Albania

Ease of Doing Business Rank: 82

Overview

 

Geographic location

The Republic of Albania is a Southeastern European country on the Balkan Peninsula.

Montenegro and Kosovo lie to the north, the Adriatic Sea and Italy lie to the west, Greece lies to the south and North Macedonia lies to the east.

Spoken language

Albanian is the national and official language, spoken by almost all the population. Minority languages include Greek, Macedonian, Romani, Serbian and Aromanian.

Foreign languages include Italian, English, French and other European tongues.

Population

The 2020 population estimate is 2.88 million.

According to Institute of Statistics 2019 data, Tirana is the largest city (858,262), followed by Durrës (201,519) and Vlorë (141,513).

Popular industries

The top industries in Albania are energy, mining, metallurgy, agriculture, tourism, agriculture, food processing, lumber, oil, cement and chemicals.

Education

The Legatum Prosperity Index ranks Albania’s educational system 50th out of 167 countries.

Popular entity types

The most common type of business entities in Albania are Limited Liability Company and Joint Stock Company.

The majority of businesses are in the form of a Limited Liability Company.

Albania incentives for business

Albania offers corporate income tax exemptions to entities involved in particular activities. These include educational, humanitarian and scientific endeavors by international organizations.

They also offer CIT exemptions to companies invested in the agricultural and industrial sectors and technical cooperation. Non-banking institutions and foundations supporting government development policies through lending may also qualify.

Albania also provides CIT exemptions to qualifying companies through the National Cinematographic Centre for film studios, cinematographic productions and other related activities.

Qualifying hotel and resort companies may enjoy a 10-year exemption, providing they obtain a four- or five-star status.

Albania only applies a tax credit against Albanian income earned if the foreign company qualifies under a Double Tax Treaty.

History & Features

 

Main cities for business

Tirana is the capital and financial center of the country.

Popular historical & tourist attractions

Albania is a small nation and relatively untouched by tourism until recent years. However, it has plenty to offer including 4 UNESCO World Heritage Sites.

The historic center of Berat features well-preserved Ottoman period architecture as well as vernacular buildings from the 18th and 19th centuries. Many people still live in the 14th century castle in the region.

Butrint in Southern Albania was once a Greek colony, Roman city and a bishopric. It was also ruled by the Byzantine Empire and the Venetians at one time. The archaeological site in Butrint documents Mediterranean history from 50 000 BC to the 19th century AD.

Albania is also known for its outstanding natural beauty. The winding Llogara Pass rises 1,000 meters above the sea and traverses a national park. Visitors may spot resident golden eagles, European wildcats or fallow deer during their two-hour drive.

The stunning coastline along the Northeastern Ionian Sea is known as the Albanian Riviera. It’s known for its isolated bays, golden sands and turquoise waters. Visitors can still find secluded beaches and quaint accommodation in the region. However, fully-equipped tourist resorts also exist for those interested in nightlife, dining and watersports.

The capital of Tirana mixes old and new. Visitors can see Ottoman, Soviet and Fascist-era architecture as well as the makings of modernist masterpieces. The Blloku Cube will be clad in a facade of aluminum triangles when completed.

The Tirana Pyramid was once a communist museum, but will soon become a tech hub aimed at instruction and education in game development, web design and other digital fields.

Tirana is also home to the National Historical Museum and BunkArt displays which focus on Albania’s former dictator.

History

Documents suggest Romans conquered the resident Illyrians in 167 BC. Romans built roads and towns and the region prospered. When the Roman Empire divided in 285 AD, Albania fell under eastern Byzantine rule.

Germanic peoples, Bulgarians and Normans periodically occupied much of what is now known as Albania from the 4th to the 11th century. Each time the Byzantine Empire managed to reclaim the territory.

However, in 1204 crusaders captured the Byzantine capital of Constantinople. Albania was briefly freed from Byzantine control and many powers struggled to claim the region. Venetian, Greek, Serb and finally Ottoman Turks too hold of the area.

The Ottoman Empire ruled Albania from 1479 to 1912. Albania participated in the Balkan War which also included Montenegro, Greece, Serbia and Bulgaria pitted against the Ottomans. The combined armies overcame the Turks, but Albanians feared their territory would be divided between their allies. They declared independence in 1912.

Britain, France, Germany, Austria and Russia recognized their independence, but not their government. Instead, they appointed a German prince as their leader. However, he fled after six months. By 1918, the country had a provisional government and elections were held in 1920.

A cabinet minister became premier in 1922. However, he lost the 1924 election and fled abroad. He returned that same year, overthrew the government and ruled under as dictator, then declared himself king in 1928.

In 1939, Italy invaded the country and the Albanian king fled. Mussolini installed a puppet government. In 1941, the Communist Party of Albania appeared and subsequently fought the Italians.

When Italy surrendered in 1943 Germany occupied Albania, but were driven out. Albania became a full-fledged Communist regime in 1944 with Enver Hoxha as head of state.

Initially, Hoxha worked with Russia. However, in 1961 Hoxha broke with Moscow and aligned with the People’s Republic of China instead.

After Mao Zedong’s death in 1976 and Hoxha’s death in 1985 Albania introduced minor reforms. However, mass demonstrations in 1990 led to an election in 1991 and a supposed Communist victory. The people rebelled through a general strike and new elections occurred in 1992.

Failed pyramid investment schemes during the 1990s collapsed the government and the country’s finances and impoverished many citizens. Unrest led to the Albanian rebellion of 1997.

The election that year resulted in an overwhelming victory for the opposition and a referendum rejected a return to a monarchy. The former Crown Prince questioned the results and violence erupted.

After the death of the Crown Prince in 2011, the Prime Minister admitted there had been vote manipulation and the monarchy should have been restored. Albanian opposition demonstrations followed in reaction to the alleged electoral fraud.

A new leader came to power in 2013 and won the parliamentary elections in 2017. However, the opposition claimed electoral fraud again.

The 2019 elections led to an opposition boycott. They demanded the resignation of the prime minister, accusing him of repeated electoral fraud and corruption. The country also experienced a devastating earthquake.

Today, Albania operates under a unitary parliamentary constitutional republic, with the president as the head of state. They are a developing country with a modern open-market economy.

Other relevant facts

According to 2011 census, most inhabitants identify as Albanian (83%). The remainder identify as Greek (.9%), Macedonian (.2%), Montenegrin (.3%), Aromanian (3%), Romani (.1%), Balkan Egyptian (14%) and other or no declared ethnicity.

The 2011 census also reports most people identify as Muslim (36.7%), followed by Catholic (15.03%) and Orthodox (21.75%), did not declare a religion (13.79%) or practiced other faiths. However, the small amount of data collected suggests these figures may be inaccurate.

Additional Information for Business

According to Forbes’ 2019 Best Countries for Business, Albania is the 74th best country in the world for conducting business.

The 2019 Index of Economic Freedom rates Albania 52nd globally and states, “Albania has been transitioning to a more open and flexible economic system by implementing substantial restructuring. Progress in income growth and poverty reduction has been considerable.”

World Bank’s “Doing Business” rankings rate Albania 82nd for ease of doing business in the world.

Albania Entity Support Services by Blueback Global

Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.

The common scenarios that may give rise to the need for Blueback Global’s services include the following:

With our integrated approach, you can expect the following experience:

We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Albania. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will of course facilitate all of these, so you do not have to keep track of the compliance dates.

Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.

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