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Doing Business in Albania: Reforms & Opportunities



DOING BUSINESS IN ALBANIA: REFORMS AND OPPORTUNITIES UK-Albania Business & Economic Reform Forum January 2012

Photo Credit: Wikimedia

Authors: Rudi Guraziu Epidamn Zeqo

IBDE – Integrating World Markets Photo credit: Tirana International Airport

Doing Business in Albania: Reforms & Opportunities

Albania’s Coastline Photo credit: Wikimedia

REPORT DOING BUSINESS IN ALBANIA: REFORMS AND OPPORTUNITIES January 2012 To order a .free copy. in the UK please contact IBDE at To order a free copy in Albania please contact the British Embassy in Tirana

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Doing Business in Albania: Reforms & Opportunities

DISCLAIMER 1. The views expressed in this document are the sole responsibility of the author(s) and do not necessarily reflect the views of the British Embassy in Albania and International Business and Diplomatic Exchange (IBDE), its affiliates or Advisory Board. IBDE is independent and owes no allegiance to any government or to any political body. This document is issued on the understanding that if any extract is used, the author(s) and IBDE and the British Embassy in Tirana should be credited, preferably with the date of the publication or details of the event. Where this document refers to or reports statements made by speakers at an event every effort has been made to provide a fair representation of their views and opinions, but the ultimate responsibility for accuracy lies with this document’s author(s). The published text of speeches and presentations may differ from delivery. 2. The information contained in this publication has been gathered by authors during the conference. Other researched information has been compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, IBDE and the British Embassy in Tirana accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and IBDE makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained. 3. This Report is intended as a basis for discussion and it constitutes a “marketing communication”. All views, opinions and assessments contained in this document may be changed after publication at any time without notice. 4. Copyright of this publication is held by IBDE and British Embassy Tirana. You may not copy, reproduce, republish or circulate in any way the content from this publication except for your own personal and non-commercial use. Any other use requires the prior written permission of International Business and Diplomatic Exchange or British Embassy in Albania. About Authors Rudi Guraziu is Founder and CEO of IBDE and Editor of Exchange Magazine. Epidamn Zeqo is Business Analyst at IBDE and Deputy Editor of Exchange Magazine Published by: International Business and Diplomatic Exchange 1 Northumberland Avenue, Trafalgar Square, London WC2N 5BW British Embassy Rruga Skenderbeg 12, Tirana, Albania © IBDE & British Embassy Tirana 2011 This report is commissioned by the British Embassy in Albania IBDE – Integrating World Markets

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Doing Business in Albania: Reforms & Opportunities


ACKNOWLEDGMENTS This report draws on the speakers’ presentations and the discussion from each of the sessions captured by the authors. A word of grateful acknowledgement goes to the following speakers for their excellent contributions: H.E. Fiona Mcllwham, British Ambassador to Albania H.E. Nasip Naço, Minister of Economy, Trade and Energy H.E. Aldo Bumçi, Minister of Tourism, Culture, Youth and Sports H.E. Genc Pollo, Minister for Innovation and Information & Communication Technology H.E. Genc Ruli, Minister of Agriculture, Food and Consumer Protection H.E. Ettore Sequi, Ambassador of the European Union Delegation to Albania Clive Rumbold, Head of Political Section, EU Delegation to Albania Fabio Serri, Head of European Bank for Reconstruction and Development Office, Albania Haris Broumidis, CEO, Vodafone Albania Jorida Tabaku, Deputy Mayor of Tirana Eneida Guria, Director, Albanian Investment Development Agency (AIDA) Perparim Kalo, Board Member, Foreign Investors Association, (FIAA) Altin Tanku, Director of the Research Department, Bank of Albania Milva Ekonomi, Executive Director, Agenda Institute Artan Gjergji, Lecturer, European University of Tirana The authors of the report wish to thank Elizabeth Evans, Deputy Head of Mission, for her invaluable support and commitment in making this project a success, and all the staff of the British Embassy in Tirana. Thanks go also to Evis Karandrea, Vodafone Albania. Warm thanks go to our IBDE colleagues, in particular Penelope Bridgers for her contribution to this report and, of course, all participants and contributors to the discussion. Last but certainly not least we would like to thank H.E. Edmond Haxhinasto, Albanian Deputy Prime Minister and Minister of Foreign Affairs, for his remarks at a drink reception, hosted by HM Ambassador for participants of the forum.

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Doing Business in Albania: Reforms & Opportunities

ABBREVIATIONS Albanian National Tourism Agency Bank of Albania Business Process Outsourcing


Central European Free Trade Area


Commodity Price Index


European Bank for Reconstruction and Development


European Commission


European Union


European Free Trade Association


External Financing Needs


Foreign and Commonwealth Office


Foreign Direct Investment


Free Trade Agreements


Global Competitiveness Report


Gross Domestic Product


Group of States Against Corruption


Information Communication Technology


Instrument for Pre-Accession Assistance


Integrated Coastal Area Management


International Business and Diplomatic Exchange


International Monetary Fund


Ministry of Economy, Trade and Energy


North Atlantic Treaty Organisation


Office for Democratic Institutions and Human Rights


Organisation for Security and Co-operation in Europe


Public Private Partnerships


Rule of Law


Small and Medium Enterprises


Stabilisation and Association Agreement


Tirana Stock Exchange


World Bank


World Economic Forum


World Trade Organisation


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Doing Business in Albania: Reforms & Opportunities















1.1. Background and Purpose


1.2. Structure of the Report




2.1. Strengths


2.2. Weaknesses


2.3. Opportunities


2.4. Threats




3.1. Overview on Progress


3.2. Challenges


3.3. Doing Business Reform


3.4. Monetary Policy



25 28

4.1. Business Opportunities 4.1.1.

Infrastructure and Construction



Energy and Mining



Tourism and Education



Agriculture and Manufacturing



Information and Communication Technology and other Services Industries

4.2. Tirana: Destination No. 1

31 32





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Doing Business in Albania: Reforms & Opportunities


Firstly, my thanks go to many Albanian Government representatives, expert speakers, and those from the UK who gave up their time to share insights and expertise with us at the UK-Albanian Business and Reform Forum. The Embassy was delighted to work with IBDE to deliver, what I believe, was an extremely successful meeting. The Forum attracted over 140 participants, from government, business, diplomacy, civil society and academia. I also wish to thank our IBDE partners for preparing this Report, which draws on the presentations of speakers and Forum discussions. In this report, IBDE have sought to identify those business opportunities and reform priorities most likely to support and advance Albania’s business, economic and European Union (EU) ambitions. In addition, it includes policy recommendations and an Action Plan for business and other stakeholders. We hope that the Report will serve both as a basis for discussion on future reforms, and also as a guide and reference for British (and other international) businesses interested in investing in Albania. As an enlargement champion, the UK government is convinced that Albania belongs in the EU. We have consistently stated our strategic commitment to the Western Balkans region and are supporting Albania’s EU journey. We are working alongside our Albanian, EU and other international partners to help support the necessary reform processes (identified in the European Commission’s 2010 Opinion and 2011 Annual Progress Report). We see progress on business and economic reform as an important

element of that effort and a way to boost UK and international investment confidence in the Albanian market. Potential investors need to see Albania as part of a larger European market, when devising their investment strategies. Building prosperity is a core objective of the Foreign and Commonwealth Office (FCO). Commercial Diplomacy lies at the heart of UK foreign policy in Albania and globally. Foreign direct investment (FDI) can act as an important driver of reform in aspirant EU countries. This Report, as part of the UKAlbania Forum, brings together bilateral and multilateral policy and business perspectives. It builds on our Commercial Insights Booklet (launched in Autumn 2011), which provided a snapshot for business of opportunities in Albania, Kosovo and Macedonia. Copies are available for download from the Embassy’s website: Albania and the UK share a strong bilateral relationship, founded on business links, friendship, and a wealth of common interests, all of which offer many opportunities for increased trade and investment. Albania’s potential is clear – its people are entrepreneurial, talented, skilled and dynamic. We hope to use this report to capitalise on that potential.

Fiona Mcllwham British Ambassador Albania IBDE – Integrating World Markets


Doing Business in Albania: Reforms & Opportunities

COUNTRY PROFILE Official Name: Republic of Albania Democratic Country: Led by Prime Minister Sali Berisha of Democratic Party since 2005 SHKODER

Population: 3,204,284 (World Bank 2010) Capital City: Tirana



Official Language: Albanian Monetary Unit: 1 Lek = 100 Qindarka Main Trade Partners: Italy, Greece, Austria, Turkey, Germany and China GNI per capita: US $3,960 (World Bank, 2010)


Internet Domain: .al; Inter. dialing code: +355 NATO Member SARANDE

EU Potential Candidate: Working towards EU Candidate Status

Following the demise of the communist regime in the early 1990s Albania has made successful transition into a parliamentary democracy based on a constitutional, legislative framework which is largely in line with European principles and standards. Albania has become a member of important world organisations such as: International Monetary Fund (IMF) 1991, World Trade Organization (WTO) 2000, and Central European Free Trade Area (CEFTA) 2007. Albania became a full member of the North Atlantic Treaty Organisation (NATO) in April 2009. In 2006, Albania signed the Stabilisation and Association Agreement (SAA) with the European Union. It also presented its formal application for membership in the EU in 2009. In November 2010, the Council of EU granted visa liberalisation to Albanian citizens. Albania is a small mountainous country in the Balkan Peninsula. It lies on the coast of the Adriatic and Ionian Seas opposite southern Italy and benefits from a stunning coastline of 362 km. Albania shares land borders with Kosovo and Macedonia to the east, with Montenegro to the north and with Greece to the South. It has a popuIBDE – Integrating World Markets

lation of over 3 million predominantly Albanian ethnic origin and with less than 5% of other ethnicities; Greek, Vlach, Roma, Serb, Macedonian and Bulgarian. The country is well endowed with natural resources mainly chrome, nickel, copper, petroleum, natural gas, limestone and hydro-electric power. It enjoys a favourable climate for agriculture and its location possesses a wealth of potential as a tourist destination. Macroeconomic stability Albania’s average annual Gross Domestic Product (GDP) growth was around 6% from 2002 – 2008. During the 2009 global economic crises Albania was the only country in the region which registered positive economic growth of 3.3%, and its GDP growth for 2010-2011 was estimated to have been the same. During the last decade or so Albania has achieved a degree of macroeconomic stability and low inflation rate at 2-4% (see section 3.4). Well-educated and low-cost work force Albania has a very young population with more than 50% under the age of 30 and the most multilingual population in the


Doing Business in Albania: Reforms & Opportunities

region. Albanians learn Italian and English, as primary foreign languages, Greek is also taught in schools of the Greek minority. Albania offers the lowest labour costs in the region with the minimal wage ALL 16.000 (approximately 130 Euro) which is based on the “Decision of the Council of Ministers” no. 235. Attractive Tax System Albania offers an attractive tax system with a flat rate tax of 10% in corporate income tax and personal tax income. Albania’s VAT rate stands at 20% of the taxable value. VAT is applied at 0% rate for exports and international services such as international transport of goods and passengers. The government has taken measures to tackle informal trading standards and has recently adopted a fiscal reform package aimed at reducing the large grey economy and attract foreign investment. Free Trade Albania has a liberal free trade regime. The country has signed Free Trade Agreements (FTAs) with all its Balkan neighbours. These agreements offer manufacturers based in Albania to use of the country as a gateway to markets in southern Europe as well as via transshipment to the EU. Albania has also signed with EU the SAA that allows all industrial products originated in Albania to be exported into the EU with 0% customs tariff, while around 80% of industrial goods originating in the EU can be imported into Albania without any custom tariffs. Protection for foreign investment Albania has adopted the 1993 Law on Foreign Investments which guarantees equal treatment of foreign and local investors. Foreign investments are protected from expropriation and nationalisation.

banking sector. The country has 16 commercial banks (14 foreign-owned) which offer services such as corporate, retail and finance services. Some of the best known international banks that currently operate in the market including Raiffeisen International, Société Générale, and Intesa Sanpaolo have boosted financing in the economy. The banking sector allows foreign investors to open and maintain foreign currency bank accounts. Foreign direct investment In the last decade Albania has experienced an increase of FDI. In 2008, FDIs tripled compared with 2005. Currently, there are over 1000 foreign companies mostly from Greece, Italy, Germany, the UK, Turkey, Bulgaria, and the US operating successfully in Albania. Amongst international brands operating in Albania are companies such as Vodafone, Raiffeisen Bank, Petroleum Bankers (Canada), Kurum (Turkey), Edil Centro (Italy), EVN (Austria), Bechtel, Enka. Transport Located in an excellent strategic position, linking the Western Mediterranean countries with the Balkans and Asia, Albania has significantly worked in improving road, railway, air and sea transportation. In 2009, Albania has invested over €1bn in its largest motorway project to date connecting Albania with Kosovo, shortening the distance from 7 hours to 2 hours. The motorway through Kosovo will connect Albania with the Pan-European Corridor 10 in Nish (Serbia). Major works have been underway to construct Corridor 8 which will link the Albanian port of Durres to Varna (Bulgaria). This corridor will be the main East-West connection through Albania and will become an important link for transporttation between the Balkan and Mediterranean countries.

Banking sector The Albanian economy is now an open economy with fully liberalised trade and a completely privatised and highly developed

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Doing Business in Albania: Reforms & Opportunities



well as active regional market are some of the advantages to invest in Albania.

This Report draws on the ideas that were developed and discussed at the “UKAlbania Business and Economic Reform Forum” organised by IBDE in partnership with the British Embassy in Albania on 25 January 2012 in the Albanian capital Tirana. The Report includes a set of policy recommendations and an Action Plan for distribution to policymakers, the business community and other stakeholders.

Ensuring the success of reforms is, however, not straightforward, and could be further complicated by the many challenges facing the economy and the country as a consequence of the on-going Eurozone crisis. This report serves to aid reform implementation and to promote business opportunities in Albania. The conference material is used under the Chatham House Rule.

The forum participants consisted of high level government and international financial institutions representatives, senior members of Albania’s diplomatic corps, and international business leaders already operating in the country, as well as those interested in investing in Albania. Discussions focused both on the progress and challenges faced by Albania in the process of strengthening its liberal democratic model, and achieving full integration with the European Union. To answer the central question of the conference - whether investors, as wealth creators, enjoy the right conditions to flourish in Albania? - our focus was twofold and dynamic. We provide an expert analysis of current macro-economic situation in the country, taking into account the impact from the Eurozone crisis, and the economic reform process that has now entered its third decade. We note that as Albania has embraced the open market economy, the focus has shifted from liberalisation and privatisation to improving the business environment and attracting FDI. The latter is the central focus of the second part of this report. This focus was thought appropriate since FDI represents the most vital engine of growth for an economy like Albania’s. Foreign investors can find rewarding investment opportunities in the various sectors of the economy. Low corporate and personal income flat tax (10%), relatively low labour costs and proximity to major European economies as IBDE – Integrating World Markets

Key Recommendations This Report includes a number of recommendations designed to enhance the business and FDI environment so as to maintain Albania’s growth momentum, strengthen the rule of law (RoL) and move forward with the needed reforms. One of the key issues identified in this Report is the difficulties in accessing credit, as a very determinant factor in limiting business development in the country, therefore, we recommend the Government to: 

Improve its macroeconomic conditions by decreasing the public debt as percentage of GDP (58.3% although just below EU ceiling), to benefit from cheaper credit in the future. Devise a comprehensive strategy in order to successfully attract equity firms to enter Albanian market. Support with funding and policymaking a feasibility project to encourage listings and secondary trading on the Tirana Stock Exchange (TSE). Take a swift action in finding other growth avenues to compensate for the eventual decrease of remittances during the Eurozone crisis. Set up, in cooperation with relevant stakeholders, an expert group/commission to debate and provide a contingency/action plan to deal with the continuing Eurozone crisis and its immediate impact on the Albanian economy and its banking sector in particular.


Doing Business in Albania: Reforms & Opportunities

1. INTRODUCTION 1.1. Background and Purpose European integration stands alongside comprehensive and sustainable growth as overarching goals for Albania. This Report helps to identify the business opportunities and reform priorities likely to advance Albania’s business, economic and EU ambitions. In economic terms Albania is one of the few countries in the region that has showed a steady growth track during the recent financial crisis. UK and Albanian relations are well-established. The UK brand is powerful within the country, attracting strong support for UK investment from all levels of business and government. In addition, the EU accession process provides a framework within which to push for business friendly reform, stimulating the advance of wider economic and the RoL reform, vital to growth.

reform have taken place in the country. The Forum sought to draw out lessons for ensuring successful and sustainable reform processes. Under particular consideration were factors that could motivate reform across the economic spectrum. We hope the intended outcome of the Forum will be a better grasp by business and other stakeholders involved on the political economy of reform processes, the problems that political challenges present to these reforms, as well as enhancing the progress towards achieving EU integration goals. It is widely accepted that technical solutions which ignore political realities cannot lead to sustained success in reform, and therefore a greater partnership between all stakeholders is necessary to achieve the best outcome. This high level, targeted event brought together a wide range of politicians, diplomats, business leaders, economists and experts from participating sectors and institutions. The first session focused both on the challenges faced by Albania and milestones in the nation’s progress towards becoming a liberal democracy with a functioning market economy. The second session of the conference focused on the notion of Albania being “open for business”, providing a platform not only for in-depth discussion of progress on economic reform but also on the promotion of business opportunities and investment potential in areas such as: tourism, technology, construction, infrastructure, manufacturing, environment, the agricultural sector, education, finance & banking, plus professional and other relevant business services industries.

The Forum’s principal aim was to highlight business opportunities as well as to provide a clear perspective on the economic reform findings in the European Commission (EC)’s 2011 Annual Progress Report (APR). It also aimed to boost the profile of UK business interests and expertise and helped facilitate an exchange of information and contacts between prospective UK and EU investors and Albanian stakeholders. In line with the goal of maximising opportunities and relationships in Albania, the authors hope this report will further assist British and EU businesses in learning more about the Albanian business environment, its opportunities and potential challenges.


The central question of the conference was whether investors, as wealth creators, enjoy the right conditions to flourish in Albania? The UK-Albania Forum attempted to further the debate by exploring what types of

The methodology used in this report, in support of the issues discussed at the conference, uses other competent sources such as the APR 2011 on Albania, Doing Business Report 2011 of the World Bank

The Structure of the Report

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Doing Business in Albania: Reforms & Opportunities (WB), European Bank for Reconstruction and Development (EBRD) assessments, the Global Competitiveness Report (GCR) 2011-2012 of the World Economic Forum (WEF), and other relevant articles and reports. Chapter 2 provides a SWOT overview, examining the strengths, weaknesses, opportunities and challenges of Albania’s investment climate. Including this section was seen as very important to provide a brief overview of the country’s business environment for potential foreign investors that are thinking of investing in Albania. Chapter 3 explores the business and economic reforms, examined in the light of the EC APR 2011 and the progress to date. It also looks at the remaining challenges and the specific nature of the Albanian economy, considering that it has been the only economy in the region to resist the

recent financial crisis and remain in positive growth territory. Chapter 4 focuses more specifically on Albania being “open for business” and explores business potential and areas of interest for British and EU investors. It also looks at the impact of the Eurozone crisis both in terms of the immediate effects and the long-term challenges for FDI. Chapter 5 offers some conclusions. Chapter 6 offers some policy recommendations and an Action Plan for business and other stakeholders. Appendices provide a directory of key contacts in Albania.

This report will be available to download at the British Embassy Tirana and IBDE websites: and

Image credit: UKTI IBDE – Integrating World Markets


Doing Business in Albania: Reforms & Opportunities



Catch-up growth potential Emerging Market Access to Regional Market (CEFTA) Government Support Liberal Model Adopted Clear EU perspective Relatively low labour costs Young and skilled labour force

  

OPPORTUNITIES         


Albania is a fast developing country and offers a multitude of investment opportunities in rewarding sectors of the economy. Proximity with West and Central Europe, low unit costs for labour, and the lowest flat tax regime - only 10% - are some of the competitive advantages Albania offers. Additionally, it offers access to the regional market, regulated by the new-CEFTA for the Western Balkans - designed to eliminate barriers to trade and provide appropriate protection of intellectual property rights in accordance with international standards. CEFTA has been adopted since 2007 as part of the SAA with the EU. The latter highlights an all important fact that should be kept in mind: Albania has a clear EU perspective and we hope will be granted a candidate status by the EC and Council this year - providing the conditions set by the Commission are fulfilled.


Consumer Market Energy/ Power Generation Tourism Mining Information Communication Technology Technology/Telecoms Agro-Business Manufacturing Sector Services


Property Rights Corruption Rule of Law


   

Eurozone Crisis: Banking Sector Currency Corruption


Corruption remains a major challenge, but progress has been considerable and significant, especially with regard to corruption as perceived by foreign investors in Albania which has fallen by 50% from 2005. For a more detailed account see Economic Reform section 3.3. Challenges. 2.3


Albania offers a high level of investment potential in infrastructure, telecommunications, information technology, energy/power generation and tourism. Although many of the strategic sectors have already been privatised, a new wave of state property privatisation has been declared by the government. Additionally, Albania is very keen in embracing Public Private Partnerships (PPPs) in an array of sectors including highway maintenance, transport infrastructure in Tirana, waste manageIBDE – Integrating World Markets

Doing Business in Albania: Reforms & Opportunities ment, and hydroelectric dam concessions. However, this desire has not been translated into many partnerships on the ground, which makes PPPs therefore an enormous opportunity. We believe that PPPs are one option to attract FDI in the country, and we are pleased to observe this model being steadily adopted by the government. 2.4


Albania has handled two external crises well so far. It avoided recession and maintained positive growth levels. Inflation is not a problem, as noted by various consultancy firms, and despite concerns over current levels of public debt (58.3% of GDP) the


general macro-economic situation remains stable and growth-conducing. That said, the looming external crisis - that of the Eurozone, could prove perilous for the Albanian economy if it continues over a prolonged period, and could possibly have a massive impact, as a result of a potential Greek, and subsequently an Italian default. The Albanian government, the Bank of Albania (BoA), assisted by international financial institutions, should take the appropriate measures to mitigate such a scenario or be prepared for it. We have included in Chapter 6 some recommendations that detail some steps that could be taken by the government in this uncertain context.

Photos Credit: Albanian National Tourism Agency

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Doing Business in Albania: Reforms & Opportunities

3. ECONOMIC REFORM -PROGRESS The aim of this section is to evaluate the momentum of economic reform against the background of the findings of the EC APR 2011, and identify areas that need to be reformed further. It will further assess issues that should be addressed in order to decrease foreign investment uncertainty and risk, whether perceived or real. How it was in the past as compared to what the status is now? Finally, what’s the forecast regarding economic reform implementation? Albania is reforming fast. United Kingdom regulation and law has been adopted especially with regard to enforcement of contracts and liberalisation of markets and trade. As part of the accession process with the EU, Albania has signed numerous free trade agreements such as CEFTA, and the European Free Trade Association (EFTA), to name but a few. 3.1. Overview on Progress During the past two decades the country experienced two fundamental changes:

initially, it pursued a robust positive transformation from an isolated centralised economy based heavily on outdated, inefficient industry, to an open economy which it is subsequently integrating not only with international markets but most importantly with the EU. The accession process is easily identified as the most powerful tool for transformation and economic and political progress in the country. Therefore, transformation and integration are not mutually exclusive processes and only by analysing them together we can understand the progress Albania has made thus far and try to assess what we can expect in the medium and long-term. Dramatic reforms were undertaken in early 1990s, and gained new momentum from 2000 when big privatisations, banks, telecoms commenced. From 2005, when Prime Minister Sali Berisha came to power for a second time (on this occasion as Prime Minister) the government has implemented a series of neo-liberal policies to create a business-conducive environment intended to improve key indicators shown in Figure 1. This shows that the Albanian economy has moved to the

Figure 1: Global Competitivness Intex 2011-2012 Stage of development 1 Factor driven

1-2 Transition

2 Efficiency driven

2-3 Transition

3 Innovation Driven

Source/Credit: World Economic Forum. World Bank staff calculations

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Doing Business in Albania: Reforms & Opportunities second stage of its development. Substantial progress has been made in infrastructure, maintaining a stable macroeconomic environment, health and primary education, higher education and training, and business sophistication. The aim of these economic and business reforms is to increase domestic business initiatives and to attract FDI. Such focus does not come as a surprise. This is because the economic model adopted in Albania relies on the role of private actors in the economy and small government - through the use of “e-government” schemes and also the so-called “one-stop shops”. The situation today could not be more different from that of the early 1990s. Currently the private sector contributes roughly 80% of the Albanian GDP and as a consequence employs around 80% of the workforce. Such development is important also because it exerts pressure on the government to sustain macroeconomic stability, improve contract enforcement, protection of intellectual and property rights, and finally, yet most crucially, to ameliorate the functioning of the RoL. With regards to politics, every effort must be made by all political actors and parties in Albania to respect the consensus for EUconditioned reforms and to work together to make necessary forward leap in the implementation of vital structural reforms. The October 2011 APR noted several positive developments in Albania’s economy. To mention a few examples: •

Albania experienced GDP growth, despite the deep and on-going crisis in the Eurozone;

Business registration and licensing has become easier and quicker;

The banking sector remains wellcapitalised;

Subsidies in 2010 are estimated to have declined to 0.3% of GDP from

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0.4% in 2009; indicating a low level of state intervention and hard budget constraints; •

The Albanian Investment Development Agency (AIDA), which serves as a one-stop shop for foreign investors, became operational in June 2011;

The Law on FDI was amended to grant special protection, under certain conditions, to foreign investors in the event of land ownership disputes.

The APR also noted the impact on foreign investment cannot currently be assessed, as the new legislation has not yet been fully applied in practice. Despite these positive developments and indicators, it is the RoL and political stability that must evolve further to a level that would give confidence to foreign and domestic investors, stimulating them to invest. Only with political stability and macroeconomic prudence can the country develop at a vigorous pace and in the near to medium term to fully integrate with the EU. Due to serious challenges within the EU itself the Union has turned much of its attention to the Euro and sovereign debt crisis affecting key member states, which some believe is also slowing up the enlargement process to the Western Balkans and Turkey. That said, it is important that we take into account key facts when it comes to analysing future prospects of EU enlargement. Number one is the successful application of Croatia, joining the EU in 2013, and two, IPA funding for enlargement/potential candidate countries has been maintained at 2010 levels. With regards to the accession of Western Balkans countries, the President of the European Council, Mr Van Rompuy, noted that “Not only did we officially open


Doing Business in Albania: Reforms & Opportunities

the door for Croatians, but we also made clear that this door will not close behind them”. Whilst the IPA funding continues as planned and as Commissioner Štefan Füle stated recently “we remain committed to credible levels of financial assistance for the enlargement countries for the 20142020 period too - no less than the period 2007-2013”. That means more than 14 billion Euros. Moreover, with regards to the crisis in the EU, it should be highlighted that the history of EU integration during the second half of the last century shows that EU integration has an intriguing relation with crises: which serve as a catalyst to deepen integration – both positive and negative integration - in this case fiscal standardisation. We urge business leaders to keep this in mind when assessing the Eurozone crisis and its impacts on the Albanian economy. Through the EU prism, we believe that Albania can also become stronger and benefit

by addressing key economic and political reforms. So far the country has also improved perceived corruption levels (50%) as shown in Figure 2. The reform momentum has to be sustained and even increased in order to meet the remaining challenges Albania faces. 3.2. Challenges Although Albania thus far has managed to avoid recession, partly because of a very strong liberal reform momentum and high levels of exports and FDI (especially in the energy sector), many challenges must be met to transform Albania into a key FDI destination in Southeast Europe and the Mediterranean. FDI is not in itself a key to the integration and accession process with the EU, but an enhanced FDI climate is undoubtedly the means to achieve economic growth and employment that will improve living standards of the Albanian population. It will also support Albania’s economy to cope with the competition rules

Figure 2: Corruption Perception Index 2010 in SEE % of firms bribing frequently, usually or always (from BEEPS) 50 40 30 20













(Source: World Bank Business Environment and Enterprise Performance Survey)

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Doing Business in Albania: Reforms & Opportunities of EU integration. Literature of democratic development shows a clear correlation between increasing living standards and democratic consolidation as the middle class becomes more demanding and policymakers more accountable. The EU is often seen as a ‘democracy anchor’ and through its accession political and economic conditionality, known as the ‘Copenhagen Criteria’ it pushes for the necessary reform. The EC’s experience with many rounds of enlargement in the past has also improved the EU capacities in managing the reform processes in accession and potential candidate countries. For instance, the lessons learned from the accession process of Croatia, with particular reference to pending actions on judiciary and fundamental rights and on justice, freedom and security, have made the EU aware that it is important to tackle this areas with the remaining Western Balkan countries as early as possible, in order to allow time for Albania to build the necessary track record for reform. Key challenges emphasised in the APR were the following: a) Strengthening the RoL and public administration reform, b) Ensuring freedom of expression in media which is currently vulnerable to political interference, insufficient statutory protection, lack of transparency and concentration of ownership, and unfair competition. c) Sustainable economic recovery and embracing the Europe 2020 agenda. Strengthening the RoL, the enforcement of contract, property rights, the fight against corruption and the informal economy are key challenges faced by both business and government. The current situation is expected to improve when the Albanian parliament approves the creation of IBDE – Integrating World Markets


administration courts, which will increase the speed of dispute resolution and will represent a new branch of the Judiciary system in Albania. The establishment of such a key institution is an all-important condition posed by the EU to grant Albania candidate status this year. Such international pressures increase the likelihood of the adoption of administrative courts and other vital reforms and institutions. The EC 2011 APR shows political consensus has been reached in order to go forward with integration, economic reforms remain to be resolved for both progressing towards joining the EU and improving living standards in the country. The Albanian economy maintained macroeconomic stability and positive growth during the global crisis and its economy continues to remain in positive territory during the current Eurozone crisis. It also made progress towards becoming a functioning market economy. Its capacity to cope with competitive pressures and market forces within the Union in the medium term is on track, provided Albania steps up structural reforms. These include reinforcing the legal system and increasing physical and human capital. Although domestic demand was muted, strong exports led to an economic growth figure of 3.8% in 2010. Inflation has remained stable through implementation of good and conservative monetary policy. However, a stronger political partnership is needed to enhance the capacity of the government to implement structural reforms. Issues of concern that remain are explicit with regard to: a) property rights, b) enforceability of contracts and the RoL, c) informal economy, d) and public debt levels (at 58.3%) together with an increasing number of nonperforming loans in the banking sector. With regards to the fulfilment of the twelve Key Priorities, as outlined by the EC Opinion on Albania 2010, there has been some progress in recent months, however much


Doing Business in Albania: Reforms & Opportunities

more is needed in order for Albania to receive a positive opinion from the Commission in 2012. When examining the Key Priorities, with relevance to foreign investors, together with the progress achieved so far, Albania has made progress on the following issues: the proper functioning of the parliament on the basis of a constructive and sustained political dialogue among all political parties (political consensus reached on November 2011); adoption of pending laws requiring a reinforced majority; reform of the electoral code in line with the Organisation for Security and Co-operation in Europe (OSCE) - Office for Democratic Institutions and Human Rights (ODIHR) ; the fight against organised crime through anti-corruption measures, and strengthening the legal framework by implementing GRECO (Group of States against Corruption) recommendations.

done in implementing the key laws requiring qualified majority voting. Progress towards the strengthening of independence and efficiency in the judiciary system is slow. There has also been limited progress in developing a comprehensive strategy for resolving property rights disputes - caused also by the fragmentation of responsibilities and a lack of coordination between various government agencies. It should be said, however, that the issue of property rights is more of a problem near the big cities of Albania and less so in the countryside and not an issue in designated industrial and technological (free trade zone) parks. According to the GCR 2011-2012 the most problematic factor for doing business in Albania is the limited access to financing which is slowing investment levels (see section Monetary Policy for more information on the issue). Given that access to finance has been a serious challenge for the economies worldwide since the financial crises began in 2009, this is not surprising. Figure 3 also demonstrates that there has been considerable progress with regard to

However, reform of public administration has been delayed, and therefore, remains less effective. With regard to the RoL, judicial reform strategies and an action plan were adopted, but more needs to be

Figure 3: The most challenging factors for doing business Access to financing Tax rates Corruption Tax regulations Inefficient government bureaucracy Inadequate supply of infrastructure Policy instability Foreign currency regulations Poor work ethic in national labour force Inadequately educated workforce Inflation Government instability/coups Crime and theft Restrictive labour regulations Poor public health

19.2 12.0 10.9 10.2 8.7 7.7 7.5 6.7 4.9 3.8 3.4 2.1 1.5 1.1 0.3 0







Percent of responses Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings. (Source: The Global Competitiveness Report 2011-2012. World Economic Forum)

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Doing Business in Albania: Reforms & Opportunities political uncertainty, skilled and competitive labour force, government bureaucracy and public infrastructure (see ‘Doing Business’ section for more details). International financial institutions such as the EBRD, aware of how these challenges can translate into barriers for receiving FDI, are supporting and encouraging foreign investment projects in the country. EBRD benefits from 19 years of experience in Albania and has already invested 650 mil euros to date. Contrary to the popular belief, e.g. that the EBRD supports only the government; the current portfolio of the bank is divided by half into public and private investments. EBRD has been especially active in infrastructure and the energy sector. Interested foreign businesses that plan to invest in Albania can also receive financial support from the wellcapitalised Albanian banking system. Low cost of labour is another incentive to invest in the country, but a skilled labour force is also a requirement in today’s global competition for FDI, therefore, we recommend that the Albanian Government

should create more training schemes, such as vocational training, in order to increase the skills of the labour force. Interestingly, the crisis in the Eurozone is proving to be an opportunity for Albania with returning skilled migrants from Italy and Greece acting as the engine for growth of SMEs in Albania. In addition, the country has profited substantially from its brain gain scheme. The concentration of this wave of ‘brain gain’ is in the major cities of Albania, especially in the capital, Tirana, which is also a magnet for Albanian talent from Kosovo and western Macedonia. This is undeniably a benefit the country can offer to potential investors. However, the Eurozone crisis and the slowdown of Albanian growth levels means the country finds itself at a crossroads, and must decide upon the economic strategy in which specific areas need to be reformed and promoted. The government has already declared the pillars of the economy are exports, energy, tourism, agriculture, education, infrastructure, as well as the digitalisation of Albania. In order to develop a comprehensive strategy, the

Figure 4: EBRD Portfolio in Albania  

Current portfolio of € 453.1 million 56% Private & 44% Public 92% Debt & 8% Equity

(Source: EBRD, Fabio Serri, Presentation at UK-Albania Business & Economic Reform Forum Jan ’12)

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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



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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Doing Business in Albania: Reforms & Opportunities where issuing of permits was blocked for two years for political reasons. This however, is promised to change under the Mayor, Lulzim Basha, who has promised a series of reforms in the municipality in order to give a second boost to the construction sector in Tirana. Mayor Basha’s administration should continue consolidating pre and post construction clearances, enforce statutory time limits for permit approvals, and consider the reduction in cost of building permits. Also, we recommend the administration shift responsibility for quality control to private professionals, authorised inspectors, as was the case in the Czech Republic and other Central and Eastern European countries. The One Stop Shop model is also spilling over into other government services. Other models should be adopted in order to create a complementary and modern integrated system. For instance, for license renewal business people will benefit from the creation of an online ‘nonstop shop’. More should be done however, with regard to enforcement of contracts, although the signing by Albania of various international treaties that regulate and manage disputes (New York Convention and Washington D.C. Convention) is a step forward. The government should set up specialised commercial courts or commercial sections within the general jurisdiction courts in cities beyond the capital. Moreover, it should also increase the capacity of courts and promote alternative dispute resolution mechanisms. In order to decrease waiting times ICT (Information and Communication Technology) should be widely adopted so as to enhance communications between various judiciary offices. Lastly, Albania ranks as average in the region for registering property. In order to improve this, the government could take some of the following steps: first, it could eliminate pre-sales certificates and clearances, reduce the property transfer tax IBDE – Integrating World Markets


and introduce fixed fees. Simplified property registration as well as standardised sale and purchase agreements should be provided. Communications technology would link government agencies and make documents available online. We note there is progress in this direction (see ICT section for more details). The challenges to market entry should not be underestimated. The annual progress reports of the EU describe other concrete areas of progress in Albania, and the challenges outstanding that need to be addressed in the future. 3.4. Monetary Policy Inflation is expected to remain low during 2012 due to global commodity prices cooling and the Eurozone crisis, demonstrating a lack of inflationary pressures. Price stability is one of the key mandates of the Bank of Albania (BoA). Inflation is expected to be on target this year at 3.6%, well inside the Bank’s target of 3%, minus or plus 1%. However, the Commodity Price Index (CPI) falling levels also demonstrate that aggregate demand is decreasing in the country. Falling consumption levels should alter the government, responsible for fiscal policies, and the BoA, which handles monetary policy. A fiscal stimulus in the current situation is almost impossible, due to current levels of public debt (58.3% of GDP 2011) which constrains fiscal action. Such a situation makes BoA the key player in mitigating a crisis in Albania, which can drive growth to pre-2009 levels. What has the BoA done so far? The liquidity situation in the country is positive. Albania has not fallen into a liquidity trap, also because the official interest rate remains at 4.5%, despite a decrease by 25 points on 25 January 2012. This action was taken because BoA recognised the need to stimulate aggregate demand, which directly affects growth levels – forecast for 2012 downgrade expectations from 2.5% to


Doing Business in Albania: Reforms & Opportunities

Image credit: ECB

1%. Since 2009 there have been a few interest rates decrease rounds (in total 125 points from 5.75% to 4.5%) but this has not translated into a 125 point decrease in loans interest rate. Banks remain liquid mainly as a result of high profits from high interest rates and high levels of commission for services, which can mean Albanian business suffers from a lack of liquidity. Another problematic area remains the non-performing loans (currently at around 18%) which have made commercial banks increase their reserves thus decreasing credit for the economy. This credit squeeze affects directly the economy and investment levels. However, it is worth noting that loans to SMEs and important projects have easier access to liquidity, supported by international financial institutions such as the EBRD. The BoA decreased the interest rates in order to stimulate lending, while constantly supervising and stress-testing the commercial banks’ exposure to non-performing loans. Another interest rate decrease is highly likely in 2012. So far the BoA has pursued a cautious conservative monetary policy, however,

more will be needed to mitigate the negative effects the Eurozone crisis has on the Albanian banking system which is composed of mainly foreign subsidiaries, with more than half of the banks being Italian and Greek owned. Intesa Sanpaolo, Raiffeisen, and Société General, together with the National Bank of Greece, Emporiki, and other Greek financial institutions operate in the country. A potential default, in any of the Eurozone members would certainly cripple the core of the banking system in Albania. As a response to this perceived threat, the BoA imposed restrictions on financial transactions of foreign owned banks to their parent banks. We believe that a “new” Vienna Initiative is necessary to avert the potential of a sudden deleveraging by western banks from Southeast European countries (Albania included) that depend on their capital. In this regard it is worth noting that on 16 January 2012 the public/private sector officials from within the European Bank Coordination "Vienna Initiative” met in Vienna with the aim to enhance the coordination of national policies that could impact the economies of emerging Europe. IBDE – Integrating World Markets


Doing Business in Albania: Reforms & Opportunities

4. ALBANIA IS OPEN FOR BUSINESS! Principally, for a country to enjoy foreign investment input it must first enjoy macroeconomic and political stability, have low regulations and taxes, RoL, competitive dynamism, and of course the size of the market comes into play. Are there good conditions for doing business in Albania? The answer is yes. There are strong reasons to invest; however, some challenges remain, and we encourage the government to closely cooperate with business to further improve the investment climate. Albania is an emerging economy in the heart of Europe, opportunities are abundant, the potential for profit is high, and future potential to do good business is bright. The country enjoys low inflation, which is expected to further decrease in the context of the Euro crisis and cooling of the

global commodity prices. Albania already ranks 46th for starting a business and 15th in protecting investors. This comes as a result of the implementation of a liberal framework for FDI, together with the adoption of Foreign Investment Law in 2010 which makes the state the guarantor in settling any land dispute claims, thereby aiming to decrease uncertainty and related risks when investing in Albania. The GCR 2011 identifies 12 areas that foreign business looks to when deciding to invest in a country. These areas also form the 12 pillars that are a part of any modern economy. We will look at 10 of them taking into consideration that Albania is at a second stage of development, being categorised as an efficiency-driven economy. The data in figure 6 shows that Albania fares quite well on many indicators making it a very competitive economy in the world’s emerging markets. The GCR

Figure 6: The Global Competitiveness Index – Albania INDICATOR


1st pillar: Institutions



6th pillar: Goods market efficiency

Burden of government regulation


No. procedures to start a business (5)


Transparency of government policymaking


No. days to start a business (5)


Efficacy of corporate boards


Extent and effect of taxation


Strength of investor protection, 0–10 (best)


Business impact of rules on FDI


2nd pillar: Infrastructure

7th pillar: Labour market efficiency

Quality of roads Quality of air transport infrastructure

58 56

Cooperation in labour-employer relations Hiring and firing practices

21 21

Mobile telephone subscriptions/100 pop.*


Pay and productivity


3rd pillar: Macroeconomic environment

8th pillar: Financial market development

Government budget balance, % GDP*


Legal rights index, 0–10 (best)*


Inflation, annual % change*


Ease of access to loans


4th pillar: Health and primary education

9th pillar: Technological readiness

Business impact of malaria/HIV/AIDS


FDI and technology transfer


Life expectancy, years Quality of primary education

40 49

Internet users Internet bandwidth, kb/s/capita

53 69

5th pillar: Higher education and training

10th pillar: Market size

Quality of the educational system Quality of math and science education

45 42

Extent of staff training


Domestic market size index, 1–7 (best) Foreign market size index, 1–7 (best)*

99 107

*It is recommended that Foreign Market size is considered as described earlier, in the regional context, which would substantially improve the rankings (SOURCE: The Global Competitiveness Report 2011-2012 - World Economic Forum)

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Doing Business in Albania: Reforms & Opportunities

report also emphasises that while all of the pillars will matter to a certain extent for all economies, the reforms needed to best improve the competitiveness of selected countries depends on the stage of development for each country. For instance, Albania’s need for reform is different from that of the UK which is at a different stage of development. As Albania’s economy moves along its development path, wages will increase and in order to sustain higher income and competitiveness the need for the improvement of the business sophistication (11th pillar) and technological innovation (12th pillar) increases. First pillar: Institutions Albania ranks 9th (out of 142 countries) for burden of government regulation; 15th for protection of investors; 27 for efficacy of corporate boards and 43rd for transparency of government policymaking. Second pillar: Infrastructure The overall infrastructure has improved substantially and Albania now ranks 58th for the quality of roads and 56th for the quality of air transport infrastructure; electricity supply has also improved at a similar pace and now the country ranks 63rd; the use of Mobile phones is especially high, ranking 18th. Third pillar: Macroeconomic Environment Key challenge remains the levels of public debt (58.3%). That said, the current level of public debt is below the statutory limit of 60% of GDP. The IMF and WB have already raised their concerns about the servicing of debt by the government and have adviced further cuts in investment. This could hurt Albania’s growth and therefore the government has resisted any further austerity measures in the 2012 budget. Fourth pillar: Health and Primary Education Albania fares very well in terms of having a healthy work force. It ranks 1st of having minimum business impact of diseases such as malaria and HIV/AIDS and 4th in terms of

business impact from tuberculosis. On life expectancy at 78.6 years Albania ranks 40th and on the quality of primary education ranks 49th. Fifth pillar: Higher Education and Training Albania has one of the youngest populations in Europe. Low cost qualified labour force remains the most competitive advantage of Albania. It ranks 45th for the quality of education and 42nd for maths and science; for the extent of staff training the country ranks 32nd. Sixth pillar: Goods Market Efficiency The number of procedures to start a business are minimal and Albania ranks 23rd and 9th for the number of days it takes for issuing of the permit/license; The intensity of local competition remains low, with Albania ranking 122nd. This means that there is plenty of opportunity for foreign investors to enter the market. Seventh pillar: Labour Market Efficiency As mentioned above foreign investors can expect to be satisfied by the Albanian labour force not only for their qualifications and low employment cost but also due to the labour-employer relations, which is very cooperative with respect to hiring and firing practices. For both cooperation in labouremployer relations and hiring and firing practise Albania ranks in a competitive 21st place. Pay and productivity are even more competitive ranking 17th. Eighth pillar: Financial Market Development The banking system remains sound and profitable, however, there are difficulties accessing loans for which Albania ranks 121st. Foreign investors are advised to seek financial support from alternative financial markets and international financial institutions such as EBRD. A form of partnership with City of London, where over 250 major international banks are based could offer certain benefits. IBDE is happy to facilitate this process. IBDE – Integrating World Markets


Doing Business in Albania: Reforms & Opportunities Ninth pillar: Technological Readiness Albania has a good standing in the FDI technological transfer ranking at 69th, and has a good Broadband infrastructure with more opportunities to invest. As regards the number of internet users Albania ranks 53rd out of 142 countries.

also advisable to contact and hire experienced lawyers, which can provide invaluable local knowledge and regulatory framework. IBDE would be happy to assist in this process through its strong network of commercial lawyers in the UK and the region. Although not formally resourced to do trade work the British Embassy in Tirana also provides support and advice to UK business interest in Albania. The Albanian Embassy in London offers assistance in the initial process.

Tenth pillar: Market Size Although Albania has a small domestic market size (ranking 99th) and foreign market size (ranking 107th), since 2007 Albania has singed the CEFTA and has a free trade agreement with its main trading partner the EU. Recent research has identified the integration of the ‘Albanosphere’ – territory where Albanian nationals live including Albania, Kosovo, southern Montenegro, western Macedonia, and the Presheva Valley in Serbia - increasing the Albanian market potential substantially.

The public administration has been reformed in order to provide better services to business, specifically through embracing egovernment and a One Stop Shop for business licenses, for example like the National Registration Centre. This has simultaneously increased transparency thus decreasing corruption and increasing efficiency in the public administration. Figure 7 shows the largest strides made by Albania in improving commercial regulations, crucial in creating a business-conducive environment.

The above pillars clearly indicate that Albania is very competitive in the global market and in particular on the pillars that determine the current stage of its development, which is the efficiency-driven economy.

Sectors awaiting foreign investment are the following: apparel industry, extraction of minerals and gas/oil (including off-shore drilling), green energy (hydropower in particular) trade and infrastructure, ICT, tourism,

When entering Albania foreign investors are recommended to contact AIDA, explicitly set up to support foreign businesses. It is

Figure 7: Albania* has made large strides in improving commercial regulation Improvement in the ranking on the ease of doing business, Doing Business 2008-2011 1

























*Represented by its capital city. (Source: Doing Business in South East Europe 2011, World Bank Report)

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Doing Business in Albania: Reforms & Opportunities

services, manufacturing, and agribusiness. A WB report 2011 on the Global Prospective ranked third Albania, for External Financing Needs (EFN) projections for 2012. Albania is therefore vulnerable to the credit squeeze and liquidity crisis. FDI is vital for an economy in which account deficit (as share of GDP) is 11.7%, debt repayment (share of GDP) is 9.6%, and EFN, share of GDP stand at 21.9%. This makes attracting FDI of key importance for the Albanian economy. The government has already made considerable progress in freeing up the business environment and directing private investment to strategic sectors such as energy production and tourism. We will now turn to business and investment opportunities that the country offers and the sectors that could be most rewarding to potential investors. 4.1. Business Opportunities According to the IMF, the monetary policy framework of an inflation target and flexible exchange rate is a fundamental strength of the Albanian economy. This explains why, despite the recent global economic crisis, foreign investment in Albania has been growing fast. From the period 2000-2008 the annual increase of FDI as percentage of PBB was a healthy 4%. A surge occurred during 2009-2010 with a significant 15% increase, mainly because of investment in green energy. The government has made strides in decreasing risk and uncertainty through the approval and implementation of two key legislations: first, the Law on Concessions, and second the 2010 Law Defending Foreign Investment in Albania. Albania offers abundant natural resources, a prime geographical location, extensive coastline and seaports, availability of inexpensive and qualified labour with English. These factors, together with its continuously improving infrastructure and membership of CEFTA, all contribute to the strengths of Albania as a potentially good country to do business with and in. The EU integration

prospective assures democratic and economic consolidation, increasing the credibility of the country in the eyes of foreign business. IPA funding could create opportunities to deploy UK expertise in the various sectors of the economy. The Albanian economy is in need of diversification, and the government is attempting especially to stimulate the key sectors of the economy described below. 4.1.1. Infrastructure and Construction Enhancing the country’s infrastructure has been the priority of the Albanian government for some time. Tirana International Airport has been modernised to European standards and is managed by Hochtief of Germany; the motorway linking Kosovo with the Port of Durres - a vitally important project - is now a reality. Kosovo is now developing its part of the project, linking Albania with the rest of the central and Eastern European markets. In addition, other major cities are being linked with modern road infrastructure. The government has also included in its development strategy the intent to create at least one Free Economic Zone and six Industrial and R&D zones. Since these projects need FDI to be successful, the government also welcomes PPPs here. Such schemes are becoming commonplace in Albania and are spreading throughout the main sectors of the economy including infrastructure, energy, waste management

Image credit:

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Doing Business in Albania: Reforms & Opportunities


etc. An Integrated Coastal Area Management (ICAM) concept is a significant project in this category. Supporting PPP projects, which are still in their infancy within the region, IBDE in partnership with the International Centre for Promotion of Enterprises, will be organising a regional business and economic Forum (in June 2012) focusing on the promotion and enhancement of PPPs as well as on effective management of public sector enterprises in the Balkans. For more information please refer to IBDE website There are currently around 380 municipal projects for secondary and village lanes, water work and drainage, for which there exists the need for project management and knowledge transfer. UK companies can meet such demand for expertise and benefit. The Albanian railway system (440 Km) was recently turned into a holding company overseeing separate business units that are process based. International freight traffic is increasing. By 2009, the tonnage of import/ export was 25,000 ton. The government is planning to upgrade the Durres-Hani Hoti (Montenegro) line together with DurresElbasan line as part of the EU-supported Corridor VIII that connects the Adriatic Sea with the Black Sea passing through Albania, Macedonia, and Bulgaria. It was recently announced that EBRD will assist the Albanian government in upgrading the country’s railways. The project will focus on a financial and economic assessment of Albania’s entire rail network with the rehabilitation of the Durres-Tirana railway line being prioritised. Railway companies are encouraged to explore this opportunity, given that the entire Albanian railway network needs upgrading. 4.1.2. Energy and Mining The energy sector has been a magnet for attracting important European firms such as EVN (Austria) and Statkraft (Norway) IBDE – Integrating World Markets

Image credit :AIDA

who have signed a concession agreement with Ministry of Economy, Trade and Energy (METE) for the construction of three HPPs in Devoll River (installed capacities will be 173 MW, 138 MW and 28 MW). The investment will be around EUR1bn. Vjosa, Osum and Drini I Zi river hydro-electric power dams are waiting for investment. Albpetrol oil company, still 25% state-owned will undergo 100% privatisation in 2012. Albanian oil has recently attracted the interest of Shell which aims to invest 50 million Euros in drilling in Shkodra and Berat – in partnership with Petrogas, a Canadian company. Off-shore drilling also represents great opportunity, especially after the discovering of substantial reserves in the Ionian Sea. The country has improved the international interconnection energy lines with the region in the Western Balkans. Albania is also rich in metals such as copper, nickel and chrome. It has recently revised the mining concession legislation and soon will issue new contracts to interested companies. It is worth consulting with the National Agency of Natural Resources, (details can be found in the Directory


Doing Business in Albania: Reforms & Opportunities

within this Report), for more information. UK

SME mining companies are encouraged to exploit this opportunity. 4.1.3. Tourism and Education The tourism sector in Albania has been booming in recent years. Though this sector is still in its infancy in terms of development, the surge of incoming tourist numbers in recent years guarantees a plethora of opportunities for foreign and domestic investors. Albania has been designated ‘Europe’s last secret’ by various travel guides. Pristine land makes up 70% of the 362 km long coast, an ample demonstration of the opportunities for resort developments and tourism services providers. In fact UK media increasingly promotes Albania as an attractive tourist destination. The Guardian again placed Butrint among the top ten world destinations in its most recent “Short break ideas for 2012” review. Both Butrint and the City of Berat (known as the city of thousand windows and, claimed to be over 2400 years old, are a UNESCO World Heritage Sites. Lonely Planet’s Best in Travel 2011 cited Albania as the number one spot in the top 10 countries to visit in 2011. In recent years Albania has increasingly become a stop-over point for European travellers touring the Balkans. Opportunities are not limited to the coast and can be found in 70% of the rest of the country, with mountain regions offering potential for

Photo credit: ANTA

Photos credit: ANTA

developing ski resorts. There are also attractions for tourism with a focus on ameliorating the ecosystem or an enriching cultural experience. IBDE in partnership with the Albanian Embassy in London is organising an UK-Albania Investment Forum on 19 April 2012 in London, to promote this growing sector to potential British investors and holidaymakers. The event could also benefit from presentations that would include promotional activities such as: diving, hang-gliding etc., in addition to the existing archaeological sites and Cultural tourism. Challenges that need attention are the competition from other destinations, the continuation of investment in tourism infrastructure, marketing and product development. The importance of investment in education, research and development is crucial in reducing “brain drain” levels but also in generating a well-educated and skilled workforce - professionals needed by the country’s economy - offering at the same time adequate conditions in attracting professionals “brain gain” to contribute to the overall development of Albania. Human resources - in particular the youth – are the engine of future growth, and this is a great asset that Albania also has to offer to the wider international business community. But more needs to be done to enhance the educational system, which has been liberalised since 2006. The UK, as a leader in research and education as well as other international coIBDE – Integrating World Markets

Doing Business in Albania: Reforms & Opportunities mpanies can also invest in the education sector of Albania. Albania offers opportunities to UK education institutions, vocational training, teacher training to improve knowledge and skills, and corporate training. Knowledge and research have become a key component to government and organisational success in the new millennium with London being a hub of knowledge transfer to emerging markets. 4.1.4. Agriculture and Manufacturing Albania has a vast unexploited agricultural potential. Thousands of hectares could be returned to cultivation without putting excessive pressure on natural resources. For most crops and animal products, yields could be increased significantly. Recent years have seen a rapid increase of investment funds targeting agribusiness in developing and transition economies. Funds include a wide range of vehicles including private equity funds and public funds seeking strategic food security investments. While some funds invest in primary agriculture and land acquisition, others target SMEs along the agricultural value chain or rural microfinance institutions.


tax, and its proximity to Western markets making Albanian apparel 20% cheaper than the Asian products. 4.1.5. ICT and other Services Industries An exciting and dynamic sector in Albania is proving to be ICT sector. So far the telecommunication and broadband markets have been liberalised, with the latter driving profits of mobile providers upwards after the saturation of the mobile market. There are currently four main mobile and broadband providers in the country. The penetration of mobile phones is almost 90% with Vodafone being a leader covering approximately 50% of the consumer base (having invested some â‚Ź400 million to date). There are around a quarter of a million people with broadband but the

The Albanian farmland remains underutilised or poorly managed; therefore, this sector offers increasing yields with little capital investment, on organic farming. Lease contracts are limited to 99 years for agricultural-land and 30 years for other land. There is a lack of cold storage and business of distribution, marketing, packaging and processing leaves substantial room for improvement. Key products are honey, olives, organic herbs, berries, and fruit trees. Albanian manufacturing remains limited to the textile industry in which the country has specialised in shoes and leather products mainly for the Italian market. UK business should invest in the Albanian apparel industry considering that the country has a competitive advantage in this sector because of low cost skilled labour, low corporate IBDE – Integrating World Markets

Image Credit: Vodafone


Doing Business in Albania: Reforms & Opportunities

number is growing fast, with an annual increase of around 40%. The telecommunication market contributes 4% to the country’s GDP, and is expected to grow simultaneously with the growth of broadband and 3G services offering High Speed Internet, Video Call & Streaming, Mobile TV and Mobile Portal. Albania enjoys one of the highest mobile subscriber growth rates in Eastern Europe and this growth will be spurred further by the use of 3G services with Vodafone leading this sector. As part of the accession with the EU, Albania is required to go digital by 2015. This means that there are great opportunities for UK businesses in providing the digital infrastructure for the state owned TV (TVSH) and national private television channels such as Top Channel (which currently offers digital channels), Tv Klan, Vizion Plus etc. Going digital means these channels require expertise and most crucially the appropriate technology. As part of Albania’s digital strategy, the government has introduced a range of reforms, including the introduction of the interactive service for e-taxation (since 2008), as well as 100% e-procurement system, the latter won Albania a prestigious UN Public Service Award in 2010. The high speed ‘Govnet’ platform integrates all ICT infrastructure and interoperable electronic services of the Albanian government. A centre for governmental data is underway. Albania also offers great Business Process Outsourcing (BPO) opportunities. Already some Italian and Greek companies have

outsourced certain processes of the business in the country, which benefits from a multilingual society. English is widely spoken and it has become compulsory for any university student. Albania’s competitive corporate tax rates and improving infrastructure support should be taken advantage of by UK investors. 4.2. Tirana: Destination No.1 Tirana is the metropolis of the “Albanosphere” – a term coined by the economist Tim Judah, to include the Albanian population that also lives in Kosovo and Western Macedonia. In this context the capital could be seen by investors as the “transborder” centre of business and cultural activities. It is also the centre for human capital and labour skills. As part of the sustainable growth strategy of the capital city for 2020, a multipolar city is envisaged, including an Industrial and technological Park project. To realise these ambitious goals for the future of the city, the Tirana municipal administration under the leadership of Mayor Lulzim Basha has embraced PPPs, especially in four main sectors: services, trade and markets, construction (with a boom anticipated to occur by the end of this year), and tourism. For its part the municipality is implementing liberal polices such as reduction of taxes and regulations for SMEs and strategic partners. It also plans to enact business friendly reforms with regard to the issuing of permits (including construction permits) and business licenses (one-stop-shop style.)

Figure 10. Tirana, Albania Starting a business (rank)


Registering property (rank)


Procedures (number)


Procedures (number)

Time (days)


Time (days)


Cost (%of the property value)


Cost (% income per capita) Paid-in minimum capital (% of income per capita)




Source: Doing Business 2011, World Bank

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Doing Business in Albania: Reforms & Opportunities


5. CONCLUSION In conclusion, it is worth repeating the key question of this report: whether investors, as wealth creators enjoy the right conditions to flourish in Albania?, and to outline the main findings from the UK-Albania Business Forum and the various reports cited in this report. We hope to have provided a comprehensive assessment of the economic reform progress in Albania, remaining challenges, and business opportunities in the country. The report clearly shows that Albania is attractive and competitive in the global market, with a fast developing economy, and rewarding for foreign investors. That said, challenges such as decreasing uncertainty and risk, and increasing access to credit need to be addressed by the government. Economic reform momentum has been sustained and the country is advancing. Providing structural reforms continue to be implemented the country will be in a good position to deal with the competitive forces of the European Single Market. Albania has made big strides in enhancing the businessenvironment and has become one of the most business-friendly countries in the region, but there is still room for improvement as this report outlines. The government and parliament seem to be working

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together to plan measures to address the 12 Key Priorities and the EU is willing to continue to assist them in doing so. The country offers very rewarding business opportunities (as identified in this report) and the future is bright. Potentially high investment return levels highlight how the country has a developing economy, which means that risks could be higher but opportunities to invest greater. Albania has a young, dynamic and entrepreneurial population, and Albanians tend to embrace opportunity, new ideas and ventures. The government’s and public support for foreign and domestic investors shows how important increasing investment levels are for Albania. Addressing issues of the RoL, corruption and property ownership will enable foreign and domestic businesses to fully seize this country’s opportunities. That means employment, which means better living standards. Since the desire and goals are the same for both the government and investors, the way forward is by creating a comprehensive strategy that could include an action plan to address the remaining challenges. This would further increase investors’ confidence in the Albanian market. We hope this report will serve as a stimulus to move forward this process.


Doing Business in Albania: Reforms & Opportunities


The presentations and discussion at the UKAlbania Business and Economic Reform Forum have identified a number of recommendations designed to enhance the business and FDI environment so as to maintain Albania’s growth momentum, strengthen the RoL and move forward with the needed reforms. These recommendations address the key conference questions by proposing action focused solutions to: enhance doing business indicators, support PPPs, strengthen the transparent relationship between business and government and the confidence of potential investors. Key Recommendations Since consultation is at the heart of the integration process, a continued constructive dialogue between business, academic researchers and policymakers is necessary in order to meet future challenges through the compiling of a comprehensive strategy. The government already benefits from the expertise and advice of international financial institutions, including the EU. London is the centre of various business, economic, and political consultancies firms – including of course IBDE. Business and policymakers in Albania should consider using the services of such organisations in order to provide suitable conditions for more successful FDI and enhance closer business - government transparent cooperation. This report has identified the difficulties in accessing credit as a very determinant factor in limiting business development in the country. The report further indicates that companies often find difficulties in getting onto the funding escalator, while this is not surprising due to the global financial crisis, we recommend that a comprehensive strategy is devised by the Government in order to successfully attract equity firms to

enter the Albanian market. We believe that “business angels” could play also an important role during these global financial constrains therefore we recommend the Government supports the “business angel” market through financial support for the enhancement of business angel networks in debating the best way of financing growing business. We further recommend the Government supports with funding and policymaking a feasibility project to encourage listings and secondary trading on the Tirana Stock Exchange (TSE). We suggest the following could be undertaken to achieve this, building on the existing mechanisms that are in place by a) providing literature highlighting examples of good practice in operating as an SME on the markets provided by TSE; and b) through the provision of training seminars to SMEs and their advisors which have an interest in listing on TSE. SMEs currently operating on the exchange could be invited to help facilitate these seminars and share their experiences. The London Stock Exchange as a leading exchange in the world can offer limitless expertise in this area. IBDE is happy to facilitate the process through its large networking in the City of London. The diaspora remittances for years served as a cushion against the negative trade balance and provided much needed credit in the country. The sovereign debt crisis especially in Greece and Italy (the main trading partners and the countries with the biggest Albanian diasporas), has affected the Albanian emigrants directly as most of them worked in the construction sector and tourism services. We recommend swift action is taken in finding other growth avenues to compensate for the eventual decrease of remittances during the Eurozone crisis. We also recommend that collaboration with the Albanian diaspora should be institutionalised in a joint effort to attract interest and promote Albania to potential foreign investors. IBDE – Integrating World Markets

Doing Business in Albania: Reforms & Opportunities The Eurozone crisis is continuing, and despite the recent positive developments and the confirmation of the ECB as the lender of last resort for the Eurozone, the high threat that Albania faces of vulnerability to this external crisis should be seen as a warning of the need to take immediate preparatory action for a worst-case scenario. We recommend the government, in cooperation with relevant stakeholders sets up an expert group/commission to debate and provide a contingency/action plan e.g. to deal with a potential default of any country in the Eurozone. IBDE will continue to lobby for an immediate need for a new Vienna-Initiative, which should focus in protecting the banking system in Southeast Europe and prevent a major liquidity withdrawal from the region should the parent banks in Western Europe get into trouble. The UK (and IBDE) are strong advocates of EU integration and its enlargement to the Western Balkans as well as to Turkey. However, the European integration process requires legislation to be compatible with Brussels. Maintaining the reform momentum is a critical task for EU members themselves as well as the accession countries. We recommend the government, legislators and business community ensure that any legislation proposed and/or adopted remain central to the debates on changes to EU legislation which may affect the ability of SMEs to further develop and raise the necessary capital cost-effectively. We recommend in-depth research and analysis is undertaken into the potential impact that EU legislation may have upon Albanian growth markets, particularly due to many changes as a consequence of euro crisis. We recommend the BoA continuously monitors the impact of EU legislation into Albanian economy so as to respond appropriately including should there be an adverse impact on the different market offerings. Finally, it is worth reiterating that the pace of the reform momentum must be susIBDE – Integrating World Markets


tained, and in some areas increased, in order to meet the political, economic, and social challenges that Albania faces during its European integration process. We believe it is of fundamental importance to identify the challenges and devise the appropriate polices to best address them. Various reports from International financial institutions such as EBRD, WB and EC APR provide recommendations that could serve as roadmaps for policymakers, and other stakeholders. We hope that this report also provides a modest contribution in identifying key challenges and the steps that could be taken to enhance the FDI environment.

Other Recommendations Global Competitiveness Index of the WEF looks at the twelve pillars of any economy. We have highlighted the positive results in section 4, Figure 6 and in this section we will identify some of the pillars where the government could focus in order to further enhance the Albanian FDI environment. The identification of these challenges can facilitate the compiling of a comprehensive action plan. Institutions Further reforms are needed to improve the country’s ranking in regards to property rights and intellectual property protection. Improvement is also needed for judicial independence. The government could focus on increasing the efficiency of the legal framework in settling dispute and challenging registration, and also strengthening the auditing and reporting standards. Institutions and government are encouraged to continue with their fair treatment of foreign investment based on the applicable laws, once FDI has been made and is operating in the country. Infrastructure Despite substantial improvements in recent years Albanian transport infrastructure needs


Doing Business in Albania: Reforms & Opportunities

to develop further and the government is committed to improving this sector. The quality of railroad infrastructure is the most problematic and is extremely under-funded. This report has identified that EBRD has initiated a feasibility project in improving the railway networks. Albania also needs reforms regarding the available airline seat kms/week (114), which translates into higher airline fares for Albania - directly impacting inbound tourism levels. Macroeconomic Environment The overall macro-economic environment is good as was mentioned above, but Albania’s credit rating of 38.1 out of 100 must be improved in order to ease the access to finance and to avoid paying a higher risk premium when seeking credit in financial markets. The government is recommended to improve its macroeconomic conditions by decreasing the risky government debt as percentage of GDP (58.3% although just below EU ceiling), to benefit from cheaper credit in the future. This would also make the servicing of its debt easier. Higher Education and Training An outstanding issue remains the availability of research and training services. Foreign investors should exploit this opportunity. The UK brand in Albania is well-established and stands for Excellency and Professionalism. The liberalisation of the Albanian education system, which was followed by the ‘mushrooming’ of private education institutions, has attracted European investors who have set up their niche private universities in Albania. The government is encouraged to support UK-Albanian and other international research partnerships. Goods and Market Efficiency As mentioned above, in Albania there is little local competition, an opportunity which should be exploited by foreign

investors. Despite the setup of a National Competition Authority, the government needs to further improve the effectiveness of anti-monopoly policy. It is recommended that a greater attention be given to the agricultural sector that remains underfunded and not profitable – due to the parcelisation of agricultural land and the lack of modern farming techniques and technology. Labour Market Efficiency The Albanian labour market is very competitive. Having said that, the rigidity of employment index (scoring 25 out of 100), reliance on professional management, brain gain, and women in labour force (ration to men = 0.73), remain areas where the government can make improvements. Financial Market Development The government should pass a new regulatory framework for securities exchanges. This could be done in cooperation with financial institutions in order to increase venture capital availability. Albania has almost no local equity market which has deprived the Albanian economy of new credit providers. We have made a few recommendations above on how to improve this sector. Technology Innovation This pillar can be easily characterised as the main challenge that Albania faces to transform the economy of the country into a ‘knowledge economy’. The capacity for innovation needs to be strengthened in order to improve the quality of scientific research institutions which remains underdeveloped. On the supply side, there is a deficit of scientists and engineers. We recommend the government enhances cooperation with public and private education institutions, together with private business in order to improve universityindustry collaboration in R&D. IBDE – Integrating World Markets


Doing Business in Albania: Reforms & Opportunities Revised Recommendations from WB Doing Business Report 2011 Doing Business in Southeast Europe Report 2011 looks at four main topics (described below) to access the business environment in Albania with the aim of measuring the regulation and red tape relevant to the life cycle of domestic small to medium firms (based on standardised case scenarios). While we have noted that the government has made a significant progress in reforming the doing business indicators (having undergone 9 reforms and improved the ranking from 136 to 82, as figure 7 shows), the following recommendations could still be valid for most of the cities in Albania. Starting a business Albania should charge only a nominal amount (1$ per square meter) and no capital need be set aside in order to start a business. What to reform?

Introduce risk-based approvals (if complex building yes, if 2 floors no regulation should be compulsory as it increases costs, thus unrealistic).

Shift responsibility for quality control to private professionals e.g. authorised inspectors, adopted in some Central European countries such as the Czech Republic.

Introduce Modern Building codes.

Registering Property (average ranking) •

Eliminate pre-sales certificates and clearances.

Reduce the property transfer tax and introduce fixed fees.

Introduce expedited procedures.

Link government agencies and make documents available online.

Consolidate government approvals at a single access point i.e. one stop shop.

Provide standardised sale and purchase agreements.

Simplify registration with municipal authorities.

Promote the use of electronic services (technology can improve the efficiency of services and accountability, egovernment).

Replace on-site property inspection with assessments based on a standardised schedule of property values.

Enforcing contracts •

Set up specialised commercial courts or commercial sections within general jurisdiction courts in cities beyond the capitals.

Increase the capacity of courts and promote alternative dispute resolution mechanisms.

Measure court performance and extend use of technology (ICT).

Dealing with Construction Permits Mayor Basha’s Administration. What to Reform? •

Consider reduction in cost of building permits.

Continue consolidating pre and post construction clearances.

Enforce statutory time limits for permit approvals.

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Doing Business in Albania: Reforms & Opportunities

Among companies and institutions that attended the Forum include: Abkons


Agenda Institute

Global Petroleum Sh.a

Air BP Albania Sh.a.

Globalb Enterprise

Albanian Centre for Economic Research

Golden Touch Resources

Albanian Competition Authority

International Business and Diplomatic Exchange

Albanian Energy Regulator

International Center for Promotion of Enterprise

Albanian Investment and Development Agency

Intracom Telecom Albania

Albanian Parliament

Japan Tobacco International

Antea Cement

JT Protocol Ltd

AVC Weeeco

Kalo & Associates

Balkimo Properties / Savills

Kevitan Security and Communications

Bank of Albania


Boga & Associates


British Airways

MAI sh.a. Insurance & Reinsurance Brokers

British Albanian Chamber of Commerce

Mili Construction Ltd

British American Tobacco Albania

Ministry for Innovation and ICT

British Embassy

Ministry of Agriculture, Food, & Consumer Protection

Cairn Energy Ltd

Ministry of Economy, Trade and Energy

Colliers International

Ministry of Foreign Affairs

Comfort Shpk

Ministry of Justice

Crown Agents

Ministry of Tourism, Culture, Youth & Sports

Delegation of the European Union

Mobile Money

Delhaize Group Albania

Mott MacDonald

Eaton Vance Management

Municipality of Durres

Embassy of Albania in Slovenia

Municipality of Saranda

Embassy of Bulgaria

Municipality of Tirana

Embassy of France


Embassy of Greece

Prime Minister's Office

Embassy of Netherlands

ProCredit Bank Albania S.A.

Embassy of Poland

Sheraton Hotel

Embassy of Sweden

Siemens AE

Ernst & Young

Sky Petrolium, Inc

European Bank for Reconstruction and Development

Standard Bank

European University of Tirana

State Supreme Audit - Albania

FB Heliservices



Stefani & Co

Ferlut Group

Strabag AG

Ferro Beton

Tirana Chamber of Commerce & Industry

Foreign Investors Association Albania

Trans Adriatic Pipeline AG


Transparency International

Gazprom Global Energy


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Doing Business in Albania: Reforms & Opportunities



LEGAL SERVICES This list is provided for the convenience of enquirers, but neither IBDE nor Her Majesty’s Government nor any official of the British Embassy in Albania take responsibility for the competence or probity of any firm/advocate on the list or for the consequence of any legal action initiated or advice given. TONUCCI & PARTNERS Rruga Abdi Toptani Tirana E-mail: Website: KALO & ASSOCIATES Kavaja Avenue G-Kam Business Centre Tirana E-mail: Website: IBDE – Integrating World Markets


Doing Business in Albania: Reforms & Opportunities

OPTIMA LEGAL & FINANCIAL 8th Floor Sky Tower Tirana E-mail: Website: BOGA & ASSOCIATES Deshmoret e 4 Shkurtit Street Mailing Address: P.O. Box 8264 Tirana, ALBANIA Tel: +355 4 225 1050 Fax: +355 4 225 1055

CHAMBERS OF COMMERCE ALBANIAN BRITISH CHAMBER OF COMMERCE & INDUSTRY Petro Nini Luarasi Boulevard No. 85 Tirana E-mail: Website: FOREIGN INVESTORS ASSOCIATION Str. Themistokli Germenj Pall. Pegasso Tirana E-mail: Website: ALBANIAN CHAMBER OF COMMERCE Rr. Kavajes, Nr. 6 Tirana E-mail: Website:

EMBASSY OF ALBANIA LONDON 33 St. George’s Drive, London, SW1V 4DG, UK E-mail:

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Doing Business in Albania: Reforms & Opportunities


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Doing Business in Albania: Reforms & Opportunities



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Doing Business in Albania: Reforms & Opportunities BRITISH EMBASSY TIRANA The British Embassy in Tirana co-hosted (and funded) the UKAlbania Business and Economic Reform Forum as part of the UK’s global effort to put trade and commercial interests at the heart of foreign policy. Shortly after being appointed Foreign Secretary in May 2010, William Hague said: “In a networked world we should see the presence of British businesses overseas as a valuable asset. Joint initiatives between businesses can be as powerful a tool in changing attitudes as summits and communiqués, if not more so over time.” He pledged that: “We will work alongside British businesses and the rest of Government and other Governments around the world to use our political influence to help unblock obstacles to commercial success, including cultural and language barriers, excessive regulation or weak enforcement of property rights.” The UK sees economic and business reform as vital for boosting investment, prosperity and Albania’s progress towards the EU. A good measure of success will be more UK investment and business in Albania and the region. British Embassy Rruga Skenderbeg 12, Tirana, Albania Tel: (+355) 4 223 4973 Fax: (+355) 4 224 7697 E: W:

INTERNATIONAL BUSINESS AND DIPLOMATIC EXCHANGE International Business and Diplomatic Exchange (IBDE) is a London based non-profit organisation, committed to facilitating both dialogue and resource-sharing between the global business and diplomatic communities. IBDE provides assistance with promoting international trade and investment flows to create new business opportunities. IBDE supports: wealth creation, public private partnerships, good governance and corporate social responsibility, as well as the integration of developing countries into the global market. Through selected events such as investments forums, round-tables, workshops and networking opportunities, IBDE aims to support international businesses in identifying key investment opportunities and strategies within the economic and political context. IBDE provides an independent, accessible platform for debate on the international business and political issues impacting global markets IBDE runs and EU-Balkans Discussion Group which is specifically designed to support and promote regional cooperation and the socio-economic development of South East Europe through the development of an integrated regional investment strategy and by providing constructive input on political and economic reforms in the region. International Business and Diplomatic Exchange 1 Northumberland Avenue, Trafalgar Square, London WC2N 5BW, United Kingdom Tel: +44 (0) 20 7193 1485 Fax: (+44) 020 3318 9199 E: w:

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British Embassy Rruga Skenderbeg 12, Tirana, Albania Tel: (+355) 4 223 4973 Fax: (+355) 4 224 7697 Email: Web:

International Business and Diplomatic Exchange 1 Northumberland Avenue, Trafalgar Square, London WC2N 5BW Email: Web:

Doing Business in Albania 2012 REPORT