Albania’s governmental backing for foreign investments
Law no.7764, dated 02.11.1994, ‘On Foreign Investment’ creates a favourable investment climate for foreign investors in Albania. It offers all foreigners, either physical or judicial persons, a range of provisions including:
* No sector is closed to foreign investment and no prior government authorization is needed to invest.
* There is no limitation on the percentage share of foreign participation in companies: 100% foreign-owned companies can be set up.
* Foreign investment may not be expropriated or nationalized directly or indirectly, except in exceptional circumstances in the interest of public use as defined by law.
* Foreign investors have the right to repatriate all funds and contributions in kind of investments.
* Most favourable treatment according to international agreements is provided.
No distinction is made between foreign and domestic investors predicted in Law no.7638, ‘On Commercial Companies’. This regulates the activities of companies and establishes the type of legal structure under which companies may be formed.
Albania’s tax system also does not discriminate against foreign investors. Likewise, legislation concerning the public procurement process makes little distinction between foreign and domestic firms.
Protection of Property Rights
Law no.9380, dated 28.04.2005, covers intellectual property rights and protects copyrights, patents, trademarks, stamps, marks of origin, and industrial designs. In 2000, Albania ratified the Marrakesh Agreement and became signatory to the World Trade Organization’s Trade Related Intellectual Property Rights (TRIPS) agreement. Albania has signed the Convention of Multilateral Investment Guarantee Agency (MIGA). MIGA provides investment guarantees against certain non-commercial risks (i.e., political risk insurance) to eligible foreign investors for qualified investments in developing member countries. Along with the MIGA Convention, Albania has signed the New York Convention of 1958 (on the recognition and enforcement of foreign arbitral awards) and the Geneva Convention on Execution of Foreign Arbitral Awards. The Overseas Private Investment Corporation (OPIC), a US-government sponsored entity, can make available insurance and project finance resources to US investors in Albania. OPIC’s three main activities are risk insurance, project finance and investment funds.
Albania has been a member of the WTO since September 2000. Investors in Albania are entitled to judicial protection of the rights related to their investments. Parties to a dispute may agree to submit claims for consideration by an arbitration institution. Foreign investors also have the right to submit disputes to an Albanian court or to the Arbitration Court in Tirana. Provisions on domestic and international commercial arbitration are incorporated in the Code of Civil Procedure.
Reduction of taxes and burocratic procedures are subject of amendments in order to improve the investment climate in country. A special incentive applies for the new capital investment allowing taxpayers to defer the payment of VAT on the importation of machinery and equipment, regardless of the type of their economic activity. The VAT payment may be deferred for up to 12 months from the moment of importation. For projects with an investment implementation phase of longer than 12 months, deferral of VAT is extended on fulfillment of requirements set out by the Ministry of Finance of Albania.
Photo credits: RadioVaticana
Favorable tax system
Corporate tax rate 15%
Personal tax rate 0 – 23 %
Treaties for the Avoidance of Double Taxation with over 30 countries
- No prior government authorization
- All sectors open to foreign investors
- No limitation or restrictions for foreign companies 100 % foreign ownership possible
- No restrictions on profit and capital repatriation Special state protection
Investment opportunities in different key sectors:
- Renewable Energy
- Transport and Logistics
- ICT Services
- Mining Industry
One stop shop model
Registration of the new business is one 24 hours at no cost
Fast and transparent business licensing, by the National Licensing Center
Tax benefits and incentives in investment strategic sectors
Online tax system
Business legal framework in compliance with EU legislation
Mining: chromium, copper, iron ore, nickel, bauxite
Petroleum, natural gas, coal
Limestone, salt, timber