CSOs are allowed to engage in economic activities in order to support their activities in line with the non-for-profit principle. Legislation allows CSOs to engage in economic activities both directly or by owning property and assets. Income generated from such activities should be used only for purposes related to organizations’ mission. Financing of organizations whose activity does not coincide with the legal order and international law is prohibited. CSOs are also allowed to use foreign and private sources of funding, whereas the legislation in force does not prohibit it in any form. The anti-money laundry and prevention of financing of terrorism law used to contain provisions that asked CSOs to require permission before accepting foreign funds either in cash or via a bank transfer, but after the law has been amended such restrictions were removed. The law on freedom of association in CSOs allows fund raising also from individuals, corporations and other sources without limitations.


In practice, there is a slight increase of CSOs that engage in economic activities, compared to 88% of CSOs that stated to have not done so in 2016. From 22% of CSOs that had economic activity this year, most of them stated to have faced no difficulties. The rest of CSOs stress out the need to simplify tax and accounting procedures, as well as monitoring and evaluation rules. Burdensome excessive requirements were also listed among difficulties. According to research findings foreign donors are the biggest source of funding for Kosovar CSOs with 41%. The EU and most of the bilateral donors are exempt from VAT, same as goods and services for humanitarian purposes. Still, only 5% of donors have been VAT exempted as opposed to 30% of CSOs. Funding from private sources remains a non-viable source of funding for civil society in Kosovo. Less than 20%of surveyed organizations stated to have received donations from private companies and individual donors. There have been no difficulties reported related to complicated administrative procedures.

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