Year-end procedures take many leadership teams’ attention, but the real questions for Kosovo’s
businesses lie ahead. The transition into 2026 is expected to create a new business
environment in Kosovo, influenced by European expectations, digital transformation, and
persistent structural issues within Kosovo’s own economy. Strategic navigation of this transition
requires more than technical compliance; it requires strategic preparation.

Although not an EU-member state, Kosovo is strongly tied to European markets. Kosovo’s much
needed export-focused companies find themselves in supply chains that are impacted by EU
frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate
Sustainability Due Diligence Directive (CSDDD). These frameworks outline expectations for
governance, workforce practices, and oversight along the supply chain. Kosovo businesses
working with EU partners are continuously being evaluated against these standards through
questionnaires, audit, and contract renewals.

Regardless of these advancements, internal issues continue to be obstacles to Kosovo’s EU
integration. Informal economy, unemployment, low female workforce participation, lack of
infrastructure, and slow digitalization are some of these issues which are creating operational
difficulties vis-a-vis the goal of exporting services and products to EU markets. Nevertheless,
this also creates an opportunity for businesses willing to invest in Kosovo’s modernization. With
an improving credit rating and growing investment interest, Kosovo-based companies that are
able to show strong governance, structured documentation, and efficient workforce practices will
be in an attractive position against funding and partnership opportunities.

Among things that attract foreign investment, human capital and digitalization are key factors.
Companies that treat workforce advancements as a strategic priority, reflect long-term potential
to international investors, with digitalization only amplifying the company’s reputation as
operational efficiency-oriented. Therefore, investing in human capital and digital infrastructure is
an essential strategic starting point for competitiveness. In 2026, business valuation will
consider the level to which a business unites governance, workforce, digital systems, and
compliance into a single business strategy. This requires professional advice in defining a clear
intent and structural approach to meeting the evolving standards set by the European Union.

Part of a top-10 global network, Baker Tilly Kosovo collaborates with Baker Tilly International
partner organizations around the world to translate these changes into actionable steps for our
clients. Going beyond compliance means interpreting EU rules, enhancing internal controls, and
developing long-term strategic plans. This requires moving beyond a stagnating position now,
into building a more sustainable business for tomorrow. For more insights regarding how
businesses should prepare for the year 2026, click here to access our latest whitepaper: Review
and Outlook: Management of Tax Obligations and Strategy for 2026.