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Investimet n ë Kosovo: Dredhit dhe kurthat! Investment in KOSOVO Tips and Trikcs!

Investimet n ë Kosovo: Dredhit dhe kurthat! Investment in KOSOVO Tips and Trikcs! Dr. Colombani Jacques – Louis, Jurist në Francë Avocat au Barreau de Dunkerque ++ 33328666264 ++33328666363. Foreing investment in Kosovo: tips and tricks!. INTRODUCTION

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Investimet n ë Kosovo: Dredhit dhe kurthat! Investment in KOSOVO Tips and Trikcs!

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  1. Investimet n ë Kosovo: Dredhit dhe kurthat! Investment in KOSOVO Tips and Trikcs! Dr. Colombani Jacques – Louis, Jurist në Francë Avocat au Barreau de Dunkerque ++ 33328666264 ++33328666363

  2. Foreing investment in Kosovo: tips and tricks! INTRODUCTION 1°) Local policies in favour of the investment 2°) A practical way in order to set up a business in Kosovo 3°) Questions that remain 4°) Presentation of the future SE: a wager in order to connect Kosovo with the rest of the world

  3. 1°) Local policies in favour of the investors • Key figures (French investors that are involved in the rebirth of Kosovo). • A) Favourable commercial provisions: • i.e: Relevant UNMIK regulations • Reg. N° 68 on contracts for the sale of goods adopted 29/12/2000). • Reg. N°3 on foreign Investment adopted 12/1/2001 • Reg. N°5 on pledges adopted 7/12/2001 • Reg. N°6 on Business Organisations adopted 8/12/2001 • Regulation on mortgage • Regulation on bankruptcy

  4. 1°) Local policies in favour of the investors • B) Modern Banking services: • Banking and Payment Authority of Kosovo provides a network of modern banks with licences: • PROCREDIT: part of commerce bank family it has the gain of branches through Kosovo. • RAFFEISEN (Present in all central Europe) • New bank of Kosovo • Private Business Bank (BPB) • Banka ekonomike • Kasa Banka • Credit Bank/ Banka Kreditore

  5. 1°) Local policies in favour of the investors • B) Modern Banking services: The European Agency for Reconstruction has actively supported the reestablishment of a commercial banking sector in KOSOVO. (Support to KTA, Access for minorities to the EC founded business development programmes, establishment of EICC technical assistance, Credit funds to SOE to restart production, EU Integrated SME Development Project, technical assistance to UNMIC DTI with policy and legal advice to the private sector, development and establishment of 5 Regional Enterprise Agencies (REA’s) and one co ordination office (KREA).

  6. 1°) Local policies in favour of the investors • C) Financial support: The European Agency for Reconstruction and the World Bank have given a grant to UNMIK for operating an SME Line of Credit delivered the Interim Credit Unit: the process is pending EAR in the last 2 years they have been financing a technical assistance to 2 commercial banks in connection with credit lines for SME’s and house improvement. These credit lines are administrated by KFW. The South East Europe Enterprise Development (SEED) provides support services to selected SME’s

  7. 1°) Local policies in favour of the investors • C) Financial support: • International Labour Organization operates a « Start to improve your business » training program in Kosovo. The goal is to develop small business training programmes and a network of small business trainers from different organisations throughout Kosovo.

  8. 1°) Local policies in favour of the investors • C) Financial support: • NGOs i.e DFID, IOM… • There are up to 300 international and local NGOs operating in Kosovo. Twelve local NGOs provide micro credit i.e. KEP and FINCA. • The global loan portfolio of micro credit providers amounts to 32.2 millions € in sept 2003, against 188.2 millions € for commercial banks

  9. 1°) Local policies in favour of the investors • D) Modern business networks EURO INFO CENTRE: The EICC KOSOVO provides the investors whith • A network of 300 Euro Info Centre that are established by the European Commission Throughout Europe. • A local source of relevant information and contacts that could be helpful as well for the investors as for the local attorneys • A huge source of business cooperation proposals HTTP://kosovo-eicc.org

  10. 1°) Local policies in favour of the investors • D) Modern business networks • KBS « Investing in the Future » USAID is implementing a four year Kosovo Employment Generation Programme which implies a boost in the small and medium business field in Kosovo. • Offers a range of business support services to private sector companies that wish to improve the performance of their businesses • Central European and Eurasian law initiative • WWW.usaidkbs.com

  11. 1°) Local policies in favour of the investors • D) Modern business networks • DEG/ GTZ • Implemented several credit programmes in order to set up and support small and larger enterprises.

  12. 1°) Local policies in favour of the investors E) Favourable tax terms: See Kosovo’s Trade and Tax Regime - UNMIK Regulation N° 2000/55 of <6 October 2000 (amending UNMIK Regulation N° 1999/3), UNMIK Administrative Direction N° 1999/1, and UNMIK Administrative Direction N° 2001/7 are the main legal instruments that are governing tariff and non tariff measures in Kosovo.

  13. 1°) Local policies in favour of the investors E) Favourable tax terms: Import Custom Duties: 10 % flat rate applies on all imports into Kosovo; Exceptions: (Montenegro/Serbia are considered as internal market) • Pharmaceutical products • Medical apparatus… but licences to be obtained…

  14. 1°) Local policies in favour of the investors E) Favourable tax terms: Export Customs Duties: None. Quantitative Restrictions-Import/Export Quotas: None. Quantitative Restrictions-Tariff Quotas: None.

  15. 1°) Local policies in favour of the investors E) Favourable tax terms: Presumptive & Profit Tax Small Taxpayers would pay a presumptive tax depending upon the type of economic activity and its location.   In April 2002, Regulation 2002/3 (February 2000) established a Profit tax at the rate of 20%..The profit tax replaces the presumptive for enterprises with an annual turnover exceeding Euros 100,000. In 2002 there were over 50,000 presumptive taxpayers and about 3000 registered profit taxpayers.

  16. 1°) Local policies in favour of the investors The value added tax (VAT) is chargeable at the rate of fifteen percent (15%) on the taxable value of imports, intra FRY inflows and other taxable supplies such as utilities. The VAT applies to domestic taxpayers and those firms that have an annual turnover of over Euro 50,000. There are over 2000 VAT taxpayers in Kosovo. The majority of it (over 80% in 2002) is collected at the border, though domestic collection is increasing.

  17. 1°) Local policies in favour of the investors Excise duties Excise duties were initially introduced under UNMIK Regulation No. 1999/3. Regulation No. 2002/2 of 22 January 2000 outlines the framework for applying excise taxes and the list of goods subject to excise taxes. The list of goods was last amended through UNMIK Regulation No. 2000/2 dates 06 October 2000.

  18. 1°) Local policies in favour of the investors Personal Income Tax  via Regulation 2003/3. The revised rates are as follows: - 5% for income over 80 euros and up to 250 euros - 10% for income over 250 euros and up to 450 euros - 20% for income over 450 euros

  19. 1°) Local policies in favour of the investors F) Custom clearance that might prevent « funny business » and preserve the IP right of the investors, especially regarding the temporary importation policies.

  20. 1°) Local policies in favour of the investors F) A few principle that are governing the regulations: • Protection against unreasonable expropriations or breach of contracts • Free movement of incomes • Protection against retroactive application of laws especially in the tax and properties matters

  21. 1°) Local policies in favour of the investors G) The ongoing work for the parliament: The Business Organisation Regulation will be amended Shortly The pledge regulation will help KOSOVO to build a secure system of transactions The contract regulation covers only the scope of the Vienna convention (on sales) and could be amended shortly in order to cover all kind of investments contracts A law on intellectual property is also expected together with the putting in place of a local PTO

  22. 1°) Local policies in favour of the investors • Foreign investment will be governed by the principle of national treatment: • The more the commercial provisions of Kosovo law will be found safe and secure, the more attractive the place will be.

  23. 2° A PRACTICAL WAY IN ORDER TO SET UP A BUSINESS IN KOSOVO A Judicial system that could that could lead to a registration of the legal entities before a court. E.i: difficult to launch a business in the agricultural sector because of the lack of relevant decrees authorising the registration to municipal courts. Courts of Kosovo Bar

  24. Privatisations: Kosovo a point on the map! Stock Holders Trade Unions Former Social Owners • Tendencies: globalisation of the business schemes: the gain of the harmonized rules e.i: on the EC Trésorier Corporate/IP Administration/HR Abroad USA Niche Europe 1 competitors JV in KOSOVO Eastern Singapore Japan Africa South America grey

  25. 2° A PRACTICAL WAY IN ORDER TO SET UP A BUSINESS IN KOSOVO B - Steps in order to set up a business: Simple to launch, difficult to enforce • 1) Choice of the brand • 2) Financial/judicial assessments: (Business plan – accountant – lawyer!) • 3) Choice of the business organisation: General partnership, limited partnership, joint stock companies, limited liability companies, agrokombinat… registration of the trade name… Documents required: (Passport, registration of the mother CIEs, payment of VAT…)

  26. 2° A PRACTICAL VIEW IN ORDER TO SET UP A BUSINESS IN KOSOVO C – Schemes of investment: lower possibilities of risk at the local level in order to provide the investors with a safer judicial system • 1) Rebuilding: Classical transactions • 2) Local development: micro credits • 3) Joint venture with a local investor

  27. 3°) Questions that remain open A – Hot spot on property issues: • Most of the companies that came to Kosovo landed with a strong desire to help the region to start again. • The current issues on property matters could be a major brake in the investment process

  28. 3°) Questions that remain open B - Short judicial analysis: • Material transferred to Serbia • Transitional case law granting the property difficult to enforce JUDICIAL AND ADMINISTRATIVE DESISIONS Out of the workshop on Rural development/minorities and returnees organised jointly with the ministry of agriculture and the EAR: the need of local technicians in order to provide the investors and private persons to set up a dynamic market in Kosovo

  29. 3°) Questions that remain open C – Legal framework of the privatisations • The Regulation N° 2002/12 on the establishment of the KTA • The Regulation N° 2002/13 on the establishment of a special chamber of the supreme court of kosovo on KTA related matters • The regulation N° 2003/13 on the transformation of the right of use to socially owned immovable property

  30. 4°) Presentation of the future SE: a wager in order to connect Kosovo with the rest of the world A Scheme of business including the future SE: A spin off strategy can be imagined in order to create a bridge between Kosovo and the rest of the world. The new European Company Statute that could enter into force in October 2004 in the Member States of the European Union could permit: mergers, European holdings, transfer of seats, spin – off strategies. Such a structure which allows the German conception of involvement of the workers and a liberal conception of company law in a single body of rules represents a huge opportunity for former SOE’s.

  31. bv CO SAS 37.000 euros Registered office in Paris 200 employees AR GmbH 35.000 euros Registered office in Vienna 150 employees UNPOL SE 120.000 euros Spinn – off KTA Registered office in Cracovia 150 employees SNG 4 representatives of CO SAS 3 representatives of AR GmbH 3 representatives of UNPOL SE ARCO SE 200.000 euros Registered office in Paris 200 employees Representative body1 president 2 representatives of AR GmbH 1 general manager 2 representatives of UNPOL SE 1 representative of CO SAS (the general manager employee of CO SAS) Board of Directors 3 shareholders directors (among them the general manager employee of CO SAS)

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