One stop shop for granting licenses
The Albanian Government’s has established on May 2009 the “One Stop Shop” for issuing licenses and permits, National Licensing Center (NLC). This will lead to the simplification of licensing procedures. From now on the time and effort required to obtain a license is significantly lower.When trying to establish an investment project and making it operational, investors tend to face a myriad of steps where they need to interact with various government agencies to obtain all the necessary permits, licenses, approvals and clearances. A delay in any of these steps will translate into additional costs and foregone revenue, and any permit, approval or clearance not forthcoming can jeopardize the entire project. From now on an investor would only have to be in contact with one single entity to obtain all the necessary paperwork in one streamlined and coordinated process.
For more detailed information about instructions for licensing and permits, please refer to the NLC website at www.qkl.gov.alThe law on concessions
The purpose of this law is to create a favorable framework for promoting and facilitating the implementation of privately financed Concession Projects enhancing transparency, fairness, efficiency and long-term sustainability, in development of infrastructure and public service projects. . It aims to better regulate unsolicited proposals and the public-private partnership in general. The law applies to a wide-range of sectors:• transport (railway system, rail transport, ports, airports, roads, tunnels, bridges, parking, public transport);
• generation and distribution of electricity and heating;
• production and distribution of water, treatment, collection distribution and administration of waste water, irrigation, drainage, cleaning of canals, dams;
• collection, transfer, processing and administration of solid waste;
• telecommunication;
• education and sport;
• health;
• tourism and culture;
• prison infrastructure;
• recycling projects, rehabilitation of land and forests, in industrial parks, housing, governmental buildings, service of maintenance of IT and data base infrastructure;
• natural gas distribution;
• management contract or provision of public services including those related to sectors specified above
This list is however not an exhaustive one since the Council of Ministers can authorize upon the proposal of the Minister responsible for economy Concessions to be implemented in other sectors.
Download law no. 9663 dated 18.12.2006 on concessionsVAT credit on machinery imports
Importers of machinery and equipment can take advantage of a 100% VAT credit if the machinery and equipment are used solely as part of their taxable economic activity.
Facon producers are not subject to VAT on services provided to their contractors providing that products under the scheme are re-exported. This is based on Law 7928, dated April 27,1995, "On Value Added Tax," Article 25/6.
Download Law no. 7928, dated 27.04.1995
Subsidized leases of state-owned premises
Investors are eligible to lease state-owned property such as land or buildings at rents below market rates. In the case of production activities, the level of rent reduction will be made accordingly to the level of investment made and of new jobs created. This is based on DCM no.315, dated 24.04.2006 “On the leasing of state enterprises and institution’s property”.
Download Fact Sheet no.9 “Property, Sites and Buildings”
Incentives in the tourism sector were introduced in 1993 as part of the law “For Development of Tourism Zones”. They are built around a special status created for tourism sector investors – designated as "promoted persons" – which are award by the Ministry of Tourism, Culture, Youth & Sports.
Investors holding this status can:
• Be exempted from the custom duties and excise taxes on imported goods for the sole purpose of investment and functioning of the “promoted activity”
• Be exempted from profit tax for 5 years from the time of the completion of the development phase of the investment. This is a 10-year tax incentive as the final five- year period profit tax is levied at only half of the normal rate
• Benefit from a reduction of profit tax up to 40%, if profits are reinvested in Albania
The principal activities that are covered are construction, reconstruction, improvements, and the extension of existing facilities as well as the operation of hotels, motels and tourist villages. Structures that complement tourist complexes such as restaurants, shops, thermal baths, and sport equipment is also covered.
Energy Sector Incentives
There are some fiscal incentives designed to encourage new means of generating electricity. Investors establishing new, or rehabilitating existing power generation plants with an installed power capacity of more than 5 MW using liquid or solid combustibles, are entitled to an exemption of custom duties on imported machinery and equipment used in the capital investment. They can also be reimbursed for the customs and excise duties paid on the import of liquid or solid combustibles used in the production of electric energy. This is based on Law 8987, dated December 24, 2002, “For the creation of facilitated conditions, concerning the establishment of new plants for the production of electric energy.”
Economic zones
‘Economic zones’ is a concept that primarily aims at encouraging investments. An economic zone is a zone with a specific economic status and it can be a free zone or an industrial park. Operating a business within such zone implies exemption from some fiscal obligations. Any juridical person (Albanian or foreigner) with a business project can propose the creation of such a zone and the development of that zone by exercising the business within that zone, given that some conditions are met.
Download Law No. 9789, dated 19.07.2007 “On Establishment and Functioning of Economic Zones”
Information about Economic Zones:
The Industrial Park of Spitalla
Surface: 850 Ha - state and private owned property which lies at the north of Durres City, only 15 km away from the biggest port of the country
Bids for developers to start soon
The Industrial Park of VLORA
Surface: 125 Ha
Investment: 20.819.797 Euros
Developer: Idea Vlora
Employment: 18,586 jobs
Surface: 61 Ha
Investment: 18.510.539.27 Euro
Developer: The Industrial and Trade Zone of Koplik
Employment: 16,734 jobs
Activities: Manufacturing, industrial, agro-processing, trade, export-import
Surface: 3.2 Ha
Investment: 17,054, 152 Euro
Developer: ATX – International Tirana
Employment: 3,000 jobs
Activities: Manufacturing, industrial, agro-processing, trade activities, export-import
Surface: 254.7 Ha
Developer: To be decided after studies are complete
Activities: Industrial, trade activities, services
The Industrial Park of SHKODRA
Surface: 137 Ha
Developer: Some offers presented
Activities: Manufacturing, industrial, grocery, services, trade, import – export
The Industrial park of LEZHA
Surface: 54.3 Ha
Activities: Manufacturing, industrial, agro processing, trade, import- export and services
• A low corporate tax of 10%
• Reduction of the fiscal burden of social security contributions payable by employers from 29 to 20 percent
• Introduction of a flat tax of 10 percent on personal income tax
• Tax exemption of dividends designated for investments
Incentives to investors are regulated by the law on state aid approved by Albanian government and parliament with the aim to promote the implementation of important projects, to facilitate the development of certain economic activities, to promote the culture and heritage conservation , etc.
The state aid may take the form of subsidies or grants; exemptions, reductions, deferrals or tax credit and other fiscal contributions; writing off of overdue fees and penalties; debts write offs or offsetting of losses; loan guarantees or loans at reduced rates; reduction in the price of goods supplied and services provided, including sales/leases of public property below market price; increase of state owned equity at enterprises or increase of its value.
