Invest in Kosovo
Key Macroeconomic Indicators: Kosovo - An Emerging Economy with Strong Potential
The sectors of Business Process Outsourcing (BPO), Information Technology Outsourcing (ITO), Shared Service Centers (SSC), and Research and Development (R&D) represent significant growth potential for Kosovo. These industries align with global trends emphasizing digital transformation and cost-effective solutions.
Key Macroeconomic Indicators
Private investment
+30%
Private investment in Kosovo (measured mainly through foreign direct investment inflows) increased by approximately 30% year-on-year in 2025, reaching over €1 billion for the first time, driven by strong diaspora engagement and growth in real estate, services, and ICT sectors.
GDP Growth 2025
4%
Kosovo’s GDP is estimated to have grown by around 4.0% in 2025, following 3.8% growth in 2024. The economy remains driven by domestic consumption, diaspora inflows, and services, with increasing contributions from construction and ICT sectors. Growth is expected to remain stable in the medium term.
Public investment
10-15%
Public investment in Kosovo increased by an estimated 10–15% in 2025, driven by continued government spending on infrastructure, energy, and municipal development projects. Capital expenditures remain a key pillar of economic growth, supporting connectivity, public services, and private sector development.
Foreign Direct Investment (FDI)
8-9%
FDI inflows in Kosovo reached approximately 8–9% of GDP in 2025, exceeding €1 billion for the first time. Growth is driven largely by diaspora investment, particularly in real estate, construction, and services, with increasing interest in ICT and energy sectors.
Corporate Tax
10%
Flat corporate tax rate, among the most competitive in Europe.
VAT
18%
Value Added Tax (VAT): 18% standard rate, with 8% reduced rate on select goods/services.
Personal Income Tax
10%
Personal Income Tax: Progressive system: 0% on income up to €250/month 4% on income from €250–€450/month 10% on income above €450/month This structure ensures a low tax burden on lower-income earners while maintaining a competitive and business-friendly fiscal environment.
Labor Market and Workforce
81000
Kosovo has one of the youngest populations in Europe, with over 75% under 35 years old. Workforce participation rate stands at 35.4%, the lowest in the region, highlighting opportunities for labor market expansion. 81,000 students enrolled in higher education in 2023/2024, ensuring a steady pipeline of skilled professionals.
BUSINESS SERVICE SECTOR IN FIGURES
Shared Service Centers (SSC) and Business Process Outsourcing (BPO) are the foundation of modern business strategies for corporations around the world. In a globalized economy, companies now need to be able to outsource to foreign locations. With new technology, it is no longer limited to a particular location.
190 m
estimated employment in EU 27
25 m
estimated employment in the business services sector
30 m
estimated employment in the business services sector by 2030
10m
estimated employment in knowledge intensive services in 2023