INVESTORS CONFIDENCE - Kosovo

Randomly, countries such as Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia have opened their doors to various foreign businesses investments.

The Balkans countries are attractive to FDI for several reasons:

• Political and economic situation assessed by the world community is considered as fairly stable.
• General Price levels, is among the lowest levels in Europe.
• Balkan countries have well-developed banking infrastructure, resulting in profit after tax, easily transferred abroad.

From the BKT experience in Kosovo we can make a statement that Kosovo has sufficient strengths to draw attention of foreign business. Kosovo has lots of advantages to attract new foreign investors in Kosovo because of cheap labour, low corporates taxes and young and dynamic labour force.

At the same time we consider that the labour force must be trained in order to fit organization faster. Also at the same time we think that Kosovo has one of the advantages of cheap workforce compared to other regional countries in Balkan.

Foreign companies while investing in Kosovo must be prepared to deal with political influence, and also corruption and nepotism. In theory procedures are very liberal but in reality there are long bureaucratic procedures.

If Kosovo wants to attract foreign investment, we think transparency should be to the maximum. This recommendation especially applies for government organizations.

This region will continue to be one of the most interesting areas in Europe for FDI.

Located in the middle of the Balkan, Kosovo serves as a connecting bridge between the South Eastern European countries. Through its unique geographical position, Kosovo has access to the growing markets in Balkans and Central Europe that covers 28 million potential customers. The road network, consisting of 630 km of main roads, has been rebuilt to a large extent over the past years, with the addition of some completely new roads. With the construction of a highway connecting Albania and Serbia directly through Kosovo, it is becoming an important gateway in the corridor connecting the Adriatic Sea to Western Europe. Kosovo has the youngest population in Europe with 70 percent of the population being under the age of 35, etc.

Strengths: Availability of skilled labour, Low labour costs, Quality of Life, Existing foreign investor’s experiences.

Weaknesses: Country legal framework, Political stability.

We would recommend to the Government to further focus on vocational education, skilled workforce,- Visa liberalisation, implementation of industrial standards,Investment in- and improvement of Quality of our products / services,Financial support, e.g. Export loans, co-finance of marketing, quality assurance, export activities, etc.

Integration into EU market should be the only agenda for the region.

We invested in Kosovo as there were no competition. Combining unique experience in a dynamic and emerging market with dedication to provide cutting edge technology to Kosovars, IPKO has established firmly itself as a fundamental pillar of the new economy in Kosovo. What we see as the weakness of the market is implementation of the laws.

Kosovo is considered as a country with a young population. About 35% of the population is unemployed, whereas youth unemployment is 61%. The high unemployment rate reflects the low production/services level, but also the gap between the skills of the labor force and market requirements. According to the World Bank, students in Kosovo are often left unprepared to enter the labor market.

We would advise to the Government to improve inter-border flow of goods and people (customs procedures, police and customs border systems).

We see the region to remain being interesting for labor-intensive investments if no bigger political turmoil occurs.

In June 2016, KIVO Kosovo was ISO 9001 certified and since April 2017 the site was BRC certified as well. In the same month a new regenerating line for production waste was installed.

Entrepreneurship requires courage, patience, resilience and often a little bit of luck as well. KIVO and the Kosovar company VM3 were each separately investigating possibilities to invest in a production facility, when, through a match-making program, they came into contact and decided to join powers.

Thanks to the intense and warm cooperation, fast learning and hands-on mentality of the team in Kosovo under management , all original plans that were developed in 2013 and onwards have been realized successfully. The successful project implementation has led to more chances and possibilities. This is demonstrated by the fast expansion to double the capacity.

Governments of the region should learn from Kosovo example to further improve competitiveness of the region.

We see region bound to EU only.

Kosovo se smatra zemljom sa mladim stanovništvom. Oko 35% stanovništva je nezaposleno, a stopa nezaposlenosti među mladima je 61%. Visoka stopa nezaposlenosti odražava nizak nivo proizvodnje/usluga, ali i jaz između kvalifikovanosti radne snage i potreba tržišta. Prema podacima Svetske banke, učenici na Kosovu često ostaju nepripremljeni za ulazak na tržište rada.

Vladama bismo savetovali da poboljšaju međugranični protok robe i ljudi (carinske procedure, policijske i carinske granične sisteme).

Vidimo da region ostaje interesantan za radno-intenzivna ulaganja ako se ne dogode veća politička previranja.