With its developing market economy, Albania offers many opportunities for investors – property and labor costs are low, the young and educated population is ready to work, and tariffs and other legal restrictions are low in many cases and being eliminated in others. Albania’s location offers a notable trade potential, especially with EU markets – it shares a border with Greece and is just across the Adriatic Sea from Italy. Albania has also entered into free trade agreements with all Balkan countries creating the opportunity for trade throughout the region.
The Albanian economy is now an open economy with fully liberalized trade and a completely privatized banking sector. Some of the best known international banks currently operating in the market include Raiffeisen International, Société Générale, and San Paolo. Their presence and the strength of the banking sector have boosted financing in the economy.
Foreign direct investments play an important role in covering current and fiscal deficit. These investments promote technology transfer, improve employment opportunities, as well as help domestic businesses further expand their activity in foreign markets.
In 1994, Albania enacted law no.7764, dated 02.11.1994 “On Foreign Investments” which creates a favorable investment climate for foreign investors. The law offers guaranties to all foreigners (either physical or judicial persons) willing to make business investments in Albania. The provisions include:
►No prior government authorization is needed and no sector is closed to foreign investment.
►There is no limitation on the percentage share of foreign participation in companies – 100 percent foreign ownership is possible.
►Foreign investment may not be expropriated or nationalized directly or indirectly, except in special cases, in the interest of the public, defined by law.
►Foreign investors have the right to expatriate all investments in the form of funds and contributions in kind.
►The most favorable treatment according to international agreements.
►No distinction is made between foreign and domestic investors in law no. 9901 “On Entrepreneurs and Commercial Companies”) entered into force on 21. 05. 2008 which regulates the activities of companies and establishes the type of legal structure under which companies may form.
Two major initiatives taken by the Government of Albania which aim to improve the business climate are the establishment of the National Business Registration Center (NRC) and of National Licensing Center (NLC). The legislation regarding business registration and licensing procedures is harmonized to EU standards with focus the reduction of administrative barriers for businesses operating in Albania.
These two one stop shop centers are based on an on line tracking system of documents and entire registering and licensing process for business in the country.
Through this system, every applicant has the opportunity to get acquainted with the documentation that needs to collect before to apply for registration or receiving a permit/license, as well as to have a step by-step tracking since the moment of presentation of the interested person at the center until receiving of the decision. The NRC and NLC are considered as success stories for the Albania business, for digital Albania and country in general.
Article by: Fabjan Mehmeti
Photo credits: Flickr / 401(K) 2012