Albania Information

AN INVESTOR’S
GUIDE TO ALBANIA
2 AN INVESTOR’S GUIDE TO ALBANIA
3
Table of Contents
Albania- a country Key information .................................................................................6

to discover Location and climate .........................................................................8
Population and language ................................................................ 12
History and government system ..................................................... 12
Natural resources ........................................................................... 15
Entertainment and culture .............................................................. 16
Economic and Economic overview ........................................................................ 17

business Foreign Investments ...................................................................... 18
Environment Privatization .................................................................................... 22
Tax regime ...................................................................................... 22
Banking system .............................................................................. 26
Labor market .................................................................................. 28
Foreign Trade .................................................................................. 29
Albania toward European Union Integration ................................... 33
Sectors of a great Tourism ...................................................................................... 41

opportunity to invest Agriculture ...................................................................................... 42
Industry ...................................................................................... 43
Mining, oil and gas ......................................................................... 44
Energy ...................................................................................... 45
Infrastructure .................................................................................. 46
Business FDI legislation ................................................................................. 56

legislation Form of business entities ............................................................... 56
Free trade agreements ................................................................... 58
Work regulations for foreigners ...................................................... 59
License and company registration .................................................. 59
Industrial and intellectual property ................................................. 61
Foreign exchange rules .................................................................. 66
Free zones and industrial parks ...................................................... 67
Privatization, its structure and the legal framework ....................... 68
Competition and consumer protection ........................................... 69
Albanian IPA
IPA About ANIH .................................................................................... 69
(ANIH) Services ...................................................................................... 70
ANIH Strategy for 2004 year .......................................................... 72
Contact us ...................................................................................... 76
Appendix Success stories .............................................................................. 78

Audit companies and Legal Studios in Albania ............................... 78
Bilateral agreements on investment area ....................................... 79
Legal framework for privatization ................................................... 80
Useful points of contacts ............................................................... 80
Dear Investor:
It is with great pleasure that we present you with our second

edition of “An Investor Guide to Albania” only one year after the
publication of the first edition. Several positive changes have
taken place in Albania and its economy over this period that
reflect our country’s continued integration into the world
economy, Europe and our region. This process has been reflected
in our legislative and institutional development as they continue
to approach international best practice.
The Albanian government has undertaken considerable reforms

to achieve targets pertaining to the economic development of
the country. The Government is also seriously engaged in the
implementation of these reforms as they are a cornerstone in
our efforts to increase the flow of foreign direct investment.
We are aware that the changes we need to undertake should

reflect the numerous challenges we are facing in a world that is
getting increasingly globalized. We consider ourselves a part of
the global economy and endeavor to act accordingly.
In this regard, Albania has signed several international

agreements. Chief among them are a series of Free Trade
Agreements with countries in our region which will, once fully
implemented, create one market in Southeastern Europe with
some 55 million consumers. Additionally, Albania has joined the
WTO and is in the process of fulfilling membership requirements.
The Government of Albania continues to view the presence of

international investors in the economy as a priority and we are
deeply committed to creating an enabling environment by
identifying their concerns with the aim of improving the legal
5
and institutional framework to facilitate their entry and operation

in Albania.
Some of the milestones along this path include a joint project

with FIAS that attempts to identify and remove administrative
barriers for foreign investors; US EXIM’s new facilities for Albania;
and, Albania’s inclusion in a recently formed OPIC Southeastern
Europe investment fund.
As a result, we were recently able to welcome several major

investors into our country. Lockheed Martin, Raiffeisen Bank
and Hochtief have decided to invest in Albania. Their presence,
and the presence of many others, is testimony that Albania is
emerging as a credible investment destination.
Finally, through the publication of this Guide, we hope that you

will become better acquainted with the investment opportunities
that Albania has to offer and how to go about positioning your
company to participate in Europe’s newest emerging market.
Anastas ANGJELI
Minister of Economy
7
ALBANIA -
a country to discover
KEY DATA
Official Name Republic of Albania
Head of State Alfred MOISIU
Head of Government Fatos NANO
Southeastern Europe, borde red by the Adriatic

Location and Ionian seas, and by Greece, Macedonia,
Serbia and Montenegro from the south -east to
the north-west.
Governance Parliamentary Republic. Elections take place
every 4 years.
Capital Tirana
570,184 inhabitants
Next Two Biggest Cites Durres 215,005 inhabitants

Vlora 150,700 inhabitants
Population 3,144,058 *
Population Density 109.4 inhabitants per Sq. Km.
Official language Albanian
Currency Lek
Exchange Rate 1 USD = 101 leks

1 euro = 124.5 leks
Surface Area 28.748 km2
Time zone GMT + 1
Telephone Codes + 355 (Albania)
Climate Two climate zones: Mediterranean and

continental. Average temperature in winter is
6.80C/440F and in summer 23.9 0C/75 0F. Annual
rainfall average 1371.6 mm/54”.
GDP per Capita $1935 (2003)**
Source: *Institute of Statistics (1 January 2004)

** Bank of Albania
Location LOCATION AND

LOCATION
Albania is situated in the CLIMATE
CLIMATE
Western part of the Bal-
kan Peninsula, covering
an area of 28,748 square
kilometers. It is bordered
SE M
&
R ON
BI T
by Montenegro and Kos-

A E
ovo to the North and

N
EG
R
KOSOVA
North East, FYR Mace-
O
donia to the East, and

Greece to the South. The
immediate western
neighbor is Italy, some 82
km across the Adriatic
through the straight of
Otranto. Major cities in-
clude Tirana, the capital,
as well as the ports of
Durres and Vlora.
Climate
Albania enjoys a Mediterranean climate. Due to its mountain
ranges, the country’s climate varies. Albania is characterized
by hot dry summers with bright sunny days, and generally mild
winters with abundant rainfall. In the Albanian Alps, the northern
part of the country, winters are cold and summers chilly.
Normally, the period from June to September is characterized by
hot and sunny weather, while from October to May the weather
is cool and wet.
ALBANIA - A COUNTRY TO DISCOVER 9
POPULA TION AND

POPULATION Population
LANGUAGE The population of Albania stood at 3,145,408 in January 2003,
with 20% of the population living in urban areas. Over 500,000
Albanians have emigrated during the 1990s, mostly to Greece
and Italy. Demographic developments and urbanization are
reflected in the decrease of the size of the household. Today,
the four-member household is the most widely observed pattern.
Language
Albanian is the official language of Albania. And although it is a
branch of the Indo-European family, Albanian is linguistically a
distinct language not deriving or related to other Indo-European
languages. Actually, Albanian derives from old Illyrian and has
preserved its originality throughout history. Italian, English and
French are widely spoken.
Religion
Albanians are Moslem and Christian (Catholic and Orthodox).
After the Communist Era, during which atheism was enforced
by the Constitution of 1967, Albanians became free to practice
their beliefs.
HISTORICAL
HISTORICAL Historical background
AND The territories of present day Albania have been inhabited as
GOVERNMENT early back as 100,000 years ago. It was at the turn of the third
millennium BC that Indo-Europeans settled there and a population
incorporating the unique cultural and linguistic characteristics of
the whole Balkan Peninsula (pellazgs) came to be. Based on this
ancient population, the Illyrians developed through the second

millennium and the first century B.C. The Illyrians, ancestors of
today’s Albanians, occupied the western Balkans in the 2nd
millennium B.C.
After its fall in the year 30 B.C., Illyria came under the control of
the Roman Empire. With the division of the Roman Empire in 395
AD, Illyria became part of the Byzantine Empire. The Country
suffered continuous invasions over the last 1000 years and by
the end of the 14th century Albania was occupied by the Ottoman
Empire. The subsequent efforts and struggles for independence
eventually brought about the proclamation of the independence
of Albania in 1912. After 1912 and until the end of the First
World War, Albania struggled to establish its territorial integrity.
Eleven years of monarchy and an occupation by Mussolini were
followed in 1943 by German occupation.
The Communist Party took power in November 1944, when foreign

armies left Albania. Shortly thereafter, a totalitarian communist
dictatorship was established and for about 50 years the regime
applied a policy of self-isolation, leaving the Country in great
economic poverty. As part of the wave of democratic changes
that swept throughout eastern Europe, Albania finally emerged
as a democracy in 1992.
Government and Administration

Albania is a Parliamentary Republic based on a system of free
periodic elections. The new Constitution of the Republic of Albania
approved in the Referendum of November 22, 1998 is the supreme
governing law of the country and embodies the principles of
democracy and the rule of law.
The Assembly is a one-chamber Parliament. Its members are

directly elected every 4 years. The Presidency is composed of
the Speaker and two Deputy Speakers, Parliamentary Groups
and Parliamentary Committees. Currently, the Albanian
Parliament counts 140 Members (MPs) and is composed as
follows:
Table no. 1.
Composition of
parliament
The head of state is the President, who is elected by Parliament

for a 5-year term. Executive power rests with the Council of
Ministers (the Cabinet). The Chairman of the Council (the Prime
Minister) is appointed by the President. Ministers are appointed
by the President with the recommendation of the Prime Minister.
The Assembly must give final approval of the composition to the
Council of Ministers.
The Albanian territory is divided into 12 Regions. Each region

has a Regional Council and is composed of a number of
Municipalities and Communes, which are the first level of local
governance. Mayors and Heads of Communes are elected through
direct ballot.
Albania has considerable mineral resources, including chrome, NATURAL

NATURAL
copper, nickel and coal. Before 1990, Albania ranked third among RESOURCES
large producers of chrome ores in the world. Important reserves
of Albanian box-ides and phosphate rocks have not been utilized
yet. In 1997, an Italian consortium signed a joint-venture
agreement for the rehabilitation of a chrome mine with an initial
investment of USD 41 million.
Additionally, Albania has reserves of limestone estimated to

amount to approximately 130 million tons of marble and stone
reserves.
Both Oil and Gas have been extracted and produced since
1928. Reserves are estimated at more than 400 million tons
with about 40 million tons utilized so far.
Albania’s natural resources include its Mediterranean climate

and location and unspoiled beaches, which make for excellent
opportunities for tourism development. Additionally, and due to
its many rivers and lakes, energy production is fast gaining the
attention of investors. Geography and climate also make ideal
conditions for agriculture and agro processing.
ENTERTEINMENT Albania enjoys many cultural monuments and locales, several of

AND CUL TURE
CULTURE which are protected by international organizations such as
UNESCO. The country counts around 2200 monuments of
historical value. Important archaeological centers include Butrint,
Apollonia, Durres and Berati.
Additionally, Albania has many talented artists, musicians and

painters with many galleries and exhibition halls catering to this.
15
Economic and
Business
Environment
ECONOMIC Gross Domestic Product

OVERVIEW Continuing a six year trend, the economy of Albania experienced
good growth rates in 2003. According to the Central Bank of
Albania, GDP growth in 2003 measured in current prices was
around 6% compared to 4.7% in 2002. The economy continued
to enjoy a stable prices index. The average annual inflation rate
for 1998–2002 was around 3.5%.
Graph:
Gross Domestic
Product in Albania
(1997 – 2003 year)
* - Estimated value for 2004
Source: Bank of Albania
GDP Structure
The importance of the service sector continued to be emphasized
for year 2003 GDP figures. Noteworthy figures include sales of
“Trade, Hotels, and Restaurants,” which increased by 11.5%
compared to last year. Revenues from tourism have increased
by 7.2% during 2003. Investments in the transportation sector
increased by 3%, which is a result of a Government budget
expansion of 7% aimed at infrastructure improvement.
And although the agricultural sector’s contribution to GDP has

been declining, this sector remains one of the main pillars of the
Albanian economy.
Construction continued to be the most dynamic sector with third

quarter 2003 figures recording an increase of some 22% in sales
compared to the same period in 2002.
Economic sector’s
contribution to the
domestic product
GDP per capita

The GDP per capita index for Albania since 1992 continues to
show a positive trend with (except for 1997).
GDP per Capita

in USD
Source: Bank of Albania, Ministry of Finance
Employment
The unemployment rate for 2003 was around 15%, which marked
a continuing decrease in unemployment figures since 1999.
Unemployment
Rate
Source: Ministry of Finance, Bank of Albania, Ministry of Labor and Social Affairs
ECONOMIC and BUSINESS ENVIRONMENT 17
The employment level according to December 31, 2003 figures

were as follows:
Total Employment 385, 862

Employed in the Public Sector (totally) 174, 693
Employed in the Public Sector (budgetary) 128, 444
Employed in the Public Sector (non budgetary) 46, 249
Employed in the Private Sector (non agricultural) 211, 169
Source: National Employment Service
Unemployment figures registered at the National Employment

Service stood at 163, 030 persons. The education level of the
unemployed workforce registered was as follows:
Elementary education High School V ocational University

86, 910 50, 456 23, 085 2, 579
Inflation
Inflation targets for 2003 as set by the Bank of Albania were
met. An annual inflation rate of 3.3% was recorded by the end
of the year while the average annual inflation rate was around
2.37%. The resulting price stability contributed positively the
overall development of the Albanian economy and helped
maintain macroeconomic equilibrium and financial system
stability.
Annual inflation
rate (%)

Budget Deficit
During 2003, decreases in expenses by the Government helped
alleviate the budget deficit. Figures indicate a deficit of 32.8
billion leks; 76% of the projected deficit and 19% lower than
2002 figures.
Budgetory
Deficit
o
Source: Ministry of Finance
Exchange Rates
2003 figures indicate the overvaluation trends of the Albanian
currency (lek). Compared to end of year figures for 2002, the lek
was overvalued by some 20% against the US dollar and 3.6%
against the euro for the same period in 2003.
Foreign exchange
rates EUR/Lek and
USD/Lek during 2003
* - Estimated value for 2004

FOREIGN DIRECT Foreign Direct Investments (FDI) continues to be an important

INVESTMENT component of private sector development and a prerequisite for
(FDI) the economic development of Albania. Hence, FDI promotion is
a strategic objective of the Government. In this regard, the
Government has pursued:
• the creation of a legal and regulatory framework with

incentives for foreign investors;
• the minimization of investment risk;
• the improvement and enhancement of the Albania’s image
as a credible FDI destination;
• the establishment of an independent and credible institution
to appeal tax issues and cases with; and,
• the improvement of both physical (energy, transport,
telecommunication) and social (education, training,
management) infrastructures
As a result, FDI figures have sharply increased since 1998.

According Bank of Albania data, FDI numbers for 2003 stood at
USD 178 million, which is a 16.3% increase over 2002 figures.
Estimated figures for 2004 are around USD 300 million, which
incorporate the privatization of Savings Bank (bought by Austria’s
Reiffeissen Bank for USD 126 million).
For foreign investors, Albania continues to offer available natural

resources, a liberal regulatory environment, access to regional
and EU markets, privatization opportunities, a labor force that is
competitive in terms of cost and quality, a strategic location and
hospitable people. Notable foreign investors that have initiated
new investments or increased levels of existing ones this year
include Lockheed Martin and Vodafone.
FDI Flows FDI
Years
FDI Flux
in mln USD for 2003 Year
Source: Organization for Economic Cooperation and Development - OECD
FDI According to Countries of Origin and Sectors

FDI figures indicate that Albania’s neighbors have taken a keen
interest in the economic development of the Country with 48%
of FDI originating in Italy, 34.2% from Greece, 2.2% from
Macedonia and Turkey. Interestingly, 87% of Albania’s FDI
originates from the EU.
FDI in Albania by
origin country
(in percentage)

FDI in Albania
The majority of Italian investments tend to small and medium

size enterprises that operate mainly in construction (35%), textile
and shoes production (21%), trade and services (16%), and
agricultural processing (8%). Greek investments have focused
on telecommunications, banking and construction.
FDI by sectors
Foreign investments are mainly concentrated in the main districts

of the country such as Tirana and Durres. Foreign investments in
these two cities alone account for approximately 67% of the
total of companies operating with foreign or joint-stock capital.
This is because Durres and Tirana are among the biggest cities
of Albania with Durres being the Country’s main port, handling
most of the import and export activity while Tirana is the capital
and the Country’s business centre.
FDI by district
location
Source: Ministry of Economy
Privatization in Albania aims to: PRIVATIZA

PRIVA TION
TIZATION
• Stimulate the Albanian economy through the efficient use
of natural and human resources
• Support and further develop the private sector
• Attract strategic and financial investors
• Create the conditions for the establishment of the capital
market
• Prepare and deliver fast, efficient and credible privatization
process in all sectors
The main privatization opportunities in Albania for the near future

are:
In TTelecommunication
elecommunication and Energy
- The privatization of Albtelecom s. a., with preparations

underway since 2003. About 51-76% of the company will
be sold through international tender.
- The privatization of the power distribution sector at the
Albanian Electro-energetic Corporate (KESH s. a.), with
preparations underway
In Hydrocarbons
- The privatization of Armo s. a (in process since 2003).
- The restructuring and privatization of Albpetrol s. a
- The privatization of Servcom s. a (in process since 2003).
- The privatization of the Oil Mechanic Factory s. a in Kuçove

(in process since 2003 year)
In W ater Supply and TTransportation

Water ransportation
- Mother Theresa International Airport is given in concession
for a 20 years period to the Consortium “Airport Partners”.
- Durres Port cereal and grain terminal concession
- Durres Port Trainferry Terminal Concession
- Water supply systems in Berat and Kuçove
Insurance
- INSIG – the only one state owned insurance company in the
market. It operates in Albania, Kosovo and in Macedonia for
the non-life insurance. 39% of shares owned by IFC and EBRD
The institutions engaged in the privatization process are:

- Albanian Parliament
- Council of Ministers
- Ministry of Economy
- The regulatory authorities for the respective sectors
- Line Ministries-General Directorates
- State Trade Enterprise (Board of Directors, Directorate)
The approval of a sale or a concessionary contract is the last

step in the privatization process and is granted by the Council of
Ministers and Parliament. Preliminary efforts include an evaluation
process approved by the Council of Ministers.
ARMO SH.A .
Armo Sh.a. was created as a spin-off from Albpetrol Sh.a., the

State company devoted to the entire oil and gas production
process, until 1999.
The Company is 100% controlled by the new holding company

APC Sh.a., a new holding created as a financial vehicle and
whose sole shareholder is the Albanian government.
Armo is responsible for the downstream activities of the oil and

gas production value chain. Armo is the only refining company in
Albania and its only supplier is Albpetrol Sh.a. (responsible for
the upstream activities).
Armo operates through two refineries: one located in Ballsh and

one located in Fier, both at about 15Km from the Western coast
of Albania, south of Vlore. The two refineries have a combined
theoretical capacity of 1.5 Mln tons of production per year
Ballsh refinery is the bigger of the two, with a theoretical capacity

of 1 Mln/Tons per year.
Fier refinery has a theoretical capacity of 0.5 Mln/Tons per year,
and has a shorter production process than Ballsh.
Company privatization law is approved and the entire legal

framework for the privatization process is completed.
ALBTELECOM SH.A .
Albtelecom is the only provider of fixed telephony services in

Albania, a rapidly growing and interesting market for fixed and
internet services. Since the commencement of its operations,
the Company has established its network, has achieved
substantial subscriber growth and has developed a variety of
service offerings and pricing plans to appeal business and
residential customers.
According to the statute, the share capital of Albtelecom is

17,400,000,000 leke, divided into 17,400,000 shares, with a
nominal value of 1,000 leke each. At present, the sole owner of
the shares is the Albanian Government, represented by the
Ministry of Economy.
Albletecom organizational structure consists on Headquarters,

12 regions and 24 Branches.
Albtelecom offers basic local, long distance and international

fixed telephony services to all urban districts of Albania as well
as public telephony, telex and radio maritime communications.
Due to the increasing presence of foreign and Albanian companies

moving to urban areas, Albtelecom has been enriching its offer
with more advanced services such as free call service, call
forwarding, call waiting and voicemail and pre paid cards for
public telephones. The Company also provides national and
international data transmission services and ISDN mainly to
business customers.
Company privatization law is approved and the entire legal

framework for the privatization process is completed.
Albtelecom has the monopoly of international fixed telephony

services in Albania up to December 31, 2004.
Albtelecom owns at the same time the third license for offering
GSM services in the country.
SUCCESSFUL • AMC
PRIVA
PRIV ATIZA TIONS
TIZATIONS Albanian Mobile Communication (AMC), the only mobile operator
until 2001, was launched in 1996 and privatized in 2000. The
company was successfully sold to a joint-venture partnership
between COSMOTE (Greece) and TELENOR (Norway). The firm
has invested about USD 200 million in Albania.
• Vodafone
In September 2000, a tender was issued for a second GSM
license. In February 2001, a consortium of Vodafone (UK) and
Panafon (Greece) was chosen as the winner, with an offer of
USD 38.1 million.
• Savings Bank of Albania

2003 year witnessed the successful privatization of Savings Bank
of Albania by the well-known Austrian Raiffeisen Bank with an
offer of USD 126 million.
• National Commercial Bank - BKT

Another banking sector privatization milestone is the sale of the
National Commercial Bank, completed in 2000. The bank was
sold to a consortium of international investors that included
Kentbank (Turkey), the International Finance Corporation (World
Bank), and the European Bank for Reconstruction and
Development (EBRD). The new shareholders injected USD
10million in November 2000, resulting in a strong capitalization
of BKT.
• Elbasan Cement Factory

and Fushe Kruje Cement Factory
In March 1997, Seament Albania acquired 70% of the Elbasan
Cement Factory along with 70% of United Quarries. In November
1999, Seament Albania bought an additional 7% in Elbasan
Cement Factory and in December 1999 an additional 16% in United
Quarries. In July 2000, Elbasan Cement Factory won the auction
for the privatization of Fushe Kruja Cement Factory, currently
operating as a clinker grinding facility. Both factories are
undergoing rehabilitation of existing technology and an expansion
program is underway.
• Darfo Albania
An Italian owned company, Darfo Albania has been operating
since in accordance to a 30-year concession to produce
ferrochromium.
Please see appendix for more information on the legal framework of the
privatization process in Albania.
The Tax System in Albania consists of the following taxes and ALBANIAN
duties: TAXATION REGIME
AXATION
I. National Taxes:
1. Personal income tax,
2. The Value Added Tax (VAT)
3. The Excise Tax
4. Other Taxes and Fees
5. Customs Duties
6. Social Security Taxes
7. Tax Treaties
II. Local Taxes

8. The Local tax on small business
9. The Property Tax
10. The Hotel Tax
11. New Buildings or construction tax
12. The tax on alienation of immovable properties
13. Motor vehicle tax
14. Other local taxes and tariffs
NATIONAL TTAXES
NATIONAL AXES
1. The PPersonal
ersonal Income TTax
ax
All individuals resident in Albania are taxed on their worldwide

income, while non-residents are taxed on their Albanian income.
Employment incomes are subject to progressive tax rates from

5% to 25%. The first 14,000 lek ($1= lek 101) per month is
exempt from taxation.
Rental income, dividends, interest, partner profits, royalties and

any other kind of personal income received by individual residents
are taxed at a flat rate of 10%. Income from lotteries, games of
chance and casinos are taxed at a flat rate of 20%.
The transfer of ownership of real estate is taxed at progressive

rates starting from 0.5% to 3% of the gross value of the property.
Incomes of individuals with diplomatic status, pensions under

the social security system and state unemployment benefits are
exempt from personal income tax.
• The Simplified PProfit ax

rofit TTax
The simplified profits tax (gross income tax) applies to any person
who conducts business in the territory of the Republic of Albania
and is not registered or required to be registered for VAT. Thus,
it applies to small businesses registered taxpayers at a rate of
4% on the annual gross income and up to 8 million leks (over

which amount the VAT registration is obligatory).
There are no provisions granting loss relief in the Small Business

Tax Law.
• Corporate PProfit
rofit TTax
ax
Corporations conducting business in Albania are subject to a

profit tax at a flat rate of 25%. Resident corporations are taxed
on their worldwide profits, while non-resident ones are taxed on
profits from Albanian sources.
Any payment consisting of dividends, other profit distributions,

interest, royalties and technical fees for such activities conducted
in Albania shall be subject to a withholding tax of 15%, except
for the cases otherwise treated in the Corporate Profit Tax Law.
Direct dividends for participations of more than 25% of the share
capital are tax exempted.
Capital gains from the sale of the company’s fixed business assets
are taxed as part of the company’s income
Resident companies will be credited on the profit tax paid abroad

on foreign income, but such credit will not exceed the Albanian
tax payable on such income.
Persons and companies exempted from taxes are also specified

in the law no. 8438, date 28.12.1998, and article 33, 34.
2. The VValue
alue -added TTax
alue-added ax (V
(VAAT)
The Law On Value Tax, Nr. 7928, dated 27.04.1995 and effective
from 1 July 1996, imposes value added tax on all taxable goods
and services made or supplied in the territory of Albania by taxable
persons and all importations of goods into the territory of Albania.
Under the provisions of this law, taxable persons are the juridical
or physical persons, individuals or any other person, which are
obliged to be registered on the basis of this law. Such persons
are the ones whose annual turnover exceedes or will exceed the
amount of 8 million leks
The rate of the Value -Added Tax (VAT) is 20 %. Exports and the
international transport of goods and passengers are not taxed
under this law.
The taxable value of imported goods is determined on the basis

of the Customs Law, whether or not the imported goods are
liable to customs duties under the law.
The reimbursement of the VAT is allowed if the excess tax credit

is carried forward for six successive months and the claimed
reimbursement exceeds 400,000 leks. In the case of exports,
VAT reimbursement is allowed every month. In both cases, the
tax authorities are obliged to make a VAT refund within 30 days
from the date of the taxpayer’s written request.
3. The Excise TTax

ax (Duty)
A new Law on Excise Duties entered into force on 6 January

2003. The law is based on the Albanian experience with excise
taxes and on the European Union directives on excise taxes.
Compared with the previous law on excise duties, the new law
has more comprehensive provisions which enable the Tax
Administration to employ better methods and means for
collecting, auditing and enforcing excise duties.
Excise duties are levied on the domestic consumption of certain

goods such as tobacco, all alcoholic drinks, soft and fresh drinks,
coffee, electric power, petroleum, oil by-products, etc. Excise
duty rates are low relative to the rates applied in other countries
in the region. The excise rates are defined in specific amounts
per unit of excisable goods or as a percentage rate on the value
of excisable goods.
Excises rates
PRODUCTS EXISES RATES
RATES
Cigarettes 25 lek per packet
Coffee 40 lek/kg
Beer 30 lek/litre
Wine 20 lek/litre
other alcoholic drinks 100 lek/litre
Perfumes 50 % of the value
Oil 30 lek/litre
Exports are exempted from excise tax.
4. Other National TTaxes

axes and Fees
Other taxes and fees in Albania include the national taxes and
fees imposed under the provision of the law no.8977 dated
12.12.2002 “On the System of Taxes in the Republic of Albania.”
Such taxes are the port tax, tax on import of used vehicles, tax
on TV sets, tax on the use of telephones, consular fees, fees on
registration in a university, fees for possessing a driving license,
hunting license fees, fishing license fees, and some other minor
taxes and fees.
5. Custom Duties
Custom Duties are levied on all goods imported into the territory
of Albania, except in the cases otherwise provided in customs
legislation. The customs value of imported goods is the
transaction value and includes the price of the commodities
shown in the invoice along with the transport and insurance
costs.
There are four rates of customs duties: 0 %, 2%, 10% and 15%
and duties may be paid in lek or in hard currencies using the
official exchange rates of the Bank of Albania.
Exemption from customs duties are only given in cases provided

by the customs law or under Free Trade Agreements or other
international agreements concluded by Albania, such as the case
of various aid forms, soft credits or governmental agreements,
provided that such exemptions are expressively mentioned in the
concerned governmental agreements and such agreements are
ratified by the Albanian Parliament.
6. Social Security TTaxes

axes
The general social security system in Albania is regulated under

the previsions of the law No. 7703 dated 11.05.1993 “On Social
Security in the Republic of Albania,” which is administered by
the Public Institute of Social Security and the Law No.7870 of
October the 10th, 1994 “On Health Securities in the Republic of
Albania” administered by the Ministry of Health. The whole
system of obligatory social and health security is non profitable.
L OCAL TTAXES
AXES The Local TTax
ax on Small Business
The Law No. 8978 dated 12.12.2002 “On Local Tax on Small
Business” regulates the taxation of small business activities that
are not registered as VAT (value added tax) taxpayers. Under
the provisions of this law, taxable persons are those that conduct
business in the territory of the Republic of Albania at any time
during the calendar year and which are not subject to the Value
Added Tax. This tax does not apply to agricultural activities.
The Law no. 8982 dated 12.12.2002 “On the System of Local
Taxes” regulates all local taxes and tariffs administered and
managed directly by the local governments. The main local taxes
are:
Small Business TTax ax

The system offers a very simple and special treatment to small
business activities regulated under the provisions of the law “On
Small Business Tax.”” Any individual entrepreneur or legal entity

that conducts business in Albania with an annual turnover under
8 million leks per year is entitled to this treatment.
The treatment consists in a fixed tax in lek per year in conformity

with the type of business and the district in which the business
is conducted, coupled with a turnover tax of 4% of the taxpayer’s
turnover ranging from 2 to 8 million leks for any calendar year.
The income of individuals receiving this treatment is not subject

to either the individual income tax or the Corporate Profit Tax.
9. The PProperty
roperty TTax
ax (includes buildings and land taxes). The
buildings tax is defined in leks per square meter per calendar
years and it varies according to the category of the district and
purpose for which the buildings are used (residential dwellings
have lower rates than buildings that are used for the business
purposes). The land tax is defined in leks per hectare per calendar
year and varies according to the category of the land (e.g.
agricultural land is divided into 10 categories, according to soil
fertility and other criteria).
The Law on the System of Local Taxes sets the property tax
rates but local governments have the right to change the property
tax rate by as much as 30%. The tax is to be paid by owners of
buildings or land in compliance with the procedures set by the
local government organs.
10. The Hotel TTax

ax is another local tax levied at a rate of 5%
on the effective nightly price per room or per person. This tax is
to be withheld by the hotelkeeper and remitted to the local
government within the 5th day of each month for the previous
month.
11. New Buildings or Construction TTax. ax. The tax rate is

defined by the local government at a rate of 1-3% (for Tirana
Municipality it ranges between 2-4%) on the value of the
investment of the new building. It is to be paid by the investor
at the time the building license is issued.
12. The TTax ax on Alienation of Immovable PProperties. roperties.

The transfer of the right of ownership over real-estate is taxed
at a rate of 2% on the gross transaction value (selling price) of
the property. The tax is levied at the property registration offices
and remitted to the municipality of the commune where the
property in question is located.
13. Motor VVehicles

ehicles TTax.
ax. This is an annual fixed tax for each
type of car or vehicle and is to be paid by the owner to the
appointed local government office by 31st of March of each year.
14. Other local tax and tariffs. The Municipality Council or

the Commune Council has the right to set tax rates for public
displays and advertisements and to introduce temporary taxes
on the permanent inhabitants in their territories when necessary
for the general benefit of their community.
CUSTOMS Customs Legislation (Customs Code and TTariffs ariffs Law)

FRAMEWORK The basic law of the Custom Administration is the law No.8449
dated 27.01.1999 “The Custom Code of the Republic of Albania”
and the Council of Ministers resolution No.205 dated 13.04.1999
“The Executive Disposes of the Custom Code.”
Since 1999, the Customs Code of the Republic of Albania has
been fully in line with the customs legislation of the European
Union. All the procedures in the code are consistent with
international rules in this area, guaranteeing uniform and
transparent procedures for all. The Customs Administration of
the Republic of Albania is a member of WCO (World Custom
Organization), observes the articles of GATT regarding revenue
evaluation, and has to harmonize the combine nomenclature of
the products accordance the legislation of the European Union.
The tariff law is a crucial part of the customs legislation, which
is updated frequently in line with international practice and also
in line with domestic liberalization policies.
The tariff level in Albania is being constantly liberalized. The
basic levels are: without taxes, 2%, 5%, 6%, 10% and 15% and
other intermediate levels according to the free trade agreements
that Albania is party to.
Albania has subscribed to several treaties within its region. These
include Free Trade Agreements with FYR of Mecedonia, Romania,
Bulgaria, Croatia and Kosovo, and is to be subscribing the
preferential agreement with EU. The implementation of these
agreements consists with the subscription between the custom
administrations, finding the well understanding for each procedural
way.
THE BANKING The banking system witnessed significant and important changes
SYSTEM in 2003. Chief amongst these were the successful privatization
of the Savings Bank of Albania. All shares of Savings Bank of
Albania were sold to the well-known Austrian “Raifeissen Bank.”
Additionally, two new banks started operation in 2003, both with
domestic capital. These events are expected to improve the
quantity and quality of financial services offered by the banking
sector by increasing the range of financial products and providing
for healthy competition.
The financial position of the banking system at the end of 2003

was satisfactory. Net positive revenues stood at around 4.45
billion leks or 0.6% of GDP, some 14% higher than 2002 figures.
Interest payments were the main contributor to this picture. It
is worthy to note that credit activity of the banking increased by
around 30.5% in 2003 compared to year end 2002.
The Bank of Albania (BoA) is the central bank of the Republic of

Albania. Within its competencies established by law, the BoA
is independent of any other authority in the exercise of its duties.
Its mandate is maintaining price stability. The Bank of Albania is
exclusively responsible for the licensing and supervision of all
banks in the Republic of Albania.
The number of banks operating in Albania has increased over

the years. Currently, there are 15 banks operating in the Country
with branches located in almost all the cities of Albania. The
services these banks offer vary and include money transfers, loans,
saving accounts, etc. Such services facilitate the investment
processes and business activity.
Please see appendix for a list of banks operating in Albania.
GENERAL INFORMA
INFORMATIONTION
Banka Popullore - the newest bank in Albania has started its activity on
March‘04 in Tirana and very soon in other cities, - Kavaje, Sarande, Bilisht,
Vlore, Himare etc.
Banka Popullore was founded with shareholders’ equity of 805 mln ALL
(approximately 8 mln USD) with the participation of more than 20 albanian
businessmen.
The shareholders’ equity is growing and it’s value will increase over 1056
mln ALL (about 10 mln USD) by the end of September 2004.
The Bank Services Offered are:

• Current Account, Saving Accounts & Time • Incoming and outgoing transfer in ALL
Deposits in ALL and foreign currencies, for and foreign currency.
corporate and individuals. • Import and Export Letter of Credit. (l/c).
• Treasury Bills operations. • Bank Guarantee.
• FOREX transactions. • Credit facilities.
• Issuance and Clearance of Bank cheque • Financial Consultancy
and personal cheque in ALL and in foreign
currency.
The correspondent banks are as follows: The Head Office is located in Tirana and the General
Manager of the Bank is
1. Raiffeisen Zentralbank , Wien /Austria
Mr
Mr.. Edvin Libohova
Libohova.
– main correspondent bank
2. Savings Bank of Albania/Albania Headquarter
Headquarter’s’s Address
Address:
3. Tirana Bank /Albania EGT Tower, “Donika Kastrioti”str. No 11/1, Tirana,
4. American Bank of Albania/Albania Albania;
5. Credins Bank/Albania Tel :+355 4 272790/91; Fax :+355 4 272781;
www.bpopullore.com; •E-mail : info@bpopullore.com ;
LABOR Legal framework

MARKET Employment rights are guaranteed by the Constitution of Republic
of Albania. Albania is a member of the International Labor
Organization since 1920. Hence, it has ratified the 37 ILO articles
pertaining to work and employment conditions, safety and health
protection, child and women protection, working time and
breaks, wages, rights and trade-union freedom, strike rights,
prevention and settlement of working conflicts, labor
administration, national labor councils, etc. Employment
relationships are regulated by the Labor Code of the Republic of
Albania. This code guarantees recruitment and professional
nondiscrimination and reflects the Social European Card and other
international agreements to which Albania is party.
For out of court settlement of labor disputes, the following

institutional frameworks are established: the intermediary (a
government labor official), the State Offices of Reconciliation
and an Arbitration Court.
Basically, employer and employee are obligated to regulate their

relationship via a contract. The standard weekly work load is a
maximum of 40 hours. The contracting parties may agree for
extra working hours. However, workers cannot exceed 50 working
hours per week without a special permission from the Labor
Inspectorate. Overtime work and work during holidays and
weekends is compensated for with a pay increase of no less
than 25% of employee wages. It can also be compensated for
with extra days off.
Capacity building in Albania

The capacity building trends during the last few years have been
oriented towards foreign language (especially English) and
computer skills. During 2003, around 8000 people were trained
at the 8 public centers for capacity building spread out throughout
Albania, from which about 3,600 were certificated in English
and 2,143 in computer skills.
In private training center, around 6,100 persons were trained during

2003 of which 4,540 were females. Trainee education levels
were as follows:
Elementary education High School University

2,559 2,814 751
Wages and Pension

The minimum wage in Albania is 11, 376 leks ($1 = 101 leks). A
person can start work at the age of 16 with certain conditions
and is considered a full laborer at the age of 18. Retirement

takes place at the age of 65 years for males and 60 years for
females.
Health and Social Insurance

The basic law on social insurance is Law No. 7703 dated 05/11/
1993 “On Social Insurance in the Republic of Albania.” The
general social insurance system comprises mandatory insurance,
voluntary insurance, supplementary insurance and special state
pensions.
Health Insurance Law No. 7870 of 10/13/1994 covers health

issues. Health insurance comprises mandatory insurance and
voluntary insurance. According to this law, health insurance
financing sources include: mandatory social insurance, the state,
direct payments by citizens and extra voluntary health insurance.
Mandatory insurance applies to all Albanian citizens who are
permanent residents as well as to foreign citizens employed and
insured in Albania.
Mandatory insurance is placed with the Health Insurance Institute

and partially covers costs for basic medicines, as established by
the Council of Ministers. Contribution is payable by employees,
employers, the state, and other economically active persons.
The employee’s contribution is 30.7% of the gross salary and the
employer’s contribution is 11.2% of gross salary.
The Albanian social security system is administrated by the Public

Institute of Social Security, which is under the jurisdiction of the
Council of Ministers. Employer and employee contributions are
as follows:
Source: Public Institute of Social Security (ISSH)

FOREIGN During 2003, figures for trade in goods stood at USD 2.2 billion,
TRADE 22.8% higher than 2002. Imported goods amounted to USD
1,860 million, 20% higher than the previous year. Exported goods
stood at USD 447 million with an annual rise of 35%. Albania’s
economy remains imports oriented. During 2003, imports
represented 80% of the foreign trade volume.
2003 year was characterized by a high deficit on services trade.

Revenues from services during this year rose by 23% and
expenditures by 36%.
The trade deficit for 2003 stood at USD 1.4 billion, 16% higher
than the previous year. Total volume of exports covers around
25% of imports.
Since 1993, trade volumes have been growing at an annual

weighted average of 13.3%. For 2003, measured in absolute
terms, trade volumes were 3.1 times higher than their level in
1993, which is testimony to the ever-increasing openness and
expansion of the Albanian economy.
In millions USD
Source: Albanian Center for International Trade - ACIT
A positive development is the increment of capital goods imports

used for production. Machinery and equipments import registered
an annual increase of 18%; a good indicator of the investment
level in the country.
Figure:
Exports according to
the main group of
goods: 2003
Source: INSTAT
Figure:
Imports according to
main group of goods
in the HS
nomenclature.
Source: INSTAT
Trading PPartners
artners
Albania’s trade activity remains European Union focused. Trade
with EU countries represented 68% of imports and 93% of exports.
Italy and Greece are the main trading partners.
Imports According to
Trading Partners
Exports According to
Trading Partners

TRADE Albania has a liberal trade regime. A 1998 Decision of the Council
REGIME of Ministers provides for an open export-import regime, excepting
hazardous goods.
Restricted goods include::
• military or strategic materials
• radioactive materials
• psychotrone (drugs) materials
Export and import of these goods is conducted in line with
international rules.
Albania’s liberal trade regime aims to further promote growth of
the Country’s exports and improve its negative trade balance.
Noteworthy features include:
• Exports are not subject to any export taxes, fees or other
barriers with a similar effect
• Albanian imports are not subject to any import duty tax other
than customs duties
• Imports are subject to the VAT, and some items such as
tobacco, alcoholic beverages and fuel are also subject to an
excise tax.
Albania and the W orld TTrade

World rade Organization
Albania joined the World Trade Organization (WTO) in 2000 and
has been working to bring its policies in line with those widely
used in international trade. WTO membership is a guarantee for
foreign investors that they will be subject to the conditions, rules
and norms standard in international trade.
Imports Licensing
Albania applies WTO rules on import licensing. Import licensing
is applied to products which affect life, health and the
environment.
Preferential Access to Markets

Albania has preferential access to the EU market as well as to
certain other markets. This is guaranteed by the asymmetric
regime with the European Union (combined with the asymmetric
regional regime accorded to some countries in the region) and
various Free Trade Agreements (FTAs).
Please see list in the appendix.
The Asymmetric Regime with the European Union

As of October 1, 1999 Albanian exports to EU countries have
benefited from the asymmetric regime, in the form of
“autonomous measures.” Because of this regime, Albanian
exports gain various reductions/discounts on duties when
accessing the EU market. The regime is applicable to agricultural

as well as industrial goods.
Agricultural goods are categorized according to this regime

into:
• Products without limitation in quantity and with 0% customs

duty.
• Products with limitations in quantity but with 0% customs

duties such tomatoes, cucumbers, fresh vegetables,
processed vegetables, etc.
• Products with limitations in quantity and customs duties
established in the EA (Agriculture Elements) additional code
such as milk and its by products, butter and milk fat, frozen
vegetables, margarine, sugar sweets, chocolates, etc.
• Products without quantity limitations and maximum customs
duties.
• After the expiry of this regime, all agricultural products
covered by it will be entitled to the benefits of the General
System of Preferences (GSP).
Industrial products are similarly categorized. However, they

are not eligible to benefit from the GSP.
This asymmetric regime was further improved to cover a broader

range of goods and items and the quotas were increased. After
completing the quota, the export of products is subject to
customs duties applied according to the MFN.
ALBANIA AND The stabilization and association agreement (SAA) of Albania to

EUROPEAN UNION EU has two main components: economic and political stability.
INTEGRATION
INTEGRATION The goal is the creation of a favorable business climate and
lowering country risk. Albania is working to benefit from this
process in terms of:
• Creating a positive image of the Country

• Improving the business legislative framework
• Gaining more European Community aid in support of stability
and the functioning of a market economy, leading to a gradual
approximation of Albania’s economic policies toward Europe.
One of the articles of this agreement, SAA (90) on “Investment

Promotion and Protection” deals with cooperation with EU
institutions on issues related to investment promotion and
protection, with the aim of creating a favorable climate for private
investments, both domestic and foreign. Cooperation areas
include:
• Economic and trade issues – the collaboration will consist

on formulating and implementing economic policies and
business law enforcement.
• Statistical field – aiming to provide an efficient statistical
system.
• Banking, assurance and other financial services.
• Development of financial control and auditing system in
Albania.
• Creation of a favorable climate for domestic and foreign private
investment. Sectors covered include SME-s, industry and
tourism, agriculture and fisheries.
• Approximation of Albanian customs system to that of the
European Community, with an emphasis on efficiency.
• Legislation pertaining to infrastructure, transportation, energy
and environment to approximate Community legislation.
• Legislation pertaining to consumer protection, data
protection, health, safety and equal treatment by employees.
The legislation approximation process is to be undertaken during

two transitory periods: the above mentioned fields should be
realized within the 5-year first transitory period. During the second
phase, Albania will focus on the remaining part of Community
legislation.
41
INVESTMENT
OPPORTUNITIES
ALBANIA ’S
ALBANIA’S Albania has embarked on the path of trade liberalization and is
COMPETITIVE facing serious competition in the regional market. Hence, Albania
AD
ADVV ANT AGES
ANTAGES needs to know and utilize its competitive advantages.
Box 1.1
MAIN COMPETITIVE AD
ADVVANTAGES OF ALBANIA
ANTAGES
• proximity and preferential access to EU markets and
participation in a variety of trade agreements, regional
and global
• liberal economic policy and legal framework for FDI
• competitive labor costs with a well trained workforce
• favorable natural conditions
• mineral and other natural sources
• potential for organic agricultural
• privatization drive
• light manufacturing and agro processing
Box 1.2 CONTRIBUTION OF STABILITY PACT TTO

STABILITY O ALBANIA ’S
ALBANIA’S
ECONOMIC DEVELOPMENT
The Stability Pact for South-eastern Europe was initiated on
10 July 1999 at the meeting of the G-8 countries in Köln,
Germany. Its objective was to support the countries of
southeastern Europe in their efforts to secure peace, democracy,
economic development and the observance of human rights.
The Agreement of Association and Stabilization between the
EU and Albania has as its primary element the stabilization of
the region and of each particular country. It has led to:
* a dialogue with international financial institutions to
increase finding sources, which will help the development
of each country in the region
* the development of common regional strategies (in
accordance with EU strategies for development) for
infrastructure development, energy, trade, investment,
information technology development, corruption,
contraband, etc., and the signing of Free Trade Agreements
among the region’s countries. Albania has completed
bilateral negotiations with Macedonia, Croatia, Bosnia and
Herzegovina, Moldavia, Serbia and Montenegro, Bulgaria,
Romania, Kosovo and Turkey.
Tourism SECTORS
Albania is a country rich in tourist resources, including mountains, PRESENTING
valleys, forests, rivers and lakes. Traditional villages, ancient INVESTMENT
castles and a beautiful coastline are part of that heritage as OPPORTUNITIES
well. The Government is giving high priority to tourism, which it
considers a sector with great potential, and hopes that it may
benefit from infrastructure development assistance to be provided
in the context of the Stability Pact.
Albania surprises many tourists with the diversity of its

landscapes, which change quickly and dramatically. Albania is
a Mediterranean country with special geographical and geological
features, with varying landscapes to be found interwoven with
one another. Landscapes range from typical Mediterranean in
West and South West, to mixed landscapes in the central areas,
to steep mountains in the inner part of country. Its coasts are
endowed with beautiful beaches. There are many beautiful
inland lakes, natural lagoons, reserves, hunting grounds and SPAs.
Agriculture
Although the weight of this sector has continued to decrease
over the past few years, agriculture remains one of the most
important sectors of the economy. This sector has contributed
24% of GDP. In 2003, agricultural production grew by 3%
compared with 2002. The growth and development of the
agricultural sector supports the growth of the Albanian economy
and the Country’s economic stability. Albania enjoys natural
factors that support agriculture such as its climate and
geography.
Sectors of Great Opportunitiess to Invest 43
Primary products include vegetables, livestock forages, corn, fruit,

vineyards and olives. Albania has the potential for a competitive
agro processing industry.
Bread Production
Bread production is the largest contributor to the food industry.
2002 figures put this contribution at 38%, followed by the milling
industry with a 15% contribution. Milling enterprises are being
consolidated and the horizontal integration phenomenon explains
the reduction of the number of enterprises on one hand and the
increase of the production and income for this sector on the
other.
Milk Processing
There are about 370 milk processing enterprises in the Country
with different processing capacities, comprising 19% of the total
number of agro processing enterprises. According to 2002 figures,
the milk processing industry was the second largest agricultural
sector after bread production. About half of the value of
investments in this sector were in technology.
Meat Processing
About 56 enterprises operate in this sector. Investments were
mostly in acquiring new technology. 2002 figures indicate a
production increase of 2.3 times 1998 figures.
Fisheries
The nineties witnessed the establishment of new fish collecting
and trading centers; in total, around 34 were set up. The sector
is concentrated near the main ports of Albania. Fish harvesting
enterprises are also present. Trading firms collect, process and
export mainly fresh fish to European Community countries.
Additionally, around 692 ton of canned fish were exported in
2002. Being one of the first countries of Central and East Europe
to benefit from “the most preferred countries” status granted by
the European Community, Albania was able to export fish to
neighboring countries such as Greece and Italy.
F ruits and VVegetables

egetables PProcessing
rocessing Industry
Production of fruits and vegetables is increasing in Albania.
Currently, the Country processes approximately 5% of its
vegetable and fruit produce. A sizeable share of the processed
fruits and vegetables market is captured by imports, mainly from
Macedonia. Enterprises active in the sector that are mostly
oriented towards the production of conserved products such as
tomato paste (6710 tons), canned vegetables (7715 tons),

marmalade (1819 tons), jams and composts (5645 tons).
Olive Oil Production

Albania is a country rich with olive trees, with approximately 3.8
million roots estimated in 2002. Olive oil produced in Albania is
of high quality and has much export potential. A considerable
number of olive processing enterprises operate at present in
Albania with a daily capacity of about 400 tons. They mainly
operate with the classic technology based on pressing processes.
2002 production figures were 4 times those of 1998.
Tobacco
Albania has both the tradition and the potential for high quality
oriental tobacco manufacturing; a variety much in demand in
export markets. Local tobacco production meets less than 10%
of the country’s need for this product.
Wine and Alcoholic beverages manufacturing industry

Before the 1990s, Albania processed approximately 40 thousand
ton of grapes and produced around 80,000 hl of wine and 30,000
hl of Raki (a traditional alcoholic drink). Currently, wine production
is about 14,000 hl, unexploited potential. Currently, there are
about 28 wine producers.
Mining & Minerals

Albania has considerable mining & mineral resources including
chrome, copper, nickel and coal. Albania also has reserves of
limestone estimated to amount to approximately 130 million tons
of marble and stone reserves. The EU is providing technical
assistance for the restructuring of the mining & minerals industry.
Manufacturing
The manufacturing sector has attracted a large number of small
joint-ventures in agro processing, textiles, footwear and wood
processing. The textile industry offers plenty of opportunities for
foreign investors and accounts for 37,4 % of exports, with
footwear accounting for a further 21%. Wood processing
opportunities include possibilities for saw-milling, plywood and
reconstituted panel making, parquet, joinery and furniture
production.
Energy sector
Albania benefits from a supply of cheap hydropower energy, with
eight major hydro-stations. Hydropower accounts for 95% of all
energy generation. Total installed capacity (hydro and thermal)
is around 1,656,000 kilowatts, making for around 3.6 billion
kilowatt hours per year. However, the system is operating below
capacity. Moreover, the country’s true hydropower potential is
estimated at over 16 billion KWh per year. Albania has no facility
for gas power and no storage facility for liquefied petroleum gas.
Telecommunications
International financial institutions have stressed the importance

of a transparent privatization process for the telecommunications
sector as this will stimulate further sector development and set
an example for other parts of the economy slated for privatization.
The World Bank and the EBRD helped create a competitive
framework through regulatory measures, with a regulatory
authority and appropriate legislation already in place. A new
telecommunications law was adopted in June 2000, designed
to lay out key requirements for the development of and minimum
standards for the sector, including radio frequency allocation,
payments for licenses and the operation of the regulatory
authority.
Currently, there are two mobile phone operators in Albania, AMC

and VODAFONE, Albtelecom, the state fixed line telephony is
slated for privatization. In March 2004, Eagle Company was
created by Albtelecom to operate a third mobile network.
Transport
A number of important transport projects are due to go ahead in
the near future. These include roads, railroads and pipelines.
The increased capacity will be a boost for the economy in general.
Road
There are about 18,000 km of roads in Albania of which 7,450
km are considered as main roads. These roads are maintained
by the state. With the dramatic increase of oad vehicles and
the increased importance of Albania as a transit route, the
Government has given priority to the main east-west and north-
south routes, which are being upgraded within an EU-sponsored
program in cooperation with other international donors.
Additionally, the Stability Pact for South-eastern Europe is giving
priority to road rehabilitation under the “Quick Start” and Near-
Term Program.
Total funding from the various donors under the Stability Pact for
transport development amounted to USD 204 million for 12
projects, which include roads and the development of the Durres
Port. The Government has given priority to the main National
Roads Corridor, North-south and East-west (which is part of
Europe’s Corridor 98. The Durres-Kukes highway is also under
consideration.
Railway
Albania has a railway network of 447 km. The Government is
giving priority to the reconstruction and modernization of the
main north-south and east-west routes. Italy is contributing to

the modernization of the Tirana-Durres route. A US firm is currnelty
negotiating a rail link between Tirana, Durres and Mother Tereza
International Airport (estimated cost at USD 80 million).
Other projects include the renovation of the Durres Pogradec

line with a new extension to the FYR Macedonian border
(estimated cost of euro 200 million). Additionally, the Greece
has been considering financing a railway line from Pogradec to
the port of Thessalonica, which would provide an important outlet
for central Albania’s mines. In January 2000 the Japanese
government donated USD 1.9 million towards Albanian railway
rehabilitation efforts.
Ports
There are five ports in Albania that are open to the international
traffic. They are: Durres, Vlora, Saranda, Shengji and Himara.
The most important ports are Durres, which has ferry facilities,
and Vlora, a naval and ferry port.
Durres Port handles 65% of imports and exports. It is the main

gateway for Corridor 8. The Government recently approved a
master plan for the development of this port; a key project in the
framework of the Stability Pact under the Near-Term program.
Financing is being provided by the World Bank, the EU Phare
Program and the European Investment Bank. The aim is to
improve the efficiency and capacity of the port. Under this
project, the Durres Port Authority has been established as a joint
stock company and has started operating under a Supervisory

Board. A Durres Industrial Park is being promoted by the EBRD
which is planned to be built just outside Durres. A project
financed by the European Investment Bank of USD 17 million for
infrastructure rehabilitation of the port is almost completed.
The second port is Vlora, a strategic point for the future

development of maritime industry in Albania. About euro 16
million has been invested in the development of Vlora Port already.
The Government has also invested some of its funds to rehabilitate
the ports of Saranda and Shengjini.
Airports
Tirana’s Mother Tereza International Airport is currently
undergoing modernization. Siemens of Germany has completed
a project with a cost of USD 26.5 million to rebuild the runway,
lights and boundary fence. Plans have been approved for a new
passenger and cargo terminal and the Government has recently
awarded a concession of a 20 years period to a consortium
“Airport Partners”, lead by Hochtief of Germany to modernize
and operate the Airport with a contract of 83 million Euro. This
concession is the first successful total privatization of an airport
in the Balkan region.
Lockheed Martin recently concluded an agreement for the

modernization and operation of the air traffic control system.
During the year 2003 was concluded the first stage of operations
with an investment of 3, 3 million USD. During this stage was

installed the new automatic Sky Line System.
The undertaken measures and the complete modernization of

technical and operational infrastructure of national air traffic
through a prospected investment of 30 million USD, intend to
increase in the future efficiently the operations and overpasses
traffic and the guarantee of air insurance.
Albania has also received a grant from the UAE Government for
the construction of Kukes Airport and its completion is forseen
in the near future.
51
BUSINESS
LEGISLATION
FOREIGN DIRECT Albanian legislation, particularly the “Law on Foreign Investments”
INVESTMENT No. 7764 dated 02. 11. 1993, foreigners have the right to engage
LEGISLA TION
LEGISLATION in economic activities without the need to request permission or
authorization. Foreign investors are treated on a basis no less
favorable than that accorded to Albanian nationals except in
cases involving the ownership of land, which is treated by a
special law. Albanian legislation provides that in all cases and
at all times foreign investments shall receive fair and equitable
treatment and shall enjoy full protection and security.
Specifically, foreign investments are protected from expropriation

and nationalization and other similar actions. Expropriations or
limitations of a property rights according to Article 41 of the
Constitution can only be carried out in cases involving public
interests and against fair compensation. Such expropriations or
limitations of property rights are based on law No. 8561 dated
22.12.1999 ““On expropriation and taking for temporary use of
private properties for public interest.”
Foreign investors that suffer losses due to war, armed conflicts,

national emergency or other similar events will be treated no
less favorable than Albanian investors.
FORMS OF Law on TTrade

rade Companies
BUSINESS The laws that regulate Albanian companies are: Law No. 7638
ENTITIES dated 19.11.1992 “On Commercial Companies” and Law No. 7667
dated 28.01.1993 “On the Business Register.” The Trade Register
is located at the Court of First Instance of the Tirana District and
covers all businesses that operate in the Republic of Albania.
According to the Company Law, a company can take the following

forms: Partnership, Limited Partnership, Limited Liability Company
and Joint Stock Company.
Partnership Partners
Partners: 2 or more partners Table :
Characteristics
Characteristics: a general partnership is considered an entity Types of Companies
distinct from its partners, who themselves may be individuals or
legal entities. In addition to the general partners, in a limited
partnership there are limited partners, whose liability is up to the
extent of their contribution. No minimum capital is required.
Limited Liability Members

Members: 2 or more shareholders
Company Minimum capital
capital: 100,000 lek
Share and contribution requirements:
The capital is divided into equal shares with nominal value not less
than Lek 100,000. The basic capital must be entirely subscribed by
the shareholders and completely paid in. The statute must contain
an estimate of the value of each contribution in kind. Members are
responsible for the company’s obligations to the extent of their
interest in the company’s capital.Company management: The general
meeting is the decision making body. Managers do not need to be
Albanian citizens or shareholders.
Joint- Stock Shareholders: 2 or more shareholders
Company Minimum capital
capital: Lek 10 000 000 for setting up the company
with a public offer and 2 000 000 for a company founded without a
public offer.
Share and contribution requirements:
The minimum nominal value of shares is not less than 1 000 Lek.
The capital must be subscribed completely. By registration at least
25% of the capital must be paid in. The remaining amount is to be
paid in one or more installments according to the decision of the
Board of Directors. Contributions in kind are to be paid completely
at the time of registration. Stocks cannot represent contributions
in the form of services. Company management
management: The General
Meeting is the decision making body. It appoints a Supervisory Board
with 3 to 21 members. There are no citizenship requirements for
Specific features: The required capital for insurance
members.Specific
and reinsurance joint-stock companies, excluding the contributions
in kind, must be no less than Lek 30 million. Joint-stock companies
that are investment funds must have a minimum capital of not less
than the amount in Lek equivalent to USD 20.000. Foreign entities
may subscribe up to 50% of the capital of an investment fund. The
minimum required capital is Lek 700 million.
Branches Legal framework: Law No. 7632, on Provisions of the First Part of
the Commercial Code ( 04 Nov. 1992); Law No. 7667 on Commercial
Register (28 Jan. 1993)Registration: Foreign companies may open
branches which must be registered at the Commercial Register.
Bankruptcy Legal Framework

Framework: Law No. 8017 on Bankruptcy Procedures
(25.10.1995)
Anti-Trust Rules Legal Framework

Framework: Law No. 8044 on Competition (7 Dec. 1995)
BUSINESS LEGISLATION 53
FREE TRADE In the context of its Memorandum of Understanding with the

AGREEMENTS countries of the region for trade liberalization and facilitation,
(FTA)
(FTA) Albania has begun negotiating free trade agreements with FYR
Macedonia, Croatia, Bosnia-Herzegovina, Serbia and Montenegro,
Romania, Bulgaria, Moldova, Kosovo and Turkey. (Please see
table in the appendix)
FTAs, based on the principle of reciprocity and mutual advantages,
aim to substantially reduce and liberalize customs, duties and
other trade barriers, and above all to eliminate the discrimination
in bilateral and multilateral trade relations between the signatory
countries.
FTAs provide for the establishment of free trade areas between
parties over a period of 5 to 6 years through the elimination of
tariffs on trade and in full compliance with article XXIV of GATT
1994. FTAs differentiates between industrial and agricultural
goods. Agricultural products are more likely to be partially or
fully protected, while industrial products are subject to progressive
tariff reductions, with few exceptions.
The FTAs that Albania entered into after its accession to the
WTO are considered amongst the most important reforms
undertaken by the Government, with a view of having in place a
modern economy in compliance with European standards, striving
towards:
• Higher living standards
• Increasing the employment
• Raising real incomes and effective demand
• Increasing production and trade
WORK The regime for entry, stay, travel, and employment of foreigners
REGULA TION FOR
REGULATION in the Republic of Albania is established in Law No.8492 dated
FOREIGNERS IN 05/27/1999 “On foreign citizens.”
ALBANIA
Visas and stay permits for foreigners

Foreign citizens may enter the territory of Albania with or without
a visa (depending on nationality). All foreign citizens whose stay
in Albania exceeds 20 days must fill out a form at the closest
police station. Albanian visas vary from 3 to 12-months.
All foreigners have the right to apply for permanent residence

after 5 years. Foreigners who work less than 3 months in Albania
do not need permission from the Ministry of Labor and Social
Affairs. Foreigners who foresee a stay of less than 3 months
may apply for:
- diplomatic visas
- service visas
- simple visas (tourist, work, medical)
Work permits for foreign citizens

Persons who are not Albanian citizens and wish to work in Albania
for more than three months need a work permit issued by the
Ministry of Labor and Social Affairs. The Minister decides on
the standard form of the work permits, procedures for acquiring,
renewing and refusing work permits and the documents that
need to be submitted along with the application.
The application forms can be obtained from the Migration

Department at the Ministry of Labor and Social Affairs, at
Albanian embassies and consulates abroad and at regional labor
offices. The issuing or refusal of the work permit takes up to 30
days from the day of the submission of the documentation to
the relevant body.
Eight different types of work permits are issued to foreigners

who work in Albania. Restricted permits (e.g. for reduced hours,
for specific geographical areas) are issued to students and to
other workers in their initial work period. Self-employed persons,
persons who employ at least two Albanian citizens for every
foreign one, and persons who have held a restricted work permit
for at least three years can receive permits without geographical
restrictions or restrictions as to type of activity. The initial validity
of the permit is usually for one year but it can be extended for up
to five years. Persons who have worked in Albania for five years
may apply for a permanent permit. The process of acquiring and
extending a work permit is fairly straightforward and takes no
more than one month.
LICENSE AND L icensing procedures

COMP ANY
COMPANY For Individuals (Persons)
REGISTRA TION
REGISTRATION
1. The decision of court
Box. 1. 2. Attestation of the Labor Office
3. Attestation of the social support office
4. Tax for advertising
5. Tax for exercising the activity
6. Tax for the building
7. Tax for the rented land
8. Tax for cleaning
9. Property tax
10. Bank account and the attestation of the bank
11. Permission by the inspection authority.
12. Hygiene-sanitary certificate
13. Registering cash machine
14. Registration in the office for the control of measuring means
15. Registration of statistic regional office
Box.2. For legal persons

1. Statute of the company
2. Foundation act of the company
3. The decision of the Tirana court for legal person
4. Attestation of the social support office
5. Contract with the labor office
6. Attestation of Social Security office
7. Registration in chamber of commerce and industry
8. Tax for advertising
9. Tax for activity exercising
10. Registering cash machine
11. Tax for the building
12. Tax for renting the land
13. Tax for cleaning
14. Opening of bank account and the attestation of the bank
15. Permission of the service of found inspection
16. Hygiene-sanitary permission
Procedures for Business Registration

Box.3. 1- Registration in the tax office
For Individuals ( Persons)
After registration in the Trade Register the natural persons should
present a request for registration in the local tax office. Within 10
days the local tax office should give the tax certification and the
fiscal code.
For Legal Persons
After registration in the Trade Register the legal persons should
present a request for registration in the local tax office. Also, they
should present the court decision of the company, certificate from
the trade register and the bank account. After the verification of all
the above documents a one year license and the certificate from
NIPT which has the identification number of persons that is needed
for VAT payment is provided by the tax office.
2- Re-registration Box.4.
For Individuals ( Persons)
The re-registration procedures follow the same procedures as
new registration, plus all the last year tax payment documents.
For businesses whose activities are performed in non- permanent
units, it is not required the bank account certificate.
For Legal Persons

The old license with two pictures of the company’s managers
The full address of the firm
The contract with the social security office
The contract with the labor office
All the tax payment bills of the previous year.
The rent payment bill of the previous year.
All the permissions of the previous registration should be renewed
and submitted
The changes in the statute and in the other acts of foundation
should be presented after reflected in the trade register.
3- Registration in the Court Box.5.

For Individuals ( PPersons)
ersons)
Natural persons should submit a registration request at the district
court.The court within a month should give the answer to the
request. After the court’s approval and payment of the register
tax, natural persons are registered to the Trade Register.
For Legal PPersons
ersons
a) Foundation Act
b) Statute (charter)
c) Certificate for payment of the initial capital in the bank (in
cases of real estate and other in kind contribution, the expert’s
report is needed
d) Ownership/leasing contract for the place where the company
will operate
4- Registration in Trade Register Box.6.

For Individuals ( persons)
After the court’s approval and payment of the register tax, natural
persons are registered to the Trade Register.
For legal persons
a) Copy of the court decision for creation of the company
b) Contract and the Statute of the Company
c) Ownership/leasing contract for the place the company will be
operation
d) Certificate of the registration tax
INDUSTRIAL AND A patent is an exclusive right granted for an invention which will
INTELLECTUAL be a product or a process. In Albania, this patent provides
PROPERTY protection to the owner for a limited period, generally 20 years.
Patent protection implies that the invention could not be sold or
used without the permission of the patent owner.
Applications for the registration of trademarks have been on the

increase in Albania. Three kinds of trade marks are recognized in
Albania:
• Deposited Marks
• Registered Marks
• Regenerated Marks
There is a periodical publication of the Albanian Patent and Mark

Office which schedules such trademarks.
Invention patents are granted by a national office called the

General Directorate of Marks and Patents. PCT (Patent
Cooperation Treaty) managed by WIPO provides only an
application, which has the same effect as the national application
registered in the certain countries. An applier who wants to be
protected can apply and can request protection in any country
he has need, where were signed the mentioned treaties.
According to this Directorate source the Growth rate of the

patent applications through the Extension Agreement against
the year 2000 is 37%. Currently, the number of patents through
the Extension Agreement is 3827 or 984 more than the year
2001. Through the National Route the number of patents is 228,
or 108 more than the year 2001.
Legal framework
The following laws govern the trademark registration and patent
procedures:
• Law on Industrial Property No. 7819 dated April, 27 1994 and

amended by Law No. 8477 dated April 22, 1999 along with
the Penal Code, the Civil Code, and Custom Code etc.
• Law on “Protection of Topographies of Integrated Circuits

No. 8488 dated May 13, 1999.
• Law on Copyright No. 7564 dated 19 May 1992 and amended

by Law No. 7923 dated 19 April 1995, by Law No.8594 dated
April 6, 2000 and by Law No. 8630 dated July 3, 2000.
Additionally, Albania is a member of and party to:
• WIPO treaties:
- Madrid Agreement - since October 1995
- Paris Convention on Industrial Property - since October 1995
- Patent Convention on Industrial Property - since October 1995
- Protocol relating to the Madrid Agreement concerning the
International registration of Marks
- Berne Convention - since March 1994
- Rome Convention (performers, producers of phonograms and
broadcasting Organizations) - since September 2000
- WPPT (WIPO Performances and Phonograms Treaty) - since
May 2001
- Geneva Convention (Protection of Phonograms producers
against unauthorized reproduction) - since March 2000.
• WTO :
- Member and signatory of TRIP’s Agreement - since September
2000
• Extension State of EPO (Extension of European

Patents Agreement) - since February 1996
• Observer State Status in Administrative Council of

EPO
EPO..
• Membership of WIPO bodies/treaties under the

ratification process:
- Stockholm Act, Vienna Act of the Hague Agreement for

International Registration of Industrial Designs
- Budapest Treaty of International Protection of Micro-
organisms for Patent purposes
- Nice Convention related to International Classification of
Goods and Services
The structure and functioning of the banking system is regulated FOREIGN

by Law 8269 dated 23 December 1997 “On the Bank of Albania” EXCHANGE RULES
and Law 8365 dated 2 July 1998. Payments between private
individuals and legal entities are considered to be civil law
relationships and are subject to the Civil Code (1994). The use
of foreign currency is allowed as means of payment in the
Republic of Albania. There are no constraints on trading in hard
currency.
All commercial banks licensed by the Bank of Albania may carry

out foreign payments. The Bank of Albania, which is responsible
for managing foreign currency is also active in making
international payments. Every local or foreign person may own

an unlimited number of accounts in any currency in any bank in
the country.
The transfer of capital into and out of Albania can be carried out
after a formal preliminary approval by the Bank of Albania. (There
are some exceptions, specified in the “Regulation for Foreign
Currency Activity” No. 63/27.05.1999, Bank of Albania). Transfers
and payments abroad can be affected by any commercial bank
after the presentation of proper documentation. Large transfers
require additional documentation. Individuals entering Albania
have to declare any amount in cash or checks over USD 10,000
or its equivalent. Foreign persons can take out of the country, in
cash or checks, amounts not exceeding the value declared at
the moment of entry. Albanians can take out of the country in
cash and traveler’s checks an amount of up to USD 10,000 or its
equivalent in other currencies. Albanian businessmen cannot
take out of the Country more than USD 25,000 in cash or checks.
No one is allowed to take out of the Country more than lek
100,000 per person in Albanian currency unless permitted by the
Bank of Albania.
FREE ZONES AND F ree Z ones

INDUSTIAL PARKS The Law “No. 8636 dated 06 July 2000 regulates the
establishment of free zones and related matters. The law provides
for the establishment of free zones near ports and airports or
similar zones at the crossroads of international transport routes.
The Council of Ministers is charged with determining the areas
and boundaries of free zones on a case-by-case basis. It approves
the creation of free zones and the economic activities to be
performed in them.
The national free zones authority is in charge of the administration

of the free zones and it licenses interested investors wishing to
establish or carry out activities within the free zones.
A free zone is defined as a protected area of land or other

immovable property which may be either publicly or privately
owned. In both cases, the “developer”1 is approved by the Council
of Ministers. When the property is public-owned:
• the candidates need to go through a bidding procedure, and
• the selected “developer” is then

i) leased the area by the state for up to 35 years and also
has the right to lend it to users of the free zone or
1
“Developer” according to the law is any licensed natural or legal person who
initiates and organizes the establishment and functioning of a Free Zone.
ii) gets the area by concession and has the right to lend it to
other users.
In the case of private ownership, the developer presents the

request to the National Entity of Free Zones after reaching
agreement with the owner.
Commodities that enter into a free zone from licensed investors

as well as related services within the zone are exempted from
both custom duties and VAT.
Licenses to operate in the Duty Free Zones are approved by the

Council of Ministers.
National Entity of Free Zones has marked 4 areas for potential

free zones:
• metallurgical factory area in Elbasan

• tractor factory area in Tirana
• Durres
• Bajza in Shkodra
Industrial Parks
Like Free Zones, Industrial Parks play a key role in the attraction
of foreign investments. A major project underway in this regard
is the Vlora Energy Park (VEP), which is a strategic initiative
fulfilling a number of important development objectives. The
Park includes 750 hectares of development area in addition to
the Vlora Thermal Power Plant and the AMBO Terminal. VEP will
also accommodate a broad range of energy-related,
manufacturing, logistics, and processing activities. The VEP
strategy development objectives are:
- Provide Albania with a model, modern, integrated industrial

development area.
- Serve as a test bed for proposed institutional reforms in the

planning, construction, and management of competitive
industrial development zones.
- Provide the Albanian Foreign Investment Promotion Agency
(ANIH) with a coherent and attractive product with which
to commence international marketing and positioning of
Albania as an investment destination.
- Proposed changes to customs procedures at the Vlora Energy
Park will serve as a model for possible reforms of the customs
service and its procedures. In particular the proposed
adoption of a paperless EDI declaration and clearance
procedure will greatly facilitate trade and export activities.
- The VEP will provide a supply and servicing base for both the
Vlora Thermal Power Station and the AMBO oil pipeline to
attract additional investment associated with these facilities.
- The VEP will create some 6000 jobs during the construction
phases and over 8000 direct jobs when it is fully operational.
- The VEP will raise training and skills levels through an
integrated training program and onsite training institutions.
This strategy examines the broad institutional framework required

for the successful planning, construction, marketing and
administration of the Vlora Energy Park. An executive body, the
Vlora Energy Park Authority (VEPA), was constituted to promote
and coordinate the development of the park. The required powers
of such an authority are discussed and a draft constitution for
the establishment of the Vlora Energy Park Authority is set out.
COMPETITION Law on Consumer Protection

AND CONSUMER The main objective of Law no. 9135 dated 11/09/1997 “On
PROTECTION Consumer Protection” affirms consumers’ basic rights and
guarantees the exercise thereof. The purpose of this Law is the
protection of health, environment, life and economic interests of
the consumer, as well as the establishment of appropriate
relations among consumers, producers, sellers and service
providers, and the bodies responsible for control and
standardization.
The law also determines the obligations to use Albanian Language

for all kinds of productions and services offered to consumers,
arrangement of new relation between consumer and business,
legal framework for the establishment of the Supervisor Trade
System, the treatment basis of the complains and reimbursement.
This Law determines the producer, seller, supplier and service
provider, as well as safety standards for goods and services. It
also contains provisions relating to labeling, prices, invoices,
guarantees, the obligations of advertisers, the duty to provide to
the consumer with the necessary information, etc. Finally, the
law defines the institutional structures which operates in the
area of consumer protection, the obligations of the state
administration, and the rights of NGOs in the area.
Law on Competition
On July 28 th, 2003 the law no.9121 “On the Protection of
Competition” was approved by the Albanian Parliament. This
law entered into force by December 1st 2003 abrogating the law
no.8044 dated 7.12.1995.
The Competition Law No.8044 dated 07.12.1995 applies to all

investors, domestic or foreign, private or state-owned, who
supply or demand goods, the acquisition or consumption of which
is subject to their own free will and initiative. On the basis of
this law, every business, consumer or association has the right
to complain to the Competition Department regarding any
violation of the law. This law represents a deep reform in the
field of competition in Albania. Differently from the former law,
the law “On the Protection of Competition”, is a pure antitrust
law, dealing with the abuse of dominance, the control of
concentrations and illegal agreements, such as cartel agreements.
The approach in dealing with these issues is the same with the
one pursued in European Legislation.
The law stipulates the establishment of Competition Authority,

as a public entity, independent in performing its tasks, which
comprises of the Competition Commission as the decision-taking
body and Secretariat with investigative powers. The Authority
is entitled to control the application of the law in all the sectors
of economy and may take up cases not only upon notification or
complaint by undertakings, but also on its own initiative. The
Authority is entitled to impose fines, may grant total or partial
leniency from the financial penalties, it has the obligation to co-
operate with respective regulatory agencies in applying
competition law in regulated sectors, etc.
The law was approved in 1995 and had not foreseen the
subsequent development of the Albanian Economy. The
Government has therefore set up a working group to produce a
revised anti-trust law in 2003. This law will deal with the abuse
of dominance, the control of mergers, and illegal agreements,
such as cartels. On the basis of the European experience and in
order to meet the commitments of the Government of Albania
in the framework of the Stabilization Association Agreement,
this draft law will also lay down the basis for the establishment
of an Independent Competition Authority to come into existence
by 2004.
Legal Framework for Public Procurement

The legal framework in the field of public procurement is set out
in the Law on Public procurements Nr. 7971 dated 26 July 1995.
The law aims at promoting efficiency in the use of public funds
by ensuring that public procurement procedures are fair,
transparent and non-discriminatory. The Public Procurement
Agency is the state agency in charge of the co-ordination of the
public procurement process.
Public procurement contracts are awarded following a public

tender procedure. The tender procedures can be open, restricted
(in two phases) or direct. Foreign tenders are subject to the

same legal provisions as domestic tenders. An “international
open bidding” may be launched to encourage foreign
participation.
Mechanisms for the settlement of disputes

Investors in Albania are entitled to judicial protection of the rights
related to their investments. The parties to the dispute may
agree to submit disputes for consideration by an arbitration
institution. In the event of failure, foreign investors have the
right to submit the dispute to an Albanian court or to the
Arbitration Court in Tirana. Provisions on domestic and
international commercial arbitration are incorporated in the Code
of Civil Procedure.
In the event of a dispute regarding discrimination, transfer of

assets, or indirect expropriation of foreign investment by the
Albanian Government, the investor may submit the dispute to
the International Center for the Settlement of Investment
Disputes.
Albania is in the process of acceding to the New York Convention

on the Recognition and Enforcement of Foreign Arbitral Awards
and the European Convention on International Commercial
Arbitration.
MEDART – Commercial Arbitration & Mediation

The Albanian Commercial Mediation and Arbitration Project is
component of the Legal and Juridical Reform Project. The
Ministry of Justice is implementing the program with financing
from the World Bank. The project goal is to establish independent
mediation and arbitration services for the out-of-court settlement
of commercial disputes in Albania.
MEDART was established on December 30, 2002, based on law

no. 8788 dated 07.05.2001 “For-Non-For-Profit Organizations.”
65
ALBANIAN FOREIGN
INVESTMENT
PROMOTION
AGENCY – ANIH
About ANIH The Albanian Foreign Investment Promotion Agency (ANIH) was
established by the Albanian Government under the law no. 8877
on 04/04/2002 “About the Establishment of the Foreign
Investment Promotion Agency.” Its Supervisory Board was
created on October 2002. The head of the Board is the Minister
of Economy. The executive director of ANIH was selected in
December 2002, whereas full staffing was completed in April
2002, the same month that this agency became fully operational.
This Agency was created by the Albanian Government to promote
and increase foreign direct investment in Albania and create a
more favorable business environment.
INVEST ALBANIA
Albanian Foreign Investment Promotion Agency
Foreign Investment Promotion Agency has its own logo. The

acronym – ANIH is accompanied with its slogan “Invest Albania.”
Services ANIH has in its organization structure a department called

“Investor’s servicing.” During the first year of its activity, ANIH
contacted and assisted more than 60 potential and existing
investors. The services the Agency offers can be classified as:
Services before the investment decision:

• Undertaking direct studies on the sector or the field of
concern by looking at: the number of companies already
operating in the sector, their success level, production level,
the number of other foreign firms present, main competitors,
etc.
• Making use of the brochure published by ANIH “Start up
procedures.”
• Information about possible Albanian partners to foreign
investors interested in joint ventures and other forms
of business cooperation
cooperation.
• Information on the business environment in general

and on the legislative context and fiscal incentives in
particular.
• Preparing site visits in country for interested investors.
Services during and after the investment
• ANIH can function as an intermediary between investors

and the public administration, accelerating different
procedures.
• ANIH can function as an intermediary between foreign
investors and domestic investors to realize joint-ventures
and other forms of business cooperation.
• Building direct contacts with existing investors in order
to assess actual problems faced in Albania and transmitting
these to the Government to remedy.
• Building an extensive database on the Albania
economy put in the service of foreign investors.
Around 33% of the total foreign firms operating in Albania were

assisted by ANIH
The strategy of the Foreign Investment Promotion Agency in ANIH STRA TEG
TEGYY
STRATEG
achieving higher levels of foreign direct investments in Albania FOR 2004 YEAR
for the year 2004 is mainly oriented towards the following:
• Focusing on and promoting Albanian comparative advantages

to foreign investors
• Identifying and promoting sectors that posses investment
opportunities
• Establishing contacts and relations with foreign and domestic
investors
• Presenting Albania as a growing new emerging market
Albanian Foreign Investment Promotion Agency 67
• Image building by the Foreign Investment Promotion Agency

(ANIH)
• Collaborating with other Southeastern Europe FDI agencies
to communicate the region’s potential as one market to
foreign investors
• Targeting international companies and other potential investors
through market research and cooperation with Albanian
embassies
Please Contact Us at:

Albanian Foreign Investment Promotion Agency - ANIH
Address: Blv. “Gjergj Fishta”, P. Shallvare, Tirana, Albania
Tel: +355 4 252 886 / 976
Fax: +355 4 222 341
E-mail: info@anih.com.al
Web-site: www.anih.com.al
www.investalbania.com
69
APPENDIX
SUCCESS ST ORIES
STORIES KURUM International sh. p. k
OF FDI IN ALBANIA KURUM International sh.p.k (limited liability) is a Turkish company
which operates in metallurgy industry. This company has operates
in Turkey and Kosovo (insurance sector) as well. The total number
of employees in this company is 530, 37 of them are graduated
in different metallurgy branches and 497 of them have previous
experiences in the metallurgy sector. For the moment KURUM
Int. produces for the Albanian market but the future projects
involve the possibility to export which intend the production
increase.
Contact points:
Tel: +355 4 255973
+355 4 221666/187
Fax: +355 4 255974
e-mail: infoalbania@kurumdemir.tr
AMC-Albanian Mobile Communications

Albanian Mobile Communications Sh.A. (AMC) a
Telecommunication Company in Albania offering
telecommunication services to the Albanian customers since
1995. AMC was sold in an international bid, supervised by EBRD,
whereas the biggest offer came by COSMOTE-TELENOR
Consortium. The Consortium acquired 85% of AMC shares.
Since its privatization in 2000, AMC has become a leading private
enterprise, not only in Albania, but in the region as well.
In the beginning the customer base was 20,000 clients, having
the monopoly in the country’s industry. Only few months after, it
was offered the prepaid service together with the Customer Care
unit. The customer base grew to roughly 100,000 in few months,
400,000 after two years. Now, after more than three years, our
customer base has reached beyond 600,000 clients, of prepaid
and business postpaid service.
AMC investment figures in the last four years have overcome
200 million Euros in technology, maintenance, construction and
else.
AMC has network coverage of more than 85 percent of the
territory and more than 90 percent of the population.
The technology is upgraded continuously as requested by EU
standards and regulations respecting also the public health and
Albanian legislation.
AMC employs more than 300 specialized employees.
During our work in the last three years, AMC has proven it self
as one of the most profitable companies in the region.
Contacts:
“Gjergj Legisi” str.-Laprake, Tirana, Albania
Tel: + 355 4 275 000 • Fax: + 355 4 275 223
E-Mail: secmd@amc.al • http://www.amc.al
APPENDIX 71
“Tirana” Beer
The company of “Tirana” beer production was established on
1960. It’s a shareholding company with joint capital of ten
shareholders. “Tirana” beer production was lunched in the market
based on a good tradition in this area in 1961. The “Tirana” beer
Company produces and sells beer of Pilsen type, blonde and dark,
packaged in glass bottles and barrels. It is prepared by malted
barley, water, lupulus, barmy, carbonic gas and alcohol in
quantities of 4%.
In the climate of evaluation process of the Albanian enterprises
for the quality of their products in the International Scale the
“Tirana” Beer was the only one, which has won the Gold Trophy
“For the quality and the prestige achieved in business” in the
International Summit of Quality organized in New York of United
States. This was the 17-th edition of this summit, where “Tirana”
Beer was the only one from 160 companies of 120 different
countries in the beer production area. “Tirana” Beer was
rewarded with this trophy for its high quality and its prestige
achieved in business through a continuous improvement of
contemporary standards of its management. The company has
invested 10 millions USD for the diversification which means the
use of the last technology of the beer production (year 2003).
“Tirana” Beer was already exported since the last year in six
states in USA, and is made studies from the company of fiscal
framework on neighboring countries to export in these countries
as well.
Contacts:
Address: Rruga e Kavajes, Tirana. Albania
Tel/fax: +355 4 235582
E-mail: tiabirra@icc.al.eu.org
SEAMENT Albania Sh.p.K

SEAMENT Albania Sh.p.K. is a member of the International Group
“Seament Holding” SAL, present in over 20 countries. “Seament
Albania” has been operating in Albania since 1994 as an import
trading company for European Cement in the Port of Durres,
where it has a land terminal with a capacity of 1,000,000 t/year.
The imported cement conforms to Albanian Standards P-50 and
European Standards of ENV 197-CEM I 42.5R.
In March 1997, during the privatization programme of
the Government, “Seament Albania” acquired 70% of the
“Elbasan Cement Factory” and 70% of the “United Quarries”. In
November 1999, Seament Albania bought an additional 7% in
“Elbasan Cement Factory” and in December 1999 an additional
16% in “United Quarries”. In July 2000, “Elbasan Cement Factory”
won the auction for the privatization of “Fushe Kruja Cement
Factory”, currently operating as a clinker grinding facility.
Contacts:
“Abdyl Frasheri” str. 11/1, Floor 7, Tirana, Albania
Tel: + 355 4 243 943
Fax: + 355 4 243 935
E-Mail: pierreseamentalbania.com
URL: www.seament.com
APPENDIX 73
VODAFONE ALBANIA
Vodafone Albania celebrated its third anniversary of establishing
operations in Albania on 3 August 2004.
Vodafone, the world’s largest mobile telecommunications
operator, was awarded Albania’s second GSM 900-band mobile
phone license on February 8, 2001, having offered the highest
bid USD 38 million in an international tender.
Vodafone International Holdings BV, participates with 51% of
the share capital in Vodafone Albania, while Panafon-Vodafone,
Greece’s leading provider of mobile telecommunications has 49%.
Vodafone-Albania launched its GSM services in Albania on August
3, 2001. Vodafone Albania, since its August 2001 launch, has
managed to cover 85% of the population and 75% of the Albanian
territory.
Till the end of March 2003, Vodafone’s investment has reached
• 65 million.
Vodafone managed to build a GSM network and start commercial
operations, reaching 100,000 customers within the first four
months, and a market share of 38.8% in the first year of operation.
Contacts:
Zayed Business Center
“Sulejman Delvina” str., Tirana, Albania
Tel: + 355 4 283 072
Fax: + 355 4 283 334
www.vodafone.al
media@vodafone.al
KPMG – Albania AUDIT

Established in 1996, KPMG Albania Sh.p.k. is part of the network COMP ANIES IN
COMPANIES
of KPMG offices in Central and Eastern Europe and is a member ALBANIA
firm of KPMG International. In 1999, we merged with Boga &
Associates, a top Albanian legal firm.
The Albanian practice provides a full range of high quality services

tailored to meet the needs of both local clients and foreign
investors operating in the country. Our services can be divided
into the following main functional disciplines:
• assurance (auditing and accounting)
• management assurance services
• financial advisory services
• tax consulting
• legal services
• advice on privatization
• performance improvement
Our assurance professionals are experienced in adopting

international auditing standards in a challenging environment
like Albania and are devising related services to help clients
manage risk. Our legal professionals are experienced in assisting
clients in dealing with a constantly evolving and complex legal
environment. In addition, we are a pioneer in the tax profession
in a country which has come from a state owned centralized
economy and is now opening up to private business with a totally
overhauled tax system.
KPMG Albania Sh.p.k. has market expertise in highly specialized,

regulated industries such as financial institutions, public utilities,
telecoms, transportation, food, hotels and non-governmental
organizations.
KPMG Albania Sh.p.k. is well placed to inform and advise on

local business developments, foreign and local investments and
ongoing projects financed by the international community. Our
Albanian practice is able to keep you abreast of national legislation
related to the economy, finance and business development as
well as of the drafts of major laws which will affect future decision
making. The firm’s booklet, Investment in Albania, and other
updates provide comprehensive guidelines for those considering
investing or doing business in Albania.
Deloitte in Albania Deloitte in Albania

Deloitte in Albania is one of our 16 national practices in Central
Europe. Our membership in the regional firm allows us to draw
on knowledge and expertise from throughout the region.
Deloitte Company delivers world-class professional services,
including:
APPENDIX 75
Audit Services: Deloitte Company provides clients with

professional advice and assurance on their controls and
accounting systems all year round. Deloitte Company understands
its clients’ operations, their industry and the issues they face,
and this enables us to provide them with relevant advice. The
combination of the specialist skills, industry expertise and ongoing
investment allows us to anticipate complex business problems
for the clients and recommend preventative action.
Consulting: Professional services from Consulting are focused on

how the clients aim to operate their business model in a rapidly
evolving business, regulatory and governance environment.
Enterprise Risk Services: Deloitte Company Enterprise Risk

Services (ERS) practice is the global leader in helping clients
manage risk and uncertainty, from the boardroom to the network..
Deloitte Company provide a broad array of services that allow
clients around the world to better measure and manage risk and
control, and to enhance the reliability of systems and processes,
throughout the enterprise.
EU Enlargement: With the European Union expanding from 15 to

25 countries in May 2004, businesses need to be prepared for
the impact enlargement will have on them. Deloitte can help by
making sure you are fully aware of how accession will impact
you by providing an in depth view into the European Union
accession.
Financial Advisory: For foreign and local national clients Deloitte

in Central Europe provides a wide array of specialised advisory
and strategic services through our regional Financial Advisory
Services (FAS) practice. Deloitte professionals combine
internationally honed investment banking skills in the areas of
Corporate Finance & Advisory Services, Transaction Services,
Forensic Services and Reorganisation Services to ensure the
creation, maximisation and preservation of value.
Tax & Legal: At Deloitte in Central Europe, the tax practitioners

work hard to help our clients increase their bottom line. Deloitte
staff does this by delivering a full range of tax services that help
minimize the effect of the many taxes our clients face. In addition,
to give its clients peace of mind, help them comply with local
tax regulations wherever they operate in the world. When disputes
arise with the tax authorities, Deloitte staff is there to help deal
effectively with these authorities.
Studio Legale TTonucci

onucci
Studio Legale Tonucci is one of the largest independent Italian
law firms with substantial experience in international law and in
the domestic market.
The firm was founded in 1994 by Mario Tonucci, who assembled
a dynamic group of experienced lawyers from leading Italian and
International law firms. Over the past 9 years, the firm has
experienced unprecedented growth and recognition on a national
and international level. Legal Business Awards nominated Studio
Legale Tonucci for “European Firm of the Year” in 2000 on the
basis of its reputation for excellence, innovation and a strong,
client-driven business approach.
Currently, the firm offers over 170 lawyers in centrally managed

offices linked by an up-to-date and sophisticated computer
network. Strategic firm locations offer legal services in all major
Italian financial and industrial centers and ensure personal and
direct assistance to clients with operations involving the United
States, EU and Eastern European markets.
The firm has chosen to remain independent in order to afford

clients maximum fee flexibility and to ensure transparent control
of potential conflicts of interest. However, Studio Legale Tonucci
maintains relationships with a number of leading independent
law firms around the world so as to offer fully-integrated
international services to its national and international clients.
The law firm has a highly developed practice throughout Central
and Eastern Europe and has been involved in several international
projects in Albania, Bosnia-Herzegovina, Bulgaria, Czech Republic,
Estonia, Hungary, Slovak Republic, Slovenia, Poland, Seychelles
and Romania.
The firm’s client base includes large Italian and multinational

corporations as well as financial institutions. The international
practice of the firm is significant and growing, and all of the
lawyers are selected for their strong international background.
Lawyers of the firm have been involved, either as consultant of

the purchaser or as advisor of the seller, in many relevant
privatisation operations in Albania, as AMC , Banka e
Kursimeve, Albtelecom, Albpetrol and Armo , and in several
other business transactions and privatisation issues in Eastern
Europe and Developing Countries. Studio Legale Tonucci has also
acted for governments, private industries and underwriters in
relation to offers of securities in privatised companies on both
domestic and international capital markets.
APPENDIX 77
The Government of Albania has signed bilateral agreements with BILATERAL

BILATERAL
many countries in the world related to trade and investment. AGREEMENTS ON
Following are some of the bilateral agreements that the INVESTMENT AREAS
Government of Albania has signed:
Trade and Economic Cooperation Agreements

These agreements are intended to create a legal basis for
promoting trade in goods and services and lead to broader
economic cooperation. According to such agreements, each
party will encourage and create favorable conditions for the
export or import of goods and services originating from the other
party and to accord to them the same treatment it accords its
own products or traders.
These are not preferential treatment agreements or free trade

agreements. Their provisions do not apply to the advantages
and privileges granted by either party to neighboring countries
to facilitate the development of border trade or to countries
with which it has concluded or will conclude in the future an
agreement on a customs union or on a free trade zone. Exports
and imports of goods and services as well as economic
cooperation between parties are to be effected on the basis of
contracts concluded in accordance with the laws and regulations
in force in the parties between legal and natural persons of the
parties. Some of the countries with which Albania has this kind
of agreement are:
Italy 1989, Turkey 1990, USA 1992, Croatia 1993, Czech Republic
1994, EFTA 1994, Macedonia 1997, France 1998, Uruguay 2000
etc. Double TTaxation
axation
Treaties signed by
Albania
Double TTaxation
axation TTreaties
reaties signed by Albania
This kind of agreement is intended to help companies to avoid
double taxation. The most used of Albania’s DTTs have been
those with Italy and Greece, which have substantial investments
in Albania.
Treaties for the A voidance of Double TTaxation.

Avoidance axation.
Albania has signed Conventions for the avoidance of double
taxation and the prevention of fiscal evasion with respect to
taxes on income and on capital with many countries, which
have priority over Albanian domestic law.
APPENDIX 79
1. TTax
ax TTreaties
reaties in force :
1. Treaty with Poland, in effect as from 1 January 1995

2. Treaty with Rumania, in effect as from 1 January 1995
3. Treaty with Malaysia, in effect as from 1 January 1995
4. Treaty with Hungary, in effect as of 1 January 1996
5. Treaty with Turkey, in effect as from 1 January 1997
6. Treaty with Czech Republic, in effect as from 1 January 1997
7. Treaty with Russian Federation, in effect as from 1 January
1998
8. Treaty with Macedonia (FYROM), in effect as from 1 January
1999
9. Treaty with Croatia, in effect as from 1 January 1999
10. Treaty with Italy, in effect as from 1 January 2000
11. Treaty with Bulgaria, in effect as from 1 January 2000
12. Treaty with Sweden, in effect as from 1 January 2000
13. Treaty with Norway, in effect as from 1 January 2000
14. Treaty with Greece, in effect as from 1 January 2001
15. Treaty with Malta, in effect as from 1 January 2001
16. Treaty with Switzerland, in effect as from 1 January 2001
17. Treaty with Moldova, in effect as from 1 January 2004
Treaties signed but not yet in force
18. Treaty with Belgium ratified by Albanian Parliament, April

2003
19. Treaty with France, ratified by Albanian Parliament, April 2003
Treaties Negotiated and initialed at technical level but

not yet signed by the Governments’ authorized persons
20. Treaty with Egypt, initialed at Cairo on November 1998

21. Treaty with Netherlands, initialed at Hague on 14 December
2001
22. Treaty with Yugoslavia, initialed in Belgrade on 11 December
2002
23. Treaty with Iran, initialed in Teheran on 22 December 2002
Bilateral Investment This kind of agreement is intended to create a legal basis for
Protection and mutual cooperation in the field of investment. Each party is to
Promotion encourage and create favorable conditions for investors of the
Agreements other party in its territory and to accord them and their
investments the treatment it accords its own investors and
investments. This is not a preferential treatment agreement
and the cooperation is to be established on the basis of
contractual relations between natural and legal persons of each
party.
Country Date Table No. 7:

Albania’s BIT-s
Greece August 1991
Germany October 1991
Italy September 1991
USA (OPIC) October 1991
Turkey June 1992
Switzerland September 1992
China February 1992
Austria March 1993
Croatia May 1993
Poland March 1993
Tunisia October 1993
Egypt May 1993
Rumania May 1994
Bulgaria April 1994
The Netherlands April 1994
Great Britain Mars 1994
Czech Republic June 1994
Malaysia January 1994
France June 1995
Denmark August 1995
Sweden March 1995
Russia April 1995
Israel January 1995
USA January 1995
Hungary January 1996
Macedonia February 1998
Finland June 1997
Slovenia October 1997
Portugal September 1998
Belgium - Luxemburg February 1999
Ukraine October 2002
Serbia and Montenegro November 2002
Spain June 2003
South Korea December 2003
Kosovo (UMNIK) February 2004
Libya DCM no. 641, approved on 13.12.2002
Bosnia and Herzegovina DCM no 577, approved on 21.08.2003
Cyprus DCM no 198, approved on 15.04.1999
Byelorussia DCM no 543, approved on 14.11.1994
Moldavia DCM no 106, approved on 20.02.2003
Iran DCM no 91, approved on 13.02.2003
Source: Ministry of Economy
APPENDIX 81
Current situation
until the full
implementation of
all FFree
ree TTrade
rade
Agreements
Table No.1.
ROUND TABLE
list of Banks operating in ALbania

31.12.2003
APPENDIX 83
Kavaja, Saranda, Bilisht

Tirana 1, Tirana 2,
5
NCB – National Commercial Bank

TB – Tirana Bank
AB – Alpha Bank
SB – Savings Bank
NBG – National Bank of Greece
CBA – Credit Bank of Albania
February 2004
IAB – Italian-Albanian Bank

ABA – American Bank of Albania
CB – Credins Bank
UBA – United Bank of Albania
Procredit Bank
DB - Dardania Bank
FIB – First Investment Bank
16. PB
ICB – International Commercial Bank

CBG – Commercial Bank of Greece
PB - Popular Bank
- Law no. 8459, of 11.2.1999 “Amendments to law no. 8306, LEGAL FRAMEWORK
14.3.1998 On the Privatisation Strategy for Sectors of Special FOR PRIVATISA
PRIVA TION
TISATION
Importance”.
- Law no. 8582, of 23.2.2000, “An addition to law no. 8306,
14.3.1998 On the Privatisation Strategy for Sectors of Special
Importance”.
- Law no. 8237, of 01.09.1997 “Amendments to law no. 7926,
20.4.1995 On the transformation of state enterprises into
commercial companies”
- Law no. 7973, of 26.7.1995 “On concessions and participation
of private sector into public services and infrastructure”.
- Law no. 8329 of 16.4.1998 “Amendments to law no. 7973,
26.7.1995 “On concessions and participation of private sector
into public services and infrastructure”.
- Council of Ministers’ Decision no. 329, of 12.7.1999 “On
tender procedures for strategic investors selection and
transferral of state owned stock at commercial companies
of specially important sectors”.
- Council of Ministers’ Decision no 578, of 8.12.1999
“Amendments to Council of Ministers’ Decision no. 329,
12.7.1999 “On tender procedures for strategic investors
selection and transferral of state owned stock at commercial
companies of specially important sectors”.
- Law no 8618, of 14.6.2000 “On telecommunications in the
Republic of Albania”
- Law no. 8288, of 18.2.1998 “On the Telecommunications
Regulatory Entity”.
- Electrical Power Law no. 7962, of 13.7.1995
- Law no. 7970, of 20.7.1995 “On the regulation of electrical
power sector”.
- Law no. 8102 of 28.3.1996 “On the regulatory framework of
power-supply and waste water processing sector”.
- Water Reserves Law no. 8093, of 21.3.1996
- Law no. 8450, of 24.2.1999 “On the processing, transport
and trade of oil, gas and their sub-products”
- Council of Ministers’ Decision no. 571, of 08.12.1999
“Approval of the Policy Development Paper for the water
infrastructure sector in the Republic of Albania”.
According the procedures, for the implementation of Law No.
8306, date 14.03.1998, for each company which operates in
a strategic sector, is prepared a specific law for the company
which will be privatized.
- Law no. 9127, date 29. 7. 2003 “For some amendments in
Law no. 8810, date 17. 5. 2001 “For the determination of
the formula’s structure and form of the privatization of
Albtelecom s. a.”
- Law no. 9117 date, 24. 7. 2003 “For the determination of
the formula’s form and structure of the privatization of Armo
s. a, Fier”
APPENDIX 85
- Council of Ministers’ Decision no. 416, date 2. 7. 2004

“Defining the Quantity of the Share Package of the
“Albtelecom” s. a, which is offered to Strategic Investors “
“Evaluation Criteria of Bid Invitations for the Privatization of
the “Albtelecom” s. a”
- Council of Ministers’ Decision no. 418, date 2. 7. 2004 “On
the Utilization scale of the revenues from the privatization of
“Albtelecom” s. a”
the Selection Criteria of Strategic Investors, interested on
the purchase of “Armo” s. a shares, Fier”
the way of utilization of revenues from the privatization of
“Armo” s. a, Fier”
“Evaluation Criteria of Bid Invitations for the privatization of
“Armo” s. a, Fier”
the transfer way of the package with remained shares of
“Albtelecom” s. a, after the transfer of the package to
strategic investors, “Albpost, SHA, ex-owners of the land
and the workers of “Albtelecom” s. a”.
Current FDI in Companies Country YYears
ears of establishment
selected sectors
Union Carbide USA 1992
ILVA, S.p.a./Technic Italy 1992
I,T,S. Group (Acciaierie Venete) Italy 1992
Table no. 2. Consiadar Europa Belgium 1992
Foreign companies in A.W.T. Austria 1992
mining, 1992-2000 Marc Rich+Co. A.G./Sot Glencore International A.G.
International A.G. United Kongdom 1992
Sumitomo Corporation Japan 1992
B.S.E.-Essen, GmbH Germany 1992
Macalloy Corporation United Kingdom 1993
Fucinati Italy 1993
Preussag Germany 1995-1996
Acciaierie Venete Italy 1995-1996
Kinglor s.r.l. Italy 1997-1998
Ribinkco, s.a. United Kingdom 1997-1998
Nebex Canada 1995-1998
Karma Rayla Roads Canada 1996-1998
Acquarter & Descat Italy 1996-1998
Triacom Germany 1997
Hayri Ogelman Madencilik Turkey 1995-1999
Metal Research Group L.T.D. Canada/USA 1999
Darfo Italy 1999-2000
Tesara Italy 1999-2000
Ben Oner Turkey 2000
* Note: The list includes the sector of Oil and LPG companies
Source: Agency for Development Promotion in Albania
Table no. 3.
FDI in energy
Source: Ministry of Industry and Energy
Table no. 5.
FDI in the transport
sector, 1992 - 2003
Source: Ministry of Transports and Telecommunications

APPENDIX 87
USEFUL POINTS OF Albanian Foreign Investment PPromotion

romotion Agency – ANIH
CONTACTS
CONTACTS Address: Blvd “Gjergj Fishta”, Pallatet e Shallvareve
Tirana, Albania
Tel: +355 4 252 886 / 976
Fax: +355 4 222 341
E-mail: info@anih.com.al
Web-site: www.anih.com.al
www.investalbania.com
Albanian Small and Medium Enterprises PPromotion

romotion Agency
Address: Blvd “Gjergj Fishta”, Pallatet e Shallvareve
Tirana, Albania
Tel: +355 4 254 316
Albanian Export PPromotion

romotion Agency
Address: Blvd “Gjergj Fishta”, Pallatet e Shallvareve
Tirana, Albania
Tel: +355 4 247 628
Tel / Fax: +355 4 247 633
Ministry of Economy
Address: Bulevardi “Zhan D’Ark”, No 3
Tirana, Albania
Tel: +355 4 364 610 / 362 504
Fax: +355 4 222 655 / 364 658
Web-site: www.minek.gov.al
Bank of Albania / Bank

Bankaa e Shqiperise
Address: Sheshi “Skenderbej”, No 1
Tirana, Albania
Tel: +355 4 222 152
Fax: +355 4 223 558
E-mail: public@bankofalbania.org
Web-site: www.bankofalbania.org
Companies Registry - Tirana Court – Gjykata e Tiranes

Gjykata
Address: Bulevardi “Gjergj Fishta”
Tirana, Albania
Tel: +355 4 22 89 09
+355 4 22 89 06
Foreign Investors Association of Albania – FIAA

Address: Blvd. “Zogu i Pare”
Tirana Business Center, Suite 20
Prane “Zerit te Popullit”
Tirana, Albania
Tel: +355 4 256 296 / 7 / 8 (120)
Fax: +355 4 256 291
Mobile: 069 20 34 469
E-mail: fiaalb@albaniaonline.net
Web-site: www.fiaalbania.org
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AN INVESTOR’S

Albania- a country Key information .................................................................................6

Economic and Economic overview ........................................................................ 17

Sectors of a great Tourism ...................................................................................... 41

Business FDI legislation ................................................................................. 56

Appendix Success stories .............................................................................. 78

It is with great pleasure that we present you with our second

The Albanian government has undertaken considerable reforms

We are aware that the changes we need to undertake should

In this regard, Albania has signed several international

The Government of Albania continues to view the presence of

and institutional framework to facilitate their entry and operation

Some of the milestones along this path include a joint project

As a result, we were recently able to welcome several major

Finally, through the publication of this Guide, we hope that you

Head of State Alfred MOISIU

Head of Government Fatos NANO

Southeastern Europe, borde red by the Adriatic

Next Two Biggest Cites Durres 215,005 inhabitants

Official language Albanian

Exchange Rate 1 USD = 101 leks

Time zone GMT + 1

Telephone Codes + 355 (Albania)

Climate Two climate zones: Mediterranean and

Source: *Institute of Statistics (1 January 2004)

Location LOCATION AND

by Montenegro and Kos-

ovo to the North and

donia to the East, and

POPULA TION AND

ancient population, the Illyrians developed through the second

The Communist Party took power in November 1944, when foreign

Government and Administration

The Assembly is a one-chamber Parliament. Its members are

The head of state is the President, who is elected by Parliament

The Albanian territory is divided into 12 Regions. Each region

Albania has considerable mineral resources, including chrome, NATURAL

Additionally, Albania has reserves of limestone estimated to

Albania’s natural resources include its Mediterranean climate

ENTERTEINMENT Albania enjoys many cultural monuments and locales, several of

Additionally, Albania has many talented artists, musicians and

ECONOMIC Gross Domestic Product

* - Estimated value for 2004

Source: Bank of Albania

And although the agricultural sector’s contribution to GDP has

Construction continued to be the most dynamic sector with third

Source: Bank of Albania

GDP per capita

GDP per Capita

Source: Bank of Albania, Ministry of Finance

The employment level according to December 31, 2003 figures

Total Employment 385, 862

Unemployment figures registered at the National Employment

Elementary education High School V ocational University

Source: Bank of Albania

* - Estimated value for 2004

FOREIGN DIRECT Foreign Direct Investments (FDI) continues to be an important

• the creation of a legal and regulatory framework with

As a result, FDI figures have sharply increased since 1998.

For foreign investors, Albania continues to offer available natural

Source: Organization for Economic Cooperation and Development - OECD

FDI According to Countries of Origin and Sectors