Shqip
English
Albania, the destination of foreign investments
Albania is a country of great economic potential because of its geographical location, demographics and natural resources.
Economic growth in the country shows signs of economic stability and fiscal consolidation, thanks to the gradual reduction of the budget deficit and public debt.
Our economy is based upon a regional approach, by incorporating ourselves in a market of 26 million customers among CEFTA member countries. In less than 10 years, we will be fully economically integrated in the large European market.
The economy is expanding and the trend is positive, people's confidence in the system has increased, the production structure of Albania is being consolidated and the exports’ amount and value is increasing.
With a view to building a new economic model that generates prosperity, employment and comprehensive development, the government has undertaken a series of reforms to improve the business climate, boost productivity and competitiveness of the Albanian economy, increase domestic and foreign investment as well as enhance financial and economic stability of the country.
Albania offers a favorable environment and suitable costs for doing business, schemes attractive to investors, online system on registration and tax payment as well as a one - stop shop process for business registration and licensing. By the end of 2015, there were around 10.560 foreign companies operating in Albania.
High priority has been given to potential foreign investors and investments through the liberalization of policies for attracting the latter. In accordance with these policies, a series of reforms and laws have been implemented, guaranteeing and supporting foreign investments. Through a liberal legislation, where domestic and foreign investors have the same rights and obligations, the Albanian government has attached great importance to sectors with high development potential, such as renewable energy, mining industry, tourism, manufacturing industry, agriculture, transportation, logistics as well as the information and communication technology sector. The inflow of FDI, compared to the previous year increased by 15.7%. Albania offers great investment opportunities in sectors with stable economic growth: energy & mining industry; transport & logistics; tourism; agriculture; manufacturing.
Legislation has been improved in a number of sectors, such as the:
• Law on Public Private Partnership, guided by the fundamental principles of transparency and non-discrimination;
• Law on TEDA, which is one of the most positive changes in the economic legal framework, aiming at making technological, economic areas and potential businesses available.
• Law on Strategic Investments, which provides maximum legal guarantee and offers facilities for domestic and foreign investors. The application for being granted the "Investor / Strategic Investment Assisted / Special procedure” status is implemented according to the one-stop shop model.
• The new Law on Tourism, which significantly improves conditions for serious investments in tourism and ensures development of the sector;
• Fundamental reforms were launched aiming at a new approach towards business. We established a whole new relationship between the government and the enterprise, with a view to build a constructive dialogue and cooperation as co-actors of the country's economic futures. The National Economic Council is now established and operational; the Investment Council was also established in cooperation with the EBRD, which deals with strategic sectors and holds constant consultations with international partners (IMF, World Bank, EBRD, etc.)
• A series of measures were taken to provide relief for various sectors, such as the inward processing and the agriculture package. Support packages are being developed for some other sectors as well, such as tourism, recycling and plastic materials, agro-processing and mechanical industry. Assistance will actively be offered to new high potential sectors, by creating supportive packages that will have a direct positive impact on the economy and citizens. Moreover, the fight against informality, reforms on fiscal rectitude, foreign investment and further growth of employment will also continue.
Regarding the "Doing Business Report 2016", the Albanian government has undertaken some structural reforms to protect the interests of investors, by being ranked in 8th place. The government has strengthened investor protection by implementing a legal obligation on the declaration of transactions;
Cross-border trade, Albania ranked 37th.The government has facilitated export procedures by implementing an electronic inspection system oriented on risk assessment, which has reduced time spent on cross-border procedures.
With regard to the PPP
The Albanian government, with its policies and in cooperation with central and local institutions and international partners has improved the legal framework in the field of concessions and public-private partnership, aiming at creating a safe, stable and transparent environment.
The adoption of Law no. 77/2015 "On some amendments to Law no. 125/2013” has brought some new changes in terms of expanding its manufacturing activities and services that can be realized through public and private partnerships, as well as facilitating procedures for the implementation of concession projects, thus encouraging the private sector.
The Albanian government considers cooperation with private sector in the form of PPP as a generator of economic and social development in the country. The implementation of PPP projects in the public sector aims at improving infrastructure, providing quality services with lower cost to public finances and better management by avoiding part of the risk transferred to the private sector.
In the context of increasing transparency and accountability, the Council of Ministers has just adopted a Decision on the establishment and management of the electronic registry of concession / PPP. This register, which will be public and accessible to all interested people, will include information on all concession contracts / PPP signed in the Republic of Albania, enabling the extraction of accurate data on the development of particular sectors of the economy.
On the development of tourism in Albania
The Albanian government has attached special importance to the development of tourism and the Ministry of Economic Development and Tourism has given priority to the development of the industrial sector of tourism: the completion of secondary legislation for the Law on tourism (dealing mainly with the standardization of accommodation structures and guides operating in Albania) and the tourism development plan.
Apart from the promotion of tourism at regional and global level, attention is paid to investments in this sector, through ideas such as the "boutique resort" marine, adventure tourism ideas, as well as promotion and investment in Albania. Efforts are being made to mobilize all national and international resources.
The new tourism law, together with its supporting package, offers various incentives to investors in the tourism industry, with a view to improving quality and raising standards based on the investment value, thus making our country more competitive in the region in terms of investments. Our goal is to turn Albania into one of the most attractive destinations in the Mediterranean.
Efforts are also being made to explore all opportunities provided by the European Union to the region and its development, aiming to apply on joint projects. Calls are open and they should also combine activities. B2B is an excellent opportunity to be taken into consideration.
We have asked for support from the Secretary General of the World Tourism Organization in drafting the national tourism plan. These, together with the Tourism Development Strategy, are two strategic documents, legal obligations arising from the law "On tourism". Currently, the tourism development strategy is under revision.
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The change of the Concession Agreement was reached after intensive negotiations between the parties; it will now be voted on by the parliament, to pave the way for development, construction and operation of other airports in Albania.
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The recently signed agreement between the Albanian government and Tirana International Airport (TIA) marked a major step towards the development of air transport in Albania, the liberalization of international flights, but also a boost for the tourism sector, the increase of touristic flow, as well as the economic development and employment in the country.
Albania has improved its performance since the publication of the Competitiveness Outlook 2018 report in 10 out of the 15 dimensions1scored in the assessment Although this clearly indicates progress in the setting up of polices to enhance its competitiveness – at least in about two-thirds of the policy dimensions covered in this assessment – if they are to have a lasting impact then the effective and continuous implementation, monitoring and upgrading of those policies should remain a key priority.
Albania achieves its highest average scores in the trade policy, education policy, energy policy, tax policy, investment policy and promotion, and employment policy dimensions.
The following are some of Albania’s major achievements in these areas:
Investment promotion and facilitation has seen notable progress. A new strategy for investment promotion is underway which is expected to include the internationalisation of Albanian investments, outreach campaigns, aftercare programmes and strategies for attracting foreign direct investment (FDI) and the manufacturing of products in Albania. The Albanian Investment Promotion Agency (AIDA) has a broad mandate that is crucial for investment promotion, facilitation and retention and has started reinforcing its investor targeting actions. A wide range of incentives are provided for investors which can all be found on AIDA’s website. Albania is also reinforcing its investment facilitation activities by accelerating the digitalisation of its public services.
As of January 2020, 73% of all public services were available on line to citizens and businesses through the E-Albania Portal. Key improvements to investment procedures include the introduction of e-registration and electronic notification of balance sheets and financial reports.
The trade policy framework has been strengthened significantly. The conclusion of Additional Protocol 6 on Trade in Services to the Central European Free Trade Agreement (CEFTA) in December 2019 created an important stimulus for reducing restrictions on services between parties and for making services markets more attractive to third-country investors. Regulatory transparency has improved, as have public consultations on trade policy. Albania has reinforced its inter-institutional policy co-ordination by adopting new rules and procedures for the National Trade Facilitation Committee (NTFC). It has also established two working groups to explore reducing or eliminating import and export fees and charges. Dialogue with local stakeholders is now required at all stages of trade policy making. All draft laws are published electronically.
The education system is improving at a rapid pace. Albania is one of the fastest-improving participants in the OECD Programme for International Student Assessment (PISA),although it still scores significantly below the European Union (EU) and OECD averages. Its mean score for student performance in mathematics increased by around 24 points between 2015 and 2018, compared to the OECD average 2-point increase. The gap between the highest and lowest-achieving students has also narrowed. Participation rates in school education are high: in 2019, net enrolment in primary education was 98%, and 96% in lower secondary education. The government has also introduced important policy reforms, such as a competency-based curriculum framework, decentralised school governance and a modernised vocational education and training (VET) sector.
Employment conditions have been broadly improved. Advances have been made in tracing the employability of young people after they complete their education and Albania also conducts skills need surveys. It has seen significant progress in increasing women’s employment rates, which have risen by 9 pecentage points since 2015 to reach 54% in 2019, the highest in the region. Its public employment service (PES) has begun to modernise the delivery of its employment services, including a new information technology (IT) system, individual counselling and individual action plans, as well as the systematic introduction of employer services.
Alignment with EU standards has improved in the energy sector. Albania has made significant progress transposing the Third Energy Package. It is well on track to establish and operate a competitive energy market – it has a strong independent regulator, is currently finalising the operational deployment of a power exchange and is unbundling the distribution system operator for electricity.
Tax policy has seen greater international co-operation and greater alignment with recent international tax trends. In August 2019, Albania became a member of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS), leading to several other initiatives. Its tax system alignment with the Action 5 minimum standard is currently under review by the Harmful Practices Secretariat. In September 2020, Albania ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS and work on treaty abuse and mutual agreement procedures has been scheduled. The OECD Global Forum Assessment team carried out a peer review of Albania and found it was “largely compliant” on the exchange of information on request (EOIR). Albania introduced a law in February 2020 on the automatic exchange of information (AEOI); the first exchanges should occur in the near future. Finally, Albania has transfer pricing legislation in force and its legislation is in line with the OECD Guidelines on Transfer Pricing.
