Numerous defects in the Law for Economic Zones

In 2009, the Kosovo government has approved the Law on Economic Zones, in order to create certain areas, where businesses would have better conditions compared to other parts of Kosovo, to develop their activities. However, an analysis made by GAP Institute, noticed many defects in the drafting of this law.

Jeton Mehmeti, from GAP Institute, said that the law on economic zones was not efficient, because many economic areas, as well as business parks, have failed and are not functioning. He claimed that from 10 initiatives that the Kosovo government has taken to establish economic zones in Kosovo, it has reached to legalize only 20 percent of them. Moreover, according to him, these two parks have failed, because the Law on Economic Zones has not been influential in stimulating foreign investors.

“Law does not contain incentives for foreign investors, as in the case of Macedonia. We have looked at their law and we have seen that in addition to providing land for a very attractive price, there is also mentioned the tax exemption for 3 to 10 years for foreign businesses. Then there is the exemption of tax on incomes of employees, trainings are offered to businesses in order to attract more foreign investors,” Mehmeti said.

In the research of GAP, it is stated that there was no coordination between law and economic zones created and that it does not foresee separation of areas by activities, as is the case with developed countries.