1.BUSINESS REGISTRATION

Starting a new business

Once you have decided to start a new business to do international trade transactions you must decide on the form of the new business. The business form or structure is important for tax purposes and also for determining your liability in the event of a law suit or other claim. After deciding on the business form, you must then register your new business. This Part presents business forms and the steps necessary to start a new business, including registration.

Types of businesses

Below is a brief explanation of the various types of businesses in Kosovo. You may wish to consult with your legal advisors and accountants when choosing a business form for your international trade activities:

Individual business

With individual businesses, the owner has unlimited liability for all debts of the organization. The organization has an official name, or it includes the lawful surname of the owner, and it includes the acronym “I.B.”

General partnership

With general partnership all partners are jointly and individually responsible for all debts and other obligations of the organization. The collective organization (partnership) has one name which may include the name of one of the partners, by putting before or immediately after it the acronym “G.P.”

Limited partnership

In partnerships, in addition to “unlimited” partners (partners who are responsible without limitations jointly and individually for debts of the company) there may also be “limited” partners or those partners who are responsible for the obligations of the company to the limit of the value of their contributions in the charter capital. Such a partnership has a name which can include the name of one or more partners, by putting before or immediately after it the acronym “L.P.”

Limited Liability Companies (L.L.C)

Limited Liability Companies are those organizations established by one or more founders, who are responsible only to the level of their contribution and all assets. The Limited Liability Company has one name in which can be included the name of one or more partners, by putting before or immediately after it the acronym “L.L.C”.

KBRA may register a limited liability company without the need to provide evidence for payment of the capital.

Joint Stock Companies (J.S.C.)

Joint Stock Companies are those organizations whose capital is divided in shares and the shareholders are responsible only to the level of the value of their contribution. The organization can be established and have one or more shareholders. It has one name before or behind which should include the acronym “J.S.C.”. The amount of the founding capital for these organizations is at least 10.000 Euro.

Foreign Company

Can be registered as:

  • Branch of a Foreign Trade Company – means a registered entity in Kosovo for the exercise of legitimate economic activity by a Foreign Trading Company established under a law of a jurisdiction outside Kosovo. After registration, it has all the rights and obligations created under applicable law. The name should be written “BRANCH IN KOSOVO” or the abbreviation “B. K.”.
  • The foreign company may also be registered as a Foreign Trade Representation Office in Kosovo. The official name should include the full name of the Foreign Trade Company with the suffix “Office of Representation in Kosovo” or the abbreviation “O.R. K”.

Agricultural cooperatives

An Agricultural Cooperative is a business organization created by natural or legal persons all of whom should be farmers who contribute with their own private property in the shared capital. An Agricultural Cooperative is established by at least five (5) farmers that are signatories of obligations. The cooperative shall not be established without capital and it shall not exist without capital. The capital is divided into shares of equal value with a minimal value of 10 EUR. The director may not be a member of the cooperative, which is in accordance with the Law No 2003/9 on Agricultural Cooperatives and Law No.03/L-004 on Amending and Supplementing Law on Agricultural Cooperatives Nr-2003/9.

Registering your new business

New businesses in Kosovo must be registered with the Kosovo Business Registration Agency (KBRA). Business Organizations can be established and registered in Kosovo for any lawful purpose and may perform any lawful activity specified in the nomenclature of activity codes.

Codes are numbers that match the activity of business you chose to open. Forms that need to be filled out to open a business contain a section where you are required to write the code (on the left side) and the written description (on the right side) of the business. The list of Codes can be found at the website of the Kosovo Business Registration Agency at  https://arbkonline.rks-gov.net/ . The codes are comprised of four digits.

The Kosovo Business Registration Agency (KBRA) registers all new businesses, performs modifications of business data and business closures, issues registration certificates with a fiscal number, certificates of value added tax, import-export certificate, and provides information and free forms.

The following types of businesses can be registered at KBRA: Individual businesses, general partnerships, partnerships, limited liability companies, joint stock companies, foreign companies and agricultural cooperatives.

Since these types differ from each other in legal liabilities, documents required for their initial registration are also different. You should fill out the corresponding form based on the type of business you wish to establish. New business can be registered also online at https://arbkonline.rks-gov.net/

KBRA

Address: St. “Muharrem Fejza” n.n.  Lagjja e Spitalit
Pristina, Republic of Kosovo

2.OBTAINING CERTIFICATES AND OTHER LICENCES

Certificate for Value Added Tax (VAT)

Under applicable law, any economic entity that plans to import or export must be registered for VAT. Application for obtaining a VAT Certificate can be done at the offices of the Kosovo Tax Administration in Pristina (see address below).

ATK

Address: ish-Ndertesa e Germise,  Square„Skenderbeu“, Boulevard  MotherTeresa n.n. Pristina, Republic of Kosovo

If the economic entity has registered its activity in other parts of Kosovo, then it may apply to other regional TAK centers, which operate in:

Prizren
Peja
Ferizaj
Gjilan
Mitrovica, and
Gjakova

For more information visit: www.atk-ks.org

Obtaining licences

No licence applicable on those products

Registration with Kosovo Customs

After submitting a certificate of business and VAT, an economic entity should request from Kosovo customs to activate their data in the electronic system of the Kosovo Customs – ASYCUDA Vorld

Kosovo Customs

Address:
Customs HQ

Str. Rexhep Krasniqi,n.n. Pristina 10000

CUSTOMS PROCEDURES ON IMPORT

A “customs procedure” is the legal action to effect release of goods from “customs control”.  Customs control refers to the measures applied to ensure compliance with the laws and regulations of the Republic of Kosovo, pertaining to the importation, exportation or transit of goods.

Regardless of the customs procedure that a trader wishes to apply to a shipment, a customs goods declaration is required to be completed by an importer or exporter (or a duly authorized representative) and lodged with Kosovo Customs in order for a shipment to be released from customs control.

In preparing a customs goods declaration, the trader must first determine and declare which customs procedure is to be declared for further treatment of the goods.  Examples of customs procedures, which may be applied to a shipment of goods, include, among others, importation, exportation, transit, temporary importation, warehousing, trans-shipment, re-exportation, duty drawback, and inward processing.

THIRD PARTY REPRESENTATIVES

For the realization of an international commercial transaction in Kosovo, either to import, export or transit goods, trading companies will need the engagement of a third-party representative who will represent them in the procedures foreseen at border agencies such as Customs, Border Police, Food and Veterinary Agency, etc. These representatives are known as freight forwarding or customs clearance agents. In Kosovo there are currently more than 100 customs brokerage firms and approximately 500 individual customs brokers. Many customs brokers are represented by the Customs Brokers Association which is affiliated with the Kosovo Chamber of Commerce. The level of professionalism and competency of customs brokers can vary so when selecting a broker to act as your agent you should carefully check their background and reputation. The fees for the services of customs brokers are individually negotiated and are based on trade volume, number of items listed in an invoice, complexity of the transaction, and similar considerations.

Other third-party agents that are essential to arranging the details of transporting goods internationally are known as freight forwarders.  Freight forwarders are experts regarding the various transportation arrangements that must be made to move goods by truck, rail, ocean or air (or some combination of these in multi-modal shipments) from the exporter to the importer. They will advise you regarding the cost and times involved with various shipping options and then make specific shipping arrangements for you and obtain necessary insurance.  Frequently the same third-party representative firm provides both customs brokerage and freight forwarder services.  Several major international freight forwarding firms operate in Kosovo. The fees for freight forwarders are determined on a per container basis and are based on the weight and volume of the shipments, time of year, and similar considerations.

DOCUMENTS REQUIRED FOR IMPORT

Three (3) documents are normally required for import transactions:

  • – Single Administrative Document,
  • – Commercial Invoice, and
  • – Certification of Origin (Certificate for free movement of goods EUR1, for countries with tariff preferential).

Commercial Invoices

The information provided in this section applies to commercial invoices that are prepared in connection with both import and export transactions. Better information on import or export invoices will facilitate faster cargo clearances in the country of destination.

The better the information provided on commercial invoices, the faster customs officers will be able to verify the declared data, and the faster shipments will be cleared and released.

 

Detailed Guidelines for Importers, Exporters and Customs Brokers

It is the responsibility of traders or their representatives to prepare complete and accurate single administrative document (SAD) for the clearance of all shipments, whether under import, export, transit, warehousing or other customs procedures.

One of the requirements for lodging an acceptable declaration is the inclusion of one copy of a commercial invoice and certificate of origin, in addition to any required permits, licenses or certificates which pertain to the goods.

The commercial invoice must provide an accurate and complete description of the goods and provide certain basic information pertaining to those goods.  The invoice must also provide the truthful and complete price paid or payable for each type of good listed on the invoice.

The failure to provide proper commercial invoices, which adequately describe the goods, when a customs declaration is lodged, may result in the immediate rejection.  In any case, the processing and approval of a declaration without a proper invoice, may be subject to delays as customs officials try to overcome the lack of information in terms of correctly classifying the goods, determining the correct value of the goods, determining the country of origin and assessing the correct amounts of duty and tax.  For this reason, inadequate or incomplete invoice information may lead to overpayments of import duty, VAT, and if applicable excise tax.

In order for Customs to provide good service in the clearance of imported or exported goods, it is essential for each declarant to ensure that the invoice(s) submitted with the CGD precisely describe the goods covered under the transaction.  The invoice description must be sufficiently detailed for a customs officer to be able to correctly classify the goods in accordance with the nomenclature of the Harmonized System Customs Tariff.  If invoice information and commodity descriptions are not provided in sufficient detail, the processing of the customs declaration can be delayed, which of course results in extra time and cost in doing business.

Most countries in the world have adopted and are applying the six digit Harmonized Commodity Description and Coding System (the “HS”) for international trade; Kosovo uses the HS for the classification of goods under the Customs Tariff Act.  In the case of importations into Kosovo, therefore, it is highly probable that the foreign supplier (exporter) is well acquainted with the HS coding process.  Consequently, it would be very beneficial for importers to request their foreign suppliers to include, along with a precise description of the goods, the correct six-digit subheading number (under the HS) on the commercial invoice; this six-digit number is used throughout the world for the goods at issue.  This process may well take some time for importers in Kosovo to arrange in advance with foreign suppliers and shippers, but the effort required to provide this information on invoices will likely result in better service from Customs in Kosovo, correct assessments of duty and tax payments, faster release times, and more accurate trade data.

Finally, invoices must be sufficiently legible to permit customs officials to carry out their processing and verification functions.  (This is not a problem with electronically submitted invoices.)  Invoice numbers must be indelibly printed on the invoice.  Goods classified under the same HS tariff classification may be grouped together on one line item on the SAD; the invoice value for each line item is to be entered in field “22” on the customs declaration form.  Hand-written or computer-generated invoices are acceptable, provided that they include the minimum required information.

The minimum information required on a commercial invoice includes:

  1. Name of the Vendor (supplier, shipper) in the foreign country.
  2. Exporter’s Name, if different from Vendor.
  3. Name of Consignee in Kosovo.
  4. Purchaser’s Name, if different from consignee.
  5. Purchase Order Number, if applicable.
  6. Date of Direct Shipment to Kosovo.
  7. Country of Transshipment, if applicable.
  8. Country of Origin (where the goods were grown, produced or manufactured; if the shipment includes goods of different origin, the origin should be given with the narrative description for each type of good in the shipment, as indicated under 14, below).
  9. Transportation – indicate the mode of transport and place of direct shipment to Kosovo.
  10. Conditions of Sale.
  11. Terms of Payment (for example “sale”, “consignment”, “lease”, “loan” and Net 30 Days, etc.).
  12. Currency of Settlement.
  13. Number of Packages.
  14. Description of the Goods (including Kind of Packages, Marks and Numbers, Characteristics, Grade, Quality, HS six-digit number) *.
  15. Quantity and Unit of Measure.
  16. Total Weight (Net and Gross).
  17. Unit Values.
  18. Invoice Total (FOB – in Currency of Settlement).
  19. Price Statement (in cases when a Royalty or other Payment(s) or subsequent proceed(s) are paid or payable by the purchaser in Kosovo for these goods).

*It is essential that the Description required under number 14 above is provided in sufficient detail and includes the following (as applicable to the type of goods): make or brand name, model numbers, date of manufacture, capacity, size(s), material composition, description of accessories included, etc.

Single Administrative Document

EUR1 Certificate

Customs Document T1

CMR