Albania Capital Tirana Currency Lek (ALL) Language Albanian Population 3.58 million EU status non-member GDP 2006 $.9.3 billion Employment 85.7% (offical figures: may be higher) Exports $763.2 million f.o.b. (2006 est.) Imports $2.901 billion f.o.b. (2006 est.)

Setting up business Number of days to start business 39 Cost (% of income per capita) 22.4% Nonwage labor cost (% of salary) 30.7% Total tax rate (% profits) 55.8%

 

Albania

A government scheme offers investors entry to Albania for just one euro

When it comes to attracting foreign investments, the government of Albania knows where its priorities lie. “Attracting foreign investments is of crucial importance to ensure higher rhythms of development and integration for Albania,” the government believes. Accordingly, Albania has set itself the target of becoming “The most attractive country for foreign investments in the region and beyond it”. Ultimately, the government intends that half of all investment in the Albanian economy should come from FDI, and is moving to attract it.

Albania for 1 euro

One of the most ambitious initiatives for achieving this aim is the “Albania 1 Euro” initative, which aims to offer entry into the market for – literally – one Euro. “We will be offering investors sites for 1 Euro. We will offer them training for their employees for 1 Euro. We will offer them technological assistance for 1 Euro. We will offer them entry to Albania for 1 Euro,” said Prime Minister Sali Berisha at the launch of the initiative in August 2006.

Going for Growth

Even before the announcement of this initiative, a package of reforms designed to ensure macroeconomic stability and guarantee security for investors had already taken effect. Albania had been slow to attract FDI in comparison to the other Balkan states, and according to investment analysts Locomonitor, annual investment fell from $147 million in 2003 to just $36 million in 2004. However, it staged a strong recovery in 2005, reaching $520 million. Last year, FDI had rocketed to some $2.18 billion, although the total number of projects actually fell against that in 2005, indicating the investors are prepared to put significant amounts of income into individual projects. Government figures indicate a more measured rate of growth, with FDI expected to be about $400 million in 2006, but the indicators are the same – foreign investment is on the up, and confidence in Albania as an investment destination is growing. However, concerns over the informal economy and incidences of corruption remain, according to an OECD report published in late 2006.

Achieving Stability

A number of initiatives are under way to ensure that growth and economic stability continue. These include:

• Reducing the budget deficit;
• Maintaining a low level of annual inflation;
• Removing administrative barriers to doing business – all sectors now are open to foreign investment, and 100% foreign ownership of enterprises is permitted;
• Ensuring foreign and domestic companies are treated equally for all taxation and legal purposes;
• Strengthening international relations. Albania is currently in negotiation with the EU over a stabilization and association agreement that could eventually lead to membership of the EU. Free trade agreements have been established between all the Balkan countries, opening up a market that extends well beyond Albania’s own borders.

Investment Incentives

A number of incentives are available for companies investing in certain sectors. These include:

• Manufacturing: Machinery and equipment imported for use within the country are exempt from VAT payments;
• Tourism: Activities including construction, redevelopment and extension of existing facilities are eligible for support. Investors involved in these activities may be eligible for exemption from profit tax for up to five years, followed by a 50% reduction over the next five years;
• Power production.

State aid is in principle available to investors in all sectors except fishing and agriculture.

Major Investors

An ongoing privatization program, an annual growth rate of some 6%, low operating costs and a young and dynamic population have already attracted some major investors to Albania. These include AMC, Vodafone and Lockheed Martin in the telecommunications sector, Darfo in the mining sector, and Raiffeisen Bank and the American Bank of Albania. Overall, there are now over 1,000 foreign-owned companies operating in Albania. the largest investor is Italy, closely followed by the US and Greece. Germany and Turkey are also major investors.

AMCHAM Albania

Being an AmCham Albania member empowers businesses to lobby in a group with leading companies, to extend networking to influential circles and to participate in events tailored to their needs. Through its work and services, AmCham Albania seeks to be the leading representative for US and international business in Albania.

 

Contact Information

American Chamber of Commerce in Albania
Ruga Deshmoret e 4 shkurtit
Pall 1, Kati 2, AP.5
Tirana
Albania
Tel: +355 425 9779
E-mail: info@amcham.com.al
Website: www.amcham.com.al

 

Useful websites

www.albic.net/eng	Albanian business information portal, in English and Albanian
www.anih.com.al	Invest in Albania website
www.fiaalbania.org	Association of Foreign Investors in Albania
www.instat.gov.al	Institute of Statistics, includes English section
www.ebrd.com	European Bank for Reconstruction & Redevelopment

 

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