Interested in investing in Albania but you do not know how? We interviewed Eno Muja, Partner at Muja Law, to find out answers to some frequently asked questions on Doing business in Albania and how to enter the Albanian market in a seamless manner.
1. How do you assess the current economic situation and investment climate in Albania?
Based on a recent study by the International Monetary Fund, on the performance of the Albanian economy in this pandemic period, it is estimated that Albania may be on the verge of pre-crisis time this year. In the data published in the Global Economic Prediction in April 2021, the IMF predicts that Gross Domestic Product (GDP) will reach about 17.1 billion, exceeding the pre-pandemic level. Previously, the fund predicted that the pre-crisis level could be overcome only in 2022, but it seems that the economy has performed sufficiently well during this time.
In the region, Albania has the lowest decline after Serbia (-1%). The Balkan country most affected by the pandemic in 2020 was Montenegro, with -15.2%, having the most negative performance from all over developing Europe. Northern Macedonia shrank by -4.5%, Kosovo by -6%, Bosnia and Herzegovina by -5.5%.
So, if we rely on this study, we can say that the climate in Albania regarding the economic investments does look promising at the moment.
2. According to you, what are the top reasons for a company to invest in Albania?
The top reasons for a company to invest in Albania are as follows:
- Open potential towards regional, European and global markets
Strategic position for access to European markets and the Balkan region. Located in the center of Europe’s largest corridors.
The Albanian economy is completely open and is characterized by a fully liberalized trade.
- Favorable environment and suitable cost for doing business
Tax and incentive benefits in strategic investment sectors. Online system for registration and payment of taxes. The legal framework of Albanian business is in line with EU legislation.
- Variety of investment choices
Beneficial investment opportunities through public-private partnership. Beneficial opportunities for investments in sectors in sustainable development: Renewable Energy, Mining Industry, Tourism, Agribusiness, Transport & Logistics, Industrial Production, ICT Services.
- Legal support
No prior authorization is required from the government and all sectors are open to foreign investors. There are no restrictions for foreign companies. There is no limit to the percentage of foreign participation in the company – 100% foreign ownership is possible. Special state protection of foreign investors by the Albanian state in case of legal-civil conflict with private third parties. Foreign investors have the right to send abroad all in-kind contributions of their investments. There are no foreign exchange controls.
- Skilled and creative workforce and inexpensive labor
Skills in foreign languages. (English, Italian and Greek are widely spoken. French and German are included in the education system) 57% of the population is under the age of 35. Over 1,071,948 young, well-educated and motivated professionals. About 116,292 students enrolled annually. The minimum wage is 245 EURO. This creates a suitable climate for starting a business as cheap labor and low costs in costs is the good start of a business.
- Favorable tax system
Corporate Profit Tax Rate – 15%. Personal Income Tax Rate 0-23%. Favorable tax system for small businesses. Double Tax Avoidance Treaties with over 30 seats. The tax system in Albania does not discriminate against foreign investors and there is no difference between foreign and domestic investors.
3. What are the different types of business entities one can establish in Albania?
In Albania it is possible to register different legal entities. Limited Liability Company (SH.P.K.) is the most common form of entity in Albania to start business. There are also other forms available in Albania like:
- Joint Stock Company (SH. A)
- General partnerships
- Limited partnership
- Representative office.
The most appropriate types of companies for carrying out business in Albania are: a limited liability company, a Joint Stock Company, a General Partnership, a Limited Partnership, a holding, a branch, and a representative office.
4. How much does it cost typically to open and maintain a company in Albania?
The cost for registering a limited liability company in Albania is ALL 0 (no charge). Also, the minimum capital requirement is 100 ALL. The cost of maintenance depends on the type of business and a state maintenance fee does not exist for registered businesses.
5. What are the procedures involved in opening a company in Albania?
In order for a person to register a limited liability company in Albania, they need to register their activity with the Albanian Business Center. The person needs to draft a statute of the company, as an individual or with other persons (individuals) as partners and/or as a single legal entity or in partnership with other legal entities, in which the common economic objectives and financial contributions of each owner are set. The process of the registration is made through E-Albania, the multifunctional government online portal. As mentioned above, the cost for registering a limited liability company in Albania is ALL 0 (no charge).
6. What tips would you have for a foreign investor venturing into Albania?
We advise all new investors in Albania, that for every step that they aim to take in their business development, to always priorly consult with a law firm or legal consultant so that they can get the right directions for a successful business. This advice comes from our fair share of experience in dealing with the instability, or sometimes chaotic legislation that Albania has.
7. At Muja Law Office, what services do you offer and what sets you apart from other agencies?
Muja Law Office is full-service and advises clients on all areas of civil, commercial, and administrative law. With significant industry expertise, we strive to provide our clients with practical business-driven advice that is clear and straight to the point, constantly up to date, not only with the frequent legislative changes in Albania, but also with the developments of international legal practice and domestic case law.
The office additionally delivers services to clients in major industries, banks and financial institutions, as well as to companies engaged in insurance, construction, energy and utilities, entertainment and media, mining, oil and gas, professional services, real estate, technology, telecommunications, tourism, transport, infrastructure and consumer goods.
In our law office, we also like to help our clients with intermediary services, as an alternative dispute resolution method to their problems.
What sets us apart from other law firms in Albania is our continued dedication and approach to clients, in assisting them in every step of the way during their day-to-day activity and ensuring that they are always compliant with the dynamic legislation of Albania.
Interested in doing business in Albania, then contact us at firstname.lastname@example.org