Business environment of Kosovo and its impact on foreign direct investments

Kosovo’s unresolved status issue remains a key obstacle to its attaining the overarching objectives of political integration and socioeconomic development. Kosovo’s economic growth has been steady and generally at rates above those in neighboring countries. The average growth rate of 4 percent during 2009–12 has largely been attributable to public investments in post-conflict reconstruction, donor assistance, and remittances. However, Kosovo’s current growth model is unsustainable over the longer term. Increasing foreign investments and private sector activities will become more and more critical as engines to generate growth and, in turn, improve job and income perspectives. Foreign Direct Investment (FDI) is an important source of capital and economic growth for developing countries. It provides a package of new technologies, management techniques, finance and market access for the production of goods and services. However, attracting FDI is a major challenge for host countries as it opens the challenge of identifying the major factors that motivate and affect the decision for FDI location. In this context, this study aims at learning the Business Environment of Kosovo and its impact of foreign investment, perception of foreign companies and business associations regarding the business environment and the investment climate in Kosovo. Additionally it tries to understand what do they latter consider to be the strongest potentials that Kosovo provides, and the areas that need to be improved. Finally, the results from the questionnaire taken with existing foreign investors, interviews with business associations and analyses of the World Bank reports “Doing Business2011’’, “Doing Business2012“,“Doing Business2013“, and ” European Court of Auditors Special report no. 18’’European Union Assistance to Kosovo related to the rule of law ‘’ published on October 16, 2012 will be the main focus of this project. The results of this study aims to give a clear picture of motivations, concerns and suggestions for improving the investment and business environment in Kosovo.