1 Country profile Potential p. 9 p. 24 investment sectors

Economic trade Economic zones p. 10 integration p. 38

Top 10 reasons to Potential projects p. 12 invest in p. 42

Investment and Investors already p. 14 business climate p. 47 in Albania

Macro-economic AIDA’s business card p. 22 indicators p. 48 Albania is opening a new chapter on foreign investments. As a result the Albanian Government is fully committed to be a partner to investors. A determined and reliable partner, Over the last 22 years, Albania has experienced a difficult ready to assist, listen, and above all to help overcome all the transition shifting from a centrally planned economy to an obstacles to a free and competitive market. Today we are fully open-market economy. During the transition process, Albania aware that in order for the economy to make a quality jump, has encountered many successes and hardships. astrong partnership between the public and private sector must be established, to address the mistakes of the past and With the EU ambition in mind, the Government of Albania to build a new future together. has committed itself to create a more competitive investment climate, by undertaking qualitative changes in procedures and Over the next two generations Albanian income per capita will legislation, and undertaking the structural reforms needed to merge with that of the EU. This will mean much greater rates reshape the business climate and environment. of growth and returns than the EU average. The foundation of this successful evolution will be the establishment of a new As a result of this, the factors of economic growth in Albania government - business relationship, and a new level of active are changing focus. The new economic model of the country cooperation. will focus on more productive inputs of economic growth, replacing the unproductive ones over the next few years. Today Albania is more open than ever to investors and Our midterm objective is to return to 5-6% annualized rates this readiness will determine the economic success of the of economic growth, with a much more diversified economy country. Namely for this reason, today more than ever, we using the full potential of the country. want to invite you to discover why Albania is a country of opportunities. Foreign investment is a key factor for the new government. Not only because FDIs provide liquidity, employment and Arben Ahmetaj development to countries, but especially because they help raise performance level of economic sectors. Minister of Economic Development, Trade and Entrepreneurship

7 Montenegro

MalesiMalesi TropojeTropoje e Madhe

HasHas

PukePuke

KukesKukes ShkoderShkoder

LezheLezhe

MirditeMirdite

DibreDibre Shengjin KurbinKurbin

MatMat

KrujeKruje

BulqizeBulqize Macedonia

TiraneTirane DurresDurres

LibrazhdLibrazhd KavajeKavaje ElbasanElbasan

KucoveKucove

LushnjeLushnje

PogradecPogradec BeratBerat GramshGramsh

DevollDevoll SkraparSkrapar FierFier

KorceKorce

KulonjeKulonje

Mallakaster VloreVlore PermetPermet

TepeleneTepelene

DelvineDelvine

GjirokasterGjirokaster

Greece

SarandeSarande

8

Country profile

General Information Political System • 2 Surface area: 28,748 km • The Albanian government is a • Length of coastline: 316 km parliamentary republic • Capital city: • It’s President since 2010 is • Currency: (ALL) HE Mr. Bujar Nishani • It’s Prime Minister since 2013 is HE Mr. Edi Rama

SLOVENIA

CROATIA

ROMANIA

BOSNJA SERBIA Location HERZEGOVINA Climate Time zone: GMT +1 hour • Albania has a mild climate with 270 MONTENEGRO • Situated in south-eastern KOSOVO to 300 days of sun per annum. BULGARIA • MAQEDONIA Borders the Adriatic and Ionian Seas

• Directly borders Greece, Macedonia, ITALY ALBANIA Montenegro and Kosovo

GREECE TURKEY

Population Natural Resources • Language: Albanian • Albania is a country that is rich in natural • Total population: 2.8 million (2012 resources data from INSTAT) • Key resources include petroleum, gas, • Median age: 31.2 years (2013 data bauxite, chromium, copper, iron ore, from CIA Fact book) nickel, salt and timber • Literacy rate: 96.8 % (2011 data from • It also has the potential to produce CIA Fact book) significant amounts of water, wind and solar energy

9 ECONOMIC TRADE INTEGRATION

Albania benefits from extensive Free Trade Agreements with: IRELAND

LITHUANIA

- The EU UNITED KINGDOM - Central Europe (through CEFTA) BELARUS NETHERLAND - Europe (through EFTA) BELGIUM POLAND - Turkey GERMANY

CZECH REPUBLIC UKRAINE This gives investors free access to over 600 million customers.

FRANCE

SWITZERLAND AUSTRIA MOLDOVA Albania is also a member of World Trade Organization (WTO) HUNGARY and applies WTO rules to all import licensing. SLOVANIA CROATIA ROMANIA

BOSNIA SERBIA

SPAIN MONTE PORTUGAL BULGARIA NEGRO KOSOVO

MAQEDONIA

ITALY 2300 KM 2800 KM 2300 KM 1700 KM 1200 KM 600 KM 230 KM ALBANIA

GREECE TURKEY

Top 10 reasons to invest in Albania

SLOVENIA STRATEGIC LOCATION IN CROATIA FREE MARKET ACCESS 1 ROMANIA 2 SOUTH-EASTERN EUROPE • The Albanian economy is BOSNJA SERBIA HERZEGOVINA Albania has immediate access to completely open and characterized by fully liberalized trade markets in the Balkans and Europe MONTENEGRO KOSOVO • It is located at the heart of several • It is among the most resilient south- BULGARIA MAQEDONIA major transport corridors ADRIATIC SEA eastern European economies

• It has immediate access to Pan ITALY ALBANIA • It was the only economy in the European corridor number VIII region that did not enter recession TURKEY • It is an entry gate to global markets GREECE during the global economic crisis through its four ports.

BUSINESS–FRIENDLY 3 ENVIRONMENT • Albania provides tax benefits to investors in key strategic sectors • It also has an attractive incentives scheme for investors • There is an efficient online tax system • The country’s legal framework for business is fully compliant with EU legislation

4 ONE-STOP SHOP MODEL 5 LARGE SELECTION OF • Registration of a new business in INVESTMENT OPPORTUNITIES Albania only takes 24 hours Albania has a range of public-private • It only costs 100 Lek (<€1) investment opportunities • Albania also has fast and • It also has a range of opportunities in transparent business licensing stable and growing sectors such as: through its National Licensing •*Renewable energy, *Mining, *Tourism, Centre *Manufacturing, *Agriculture, *Transport & logistics, *ICT services

12 Top 10 reasons to invest in Albania

6 SUPPORTIVE FDI LEGAL 7 FAVOURABLE TAX SYSTEM FRAMEWORK • Albania’s corporate tax rate is only 15% • No prior government authorization is • The progressive personal tax rate is required for investments in Albania between 0%and23% for high earners • All sectors are open to foreign investors • Albania has double taxation treaties • Albania imposes no limitations or with over 30 countries restrictions on foreign companies • The tax system does not distinguish • There are no restrictions on profit between foreign and domestic and capital repatriation investors • Albania offers special state protection to all foreign investors

8 COMPETITIVE WORKFORCE • Albania has over 1 million well-educated, highly-motivated professionals • English, Italian and Greek are all widely spoken while French and German are taught at school • 57% of the population is under the age of 35 • Each year, more than 100,000 students enroll at university • Albania has one of the lowest minimum wages in the region at 157 Euros per month

RAPIDLY IMPROVING A GLOBAL-RECOMMENDED 9 INFRASTRUCTURE 10 TOURIST DESTINATION • There has been significant investment • Albania was listed fourth on the in the infrastructure of the transport, New York Times’ “52 places to go telecommunication and energy in 2014” sectors • It was a top destination • Albania has well-developed, low- ‘Frommer’s Travel Guide’ in 2012 cost sea transportation facilities • It has also topped the Lonely • It also has direct delivery Planet’s annual list of top 10 places mechanisms to most EU countries to visit (2011)

13 INVESTMENT AND BUSINESS CLIMATE A SUPPORTIVE LEGAL FRAMEWORK ON FOREIGN INVESTMENT No prior government authorization is needed for foreign investments and no sector restrictions apply Albania: an increasingly free economic force

In the Heritage Foundation’s 2014 Index of Economic Freedom, Albania’s Standard & Poor’s CreditWatch/Outlook Action score improved to 66.9 out of 100, making its economy the 54th freest Sovereign Credit Rating economy in the world. Its overall score increased as a result of clear Ratings improvements in its investment and trade freedom. The improvements mean that Albania is now ranked above 18 European countries with an overall “On April 11, 2014, Standard & score that is above the world average. Poor’s Ratings Services revised 2014 its outlook on the Republic 2013 of Albania to stable from B/STABLE/B negative.” B/NEGATIVE/B

54 61 64 68 70 86 87 119 140

Albania Bulgaria Turkey Montenegro France Italy Croatia Greece Russia

Level of economic freedom Doing business 2014 Globally, Albania has a good performance and is ranked 14th out of 189 economies related to investor’s protection ALBANIA 78.1 87.5 92.7 75.6 80 75 70

Business Trade Fiscal Government Monetary Investment Financial BOSNIA & HERZEGOVINA 115 Freedom Freedom Freedom Spending Freedom Freedom Freedom KOSOVO USA 89.2 86.8 65.8 48.1 75.4 70 70 98 115 FRANCE 79.9 82.8 48.4 5.6 76.1 70 70 SERBIA 80 RUSSIA 70 74.6 85.6 61.5 69.4 25 30 MONTENEGRO 34 SERBIA 59.3 77 83.1 38.6 66.9 75 50 GREECE 75.8 82.8 65.9 19.2 76.3 60 50 MACEDONIA 16 MACEDONIA 81 85.9 91.4 70.7 83.5 60 60 ALBANIA 14 TURKEY 67.6 84.5 77.5 63.5 71.8 70 60 BOSNIA AND 55.5 86.9 82.9 27.4 80.1 75 60 HERZEGOVINA

100-80 79.9-70 69.9-60 59.9-50 49.9-0 N/A

Source: 2014 Index of Economic Freedom. www.heritage.org/index/country/albania Source: Doing Business 2014

16 INVESTMENT CLIMATE

For investors, Albania is a highly attractive,growingmarket with stable economic, political and legal structures, as well as a liberalized economic framework and good conditions for doing business. Foreign direct investments (FDI) inflow figure in Albania, for the year 2013, reached 893 million Euro. This represents a considerable increase compared to the FDI figures experienced in 2012. The four sectors that have made the biggest contributionto the value of foreign direct investment (FDI) in Albania are: (1) energy, (2) finance, (3) telecommunications and (4) manufacturing.

FDI Inflow in mln EUR

609.8 688.7 788.5 715.5 727.2 893

2008 2009 2010 2011 2012 2013

Source: INSTAT, , Ministry of Finance, WB

The focus for the future development of the Albanian economy will remain on attracting FDIs with a focus on sectors where the Albanian economy has unexploited potential both in terms of natural resources as well as in developing sectors that are yet not performing to their full potential , such as renewable energy, tourism, agribusiness, infrastructure and services. Albania has adopted a liberal framework which has been designed to create a favorable investment climate for foreign investors.

Double taxation treaties are currently in force with the following countries: • Austria • Belgium • Bosnia and Herzegovina • Bulgaria • China • Croatia • Czech Republic • Egypt • France • Greece • Hungary • Italy • Kosovo • Latvia • Macedonia • Malaysia • Malta • Moldova • Montenegro • Netherlands • Norway • Poland • Romania • Russia • Serbia • Slovenia • South Korea • Spain • Sweden • Switzerland • Turkey • United Kingdom • Ireland • Germany • Singapore • Qatar • Kuwait

17 Albania has bilateral agreements on the promotion and protection of reciprocal investments with the following countries:

• Austria • Belgium • Bulgaria • China • Croatia • Czech Republic • Denmark • Egypt • Finland • France • Macedonia • Germany • Greece • Hungary • Israel • Italy • Luxembourg • Malaysia • Netherlands • Poland • Portugal • Romania • Slovenia • Sweden • Switzerland • Tunisia • Turkey • United Kingdom • United States

A SUPPORTIVE LEGAL • No prior government authorization • In all cases, investments will Foreign investment in Albania is, FRAMEWORK ON FOREIGN is needed for foreign investments receive equal and unbiased therefore, generally permitted and INVESTMENT and no sector restrictions apply; treatment and will have complete treated according to conditions no • There is no limiton the share of protection; less favorable than those which apply foreign participation in a company • In any case foreign investment to domestic investment in similar Albania has a liberal framework (100% foreign ownership is will have a treatment equal to what circumstances, the purchase of which encourages and protects possible); common international practice private residential property is allowed foreign investments. Indeed, law • Foreign investment may not be allows; to foreign investors. However, they no.7764, dated 02.11.1993, was expropriated or nationalised directly • Special state protection through cannot purchase agricultural land specifically designed to create a or indirectly, expect in special replacement with full rights of which can only be rented for up to 99 favourable investment climate for cases that are in the interest of the foreign investors by the Albanian years and commercial property may foreign investors. The law offers public as defined by the law; state in legal and civil conflict with be purchased only if the proposed guarantees to all foreigners (either • Foreign investors have the right to private thirdparties. investment is worth three times the physical or legal persons) who are expatriate all funds and price of the land. willing to invest in Albania. The contributions in kind; provisions include the following:

18 BUSINESS CLIMATE The Government is committed to locating and identifying new resources that will ensure the sustainable development of the economy. Indeed, ongoing reforms have been designed to increase the efficiency of the tax administration and the fight against corruption. Constant dialogue has also been established between the business community and the Government through the creation of a National Economic Council which is chaired by the Prime Minister.

Close co-operation with international organizations such as the World Bank, the International Monetary Fund and the European Union is helping to ensure steady economic development. The implementation of wide-ranging economic reforms is also contributing to the country’s broader social-economic development with the ultimate aspiration being integration into the European Union.

19 National Economic • International Special Advisers to • The registration of a new business Council the Government may be completed within 24 hours • Representatives from the big with a minimal cost of 100 ALL (<€1) National Economic Council private taxpayers (domestic or • This can be done at the service (NEC) is a new and of a high foreign companies) window of the National Registration importance structure of the new Centre’s (NRC) office in Tirana or • Leaders of Business Associations Government. NEC is the highest – at any of the other 32 NRC offices level institutionalized public-private throughout the country dialogue mechanism where the • Requests for licenses and permits business community can represent Administrative Simplification “One may be submitted at the service and voice its concerns regarding window of the National Licensing private sector policies affecting Stop Shop” Centre’s (NLC) office in Tirana or business interest. any of the other X NLC offices The National Economic Council (NEC) Two major initiatives taken by the throughout the country. Prices start has as primary objective the provision Government of Albania, which aim at 100 ALL (<€1) of concrete recommendations for the to improve the business climate, are Government to improve the legal and the establishment of the National institutional framework which has a Business Registration Center (NRC) A FAVOURABLE TAX AND direct impact on the business climate. and of National Licensing Center (NLC). The legislation regarding CUSTOMS SYSTEM The Council is a decision making business registration and licensing body. It consists of permanent procedures is harmonized to the With the adoption of a new fiscal members and temporary members EU standards with focus on the package at the start of 2014, the who belong to the central or local reduction of administrative barriers Government has introduced a institutions, as well as organizations for businesses operating in Albania. number of new business-friendly that want to be represented for initiatives such as: different issues. These two “One Stop Shop”centres • NO VAT on machinery worth over In accordance with the law, NEC is are based on an on line tracking 360,000 € that is used to increase chaired by the Prime Minister and system of documents and entire productivity its members are: registering and licensing process for business in the country. Through • NO TAXES on small businesses • The Deputy Prime Minister this system, every applicant has the with an annual turnover of 2 million opportunity to get acquainted with ALL or less (€0 – €14,000) • The Minister of Economic the documentation that needs to • LOW TAXES of 7.5% for Development, Trade and collect before to apply for registration businesses with an annual turnover Entrepreneurship or receiving a permit/license, as well between 2 and 8 million ALL as to have a step-by-step tracking • The Minister of Finance (€14,000 – €56,000) since the moment of presentation of • The Governer of the Bank of the interested person at the center • NO EXCISE on the fuel used by Albania until receiving of the decision. oil-producing companies. • Representatives of Financial Institutions

20 TYPE OF TAXES RATE Employment/Unemployment rate for the second quarter of 2013: Personal Income Taxes Labor force -1,106,480; Unemployment rate - 12.8% 0 – 30,000 ALL (approx 214 €) 0 % 30,001 – 130,000 ALL (approx 924 €) 13% Age Group Employment % Unemployment % 130,001 – and above ALL 23% 15-64 years 55.2% 16.9% Corporate Profit Tax 15% 15-29 years 37.4% 26.9% VAT 20% 30-64 years 70.5% 14% Customs/Import Tax 0%, 2%, 5%, 6%, 10% or 15%. Gender Excise Tax Depending on goods Female 48.9% 13,7%. Male 69.5% 19,3 % LOW WORKFORCE COSTS AND HIGH AVAILABILITY Source: INSTAT Albania not only offers a highly skilled workforce – it also offers some of the lowest labour costs in Europe. Labour relations between employers and employees are regulated by individual employment contracts in accordance with A STRONG BANKING SECTOR the Labour Code of the Republic of Albania. • Albania has 16 commercial banks, 14 of which are foreign owned WAGES including Raiffeisen, Intesa San Paolo, Societe Generale and Credit Agricole Minimal Wage 21,000 ALL (approx. €157) • Foreign capital in the Albanian banking system reached the level of 93% Average Wage(privat sector) 37,000 ALL (approx.€266 ) • 75% of all invested capital comes from the European Union Source: INSTAT • There are no exchange rate restrictions in Albanian • There is a floating exchange rate regime • More than 6,800 people are currently employed in the financial sector in Albania A THRIVING NATIONAL EMPLOYMENT SERVICE Albania’s National Employment active operations in order to fully Service was established with support employment in line with EU Many powerful European banking As the main actors in the finance two goals: (i) optimising service standards. For more information groups have invested in Albania: sector in Albania, banks have: performance, and (ii) pursuing about this service, please visit: Raiffeisen, 560 branches, http://www.epunesim.gov.al Intesa San Paolo, 830 ATM Pireaus, 5,400 (POS) Societe Generale, Alpha, NBG, Procredit, Credit Agricole, Veneto, Also, many other Albanian and foreign investors have invested in the banking sectors during these 22 years.

21 MACRO-ECONOMIC INDICATORS Standard & Poor’s Ratings “On April 11, 2014, Standard & Poor’s Ratings Services revised its outlook on the Republic of Albania to stable from negative.” Albania has one of the most dynamic, fastest-growing economies in Europe. This is demonstrated in the fact that it has achieved strong economic growth for more than a decade, despite the global economic crisis. Indeed, GDP growth for the period 2000 to 2009 was 6.0 % with more than 3.0 % of this growth occuring in 2010 and 2011.

The macroeconomic situation in Albania is characterized by stable prices, low inflation rates and solid exchange rates. Average annual inflation has remained relatively stable for more than a decade with 2.0 % inflation recorded in 2012 and 1.9% recorded in 2013.

GDP Growth Unemployment (%)

7.5 13.8

13.5 5.9 13.3 13.3 13.2

3.8 12.9 3.3 3.1 12.7

1.3 0.7

2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013

Inflaytion Rate Exports by year (min EUR)

3.6 1721.6 3.4 3.5 3.1 1525.6 1405.5

2.3 1171.5 2 1.9 917.5 786.3 750.7

2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013

Albania’s domestic currency

The Lek – is extremely stable, with €1 being the equivalent of 140.0 ALL throughout 2013

23 POTENTIAL INVESTMENT SECTORS

• RENEWABLE ENERGY • MINING INDUSTRY • TOURISM • MANUFACTIRING • AGRICULTURE • TRANSPORT & LOGISTICS • ICT SERVICES RENEWABLE ENERGY

Albania is the most dynamic renewable energy country in Europe. Through strong political commitment and an ambitious national strategy, the Government has placed renewable energy at the top of the country’s development agenda. The long-term vision of the Government is to position Albania as one of the world’s leading renewable energy-driven economies.

For investors in the renewable sector, the Government of Albania offers the following benefits: Attractive feed-in tariffs for small hydropower plants (HPP) New electricity market laws

Albania has huge potential for hydroelectric energy: Total installed capacity of 1,726 MW Potential installed capacity of 4,500 MW Average power production of 4.2 TWh Potential annual power production of 16-18 TWh Only 35% of hydroelectric energy potential is currently being utilised

Production During the period 2002-2012, there have been noticeable differences in the electricity production

Main indicators of electricity

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Production 3,204 4,974 5,467 5,409 5,516 2,933 3,770 5201 7743 4185 4725 (GWh) Import (GWh) 2,072 937 567 365 633 2,828 2,417 1884 0 3262 2538 Supply (GWh) 5,430 5,900 5,945 5,933 6,121 5,750 6,300 6592 6773 7342 7617

26 HYDROPOWER SOLAR ENERGY WIND ENERGY PETROLEUM AND GAS ENERGY Water resources are amongst Albania is part of the Albania has unexploited wind the most important natural Mediterranean climatic zone. power potential, especially along Albania has a significant volume resources in Albania. Eight This means that it has a hot, the Adriatic Coast where it has a of oil reserves, producing more large rivers, fed by hundreds dry summer followed by a number of areas with very high than 1.2 million tonnes in 2013. of smaller rivers and streams, relatively short and mild winter. wind energy potential. The government has a run through the country from For this reason, the country Key facts to note include: favourable policy to attract the mountainous East to the has very favourable conditions • Average annual wind speed of foreign investment in its Adriatic and Ionian Seas in the for the development of solar 6-8 m/s natural resource sector. The West. The average height of energy including: Albanian oil, gas and by- • Average energy density of the hydro graphic territory of products market is a free and • Average daily solar radiation 250¬600 W/m2 Albania is about 700 m above of 4.1kWh/m2 open and liberalized market, sea level. • Potential for at least 20 oleic predominately operated by • Average sunshine hours per electricity centrals private companies, and where year of 2,400 the Government of Albania

Several domestic and foreign plays only a regulatory role. At present, solar energy investors are licensed to explore is mainly used for heating wind power production in Albania purposes. Photovoltaic energy with the construction of a 150 has still to be properly explored. MW wind farm in the pipeline. By 2020, the Government would like to generate 5% of total electricity from wind sources.

27 • The investment of major operators Indeed, the exploration potential for • Rich in various minerals with MINING INDUSTRY from across the globe including copper is considered very high for a proven record of successful Canada and the U.S.A.; Austria, small- to medium-sized deposits. investments – both domestic and The mining industry has traditionally the U.K. and Turkey; and China There is also high potential for larger foreign – in the sector been the backbone of the Albanian and Australia copper mining operations. economy. With its rich mining history, • Huge untapped potential for further considerable natural reserves and a investments, both in extracting and Key areas of mining include: • NICKEL: Albanian reserves of processing favourable investment environment, nickel are currently estimated at 322 Albania is emerging as a regional • A priority sector for the • CHROMIUM: Albania has large million tonnes of which 220 million and European leader in mineral Government which continues to reserves of chromium currently tonnes are iron-nickel and 102 million production. develop favourable investment estimated at 36.9 million tonnes tonnes are nickel silicate. However, policies of which 12.8 million tonnes have the total potential for reserves is Key facts to note include: between 30% and 42% Cr2 O3. The considerably higher. • Volume of high-quality, • 764 local and foreign companies exploration potential for chromium experienced engineers and other equipped with mining licences is considered high for small- to technical personnel • 154 local and foreign companies medium-sized deposits. There are several • Easy access to international equipped with mining licences for advantages to investing markets search, search-prospection and • COPPER: The copper subsector in in the mining industry in • Cheap labour investment in the prospection Albania is underdeveloped and offers sector sizeable investment opportunities. Albania:

28 TOURISM New York Times In recognition of its outstanding natural beauty, Albania was Albania has flourished as a tourist destination for several listed fourth on the New York Times’ “52 places to go in reasons: 2014”. According to the article entitled “On a rugged shore, • Its favourable geographical position and seasonal climate Europe at its best”: • Its range of archaeological, historical and religious sites • The popularity of its two UNESCO world heritage sites Albania sits ‘on the eastern shores of the Adriatic and has • Its stunning coastline with 316 km of sand and sea limestone-ringed beaches, ancient ruins like Butrint and • Hundreds of beautiful lakes waterfront inns where you can stay for less than $50 a night. • A variety of other geographical features including mountains, lagoons and … Head to villages like , within sight of Corfu, where sand belts you can kayak past Cold War submarine tunnels, swim by For an investor, there have never been more opportunities to abandoned forts and watch the tide rise during a dinner of develop your business in key sectors such as: fresh fish at an inn called the Riviera. This is Europe when it • Sun and sea tourism was fresh and cheap’ • Cultural tours • Nature and adventure holidays including trekking, climbing and rafting • Winter sports • Health tourism • Golf

Number of Foreign Visitors

3.000.000 2.399.362 2.500.000

2.000.000

1.500.000

1.000.000 1.059.456

500.000 January- June July - December

Source: Ministry of Tourism and Urban Development

29 THE FIRST OF THE 10 BEST PLACES TO VISIT IN 2011 Lonely Planet “This country is a dizzying mixof religion, styles, cultures and landscapes, from the Orthodox Sunni Muslim , from idyllic beaches to the peaks of the Rocky Mountains and fields for intensive cultivation.”

ONGOING TOURISM DEVELOPMENT PROJECTS:

SUBDOMAIN CONTEXT: IMPLEMENTER PARTNERS PHASE

Rehabilitation Of Aims to revitalise and Ministry of Urban Donors Duration Durres’ Roman develop one of the most Development and Tourism Private Sector Of Current amphitheatre important archeological Ministry of Culture Phase sites in the country Agencies 2014-2016 Local Government Units Improvement of Aims to rehabilitate this Ministry of Urban Expected the tourism district important and popular Development and Tourism Duration in Kruja zone as well as the Agencies February revitalise the town’s Municipality 2014 – March Ottoman Bazaar which is Partners 2015 400 years old Donors Ministry of Culture Private Sector Construction Aims to build a modern Ministry of Urban Donors Expected of a ski track in ski track through a public- Development and Tourism Technical Duration Dardha, 1600m private partnership. This Agencies Assistance February above sea level will have a direct impact Local Government Units Companies 2014- March on sustainable tourism in Private Sector 2015 the area

A park of wooden Aims to develop a new Ministry of Urban Donors Expected guesthouses model of guest houses Development and Tourism Technical Duration in mountainous areas Agencies Assistance February through public-private Local Government Units Companies 2014- March partnership Private Sector 2015

30 • Experienced employees who MANUFACTURING specialise in finishing, dying and Albania has a strong and sewing shoes by hand Government Incentives vibrant manufacturing sector • Accomplished cut-make and cut- Textile and Footwear Industry Package 2014 which is driven by highly make-trim subcontractors • Continuous investment in new successful enterprises in On April 21st 2014 the government introduced the Package of equipment and technology Textile and Footwear Industry under the slogan “A New Chapter for the textiles and footwear Employment”. The package consist of 42 initiatives in response to the industries. This success Aconsolidated legal industry needs, some of them are: has been achieved through framework in compliance • For the first time, the Government provides a symbolic tariff of € 1 establishing extraordinarily with international standards leasing contract, when renting government property. close relationships with • A one-stop shop dedicated solely to textiles and footwear investors leading Italian brands over • Flexible production in terms of order size has been established within the Albanian Investment Development the past 20 years. • Overnight delivery to EU countries Agency (AIDA). • Excellent low cost transport and • Instant reimbursement of VAT, in the case of taxpayers with a zero Key facts to note about the logistics opportunities risk, and within 30 days in the case of exporter taxpayers. manufacturing sector include: • Experience and tradition mixed with Italian design influence • Simplification of procedures on the Employment and Social Security • Average annual exports of €428 • Government incentives are available • A representative of the Textile and Footwear Association in the million for footwear manufacturers National Economic Council, for an open dialogue, direct and active • Partnerships with major brands and with the Government. retailers throughout Europe • Major markets in Italy, Germany, France, Holland, Denmark and Greece

Key advantages of the textiles and footwear industries in albania • Highly skilled and cost-competitive workforce • High quality products with a history of reliable delivery and short lead times • Produce a wide range of products for men, women and children. • Cover the full production cycle – from design and sourcing to pattern-making, cutting and finishing

31 AGRICULTURE

There are many reasons to invest in the agriculture sector in Albania: • We have fertile soil, a suitable climate and an abundant supply of water, resulting in huge production potential • We produce a range of produce including fruits and vegetables, cooking oils, nuts, herbs and spices, fish and dairy products • The recent development - and future potential - of organic agriculture • The rapid growth of national markets and the accessibility of regional markets • Preferential trade agreements with the EU on the increase in exports • 20,000 ha of agricultural land owned by the government • Low labour wages

32 • Passes through Albania, Macedonia TRANSPORT & and Bulgaria LOGISTICS • Connects Durres and Tirana with Skopje, Sofia, Bourgas, Varna and Albania’s location at the centre of Plodviv a natural crossroad of European transport corridors places the Albania also has several critical country in a unique geographical logistics corridors position. A decade of continuous investment in the country’s One example is the “Durrës - Kukës - infrastructure has boosted the Morinë” corridor which is known as development of the transport sector ‘the nation’s road’. It: which continues to play an important • Is considered Albania’s best role in the broader economic individual link with pan-European development of the country. corridor VIII • Is 170 km long Road transport • Connects the capital – Tirana – with The Albanian national road network the port of Durres and the new state contains: of Kosovo • 3,719 km of roads Work is currently in progress • 1,198 km of primary roads and on the completion of a number 2,083 km of secondary roads of other important corridors • All the country’s primary roads are including: paved to international standards • Between the east and west of • 67% of the country’s secondary Albania, a 64 km road between network are paved to international Lushnje, Fier and Vlore standards • A 63 km road between Qafë Thanë, Pogradec and Korçë Albania is connected to a • A 29 km road known as the ‘Tirana- number of regional logistics Elbasan highway’, an important part corridors of Albania’s Central-Southaxis

The pan-European corridor VIII • A 22 km bypass around the city of Fier, a significant project which This strategic transport corridor is will connect two of Albania’s main critical to Albanian trade. It: highways • Joins the Adriatic Sea to the Black Sea, 33 SEA PORTS RAILWAY TRANSPORT The Albanian railway network Albania currently has ports in four comprises 441km of single main cities - Durres, Vlora, Saranda track rails. The network and Shengjini - with plans for was purposefully built to continuous expansion. serve Albanian industry and connects several important Port of Durres is: cities with the most important • The largest and most important passenger connection port in Albania between Tirana and Durres. • The main gateway to pan- Since 2006, the Albanian European corridor VIII Government has been • Covers 81.8% of all the country’s developing the country’s maritime transport railway network in line • Has a processing capacity of 4 with EU principles having million tonnes per year signed the Stabilization and Association Agreement Port of Vlora is: as part of its progression • Albania’s second largest port towards EU accession. • Primarily a passenger port

Porto Romano: • Located 6.5 km in the north of the city of Durres. • It’s infrastructure supports coastal deposits of oil, gas and of their by products and L.P.G

Petrolifera Port: • Terminal port for petroleum and by-products and LPG, in the Vlore Bay. • Access with Corridor VIII • Positioned nearby the Greek and Italian refineries.

34 AIR TRANSPORT Key facts to note include: Airlines routes

Tirana International Airport – • 32 km (45 minutes) from Durres, • Total Aircraft movements of • Regular routes for 2012: named after Mother Teresa the country’s biggest port 20,528 in 2012 18,832 • is located in an excellent • Located at a major crossroad • Total passenger volume of geographical position at the between northern, southern, 1,665,331 in 2012 central and eastern Albania heart of Albania. It is: • Total cargo volume (in tons) of • 17 km (30 minutes) from the • Located very closely to Albania’s 1,875 in 2012 heart of the capital city core industries which are mostly located in or around Tirana

35 TELECOMMUNICATIONS

ICT SERVISES Albanian telecommunications services include fixed telephony and ICT sector remains on the mobile telephony. The main operator focus of Government plans. of fixed telephone is Albtelecom The Government will work on Sh.a., governed by CETEl a.s with three main directions to set 76% of shares, and the rest of the measurable objectives: shares of 24% are owned by the Albanian government and other To improve and promote stakeholders. digital services, e- services for citizens and business. Operators Abcom, ASC, Nisatel, Priority will be the increase Primo and AMC Fix (in December of transparency and 2011 began providing fixed improvement of public telephony services, with landline administration services in numbers using GSM network) are accordance with the principles the five most alternative operators of Open Government owning about 67% of the number Partnership initiative. of telephone subscribers alternative fixed operators, or in other words, The massive introduction holding about 17% of the total fixed of services in education to telephony subscribers. overpass the digital divide and to enable youth. Policies will For the year of 2012, the be oriented towards improving ALBtelecom made significant and expanding human investments in fiber optics networks capacities in order to increase (network already reaches 3000 km the number of users and the across the country and 600 km number of local providers international network linked with of e- services. This way will neighboring countries) and migration encourage the creation of jobs from PSTN / TDM in NGN /NGA, in this field for the Albanian, from the traditional network based regional and wider markets. on IP. This migration, which until now has been done by some incumbent The consolidation of digital operators in Europe, ensures the infrastructure in the territory provision of fixed-line broadband of the Republic of Albania, customers and represents a strictly respecting European significant achievement for the principles of free and fair market by aligning our country with competition. the most advanced technology in Europe and beyond. 36 MOBILE TELEPHONY offered through ADSL and the Hybrid Fiber-Coax. According to Electronic Mobile telephony has greater use and Postal Communications Authority in Albania compared with other – (AKEP) data, with the increase of the countries in the region. Mobile broadband Internet users for the year operators are: 2011, their number reached 161,000. The number of broadband lines per Year 3G 100 inhabitants rose to around 4.3%, Mobile Operators Licensed Services compared to 3.7% that was at the end of 2010. Albanian Mobile Communication 1996 Yes (AMC) The total number of subscribers to Vodafone Albania 2001 Yes broadband Internet access at the end of 2012, amounted to about 215 thousand Eagle Mobile 2008 Yes which shows an increase of about 24% Plus 2009 No compared to 2011, and the number of Communication mobile users who use Internet GPRS

/ EDGE (2.5 G) in 2012, amounted to about 1.4 million from 1.2 million in At the end of the year 2012, 2011, which shows an increase of 15% the number of mobile phone compared to 2011. users (active SIM cards) reached about 5.6 million, increased by about 7% compared to the year The leading internet service 2011. While the number of active providers: subscribers (subscribers who have used mobile services in the last 3 months) reached 3.5 million, which Albtelecom www.albtelecom.al represents an increase of 14% Albaniaonline www.albaniaonline.net compared to 2011. The number of Abcom www..al users per 100 inhabitants at the end Abissnet www.abissnet.com.al of 2012 was 125% as measured by Interalb www.interalb.net active users, approximately the same as the average of the EU countries. Primo www.primo.al

INTERNET SERVICE

According to data pertaining to the first half of 2010, 96 Internet providers are currently operating in Albania. Most of the providers are located in Tirana and other cities in western Albania. Internet is mainly

37 ECONOMIC ZONES Economic Zones with the status of One of the Albanian “industrial parks”: Government’s Malesi e TropojeTropoje 1. Location: Koplik, Shkodra objectives is the Madhe • Surface Area: 61 hectares HasHas • State-Owned ShkoderShkoder development of PukePuke 2. Location: Shengjin, Lezha KukesKukes • Surface Area: 3.2 hectares economic zones • State-Owned LezheLezhe (i.e. industrial parks MirditeMirdite 3. Location: Spitalle, Durres DibreDibre • Surface Area: 850 hecatres and free zones) KurbinKurbin • 520 hecatres State-Owned MatMat KrujeKruje on the basis of BulqizeBulqize 4. Location: Vlora DurresDurres • Surface Are: 125 hectares public-private Tirane • State-Owned TiraneTirane LibrazhdLibrazhd 5. Location: Shkodra partnerships. The KavajeKavaje PeqinPeqin • Surface Area: 137 hectares ElbasanElbasan • 11.3 hecatres State-Owned Government has LushnjeLushnje PogradecPogradec KucoveKucove GramshGramsh 6. Location: Lezha approved nine • Surface Area: 54.3 hectares FierFier BeratBerat • State and Privatly-Owned KorceKorce economic zones, DevollDevoll Mallakaster SkraparSkrapar 7. Location: Laknas,Tirana eight of which • Sufrace Area: 9.48 hectares KulonjeKulonje • Privatly-Owned TepeleneTepelene have the status of VloreVlore PermetPermet 8. Location: Rrashbull, Durres • Surface Are: 16.5 hectares “industrial parks” GjirokasterGjirokaster • State-owned and one of which DelvineDelvine Economic zones with the status of “free zone”: has the status of 9. Location: Vlora SarandeSarande • Surface Area: 478.14 hectares “free zone”. • State and Privately-Owned

40 Accelerating economic development through privatisation

In the context of promoting better property management, increasing transparency and strengthening the fight against corruption, the Albanian Government has created an inventory of state assets which can be accessed online.

To accelerate the privatisation of these assets, the Government has agreed to: • The sale of 10 commercial companies with 100% state-owned shares • The sale of 10 Joint Stock Companies with 50% or less state-owned share

Three industries which have significant opportunities in Albania :

Insurance: Telecommunications: Water Supply and Transportation: INSIG Sh.A is the only state- Albtelecom is a state-owned The Government has owned insurance company in telecommunications company introduced a concession for the marketplace. It operates which the Government would the development of a ferry in Albania, Kosovo and in like to privatise terminal in Durres Macedonia, and offers life and It would also like to privatise non-life insurance products water supply systems in Berat and Kucove.

41 POTENTIAL PROJECTS 43

WBR

CROATIA

BOSNIA AND ROMANIA HERZEGOVINA

IAP SERBIA RENEWABLE ENERGY:

WBR Key hydropower sector projects include:

MONTENEGRO PROJECT CAPACITY RESEARCH KOSOVO Vjosa River 300 MW Yes Drini i Zi River 200 MW Yes BULGARIA IAP MACEDONIA ADRIATIC SEA Key electricity transmission projects include:

ITALY PROJECT CAPACITY RESEARCH Albania – Italy 400 kWh No ALBANIA TAP Albania – Macedonia 400 kWh Yes AlbaniaTURKEY – Kosovo 110 kWh Yes GREECE

44 TRANSPORT & Transport investment LOGISTICS opportunities

ONGOING HIGH PROFILE • A road maintenance public- PROJECTS private partnership / concession between Milot, Rrëshen and 1. The Trans Adriatic Pipeline (TAP) Morinë. Preliminary investment is 2. The Ionian Adriatic Pipeline (IAP) estimated to cost between 60 and 90 million Euros. The TAP project is a very important investment for Albania. It will bring • An extension of the “Tirana-Durres” natural gas from Azerbaijan to highway featuring three lanes on Europe, starting in Greece and each side. This contract is worth crossing Albania and the Adriatic between 100 and 120 million Sea before coming ashore in Euros. southern Italy. This will allow gas to flow directly from the Caspian region to European markets. “ARBRI ROAD” PROJECT

To demonstrate its commitment • This is a primary road which provides to the region, TAP signed two the quickest link between the port Memoranda of Understanding and of Durres and the Republic of Cooperation with developers of the Macedonia. It is, therefore, of great Ionian Adriatic Pipeline (IAP). strategic importance to the country.

Using the TAP, the IAP project • The objective is to establish a aims to deliver gas to northern sustainable transport route which Albania, Montenegro, Bosnia and is safe, environmentally friendly and Herzegovina, and Croatia. helps to promote the economic development of two regions – Mati and Diber. It will shorten the distance *Source: (http://www.trans-adriatic- between Tirana and Diber from 173 pipeline.com) km to 74 km.

45 “NORTH – SOUTH ROUTE • Funds Required:1,1 billion Euro ( • Within the framework of SEETO, • Situated on the south of Kukes, OF ALBANIA” PROJECT including the construction cost, the focus was on the in “Fusha e Meteorit” port yards, pier and tourism port, “Blue-Highway Concept” improvement of the core railway • 3 km from the city Kukes installation, machinery etc) network in the region, (corridor • 45 km from Prizren, Kosovo • The development of the Shengjini VIII and Corridor X relation with • 120 km from Pristina Kosovo • The north-south route of Albania zone provides great possibilities Montenegro line) as an important is one of the main arteries of the for the development of the form of transport to increase “Saranda Airport” country’s road network. Starting northern area of Albania. The port trade in the region and linking the on the border of Montenegro Saranda Airport located in the will be the largest employer, both region with the European Railway and ending on the Greek border, southern part of Albania, operates in the region and in the country. Network. it covers more than 80% of the for emergency landing (Field of It increases the possibility of the • The use of trains for freight populated area and 90% of Vrion). After the independence of development of tourism, trade, transport is growing due to the Albania, Saranda’s aerodrome was industrial, agricultural and coastal the housing construction sector, link with Montenegro which serves never used and to this day it still activities agriculture etc. as the international link to the rail stands above the old infrastructure. • The objective is to establish a • The New Port of Shengjin project network for the export-import The aerodrome is surrounded by sustainable transport route in line is planned to modernize the goods. (International freight trains agricultural land which is state with European and international design standards. All port facilities are 50 % of total trains of Albanian property. standards, and to contribute to will meet all the requirements Railway) • 3 km east of the Saranda city the establishment of a unique of an international port in terms • This Project is in line with the • 6 km from the national road economic area on national, of construction and function. long-term vision of the Albanian • 20m above sea level. regional and pan-European levels The structures of the port will be Government for the railway • Field dimensions are 780 x 70 m. • A feasibility study and detailed designed to conform organically to sector which is the revitalization, design for the whole corridor is the coastal relief. restructuring and the integration Basic Data required for this project • In addition to the port yards, the of Albanian railway network into • Runway landing length: 1800 m port has available a coastal area the regional and European railway • Runway landing width: 36 m SEA PORTS PROJECTS: 2 network. of (5000 x 300) m = 1,500,000 m Source: Institute of Statistics (INSTAT) and behind the tunnels there is • Requires necessary Port of Saranda: large free area for the storage of measures that shall ensure the • The most southern port goods on Kakariqi plain. development and promotion of CONCEPT PROJECT • Operates only for tourist and the railway transport and other South Tourist Airport: Saranda- passenger transport combined forms of transportation, RAILWAY PROJECT: as a mean to ensure transit Gjirokaster through Albania. Port of Shengjin: The Project of Railway • The northern port of Albania and Infrastructure AIRPORT PROJECTS the closest to Kosovo, Republic of • The railway network is an Macedonia and Serbia and other important part of the South East regional countries. Europe Transport Observatory “Kukes Airport” • Three types of activities planned: (SEETO) initiative of the European Kukes Airport located in the fishing, passenger transport and Union. northern part of Albania, operates stevedoring only for emergency landing. 46 INVESTORS ALREADY IN ALBANIA

and more ...

47 AIDA’s BUSINESS CARD

Albanian Investment Development Agency

Blv Gjergj Fishta, Pall. Shallvare. Tirana, Albania Tel: +355 (0) 42251001 / Fax: +355 (0) 42250970 E-mail: [email protected] / Web: www.aida.gov.al ALBANIAN INVESTMENT DEVELOPMENT AGENCY:

• Government Agency: - Promote and support exports of - Promoting Albania Internationally “Made in Albania” goods - Increasing awareness of Albania as an investment destination • “One-Stop-Shop” for investors and - Facilitate and support direct business free of charge investment in Albania, before, during & after investment process “Trusted moderator” between - Increase the competitiveness Investors, Government and Local of small and medium-sized companies enterprises

Investors

Local Goverment AIDA Companies

TRUSTED INFORMATION PROJECT MANAGEMENT • General data SUPPORT THROUGHOUT THE • Information about business INVESTMENT CYCLE conditions and opportunities in Albania INVESTOR AND “AFTER SALE CARE” SERVICES • Detailed statistical and survey data about Albania and its key sectors

COMMUNICATIONS • Access to the Albanian Government at all levels • Links with potential partners

49