Operation Kosovo
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Business Guide (English)

Small Business FAQ (updates-coming)

News in Business Law (coming)

About Business in Kosovo

Links to helpful guides & organizations, consulting firms, etc. (updates-coming)

Business Regulations regarding businesses in Kosovo (ENGLISH)

TRADE

FOREIGN INVESTMENT

PRIVATIZATION

LABOR

INCOME & PROFIT TAXES

CUSTOMS

EXCISE TAXES

VALUE ADDED TAX

PROCEDURAL BUSINESS REGULATIONS

BANKING & INSURANCE

CONTRACTS FOR THE SALE OF GOODS

ABOUT THE MTI

TAX ADMINISTRATION & PROCEDURES

 

TRADE

UNMIK/REG/2003/15 - 12 May 2003 - ON THE PROMULGATION OF A LAW ADOPTED BY THE ASSEMBLY OF KOSOVO ON EXTERNAL TRADE ACTIVITY

FOREIGN INVESTMENT

UNMIK Regulation 2001/3 - 12 January 2001 - ON FOREIGN INVESTMENT IN KOSOVO

PRIVATIZATION

UNMIK/REG/2003/13 - 09 May 2003 - ON THE TRANSFORMATION OF THE RIGHT OF USE TO SOCIALLYOWNED IMMOVABLE PROPERTY

IMPLEMENTING UNMIK REGULATION NO. 2002/13 ON THE ESTABLISHMENT OF A SPECIAL CHAMBER OF THE SUPREME COURT OF KOSOVO ON KOSOVO TRUST AGENCY RELATED MATTERS

UNMIK/REG/2002/13 - 13 JUNE 2002 - ON THE ESTABLISHMENT OF A SPECIAL CHAMBER OF THE SUPREME COURT OF KOSOVO ON KOSOVO TRUST AGENCY RELATED MATTERS

UNMIK/REG/2002/12 - 13 June 2002 - ON THE ESTABLISHMENT OF THE KOSOVO TRUST AGENCY

LABOR

UNMIK/REG/2003/4 - 21 February 2003 - ON THE PROMULGATION OF THE LAW ADOPTED BY THE ASSEMBLY OF KOSOVO ON THE LABOUR INSPECTORATE OF KOSOVO

UNMIK Regulation 2001/27 - 8 October 2001 - ON ESSENTIAL LABOUR LAW IN KOSOVO

ADMINISTRATIVE DIRECTION NO. 2001/1 UNMIK/DIR/2001/1 - 21 March 2001 IMPLEMENTING UNMIK REGULATION NO. 2000/24 ON THE ESTABLISHMENT OF THE ADMINISTRATIVE DEPARTMENT OF LABOUR AND EMPLOYMENT

UNMIK Regulation 24 - 21 April 2000 - ON THE ESTABLISHMENT OF LABOUR AND EMPLOYMENT

INCOME  & PROFIT TAXES

UNMIK/REG/2003/3 - 30 January 2003 - AMENDING UNMIK REGULATION NO. 2002/4 ON PERSONAL INCOME TAXES IN KOSOVO

UNMIK/REG/2002/4 -20 February 2002 - ON PERSONAL INCOME TAXES IN KOSOVO

UNMIK/REG/2002/3 - 20 February 2002 - ON PROFIT TAXES IN KOSOVO

UNMIK/DIR/2002/8 - 29 March 2002 - IMPLEMENTING UNMIK REGULATION NO. 2002/4 ON PERSONAL INCOME TAXES IN KOSOVO

UNMIK/DIR/2002/7 - 29 March 2002 - IMPLEMENTING UNMIK REGULATION NO. 2002/3 ON PROFIT TAXES IN KOSOVO

UNMIK Regulation 2001/40 - 31 December 2001 - AMENDING UNMIK REGULATION NO. 2000/29 ON THE ESTABLISHMENT OF A PRESUMPTIVE TAX

UNMIK Regulation 2001/39 - 31 December 2001 - AMENDING UNMIK REGULATION NO. 2000/20 ON TAX ADMINISTRATION AND PROCEDURES

UNMIK Regulation 29 - 20 May 2000 Amended by: Reg/2001/40 - 31/12/01 ON THE ESTABLISHMENT OF A PRESUMPTIVE TAX

CUSTOMS

IMPLEMENTING UNMIK REGULATION NO. 1999/3, AS AMENDED, ON THE ESTABLISHMENT OF THE CUSTOMS AND OTHER RELATED SERVICES IN KOSOVO - UNMIK/DIR/2003/3 - 31 January 2003

ADMINISTRATIVE DIRECTION NO. 2001/26 - UNMIK/DIR/2001/26 - 31 December 2001 AMENDING UNMIK ADMINISTRATIVE DIRECTION NO. 2001/7 IMPLEMENTING UNMIK REGULATION NO. 1999/3 ON THE ESTABLISHMENT OF THE CUSTOMS AND OTHER RELATED SERVICES IN KOSOVO

ADMINISTRATIVE DIRECTION No. 2001/25 DIR/2001/25 - 24 December 2001 IMPLEMENTING UNMIK REGULATION NO. 1999/3, AS AMENDED, ON THE ESTABLISHMENT OF THE CUSTOMS AND OTHER RELATED SERVICES IN KOSOVO

ADMINISTRATIVE DIRECTION NO. 2001/7 Amended by: Dir/2001/26 - 31/12/01 UNMIK/DIR/2001/7 - 29 May 2001 IMPLEMENTING UNMIK REGULATION NO. 1999/3 ON THE ESTABLISHMENT OF THE CUSTOMS AND OTHER RELATED SERVICES IN KOSOVO

UNMIK Regulation 55 - 6 October 2000 - AMENDING UNMIK REGULATION NO. 1999/3 ON THE ESTABLISHMENT OF THE CUSTOMS AND OTHER RELATED SERVICES IN KOSOVO

UNMIK Regulation 3 - 31 August 1999 Amended by: Reg/2000/55 - 06/10/00 ON THE ESTABLISHMENT OF THE CUSTOMS AND OTHER RELATED SERVICES IN KOSOVO, 31 AUGUST 1999

ADMINISTRATIVE DIRECTION NO. 1999/1 UNMIK/DIR/1999/1 - 31 August 1999 IMPLEMENTING UNMIK REGULATION NO. 1999/3 OF 31 AUGUST 1999 ON THE ESTABLISHMENT OF THE CUSTOMS AND OTHER RELATED SERVICES IN KOSOVO

EXCISE TAXES

UNMIK/REG/2002/16 - 1 August 2002 - AMENDING UNMIK REGULATION NO. 2000/2, AS AMENDED, ON EXCISE TAXES IN KOSOVO

UNMIK/DIR/2002/21 - 1 October 2002 - IMPLEMENTING UNMIK REGULATION NO. 2000/2, AS AMENDED, ON EXCISE TAXES IN KOSOVO

UNMIK Regulation 2001/38 - 31 December 2001 - AMENDING UNMIK REGULATION NO. 2000/2, AS AMENDED, ON EXCISE TAXES IN KOSOVO

UNMIK Regulation 2001/15 - 3 July 2001 - AMENDING UNMIK REGULATION NO. 2000/2, AS AMENDED, ON EXCISE TAXES IN KOSOVO

UNMIK Regulation 56 - 6 October 2000 - AMENDING UNMIK REGULATION NO. 2000/2, AS AMENDED, ON EXCISE TAXES IN KOSOVO

UNMIK Regulation 35 - 16 June 2000 - AMENDING UNMIK REGULATION NO. 2000/2 ON EXCISE TAXES IN KOSOVO

UNMIK Regulation 26 - 27 April 2000 - AMENDING UNMIK REGULATION NO. 2000/2 ON EXCISE TAXES IN KOSOVO

UNMIK Regulation 02 - 22 January 2000 - Amended by: Reg/2002/16 - 01/08/02; Reg/2001/38 - 31/12/01; Reg/2001/15 - 03/07/01; Reg/2000/57 - 06/10/00; Reg/2000/35 - 16/06/00; Reg/2000/26 - 27/04/00 ON EXCISE TAXES IN KOSOVO, 22 January 2000 1999

ADMINISTRATIVE DIRECTION NO. 2000/19 UNMIK/DIR/2000/19 - 21 August 2000 AMENDING UNMIK ADMINISTRATIVE DIRECTION NO. 2000/1 IMPLEMENTING UNMIK REGULATION NO. 2000/2 OF 22 JANUARY 2000 ON EXCISE TAXES IN KOSOVO

ADMINISTRATIVE DIRECTION NO. 2000/1 Amended by: Dir/2000/19 - 21/08/00 UNMIK/DIR/2000/1 - 22 January 2000
IMPLEMENTING UNMIK REGULATION NO. 2000/2 OF 22 JANUARY 2000 ON EXCISE TAXES IN KOSOVO

VAT

UNMIK/REG/2002/17 - 1 August 2002 - AMENDING UNMIK REGULATION NO. 2001/11, AS AMENDED, ON VALUE ADDED TAX IN KOSOVO

UNMIK Regulation 2001/41 - 31 December 2001 - AMENDING UNMIK REGULATION NO. 2001/11 ON VALUE ADDED TAX IN KOSOVO

UNMIK Regulation 2001/11 - 31 May 2001 - Amended by: Reg/2002/17 - 01/08/02; Reg/2001/41 - 31/12/01 - ON VALUE ADDED TAX IN KOSOVO

PROCEDURAL BUSINESS REGS.

UNMIK/DIR/2002/22 - 11 October 2002 - IMPLEMENTING UNMIK REGULATION NO. 2001/6 ON BUSINESS ORGANIZATIONS

UNMIK Regulation 2001/30 - 29 October 2001 - ON THE ESTABLISHMENT OF THE KOSOVO BOARD ON STANDARDS FOR FINANCIAL REPORTING AND A REGIME FOR FINANCIAL REPORTING OF BUSINESS ORGANIZATIONS

UNMIK Regulation 2001/6 - 8 February 2001 - ON BUSINESS ORGANIZATIONS

UNMIK Regulation 08 - 29 February 2000 - ON THE PROVISIONAL REGISTRATION OF BUSINESSES IN KOSOVO

ADMINISTRATIVE DIRECTION NO. 2000/15 UNMIK/DIR/2000/15 - 21 June 2000 IMPLEMENTING UNMIK REGULATION NO. 2000/8 ON THE PROVISIONAL REGISTRATION OF BUSINESSES IN KOSOVO

ADMINISTRATIVE DIRECTION NO. 2000/4 UNMIK/DIR/2000/4 - 2 March 2000 - IMPLEMENTING UNMIK REGULATION NO. 2000/8 OF 29 FEBRUARY 2000 ON THE PROVISIONAL REGISTRATION OF BUSINESSES IN KOSOVO

BANKING & INSURANCE

UNMIK Regulation 2001/26 - 8 October 2001 - ON PAYMENT TRANSACTIONS

UNMIK Regulation 2001/25 - 5 October 2001  - ON LICENSING, SUPERVISION AND REGULATION OF INSURANCE COMPANIES AND INSURANCE INTERMEDIARIES

UNMIK Regulation 2001/24 - 1 October 2001 - AMENDING UNMIK REGULATION NO. 1999/20 ON THE BANKING AND PAYMENTS AUTHORITY OF KOSOVO

UNMIK Regulation 2001/5 - 7 February 2001 - ON PLEDGES & CREDIT TRANSACTIONS

CONTRACTS FOR THE SALE OF GOODS

UNMIK Regulation 68 - 29 December 2000 - ON CONTRACTS FOR THE SALE OF GOODS

ABOUT THE MTI

UNMIK Regulation 63 - 7 December 2000 - ON THE ESTABLISHMENT OF THE ADMINISTRATIVE DEPARTMENT OF TRADE AND INDUSTRY

TAX ADMINISTRATION & PROCEDURES

ADMINISTRATIVE DIRECTION NO. 2000/7 UNMIK/DIR/2000/7 - 12 April 2000 - IMPLEMENTING UNMIK REGULATION NO. 2000/20 OF 12 APRIL 2000 ON TAX ADMINISTRATION AND PROCEDURES

ADMINISTRATIVE DIRECTION NO. 2000/6 UNMIK/DIR/2000/6 - 12 April 2000 - IMPLEMENTING UNMIK REGULATION NO. 2000/20 of 12 APRIL 2000  ON TAX ADMINISTRATION AND PROCEDURES

About Business in Kosovo
Source: ECIKS / Kosovo Trust Agency (KTA)
Taxation
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%.
Europeanization
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 with 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 more 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.
How to register a business in Kosovo?
According to UNMIK Regulation 2000/8, all businesses operating in Kosovo must register. Entrepreneurs have to register at the Municipality in witch they are operating the business. Business registration is compulsory in order to operate legally. Registration provides needed information to the civil administration and is important taxation purposes. A business registration certificate is needed for opening bank accounts and conducting business with foreign companies. All business must apply for provisional registration on application forms available in all municipality centers and must pay a non-refundable administrative fee. Fees vary from € 50 for business with fewer than 10 employees to € 150 with more than 10 employees. The registration remains provisional until the moment a special law business registration is passed complying with UNMIK Regulation 2001/6, when registration authority will be transferred to the appropriate Ministry.
Registration of a foreign company
Documents:

Opening a bank account with minimum of € 5000.
Declaration on how long the company intends to operate in Kosovo.
Contract for Rent of Office of Premises certified by the Court of Kosovo.
Act of Foundation of the foreign Company, if the Company has more than one owner.
Report on the property of the company in Kosovo at the moment of the registration.
Application form filled in (the application form can be obtained in the Municipality).

Registration of a company established by a foreign enterprise with a local partner
Documents:

Agreement between foreign and local partner, to be signet personally by both of them in the presence of the Municipal officer.
Decision on the nomination of the Director of the Enterprises.
ID documents of both the representatives of the companies (foreign and local)
Report on the property of the company in Kosovo at the moment of the registration
Application form filled in
Registration Procedure:
Within 2 days after the Application for registration, the Municipality issues an official Confirmation, which allows the company to operate as registered. After 1 month, the Municipality issues the regular Certificate Registration. The cost of registration is linked to the number of employees in the Company: up to 9 employees: the cost is € 50, to be paid € 25 upon applying and € 25 when the Certificate is issued. For companies with more than 10 employees. The cost is € 150, to be paid € 50 upon applying and € 100 when the Certificate is issued.

LEGAL FRAMEWORK
Regulations

The Commercial Law Development Group within the MTI and KTA are responsible for the preparation of Regulations and Administrative Orders to provide Kosovo with a workable body of law to enable its economy to function according to Western, free market principles. So far nine Regulations have been adopted in the Commercial sphere; these are the regulations on:
Foreign Investment
Business Organizations, Contracts for the Sale of Goods, Pledges, Insurance Regulation and Supervision, Payment Transactions, Essential Labor Law, Standards for Financial Reporting and Establishment of a Pledge Filing Office.
Foreign Investment The purpose of this regulation is to put in place certain legal guarantees that are necessary to encourage foreign investment in Kosovo. The most important provisions in the regulation provide that: -
Foreign investments will be governed by the principle of national treatment, meaning that they will be treated no less favorably than similar domestic enterprises; Foreign investments will be protected against unreasonable expropriations;
Income from foreign investment may be freely transferred abroad and otherwise used in an unrestricted manner; Foreign Investments are protected against retroactive application of laws;
Foreign investors are able to employ foreign nationals

The Business Organizations Regulation establishes the ways in which businesses can be organized and registered. The Pledge Regulation has been prepared in order to give Kosovo a modern law regulating all forms of secured transactions. Contracts for the Sale of Goods is a regulation that only covers sales law; it does not cover all areas of contract. It is based on the Vienna Sales Convention. In the coming months it is expected that Regulations on Bankruptcy, Mortgage, Protection of Competition and Intellectual Property will be adopted.
Good Corporate Governance
In terms of Good Corporate Governance the Standards for Financial Reporting Regulation has been instated and is entirely compatible with the internationally accepted accounting and auditing standards issued by the International Accounting Standards Committee (IASC) and the International Auditing Practices Committee (IAPC) of the International Federation of Accountants.
Banking Services
There are now seven banks operating in Kosovo. It should be noted that the use of credit cards in Kosovo is rare. Visitors are advised to bring denominations of the generally accepted currency (the Euro) with them. The first bank to gain a BPK (Banking and Payments Authority of Kosovo) license was the Micro-Enterprise Bank (MEB). MEB is a joint venture of the European Bank for Reconstruction and Development (EBRD), Commerzbank AG, International Finance Corporation (IFC), Nederlands Financireings- Maatschappil voor Ontwikkelingslanden (FMO), International Micro Investitionen (IMI), and Kreditanstalt fur Wiederaufbau (KFW). MEB has seven branches across Kosovo. As of October 2001, MEB had 175 million Euro in deposits and 8.75 million Euro in loans. The bank also offers the Western Union transfer service and cashes travelers checks and Eurochecks. Other checks are taken for collection. The bank has installed a network of ATMs for its customers. This may be expanded to provide international services in coming months. A number of local banks have also opened up with official licenses from the BPK. These include the New Bank of Kosovo, Bank for Private Business and the Economic Bank, American Bank of Kosovo, Credit Bank of Pristina and Kasa Bank, which all offer similar banking services.
Taxation
VAT was introduced in Kosovo in 1 July 2001 replacing the sales tax. It currently only applies to imports and domestic transactions by businesses who have an annual turnover of more than Euro 100,000. The rate of VAT has been established at 15% of the value of goods and services. There is 0% VAT on exports (including on goods going to FRY) and international transport of goods and passengers. A 20% tax on business profits began in February 2002 for businesses with annual turnover of Euro 100,000 or more. Small businesses may have the option of paying either the profits tax or the presumptive tax of 3% turnover. The profits tax is a tax on bottom line profit rather than turnover. Deductions on profits tax include: business expenses; indirect taxes paid; depreciation; allowance for new investments; purchase of raw materials, intermediate goods, electricity, office supplies; repair, payment of staff salaries. A progressive rate wage tax is now in effect. It has a maximum rate of 10% in 2002 and 20% in 2003 onwards. It serves as a framework to collect social security contributions. Internationals working in businesses, local or multinational will pay the wage tax. A property tax and a pensions contribution regulation have also been introduced.

LINKS
· Economic Initiative for Kosovo: is a non-profitable organization created in April 2003 by Kosovar and Austrian senior students of economy and multimedia in the universities of Vienna, Austria.

Guide for starting new companies / enterprises in Kosovo (Albanian): A very detailed ECIKS guide for Kosovar entrepreneurs for planning and starting new companies in Kosovo. It also includes the addresses of all relevant institutions.

USA - Kosovo Investment Consulting Firm

Kosovo Chamber of Commerce

Kosovo Import/Export Road Map

Trade & Investment Guide to Kosovo - USAID

Business Kosovo Center

Kosova Tenders

Kosovo Yellow Pages (old)

Kosovo Yellow Pages (new)

Kosovo Business Support - USAID Sponsored Business & Investment consulting firm

Kosovo Trust Agency

Statistical Office of Kosovo

Euro Info Correspondence Center

 

This portion of the website by Kate Todryk - IPRO 2003-2004

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Special thanks to Charles Rudnick, Julian Mulla, George Soros's people by name, IV Ashton, Scott Waguespack, and a number of students who have participated in past IPROs and played key roles.
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Last updated: August 6, 2003