8.1 Business types

Businesses operating in Kosovo must be registered with the Ministry of Trade and Industry's Business Registration Unit (

Registering a business in Kosovo is both simple and inexpensive. The 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 regarding registered companies can be transparently and freely accessed via the internet.

With six steps needed to start a business, Kosovo 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 Yugoslavia. The declaration of independence established Kosovo as a democratic, secular and multi-ethnic Republic promoting the rights of all communities. In April 2008 the Assembly 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 difficult and complicated procedure of making more than 80,000 laws compatible with European Union regulations, Kosovo's legislation is already EU-compatible.

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;
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:
Protection of Foreign Investment

In order to put in place certain legal guarantees that are necessary to encourage foreign investment, in April 2006 the Government of Kosovo promulgated a Law on Foreign Investment (Law No. 02/L-33).

According to this regulation a foreign investor, defined as a physical person who is not a habitual resident of Kosovo or a business or other organization, entity or association established under a jurisdiction other than Kosovo, is to be governed by the principle of national treatment, meaning that foreign enterprises will be treated no less favourably than similar domestic enterprises. In particular the right vested to a foreign investor are:
• Non-discriminatory treatment
• Constant protection and security
• Compensation in case of nationalization, expropriation, including payment of interest;
• 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. 03/L-090 on Public-Private-Partnerships and Concessions provides the legal framework for granting public-private partnerships and concessions. 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, health, education, transportation, waste, production activities etc.
According to this law a public-private-partnership and/or concession can be granted for a maximum of 40 years. The duration of such agreement for additional period can be extended but cannot exceed more than one quarter of the initial duration stated in the agreement. There is a special unit "Partnership Kosovo", within the Ministry of Economy and Finance of the Republic of Kosovo, which is responsibile for Public-Private-Partnership. More details can be found at:

Legal Forms of Enterprises
Similar to common practices in EU countries, only certain types of business can be registered 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 company, a limited partnership and a joint stock company. The characteristics of each type are listed in the table above.
In accordance with the clauses of the Foreign Investment Law, foreign companies are permitted 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. Therefore, foreign entities may establish subsidiary enterprises and branches in the same manner and to the same extent as similar domestic business organizations.

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. In general, the municipal courts have jurisdiction to enforce contracts, with the exception of matters falling within the jurisdiction of the Commercial Court, which is responsible for enforcement.

Trade Marks
The 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 personal names, designs, letters, numerals, audio marks, three-dimensional configurations, including the shape of goods or their wrapping 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 office. The proprietor of a registered trademark will after registration have exclusive rights in relation to the goods or services covered by the registration. In particular these rights are:
a. to use the trademark;
b. to authorize another to use the trademark;
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 specific character. The 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 specific character if the consumers' impression differs 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 registration is to be submitted to the Patent and Trademarks Office. Protection of the industrial design lasts five years and can be extended to a maximum of 25 years.

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.
The application for a patent is to be submitted to the Patent Office 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 description or the claims,
e. an abstract of the invention.

The certification 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 issued by KSA are equally determined and applicable 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 requirements to protect and improve the quality of life, health safety, environment and consumer protection, by ensuring common rules;
2. promote quality of products, processes and different services according to defined standards;
3. ensure rational use of materials and energy and efficiency in performance;
4. help to abolish the technical barriers in international trade.

8.3 Taxation

Kosovo's tax policies are streamlined and efficient. 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. Furthermore, the Government is introducing tax incentives to support domestic production.

Corporate tax
Depending on annual income, domestic legal entities and permanent establishments of foreign legal entities are taxed as follows (Law Nr.03/L- 162):


Value added tax
Value added tax (Law Nr.03/L- 146) is applied to all importers and businesses with an annual turnover in excess of 50,000 Euro. The 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) applies to natural persons receiving income from Kosovo sources and also to foreign incomes, received by Kosovo residents. The rate of personal income tax depends on annual income and ranges from zero percent to 10 percent.

Specific 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; five percent (5%);
(b) Category 2: Vehicles and office equipment; twenty percent (20%); and
(c) Category 3: Machinery and heavy transport vehicles; fifteen percent (15%)

Property taxes
Property tax was introduced in 2003 and is collected at the local government level by Municipal administration.

The Municipal Assembly of each municipality defines tax rates on property on an annual basis. The tax rates range between 0.05 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. In 2001, with the UNMIK Regulation No.2001/30, the Board on Standards for Financial Reporting was established and to date, 18 accounting standards in conformity 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 financial statements on an annual basis (Balance sheet, income statement, cash flow 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.

The overview of the comparison of the Kosovo tax system with its neighbouring countries is shown in the table 6.

The Government of Kosovo is currently preparing tax incentives and tax breaks for foreign and local investors. More information can be obtained by contacting the Investment Promotion Agency of Kosovo.

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 publicly or socially owned can be acquired from private individuals.

Registering property in Kosovo is both quick and simple. Due to efficient 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 registered in the municipal register. For details visit
Land leasing

According to the Law on Local Self Govemnment Nr. 03/L-040, the municipalities in Kosovo have the right to lease movable and immovable property. The lease can be granted for a term of ten years with an extension opportunity of up to 99 years.

8.5 Industrial parks

Industrial property in Kosovo can be acquired for business purposes in two different ways. Foreign companies can freely buy land and buildings through the ongoing privatisation procedures. For information on current privatisation opportunities contact the Privatisation Agency of Kosovo. 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 for details on 30 municipalities across Kosovo).
Industrial Parks

The industrial park initiative was launched by the Ministry of Trade and Industry as a concrete measure to boost business in Kosovo.

It has been identified that business growth is hindered by a lack of good quality and reliable amenities. The concept of the industrial park is relatively simple, aiming to provide high quality facilities and infrastructure at a competitive market price, from which businesses can operate effectively and efficiently.
In addition to providing a solid base from which to operate, additional effects 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 development and growth.

The "Drenas Industrial Park" covers an area of 24 hectares, in which 781 local and foreign enterprises will be placed. Three 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, five 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 located in this industrial park will therefore have a unique possibility to serve the local market from a very central position. In an area populated with one million inhabitants, the location can offer a sufficient 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 access any neighbouring country by road transport within one hour.

Details concerning industrial parks are available from the SME-Agency, which is a part of the Ministry of Trade and Industry of the Republic of Kosovo (

8.6 Utility costs and availability


The fuel supply is sufficient in all regions of Kosovo. Measured at a ratio of one fuel station per 1,000 inhabitants, Kosovo has one of the highest fuel station densities in Europe.

The telecommunication sector in Kosovo is dominated by the Post and Telecommunications of Kosovo (PTK). The PTK was incorporated in 2005 and is still a fully state owned enterprise. It provides various telecommunication services ranging from post and fixed telephony to mobile telephony and internet. The PTK will be privatised soon and represents a great investment opportunity for Western telecom companies.

The fixed network currently consists of 135,000 telephone connections. Additionally, there are 600 pay phones located in public areas as well as 470 in post offices. A second fixed phone licence was issued in 2006 to the private company and internet provider IpkoNet.

GSM-services in Kosovo are provided currently by Vala, a subsidiary of PTK, and IPKO, a company owned by Slovenian Telecom, which has acquired the second mobile operator license in Kosovo and started operations in late 2007. Vala has over 900,000 subscribers, mostly using the pre-paid system, whereas IPKO has gained over 300,000 subscribers within three years of its establishment.
In addition to the 120 post offices belonging to the PTK, Kosovo has a wide variety of international courier service providers operating in its territory (UPS, TNT, FEDEX, DHL). As a consequence, quick and reliable shipping possibilities to different international destinations 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). The 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. The society of internet users is estimated to have around 350.000 members.

Energy, water and sewage
Kosovo uses 220 V energy network and the plug socket system corresponds to the German standard.
A public water supply system as well as sewage services are established throughout the country. The cost for energy and water supply can be taken from the table below:

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