CONSTRUCTION LEGISLATION IN ALBANIA Table of Contents Letter to Stakeholders 3 FREQUENTLY ASKED QUESTIONS (FAQ) 5 Which subjects can exercise requests for construction permits in construction activity? 5 public property sites? 20 Which institucion has the authority to What is the deadline for reviewing licence construction activity? 5 requests for construction permits in private property sites? 20 Which are the main documentes required for license application? 6 What are the tariffs for a construction permit? 20 Which are the tariffs for licensing? 6 What is a utilization permit? 21 What is important to know about the constuction? Requests for utilization permit 21 What is a city planning study? 7 Construction on tourist zones 23 What is an environmental study? 7 What is the tax rate for personal What is the partial city planning study? 7 incomes deriving from ownership transfer of immovable property City Planning 8 titles? 26 What are the city planning conditions? 8 The local tax for “buildings ownership Which are the bases for construcions? 8 transfer right” is incompatible with personal income tax, isn’t it? 27 Which conditions shoud a project meet? 8 Process of approval for construction Is it possible to construct out of city license outside city borderline and planning terrritories? 9 relevant decision making bodies 28 What is KRRTRSH? 9 What is important to know when What are the powers of “KRRTRSH”? 10 opening a new business? Which subjects should register with the Which are the specialized bodies for city national registration center? 30 planning? 11 Which are the legal forms of business? What are the powers of KRRT? 12 31 What are the first necessary steps What documents are required for required for construction? 13 registration? 34 What documents are required in order to What are the registration tariffs? 36 obtain construction site permits? 14 Sources 38 What is the deadline for reviewing Letter to Stakeholders CONSTRUCTION LEGISLATION IN ALBANIA IN LEGISLATION CONSTRUCTION Dear Reader, This booklet presents a summary of the legislation on the Construction Sector to be considered by those thinking of investing or doing business in Albania. We have provided you with this brochure to inform you on the laws and legislation of Albania in regards to the Construction Sector. This brochure is put together in the form of frequently asked questions and the information herein reflects the current legislation as of November 2008. Most of the questions are answered in a short form, therefore, you might deem it necessary to look at the legislation in more detail. We hope you find this brochure very useful in helping you with your investment plans in Albania. I would like to take this time to send a warm felt thanks to our partners and the Albinvest staff who worked restlessly to put this brochure together. As I close this letter, I thank you for taking the time to read this very useful information. Respectively, Viola Puci Executive Director Albanian Business and Investment Agency SPOTLIGHT ON ALBANIA’S CONSTRUCTION LEGISLATION FREQUENTLY ASKED QUESTIONS (FAQ) CONSTRUCTION LEGISLATION IN ALBANIA IN LEGISLATION CONSTRUCTION Which subjects can exercise construction activity? Every Albanian or foreign legal entity or private individual can exercise construction activity in the Republic of Albania in spite of its organization form. Public or private subjects investing in construction with private funds or procuring with public funds, have the obligation to contract only licensed subjects. Which institucion has the authority to licence construction activity? Ministry of Public Affairs, Transportation, and Telecommunication, is the institution with the authority to license construction activity and construction companies. It is with an order from the minister of public affairs that a special structure named “special commission for professional licenses” is created. This commission has the authority to review and approve a license, change the classification of professional license and revoke that license. Which are the main documentes required for license application? The documentation accompanying different applications for license in construction is specified in Decision of Council of Ministers (DCM) nr.42, date 16.01.2008. This decision also approves the regulation with criteria and procedures for issuing professional licenses to legal entities exercising construction activity. Which are the tariffs for licensing? The following tariffs apply to all legal entities obtaining a professional license: 1. First time license to a company 1(one) EUR 2. An addition in the license (category or classification FREQUENTLY ASKED QUESTIONS (FAQ) QUESTIONS ASKED FREQUENTLY level) 1(one) EUR 3. Extension of company license 1(one) EUR 4. Change and addition of technical and legal supervisor 1(one) EUR 5. Change of company name 1(one) EUR 5. Extraction of information from Basic Register 1(one) EUR 6. Duplicate for legal entity 1(one) EUR 7. Re-licensing 1(one) EUR The applicant can pay the above tariff in one of the second-level banks or in the Albanian Post Office which has a special account for the Ministry of Public Affairs and attaches proof of payment to his application. What is important to know about the constuction? What is a city planning study? “A regional city planning study” is a complex city planning which includes the territory of one or some ALBANIA IN LEGISLATION CONSTRUCTION municipalities or districts; “Master plan” is the city planning study for a specific topic which includes the entire national territory or special parts of it. What is an environmental study? “Environmental study” is conducted in order to determine the ecologic conditions of a particular environment. “The general regulatory plan” is a complex city planning study of a restricted territory, including the prospective territory of a city with its suburban zone, the territory of a village, residential area, vacation resort, industrial area, etc. What is the partial city planning study? “The partial city planning study” is a detailed city planning study, based on the general regulatory plan and it includes areas or parts of its territory where regulatory interventions are foreseen. City planning “City planning” is the process of occupying a certain surface area of land for the purpose of construction from simple elements to the final constructions. What are the city planning conditions? “City planning conditions” are obligatory technical conditions to be respected which define the development area of a construction (location in length, width, height, capacity, form, etc.) Which are the bases for construcions? FREQUENTLY ASKED QUESTIONS (FAQ) QUESTIONS ASKED FREQUENTLY All constructions in the territory of the Republic of Albania are based on regional and environmental city planning studies, on master plans, general regulatory plans, partial city planning studies in the stage of project ideas, technical project and application project. Which conditions shoud a project meet? All projects for any kind of on-the-ground or underground construction and engineering infrastructure in all the territory of the country are based on technical rules and conditions as well as legal and sub legal acts in force. Is it possible to construct out of city planning terrritories? It is possible to construct out of urbanized territories only in those cases when such territories are specified in regional studies and master plans approved by relevant competent authorities. When preparing regional ALBANIA IN LEGISLATION CONSTRUCTION studies and master plans, exclusion from construction applies to agriculture land of the first, second, third and forth category as specified in a technical report from the regional department of agriculture and food in a specific region as well as protected natural areas. What is KRRTRSH? It is the highest governmental body which approves urban studies. KRRTRSH stands for Keshilli i Rregullimit të Territorit i Republikës së Shqipërisë (Council for Territory Regulation of Republic of Albania). KRRTRSH is a decision-making body with the Council of Ministers. The Prime Minister is the Chairman of KRRTRSH. The composition, number of members of KRRTRSH and their respective remuneration are approved with a Decision of Council of Ministers (DCM). What are the powers of “krrtrsh”? KRRTRSH- approves the following studies: • Projects tasks for studies approved by this body • Regional city planning studies • Master plans for areas with a surface over 10 hectares. • Regional and partial city planning studies for development of tourist zones. • Master plans for development of tourist zones. • General regulatory plans, borderlines of constructors and suburban borders of cities which are administrative centers of a region and those of other cities with a population of over 10 000 inhabitants. • City planning studies for centers of cities with a population of over 50 000 inhabitants FREQUENTLY ASKED QUESTIONS (FAQ) QUESTIONS ASKED FREQUENTLY • Studies of partial city planning inside cities with a surface area of over 15 hectares. 10 • Studies for city parks, national parks and wildlife sanctuaries of biodiversity and protected natural areas • Regional studies for harbors, airports and strategic zones. • Project ideas of general studies for road infrastructure, railroad, electricity, water-supply, canalization, phones, gas and oil pipelines, inside and outside the city areas • Construction sites and projects for constructions therein with a surface of over 0.5 hectares,