ABOUT KOSOVO

Amongst all the countries in Europe, Kosovo, officially the Republic of Kosovo, is a landlocked country located in the heart of the Balkan Peninsula in Southeast Europe. It is known for its mountainous terrain, rich cultural heritage influenced by various empires, and a young, dynamic population. The capital of Kosovo is Pristina, which is its largest and most populous city, serving as the country’s main economic, cultural, and administrative hub. According to the World Bank, Kosovo is classified as an Upper Middle-Income Economy, having achieved significant economic progress since its declaration of independence, with a strong focus on further integration with European structures. The currency of Kosovo is the Euro (EUR), which it unilaterally adopted. The value of 1 Euro is approximately 89.85 Indian Rupees as of today’s exchange rates (June 2025). The population of Kosovo is estimated to be around 1.77 million in 2024. Its neighbouring countries are Serbia to the north and east, North Macedonia to the southeast, Albania to the southwest, and Montenegro to the west. The official languages of the country are Albanian and Serbian, with English widely spoken, especially among the younger generation and in business. The majority of the Kosovar population practices Islam, with a significant Kosovo Serb Orthodox Christian minority. Currently, Kosovo has one major international airport, Pristina International Airport “Adem Jashari” (PRN), which is the primary gateway for international flights. As a landlocked country, Kosovo relies on the seaports of neighbouring countries, primarily Durrës and Shengjin in Albania, for its international trade, with goods transported mostly by road.

The corporate income tax rate in Kosovo is a flat 10%, which is highly competitive within the region and Europe. This low rate is a key incentive for investors. Additionally, Kosovo offers various tax incentives for specific types of investments, particularly in Free Economic Zones (FEZs), which provide exemptions from customs duties, VAT, and corporate income tax for a certain period. Incentives also exist for investments in strategic sectors and for job creation, often linked to the Law on Strategic Investments. Opesh Group of companies will be helping you in completing the Due Diligence process which includes financial planning, registration process, business options, and if required, even helping you find a rental property for your office.

Establishing a business in Kosovo has become increasingly streamlined in recent years, with efforts to improve the business environment and attract foreign direct investment. The Kosovo Investment and Enterprise Support Agency (KIESA) is the primary government body promoting and assisting foreign investors. A foreign investor who is planning to start his business in Kosovo can form various company types, such as a Limited Liability Company (LLC), a Joint Stock Company (JSC), or a Branch Office. A Limited Liability Company (LLC) is the most common and flexible form, allowing 100% foreign ownership and requiring a minimum share capital of only EUR 1.

In case an investor is planning to establish an LLC in Kosovo or a corporate business setup, Opesh Group will be helping you in taking the right decision for setting up your business in Kosovo and we will also guide you about how to follow the procedure while formulating your company in Kosovo.

Types of Business which can be started in Kosovo:

• Information & Communication Technologies (ICT) & BPO: Kosovo has a young, tech-savvy population with high English proficiency and competitive labor costs. Opportunities are vast in software development, IT outsourcing, call centers, digital marketing, and tech startups, leveraging its growing digital infrastructure.
• Manufacturing: Opportunities exist in light manufacturing, particularly in textiles, footwear, wood processing, plastic products, and construction materials (e.g., bricks, tiles). Competitive labor costs and proximity to EU markets make it attractive for export-oriented production.
• Agriculture & Agro-processing: With fertile land and diverse climate, opportunities are in modernizing farming, organic production, and especially in value-added agro-processing (e.g., fruits, vegetables, dairy, honey, wine) for both domestic consumption and export.
• Energy: Kosovo has significant lignite coal reserves, which are the basis for its power generation. Opportunities exist in modernizing existing power plants, developing new lignite-based power generation with advanced technologies, and increasingly, in renewable energy sources like solar and wind power.
• Tourism & Hospitality: Kosovo offers mountains (skiing, hiking), historical sites, vibrant cities, and a rich cultural heritage. Opportunities are in developing hotels, guesthouses, adventure tourism, cultural tourism, and related services, particularly in new and underserved areas.
• Infrastructure & Construction: Ongoing needs for modernizing infrastructure (roads, railways, energy, water systems) and urban development create demand for construction, engineering, and material supply firms, often supported by international financial institutions.
• Mining (Non-Coal): Beyond lignite, Kosovo has potential in minerals like lead, zinc, nickel, and chrome. Opportunities exist in modernizing existing mines, exploring new deposits, and mineral processing for value addition.

Advantages of Starting Business in Kosovo:

• Young & Dynamic Population: A very young population (average age around 30) provides a large and adaptable workforce.
• Low Corporate Tax: A flat 10% corporate income tax is highly competitive.
• Use of Euro: Eliminates currency exchange risks and simplifies financial transactions with Eurozone countries.
• Competitive Labor Costs: One of the lowest labor costs in the region.
• Strategic Location: Positioned in the Western Balkans, offering access to regional markets and serving as a potential gateway to wider European markets.
• EU Integration Path: Kosovo has a Stabilization and Association Agreement (SAA) with the EU and aims for EU membership, leading to continuous reforms and harmonization with EU standards.
• Diaspora Links: A large diaspora provides valuable connections and investment potential.

Business Opportunities for Indians in Kosovo:

There are emerging business opportunities in Kosovo for new investors who are planning to start their business abroad. Kosovo’s focus on economic development, young workforce, and competitive tax environment can be attractive. Indian investors, with their strengths in IT services, pharmaceuticals (import/distribution), light manufacturing (e.g., textiles, plastics), and potentially in segments of renewable energy or agro-processing, can find avenues. Kosovo’s strategic location in the Balkans could also serve as a base for regional operations.

Imports & Exports:

Many goods are imported and exported from Kosovo. Imports and exports business is an ever-growing business in any country; however, you need to do proper R&D before investing in that product which you can import or export. You need to check whether that product is suitable for your target market and how much revenue you will be able to generate from that market.

Major items which are exported from Kosovo (limited direct exports to India):

• Base metals and articles thereof (e.g., lead, zinc, nickel, scrap metals)
• Mineral products (e.g., lignite, cement)
• Plastic and rubber products
• Vegetable products (e.g., fruits, vegetables)
• Textiles and apparel
• Prepared foodstuffs

Major items which are imported in Kosovo (limited direct imports from India):

• Mineral fuels, lubricants (petroleum products are major imports)
• Machinery and mechanical appliances
• Electrical machinery and equipment
• Vehicles and parts
• Prepared foodstuffs, beverages, tobacco
• Pharmaceutical products
• Iron and steel

Manufacturing:

Opportunities in manufacturing are primarily in light industries such as textiles and apparel (often through outward processing arrangements), wood processing, plastic product manufacturing, and construction materials (e.g., bricks, cement). The competitive labor costs and proximity to European markets are key advantages.

Mining:

The mining sector in Kosovo is dominated by its vast lignite coal reserves, used for electricity generation. Beyond coal, Kosovo has significant potential in metallic minerals like lead, zinc, nickel, and chrome. Opportunities exist in modernizing existing mines, exploring new deposits, and especially in mineral processing for value addition.

Major Indian companies which are currently working in Kosovo:

Due to Kosovo’s relatively nascent and developing economy, and considering India’s formal recognition stance, there are no major Indian corporate entities with large-scale manufacturing facilities or significant direct investments in Kosovo currently. Any Indian business presence would likely be through:

• Pharmaceutical Distribution: Indian pharmaceutical products are likely imported and distributed by local companies.

• Trade: Smaller Indian trading firms might be involved in general import-export activities.

• Individual Ventures: Some Indian entrepreneurs or diaspora members might have established small to medium-sized businesses in sectors like IT, hospitality, or retail.

• GDP = $9.4 billion (2023 est.)

• GDP Growth = 3.8% (2023 est.), 4.0% (2024 est. by IMF)

• Ease of doing business rank = 57 (2020 – Note: The World Bank discontinued this report, but this is the last available ranking.)

• GDP per Capita = $5,300 (2023 est.)

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