Comparison of the cost of doing business in the Balkans: analysis and key conclusions

Doing business in the Balkans attracts entrepreneurs thanks to the variety of tax regimes, relatively low operating costs and growing economic opportunities. This review examines key indicators of doing business in eight countries of the region: North Macedonia, Bulgaria, Serbia, Croatia, Montenegro, Kosovo, Albania, Bosnia and Herzegovina.

1. ease of doing business (Doing Business 2020 ranking)

The countries are ranked from best to worst:

North Macedonia – 17th place (regional leader)

Serbia – 44th place

Montenegro – 50th place

Croatia – 51st place

Kosovo – 57th place

Bulgaria – 61st place

Albania – 82nd place

Bosnia and Herzegovina – 90th place

Conclusion: North Macedonia offers the best business conditions in the region, while Bosnia and Albania are at the end of the list and need improvements in the business climate.

2. Tax burden

The countries are ranked by the income tax rate (from lowest to highest):

Montenegro: income tax – 9%, VAT – 21%, dividend tax – 9%

Bulgaria: income tax – 10%, VAT – 20%, dividend tax – 5%

North Macedonia: income tax – 10%, VAT – 18%, dividend tax – 10%

Kosovo: income tax – 10%, VAT – 18%, dividend tax – 0%

Bosnia and Herzegovina: income tax – 10%, VAT – 17%, dividend tax – 5%.

Croatia: income tax – 10%-18%, VAT – 25%, dividend tax – 10%

Serbia: income tax – 15%, VAT – 20%, dividend tax – 15%

Albania: income tax – 15%, VAT – 20%, dividend tax – 8%.

Conclusion: The lowest tax burden on profit is in Montenegro (9%), and there is no dividend tax in Kosovo.

3. Company registration

State fee: €50-€150

Notary services: €30-€200

Bank deposit: Not required

Conclusion: The company registration process in the Balkans is relatively inexpensive and quick, with minimal bank deposit requirements.

4. Average salary (€ per month)

Countries are ordered by decreasing average salary:

Croatia: €1,150

Bulgaria: €830

Serbia: €770

Montenegro: €730

Bosnia and Herzegovina: €650

North Macedonia: €640

Albania: €520

Kosovo: €450

Conclusion: The highest salaries are in Croatia (€1,150) and Bulgaria (€830). Kosovo and Albania have the lowest figures, which reduces personnel costs but may make it harder to find qualified specialists.

5. Office rent (€/m²/month)

Countries are arranged by decreasing rental cost:

Serbia (Belgrade): €15-€25

Croatia (Zagreb): €14-€24

Bosnia and Herzegovina (Sarajevo): €12-€22

Albania (Tirana): €10-€20

North Macedonia (Skopje): €10-€20

Montenegro (Podgorica): €10-€18

Kosovo (Pristina): €8-€15

Conclusion: The most affordable office rent is in Kosovo, the highest in Serbia and Croatia.

6. Utilities (85 m² office, €/month)

Countries are arranged by decreasing cost of utilities:

Croatia: €160

Serbia: €150

Montenegro: €140

Bosnia and Herzegovina: €130

Bulgaria: €130

North Macedonia: €125

Albania: €120

Kosovo: €110

Conclusion: Kosovo remains the most affordable region in terms of utilities cost, while Croatia leads with the highest costs.

7. Internet and communications (€/month)

Countries are arranged by decreasing cost of internet:

Croatia: €35

Serbia: €30

Albania: €25

Bulgaria: €25

Kosovo: €20

Conclusion: The cheapest internet is in Kosovo (€20) and Bulgaria (€25). In Croatia the cost of internet is above the regional average.

Summary analysis:

To minimize taxes: Montenegro, Bulgaria, Kosovo.

For developed infrastructure and highly qualified employees: Croatia, Serbia.

For starting with minimal costs: Kosovo, Albania.

For stability and access to the EU: Croatia and Bulgaria.

The Balkan region offers diverse opportunities for business. The choice of country depends on the company’s specific priorities: whether it is the tax burden, the cost of labor or operating costs.

  Balkans, BUSINESS