Albania has managed to strengthen its business climate over the past few years through various legal benefits and incentives aimed at attracting foreign and local investments. Hence, law 55/2015 “On Strategic Investments in the Republic of Albania” is the main legal instrument that has driven continuous positive changes in the Albanian business climate.
Encouraging Strategic Investments
Law no. 55/2015 aims to encourage and attract strategic investments, domestic and foreign, in certain sectors of the economy, recognized as strategic sectors. The law provides preferential terms for investments that are deemed to be in the public interest.
For instance, administrative procedures related to the preparation, implementation, development, and execution of strategic investment projects, as well as the issuance of licenses, permits, and authorizations, will be prioritized and expedited by all public and state authorities involved, whether directly or indirectly, in these processes.
In addition, approved investments can benefit from several other advantages, including the provision of auxiliary infrastructure and access to state-owned real estate for the realization of strategic investments.
To further support these investments, a Real Estate Fund has been established, utilizing state-owned properties to facilitate strategic projects.
The evaluation of strategic investments is subjected to multiple criteria, including, but not limited to; the value of the investment, time of investing, productivity and added value of the investment, opening of new jobs, increasing the general level of security and quality of life of citizens and environmental and/or consumer protection.
Strategic Sectors and Criteria to Obtain the Status of Strategic Investor
According to Law 55/2015 the following sectors are considered strategic investments:
- Energy and mining sector.
- Transport, electronic communications infrastructure, and urban waste.
- Tourism (tourist structures).
- Agriculture (large agricultural farm) and fishing.
- Technology and economic development area.
- Priority development areas.
Minimum Value of Investment Required for Strategic Investments
Energy and Mining Sector
- Equal to or greater than 30 million euros per assisted procedure.
- Equal to or greater than 50 million euros for a special procedure.
Tourism Sector
- Equal to or greater than five million euros and that at the same time creates, at least, 80 new jobs for an assisted procedure.
- Equal to or greater than 50 million euros for a special procedure.
Technology and Economic Development Area Sector
- Equal to or greater than five million euros, for assisted procedure.
- Equal to or greater than 50 million euros, for special procedures.
- Investments with a value of 100 million euros or more, regardless of not being in the strategic sector, benefit from the special procedure strategic investment status.
Strategic Investor Benefits under Law 55/2015
The status of a strategic investor in Albania is divided into two categories: Investment/Strategic Investor ‘’Assisted Procedure’’ and Investment/Strategic Investor, ‘’Special Procedure’’. The main benefits that each group can receive under this law can be categorized as follows:
From an Administrative Perspective:
- Expert Assistance – The Albanian Investment Development Agency (AIDA) provides direct support through its team of experts, helping investors prepare the necessary documentation and complete administrative applications.
- Support Program Development – AIDA also offers guidance in the creation and implementation of support programs tailored to the needs of strategic investments.
- Project Facilitation – For projects granted the status of ‘Strategic Investment/Investor, Assisted/Special Procedure,’ AIDA acts as a mediator, coordinating with relevant state bodies to ensure the smooth acquisition of permits, licenses, and authorizations.
- Strategic Investment Contracts – After thorough evaluation by the Council of Ministers, the Assembly (Parliament) is responsible for approving strategic investment contracts.
From a Material and Economic Perspective:
- Allocation of State Resources – Strategic investments may be granted access to state-owned assets, such as land, machinery, or other facilities, to support their development.
- Use of Natural Resources – The Council of Ministers, following a proposal by the Strategic Investments Commission (part of AIDA), can approve the use of natural resources like seas, lakes, and rivers for strategic investment projects.
- Expropriation for Development – In certain cases, the government may expropriate real estate or private property to facilitate the successful execution of strategic investment projects, ensuring they have the necessary space and resources.
- State Partnership – The government may choose to partner with investors in strategic projects, either through financial contributions or by providing in-kind resources. This partnership could include developing infrastructure, constructing new facilities, or making other necessary enhancements to support the investment.
Why to Invest in the Energy Sector (Renewable Energy)
Albania has significant potential in the Renewable Energy Sources (RES) sector. This is because the country is currently focused on implementing a sustainable economy based on green energy, with renewable energy being identified as a current priority in Albania’s 2030 Plan.
Albania’s strategic location offers short routes from the Western Mediterranean to the Balkans and Asia Minor, making it easy to access its rich renewable energy sources like solar, wind, water, biomass, and geothermal resources. This gives Albania a strong advantage in developing renewable energy projects.
With considerable potential in RES, Albania’s long-term energy strategy focuses on three key objectives: promoting overall economic growth, enhancing energy supply security, and protecting the environment. For instance, 2020 Eurostat Data indicates that Albania had the highest share of renewable sources in the gross final energy consumption among the Western Balkans (45.0%), an increase of 13.1 percentage points compared to 2010. Additionally, the Albanian National Statistics Institute (INSTAT) states that during the first quarter of 2024, the net domestic production of electric power reached the value of 2,478 GWh. This was achieved by (i) public hydro plants, which contributed 46.9% of net domestic production, (ii) independent power producers, which contributed 50.3%, and (iii) other producers (photovoltaics), which generated 2.8% of net domestic electricity production.
Recognizing Albania’s great potential for renewable energy and its importance for sustainable growth, banks in Albania have introduced a new lending product – Investment in the Energy sector called Green for Growth Fund (Green Loan) up to the value of EUR 1,000,000.00.
Furthermore…
In addition to the promising data outlined above, the following aspects underline Albania’s attractiveness for investments in the Energy Sector:
- The Government in its General National Plan “Albania 2030” has set Renewable Energy as the key priority, for developing a “Green Energy”- driven economy.
- Incentives, governmental support, and facilitation of investments.
- High-quality experienced engineering and technical workforce, particularly in the hydropower sector.
- Proven record of successful foreign investments in the sector.
Important to note, that Albania has started the EU integration process and the compliance of Albanian legislation with that of the EU. The main instruments of Albanian energy policies include the harmonization of the legal framework of the energy sector with European directives, consumer protection, promotion of energy efficiency, and increased use of renewable resources.
Click here for further information about the additional benefits of investing in renewable energy in Albania.
If you are interested in investing in Albania, it is advisable to consult with the relevant professionals. 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.
