Why do business in Kosovo?
The Work Force
As an emerging market, Kosovo does hold a number of advantages. Kosovo’s greatest asset is probably its enterprising and self-reliant population. Its energy and creativity can be used to build a new and prosperous economy. In terms of human resources, there is a high population of young people relatively well trained in basic skills. There is a workforce that has learnt to survive through extreme difficulties and which is notoriously commercially driven. Although they are not the cheapest in the region, current salary levels are competitive. Kosovo’s large diaspora community provide many international connections and has traditionally been a source of remittances that could, if stimulated, turn into a starting point for foreign investment. The International Monetary Fund (IMF) has estimated that 200,000 remitters are sending between 3-6,000 Euro per family every year back to Kosovo.
An abundance of natural resources and raw materials should not be overlooked when defining comparative advantage. Although the price of minerals has been falling over time in international markets, it is clear that the extractive sector through a restructuring process could prove to be a very lucrative business.
The system of taxation in Kosovo is oriented towards simple, efficient forms of taxation that are designed to expand the tax base and achieve balance between personal and corporate tax. The tax burden in Kosovo is very low, with total tax revenue in Kosovo in 2000 standing at 7.1% of GDP and in 2001 only expected to reach 11%. These percentages are much lower than those of nearby countries: Albania 19%, Macedonia 39%, Slovak Republic 45%.
The economic policy for Kosovo is to move it towards operating under free market principles. In this context the legal framework being devised in a business context is providing the conditions for this whilst at the same time ensuring that new regulations comply to European Union standards. In addition to this the EURO became the official currency used in Kosovo from January 1st 2002.
Security of Investment
The new Government of Kosovo was sworn in on 4th March 2002 providing Kosovo with a President, Prime Minister and nine Ministries. This shows that Kosovo is developing along democratically acceptable lines. In addition, the international composition of the Kosovo administration provides a unique environment of support for entrepreneurs. The contacts and experience from abroad are readily available for the local and international business community through the United Nations mission and through Non-Governmental Organisations.
Source: ECIKS / Kosovo Trust Agency (KTA)