Albania: Investing

FDI in Figures

Foreign direct investment has been increasing constantly since the beginning of the 2000s. Currently, FDI stock has reached almost USD 2.5 billion, which means more than 20% of the country's GDP. These investments are essentially in the oil, metal ore, infrastructures and construction sectors, and more recently, in the telephony sector.

Albania has set up reforms to boost FDI.  As a fact, the State has adopted a tax reform that is advantageous to foreign investors. Corruption and administrative difficulties could be discouraging for investors. The long-winded procedures to obtain operating licenses in the trade, construction and tourism sectors have slowed down investment progress. In addition, investments continue to suffer from the lack of infrastructures and a poorly defined property law.

In the context of the global economic crisis, foreign direct investments in Albania have strongly decreased in 2009 and 2010, mainly due to the decline of remittances from Albanians living abroad (-27%) which represents 15% of the country's GDP.  This trend should continue in 2011 because the financial condition of the European countries has an important impact in the Albanian economy.

Why You Should Choose to Invest in Albania

Strong Points

Albania's strong points are:
- A strategic geographical position (with ports on both the Adriatic and the Ionian Sea);
- Significant natural resources;
- Cheap manpower;
- Prospects of joining the European Union.

Additionally, Albania is still a developing country which needs foreign investors to develop entire sections of its economy, a fact which provides interesting opportunities.

Weak Points

Albania remains one of the least developed countries in Europe. A fifth of its population lives under the national poverty line and the country still suffers from very inadequate infrastructures. In addition, the Albanian economy remains fragile and is heavily dependent on foreign organizational aid.

Up to now, the main hindrance to FDI development has been the dominance of personal relations over the law and legal procedures: competition is rarely fair and in reality far removed from the legal decisions, corruption exists and despite efforts to fight it, it remains one of Albania's major problems. The taxation and Customs systems also need to be improved. Albania must continue its reforms and, above all, ensure they are effectively enforced, especially in the area of the fight against organized crime and corruption, the reinforcement of the Rule of Law, the freedom of the judiciary system and media freedom.

Government Measures to Motivate or Restrict FDI

Tax and legislative reforms have been put in place, as well as new laws on public and private partnerships, public spending, free-trade zones, company registration and electronic signature. On the 1st January 2008, the Albanian government decided to include companies in a single tax rate of 10%, which was being applied to households since 1st July. A single counter will simplify administrative procedures for companies. The country also ratified the "Investment Charter": an initiative of the Stability Pact aimed at reforming the legal environment in order to facilitate FDI in the Balkans. Measures are also taken to reduce by half, non-tariff bariers and to shorten the length of time required to register a company (from the current 40 days to only 8 days).

In addition, on 16 August 2006, the Prime Minister, Sali Berisha, presented the "Albania for 1 euro" solution: this measure aims to offer investors public land at 1 euro, staff training at 1 euro, technological water at 1 euro, the cost of registering a company at 1 euro, and entry into Albania at 1 euro.

Therefore for a number of years, Albania has established measures aimed at attracting foreign capital. Guarantees such as equal treatment of national and foreign investors and tax measures like the absence of VAT in certain sectors will allow for the development of FDI in the country.

Bilateral Investment Conventions Signed By Albania

Albania has signed conventions for the protection of investment with: Greece, Germany, Italy, France, Austria, the Netherlands, the United Kingdom, Denmark, Sweden, Portugal, Belgium, Spain, Finland, Poland, Hungary, Slovenia, the Czech Republic, Switzerland, the United States, Turkey, Romania, Bulgaria, Macedonia, Croatia, Russia, Israel, Tunisia, Egypt, China, Malaysia, Serbia-Montenegro, South Korea and Kosovo.

Procedures Relative to Foreign Investment

Freedom of Establishment

Guaranteed.

Acquisition of Holdings

Possible.

Obligation to Declare

The agency for the promotion of foreign investment  in the country provides information about the authorizations required to set up business.

Competent Organization For the Declaration

Agency for the Promotion of Investment

Requests For Specific Authorizations

No sector is closed to investment and no prior authorization from the government is necessary to be able to invest. There is no restriction on holdings; a company may be 100% foreign.

Investment Opportunities

Investment Aid Agency

Agency for the Promotion of Investment

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Albania
Globaltenders, Tenders & Projects from Albania
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

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