Setting up a company in Kosovo as a foreign investor

Foreign investors come to Kosovo for different reasons: a finance or software team in a time zone close to Western Europe, a regional base, or an opportunity in the local market. Whatever the reason, setting up follows the same sequence, and most delays come from doing the steps in the wrong order. This guide walks through that sequence. It describes how the process generally works; requirements and procedures can change, so confirm the current details with your adviser and, where needed, a local lawyer before you rely on them.

Step 1: Choose the structure

Most foreign investors set up a limited liability company (SH.P.K.), a separate legal entity owned by the parent company or by individual shareholders. Some operate through a branch of the foreign company instead. The choice affects liability, accounting, how profits reach the parent and which documents the registration needs. Decide it first, because every later step depends on it.

Before you register, also decide who will manage the company locally, who can sign on its behalf, where its registered address will be and who will hold the bank mandate. These answers are needed for the registration and again for the bank.

Step 2: Register with ARBK and receive the NUI

Companies in Kosovo are registered with the Kosovo Business Registration Agency (ARBK). On registration the company receives a unique identification number, the NUI, which identifies it in its dealings with the tax administration, banks and public bodies. The NUI appears on invoices, contracts and tax filings, so keep it at hand from day one.

Registration requires founding documents and details of the owners, managers and registered address. When a shareholder is a foreign company, documents issued abroad, such as proof of its registration and the decision to establish the Kosovo company, usually need certification and translation. Collect them early: obtaining certified documents in the investor's home country is often the slowest part of the process. Confirm the current list of requirements with ARBK or your adviser before you start.

Step 3: Get the tax position right from day one

Once registered, the company deals with the Kosovo Tax Administration (ATK), and filings are made electronically through ATK's EDI system. Arrange access and decide who will file before the first deadline arrives.

• Corporate income tax is 10% of taxable profit. It is paid through quarterly advance payments due by 15 April, 15 July, 15 October and 15 January, with the annual return and final payment due by 31 March.
• Small businesses with annual turnover under EUR 30,000 pay a simplified quarterly tax on gross income instead: 3% for trade and 9% for services. Whether this regime is available or sensible for a company owned by a foreign group is a question to settle with your adviser.
• VAT registration is required once annual turnover exceeds EUR 30,000. The standard rate is 18% and the reduced rate 8%. Registered businesses file and pay monthly, by the 20th of the following month.

Many foreign-owned companies in Kosovo provide services to their own group. Charges between the Kosovo company and its parent should be documented in a written agreement and priced on a reasoned basis. Agree the approach and the documentation with your adviser before the first invoice is issued.

Step 4: Hire and run payroll correctly

Employees need written employment contracts, and payroll has to follow the rules from the first month.

• Wage tax at the employee's main employer is 0% on monthly taxable wages up to EUR 250, 8% from EUR 250.01 to EUR 450 and 10% above EUR 450, applied after the employee's 5% pension contribution (Law No. 08/L-142, in force since September 2024).
• A secondary employer withholds a flat 10%.
• Pension contributions are 5% from the employee and 5% from the employer, paid to the Kosovo Pension Savings Trust (KPST).
• Wage tax and pension contributions are declared and paid by the 15th of the following month, through EDI.

Budget for the employer's 5% pension contribution on top of gross salaries, and ask each employee to confirm in writing whether you are their main employer.

Step 5: Open a bank account

A business bank account with a bank operating in Kosovo is needed to pay salaries, taxes and suppliers. Banks carry out know-your-customer checks on the company, its owners and its ultimate beneficial owners, and for a foreign-owned company they will ask for documents about the parent as well. Prepare the ownership chain, identification for directors and beneficial owners, and an explanation of the expected activity and source of funds. Requirements and timelines differ between banks, so start the conversation as soon as the company is registered.

Step 6: Set up accounting and reporting

The Kosovo company keeps its own books and meets its own statutory and tax obligations. The parent company will also want monthly figures in its own format and chart of accounts. Agree early what the parent needs, by which day of the month and in which currency, so that the local close and the group reporting are designed together rather than reconciled afterwards.

A setup checklist

Pitfalls we see most often

• Waiting for foreign documents. Certified documents from the parent company's country take the longest. Request them first.
• Hiring before payroll is ready. The first salary month arrives quickly, and the first declaration is due by the 15th of the following month.
• Undocumented intra-group charges. Invoices to the parent without a written agreement are hard to defend later.
• Assuming VAT can wait. Turnover from intra-group services can pass EUR 30,000 within months.

The fastest setups are not the ones that skip steps. They are the ones where every document is requested in the first week.

How we help

Ura Advisory supports foreign investors from the first conversation to a running company: structuring and coordination of the registration with a local lawyer, tax and VAT setup, payroll, monthly accounting and reporting to the parent company in its own format. Our clients follow every filing, payment and document request in the Ura client portal, in English or Albanian.