connections. Measured at a ratio of one fuel station per 1. caused in main by the high share of privately owned businesses.000 members. It provides various telecommunication services ranging from post and fixed telephony to mobile telephony and internet.05 From 0. a subsidiary of PTK).10 0. A public water supply system as well as sewage services are established throughout the country.36 From 0.200. The high competition in this sector. As a consequence. DHL). The cost for energy and water supply can be taken from the table below: Tariffs for Water Supply and Energy Description Water Supply Energy Sewage Prices: March 2011 EUR/Lit 1.09/ m3 In addition to the 120 post offices belonging to the PTK.24 1. which has acquired the second mobile operator license in Kosovo and started operations in late 2007.02-0. FEDEX. The PTK was incorporated in 2005 and is still a fully state owned enterprise.10 Tariffs for Fixed telephone. Kosovo has one of the highest fuel station densities in Europe.0.0. Internet Cost EUR 0.000 subscribers within four years of its establishment. VIP Trading) and one state owned (DardaNet.32 .05-0. The society of internet users is estimated to have around 500.0. TNT. a subsidiary of PTK.084 Euro/ kWh 0. water and sewage Kosovo uses 220 V energy network and the plug socket system corresponds to the German standard.01 0.76 /m3 0.26 From 0. quick and reliable shipping possibilities to different international destinations are available.001 To other local From 0.09 0. Mobile.05 International From 0. A second fixed phone licence was issued in 2006 to the private company and internet provider IpkoNet. Tariffs for fuel Description Diesel Petrol Prices: March 2011 ternational courier service providers operating in its territory (UPS. mostly using the pre-paid system. The fixed network currently consists of 135.44 From 0. has produced a very wide internet coverage.046 . Kosovo has a wide variety of inWithin the network 0. Mobile. Table 7: Tariffs for Fixed telephone. Energy.6 Utility costs and availability Fuel The fuel supply is sufficient in all regions of Kosovo. Kosovo has four licensed internet-providers of which three are private (IPKO Net.10 From 0.

39 .

9 Quality of life © Samir Karahoda 40 .

thus enabling payments to be made with credit cards and other means of electronic payment. No toll fees are levied for the use of the road network. Rental car companies with premises at Prishtina Airport are Europcar. each culture has contributed its diverse values to the cultural heritage of Kosovo. Mexican. the mosques. Italian cuisine). Supermarkets with ever-increasing assortments are usually located in the suburbs. Hotel Victory and Hotel Gorenje. IPKO. For detailed attractions in Kosovar cities please visit www. private health institutions are more favourable. These are supported by health houses in each of the 30 municipalities. The international green insurance card is still not valid in Kosovo. Prishtina and other larger cities have numerous Internet Cafés. Communication: Kosovo has a developed telecommunication system. The newer and more modern hotels usually operate at full capacity.for 1km ride). and the Turkish baths. material and spiritual heritage treasure-house of various historical periods. The small fortresses such as the Albanian “Kullas”. and qualities. Byzantine. Hotel Royal. etc. Auto Shkodra and LTG. the influence of Illyrian. Foreigners travelling by car must therefore obtain additional insurance at the Kosovo border crossover. a good variety of meals and beverages are offered (Balkans. the Catholic and Orthodox churches. the castles and archaeological settlements. Apart from the Public Health System there are numerous private hospitals. Gjakova. Furthermore. D3 and Z-Mobile and roaming is offered for the majority of international telephone service providers. and an EU driving licence is sufficient. and Prizren.kosovoguide. including the Dukagjin region and towns of Peja. features. 41 .com and www. H Health care: There are six regional hospitals situated in the major towns of Kosovo. The most known hotels of the capital Prishtina are Hotel Prishtina. Hotel Baci. Currently Kosovo is also building a highway that will connect Kosovo to Albania to the south side and Serbia to the north.otels: Kosovo has plenty of hotels spread throughout its territory. there are numerous restaurants located in Prishtina and other larger towns offering international cuisine (Thai. Western and Eastern. Smaller shops can be found at each street corner. In the figurative-applicative establishment (composition) of Kosovo. Groceries: The supply of groceries is very good. The hotels are usually two to four-star rated and the prices range from between 30 and 100 Euro per night. Chinese. There is no restriction on the amount of cash that may be imported into Kosovo. Map material: There are several good road maps and city plans. For travel in the city. some of which are open 24 hours.). However. There are numerous “rental car” companies and daily charges range from between 20 and 75 Euro depending on the class of vehicle. available at kiosks and fuel stations. restaurants and hotels are equipped with electronic payment devices. Money: The Euro is the official currency in Kosovo and the majority of payments are usually made in cash. bistros. Kosovo presents a rich ethno-cultural. Due to the higher quality of their equipment and sanitation. Booking prior to travel is therefore advisable. Hotel Pejton. amounts greater than 10. With their unique characteristics. Gastronomy: In restaurants. cafés and hotels. Adequately equipped pharmacies may be found in every town throughout Kosovo.org. Hotel Afa. For longer stays in Kosovo the purchase of a local pre-paid number is recommended. especially in the south and west of Kosovo. Traffic: Traffic in Kosovo keeps to the right. Roman. There are 600 pay phones located in the public areas as well 470 in the post offices. a taxi is recommended (EUR 1.visitkosova. all make up a part of the extraordinarily rich history of the region. However. Helen. Some parts of the city are also covered by a WLAN network.000 Euro must be declared at the border. The fish restaurants in Vërmicë and Istog with their unique trout specialities are also major attractions. Sixt. many major shops. Hotel Emerald. mills and bridges. Indian.5 . GSM providers are Vala. and Ottoman cultures are present. Cultural attractions: The cultural heritage in Kosovo is very rich. The major and smaller roads are to a large extent rehabilitated and offer good connections to neighbouring countries.

10 About Investment Promotion Agency in Kosovo and its office in Vienna 42 .

mission and our services The Investment Promotion Agency of Kosovo was established as an Executive Agency under the administration of the Ministry of Trade and Industry.: +43 676 338 09 35 E-Mail: info@ipak-vienna. opened the first official representation of Kosovo abroad. & Fax: +381 38 200 36527 Email: info@invest-ks. and other documentation • Linking potential investors to Brownfield. work permits. Austria Tel.: +43 (01) 890 50 26 Mob. Vision To support the economic development of Kosovo by stimulating and facilitating foreign direct investments which will have a direct impact in reducing unemployment and increasing the social welfare of our citizens. Real Estate and other relevant laws and regulations Advice on business service providers: financial. including site visit organization • Assistance in dealing with administration on all levels • After care services Contact Investment Promotion Agency of Kosovo Muharrem Fejza Street. The Vienna Office of the Investment Promotion Agency of Kosovo provides existing and potential foreign investors from German-speaking countries (Austria. licensing. Customs.free of charge services: • Collection and dissemination of information and assistance during all phases of investments • Providing of information on the general business environment and specific industries • Provision of information on Taxation.N. Germany.org 43 . with financial support from the Austrian Federal Ministry of Foreign Affairs through the Austrian Development Cooperation. Greenfield. N.10000 Prishtina Republic of Kosovo Tel. regulated by the Law on Foreign Investments no 02/L-33. In November 2006 the Economic Initiative for Kosova (ECIKS). Lagja e Spitalit KS . and Switzerland) with free-of-charge services on a confidential basis. Mission Improve the image of Kosovo and attract investments through a proactive marketing campaign and through offering free-ofcharge information and services to foreign potential investors.ipak-vienna. article 19. Services One stop shop for all investors .invest-ks.org Investment Promotion Agency of Kosovo Office in Vienna Nussdorfer Strasse 20/23 A-1090 Vienna. Employment.Our vision.org Web: www. consulting etc • Assistance with registration.org Web: www. and JV opportunities.

11 Key contacts – Websites 44 .

Education and Technology of the Republic of Kosovo www.org EULEX Kosovo www.net/mpms Ministry of Infrastructure of the Republic of Kosovo www.org Statistical Office of Kosovo www.IMF www.org Ministry of Economic Development of the Republic of Kosovo mem.ero-ks.org Ministry of Science.org Kosovo Privatisation Agency www.pak-ks.rks-gov.net/map Ministry of Justice www.org Kosovo Customs www.europa.net Ministry of Agriculture.scaak-ks.eulex-kosovo.mmph-ks.org The Kosovo Registry of Business Organizations and Trade Names www.art-ks.ks-gov.net/mbpzhr Ministry of Labour and Social Welfare of the Republic of Kosovo www.net/esk Society of Certified Accountants and Auditors of Kosovo www.kryeministri-ks.ks-gov.org Ministry of Environment and Spatial Planning of the Republic of Kosovo www.org/kosovo International Monetary Fond .org 11.mef-rks.usaid.org/ Ministry of Public Services of the Republic of Kosovo www.net Ministry of Trade and Industry of the Republic of Kosovo www.org Energy Regulatory Office www.assembly-kosova.ks-gov.eu International Civilian Office / EU Special Representative www.gov/kosovo 45 .ec.1 Websites of Kosovo Institutions Assembly of the Republic of Kosovo www.bqk-kos.md-ks.eu World Bank .Kosovo www.imf.net Ministry of Finance of the Republic of Kosovo www.dogana-ks.org/kosovo United States Agency for International Development – Prishtina Office www.arbk.org Central Bank of the Republic of Kosovo www.org Telecommunication Regulatory Authority www.worldbank.delprn.2 Websites of International Institutions in Kosovo European Commission in Kosovo www.kpst.mtpt.ks-gov. Forestry and Rural Development of the Republic of Kosovo www.11.org The Kosovo Pension Saving Trust www.masht-gov.ico-kos.org The Office of the Prime Minister of the Republic of Kosovo www.mti-ks.

invest-ks.org SME – Agency of Kosova Muharrem Fejza Street n.org 46 . Lagja e Spitalit.oek-kcc.akb-ks.1 10000 Prishtinë Republic of Kosovo Tel: +381 38 233 006 Fax: +381 38 233 008 Email: administrator@usaidkpep.org Economic Initiative for Kosova (ECIKS) Nussdorfer Strasse 20/23 A .org Investment Promotion Agency of Kosovo Office in Vienna Nussdorfer Strasse 20/23 A . N.1090 Vienna Austria Tel: +43 1 890 50 26 Fax: +43 1 890 50 26 26 E-Mail: info@eciks.3 Business support Institutions Investment Promotion Agency of Kosovo Muharrem Fejza Street.org Aleanca Kosovare e Bizneseve Dardania SB-6 6/6 B4 10000 Prishtinë Republic of Kosovo Tel/Fax: +381 38 551 311 Email: alenacakosovarebizneseve@gmail.org Web: www. 10000 Prishtinë Republic of Kosovo Tel: +381 38 200 360 07 Fax: +381 38 212 807 Email: naser.amchamksv.usaidkpep.sme-ks.org American Chamber of Commerce Kosovo Fehmi Agani 36/3 10000 Prishtinë Republic of Kosovo Tel: +381 38 246 012 Fax: +381 38 248 012 Email: info@amchamksv. No.org Web: www.10000 Prishtinë Republic of Kosovo Tel: +381 38 224 741 Fax: +381 38 224 299 E-Mail: info@oek-kcc.org Web: www.org Kosovo Chamber of Commerce Nëna Terezë Street 20 KS .10000 Prishtina Republic of Kosovo Tel: +381 38 200 36 527 Fax: +381 38 212 807 Email: info@invest-ks.N.1090 Vienna.org Kosovo Private Enterprise Program Radovan Zogovic Str.ipak-vienna. Lagja e Spitalit KS . Austria Tel: +43 1 890 50 26 Fax: +43 1 890 50 26 26 Email: info@ipak-vienna.eciks.n.com Web: www.org Web: www.grajcevci@ks-gov.net Web: www.org Web: www.11.org Web: www.

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Investment Promotion Agency of Kosovo Muharrem Fejza Street n. Lagja e spitalit 10000 Prishtinë.invest-ks. Kosovo Tel: +381(0) 38 200 36 527 +381(0) 38 200 36 542 Fax: +381(0) 38 212 807 Email: info@invest-ks.org Web: www.org .n.

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