Kosovo is not seen as an attractive destination in the eyes of foreign investors. It is considered that the country has stagnated in attracting productive foreign investments.

Additionally, political instability has contributed to investors not feeling secure enough to invest their capital in Kosovo, particularly in the manufacturing sector.

Real estate continues to dominate as the main sector for foreign direct investment in Kosovo, but representatives of the business community see this trend as a challenge to the country’s economic development. They describe it as a “dead economy,” where the benefits are only short-term, mostly for sellers and builders, without contributing long-term value to the broader economy.

According to them, real estate is not a real investment, calling instead for a shift toward factories and production. As they explain, only investments that create jobs, reduce imports, and increase exports truly support Kosovo’s economy.

Voices from the business community believe that the entry of foreign brands into the Kosovo market would aid the country’s economic development.

According to data from the Central Bank of Kosovo, provided to KosovaPress, in the first four months of 2025, the leading sector in terms of foreign investment remains real estate.

Lack of foreign brands in the market

The President of the Kosovo Chamber of Commerce, Lulzim Rafuna, says that in recent years the country has failed to attract high-quality investments.

“In recent years, we’ve failed to bring in quality investments. By ‘quality investments,’ I mean well-known brands that would come not only came to us as material investment, as income, but also as sources of knowledge and as a form of marketing that would show Kosovo as a very safe place to invest. This could attract further investments. Brands that are known regionally, in Europe, and even more broadly… All governments compete to bring such brands as strategic investors. We have failed because we have not made enough effort to attract them,” Rafuna states.

Rafuna emphasizes that over 75 percent of foreign investments continue to go into the real estate sector. He notes that such a high percentage in one sector does not represent a true indicator of development and signals that the country has stagnated in attracting productive foreign investments.

“When we look at the total investments made in Kosovo, including this 0.4 percent increase—or €1.1 million more—compared to the same four-month period last year, over the past three years foreign investments (around 80 percent of which come from the diaspora) have remained at the same level, around €800 million, give or take. Of that €800 million, over 75 percent of the three-year average has gone into real estate investments. Again, this is not a meaningful indicator. It sends a message that we have stagnated in attracting foreign investments. Much more work is needed to increase foreign investment,” Rafuna emphasizes.

The head of the Kosovo Chamber of Commerce states that real foreign investment is that which brings capital and creates jobs—such as building factories with hundreds of employees.

He stresses that Kosovo needs quality investments that reduce imports and increase exports, thereby contributing to long-term economic development.

“Real estate is not a real investment. Many countries around the world, including in our region and Europe, do not consider real estate investments—especially from the diaspora—as true foreign investments. We’ve included this indicator and are counting it as foreign investment. However, a real foreign investment is when an investor comes and opens a production factory employing 100 or even 1,000 people. That’s what Kosovo needs: quality investments that reduce imports and increase exports,” Rafuna says.

Real Estate Investment Is a “Dead Economy”

Alongside this, the Executive Director of the Chamber of Trade and Industry Kosova, Kushtrim Ahmeti, highlights the lack of serious investment offers in Kosovo, especially from the diaspora.

He points out that instead of investing in production capacities and bringing home the expertise they’ve gained abroad, diaspora funds are being funneled into the real estate sector.

Ahmeti describes this trend as a “dead economy,” which, according to him, does not generate long-term value.

As Ahmeti says, these investments provide only short-term benefits for the seller, buyer, and worker, without impacting sustainable economic development.

“It’s unfortunate that our country still lacks serious offers. As you know, real estate investments are mostly made by the diaspora. We continue to fail as a country in encouraging the diaspora to invest in productive capacities and companies. To bring the expertise and long-standing experience they have gained in the countries where they live, across Europe and elsewhere. But what’s happening here is that all the money they earn abroad is being invested in a ‘dead economy.’ Because this is not an economy that generates anything—it simply results in the construction of an apartment or a house. It’s not an investment that brings long-term benefits. These are short-term gains that benefit only the seller, the buyer, and the worker,” says Ahmeti.

Based on official data from the Central Bank of Kosovo, after real estate, the sectors attracting the most foreign investment are financial and insurance activities, followed by wholesale trade, manufacturing, information, and communication.

Foreign direct investment in Kosovo for the January–April 2025 period has remained at a similar level as last year, reaching €276.8 million—a 0.4 percent increase.

“According to statistical data, the leading sector in terms of foreign investment is real estate, followed by financial and insurance activities, wholesale trade, manufacturing, information, and communication. Foreign direct investment in Kosovo in the January–April period reached €276.8 million, compared to €275.6 million in the same period last year—an increase of 0.42%. Total foreign investment in 2024 reached €847.4 million,” the Central Bank of Kosovo stated in a written response.

During the first four months of 2025, Switzerland and Germany were the largest investors in Kosovo, followed by the United States and Albania.

Foreign direct investment in Kosovo during January–April 2023 was €251 million, while in the same period in 2022 it was €184 million.

Meanwhile, foreign investments during 2024 amounted to €847.4 million. Throughout 2023, foreign investment reached €840.1 million; in 2022, €732 million; and in 2021, €420.7 million. /Z.Zeneli/