In 1993, the Republic of Albania adopted Law No.7764/1993 “On Foreign Investments”, aiming to regulate the protection, promotion, and encouragement of foreign investments in the country. In addition, the law provides foreign investors with rights and guarantees, while safeguarding their assets and ensuring they are treated fairly per the adopted international standards and practices.
Foreign Investment Rights and Protections in Albania
According to the law, foreigners who want to set up a business in Albania should not have to get permission from the Government. While there are no restrictions on the share of foreign participation in Albanian companies, 100% foreign ownership is allowed. Additionally, foreign investors have the right to expatriate all funds and contributions related to their investment, whether in kind or otherwise.
Foreign investors are entitled to the same favorable treatment as domestic investors, except for land ownership, which is governed by a special law. Albanian law provides that foreign investments are never governed by terms that are less favorable than the generally accepted norms of international law. Furthermore, investments are treated equally and impartially, ensuring complete protection and security.
Foreign Investments Sectors and Countries in Albania for 2024
In the early 2000s, Albania began attracting foreign investments, and since then, both the amount and the number of partners have grown. Data on the FDI flows in Albania between January and March 2024, confirm that foreign investments in the country reached €354 million, the highest ever for this period. A year earlier, the total was €307 million, showing an increase of 15.3%, or €47 million, in just one year.
In 2024, Turkey led foreign investments in Albania, contributing around 19.5% of the total. Italy and Austria followed with 11.6% and 9.6%, respectively. Other key contributors included the Netherlands at 7%, Kosovo at 5.6%, and Germany at 5%.
Main contributor sources of the FDI inflows in 2024 included the real estate sector with 23.7% of the total, followed by financial and insurance activities (20.9%), extractive industry (14.4%), processing industry (11.8%), and professional, scientific, and technical activities (7.3%).
Laws Implemented to Support Foreign Investments in Albania
The framework of foreign investments in Albania, in addition to the above mentioned cornerstone Law No.7764/1993 “On Foreign Investments”, has been contemplated with additional legal instruments. Notably, Law No. 55/2015 aims to attract strategic domestic and foreign investments in key sectors of the economy by offering preferential terms for projects deemed in the public interest. It expedites administrative procedures for strategic investment projects, such as permits and licenses, and provides customized benefits like access to state-owned real estate and infrastructure support; for instance, a Real Estate Fund has also been created to facilitate these projects. Strategic investments are evaluated based on criteria such as investment value, job creation, economic impact, and contributions to security, quality of life, and environmental protection.
Furthermore, the Albanian Investment Development Agency is an ad-hoc institution that has been established to inform, overview, and provide all the relevant data on foreign investments.
Why Invest in Albania?
Albania’s economy grew by 2.24% in 2019. Thanks to its strategic location, with ports on both the Adriatic and Ionian seas, and natural resources like oil, chromium, copper, and coal, the country has an advantage in the region and is more prone to attract investments in sectors related to these resources.
Important to mention, that Albania benefits from a young, skilled, and low-cost workforce providing companies and investments with sustainability and efficiency. Its currency, the lek, currently remains stable and strong against the euro, providing further economic confidence. The country also has a competitive tax system.
In addition, as a member of the General System of Preferences (GSP) and in connection with its participation in free trade agreements, Albania has free access to major markets. Being a forward-looking country Albania has created a supportive legal and institutional environment for foreign investments. As a result, it has become a reliable partner for investors, with strong potential remaining in priority sectors like mining and infrastructure.
If you are interested in investing in Albania, it is advisable to consult with a professional on investment opportunities that best suit your needs. Our firm specializes in international taxation, and our team is ready to assist with any related matters. If needed, we can connect you with top professionals to support your business activities in Albania. Please feel free to contact us.
