Kosovo Table of Contents Doing Business in Kosovo ____________________________ 6 Market Overview ___________________________________ 6 Market Challenges __________________________________ 7 Market Opportunities ________________________________ 8 Market Entry Strategy ________________________________ 9 Political and Economic Environment ____________________ 11 Selling US Products & Services ________________________ 11 Using an Agent to Sell US Products and Services _________________ 11 Establishing an Office ________________________________ 11 Franchising ______________________________________ 11 Direct Marketing ___________________________________ 12 Joint Ventures/Licensing ______________________________ 12 Selling to the Government ______________________________ 12 Distribution & Sales Channels____________________________ 13 Express Delivery ___________________________________ 13 Selling Factors & Techniques ____________________________ 13 eCommerce ______________________________________ 14 Overview ____________________________________________ 14 Current Market Trends ___________________________________ 14 Domestic eCommerce (B2C) ________________________________ 14 Cross-Border eCommerce __________________________________ 14 Online Payment________________________________________ 15 Major Buying Holidays ___________________________________ 15 Social Media __________________________________________ 15 Trade Promotion & Advertising ___________________________ 15 Pricing _________________________________________ 19 Sales Service/Customer Support __________________________ 19 Protecting Intellectual Property __________________________ 19 Due Diligence _____________________________________ 19 Local Professional Services _____________________________ 20 Principle Business Associations __________________________ 22 Limitations on Selling US Products and Services _________________ 23 Web Resources ____________________________________ 23 Leading Sectors for US Exports & Investments _______________ 25 Energy _________________________________________ 25 Overview ____________________________________________ 25 Leading Sub-Sectors _____________________________________ 27 Opportunities _________________________________________ 27 Web Resources ________________________________________ 27 Agricultural Sector __________________________________ 29 Overview ____________________________________________ 29 Leading Sub-Sectors _____________________________________ 30 Opportunities _________________________________________ 30 Web Resources ________________________________________ 30 Health _________________________________________ 31 Overview ____________________________________________ 31 Leading Sub-Sectors _____________________________________ 31 Opportunities _________________________________________ 31 Web Resources ________________________________________ 31 Infrastructure _____________________________________ 33 Overview ____________________________________________ 33 Leading Sub-Sectors _____________________________________ 33 Opportunities _________________________________________ 34 Web Resources ________________________________________ 34 Mining and Minerals _________________________________ 35 Overview ____________________________________________ 35 Leading Sub-Sectors _____________________________________ 36 Opportunities _________________________________________ 36 Web Resources ________________________________________ 36 Telecommunications _________________________________ 37 Overview ____________________________________________ 37 Leading Sub-Sectors _____________________________________ 37 Opportunities _________________________________________ 38 Web Resources ________________________________________ 38 Customs, Regulations and Standards ____________________ 39 Trade Barriers _____________________________________ 39 Import Tariff _____________________________________ 40 Import Requirements & Documentation ______________________ 40 Labeling/Marking Requirements __________________________ 41 U.S. Export Controls _________________________________ 41 Temporary Entry ___________________________________ 41 Prohibited & Restricted Imports __________________________ 42 Customs Regulations _________________________________ 42 Standards for Trade _________________________________ 42 Overview ____________________________________________ 42 Standards ___________________________________________ 43 Testing, inspection and certification ___________________________ 43 Publication of technical regulations ____________________________ 44 Contact Information _____________________________________ 44 Trade Agreements __________________________________ 45 Licensing Requirements for Professional Services ________________ 45 Web Resources ____________________________________46 Investment Climate Statement ________________________ 46 Executive Summary __________________________________46 Openness To, and Restrictions Upon, Foreign Investment ___________ 48 Policies Towards Foreign Direct Investment _______________________ 48 Limits on Foreign Control and Right to Private Ownership and Establishment ___ 48 Other Investment Policy Reviews _____________________________ 49 Business Facilitation _____________________________________ 49 Outward Investment _____________________________________ 50 Bilateral Investment Agreements and Taxation Treaties ____________ 50 Legal Regime _____________________________________ 50 Transparency of the Regulatory System _________________________ 50 International Regulatory Considerations _________________________ 51 Legal System and Judicial Independence _________________________ 51 Laws and Regulations on Foreign Direct Investment __________________ 52 Competition and Anti-Trust Laws _____________________________ 53 Expropriation and Compensation _____________________________ 53 Dispute Settlement ______________________________________ 54 ICSID Convention and New York Convention _____________________ 54 Investor-State Dispute Settlement ___________________________ 54 International Commercial Arbitration and Foreign Courts _____________ 54 Bankruptcy Regulations ___________________________________ 55 Industrial Policies___________________________________ 55 Investment Incentives ____________________________________ 55 Foreign Trade Zones/Free Ports/Trade Facilitation ___________________ 56 Performance and Data Localization Requirements ___________________ 56 Protection of Property Rights ____________________________ 56 Real Property _________________________________________ 56 Intellectual Property Rights ________________________________ 58 OPIC and Other Investment Insurance Programs ____________________ 59 Foreign Direct Investment and Foreign Portfolio Investment Statistics _______ 60 Contact for More Information____________________________ 61 Trade & Project Financing ___________________________ 62 Methods of Payment _________________________________ 62 Banking Systems ___________________________________ 62 Foreign Exchange Controls _____________________________ 63 US Banks & Local Correspondent Banks ______________________ 63 Project Financing ___________________________________ 63 Multilateral Development Banks: ____________________________ 65 Financing Web Resources ______________________________ 65 Business Travel _________________________________ 67 Business Customs ___________________________________ 67 Travel Advisory ____________________________________ 67 Visa Requirements __________________________________ 67 Currency ________________________________________ 68 Telecommunications/Electric ____________________________ 68 Transportation ____________________________________ 68 Language ________________________________________69 Health _________________________________________69 Local Time, Business Hours and Holidays_____________________69 Temporary Entry of Materials or Personal Belongings _____________ 70 Travel Related Web Resources ___________________________ 70 Doing Business in Kosovo Market Overview • The Republic of Kosovo is Europe’s youngest country – and one of its poorest – but it has maintained positive economic growth rates, most recently 3.8 percent in 2016. Kosovo is working to improve the investment climate by strengthening the legal environment necessary to attract and retain foreign investment. • In 2016, the Central Bank of Kosovo estimated Foreign Direct Investment (FDI) at €234.8 million, down from €338 million in 2015. The unemployment rate is estimated at 27.5 percent. The difficult labor-market conditions affect youth and women disproportionately and risk undermining the country’s social fabric. Despite these challenges, Kosovo’s relatively young population, low labor costs, and abundant natural resources have attracted foreign investment, with several international firms and franchises already present in the market. • Kosovo’s main trade partners are EU countries (approximately 43.1 percent of imports and 22.6 percent of exports) and its neighbors through the Central European Free Trade Agreement (CEFTA – approximately 27.0 percent of imports and 46.6 percent of exports). Kosovo continues to run a large trade deficit, with exports covering only about 12 percent of imports. • Switzerland was the largest investor in Kosovo in 2016 (€61.8 million). U.S. investment reached €22.5 million in 2016. • Kosovo has much to offer U.S. investors and exporters: o Kosovo’s liberal trade regime enables duty-free exports for the majority of Kosovo goods to the EU market. The Stabilization and Association