Kosovo has a number of conditions making it an attractive destination for investments.
Kosovo is located at the heart of the Balkan Peninsula, bordering Serbia in the North and East, Macedonia in the South, Albania in the Southwest and Montenegro in the Northwest. Kosovos strategic location is supported by a number of highways linking the country to the region and the rest of Europe, in addition to providing access to major ports on the Adriatic and Black Sea coasts.
Free access to a 520 million consumer market
Kosovo has a liberal regime of free market trade as it enjoys duty-free access to the EU market based on the EU Autonomous Trade Preference (ATP) regime. Under this Agreement, quantitative and qualitative restrictions remain the force only for a very limited number of goods. In addition, Kosovo has a free trade agreement with Central European countries, under CEFTA. These free trade agreements give Kosovo duty-free access to more than 520 million consumers.
Young and motivated population
Kosovo has population of 2.2 million, 70% of which are under the age of 35, making it the youngest population in Europe. Due to the long international presence in Kosovo, English is just short of an official language, whereas thousands of Kosovars, graduating in Kosovo or returning from their studies abroad, guarantee a sufficient stream of highly educated labor. Kosovars speaking German and other European languages are also numerous due to a very large Kosovar Diaspora.
Abundant natural resources
There is abundance of natural resources across the country, with rich reserves of lignite, lead, zinc, ferronickel and fertile agricultural land. Kosovo has a number of sectors offering prolific investment opportunities, including: food processing, mining and energy, wood processing, decorative stone, metals and metal processing, clothing and textiles, information and communications technology, tourism, construction etc.
During the last decade Kosovo has built its legal system in complete compatibility with EU legislation, which maintains the same legal regime for both foreign and domestic investments. Applicable legislation provides prohibitions of favoritism and discrimination, guarantees for unrestricted use of income, as well as protection against expropriations. Among others, Kosovo has also installed the International Standards for Financial Reporting and it offers national treatment for foreign investors.
Euro is the currency in use in Kosovo, thus eliminating currency and exchange rate risks. The Euro gave Kosovo a considerable advantage over its competitors in the region by bringing financial and macroeconomic stability. It also enabled Kosovo to offer the lowest transaction costs in the region, to strengthen financial discipline and to sustain a very low inflation.
Competitive, flexible and skilled labor force
Average gross wage in Kosovo is less than 240 EUR. Wages in Kosovo are unburdened by costly social contributions, unlike those in the countries of the region. Through engaging in smaller workshops and private businesses during the 1990s and through vocational training programs established in the last 9 years, Kosovars have gained skills which are highly appreciated by foreign investors.
Sound banking system
Kosovos new financial sector has been built upon modern foundations. The Banking and Payments Authority of Kosovo (BPK), in charge for regulating banking and insurance sector, has recently transformed into Kosovos Central Bank. Central Bank has so far licensed eight banks, two pension funds, 16 other financial intermediaries, 27 financial auxiliaries and nine insurance companies in Kosovo. Six out of eight banks in Kosovo are foreign-owned.
Simple and low tax regime.
Kosovo has a simple and straightforward tax system and the tax burden is very low. In 2009 Kosovo halved its corporate tax from 20% to 10%, offering thus one of the lowest corporate tax rates in the region. Personal incomes taxes are also very low ranging from 0-10% - with income taxex on average gross salary being approximately 5%. Custom duties on imports generally stand at 10%, yet there is no import duty on capital goods and agricultural inputs. The standard VAT is at the level of 16%
Kosovo offers modern telecommunication systems, with three fixed and two mobile telephony operators. Telecommunication system in Kosovo provides for the latest and most modern technologies, including VoIP, GPRS, etc. Three main internet service providers offer stable and broadband Internet, including DSL, Wireless, and Cable, with lower prices than in any other European country.
Stimulating rules on foreign investments
National treatment investment regime guarantees unrestricted use of income. Favoritism and discrimination and prohibited whereas a number of investment guarantees are in place (such as Multilateral Investment Guarantee Agency, US Overseas Private Investment Corporation etc. ).
For more information on applicable legislation and investment opportunities visit web-sites of Kosovo Privatisation Agency (hiperlink - http://www.pak-ks.org), Kosovo Investment Promotion Agency (hiperlink -http://www.invest-ks.org) and Economic Initiative for Kosovo (hiperlink- http://www.eciks.org/english/index.php)