Limited access to finance, about 1500 businesses go bankrupt during 2023

Limited access to finance, about 1500 businesses go bankrupt during 2023

During the year 2023, about 1,500 businesses were closed in the Business Registration Agency within the Ministry of Industry, Entrepreneurship and Trade, although the Tax Administration of Kosovo during this period closed the activity of only 20 businesses.

since no business can be deregistered without fulfilling its obligations and liabilities to the Tax Administration.

The lack of development policies and limited access to finance are some of the barriers that lead to great difficulties for businesses and which can be contributing factors in the bankruptcy of many of them.

In a written response from the Ministry of Industry, Entrepreneurship and Trade, they say that during the period January-November 2023, the number of registered businesses is 10 thousand 790, while 1 thousand 497 have been closed. MIET points out that the trend of opening and closing businesses is similar to that of 2022.

Meanwhile, the opening and closing figures of businesses in Kosovo are different from MIET and TAK.

The spokesperson of the Tax Administration of Kosovo, Valentina Bytyqi-Sefa, in a statement for KosovaPress, states that the number of businesses that opened in 2023 is over 20,000, while another 20 have closed their operations.

Bytyqi-Sefa mentions that about two thousand businesses have been opened whose primary activity is wholesale and retail trade, while seven businesses have been closed from the same activity.

She estimates that the process of opening a business is simple, while in order to close, certain criteria and all obligations to TAK must be met.

Bytyqi-Sefa: TAK has closed the activity of 20 businesses

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“The number of businesses that opened in 2023, the year we are leaving behind, is 21,156, as opposed to those that have sought to extinguish their activity, where there are 20 businesses that it was possible to close their activity… According to the statistics, which we have provided, the businesses that have requested to open in the past year are in the sector or primary activity that has wholesale and retail trade, which are some 2 thousand 722 businesses that have been opened in this activity. Whereas, in the businesses, which were closed last year, we have somewhere around seven businesses, which have asked to be closed from the same activity, from the activity of wholesale and retail trade… Of course, the procedures for opening a business are much simpler and do not have much responsibility towards the state, the law does not oblige much in the opening part. However, regarding the part of the procedure when a business must be closed, there are other procedures, which are provided for the Tax Administration and procedures. No business can be closed if it does not meet all the criteria, which are referred to in the articles defined by this law, as first the business must fulfill all the obligations, the obligations it has towards the Tax Administration of Kosovo”, says Bytyqi. – Sefa.

Meanwhile, the executive director of the Chamber of Trade and Industry Kosova (CTIK), Zana Beqiri, tells KosovaPress that the biggest problem for new businesses is access to finance. She emphasized that there are delays in the Sovereign Fund, while adding that the government should act with better mechanisms to facilitate the processes for the good functioning of businesses.

Beqiri emphasized that based on the reports of the World Bank, regarding the opening of businesses, Kosovo has been in the top 10 countries of the world for a long time.

She considers that the process of opening businesses is efficient and simple, but closing them is much more problematic.

Beqiri: The opening is so efficient, but the closing is very problematic

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“New businesses have the biggest problem with access to finance. The reasons are the rather unfavorable conditions regarding business loans, especially for new businesses. An individual investment is always required and therefore this point is seen as quite problematic. and we think that the government should come up with much better mechanisms. We expect to see some movement regarding the Sovereign Fund, but we see that even that process has stalled… When they have a lack of finance, they also have a lack of access to expertise and for this reason they get stuck or have delays, or have various problems in terms of supplies, quality of materials… 15:21 Based on the reports of the World Bank, in terms of opening a business, we have been in the top 10 countries of the world for a long time. The opening is so efficient, but the closing is very problematic and moreover due to an instruction, published a few months ago, it has become quite problematic even for the changes that the companies want to make, because notarized documents are required”, says Celibacy.

Kosovo remains an unattractive country for foreign investments, especially from corporations and big global brands.