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Doing Business in Albania: Reforms & Opportunities
government could also make use of, and exploit, the expertise of various consultancy firms and UK/International agencies to better face the challenges ahead. This assistance is crucial in also creating a powerful network that can promote investment in the country. This year, IBDE together with its partners in the region will organise a Southeast European Economic Forum to promote PPPs in the region and a Mediterranean Business Summit to examine the reshaping of the Mediterranean development. Such forums will serve as a powerful platform to promote different sectors of the Albanian economy. 3.3 Doing Business Reforms Albania is a fast growing, business-friendly, with improving infrastructure country that offers a plethora of investment opportunities. The improving legal and regulatory framework towards European standards, market size of Western Balkans, dynamic labour with relatively low cost, and ranking 15th in the world with regard to protecting foreign investors and access to credit are some of the reasons to invest in Albania. The World’s Bank Doing Business Report 2011 identifies four main areas to assess the business environment in Albania. These are: a) b) c) d)
Starting a business, Construction permits, Registering property, and Enforcing contracts.
The aim is to measure the regulation and red tape relevant to the life cycle of domestic small to medium firms (based on standardised case scenarios). The four main cities assessed in the country are business-friendly and are competitive with important cities in Southeast Europe. Figure 5 shows the results from key Albanian cities, which make up the majority of economic activity in the country. Although Albania ranks high for business start-ups in the region - for instance charging only a nominal amount and not requiring fixed capital – more reforms need to be adopted in order to attract more FDI. For example, the government should consolidate governmental approvals at a single access point (one stop shop), simplify registration with municipal authorities, and promote the use of electronic services. Also a single tax and business identification number should be adopted whilst removing the need for a company to have a seal, logo or brand. We note, however, that since almost all transactions and registrations are based on the Tax Identification Number, (NIPT) and that the logo and brand could be useful for companies to have them for commercial reasons they should not be compulsory. The seal in particular is inconvenient for small businesses and should be removed. An area that Albania has not gained many points in is dealing with the construction permits, especially in the capital Tirana -
Figure 5: Doing Business in Albania’s Key Cities - Ranking (1-22) Economy
Albania
City
Durres Shkodra Tirana Vlora
Ease of starting a business
Ease of dealing with construction permits
Ease of registering property
Ease of enforcing contracts
9 8 10 7
11 3 N/A 9
13 9 16 10
14 11 18 10
(Source: Doing Business in South East Europe 2011, World Bank)
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