Kosovo requires all companies to declare their beneficial owners. But behind this obligation lies a more troubling reality. The system is far from fully functional and depends almost entirely on self-declaration. Despite the undertaken commitment to create a Beneficial Ownership Register — a tool used worldwide to prevent corruption and money laundering — the register is still not operational. This creates a major gap in transparency, since authorities cannot verify real ownership structures, banks lack a reliable source for KYC ("Know Your Client") checks, and the public has no way of knowing who controls companies involved in public tenders or strategic sectors. Without a working register, Kosovo is essentially fighting financial crime with one of its most important tools missing.
The Law No. 06/L-016 on Business Organization ("Law on Business Organization"), promulgated on 24 May 2018, set the obligation for a centralized database, separated into specific physical and electronic files for each business organization. The registry was later set up and put to work and is currently managed by the Kosovo Business Registry Agency, within the Ministry of Trade. The data required to be registered relates to the registration and deregistration of business organizations or any other entity. In cases of any change in the initial registration of the current data, the update shall be submitted with KBRA within fifteen (15) days from the date of such change occurring. The Law on Business Organization does not address the matter of beneficial owner registration.
In order to fill this gap, the Law No. 08/L-265 on the Register of Beneficial Owners ("Law on Beneficial Owners") was promulgated last year, namely on 22 November 2024, creating a central, electronic registry aimed at revealing the natural persons who ultimately own or control legal entities, including companies, NGOs, partnerships, and certain trusts.
Under the Law on Beneficial Owners, all obliged entities must identify their beneficial owners, maintain accurate records, and submit the data to KBRA, which is tasked with verification and storage. The law sets deadlines, designates responsible officers, prescribes fines for non-compliance, and limits public access to those with a "legitimate interest" while allowing exemptions to protect owners at risk of harm.
Despite this comprehensive legal framework, the reality is starkly different: the register has not been functionalized to this date and no meaningful data collection, verification, or enforcement has taken place. The gap between the law's ambitious provisions and the complete absence of practical implementation highlights that Kosovo's commitment to beneficial ownership transparency is, at best, superficial. The legal framework exists without the tools, capacity, or political will to make it work, leaving corporate ownership largely unaccountable.
Consequences for the financial sector
This institutional vacuum has direct consequences for the financial sector. Banks in Kosovo are legally required under the Central Bank's Regulation — more precisely, the Regulation on the Prevention of Money Laundering and Financing of Terrorism of 26 June 2024, Article 9(1) — to conduct customer due diligence to identify the beneficial owner of their clients and take appropriate risk-based measures to make such verification.
In theory, this obligation is supported by state infrastructure. In practice, however, banks are expected to perform verification without access to a reliable source. Compliance officers must rely almost entirely on documents provided by the companies themselves — company charters, shareholder declarations, or notarized statements — none of which can be independently confirmed through a public register. This leaves financial institutions exposed to significant risk, while shifting the burden of verifying beneficial owners from public authorities to the private sector.
Out of step with European standards
Kosovo's failure to operationalize its register also places it out of step with European standards. The EU's 4th Anti-Money Laundering Directive (4AMLD) made beneficial ownership registers mandatory across Member States, establishing them as a core instrument for preventing money laundering, tax evasion, and corruption. The 5th Directive (5AMLD) went even further, requiring that these registers be not only established but updated, verified, and accessible to those with a legitimate interest. Most EU member states have already implemented these requirements, and many have moved toward more proactive verification mechanisms and cross-border data exchange.
While the EU increasingly treats beneficial ownership transparency as a non-negotiable component of its AML architecture, Kosovo still remains at the level of legislative drafting, with no functioning system to demonstrate actual implementation.
Comparisons with countries in the region further expose Kosovo's stagnation. Albania, North Macedonia, and Montenegro have all operationalized their beneficial owner registers, providing at least partial public access and enabling authorities to verify ownership information. Even where implementation remains imperfect, these countries have moved beyond the legislative stage and begun collecting and publishing data. Kosovo, on the other hand, remains without a functioning system, placing it behind its regional peers and weakening regional cooperation in combating financial crime.
The CJEU ruling is not a justification for delay
Kosovo authorities have informally pointed to the 2022 ruling of the Court of Justice of the European Union (CJEU) in WM and Sovim SA v Luxembourg Business Registers, which limited full public access to beneficial ownership registers in the EU, as justification for delaying implementation. This interpretation is misleading. The decision did not question the existence or operation of the registers; it only required additional safeguards around access based on legitimate interest. The CJEU emphasized that the EU legislature failed to strike the right balance between the fight against money laundering / terrorist funding and sufficient protection of personal data. Following this ruling, EU Member States continued to maintain and use their registers for law enforcement, financial institutions, and stakeholders with legitimate interest, while adjusting public access procedures. Using the CJEU decision as a rationale ignores the core obligation of establishing and operating the register in the first place.
A problem of institutional design
A core issue also lies in the institutional design of the system itself. The law assigns responsibility for administering the Beneficial Ownership Register to the Kosovo Business Registration Agency (ARBK), an institution already overwhelmed with its existing mandate and chronically understaffed. ARBK currently manages company registration, licensing of trademarks, and continual updates to business records without the additional burden of verifying complex ownership structures. Expecting the same agency to collect, analyze, verify, and maintain sensitive beneficial ownership information — and to enforce compliance across tens of thousands of entities — is unrealistic from the outset.
Unlike many EU and regional counterparts, where beneficial ownership registers are supported by dedicated verification units, financial intelligence bodies, or tax administrations, Kosovo placed this responsibility on an agency lacking both the resources and the specialized expertise required. ARBK has neither the capacity to conduct verification nor the authority to coordinate with law enforcement, tax authorities, or the financial intelligence unit.
While Kosovo's legal framework on beneficial ownership may look aligned with European standards, without an operational register it remains largely symbolic. The gap between legislation and implementation undermines the country's efforts to combat money laundering, weakens institutional credibility, and places Kosovo behind both EU expectations and regional practice. As long as beneficial ownership depends on self-declaration and an overstretched agency with limited capacity, corporate accountability will remain superficial.
The way forward
To move beyond formal compliance, Kosovo must prioritize the practical establishment and operation of the register. This requires more than software procurement or legal amendment.
First, the government should allocate dedicated resources and staffing to administer the register, rather than relying solely on ARBK. Either a specialized unit within ARBK or a transfer of responsibilities to an institution with investigative and supervisory capacity — such as the Financial Intelligence Unit or the Tax Administration — should be seriously considered. Further, a verification mechanism must be introduced. Without cross-checking ownership data against tax records, bank information, and international registers, the system will continue to rely on self-reporting, defeating its core purpose.
Second, transparency must remain a central objective, not an excuse for delay. Clear and balanced access rules must be implemented in line with EU practice following the CJEU ruling, allowing law enforcement, financial institutions, journalists, civil society, and other stakeholders with legitimate interest to access the data.
Ultimately, Kosovo cannot credibly claim progress in fighting corruption and financial crime while one of its most fundamental transparency tools remains non-functional. Functionalizing the Beneficial Ownership Register is not a technical detail — it is a test of political will. Whether Kosovo chooses to act will signal whether its commitment to transparency is genuine, or merely another legislative exercise without real impact.
