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
3.5%
Private investment grew by 3.5% year-over-year in the first three quarters of 2024.
GDP Growth 2024
3.5 %
Kosovo’s GDP grew by 3.8% in 2024, with similar growth expected in 2025. The economy remains service-driven, with a strong emphasis on domestic demand, public investment, and business services.
Public investment
32.5%
Public investment surged by 32.5%, reflecting strong government spending on infrastructure and development projects.
Foreign Direct Investment (FDI)
6.4%
FDI inflows reached 6.4% of GDP, driven by diaspora engagement and investments in business services. Kosovo has Double Taxation Agreements (DTAs) with 10 countries, facilitating international investments.
Corporate Tax
10%
Flat 10% rate, one of the most competitive in Europe.
VAT
18%
Value Added Tax (VAT): 18% standard rate, with 8% reduced rate on select goods/services.
Corporate Tax
10%
Personal Income Tax: Progressive system, ranging from 0% (up to €250/month) to 10% (above €450/month).
Labor Market and Workforce
81,000
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.
200 m
estimated employment in EU 27
40 m
estimated employment in the business services sector
50 m
estimated employment in the business services sector by 2030
10m
estimated employment in knowledge intensive services in 2023