Investment in Kosovo 2017 | 41 Investment in Kosovo 2017 KPMG in Kosovo kpmg.com/al © 2017 KPMG Albania Shpk Kosovo Branch, a branch of KPMG Albania Shpk, an Albanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Investment in Kosovo Edition 2017 Investment in Kosovo 2017 | 3 Preface Investment in Kosovo is one of a series of booklets published by KPMG member firms to provide information to those considering investing or doing business internationally. Every care has been taken to ensure that the information presented in this publication is correct and reflects the situation as of March 2017 unless otherwise stated. Its purpose is to provide general guidelines on investment and business in Kosovo. As the economic situation in the country continues to undergo changes, further advice should be sought before making any specific decisions. For further information on matters discussed in this publication, please contact Heris Jani, Managing Director. KPMG Albania Shpk Kosovo Branch 6 Pashko Vasa Str. 10 000 Pristina Kosovo Tel: +381 38 246 771 Fax: +381 38 246 772 kpmg.com/al © 2017 KPMG Albania Shpk Kosovo Branch, a branch of KPMG Albania Shpk, an Albanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 4 | Investment in Kosovo 2017 Contents General Information .......................................................................................................... 7 Geography and climate .............................................................................................................7 Population and language ...........................................................................................................7 Infrastructure .............................................................................................................................7 Travel .......................................................................................................................................7 Visa system for foreigners traveling to Kosovo ......................................................................8 Airport .....................................................................................................................................8 Currency ....................................................................................................................................8 Labor Force ...............................................................................................................................8 Political system..........................................................................................................................9 Economy ...................................................................................................................................9 Macroeconomic trends ..........................................................................................................9 Fiscal indicators ....................................................................................................................10 Trade ..................................................................................................................................... 11 Foreign investment ...............................................................................................................12 Opportunities for International Investors ...................................................................... 14 Privatization and investment opportunities .............................................................................14 Agriculture ............................................................................................................................15 Energy/power generation .....................................................................................................15 Tourism .................................................................................................................................16 Mining sector ........................................................................................................................17 Telecommunications and post ..............................................................................................17 Banking and finance ................................................................................................................18 Other financial intermediaries ..............................................................................................18 © 2017 KPMG Albania Shpk Kosovo Branch, a branch of KPMG Albania Shpk, an Albanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Investment in Kosovo 2017 | 5 Business Environment .....................................................................................................19 Business entities .....................................................................................................................19 Individual business ..................................................................................................................19 Overall partnership ..................................................................................................................19 Limited partnership .................................................................................................................20 Limited liability company .........................................................................................................20 Joint-stock company ...............................................................................................................20 Foreign business organization .................................................................................................21 Business Registry ...................................................................................................................21 Accounting and Auditing ................................................................................................ 22 Accounting: regulations and requirements ..........................................................................22 Auditing: requirements .........................................................................................................23 Taxation ............................................................................................................................ 24 General ....................................................................................................................................24 Corporate income tax ..............................................................................................................24 Depreciation .........................................................................................................................25 Amortization .........................................................................................................................26 Income exempt from corporate income tax ........................................................................26 Withholding tax ....................................................................................................................26 Losses carried forward .........................................................................................................27 Relief from tax: foreign tax credits .......................................................................................27 Anti-avoidance measures .....................................................................................................27 Transfer pricing .....................................................................................................................27 Special treatment of insurance companies ..........................................................................27 Taxation of individuals .............................................................................................................27 Personal income tax .............................................................................................................27 Tax rates ...............................................................................................................................28 Pension contributions ...........................................................................................................28 Health insurance contributions .............................................................................................28 © 2017 KPMG Albania Shpk Kosovo Branch, a branch of KPMG Albania Shpk, an Albanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 6 | Investment in Kosovo 2017 Local taxes ..............................................................................................................................28 Value added tax .......................................................................................................................28 Deduction of input VAT .........................................................................................................29