Bureau of Economic and Business Affairs
July 5, 2016

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Executive SummaryShare    

Albania is a relatively small country located in the Western Balkans with a population of approximately 3 million people and a landmass the size of Maryland. Albania became an EU candidate country in June 2014 and currently is working to fulfill the criteria that would pave the way for the start of accession negotiations.

Despite the government’s stated desire to attract foreign direct investment, Albania remains a very challenging economy for foreign investors. Validity of contracts with the government is an ongoing concern, with incoming governments often seeking to nullify or modify contracts signed by previous governments. Albania’s judiciary is inefficient and frequently corrupt. To minimize this risk, investors traditionally have bypassed local courts by including international arbitration agreements in their contracts with Albanian counterparts. In 2016, however, the government ignored an injunction order from an international arbitration court in a high-profile investment dispute, which caused many foreign investors to question the country’s commitment to honoring arbitration decisions.

Investors report ongoing concerns that regulators use difficult-to-interpret, or inconsistent, legislation and regulations as a tool to punish competition and to favor politically connected companies. Regulations and laws governing business activity change frequently and with little meaningful consultation with the business community. Major foreign investors report pressure to hire specific, politically connected subcontractors and often raise concerns about operating in Albania while complying with the Foreign Corrupt Practices Act. Reports of corruption in government procurement are commonplace. Numerous U.S. companies complained last year that they were disqualified from public tenders despite offering the lowest bid in order to award tenders to companies with politically connected local partners. Another challenge is the situation related to property rights in Albania; clear title is hard to obtain for various reasons, (unscrupulous actors frequently manipulate the corrupt court system to obtain title to land not their own); compensation for those whose land was confiscated by the communist regime is hard to obtain and inadequate; the agency charged with removing illegally-constructed buildings (a significant problem in Albania) sometimes acts without full consultation and without following procedures.

Although the country largely was spared from the severe fallout of the 2008 financial crisis, economic output has slowed since 2009, reflecting the prolonged European crisis in neighboring Italy and Greece, where close to 1.2 million Albanians live and work and with which 66 percent of Albanian trade occurs. Faced with public debt ballooning to 70 percent of GDP and large arrears to the private sector, the government began an ambitious fiscal consolidation program and signed a 330 million Euro, three-year program with the IMF in February 2014. The program aims to help the GOA implement structural reforms that would in turn strengthen competitiveness, improve the investment climate, and catalyze stronger growth. GDP grew by 2.66 percent in 2015, up from 1.9 percent in 2014, and both the government and IMF estimate approximately 3.4 percent growth in 2016.

With low domestic demand, low bank lending rates, and limited government spending, the Albanian government has been focused on promoting foreign direct investment (FDI) as the driver of growth in the economy by implementing a liberal foreign investment regime. In an attempt to attract much-needed FDI, the GOA approved a new Law on Strategic Investments in 2015, which outlines investment incentives and offers fast-track administrative procedures to strategic foreign and domestic investors, depending on the size of the investment and number of jobs created. The government also passed legislation creating Technical Economic Development Areas (TEDAs) similar to free trade zones, but the tender to develop the first TEDA failed and the process has stalled.

After climbing 40 places in the 2015 World Bank Doing Business Report, Albania fell 20 slots in 2016, largely due to the near complete suspension of issuing construction permits in 2015.

The Albanian legal system does not discriminate against foreign investors. The U.S. - Albanian bilateral investment treaty entered into force in 1998 ensures that U.S. investors receive most-favored-nation treatment. The Law on Foreign Investment outlines specific protections for foreign investors and allows 100 percent foreign ownership of companies with a few typical exceptions in international air passenger transport, electric power transmission, and television broadcasting.

Foreign direct investment annual inflows in Albania have increased significantly since 2008, averaging close to $1 billion per year for the period 2008-2014. Greece and Canada are the largest source of Albanian FDI, representing 42 percent of Albania’s $5.1 billion foreign investment stock in 2014 primarily in the telecommunications, financial intermediation, manufacturing, hydrocarbon, and mining sectors. FDI experienced a slight decrease in 2014 and 2015 reflecting a decline in investments in the oil sector.

Foreign investment opportunities in Albania likely will grow in the coming years, especially in the IT, oil and gas, electricity, and hydropower sectors. However, despite many emerging opportunities, the major challenges outlined above will remain for the foreseeable future.

Table 1



Index or Rank

Website Address

TI Corruption Perceptions index


88 of 168

World Bank’s Doing Business Report “Ease of Doing Business”


97 of 189

Global Innovation Index


87 of 143

U.S. FDI in partner country ($M USD, stock positions)


$116 million

Bank of Albania (2014 data U.S. stock FDI in Albania – USD 116 million)

World Bank GNI per capita




1. Openness To, and Restrictions Upon, Foreign InvestmentShare    

Attitude toward Foreign Direct Investment

The Albanian government has a stated policy goal of attracting foreign investment as a driver of economic growth. The country maintains a liberal foreign investment regime designed to help attract foreign investment. The Law on Foreign Investment outlines specific protections for foreign investors and allows 100 percent foreign ownership of companies in all but a few specific sectors.

Albanian legislation does not distinguish between domestic and foreign investments. The 2010 amendments to the Law on Foreign Investment introduced criteria when state would grant special protection to foreign investors involved in property dispute, providing additional guarantees over domestic investors for investments of more than 10 million euro.

The U.S. - Albania bilateral investment treaty (BIT) entered into force in 1998 and, ensures that U.S. investors receive most-favored-nation treatment.

Despite favorable legislation for foreign investors, rampant corruption and a high degree of “informal” business practices means that it often is difficult for U.S. investors to enter the market. Most major U.S. investments in the country currently face significant challenges with the Albanian government. The government’s recent antagonistic treatment of major investors and its refusal in one instance to recognize the jurisdiction of an international arbitration court call into question this government’s treatment of foreign investment.

Other Investment Policy Reviews

There are no OECD or UNCTAD investment policy reviews of Albania.

Laws/Regulations on Foreign Direct Investment

Albania’s Law on Foreign Investments attempts to create a hospitable legal climate for foreign investors and stipulates the following:

  • No prior government authorization is needed for an initial investment.
  • Foreign investment may not be expropriated or nationalized directly or indirectly, except for designated special cases, in the interest of public use and as defined by law.
  • Foreign investors enjoy the right to expatriate all funds and contributions in kind from their investments.
  • Foreign investors receive most favored nation treatment according to international agreements and Albanian law.

There are limited exceptions to this liberal investment regime, most of which apply to the purchase of real estate. Agricultural land cannot be purchased by foreigners and foreign entities, but may be rented for up to 99 years. Investors can buy agricultural land if registered as a commercial entity in Albania. Commercial property may be purchased, but only if the proposed investment is worth three times the price of the land. There are no restrictions on the purchase of private residential property.

In an effort to boost investments in strategic sectors, the government approved a new law on strategic investments in May 2015. Under this law, an investment deemed as a “strategic investment” by the government would benefit from either “Assisted Procedure” or “Special Procedure” assistance from the government in navigating the permitting and regulatory process. To date, no major investors have taken advantage of this law.

Major Laws Governing Foreign Investments:

  • Law 9901/2008 “On Entrepreneurs and Commercial Companies”: Outlines general rules and regulations on the merger of commercial companies.
  • Law 110/2012 “On Cross-Border Mergers”: Determines rules on mergers when one of the companies involved in the process is a foreign company.
  • Law 9121/2003 “On Protection of Competition”: Stipulates provisions for the protection of competition, and the concentration of commercial companies.
  • Law 10198/2009 “On Collective Investment Undertakings”: Regulates conditions and criteria for the establishment, constitution, and operation of collective investment undertakings and of management companies.

Authorities responsible for mergers, change of control, and transfer of shares are: Albanian Competition Authority (ACA) which monitors the implementation of the competition law and approves mergers and acquisitions when required by the law; and, the Albanian Financial Supervisory Authority (FSA) which regulates and supervises the securities market and approves the transfer of shares and change of control of companies operating in this sector.

Investors in Albania are entitled to judicial protection of legal rights related to their investments. Foreign investors have the right to bring claims to an Albanian court. In addition, parties to a dispute may agree to non-judicial arbitration. Albania is a signatory of the New York Convention; foreign arbitration awards typically are recognized by Albania, although the government refused to recognize an injunction from a foreign arbitration court in one high profile case in 2016, calling into question the government’s commitment to arbitration. The Albanian Civil Procedure Code outlines provisions regarding domestic and international commercial arbitration. Many foreign investors complain that endemic corruption and inefficient court procedures undermine judicial protection in Albania and choose to seek international arbitration as the most expeditious means of dispute resolution.

Albania's tax system does not distinguish between foreign and domestic investors. Informality in the economy (as high as 50 percent) makes tax administration a challenge.

Visa requirements to obtain residence or work permits are straightforward and do not pose an undue burden on potential investors. The only potential complication to obtaining a work permit is the requirement that a foreign employer maintain a mandated number of local employees. The Law on Foreigners states that a foreign employer will be granted a work permit if the number of foreign employees in the company does not exceed 10 percent of the total number of employees on the payroll for the 12 proceeding months.

The Law on Entrepreneurs and Commercial Companies sets guidelines on the activities of companies and the legal structure under which they may operate. The government adopted the law in 2008 to conform Albanian legislation to the European Union's Acquis Communitaire. The most common type of organization for foreign investors is a limited liability company.

The Law on Concessions establishes the framework for promoting and facilitating the implementation of privately financed concessionary projects. Concessions may be identified by central or local governments or through third party unsolicited proposals. In the case of unsolicited proposals, the proposing company is entitled to receive a bonus of up to 10% of total points based on the technical and financial proposal.

Business Registration

According to the 2016 World Bank Doing Business Report, it takes an average of six procedures and 5.5 days to start a company in Albania. The National Registration Center (NRC) serves as a one-stop shop for business registration. All required procedures and documents are published on-line at The registration may be done in person, or online via the e-Albania portal at Many companies choose to complete the registration process in person, as the online portal requires an authentication process and electronic signature and is only available in Albanian. Business licenses can be acquired through the Business Licensing Center at

The Albanian Investment Development Agency (AIDA) is in charge of promoting foreign investments in Albania. Investors intending to invest in Albania should contact AIDA to learn more about the services AIDA offers for foreign investors

The Law on Strategic Investments stipulates that AIDA, as the Secretariat of the Strategic Investment Council, serves as a one stop window for foreign investors, following all the administrative procedures from the filing of the application form to granting the status of strategic investment/investor.

The deadline for application to receive the status of strategic investment/investor is December 2018. The legal framework regulating the strategic investments can be found at the Albanian Investment Development Agency page at:

For tax purposes companies are categorized based on their annual turnover. As of January 2016, companies that generate up to 5 million lek (roughly $40K) and from 5-8 million lek ($40 - $64k) are considered small companies and are subject to a simplified income tax of respectively 0% and 5%. Companies with a turnover of more than 8 million lek ($64K) are considered large companies and incur a 15% corporate income tax.

The law on small and medium enterprises categorizes companies in:

  • Micro companies: Less than 10 employees and a turnover of less than 10 million lek ($80,000).
  • Small companies: 10-49 employees and a turnover of less than 50 million lek ($400,000).
  • Medium companies: 50-250 employees and a turnover of less than 250 million lek ($2,000,000).

Industrial Promotion

The GOA is eager to attract foreign investment across all sectors, particularly in job creating industries that help the government address high unemployment rates. Please see a detailed list of incentives under the subchapter below. Interested investors should contact the Albanian Investment Development Agency (AIDA) (, to learn more about specific sectors.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are generally no restrictions on foreign ownership or control in domestic corporations. According to the Albanian legislation, 100 percent foreign ownership of companies is allowed in almost all sectors with a few exceptions including:

  • International air passenger transport (foreign ownership of airline companies is limited to 49% ownership for investors outside the Common European Aviation Zone).
  • Electric power transmission (100% state owned).
  • Television broadcasting (no entity may own more than 40% of a television company).

Albanian law permits private ownership and establishment of enterprises and property. Foreign investors do not need additional permission or authorization beyond that required of domestic investors. The government applies restrictions only on the purchase of real estate: agricultural land cannot be purchased by foreign individuals or foreign companies, but may be rented for up to 99 years. Commercial property may be purchased, but only if the proposed investment is worth three times the price of the land. There are no restrictions on the purchase of private residential property. Foreigners can acquire concession rights on natural resources and on resources of the common interest, as defined by the Law on Concessions and Public Private Partnerships.

Foreign and domestic investors have numerous options available for organizing business operations in Albania. The 2008 ‘Law on Entrepreneurs and Commercial Companies,’ and ‘Law Establishing the National Registration Center’ (NRC) allows for the following legal types of business entities to be established through the NRC: Sole Entrepreneur; Unlimited Partnership; Limited Partnership; Limited Liability Company; Joint Stock Company; Branches and Representative Offices; and Joint Ventures.

Privatization Program

The privatization process in Albania is nearing a conclusion, with only a few major privatizations remaining. These few opportunities include the electricity distribution company, 16 percent of the fixed line telephone company Albtelekom, state-owned oil company Albpetrol, and, 25 percent of oil refinery ARMO. SOEs operate in the energy generation, electricity transmission and distribution, water supply, ports, railway, insurance, postal services, and hydrocarbon sectors.

Screening of FDI

The government does not screen foreign direct investment.

Competition Law

The Law on Protection of Competition governs incoming foreign investment whether it is through mergers, acquisitions, takeovers, or green field investments, irrespective of the industry or sector. In the case of particular share transfers in insurance and banking industries, additional regulatory approvals may also be necessary. Transactions between parties outside Albania – foreign to foreign transactions – are covered by the competition law, which explicitly states that it applies to all undertakings, whether domestic or foreign, whose activities have a direct or indirect effect on the Albanian market.

2. Conversion and Transfer PoliciesShare    

Foreign Exchange

The Central Bank of Albania (BOA) formulates, adopts, and implements foreign exchange policies and maintains a supervisory role in foreign exchange activities in accordance with the Law on the Bank of Albania No. 8269 and the Banking Law No. 9662. Foreign exchange is regulated by the 2009 Regulation on Foreign Exchange Activities no. 70 (FX Regulation).

The BOA maintains a floating free exchange rate regime for its domestic currency, the Lek (ALL). Foreign exchange is readily available at banks and exchange bureaus. However, when exchanging large amounts, preliminary notification may be necessary as a technical matter given the exchange market in Albania remains small. The domestic currency has remained stable compared to the Euro, but depreciated by approximately 25 percent compared to the dollar over the past year (largely due to Euro depreciation). Albanian authorities do not engage in currency arbitrage and do not view it as an efficient instrument to achieve competitive advantage.

Remittance Policies

The Banking Law does not impose any restrictions on the purchase, sale, holding, or transfer of monetary foreign exchanges. However, the Law on the Bank of Albania authorizes the bank to temporarily restrict the purchase, sale, holding, or transfer of foreign exchanges in order to preserve the foreign exchange rate or its official reserves. In practice, the Bank of Albania rarely uses such measures. The last time was in 2009 when the Bank temporarily tightened supervision rules over liquidity transfers by domestic banks to their foreign mother banks due to the widespread lack of liquidity in international financial markets. It also asked banks to not distribute dividends and to use them to increase shareholders’ capital instead. The Bank lifted these restrictions in 2010.

The Law on Foreign Investment guarantees the right to transfer and repatriate any funds associated with an investment from Albania into a freely usable currency at a market-clearing rate. Only licensed entities (banks) may conduct foreign exchange transfers; waiting periods depend on office procedures adopted by the banks. Both Albanian and foreign citizens entering or leaving the country must declare assets in excess of ALL 1,000,000 (USD 8,000) in hard currency and/or precious items. Failure to declare such assets is considered a criminal act and punishable by confiscation of the assets and imprisonment. Legal parallel markets are not in place in Albania as the financial sector does not make use of convertible or negotiable instruments.

Although the Foreign Exchange Regulation provides that residents and non-residents may transfer capital within and into Albania without any restrictions, capital transfers out of Albania are subject to certain documentation requirements. Physical persons must submit a request indicating the reasons for the capital transfer, the amount of capital transferred outside the territory of Albania, and the address to which the capital will be transferred. Such persons also must submit a declaration on the source of the funds to be transferred. In January 2015, The FX Regulation was amended and the requirement to present the documentation showing the preliminary payment of taxes related to the transaction was removed.

Albania is not a major trading partner for the United States, but in general it does not engage in policy currency manipulation tactics. Albania is a member of the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a Financial Action Task Force-style regional body. The INCRS 2015 report categorizes Albania as a country of jurisdiction of concern with regard to money laundering.

3. Expropriation and CompensationShare    

The Albanian Constitution guarantees the right of private property. According to Article 41, expropriation or limitation in the exercise of a property right only can occur in the public interest and with fair compensation. In the post-communist period, expropriation has been limited to land needed for the public interest, mainly infrastructure projects such as roads, energy infrastructure, water works, airports, etc. Compensation has generally been below market value and owners have complained that the compensation process is slow and unfair. Civil courts are responsible for resolving such complains.

Political change also can be of concern to foreign investors. Following 2013 elections and a peaceful transition of power, the new government revoked or attempted to renegotiate numerous concession agreements, licenses, and contracts signed by the previous government with both domestic and international investors. This has occurred in years past, as well.

There are many ongoing disputes regarding properties confiscated during the communist regime. Identifying land titles and ownership in Albania is a longstanding problem that makes restitution for expropriated properties extremely difficult. The restitution and compensation process started in 1993, but has been slow and marred by corruption. Many U.S. citizens of Albanian origin have long-running restitution disputes. Court cases tend to drag on for years without a final decision, forcing many to take their case to the European Court of Human Rights in Strasburg, France. The Court has so far issued 23 (5 just in 2015) decisions in favor of Albanian citizens in civil cases involving protection of property with an assessed financial cost of approximately $30 million. Reportedly, there are approximately 400 applications pending for consideration. Even after settlement in Strasburg, enforcement of the decision is often slow or nonexistent.

The GOA has recently approved new legislation on property compensation, which aims to provide a final solution to the pending claims for restitution and compensation. The legislation presents three methods of compensation for confiscation claims: restitution; compensation of property with similarly valued land in a different location; and cash settlement/financial compensation. The legislation sets a 10-year timeframe for the completion of the whole process.

Albanian governments at the federal or sub-federal level have not engaged in expropriation actions against U.S. investments, companies or representatives. There have been limited cases when the government has revoked licenses, especially in the mining and energy sectors, based on claims of contract violation.

4. Dispute SettlementShare    

Legal System, Specialized Courts, Judicial Independence, Judgments of Foreign Courts

The Albania legal system is based on the continental judicial system. The Albanian Constitution provides for the separation of legislative, executive, and judicial branches; thus supporting the independence of the judiciary. The Civil Procedure Code enacted in 1996 governs civil procedure in Albania. The civil court system consists of District Courts, Appellate Courts, and the Supreme Court. The district courts are organized in specialized sections according to the subject of the claim: civil disputes; family disputes; and commercial disputes.

The administrative courts of first instance, the Administrative Court of Appeal, and the Administrative College of the High Court now adjudicate administrative disputes. Administrative courts aim to enable expeditious adjudication of administrative cases. The Constitutional Court reviews whether laws or subsidiary legislation comply with the Constitution and in limited cases protects and enforces the constitutional rights of citizens and legal entities.

Parties may appeal the judgment of the first instance courts within 15 days, while Appellate Court judgments must be appealed to the Supreme Court within 30 days. A lawsuit against an administrative action is submitted to the administrative court within 45 days from notification and the law stipulates short procedural timeframes enabling faster adjudication of administrative disputes.

Albania does not have a specific commercial code, but defines commercial legislation through a series of commercial laws. Relevant laws include: Foreign Investment Law; Commercial Companies Law; Bankruptcy Law; Environmental Law; Corporate and Municipal Bonds; Transport Law; Maritime Code; Secured Transactions Law; Employment Law; Taxation Procedures Law; Banking Law; Insurance and Reinsurance Law; Concessions Law; Mining Law; Energy Law; Water Resources Law; Waste Management Law; Excise Law; Oil and Gas Law; Gambling Law; Telecommunications Law; Value Added Law; Sports Law; etc.

Corruption is rampant in the Albanian judicial system and U.S. investors are advised to include binding international arbitration clauses in any agreements with Albanian counterparts. The government typically respects decisions from international arbitration courts, but, as reported above, recently ignored an injunction from such a court in a high-profile investment dispute. Albania is a signatory of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and normally foreign arbitration awards may be enforced in local courts.


Although Albania maintains adequate bankruptcy legislation, actual bankruptcies are rare in practice. Corrupt and inefficient bankruptcy courts make it difficult for companies to either reorganize or discharge debts through bankruptcy.

The Bankruptcy Law governs the reorganization or liquidation of insolvent businesses. It sets out non-discriminatory and mandatory rules for the repayment of the obligations by a debtor in a bankruptcy procedure. The law establishes statutory time limits for insolvency procedures, professional qualifications for insolvency administrators, and an Agency of Insolvency Supervision to regulate the profession of insolvency administrators.

A bankruptcy procedure can be initiated by debtors, creditors, or, tax authorities. Debtors and creditors can file for either liquidation or reorganization. Tax authorities can request a bankruptcy procedure when the subject reports losses of three years in a row. Bankruptcy proceedings also may be invoked when the debtor is unable to pay the obligations at maturity date or will be unable to pay them in the near future.

According to the provisions of the Bankruptcy Law, the initiation of the bankruptcy proceeding would suspend the enforcement of the claims of all the creditors against the debtor subject to bankruptcy. Creditors of all categories should submit their claims to the bankruptcy administrator in order to be treated under the bankruptcy proceeding. The Bankruptcy Law provides specific treatment for different categories, dividing them into: secured creditors; unsecured creditors; and unsecured creditors of lower ranking (i.e. those whose claims would be paid after all the secured and unsecured creditors are satisfied). The claims of the secured creditors will be satisfied by the assets of the debtor, which secure such claims under security agreements. The claims of the unsecured creditors will be paid out of bankruptcy estate excluding the assets used for payment of the secured creditors, following the priority ranking described under the Albanian Civil Code.

Pursuant to the provisions of the Bankruptcy Law, the creditors have the right to establish a creditors committee and the creditors’ assembly. The creditors’ committee is appointed by the Commercial Section Courts, before the first meeting of the creditors’ assembly. The creditors’ committee represents the secured creditors, the unsecured creditors with the larger claims, and creditors with the small claims. The committee has the right: (a) to support and supervise the activities of the insolvency administrator; (b) to request and receive information about the insolvency proceedings; c) to inspect the books and records; and d) to order an examination of the revenues and cash balances.

In the event that the creditors and administrator agree that reorganizing the company is the best option, the administrator of the bankruptcy prepares a reorganization plan and submits it to the court for authorizing implementation.

According to the insolvency procedures, only creditors whose rights are affected by the proposed reorganization plan enjoy the right of vote and the dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation. Creditors are divided into classes for the purposes of voting on the reorganization plan and each class votes separately and creditors of the same class are treated equally.

The insolvency framework allows for the continuation of contracts supplying essential goods and services to the debtor; the rejection by the debtor of overly burdensome contracts; the avoidance of preferential or undervalued transactions; and the possibility of the debtor obtaining credit after commencement of insolvency proceedings. No priority is assigned to post-commencement creditors.

The creditor has the right to object to decisions accepting or rejecting creditors' claims, and they should approve the sale of substantial assets of the debtor. The creditor does not have the right to request information from the insolvency representative and the law does not require approval by the creditor for the selection of appointment of the insolvency representative.

According to the law on bankruptcy, foreign creditors have the same rights as domestic creditors with respect to the commencement of, and participation in, a bankruptcy proceeding. The claim is valued as of the date the insolvency proceeding is opened. Claims expressed in foreign currency are converted into Albanian currency according to the official exchange value applicable to the place of payment at the time of the opening of the proceeding.

The Albanian Criminal Code provides for several criminal offences in bankruptcy such as: (i) the bankruptcy provoked intentionally; (ii) concealment of bankruptcy status; (iii) concealment of assets after bankruptcy; and (iv) failure to comply with the obligations arising under bankruptcy proceeding.

According to the 2015 Doing Business Report of the World Bank, Albania ranks 42 out of 189 countries in the insolvency index. A reference analysis of the ‘resolving insolvency’ can be found at:

The number of bankruptcy requests in Albania is growing with 88 new requests for bankruptcy filed during 2015, with the majority requested by the Taxation Department.

Investment Disputes

In the past ten years, there have been four major investment disputes between the Albanian government and U.S. companies, three of which led to international arbitration. Despite a stated desire to attract and support foreign investors, U.S. investors in disputes with the Albanian government report a lack of productive dialogue and a reluctance to settle the disputes until they either are escalated to the level of international arbitration or the international community exerts pressure on the government to resolve the issue. U.S. investors in Albania are encouraged to include strong binding arbitration clauses in any agreements with Albanian counterparts.

International Arbitration

ICSID Convention and New York Convention

Under the Albanian Constitution, ratified international agreements prevail over domestic legislation. Albania is a member state to the International Centre for the Settlement of Investment Disputes (ICSID Convention). It also is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention). Albania has ratified the 1927 Convention and the European Convention on Arbitration (Geneva Convention).

In order for an arbitration award to be locally recognized, the claimant must enforce the award before the Court of Appeals. The procedure for the recognition of a foreign arbitral award typically last around one month and either party may appeal the Court’s decision to the Supreme Court. The appeal must be filed within 30 days from the date of decision or notification of the other party (if absent).

The possibility of bringing an action before the local court in order to avoid arbitration proceedings is remote. According to explicit provisions in the Albanian Code of Civil Procedure, if a party brings actions before local courts despite the parties’ agreement to arbitrate, the court would, upon motion of the other party, dismiss the case without entertaining the merits of the case. The decision of the court to dismiss the case can be appealed to the Supreme Court, which has 30 days to consider the appeal.

An alternative to dispute settlement via the courts is private arbitration or mediation. Parties can engage in arbitration when they have agreed to such a provision in the original agreement, when there is a separate arbitration agreement, or by mutual agreement at any time when the dispute arises. Legislation distinguishes arbitration of international disputes from arbitration of domestic disputes in that the parties involved in an international dispute may agree to settle through either a domestic or foreign arbitration tribunal. Mediation also is applicable in resolving all civil, commercial, and family disputes and is regulated by the law “On Dispute Resolution through Mediation.” Arbitral awards are final and enforceable and can be appealed only in cases foreseen in the Code of Civil Procedure. Mediation is final and enforceable in the same way.

There are no consolidated institutions for dispute resolution through arbitration and arbiters are appointed ad hoc in compliance with the provisions of the Code of Civil Procedure. While for the mediation process, the law provides for the establishment of the National Chamber of Mediators and Chambers of Mediators as institutions to perform mediation. Mediators are licensed and registered at the Mediators Register at the Ministry of Justice, which maintains a list of mediators from which the parties can choose.

The provisions with respect to arbitration procedures and the recognition and enforcement of the foreign awards are stipulated in the Albanian Code of Civil Procedure. Albania does not have a separate law on arbitration. Although the arbitration chapter of the Code of Civil procedure stipulates only the rules for domestic arbitration, the country is signatory of the 1958 New York Convention and as such, is legally obligated to recognize the validity of the written arbitration agreements and arbitral awards in a contracting state.

Duration of Dispute Resolution – Local Courts

The Albanian Code of Civil Procedure requires the courts to reach a judgment within a reasonable amount of time, but it does not provide for a specific deadline when referring to commercial disputes. Reaching a final judgment in a commercial litigation may take several years if all the stages of the process are exhausted.

An appeal against a court decision that recognizes a foreign arbitral award does not automatically suspend the effects of the enforcement.

5. Performance Requirements and Investment IncentivesShare    


Albania does not have any performance requirements that are inconsistent with the World Trade Organization (WTO) Trade-Related Investment Measures (TRIMs) obligations. Albanian law does not impose performance requirements on foreign or domestic investors. Furthermore, the bilateral investment treaty between the two countries prohibits either party from mandating or enforcing performance requirements as a condition for the establishment, acquisition, expansion, management, conduct, or operation of a covered investment.

Investment Incentives

The Albanian Investment Development Agency ( is the best source to find incentives offered across a variety of sectors. Distinct from the incentives listed below, individual parties may negotiate additional incentives directly through AIDA or with the Ministry of Economy, Trade, Tourism and Entrepreneurship.

In an effort to boost investments in strategic sectors, in May 2015 the Government of Albania approved a new law on strategic investments, which creates two categories – Assisted Procedure or Special Procedure – and outlines the criteria, rules, and procedures that state authorities shall use when granting the status of strategic investment. A strategic investment is an investment of public interest, based on several criteria including: size of the investment, implementation time, productivity and added value, creation of new jobs, sectorial economic priorities, regional and local economic development, etc. The law does not discriminate between foreign and domestic investors.

The following sectors are defined as strategic sectors: Mining and Energy; Transport, Electronic Communication Infrastructure, and Urban Waste Industry; Tourism (touristic structures); Agriculture (Large Agricultural Farms) and Fishing; Economic Zones; and Development Priority Areas. The law foresees that investments in strategic sectors may benefit from a financial grant which varies from 1 million to 100 million euro, and comes with the status of Assisted Procedure or Special Procedure, depending on the sector and other criteria stipulated in the law. In the Assisted Procedure the public administration coordinates, assists, and supervises the entire administrative process for the investment approval and makes available to the investor state owned property needed for the investment. In the Special Procedure the investor also enjoys state support for the expropriation of private property and the ratification of the contract by Parliament.

The law and bylaws that entered into force on January 1, 2016, foresee the establishment of the Strategic Investments Committee (SIC), a collegial body headed by the PM whose members include ministers covering the respective strategic sectors, state advocate, and on a case by case basis ministers whose portfolios are impacted by the strategic investment. The Albanian Investment Development Agency (AIDA) serves as the Secretariat of SIC and is in charge of providing administrative support to investors. The SIC is in charge of granting the status of Assisted Procedure and Special Procedure, for strategic investments/investors based on the size of investments and other criteria defined in the law.

  • Energy and Mining, Transport, Electronic Communication Infrastructure, and Urban Waste Industry: Investments greater than 30 million euro enjoy the status of assisted procedure; equal or higher than 50 million enjoy the status of special procedure.
  • Tourism and Economic Areas: Investments equal or higher than 5 million euro enjoy the status of assisted procedure and greater than 50 million enjoy the status of special procedure.
  • Agriculture (large agricultural farms) and Fishing: Investments greater than 3 million euros, which create at least 50 new jobs enjoy the status of assisted procedure and greater than 50 million euros enjoy the status of special procedure.
  • Development Priority Areas: Investments greater than 1 million euro that create at least 150 new jobs enjoy the status of assisted procedure. Investments greater than 10 million euros which create at least 600 new jobs enjoy the status of special procedure

Additional investment incentives:

Energy sector: Cement and iron imported for the construction of hydropower plants is VAT exempt.

Foreign tax credit: Albania applies foreign tax credits rights even in case there is no double tax treaty in place with the country where the tax is paid. If a double taxation treaty is in force, double taxation is avoided either through an exemption or by granting tax credit up to the amount of the applicable Albanian corporate income tax rate (currently 15 percent).

Corporate income tax exemption: Film studios and cinematographic productions, licensed and funded by the National Cinematographic Centre are exempt from paying corporate income tax.

Loss carry forward for corporate income tax purposes: Fiscal losses can be carried forward for three consecutive years (the first losses are used the first). However, they can’t be carried forward if more than 50 percent of direct or indirect ownership of the share capital or voting rights of the taxpayer is transferred (changed) during the tax year.

Tax exemption of dividends designated for investments: Dividends and profit share paid by a resident or non-resident company to a resident taxpayer will not be subject to corporate income tax for the resident taxpayer. This applies, despite the participation quote, in amounts or number of shares, in shareholder capital of the voting rights or participation in initial capital of the beneficiary.

Lease of public property: Government of Albania can lease public property of more than 500 m2, or grant a concession for the symbolic price of 1 euro if the properties will be used for manufacturing activities with an investment exceeding 10 million euro, or for inward processing activities. The GOA can also lease public property or grant a concession for the symbolic price of 1 euro for investments of more than 2 million euro on activities that address social and economic issues in a certain area, as well as activities related to sport, culture, tourism and cultural heritage. Criteria and terms are decided on a by case basis by the Council of Ministers.

Manufacturing activities: are exempt from VAT on machinery and equipment.

The employer is exempt from the social security tax payment for 1 year for all new employees.

The state pays the salaries for 4 months for the new employees and offers various financing incentives for job training.

VAT credit for fuel: Taxpayers whose main business activity is the production of bricks and tiles and the transport of goods with technological means are allowed to credit VAT on the purchase of fuel used wholly and exclusively for their business activities, up to the limit of a certain percentage of the taxpayer’s total annual turnover.

Manufacturing sector obtains VAT refunds immediately in the case of zero risk exporters, within 30 days if the taxpayer is an exporter, and within 60 days in the case of other taxpayers.

Apparel and footwear producers are exempt from 20 percent VAT on raw materials as long as the finished product is exported. In 2011, the GOA also removed customs tariffs for imported apparel and raw materials in the textile and shoe industries (e.g. leather used for clothes, cotton, viscose, velvet, sewing accessories, etc.)

Research and Development

The Agency for Research, Technology and Innovation (ARTI), is a public, legal institution whose mission is to evaluate, finance, monitor and manage programs and projects in the fields of science, technology and innovation in Albania. ARTI ( aims to target projects for small and medium-sized businesses as well as the transfer, modernization, and renewal of their technologies. The Agency is funded by a combination of the state budget, donations by both domestic and foreign individuals and private sector, EU programs and projects, from specific countries and partner organizations. There are no restrictions against foreign firms operating in Albania to apply for research and development projects.

Performance Requirements

Although visa, residence, and work permit requirements are straightforward and do not usually pose an undue burden on potential investors, the Law on Foreigners requires foreign investors to prove that foreign employees comprise less than 10 percent of the company’s total workforce before granting a work permit.

Data Storage

According to the current legislation in force, companies that have sensitive data (mostly in telecommunications, banking, energy sector, etc.) are not authorized to transfer data abroad. In order to do so, they need to get approvals and fulfill certain security criteria. As such, many companies operating in Albania are returning their data inside Albania. The two large private datacenters in Albania belong to the telecom operator Albtelecom and Albanian Telecommunication Union (ATU.)

6. Protection of Property RightsShare    

Real Property

Real Estate is registered at the Immovable Property Registration Office (IPRO). The procedures are cumbersome and registrants have complained of corruption within the process. Recent changes in legislation allow a notary public to have access to real estate registers and confirm the legal ownership of property. The process of registering property remains cumbersome and difficult to navigate. For large transactions, it is still advisable to hire an attorney to check documents and procedures for property registration.

Property legislation has developed in a piecemeal and uncoordinated way. The reform in the sector has not fully achieved the consolidation of property rights and the elimination of legal uncertainties. Immovable property rights enforcement is not efficient and is a common source of corruption allegations and lengthy legal procedures. Through the use of international donor assistance the registration system has improved. The initial property registration process has seen progress but the finalization of the process has stalled in recent years. Approximately 17 percent of properties nationwide are not yet registered, mostly in urban and high value coastal areas. Illegal construction is a major impediment to securing property titles. The legalization process to address large-scale illegal construction started in 2006 and, is still ongoing. There are an estimated 440,000 illegal buildings in Albania of which only 52,000 have been legalized so far. In an attempt to legalize property and punish illegal construction, the government’s National Urban Construction Inspectorate (INUK) began a campaign of demolition in late 2013. There were credible reports that the government demolished some homes without due legal process as part of a wider campaign to demolish illegally constructed buildings. Citizens also submitted complaints that INUK ignored citizens’ requests to demolish some illegal buildings while choosing to demolish other buildings about which citizens had not complained.

The civil court system manages property rights disputes. Decisions from civil courts often take many years and authorities often do not enforce court decisions. In 2010, there were amendments to the law on foreign investments, which granted special protection to foreign investors on property disputes. However, the new law on strategic investments aims to fill in the gap and provide to foreign investors assistance on a large variety of issues including property title. Foreigners and/or foreign entities can purchase commercial land only if the investment is more than three times of the value of land. In case of agriculture land, it can only be leased for 99 years.

According to the 2016 World Bank’s Doing Business Report, Albania performed poorly in the registering property category, ranking 107 out of 189 economies. It still takes 22 days and 6 procedures to register a property and the associated cost can reach 10 percent of the total property value.

Intellectual Property Rights

Albania is not and never has been on the Special 301 Watch List, Priority Watch List, or Notorious Markets report. However, IPR infringement and theft are common due to weak legal structures and poor enforcement. Counterfeit goods are present in the local market ranging from software to garments and machines. Albanian law protects copyrights, patents, trademarks, stamps, marks of origin, and industrial designs, but there remains a significant gap between the law’s intent and its enforcement. Regulators are ineffective at collecting fines and prosecutors rarely press charges for IP theft. U.S. companies should consult an attorney experienced in IPR issues and avoid potential risk by establishing solid commercial relationships and drafting strong contracts.

Parliament passed a new IPR law which, when enacted, will harmonize domestic legislation with EU law in order to strengthen IPR enforcement and address shortcomings in existing legislation. The main institutions responsible for IPR enforcement include the Albanian Copyright Office (ACO), Audiovisual Media Authority (AMA), the General Directorate of Patents and Trademarks (GDPT), the General Directorate for Customs, the Tax Inspectorate, the Prosecutor’s Office, police, and courts. The new law also stipulates the establishment of three new bodies on IPR issues, the National Council of Copyrights, which will be responsible to monitor the implementation of the law, the Agency for the Collective Administration, in charge of IPR administration, and the Copyrights Department within the Ministry of Culture.

While official figures are not available, Customs does report the quantity of counterfeit goods destroyed annually. In case of seizure, the rights holder has the burden of proof and must first inspect the goods before any further action takes place. The rights holder is also responsible for the storage and destruction of the counterfeit goods.

Law enforcement on copyrights remains virtually nonexistent and copyright violations are rampant. Most IP-related fines are never collected and the few cases that the regulatory agencies refer to prosecutors are rarely enforced. The number of copyright violation cases brought to court remains low. ACO sanctions are not effective and the low fines it levies are rarely collected and do not serve as an adequate deterrent.

Patents and Trademarks

The General Directorate for Patents and Trademarks (GDPT) is responsible for the registration and administration of patents, commercial trademarks and service marks, industrial designs, and geographical indications. The 2008 law on Industrial Property was amended in 2014 to reflect EU legislation on this matter. Despite adequate legislation, the GDPT still needs further capacity building and additional human resources to be effective. Specifically, examination procedures are lengthy due to the very limited number of examiners for patents and trademarks.

Albania became a contracting party to the WIPO Patent Law Treaty and a full member of the European Patent Organization in 2010. The government became party to the London Agreement on the implementation of article 65 of the European Convention for the Patents in 2013.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at

Resources for Rights Holders

Contact at mission on IP issues:

  • Donald A. Brown
  • Economic and Commercial Officer
  • Phone: + 355 (0) 4229 3115
  • E-mail:

Country resources:

  • American Chamber of Commerce:
  • Address: Rr. Deshmoret e 4 shkurtit, Sky Tower, kati 11 Ap 3 Tirana, Albania
  • Email:
  • Phone: +355 (0) 4225 9779
  • Fax: +355 (0) 4223 5350

List of local lawyers

7. Transparency of the Regulatory SystemShare    

Albania’s regulatory system has improved in recent years but still faces challenges. Uneven enforcement of legislation, cumbersome bureaucracy, and lack of transparency are all hindrances to the business community.

Albania has adopted legislation and established agencies that superficially provide transparent rules and regulations to foster competition and attract investment. The government has amended the 2003 ‘Law on Protection of Competition’ several times and created the Agency for the Protection of Competition in 2004. The law seeks to promote clear market rules, but uneven enforcement remains one of the major reasons for distorting competition in the market.

Albanian legislation includes rules on disclosure requirements, formation, maintenance and alteration of capital, mergers and divisions, takeover bids, shareholders' rights, as well as corporate governance principles. The ‘Law on Accounting and Financial Statements’ includes reporting provisions that stipulate large companies will apply International Financial Reporting Standards, while small and medium businesses will apply National Financial Reporting Standards.

Other independent agencies and bodies, including the Energy Regulator (ERE), Telecom Regulator (AKEP), Natural Resources Bureau (AKBN), and other major institutions operate to ensure transparency in specific sectors.

State-owned oil company AlbPetrol retains some regulatory authority over legacy oilfields and is a consistent source of reports of corruption, predatory interpretation of regulations, and inefficiency in the hydrocarbon sector. Major foreign investors in this sector report difficulties in complying with often overlapping regulatory requirements and inconsistent and often conflicting interpretation of Albanian legislation and regulations governing oil exploration and extraction.

8. Efficient Capital Markets and Portfolio InvestmentShare    

In the absence of a stock market, the country’s banking sector remains the main channel for business financing. It is sound, profitable, and well-capitalized, although the high rate of non-performing loans remains a concern. The Bank of Albania’s legal measures to address the problem have generated positive results. At the end of 2015, non-performing loans dropped to 18.2 percent of all private loans, marking a significant reduction compared to their peak level of 25 percent throughout most of the 2014. Capital adequacy at 15.7 percent -- far above Basel requirements -- indicates the sector currently has sufficient assets, which totaled $11 billion in 2015. The banking sector is fully private and consists of 16 banks, most of which are subsidiaries of foreign banks. The Turkish National Commercial Bank is the largest bank, with 25.4 percent of the market, followed by Austrian Raiffeisen Bank with 21.5 percent market share. The market share of Greek banks has decreased significantly in recent years to approximately 14 percent of market share.

Money and Banking System, Hostile Takeovers

Albania’s banking sector weathered the financial crisis better than many of its neighbors, largely due to a lack of exposure to international capital markets and domestic housing bubbles. There is sufficient liquidity in the market to enter and exit sizeable positions. The sector remained profitable even during the peak of the financial crisis when it suffered a reduction of deposits of about 15 percent in 2015 reached an historical record of $125 million, marking an increase of 33 percent compared to last year. Return on assets and on equities also increased respectively to 1.2 percent and 13.2 percent. Market concentration remains high, as the five largest banks dominate the market with about 73 percent of total assets. The Bank of Albania has the flexibility to intervene in the currency market to protect exchange rates and official reserves, but only for a period not exceeding 12 months. In an attempt to stimulate business activity, the Bank of Albania further loosened monetary policy in 2015 with official central bank interest rates reaching a historical low of 1.75 percent.

Foreigners are not required to prove a residency status to establish a bank account other than the normal ‘know your client’ procedures. However, U.S. citizens are required to fill out a form accepting the disclosure of their banking data to IRS authorities in the framework of U.S. Foreign Account Tax Compliance Act requirements.

Commercial Credit

The government has adopted policies promoting the free flow of financial resources as a mechanism to promote any type of foreign investment in Albania. The government and Central Bank refrain from restrictions on payments and transfers for international transactions. While being a shallow FX market, banks enjoy enough liquidity to support sizeable positions. Furthermore, portfolio investments remain limited mostly to company shares, government bonds, and real estate.

The high rate of non-performing loans and the economic slowdown has forced commercial banks to tighten their lending standards, making access to local capital more difficult. The stock of loans decreased by 2.4 percent on annual basis in 2015 due to sluggish business activity and bad loan write-offs. The credit market is quite competitive but interest rates can be high, currently between 6.5 and 9.4 percent. Most mortgage and commercial loans are denominated in euros as rate differentials between local and foreign currency average 2-3 percent. Commercial banks have improved the quality and quantity of services they offer and the private sector has benefited from the expansion of these instruments.

9. Competition from State-Owned EnterprisesShare    

The major state owned enterprises are Electric Distribution Operator OSHEE, Transmission System Operator OST, Electricity Generation Company KESH, Oil and Gas Operator, Albpetrol, Albanian Post Office, and the Albanian Railway System. There is no published list of SOEs and there are no clear data on their assets, net income, and total number of employees.

SOEs are defined as legal entities, which are entirely state-owned or state-controlled and operate as commercial companies in compliance with the Law on Entrepreneurs and Commercial Companies. There is no discrimination between public and private companies operating in the same sector. The government requires SOEs to submit annual reports and undergo independent audits. SOEs are subject to the same tax levels and procedures, same domestic accounting and international financial reporting standards as all other commercial companies. The High State Audit is the institution that audits the activity of the SOEs. The SOEs purchase and supply goods and services from and to the domestic and foreign companies, and are subject to public procurement law .

Albania is not part of the Government Procurement Agreement (GPA) of the World Trade Organization (WTO.) However, private companies can compete openly and under the same terms and conditions with respect to market share, product/ services and incentives.

OECD Guidelines on Corporate Governance of SOEs

The SOE operation in Albania is regulated by the Law on Entrepreneurs and Commercial Companies, Law on State Owned Enterprises, and the Law on the Transformation of State Owned Enterprises into Commercial Companies. The Ministry of the Economic Development, Tourism, Trade and Entrepreneurship represents the state as the owner of the SOEs. There are no legal binding requirements for the SOEs to adhere to OECD guidelines. However, basic principles of corporate governance are stipulated in the above mentioned laws and are generally in line with the OECD Guidelines. The corporate governance structure of the SOE includes the Supervisory Board and the General Director (Administrator) in the case of the joint stock companies. The Supervisory Board is comprised of 3-9 members, who are not employed by the SOE and are appointed two-thirds by the representative of the owner, which is the Ministry of Economic Development, Tourism, Trade and Entrepreneurship, and one-third by the line ministry, local government unit, or the institution to which the company reports. The Supervisory Board is the highest decision making authority, and appoints and dismisses the Administrator for the SOE, by two-thirds of the vote. In the case of SOEs operating in the electricity sector, the representative of the owner and the appointment of Supervisory Board members is regulated by the Law on the Electrical Energy Sector and in the sector of natural gas by the Law on the Sector of Natural Gas.

Sovereign Wealth Funds

Albania does not have a sovereign wealth fund.

10. Responsible Business ConductShare    

Public awareness of corporate social responsibility (CSR) in Albania is low and CSR remains a relatively new concept for the majority of the business community. The small amount of CSR engagement in Albania primarily comes from the energy, telecommunication, heavy industry, and banking sector and tends to focus on philanthropy and environmental issues. Efforts from international organizations to promote CSR awareness, however, are beginning to bear fruit. Thanks to the efforts of the international community and large international companies, the first Albanian CSR Network was founded in March 2013 as a business-led non-profit organization. The American Chamber of Commerce also formed a CSR subcommittee to promote CSR amongst its members in 2015. The government maintains relatively robust CSR, labor and employment rights, consumer protection, and environmental protection legislation, but enforcement and implementation is inconsistent.

Albania is member of the Extractive Industries Transparency Initiative (EITI) and a compliant country since May 2013.

OECD Guidelines for Multinational Enterprises

While Albania is not an adherent to the OECD Guidelines for Multinational Enterprises, the Law on Commercial Companies and Entrepreneurs outlines generic corporate governance and accounting standards. According to the above mentioned law and the law on the national business registration center, companies are required to make a public disclosure when changing administrators, and shareholders and to disclose financial statements.

The Corporate Governance Code for unlisted joint stock companies incorporates the OECD definitions and Principles of Corporate Governance, but is not legally binding. The Code provides guidance for Albanian companies, aiming to provide a best-practice framework above the minimum legal requirements, and assists Albanian companies in developing a sound governance framework.

11. Political ViolenceShare    

Political violence is rare. Albania’s June 2013 elections and subsequent September 2013 transition to a new government were peaceful. However, four protesters were shot and killed by security forces during a violent political demonstration on January 21, 2011. Albania is a source of stability in the region and maintains friendly relations with all neighboring countries.

12. CorruptionShare    

Corruption remains a persistent and pervasive problem at all levels of Albanian society and is the largest deterrent of U.S. investment in Albania. Despite frequent legislative improvements and governmental structures designed to fight corruption, a culture of impunity is widespread and deeply rooted in Albania. Ordinary citizens and foreign investors alike can point to the judiciary, uneven enforcement of laws and property rights, the opaque regulatory environment, and government procurement as indicators of endemic corruption. Investors often cite the corruption in the judiciary as one of the main reasons why they prefer to solve disputes outside the courts or through international arbitration. Although the number of corruption investigations is rising, conviction rates remain low. Furthermore, high-level corruption cases of politicians or well-connected business leaders very rarely end in conviction. Under the Albanian Criminal Code, both active and passive corruption, abuse of office and undue influence are considered criminal offences. In addition to basic corruption offenses, there are specific criminal provisions addressing active and passive corruption by persons exercising public functions, high state officials and locally elected persons, judges, prosecutors, and employees of the judicial bodies and the private sector. Provisions addressing cases of bribery by foreign public officials exist while penalties for corruption in the private sector have increased. There also are provisions addressing trading in influence. Legislation on conflict of interest and declarations of assets by public officials, their spouses and adult children also is in place and was amended several times to address the loopholes and improve the efficiency. In 2012, Parliament restricted the immunity of high-level public officials and judges while 2014 amendments of the Criminal Procedure Code enabled the proper enforcement of these constitutional changes. Despite these amendments, successful prosecutions of high-level officials, despite frequent investigations and allegations, remains rare.

Police authorities and the Prosecutor General’s Office are in charge of criminal investigations and law enforcement, while the High State Audit and internal auditing units within various state institutions inspect, assess, and report alleged cases of corruption. The High Inspectorate for the Declaration and Audit of Assets and Conflict of Interest (HIDAACI) collects and audits the annual declaration of assets and properties of around 5,000 mid- and high-level public officials in central and local executive agencies and supervises the prevention of conflicts of interest. In the Judiciary, the High Council of Justice is in charge of the appointment and removal of judges and prosecutors in district and appeals courts. Specialized inspectors investigate allegations of misconduct of judges and the High Council of Justice then takes the relevant disciplinary measures.

Perception of corruption continues to be high; Albania ranked 88th out of 168 countries in the 2015 Transparency International Corruption Perception Index, although the Transparency International office in Albania suspended its operations in 2015. Some NGOs perform watchdog functions regarding corruption, but the role of civil society in denouncing corruption is weak.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

The government has ratified several corruption-related international treaties and conventions and is a member of major international organizations and programs dealing with corruption and/or organized crime. Albania has ratified the Civil Law Convention on Corruption (Council of Europe), the Criminal Law Convention on Corruption (Council of Europe), the Additional Protocol to Criminal Law Convention on Corruption (Council of Europe), and the United Nations Convention against Corruption (UNCAC). Albania also has ratified a number of key conventions in the broader field of economic crime, including the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (2001) and Convention on Cybercrime (2002). Albania has been a member of the Group of States against Corruption (GRECO) since the ratification of the Criminal Law Convention on Corruption in 2001 and also is a member of the Stability Pact Anti-Corruption Network (SPAI). Albania is not a member of the OECD convention on Combating Bribery of Foreign Public Officials in international Business Transactions.

Resources to Report Corruption

Government online portal to denounce corruption:

13. Bilateral Investment AgreementsShare    

Bilateral Taxation Treaties

The United States and Albania signed a bilateral investment treaty in 1995, which entered into force in January 1998. This treaty ensures that U.S. investors receive the better of national or most-favored-nation treatment, and provides for investor-State dispute settlement. There is no free trade agreement or bilateral taxation treaty between the two countries.

As of December 2015, Albania has concluded bilateral investment treaties with 44 countries: Austria, Azerbaijan, Belgium-Luxembourg Economic Area, Bosnia and Herzegovina, Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Islamic Republic of Iran, Israel, Italy, Kosovo, Kuwait, Lithuania, Macedonia, Malta, Malaysia, Moldova, Netherlands, Poland, Portugal, Republic of Korea, Qatar, Romania, Russia, San Marino, Serbia, Slovenia, Spain, Sweden, Switzerland, Tunisia, Turkey, Ukraine, United Kingdom, and the USA. Out of 44 agreements, ten are not yet in force.

As of December 2015, Albania has signed treaties for the avoidance of double taxation with the following countries: Austria, Belgium, Bosnia and Herzegovina, Bulgaria, China, Croatia, Czech Republic, Egypt, Estonia, France, Germany, Great Britain, Greece, Hungary, India, Ireland, Italy, Island, South Korea, Kosovo, Kuwait, Latvia, Luxembourg, Macedonia, Malaysia, Malta, Moldova, Montenegro, Netherlands, Norway, Poland, Qatar, Romania, Russia, Serbia, Singapore, Slovenia, Spain, Sweden, Switzerland, Turkey, and United Arab Emirates

Albania also has signed free trade agreements with the EU, CEFTA countries (Macedonia, Montenegro, Serbia, Bosnia and Herzegovina, Kosovo, and Moldova), EFTA countries (Switzerland, Liechtenstein, Norway, and Iceland), and Turkey. In addition, in 1992 Albania ratified the Agreement on Promotion, Protection and Guarantee of Investments amongst the Member States of the Organization of the Islamic Conference.

14. OPIC and Other Investment Insurance ProgramsShare    

The Overseas Private Investment Corporation (OPIC) signed an agreement with Albania in 1991. Albania also has ratified the World Bank’s Multilateral Investment Guarantees Agency (MIGA) Convention. Both instruments provide investment guarantees against certain non-commercial risks (i.e., political risk insurance) to eligible foreign investors for qualified investments in developing member countries. MIGA's coverage is against the following risks: currency transfer restriction; expropriation; breach of contract; war; terrorism; civil disturbance; and non-honoring of sovereign financial obligations. MIGA and OPIC often cooperate on projects.

In 1998, OPIC supported the Southeast Europe Equity Investment Fund (SEEF I), which invested heavily in southeastern Europe. OPIC supported its successor, SEEF II, managed by Bedminster Capital. SEEF II has invested in the Albanian health and ICT sectors.

For more information on OPIC please see

For more information on MIGA please see

15. LaborShare    

Albania has a labor force of about 1.33 million people. The official estimated unemployment rate at the end of 2015 was 17.7 percent, but unemployment for people aged 15-29 was estimated at 32.3 percent. Approximately 39 percent of the population is self-employed in the agricultural sector. Informality is widespread in the Albanian labor market. Labor force survey estimates suggest that 43 percent of total employment outside agriculture corresponds to informal employment, and nearly three-quarters of the labor in construction is informal. The situation is even more serious in the agriculture sector where 88 percent of employment is informal or undocumented.

While some members of the labor force are highly skilled, many work in low-skill industries or have outdated skill sets. The education level of the workforce is low in Albania, limiting economic prospects of the country and access to quality jobs particularly for the low-skilled. Slightly more than half of those of working-age in Albania have primary education or less, while only 12 percent have tertiary education. The government provides fiscal incentives for the training of labor force for the inward processing industry which in Albania includes the shoe and textile sector. A majority of young Albanians speak English, Italian, or Greek as a second language. Other foreign language skills are common, as well.

Albania has a tradition of a strong secondary educational system, while vocational schools are less prevalent. In 2013, only 17 percent of high school pupils were enrolled in vocational schools. However, the new government has shifted its attention to the promotion of vocational education.

In 2014, the average salary in public administration was approximately $425 per month. Minimum wage is 22,000 Lek/month (approximately $176), which is among the lowest in the region.

Pursuant to the Labor Code and the recently amended “Law on the Status of the Civil Employee,” both individual and collective employment contracts regulate labor relations between employees and management. Albania has been a member of the International Labor Organization (ILO) since 1991 and has ratified 53 ILO international labor conventions, the entire set of fundamental and governance conventions as well as two protocols. The Albanian government has established the National Council of Labor, composed of government officials, trade unions, management, and employers’ associations, to improve social dialogue between stakeholders. The institutions governing the labor market include: the Ministry of Welfare and Youth, Ministry of Innovation and Public Administration, the National Employment Service, the State Labor Inspectorate, and private actors such as employment agencies and vocational training centers. Albania has adopted a large variety of regulations to monitor labor abuses, but their enforcement remains weak due to persistent informality in the work force.

Law 108/2013 dated March 28, 2013 “On Foreigners” and various decisions of the Council of Ministers regulate the employment regime in Albania. The law limits to 10 percent the total number of foreigners hired by employers in Albania. In 2015, the labor code was amended to include the temporary employment of foreigners in Albania. However, for specific projects or to attract foreign investment, employment can be regulated thorough special laws, and wages and training costs may be tax deductible.

Both employees and managers have the right to form trade unions. Trade unions are organized both at the national level (according to industrial sector) and at the company level. The Labor Code guarantees the right to strike as part of the right to negotiate wages and working conditions. However, economically driven strikes are very rare in Albania. Employment contracts are applicable both to union and non-union workers. The two main national-level trade unions, both affiliated with the International Trade Union Confederation (ITUC) are the Confederation of Trade Unions (KSSH) and the Union of the Independent Trade Unions of Albania (BSPSH). Employment contracts can be limited or for an unlimited period, but typically cover an unlimited period of duration if not specified in the contract. Employees can benefit from up to 12 months paid salary in case of unexpected interruption of the working contract.

The State labor inspectorate is the main authority responsible for the monitoring of labor conditions and the enforcement of labor code and occupational health and safety standards. Its performance is considered fairly inadequate due to the lack of human resources and limited financial capabilities. Furthermore, the inspectorate has no investigative and prosecution responsibilities as it submits all allegations of infringements to other law enforcement agencies.

The State Labor Inspectorate is responsible for enforcing occupational health and safety standards and regulations. Workplace conditions in the manufacturing, construction, and mining sectors often are poor and, in some cases, dangerous due to lack of inspections and enforcement from the Labor Inspectorate.

U.S. Department of State Human Rights Report:

Department of Labor Child Labor Report:

16. Foreign Trade Zones/Free Ports/Trade FacilitationShare    

Albania does not have any functional duty free import zones, although the legislation exists to create them. The May 2015 amendments to the Law on the Establishment and Operation of Technical and Economic Development Areas (TEDA) established the legal framework for the establishment of TEDAs (a.k.a. free trade zones), defining the incentives for developers investing in the development of these zones as well as companies operating within the zones. The Ministry of Economic Development, Tourism, Trade and Entrepreneurship (MEDTTE) has announced three investment opportunities seeking private sector developers to obtain, develop, and operate three fully serviced areas, located in Koplik (61 ha), Spitalla (501.9 ha), and, Vlora (230 ha.) Interested investors and developers may find more information for the development of Technical and Economic Development Areas (TEDA) at the following page

17. Foreign Direct Investment and Foreign Portfolio Investment StatisticsShare    

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy


Host Country Statistical source*

USG or international statistical source

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

Economic Data






Host Country Gross Domestic Product (GDP) ($M USD)





Foreign Direct Investment

Host Country Statistical source*

USG or international statistical source

USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country ($M USD, stock positions)





BEA data available at

Host country’s FDI in the United States ($M USD, stock positions)


Not available



BEA data available at

Total inbound stock of FDI as % host GDP





Not available

*Domestic Sources: Bank of Albania
Albanian Institute of Statistics
Albanian Ministry of Finances:

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data

From Top Five Sources/To Top Five Destinations (US Dollars, Millions)

Inward Direct Investment

Outward Direct Investment

Total Inward



Total Outward

Not available






















"0" reflects amounts rounded to +/- USD 500,000.

Source: IMF Coordinated Direct Investment Survey

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets

Top Five Partners (Millions, US Dollars) – June 2015


Equity Securities

Total Debt Securities

All Countries



All Countries



All Countries






Not available


Russia Federation



Russia Federation




























Source: IMF’s Coordinated Portfolio Investment Survey (CPIS) (

18. Contact for More InformationShare    

Donald Brown
Economic and Commercial Officer
U.S.A. Embassy Tirana, Albania
Rruga Elbasanit, Nr. 103
Tirana, Albania
+355 4 224 7285