As a relatively new country with business potential that is yet to be fully explored, Kosovo is positioning itself as an attractive investment location for foreign companies of many sectors. In addition to the young and skilled workforce and a variety of natural resources, a wide range of incentives increase the attractiveness factors as well, including the carrying forward of tax and capital losses (up to seven tax periods), the reduced and zero-rated customs duties on import and export of certain goods, the investment guarantees by the Multilateral Investment Guarantee Agency and the US Overseas Private Investment Corporation, as well as the ability to lease land up to 99 years.
Kosovo’s ongoing efforts, aimed at reforming the local business climate, were recognized in the World Bank’s Doing Business 2016 report. Ranked 47th for ease of starting a business, Kosovo scores significantly higher than most of the other countries in the region. This is largely due to the fact that registering a business in Kosovo is relatively quick and also free of charge.
As per Kosovo’s Law on Business Organization (02/L-123), the types of companies that can be incorporated in Kosovo include: single person enterprises, general partnerships, LLCs, limited partnerships and joint stock companies. According to the Foreign Investment Law, foreign companies can freely participate in resident companies with no restriction on the share capital that they can hold. The Kosovo Law does have a requirement for a registered agent of a company who is a person with a principal residence or principal place of work at the registered office declared during registration or a business organization with a principal place of business at the registered office.
Incorporation of a company is performed through the Business Registration Unit (KBRA) of the Ministry of Trade and Industry and through the many one-stop-shop registration center locations. In addition to a business registration form, documents required for the company incorporation include a company statute, property title certificate or lease contract, copies of shareholder IDs (for physical person shareholders) or company registration certificates (for legal entity shareholders) and the resolution to establish a business. Registration of a company lasts about 10 days and there is no administrative fee associated with it. There is no legal requirement for a seal even though most businesses use one.
It is worth noting that companies need to submit proof of depositing the minimum capital within 14 days of incorporation. Bank account opening is required both for the registration process and for the ongoing daily business activities. All transactions exceeding EUR 500 must be performed through a bank account. Banks typically require the physical presence of the directors of the newly registered company during the bank account opening procedure.
An additional requirement following the company registration procedure is the need to undergo an inspection by the Municipal Technical Committee which audits sanitary conditions and safety.
Following the above, a company may elect to register for VAT (mandatory for companies with annual turnover exceeding EUR 30,000) and – if it has employees – must register them for the Pension Fund in the Tax Administration.
Registering a company in Kosovo is relatively quick and low-cost when compared to other potential investment locations in the Balkans. Eurofast is at your disposal for assistance in the process of incorporating a business in Kosovo and advising you on the best approach to expanding in the region.
Your contact for further queries is:
Elena Kostovska
T.+389 2 2400225
E. elena.kostovska@eurofast.eu