Albania Economia
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The man who helped change the Albanian Constitution speaks about the country’s business strengths and challenges.
Tonucci & Partners was founded in the early 1990s as the ambitious project of an Italian law firm with an international vocation and a particular focus on Eastern Europe. Today the firm has offices in Italy (Rome, Milan, Padua, Florence, Prato, Naples, Foggia), Romania (Bucharest), Serbia (Belgrade) and Albania (Tirana).
Albania Economia interviewed Mario Tonucci.
Tonucci & Partners was a pioneer in establishing offices in Eastern Europe. How did your presence in Albania begin?
We began our professional activity in Albania in 1995. The “EU PHARE” Commission and the Albanian Government selected Tonucci & Partners as legal consultant and coordinator for reforms and improvements to Albania’s economic legislation.
We supervised and coordinated a team of international professionals, specialized in nine different areas of law, working on amendments to existing economic legislation and its alignment with European standards. We actively participated in drafting some of the most important Albanian laws, including the 1998 Constitution and the Albanian Customs Code.
The firm was also selected by the World Bank as exclusive legal adviser to the Albanian Government for the privatization of major state-owned enterprises operating in strategic sectors such as oil, gas, mining and telecommunications.
We regularly assist foreign embassies in Albania and have served as consultants to the OSCE on several legislative reform projects in the country.
We are also proud to be active members of the Foreign Investors Association of Albania, as well as the Italian, British and German Chambers of Commerce in Albania and Confindustria Albania.
Why is it advantageous to invest in Albania today?
Albania is a very dynamic, young and rapidly developing country with a stable political and legal framework. Over the years it has maintained steady economic growth and solid macroeconomic stability.
Its geographic position in the south-western Balkans,
the availability of skilled yet cost-competitive labor, a favorable tax regime, and the fact that Albania obtained EU candidate status in 2014 make the country particularly attractive to investors, especially Italian ones who wish to access not only the Albanian market but also the wider Balkan and European markets.
In recent years, the Albanian Government has implemented a series of structural reforms aimed at improving the business climate and attracting foreign investment, particularly from large international groups that had previously lost interest in the country.
We already mentioned the reform of the judicial system, which aims to create an efficient and reliable system capable of supporting sustainable socio-economic development and facilitating integration into the European space.
The Albanian regulatory framework has been designed to create a favorable investment climate, offering significant guarantees to foreign investors, whether individuals or companies.
Albania is an open economy with liberalized trade and ensures equal treatment between foreign and domestic investors.
Special benefits are granted for strategic investments, defined by law based on several criteria such as investment size, job creation and sectoral economic priorities.
Moreover, the procedures for registering new companies are relatively simple and fast. The establishment and registration of a limited liability company—the most common corporate form in Albania—can generally be completed within 48 hours.
What are the main challenges from a business perspective?
Albania’s fiscal policy is subject to frequent changes by the executive branch, which often introduces modifications in a discretionary manner and not always following thorough consultations with relevant stakeholders.
Another area that could be improved is transparency in public procurement, although it must be acknowledged that significant progress has been made in this regard.
Despite recent reforms, there is still some degree of discretion exercised by public authorities—particularly tax authorities—which can create uncertainty and occasionally lead to unequal treatment of taxpayers.
There are still some challenges, but the country’s progress toward EU integration is pushing the government to address structural issues more seriously and to seek positive solutions.
Which sectors look most promising in the coming years?
Several sectors of the Albanian economy show strong development potential, including agriculture, tourism, renewable energy, mining, oil and gas, and manufacturing.
The Albanian Government has placed particular importance on developing the tourism industry. The new tourism law—focused on the standardization of hospitality structures and tourism guides—along with its support package, offers various incentives to investors in the sector, especially those interested in developing high-quality hotel and resort facilities rated four or five stars and associated with internationally recognized brands.
Albania also offers significant opportunities in agriculture, thanks to its favorable climate and low rural labor costs. Traditional farming methods mean that Albanian fruits, vegetables, meat and dairy products are produced with very few artificial additives, chemicals or pesticides.
This positions Albania to potentially become one of the world’s leading producers and exporters of high-quality organic food for regional, European and North American markets.
The agri-food sector is a significant part of the Albanian economy, accounting for about 20% of GDP and employing 46% of the national workforce. In recent years, substantial investments have been made and the sector’s added value has steadily increased.
In particular, the Albanian Government is planning major investments in the irrigation and drainage system, including not only the rehabilitation of canals but also the modernization of the entire infrastructure.
