- Geography Land Area 10.908 km²
- Largest City Prishtina – est. pop. 500,000
- Population Estimated 2.2 million people
- Languages Albanian, Serbian, English
- Currency EURO
Opportunities in Business Processing and Information Technology Outsourcing
The Southeastern European Republic of Kosovo is well-positioned to capture the forecast growth in outsourcing in both the European Union (EU) and regional markets. Kosovo boasts an available and educated workforce; large numbers of English and German speakers; low labor costs; 10% corporate tax rate; 10% personal income tax rate; convenient Central European time zone; and both geographic and cultural proximity to EU markets. This investment summary provides an overview of the essential information investors need to know to invest in Kosovo’s BPO/ITO industry, including target markets, competitive environment, advantages/challenges, and the primary cost elements.
The first companies in Kosovo to provide BPO/ITO services, specifically call center services, began in 2002. Today, Kosovo has at least 30 BPO/ITO companies, with the majority formed in the last two years. Total employment now exceeds 2,000 workers, with that number expected to double this year alone.
Most companies are concentrated in Pristina, Kosovo’s capital city. The most common services provided include: customer service class, outbound sales calls, product support, technical help-desk support, inbound sales calls, and billing or account support. The largest companies, including MC Mobile Communication GmbH, currently employ at least 300 workers; smaller companies have as few as two employees.
Beyond call centers, industry experts see Kosovo enjoying growth in other areas of ITO/BPO, such as software testing, telecommunications services, web services and other back-office processes. The largest IT outsourcing company
is 3CIS. It began operations in 2009 and today has 150 employees, with more undergoing training. Its clients include AT&T Mobility, Sprint, Vodafone, BT and Orange.
Kosovo’s young population
There is growing international recognition of the skills and capabilities of Kosovo’s workforce. Kosovo has the youngest population in Europe, with 70% of its citizens under 35. The median age is 26.3 years. Kosovo also boats a growing number of students enrolled in university (these include the universities of Pristina, Mitrovica, and Prizren, as well as multiple private institutions).
According to state education statistics, there were 29,051 students enrolled in public universities during the 2008-‘09 academic year. These included 3,678 economics students and 1,592 electrical engineering and computer sciences students. That year, Kosovo produced 3,716 university graduates. Of these, 548 graduated in economics faculty, and 115 students in electrical engineering and computer sciences.
Kosovo’s main advantage is its language coverage.
English is widely spoken in Kosovo, especially given the presence, since the end of hostilities in 1999, of a huge number of international organizations. Those include the UN, OSCE, GTZ, EU and so on. Moreover, English has long been taught in Kosovo schools, from the fourth grade on. In 2010, Kosovo mandated English be taught beginning in the first grade through the university level. Indeed, many university programs already include English language instruction as part of their curricula. Furthermore, Kosovo is home to several schools and universities that teach students partly or entirely in English. These include the American University in Kosovo, American School of Kosova and the International School of Pristina/Mehmet Akif. Another 38 language schools provide English language courses across Kosovo.
Kosovo also has a long German-speaking tradition. Indeed, in the immediate term, German-speaking countries (i.e., Germany, Switzerland and Austria) represent the largest market potential for Kosovo, given the country’s large number of German speakers. This is due to Kosovo’s longstanding diaspora ties, especially with Germany and Switzerland. According to German government sources, there are an estimated 300,000 Kosovo citizens (or 17% of the country’s total population) living in Germany, with another 100,000 recently returned to Kosovo after years abroad. Another 14,000 are due to return in 2010. Furthermore, about 160,000 (9% of the total population) Kosovo citizens currently live in Switzerland.
Kosovo’s location in Southeastern Europe places it close to the important EU market. Likewise, Kosovo, along with most of Europe, is in the Central European time zone. Thus, Kosovo’s proximity to key markets both in time and space, helps facilitate connections between countries, optimizing time and accelerating decision-making. Furthermore, Kosovo’s cultural affinity and geographical ties to Western Europe (nearshore locations) also prove beneficial, since personal contact, common language and cultural understanding are critical to facilitating communication and providing quality customer services. Kosovo has daily short flights to the UK, Germany, and Switzerland.
Taxes, Labor and Other Costs
Kosovo has established a favorable tax system for businesses seeking to make a profitable investment. All businesses enjoy a low 10% corporate tax and 10% income tax. Furthermore, Kosovo boasts far lower labor costs than other BPO locations.