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Investing in Albania

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One of the fastest growing economies in Europe. Let us help you get a piece of the cake…

Get to know Albania's business Environment

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Money

The official currency of the Republic of Albania is the Albanian lek (lek). The abbreviation of the currency is ALL and is represented in the foreign exchange market with the symbol L. The Lek is issued and maintained by the Bank of Albania, the country’s central bank. Banknotes are issued in denominations of L200 to L5,000 while coins are minted in denominations of L1 to L100. According to the Bank of Albania, 1 USD was equal to 98.15 L and 1 EUR was equal to 106.44 L on June 30, 2023. The Albanian Lek is considered a strong currency due to several factors, including the stable economic environment, low inflation , prudent fiscal policies, increased foreign investment and the growth of the tourism sector. These elements contribute to investor confidence and maintain the stability and value of the currency. 

Political System & Government

The political system in Albania is a parliamentary republic in which the dominant role of the administration of state affairs rests with the Chairman of the Council of Ministers (prime minister). The Council of Ministers is elected once every four years by the Parliament, which emerges through the General Parliamentary Elections. The head of state is the President, who is elected by the Parliament every 5 years. Since September 13, 2013, the Republic of Albania is governed by the Socialist Party headed by Mr. Edi Rama, where in the 2021 elections, the Socialist Party won its third mandate in the government. 

Transportation Infrastructure

There are about 18,000 km of roads in Albania, of which 7,450 km are considered “main roads”. Albania has a very convenient and extensive system of transport links, as it is focused on welcoming tourists. The main station of the Albanian railways is in Durrës and the schedules are as follows: Durrës – Elbasan: Departure 7:20, 15:10 Arrival 10:06, 17:55; Elbasan – Durrës: Departure 6:00, 13:05 Arrival 8:43, 15:53; Shkodër – Durrës: Departure 5:45, Arrival 9:40; Durrës – Shkodër: Departure 13:00 Arrival 17:05. Taxis are easily available in most cities in Albania, they are distinguished by their yellow color and most of them are equipped with taxi meters. Fares are generally predetermined based on distance traveled, but can sometimes be negotiated in advance. Taxis are plentiful in Tirana and can easily be picked up on the street or at one of the many taxi stands throughout the city. For interurban transport, many buses are available for transport around the main cities of Albania. Traveling by bus is economical and offers a unique view of the rural part of the country. Buses run almost exclusively during the day. Approximate ticket costs are from 1000L to 1200L for long distances such as Tirana-Saranda. Many travelers looking for public transportation prefer to use private vans, which operate as an alternative system to bus routes and operate almost entirely without set schedules or fares. Today, Albania is connected to many European countries via air routes. Mother Teresa Airport closely cooperates with more than two dozen international airlines, the largest of which are Turkish Airlines, Albanian Airlines, Austrian Airlines, etc. The airport infrastructure is well developed. The latest innovations are low-cost flights and year-round holiday destinations, accompanied by the country’s growing middle and upper class. While during the summer air transport is characterized by charter trips, in other words special flights of tourists coming from countries such as Norway, Sweden, Ukraine, Israel, but also the holiday destinations of Albanians in Antalya, Sharm el-Sheikh and beyond. But despite the light competition in this market, the number of trips remains low. Even 5 to 7 times lower than in developed countries. Something that despite the situation, 

Population

The population of Albania on July 1, 2023 is 2,868,422 inhabitants, based on Worldometer’s processing of the latest United Nations data. The population of Albania is equal to 0.04% of the entire world population. Albania ranks 140th in the list of countries according to population. The average age in Albania is 36.4 years.

Residence permit/visa for foreign workers

Residence permits and visas in the Republic of Albania are regulated according to law no. 79/2021 “For Foreigners”. Foreign citizens who are equipped with a valid residence permit, issued by the competent authorities of the United Arab Emirates, are exempted from the obligation to obtain a visa to enter and stay in the Republic of Albania for up to 90 days per 180 days , for purposes equivalent to those of the “C” type visa. In order to extend their stay in the Republic of Albania, these citizens can be provided with a temporary residence permit for work purposes according to the following categories: 

Banking system

The banking sector is regulated through Law 9662/2006 “On banks in the Republic of Albania”. The law establishes guidelines to ensure efficient management and administrative procedures for domestic and foreign banks. The banking sector is fully private and includes 14 operational banks, up from 16 in 2018. National Commercial Bank owns 31% of the market, followed by Austria-based Raiffeisen Bank with 16% and local bank Credins with 14%. Greek banks’ market share fell to 5.6% at the end of 2018, from more than 15% in recent years. American Investment Bank (ABI Bank), owned by New York-based NCH Capital Group, is the only American private equity firm in Albania’s banking sector. ABI Bank acquired the National Bank of Greece in early 2018. Hungary’s OTP Bank Group, one of the largest independent financial services providers in Central and Eastern Europe, completed the acquisition of Societe General Albania in 2019 and has expressed plans to further expand in Albania. The banking sector remains well capitalized, profitable and liquid. In 2018, earnings reached about $82 million, with a capital adequacy ratio of 17.9, a 1.2% return on assets, and a 13% return on equity. At the end of 2018, the total assets of the banking sector reached 12.7 billion dollars, mainly bank deposits. The regulatory framework complies with international practice. The Bank of Albania (BSH) has tightened the supervision rules for banks due to the global financial crisis and the risks of contagion posed by the region’s banks. In Albania there are 31 non-banking financial institutions and 14 savings and loan companies. These institutions target medium-sized businesses that are not primarily served by the commercial banking sector. They offer loans from USD 1,000 to USD 500,000. 

Geography

Albania is located in the southwestern corner of the Balkan Peninsula, occupying 28,748 km2. The maximum length is about 340 km and the maximum width is about 150 km. Much of the country is rugged and mountainous. The highest peak is Korabi in the northeast with a height of 275 m. Albania has 1094 km of borders, 30% of which are the coast of the Adriatic and Ionian seas. Of Albania’s lakes, Lake Shkodra is the largest in the Balkans (368 km2) and Lake Ohrid is the deepest. The country has 152 rivers including the Shkumbin, which roughly divides the country into northern and southern regions. The Republic of Albania is bordered to the north by Montenegro, to the north-east by Kosovo, to the east by Macedonia, and to the south and south-east by Greece. Albania’s natural resources include underground wealth such as oil, natural gas, chrome, coal, 

Working hours

The normal daily working time is no more than 8 hours, while the daily rest is at least 11 hours without interruption within the day or in case of need for two consecutive days. While the normal duration of the work week is no more than 40 hours. The weekly duration of work is understood as the working time performed from Monday morning at 0:00 until the following Sunday at 24:00. For jobs that present difficulties or that are harmful to health, a reduced weekly duration of work is foreseen. Only if the circumstances require the performance of additional working hours, the employer may ask the employee to perform additional work, however the additional hours in a year should not be more than 200. 

Registration of a business

All commercial entities that wish to operate in Albania, organized in the form of a limited partnership, a collective partnership, a limited liability company and a joint stock company, according to law no. 9901, dated 14.4.2008 “For merchants and commercial companies”, are obliged to register at the National Business Center. 
 
It is worth noting that the most widespread legal form in the exercise of commercial activities in Albania is the limited liability company, except for those cases where the law necessarily requires that a certain activity, such as banking or insurance activities, be exercised by an entity which has the form of a joint stock company. 
 
Each entity is registered in the commercial register through the electronic submission of the application for initial registration, completing the application with all mandatory data, the statute and the act of establishment, as well as with the bank mandate or the notarial act that certifies the payment of the capital, if the latter has been paid. If the application is made through a representative, then his authorization is also required. 
 
In the event that all conditions and legal criteria for registration are met, the National Business Center within one day from the date of submission of the application decides the registration and issues the relevant registration certificate. 

Property Ownership

The right of ownership over real estate in Albania can be realized in several forms, where the most classic form is that of the sales contract. According to the Civil Code, real estate sales contracts must be notarized and registered, otherwise they are not valid. 
 
However, it should be kept in mind that Albania is one of the countries that have imposed some restrictions on the right of ownership for foreign citizens. Thus, Albanian natural and legal persons have the right to freely buy and sell land among themselves without any restrictions, while foreign natural or legal persons enjoy this right in a limited way. So, these persons have the right to buy land for investment, state or private property, or the land of investments made or under investment. This right arose only after they have made the investment in a value not less than three times the value of the land in the Republic of Albania. Meanwhile, these persons cannot buy lands that hold museum, archeological, historical values, national parks, flora and fauna reserves, 
 
Also, it is worth mentioning that in 2015, law no. 55/2015 “On strategic investments in the Republic of Albania”. This law defines as strategic sectors: the energy and mining sector; the transport sector, the infrastructure of electronic communications and urban waste, the tourism sector, the agricultural sector, the sector of technological zones and economic development. Thus, investments made by subjects, Albanian or foreign, that are in these sectors and meet the conditions defined in the law, benefit from support from the state in several forms. One of these forms of state support is related to making available the development and realization of strategic investment projects of lands, forests, agricultural lands, as well as other immovable assets, owned by the Albanian state. 

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Opportunities&Regulations

Taxation in Albania

As far as personal income tax is concerned, all resident persons are subject to personal income tax for all sources of income, while non-resident individuals are subject to this obligation only for income realized in the territory of Albania. 
 
Dividends, the income flowing as a partner’s profit, even when it is a single partner, are taxed at 8%. While interest from loans, deposits or similar contracts, as well as other income are taxed at 15%. 
 
As far as the profit tax is concerned, it is worth noting that the Albanian law provides that all legal entities with income above 8,000,000 ALL per year are subject to the obligation for the profit tax. However, the profit tax rate is 0% for all entities with income up to 14,000,000 ALL, and 15% for all entities that exceed this level of income. As for legal entities that carry out activities for the production or development of software, the tax on profit is 5%. 
 
Accommodation structures “Hotel/Resort with four and five stars, special status” and that are holders of a registered and internationally recognized trademark “brand name”, which apply before December of of the year 2024. 
 
Regarding the value added tax, it is worth mentioning that all supplies of goods and services, made against payment within the Republic of Albania and all imports of goods in the territory of Albania are subject to this tax at the rate of 20%. However, the minimum registration limit for this type of tax is the circulation by the taxable person of an amount of at least 10,000,000 ALL in a calendar year. 

Dividends, the income flowing as a partner’s profit, even when it is a single partner, are taxed at 8%. While interest from loans, deposits or similar contracts, as well as other income are taxed at 15%. 
 
As far as the profit tax is concerned, it is worth noting that the Albanian law provides that all legal entities with income above 8,000,000 ALL per year are subject to the obligation for the profit tax. However, the profit tax rate is 0% for all entities with income up to 14,000,000 ALL, and 15% for all entities that exceed this level of income. As for legal entities that carry out activities for the production or development of software, the tax on profit is 5%. 
 
Accommodation structures “Hotel/Resort with four and five stars, special status” and that are holders of a registered and internationally recognized trademark “brand name”, which apply before December of of the year 2024. 
 
Regarding the value added tax, it is worth mentioning that all supplies of goods and services, made against payment within the Republic of Albania and all imports of goods in the territory of Albania are subject to this tax at the rate of 20%. However, the minimum registration limit for this type of tax is the circulation by the taxable person of an amount of at least 10,000,000 ALL in a calendar year. 

Energy sector and opportunities

The most important national objective of the Albanian government for the share of energy is related to the fact that in the gross energy consumption in 2030, the share of energy produced from renewable sources will be 54.4%. 
 
Thus, any entity that conducts commercial activity in the territory of the Republic of Albania can apply for an approval for the construction of new generating sources of electricity. In reference to the Albanian legislation, the requests for the approval of these objects, in addition to having to be accompanied by legal and administrative documents, as well as those of a financial-fiscal nature, which are considered as general documents, must also be accompanied by some specific documents related with the nature of the project. It is important to note that in these cases, a pre-feasibility study is also required, which provides sufficient technical, economic and financial reliability of the proposed project. This study should give full credibility in terms of environmental and social impact. 
 
The Ministry responsible for energy examines the documents submitted by the applicant if they are in accordance with the requirements of the rules, as well as verifies the reliability and accuracy of these data. If the documents are complete and in accordance with the law, the Ministry, within 20 calendar days from the date of submission of the request, communicates to the applicant the acceptance of his application. In the case of new production capacities above 2 MW, the Ministry, when it concludes that all the documents submitted by the applicant are complete and correct, sends the relevant proposal to the Council of Ministers for approval. If the new production capacities will be up to 2 MW, when they are not the subject of a concession, the decision is taken by the minister responsible for energy. 

Workers' rights and the Labor Code

The minimum wage currently in Albania is 40,000 ALL and is paid, through the banking system, to the employee every two weeks, when it is calculated by hours, days or weeks, and at the end of every month when it is calculated by months, except in cases where it is stipulated otherwise in the written agreement. 
 
As for the weekly rest, it cannot be less than 36 hours, of which 24 hours must be uninterrupted and includes Sunday. However, these holidays are not paid. 
 
As for annual vacations, their duration cannot be less than 4 calendar weeks during the current working year. In those cases where the employee has not completed a full year of work, the duration of paid annual leave is determined in relation to the duration of the employment relationship. Regarding the termination of the employment contract, the Labor Code determines not only the notification deadlines after the probationary period, but also the procedure that the employer must follow to terminate the contract. Actions carried out contrary to the above, cause the termination of the contract to be considered immediate and which, according to the law, can only be accepted for justified reasons. 
 
Regarding the procedure, it is required that, initially, the employer notifies the employee in writing at least 72 hours before the meeting and talks with him. During this meeting, the employer must communicate his decision-making to the employee, as well as giving him the opportunity to express himself. Within 48 hours to one week after this meeting, the employer must notify the employee of the termination of the contract. The only reasons why an employment relationship can be terminated are: the ability of the employee, his behavior, or the operational requirements of the enterprise. 

Tourism sector opportunities

In Albania, the development of tourism, through domestic or foreign investments, is considered public interest and enjoys all the support and facilities from the state. In the context of state support, it is worth noting that it can appear in several forms, but not limited to the provision of real estate, the provision of special infrastructure, etc. 
 
One of the most important forms that the law on tourism defines for the development of tourism is the investment in accommodation structures with 4 or 5 stars, with special status. This status can only be obtained by those entities that are certified as accommodation structures with 4 or 5 stars by the relevant authority and that have an investment value of at least 8 million euros for accommodation structures with 4 stars, and at least 15 million euros for accommodation structures with 5 stars. 
 
Also, in areas with priority for the development of tourism, the Council of Ministers, with the proposal of the relevant minister, can approve the provision of state real estate for investment projects up to 99 years. This provision can also be made through a symbolic contract of 1 euro. 

One of the most important forms that the law on tourism defines for the development of tourism is the investment in accommodation structures with 4 or 5 stars, with special status. This status can only be obtained by those entities that are certified as accommodation structures with 4 or 5 stars by the relevant authority and that have an investment value of at least 8 million euros for accommodation structures with 4 stars, and at least 15 million euros for accommodation structures with 5 stars. 

Commercial Entitites

The sector covering the organization of Commercial Companies near Halimi Albanian Law Firm and Rokas advises large and small organizations on the establishment, management, meetings of boards of directors and board committees on a variety of issues of corporate organization, including corporate liability. , the financial aspect, and the responsibilities of the board. Our long-term practice in this field with lawyers with experience and expertise in a wide range of legal disciplines, including the rules of commercial companies, litigation related to them, etc. 
 
We routinely advise companies on day-to-day matters of internal governance, shareholder relations and compliance with the full range of laws, rules and regulations covering corporate governance matters. From drafting the latest documents, notifying clients of changes in the law or best practices to advising on potential acquisitions, conducting audits and due diligence, other sensitive matters, our lawyers provide practical legal advice to boards, administrators and shareholders of commercial companies in Albania and beyond. Our law firm has extensive experience in the field of employment. 
 
We advise our clients on all aspects of employer-employee relations including pre-employment matters, negotiation of employment and executive compensation agreements, non-compliance/dispute agreements (and other contractual matters), enforcement of discrimination laws, duties of employee loyalty, staff reductions, terminations of employment and compensation matters. We develop employee handbooks, handbooks and other employment policies and procedures. Please contact us for an initial consultation. 

Property&Real Estate

Legal issues related to real estate in Albania are generally long and complex processes and are usually the main reason why international corporations do not invest in our country. 
 
Real estate law is about helping clients manage their rights and responsibilities as landowners and advising on transactions to realize the economic potential of their properties. Our lawyers advise on commercial transactions such as acquisitions and sales, leasing, development, joint ventures, asset management and financing arrangements. We are also at the disposal of our clients in court proceedings when disputes arise regarding real estate and property. 
 
Our clients include property developers, institutional investors, real estate funds, corporations, retailers, public service companies and financial institutions where we can mention the Salillari company, and construction companies within the Bolv Group etc. 
 
Please contact us for an initial consultation. 

Tax Practices and Customs

The lawyers of the Albanian law firm Halimi, part of Rokas International, have a long practice in the field of international trade dealing with the full range of legal issues arising from the trade of goods and services across international borders. Practice includes customs and import compliance, export controls, commercial litigation and international business transactions. We also advise our clients on a number of international trade matters, including how to enter new markets, the legal risks associated with various business plans and strategies, and dealing with international trade regulations and litigation. 
 
Our customs and import and export compliance services offer a complete and comprehensive service for experienced and novice importers, from large international companies to family businesses. 
 
We advise our clients on law enforcement and audit strategies, help them manage the import of goods through the use of information and effective entry strategies in accordance with Albanian legislation. Our law firm represents clients in enforcement matters and other disputes with the Albanian government or private entities. 

Industry & Logistics

Albania has some of the cheapest electricity in Europe. With a price of approximately 0.11-0.15 euro kwh. Coupled with a relatively cheap work force and great positioning in Europe, makes it that much more advantageous to produce and ship from Albania.

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