Kosovo is favorable country for investment

With the youngest population in Europe, Kosovo is a vibrant country emerging in the global market. Its workforce is both skilled and multilingual, with English being almost an official language. Additionally, Kosovo boasts the highest Internet user penetration in Europe at 96.4 percent, making it the most business-competitive nation in the Western Balkans.

Earlier this year, the Federation of Saudi Chambers of Commerce flew to Kosovo, marking the first visit by a large Saudi economic delegation to the country. This significant event coincided with the 15th anniversary of the establishment of diplomatic relations between Kosovo and Saudi Arabia.

Saudi Arabia recognized the independence of Kosovo on April 20, 2009, and formalized diplomatic ties on Aug. 7, 2009. Over the years, these relations have steadily grown, underscored by the Kingdom’s unwavering support.

Saudi Arabia has consistently stood on the right side of history, exemplified by pivotal moments such as its support for Kosovo’s independence at the International Court of Justice and its backing of Kosovo’s aspirations for membership in various international organizations.

The friendly and well-established political relations provide the necessary official framework for fostering economic ties. On this 15th anniversary of diplomatic relations, I would like to offer readers a clear perspective on how my country is progressing during these dynamic times.

Kosovo ranks first in the western Balkans for real economic growth for 2023–2025 and for the rule of law. Additionally, it ranks second in Europe and third globally for improvements in political rights and civil liberties, according to the World Bank, the World Justice Project, and Freedom House.

Kosovo, located in the heart of the Balkans, has access to southeast Europe, central Europe, the Adriatic and the Black Sea. It is a member of the International Monetary Fund, the World Bank, the European Bank for Reconstruction and Development, and the Council of Europe Bank, and it is in the process of becoming an EU member. The euro is its only official currency.

Kosovo is the most business-competitive country in the western Balkans, and business development is straightforward. The tax burden, including total taxes and contributions on profits, is 15 percent. The corporate tax rate is 10 percent, the time required to start a business is 4.5 days, the average GDP growth over the past 8 years is 4.1 percent, and total investments as a percentage of GDP are 36 percent.

Kosovo is a picturesque location, rich in mountains, and offers other investment opportunities such as the skiing center in Brezovica Resort, Rugova, as well as rural and cultural tourism.

Kosovo provides favorable conditions for investment in various sectors due to the lowest labor costs in Europe and stable government policies that support the business environment.

A new wave of information technology experts is making the country known for their professional success. Some IT applications used in Saudi Arabia were designed in Kosovo, which serves as an excellent example of our IT sector’s success in the competitive international market, exporting 70 percent of its services worldwide.

Key sectors include agriculture and food packaging, mining, ICT and BPO, and energy. There is a strong tradition in agribusiness and food packaging, with 588,000 hectares of arable land. This sector contributes 13 percent to GDP and 18 percent to exports. Mining is synonymous with my country, and with a strong legacy and potential for growth, the mining sector remains a top priority for Kosovo’s investor-friendly government.

Kosovo sits on the world’s largest lignite reserves, with 14.7 billion tonnes, placing it among the global top 10. Additionally, the country has reserves of other minerals, including lead, aluminum, zinc, gold, copper, bauxite, magnesium, asbestos, chromium, limestone, marble and quartz. These metal and industrial resources present unparalleled investment opportunities. Lead and zinc are Kosovo’s primary metal resources — covering nearly a quarter of the country. The Trepca Metallogenic Belt is estimated to hold 60 million tonnes of lead and zinc reserves. Co-owned by the government and its workers, Trepca is currently modernizing its operations and plans to further develop both existing and new sites throughout the country.

The investment sectors in Kosovo are diverse. The wood processing sector has found key export destinations in Germany, Austria, Switzerland, and other countries in the western Balkans. In textile and leather processing, there are opportunities for business process outsourcing, supported by an experienced workforce, competitive advantages, a friendly environment and a readiness for investment.

Construction is a main pillar of Kosovo’s economy, with about 3,800 enterprises. Every year, about 20 percent of new businesses are recorded.

Kosovo is a picturesque location, rich in mountains, and offers other investment opportunities such as the skiing center in Brezovica Resort, Rugova, as well as rural and cultural tourism.

In the past decade, Kosovo has experienced solid economic growth. Real GDP growth has picked up since 2014 and is expected to remain close to 4 percent until 2024. The economy saw a strong recovery with a GDP growth of 10.7 percent in 2021, demonstrating its resilience. The main contributors to GDP are the trade, manufacturing and construction sectors. Over the past eight years, GDP growth has been primarily driven by domestic demand, including both private consumption and investments. Kosovo has registered the highest GDP growth in the past eight years and has outperformed its neighboring countries.

During this period, Kosovo has had the highest proportion of investments as a share of GDP in the region, enabling it to boost its economic growth and productivity. Investments are increasing, with the stock of foreign direct investment from 2007 to 2020 reaching €4.2 billion ($4.4 billion), led by Germany, Switzerland and the UK.

Kosovo’s economy is transitioning toward an investment- and export-driven model. Foreign direct investments have been consistently rising (as a percentage of GDP) since 2019 and saw a massive surge in 2021 compared to the previous year. In 2021, exports increased by 77 percent over the previous year, with industrial supplies being the largest export sector.

Kosovo has registered the highest average GDP growth and the highest proportion of investments as a share of GDP over the past eight years. It also has the lowest debt-to-GDP ratio in the region. The IMF predicts that the share of external debt in total public debt is expected to remain low, about 9 percent, until 2028. Public debt is also the lowest in the region at 19.9 percent.

With its young population, the youngest in Europe with an average age of 30, Kosovo is a vibrant country driven by its highly competitive workforce, which is emerging in the global market. The workforce is skilled and multilingual, with English nearly an official language. Kosovo also boasts the highest Internet user penetration in Europe, making it a favorable country for investment.

• Lulzim Mjeku is the ambassador of Kosovo to Saudi Arabia.