When you want to invest in a new country you must consider political risks as well!
Political risk matters as it can affect directly businesses operation and finances. Unfortunately, in Kosovo, there are many factors of political reasons which have its impact on hesitating multinational companies to invest here.
The main challenges of political in Kosovo for foreign business are:
Instability of government
Due to the last changes in government that our country is facing now is one of the reason and it can have its own impact for not investing here as political changes and a government which is unstable have affected to the risks of business which it can be withdrawn as well. As the instability of government is one of the discouraging for people who think to invest in Kosovo from foreign countries.
We had elections in October 2019 but it did not work until now so may we will have again new elections to change government as they did not work together.
But their instability it is costing in other ways to our country.
Corruption
A high rate of corruption poses a risk for planning to invest and operate in Kosovo. Unfortunately, there are too many public sectors that are known for being affected by corruption as one of the main challenges to do business in Kosovo because of bribes that happened with a public institution.
Whether, one of the biggest reasons it is corruption that does not let big companies invest in Kosovo.
As there was an example when someone from a foreign country wanted to invest here but in order to start they needed to get licenses and permits and they asked for a percentage in order to get permits and licenses.
I hope day by day corruption rate will get lower, in addition, to motivate multinational investors to invest in Kosovo and their companies to be present here as soon as possible.
As it is our benefit to help Kosovo’s economic growth and for employment rate.
Black Market
When it comes, in part of the Black Market in Kosovo which includes people who work without contracts and works illegally for long hours than it is expected with the law which it is the violence right of the employer from that company. We have also businesses who work but do not pay taxes so when one multinational company will work based on regulations and paying all taxes, employees regularly while there is a company who does not do the same and it will be easier for that one but it will have bad impact on that company who is doing their business in Kosovo and based on all regulations while others are working in the black market.
Labour Laws
When multinational companies will consider Kosovo’s labor laws which include the main sources of employment law.
It is not with very high standards when it comes to the salaries of employees. So we can not consider it as a challenge to not come to invest in Kosovo.
As for employees and the average wages, it is not very high.
When we compare Kosovo with other countries in Europe salaries are not very high as the standards living in Kosovo are low as well.
Taxes
When it comes to the Taxes part which includes tax laws, administrative, regulations, etc.
Taxes in Kosovo are not very high as well which depends on the incomes of the company.
Taxes part can be considered as a good option to motivate the multinational companies to invest in Kosovo.
The income taxation for companies is like 10 percent as in contrast with other countries when they perform it is not very high.
However, there are good reasons as well. Like why multinational companies should invest in Kosovo will be in my next post.
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