Kosovo Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in kosovo, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Investment Climate Statement
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The U.S. Department of State’s Investment Climate Statements help U.S. companies make informed business decisions by providing up-to-date information on the investment climates of more than 170 countries and economies. They are prepared by our embassies and consulates around the world and analyze each economy’s openness to foreign investment. Topics include:

  • Openness to, and Restrictions upon, Foreign Investment,

  • Investment and Taxation Treaties,

  • Legal Regime,

  • Industrial Policies,

  • Protection of Property Rights,

  • Financial Sector,

  • State-owned Enterprises,

  • Corruption,

  • Labor Policies and Practices,

  • Political and Security Environment, and

  • U.S. International Development Finance Corporation (DFC) and Other Investment Insurance or Development Finance Programs

Each statement provides a starting point for U.S. firms and offers a point of contact at the relevant U.S. embassy or consulate abroad.

These reports are also a resource for foreign governments to create business environments that ensure fair treatment for the United States and our companies and investors. 

To access the full Investment Climate Statement, visit the U.S. Department of State Investment Climate Statements website

EXECUTIVE SUMMARY - Kosovo

The Republic of Kosovo, with an estimated population of 1.6 million, has an emerging market economy. Kosovo’s economy has shown considerable resilience in the wake of global and regional shocks, Russia’s invasion of Ukraine, and rapid increases in commodity prices. Foreign Direct Investment (FDI) remains limited, while diaspora remittances continue to represent a significant portion of Kosovo’s GDP.

Kosovo has taken measures to improve its investment climate with the government acting to simplify business registration and reduce bureaucratic hurdles. The ban on Serbian finished goods was lifted in October 2024 and Kosovo can now fully represent itself in the Central European Free Trade Agreement, which promotes regional trade. In April 2024, Kosovo received its first sovereign credit rating of BB-, which reflects the country’s low and stable public debt/GDP, very low interest/revenue, a record of prudent fiscal policy, and sound banking sector. This positive development could improve access to global capital markets, attract foreign investment, and lower borrowing costs. However, the government’s lack of constructive dialogue with businesses hampers reforms. Economic growth and productivity continue to be constrained by structural issues, including:

  • a large informal economy,
  • reliance on remittances for consumption, and
  • high unemployment rates among women and youth.
     

The women’s labor force participation rate is also the fifth lowest in the world. A small but growing domestic market, limited regional integration, and continued tensions with Serbia continue to be the most significant barriers to attracting FDI. Citizens continue to have difficulties accessing funding from the Serbian government due to a lack of agreement on how to lawfully transfer funds from Serbia to Kosovo.

CBK data shows net inflows of FDI to Kosovo totaled €850 million ($907 million) in 2024, up from €816 million the previous year. Real estate and leasing activities are the largest beneficiaries of FDI, followed by financial services and energy. The information and communications technology, infrastructure, and energy sectors continue to grow and are expected to attract additional FDI in future years.

Kosovo’s laws and regulations are consistent with international benchmarks for supporting and protecting investment, though enforcement remains weak. Kosovo has a flat corporate income tax of 10 percent. The Commercial Court established in 2022, has shown progress in reducing case backlogs and improving predictability in commercial disputes, though it will take time to build full investor confidence. The court is expected to improve the business-enabling environment by reducing opportunities for corruption and by building investor and private sector trust in the judiciary. The legal, regulatory, and accounting systems in Kosovo are modeled on EU standards and international best practices. Large companies are required to comply with international accounting standards. Despite regulatory requirements for public consultation and the availability of an online platform for public comments, business associations report that regulations are occasionally adopted with little substantive discussion or stakeholder input.

Investors are attracted by Kosovo’s young, multilingual population, low labor costs, proximity and access to the EU market, and natural resources. Global supply disruptions brought on by the COVID-19 pandemic have sparked greater interest from some businesses to use Kosovo as a base for friend-shoring production destined for the EU market. Kosovo does provide preferential access for products to enter the EU market through a Stabilization and Association Agreement (SAA). View the Kosovo Investment Climate Statement: https://www.state.gov/reports/2025-investment-climate-statements/kosovo/. 

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