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Doing Business in Albania Guide 2017

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Doing Business in Albania Guide 2017 www.pwc.com/al Doing Business and Investing in Albania 2017 Edition Partner’s letter I am delighted to present the guide to “Doing Business and Investing in Albania”. The guide is intended to be of interest to business owners and investors looking to enter or grow their operations in the Albanian market. Albania is a small country in South Eastern Europe that has been striving to improve its business, legal and tax climate in order to enhance its attractiveness to prospective foreign investors. Indeed, in the 2017 ‘Index of Economic Freedom’ Albania ranked 13th in the world in terms of trade freedom1. Albania continues to develop as an attractive destination for foreign direct investment in the region, despite strong competition with a number of neighbouring countries, which has led to a steady growth in GDP. The PwC Albania team has brought together all of their experience and knowledge to design this guide and to provide a high level overview of the main issues and features that we believe every investor should consider before entering the Albanian market. The guide provides some basic information about Albania and its people, reviews the key business conditions in the country and then delves into the most important trade, legal, labour and taxation regulations in the Loreta Peçi country; which every prospective investor should keep in mind. Country Managing Partner In particular, it contains a section dedicated to foreign investment, with a Tax and Legal Services discussion about the various incentives and favourable treatments that are Albania and Kosovo available to prospective investors. As an example, a recent law on tourism encourages foreign and domestic investors to consider Albania as a business destination by providing very competitive investment terms aimed at transforming the tourism business in Albania into one of the most important sectors of the economy. The information provided is not an exhaustive description of all the business, legal and tax regulations in Albania. Therefore, should you need any specific assistance or would like to inquire in more detail about any specific topic in this guide, please do not hesitate to get in touch with our team. We are always ready to assist you. On behalf of PwC Albania, I wish you all the very best with your endeavours in Albania. 1 http://www.heritage.org/index/ Doing Business and Investing in Albania 3 Content 6 Office Location 22 6 Business entities 7 Investing in Albania – Highlights 6.1 Business registration 22 8 1. Albania – a profile 6.2 Forms of business entities 22 1.1 Introduction 8 6.3 Regulatory environment 24 1.2 People 8 26 7 Labour relations 1.3 Governing structures 9 7.1 Labour 26 1.4 Legal system 9 7.2 Employment contracts 26 1.5 Economy 10 7.3 Public holidays 26 1.6 Trade 12 7.4 Employment of foreigners 27 1.7 Energy and mining 13 28 8 Taxation 14 2 Business environment 8.1 Profit tax 28 2.1 Business environment 14 8.2 Transfer pricing 30 2.2 Information, communication & technology 15 8.3 Personal taxation 32 16 3 Foreign investment 8.4 Withholding tax 34 3.1 Attracting foreign investment 16 8.5 Social and health contributions 35 3.2 Investment incentives 17 8.6 Value added tax 36 18 4. Banking and finance 8.7 Excise duty 38 4.1 Banking system 18 8.8 Local taxes and tariffs 39 4.2 Central bank 18 42 9 Accounting and statutory audit 4.3 Insurance market 19 9.1 Accounting and financial statements 42 4.4 Supervision authority 19 9.2 Statutory audit 42 4.5 Latest developments 19 44 10 Introduction to PwC 4.6 Leasing companies 19 10.1 PwC in Albania 44 20 5 Importing and exporting 46 11 Corporate social responsibility 46 5.1 Legislation 20 47 Appendice 47 5.2 Prohibitions and restrictions 20 5.3 Customs duties 20 5.4 Customs regimes 21 5.5 Documentation and procedures 21 4 Doing Business and Investing in Albania Doing Business and Investing in Albania 5 Office Location Investing in Albania – Highlights Albania is a country with clear potential Albania’s favourable climate and Albania’s stable economic situation for economic growth and development. abundance of natural resources offers has resulted in one of the lowest Located in the Western Balkan development opportunities in sectors inflation rates in the region (1.3% in Peninsula, its geographical position is such as energy, mining, agriculture 2016) and a consistent annual growth perfect for quick access to the markets and tourism. The country offers a rate of around 3.4%. With 38 double of Italy and Greece, as well as overland professional and skilled labour force tax treaties and other bilateral and into other European Union countries. with an average salary of around EUR multilateral agreements, coupled with It is also a crucial transport hub, with 300 per month enabling investors to recent changes to investment laws that Durres and Vlora ports linking up to consider Albania as a viable option promote investment incentives, Albania the regional road corridor networks for the manufacture, production and has created an amicable and liberal and enabling access to the sea to other processing of goods and services. business environment for those looking landlocked Balkan countries. to invest. Currently, Foreign Direct Investment is one of the highest in the region, with EUR 880 million invested in 2015. Contact details PwC Albania Tirana Str. Ibrahim Rugova, Sky Tower, 9/1 floor Tirana, Albania Telephone: +[355] (4) 2 242 254 Fax: +[355] (4) 2 241 639 E-mail: [email protected] Web: www.pwc.com/al 6 Doing Business and Investing in Albania Doing Business and Investing in Albania 7 1 Adult education is also possible for those composed of the Constitutional Court, Court decisions are issued from First Albania – a profile adults who either did not complete their the Supreme Court, First Instance Instance Courts, Courts of Appeal, and basic education or those who wish to Courts and Courts of Appeal. the Supreme Court. continue with their learning. As of September 2017, the Government The Constitutional Court, which is not Not long after independence Albania and 1,500mm annually, with the higher There are about 2000 schools consists of 11 ministries. Whereas, the part of the ordinary judicial system, 1.1 Introduction became a communist state, led and levels of rain falling in the north. Nearly throughout the country (approximately unicameral Parliament consists of 140 has a specific role and has jurisdiction dominated by Enver Hoxha (d. 1985). 95% of the rain falls in the winter. 1500 schools for Basic Education, and seats based on a closed list proportional over the review of constitutionality The Republic of Albania was founded History 500 Secondary Education schools), representation system, where all of law and other normative acts. in 1991 and the former communist Albania falls within the Central and 38 universities, (15 public and Parliament members serve a four-year The Constitutional Court guarantees The history of Albania begins to take party was removed from power in European Time Zone (GMT +1) and 23 private ones) with approximately term. and upholds compliance with the shape around 3000BC. The Illyrians the elections of March 1992, amid between April and October switches to 146,000 students registered for the Constitution and has the ultimate were the first to populate Albania at the economic collapse and social unrest. daylight savings time, i.e. GMT +2. academic year 2015/2016. power to interpret its content. beginning of the Bronze Age, an Indo- Further crises followed during the Individuals or legal entities can also European people who settled in the 1990s, peaking in the 1997 financial Living standards Balkan Peninsula. The name Albania pyramid schemes scandal, and led to 1.4 Legal system address the Constitutional Court if (in Albanian: “Shqipëri”), derives from a mass emigration of Albanians from 1.2 People In 2016, Albania’s GDP per capita was they claim that the right for a fair legal process has been violated. one of the Illyrian tribes called “Albano” the country; mostly to Italy, Greece, EUR 3,781 p.a. The data generated from The Albanian legal system has a meaning the “Land of Eagles”. Switzerland, Germany and the U.S.A. Population the Ministry of Finance shows a 3.4% civil law system. All legal acts must Judicial system growth in economy. be in compliance with the Albanian In 1190 the first Albanian medieval Albania became a full member of NATO Albania has a population of just under Constitution which is the highest law in The judicial system consists of the First state, the Principality of Arbër, was in 2009 and in June 2014 was granted three million people, of which nearly a The minimum wage in Albania is the legislative hierarchy. International Instance Courts, the Appeal Courts founded, with Kruja city as the capital. candidate status to the European Union. third live in Tirana, the capital city. approximately EUR 185 (ALL 24,000) treaties and conventions ratified by In the middle ages, the name Arbëri was per month while the average monthly and the Supreme Court. The First Language the Parliament prevail over the local increasingly used to refer to the region Geography and climate salary in the public sector is around Instance Courts and the Appeal Courts legislation, apart from the Constitution, now comprising the nation of Albania. EUR 410 (54,500 ALL) and around EUR judge cases under three jurisdictions: Albania is located in South East Europe The official language in the Republic of in the event of an inconsistency with the Albania is Albanian (locally referred as 320 in the private sector (ALL 42,500).
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