Category: Kosovo

Taking a deep dive into the most interesting recent developments in Kosovo, Vokshi & Lata Partner Florin Lata discusses a projected 4% GDP growth for the year, significant legal reforms across several sectors, as well as key business and economic drivers for the small Balkan market.

The World Bank has projected a 4% GDP growth for Kosovo this year, a most positive indicator as Lata points out: “We see a steady improvement in economic terms, with decreasing inflation,” he says. “While investments in the energy sector and infrastructure are not massive, they mark a notable increase compared to last year. The economy of Kosovo has been consistently growing, which is encouraging; although the percentages can vary, the overall trend remains positive,” he shares.

It’s not all smooth sailing, however, as immigration has been a significant issue in Kosovo, with many citizens moving to Germany for work, Lata says. “Many Kosovans are moving to Germany with work visas, a trend common across the region, including Albania and Serbia. This migration is causing a labor shortage, and we need to find solutions to continue local production and sustain our economy,” he stresses.

And progress is being made in other important legislative areas, with Lata mentioning a few interesting developments. “One of the significant developments is the expected approval of the Administrative Court by the assembly next month. Until now, we only had a department within the Pristina court handling administrative matters. This new court will be a crucial development for lawyers and citizens, as administrative issues have been neglected in the past, making it difficult to reach timely decisions,” he explains. Additionally, there’s a new law concerning court fees. “Previously, parties often went to court without lawyers because it was too expensive. Now, with the possibility of reimbursement for lawyer fees, it will make the process more accessible,” he adds.

Additionally, Lata reports there are “important changes in tax procedures, particularly regarding payments over EUR 300. These must now be made via banking transfers instead of cash.” While this might be challenging initially, he feels it is a move towards greater transparency and “will benefit the economy in the long run.”

Moving on, Lata mentions interesting developments in the renewable energy and IT sectors. “Solar energy, in particular, has great potential in Kosovo,” he says. “Although the licensing process has been complicated, Kosovo is well-positioned to develop solar energy. We’re currently working on two solar projects that we hope to launch next year in different areas of Kosovo,” he adds. At the same time, he notes the “IT sector has a very high potential, with many startups and opportunities for employment. Both international and local companies are making significant strides here.”

Finally, Lata mentions a somewhat rarely talked about sector these days – fashion – as being a most promising one for Kosovo. “Fashion is particularly important from a copyright law perspective. Kosovo has over 50 well-known designers, and e-commerce in this sector is booming. Many designers are now working with local companies, making fashion one of the top five industries with the most potential in Kosovo,” he explains.

Looking ahead, Lata concludes by saying that “Kosovo is on a positive trajectory with steady economic growth, legal reforms, and developments in various sectors. The future looks promising if we continue on this path.”

Cytowski & Partners has advised Kode Labs on its USD 30 million series B financing round with Maverix Private Equity. Canada’s Osler Hoskin & Harcourt advised Maverix.

Kode Labs is a Detroit and Kosovo-based technology company that describes itself as “working to become the Salesforce of commercial real estate.” It has developed a range of applications to increase the energy efficiency of buildings, allowing commercial building managers to monitor energy use, carbon emissions, and water consumption, among others. Kode raised its USD 8 million series A in 2022 and reportedly has more than 40 employees in Detroit and around 150 in Kosovo.

The Cytowski & Partners team included Partner Tytus Cytowski and Associates Kunal Kolhe, Fabiana Morales Centurion, and Heidi Fan.

Delving into the impacts of the EU’s recent visa liberalization for Kosovo citizens and the country’s ambitious strides towards legal and sustainable energy reforms, Deloitte Legal Senior Legal Manager Ardian Rexha shares his insights on the easing of travel restrictions, pioneering steps in renewable energy, and the overhaul of the tax administration system.

“The EU’s decision to allow Kosovo citizens visa-free travel, starting from January 1, 2024, marks a historic milestone,” Rexha begins. “It not only facilitates easier travel for our people but also strengthens cultural and economic ties between Kosovo and EU countries.” According to him, “it’s particularly beneficial for students and the public, opening new opportunities for education, work, and cultural exchange.”

Focusing on legislative updates of note, Rexha says “Kosovo is taking significant steps towards sustainable energy. Historically reliant on coal for over 90% of our energy, the government initiated the first auction for a solar plant capable of producing 100 megawatts last year, in 2023.” As he sees it, this move, along with the recent announcement that an auction for wind power will be launched this year, “underscores our commitment to reducing dependency on coal and achieving our renewable energy targets by 2031.”

Rexha then highlights the new law on Tax Administration and Procedure introduced in late January, which, among others, “established a Board of Appeal, a quasi-judicial body to review final decisions made by tax and customs administrations. This development stems from the business community’s need for a more efficient process in resolving fiscal disputes, addressing the inefficiencies and lengthy timelines experienced in the relevant courts,” he explains.

Moreover, Rexha reports there are public concerns about the Central Bank’s regulation on cash operations, which “aims to reduce counterfeit cash, safeguard financial stability, as well as increase the transparency of cash flows in Kosovo. Despite concerns over pension contributions received in cash in RSD from Serbia, such payments are still permissible but will be formalized and received in euro-based accounts. Nevertheless, to ease the transition, a three-month period starting from February 1 has been set to promote awareness and formalize transactions in foreign currencies,” he elaborates.

Finally, Rexha notes there are several other legal initiatives “currently under review, including a law on the confiscation of unjustified assets, a law on sovereign funds, and a law on sustainable investments. Additionally, there’s an ambitious legislative plan from the government for this year, and we expect to have a new civil code and civil procedural code,” he says, with such developments a “part of Kosovo’s broader efforts to modernize its legal framework and align with European standards.”

In conclusion, Rexha underscores his belief that “these initiatives represent significant steps forward for Kosovo, not just in terms of legal reforms but also in fostering economic growth, environmental sustainability, and a closer integration with the European Union.”

Gecic Law, working with the Brussels office of Clifford Chance, has successfully represented the interests of the Arena Channels group regarding a broadcasting dispute in Kosovo. Deloitte Legal reportedly advised Arena Channels as well.

According to Gecic Law, “the Independent Media Commission in Pristina annulled its decision from October 3, 2023, which had suspended the broadcasting of Arena Channels in its territory claiming the alleged broadcasting of illegal content. The channels have now been reinstated and are free to broadcast cable networks in Kosovo.”

The Gecic Law team included Partners Bogdan Gecic and Ognjen Colic, Counsel Miodrag Jevtic, and Senior Associate Vuk Lekovic.

The recent establishment and practice of its Commercial Court – along with other legal developments and the government’s push on energy – signify a shift towards impartiality, transparency, and investor-friendly policies in Kosovo, according to Sejdiu & Qerkini Managing Partner Korab Sejdiu.

“One of the most noteworthy recent developments in Kosovo is the establishment of the Commercial Court, comprising both first and second instances of decision making,” Sejdiu begins. “This is particularly important because, in addition to handling commercial, competition, and bankruptcy matters, the court also addresses administrative challenges brought by businesses against public bodies,” he explains.

The Commercial Court seems to have changed the prior practice of the courts – favoring the public institutions in their decision-making – and is addressing administrative matters more justly, Sejdiu continues. According to him, this also means “ensuring impartiality and preventing undue influence.” Moreover, this change significantly “benefits businesses and investors by providing a more impartial and just legal environment. It ensures that administrative decisions are scrutinized more objectively, fostering a fair business environment and promoting investor confidence in Kosovo.”

Additionally, Sejdiu reports that “the Business Registration Agency in Kosovo recently made a decision that requires all documents related to changing shareholders in companies and appointing managing directors to be notarized in Kosovo, even for online transactions.” This decision has caused some concerns, Sejdiu explains, especially for “foreign investors who now face an additional administrative hurdle.” According to him, the legality of this requirement is questionable. “The agency is reportedly considering allowing these documents to be notarized in other countries, which would ease the process for foreign investors,” he says.

Moreover, in addition to these major developments, Sejdiu reports that Kosovo has seen the passage of various laws, including the law on cybersecurity, the law on judicial experts, a new anti-doping law, and a plethora of international agreements to finance the energy sector and the country’s infrastructure. “The legal landscape is constantly evolving,” he stresses.

And indeed, the government is focusing, in addition to daily matters, on the energy situation in the country. “The government has made the energy sector a top priority, especially given the challenges posed in the last few years by the rising energy prices and frequent blackouts,” Sejdiu explains. “In response to these issues, the government has substantially invested in renewable energy sources and provided subsidies for both the energy sector and homeowners. These initiatives aim to enhance energy production, reduce dependence on conventional sources, and make energy more affordable for citizens,” he highlights in conclusion.

Kosovo has recently adopted a new law to regulate the pricing of medicinal products (Law on Pricing of Medicinal Products). This marks the first time that Kosovo has taken steps to regulate the pricing of medicinal products, and it is a significant milestone in an upcoming major reform within the healthcare and pharmaceutical sector. The reform also includes new laws on medicinal products and medical devices, health insurance, and related areas.

The Law on Pricing of Medicinal Products is designed with a simple and straightforward regulatory regime, with the expectation that it will help reduce the prices of medicinal products. Furthermore, it aims to promote transparency, foster healthy competition, increase the availability of medicines, and enhance the role of pharmacists within pharmacies.

According to the provisions of the Law on Medicinal Products, all Marketing Authorization Holders in Kosovo (MA Holders) are required to submit and recommend the prices of their medicinal products to the newly established Commission for Medicinal Products Pricing (Commission).

The Commission will subsequently compare the recommended prices submitted by the MA Holders with a basket of countries used for reference prices. This basket includes Albania, North Macedonia, Montenegro, Croatia, and the country of origin of the product. Based on this comparison, the Commission will calculate the average wholesale price using the two lowest prices from the reference countries.

The expectation is that, due to the simple and straightforward regulatory and compliance requirements, the recommended prices by MA Holders will be lower in Kosovo compared to those in the basket of the reference countries. In such cases, the lower price recommended by the MA Holder will prevail.

Additionally, an interesting rule within the law stipulates that the price of a generic product must not exceed 70% of the value of the original product that holds Marketing Authorization in the Republic of Kosovo. Furthermore, the price declaration provided by the MA Holders will be valid for a maximum of one (1) calendar year.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Visar Ramaj, Partner, RPHS Law

RPHS Law has advised Shkolla Finlandeze on the full sale of Kosovo-based plagiarism and AI content detection company Crossplag to Norway’s Inspera. Pallaska & Associates advised Inspera.

Crossplag is a plagiarism detection and AI content detection company specializing in advanced technology solutions for academic integrity. According to RPHS Law, “Crossplag is the first and only plagiarism detection tool to work across a large number of languages, including translations. This means student submissions can be checked for cross-language matching and originality.”

Norway-based Inspera operates in digital examination solutions, supporting educational institutions, professional organizations, and awarding bodies worldwide. According to RPHS Law, by incorporating Crossplag’s expertise and technology, Inspera aims to further enhance its solutions, each of which empowers educators and institutions to deliver authentic assessments with ease.

The RPHS Law team included Partners Visar Ramaj and Kushtrim Palushi and Associate Blerina Ramaj.

The Pallaska & Associates team included Managing Partner Dastid Pallaska and Counsel Afrore Shaipi.

RPHS Law has advised Puratos NV on its partnership with Korabi Corporation.

Puratos NV is a manufacturer of ingredients for bakery, patisseries, and chocolate, headquartered in Belgium. According to RPHS Law, this partnership aims to increase Puratos’s presence in the region.  

Headquartered in Pristina, Korabi Corporation is a distributor of Puratos products.

The RPHS Law team included Managing Partner Fisnik Salihu, Partner Mentor Hajdaraj, and Senior Associate Blerina Ramaj.

The healthcare industry is undergoing reform and the renewable energy sector is shifting to foreign-investment-friendly auction-based strategies, while the new Civil Code and large investment projects – including healthcare digitalization and infrastructure development – are on the books in Kosovo, according to RPHS Law Partner Visar Ramaj.

“The healthcare sector in Kosovo is currently undergoing significant reforms, with a new legal framework taking shape,” Ramaj starts. “The Assembly has passed the first laws, starting with a law on the pricing of pharmaceutical products. This law is expected to come into effect by the end of July.” Additionally, there are drafts for new laws on pharmaceutical products, the healthcare system, and the health insurance fund. “These draft laws have been prepared by the government and passed to the Assembly for parliamentary procedure, to be passed by the end of the year,” he reports. “With the adoption of the new laws, there will be an increased need for legal services to ensure compliance not only for local players but also for marketing authorization holders of foreign pharmaceutical manufacturers.”

Turning to the energy sector, Ramaj outlines that there has been a shift “from feed-in tariffs to auction-based strategies for increasing renewable energy sources. The government recently published the first project for a 100-megawatt solar energy project, with allocated land plots and grid connection agreements, utilizing a competitive auction,” he says. According to him, this has generated a lot of foreign investor appetite. “We anticipate the government establishing practices to increase the scope of such projects.”

Furthermore, according to Ramaj, “the auction sets the stage for future energy projects in Kosovo. The country aims to have 35% of its energy from renewables by 2030, which is quite ambitious.” Continuing, he says that “the auction offers a guaranteed 15-year power purchase agreement and a minimum 30-year land lease.” The opening of bids is expected to take place by the end of August.

Additionally, Ramaj reports that “private projects in the area of renewable energy are also underway, with two projects currently in the development phase. These projects are still confidential, but negotiations, development, and financing are all ongoing,” he elaborates. 

On a different note, Ramaj says that a new Civil Code is expected to enter into force later in 2023. “This will be the first time Kosovo has a unified Civil Code, replacing dispersed laws. The plan is for the Civil Code to be passed by the Assembly by the end of the year, which is quite an ambitious goal,” he explains. Given the ongoing reforms in the healthcare and energy sectors as well, he expects a “continued high demand for legal services in Kosovo.”

Finally, Ramaj reports that “Kosovo is expecting several big investment projects, including the digitalization of healthcare, infrastructure projects, and the development of tourist resorts.” However, many of these projects are still pending, with their timelines yet to be specified. “The government has been primarily focused on political issues with Serbia in recent months, which has overshadowed other projects. Still, Kosovo needs to unlock the potential of these pending projects,” he notes.

Squire Patton Boggs has successfully represented the Republic of Kosovo in arbitration proceedings under the rules of the International Chamber of Commerce for a dispute with a virtual mobile network operator.

“The dispute, Blerim Devolli v Republic of Kosovo, concerned the alleged expropriation of Dardafon.net, a Kosovo virtual mobile network operator (MVNO) owned by the Claimant, Mr. Devolli,” the firm informed. “As an MVNO, Dardafon.net operated on the basis of an agreement concluded in 2009 with Kosovo Telecom and which expired in June 2019. This cooperation resulted in two commercial ICC arbitrations initiated by Dardafon.net against Kosovo Telecom, and one investment arbitration brought by Mr. Devolli against the Republic of Kosovo. Mr. Devolli had sought EUR 45 million in damages from Kosovo.”

According to Squire Patton Boggs, the Tribunal declined jurisdiction as Mr. Devolli had not established any investment in Kosovo, and he does not qualify as a foreign investor for the purposes of Kosovo’s Law on Foreign Investments. The Tribunal also awarded Kosovo costs of over EUR 1.3 million.

The Squire Patton Boggs team was led by Prague-based Partners Luka Misetic and Rostislav Pekar and included Partner Matej Pustay and Associates Fellenza Limani and Mailis Meier-Lutterodt and Bratislava-based Senior Associates Eva Dragunova and Jakub Kamenicky, as well as Houston-based Partner Mark Stadnyk.