Albania

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Albania, a small country in Central South-Eastern Europe, has taken longer than its more westerly situated neighbours to adjust to the demands of a market-driven economy. On the one hand, this means a less developed infrastructure, an economy which is still largely cash-based, and, on occasion, difficulties in dealing with administrative requirements when tendering for business. On the other hand, there is a rapid growth rate, a real appetite for foreign investment, and the opportunity to get in at ground level in sectors that are rapidly modernising, in particular in the telecommunications, services and mining sectors.

Rapid, sustainable growth

GDP growth throughout 2003 and 2004 was at a steady 6%, with a similar growth rate expected for 2005. The political environment has become increasingly stable over the last seven years.

An appetite for investment

The Albanian market is wide open to investment, with no restrictions on sector, amount of investment, or the amount which can be taken out of the country. Entry requirements are straightforward, and the cost of registering a business is approximately $550. On the other hand, there are as yet no established incentives for private investors, and administrative procedures can be complex. According to the US Commercial Service, however, legal uncertainty over property ownership is the greatest hurdle facing potential investors.

Telecommunications

A telecommunications network that is growing rapidly but still has only low density coverage offers excellent opportunities for development. Fixedline coverage remains low, with a total of around 260,000 lines — around 6.8 telephones per 1,000 inhabitants. By contrast, cellphone coverage is rapidly improving after the entry onto the market of two network providers in recent years, and cellphone ownership is now well over 1.5 million.

Natural resources

Albania has large reserves of oil and gas, and has already attracted significant investment from foreign interests in this sector. FDI in the oil sector was estimated at around $20 million in 2004. Oil reserves are estimated at about 550 million tonnes, and gas at 69 million cubic metres. A trans-Balkan oil pipeline is currently in development, and discussions are in progress on the construction of an international gas pipeline. Both are likely to offer opportunities for international investors.

Transport infrastructure

Albania is well placed to act as a transport corridor for south-eastern Europe. The road and rail infrastructure, however, is in poor condition. The government is keen to improve transport links, and is looking for co-operation with private investors to modernise and extend transport options. Key aims include development of Albania’s ports and airports. Durres Port in particular is being developed as a general cargo port, and Vlora as a wet freight port.

A developing market

Albania’s main trading partners are within the EU, particularly Italy and Greece. Imports from the US are increasing, up by 66% in the first nine months of 2003, for example.

Facts in brief

Albanian airport stamp

Albania’s location is South-eastern Europe, bordering the Adriatic Sea and Ionian Sea, between Greece and Serbia and Montenegro. Strategic location along Strait of Otranto (links Adriatic Sea to Ionian Sea and Mediterranean Sea)

Its climate is mild temperate: cool, cloudy, wet winters; hot, clear, dry summers; interior is cooler and wetter

Natural resources include petroleum, natural gas, coal, bauxite, chromite, copper, iron ore, nickel, salt, timber, hydropower

Agriculture products are wheat, corn, potatoes, vegetables, fruits, sugar beets, grapes; meat, dairy products

Industries include food processing, textiles and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower, natural gas

Albania has a civil law system; has not accepted compulsory ICJ jurisdiction; has accepted jurisdiction of the International Criminal Court for its citizens

Diplomatic representation in the US — Chief of mission: Ambassador Aleksander Sallabanda

Diplomatic representation from the US — Chief of mission: Ambassador Marcie B Rries

Contact Information

American Chamber of Commerce in Albania
Tirana
Rr Deshmorete 4 shkurtit
Pall 1, Kati 2 Albania
Tel: +355 425 9779
E-mail: floreta@amcham.com.al
Website: www.amcham.com.al

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