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Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Albania | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

FDI flows towards Albania have been rising steadily since the early 2000s. Today, FDI stock has reached nearly 50% of the country's GDP. These investments are essentially in the oil, metal ore, infrastructure, construction and telecommunications sectors.

Albania has set up reforms to boost FDI. The State has adopted a tax reform that is advantageous to foreign investors and aims at reducing corruption and administrative difficulties, which can be discouraging to investors. The long-winded procedures to obtain operating licences in the trade, construction and tourism industries have slowed down investment progress. In addition, investments continue to suffer from the lack of infrastructure and poorly defined property law. After the implementation of a new law on strategic investment in January 2016, the Albanese government declared in early 2018 it was readying another law to further boost investment. This new law will aim at ensuring compliance with labour, safety and environmental legislation, increase guarantees for investors and set up a new procedure enabling them to start their business quicker. The country wishes to attract investment in the following sectors: energy and mining, transport, telecommunications, infrastructure and urban waste, tourism, agriculture and fisheries. Minimum capital requirements range from USD 1 to 50 million (source: Albania Investment Development Agency).

Annual FDI inflows in Albania have increased significantly in the last ten years or so, averaging close to USD 1 billion per year for the period 2008-2017. FDI inflows amounted to more than USD 1 billion in 2017, compared with USD 1.12 billion in 2016, and 9.45 billion in 2015.

 

Country Comparison For the Protection of Investors

  Albania
Index of Transaction Transparency* 9.0
Index of Manager’s Responsibility** 7.0
Index of Shareholders’ Power*** 7.0
Index of Investor Protection**** 7.2

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

 
Foreign Direct Investment 201420152016
FDI Inward Flow (million USD) 1,1109451,124
FDI Stock (million USD) 4,2954,3314,987
Number of Greenfield Investments*** 652
FDI Inwards (in % of GFCF****) 34.131.530.9
FDI Stock (in % of GDP) 32.438.041.1

Source: UNCTAD - Latest available data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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. In 2012, according to latest available World Bank data, 39% of the population lived with less than 5.5 USD a day. 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 barriers 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 Albanian Investment Development Agency (AIDA) in the country provides information about the authorizations required to set up business.
Competent Organisation For the Declaration
Agency for the Promotion of Investment
Requests For Specific Authorisations
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.

Find out more about Investment Service Providers in Albania on GlobalTrade.net, the Directory for International Trade Service Providers.

Investment Opportunities

Investment Aid Agency
The Albanian Investment Development Agency (AIDA)
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Albania
Globaltenders, Tenders & Projects from Albania
DgMarket, Tenders Worldwide
 
 

 

Find out more about Investment Service Providers in Albania on GlobalTrade.net, the Directory for International Trade Service Providers.

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Last Updates: June 2018