Introduction
When investing outside home borders, it is of vital importance to be aware of the legal context of the host country, especially the laws regulating the foreign direct investments and the protection of property rights. In this section you will find the main legal provisions concerning FDI and the protection of property rights.
In Albania you are entitled to judicial protection of the rights related to your investment. A paragraph explains how you can deal with eventual disputes.
Finally, Albania has signed Trade and Economic Cooperation Agreements, Bilateral Investment Protection and Promotion Agreements and Treaties for the Avoidance of Double Taxation with many countries. A description of how you as an investor might benefit from such agreements as well as the listing of the countries with whom Albania has such agreements are presented in this section.
FDI Legal Provisions
Law no.7764, dated 02.11.1994, 'On Foreign Investment' creates a favourable investment climate for foreign investors in Albania. It offers all foreigners, either physical or judicial persons, a range of provisions including:
* No sector is closed to foreign investment and no prior government authorization is needed to invest.
* There is no limitation on the percentage share of foreign participation in companies: 100% foreign-owned companies can be set up.
* Foreign investment may not be expropriated or nationalized directly or indirectly, except in exceptional circumstances in the interest of public use as defined by law.
* Foreign investors have the right to repatriate all funds and contributions in kind of investments.
* Most favourable treatment according to international agreements is provided.
Law no. 9663 “On concessions”, dated 8.2.2006, has been approved by the Albanian Parliament. Its primary goals are to establish the necessary framework for the promotion and facilitation of concessionary project implementation, increased transparency, and project sustainability. The law applies to several public sector services including transportation, power production and distribution, telecommunication, etc
Law no. 9723 “On the National Registration Center” establishes the National Registration Center (NRC) as a new central public institution. Law on business registration reform was enacted by the Parliament on May 3, 2007.
Law No.9901, date 14.04.2008, “ON ENTREPRENEURS AND COMPANIES”.
Scope of the Law, definitions, different registrations :
(1) This Law shall regulate the status of entrepreneurs, the founding and managing of companies, the rights and obligations of founders, partners, members, and shareholders, companies’ reorganization and liquidation. Companies are general partnerships, limited partnerships, limited liability companies or joint-stock companies.
(2) Entrepreneurs and companies register with the National Registration Centre in accordance to this law and Law No. 9723, dt. 03.05.2007 on the National Registration Centre amended.
(3) Entrepreneurs and companies shall keep books, compile and disclose annual accounts and performance reports including verification of authorized auditors in conformity with Law on Accounting and Financial Statements.
(4) If not provided otherwise, the court referred to in this law is the competent court in accordance with Articles 334 to 336 of the Civil Procedure Code.
(5) Provisions requiring disclosure of information on a company website may be satisfied by establishing an effective link to the registered information held by the National Registration Centre for that company.
(6) As used in this Law, the singular includes the plural and the plural includes the singular, unless the context otherwise requires. The personal pronoun “he” includes “she” and “it”; and the word “him” includes “her” and “it” unless the context otherwise requires.
Law no. 9880 dated 25.2.2008 “On Electronic Signature”
Albania's tax system also does not discriminate against foreign investors. Likewise, legislation concerning the public procurement process makes little distinction between foreign and domestic firms.
Protection of Property Rights
Law no.9380, dated 28.04.2005, covers intellectual property rights and protects copyrights, patents, trademarks, stamps, marks of origin, and industrial designs. In 2000, Albania ratified the Marrakesh Agreement and became signatory to the World Trade Organization's Trade Related Intellectual Property Rights (TRIPS) agreement.
Albania has signed the Convention of Multilateral Investment Guarantee Agency (MIGA). MIGA provides investment guarantees against certain non-commercial risks (i.e., political risk insurance) to eligible foreign investors for qualified investments in developing member countries. Along with the MIGA Convention, Albania has signed the New York Convention of 1958 (on the recognition and enforcement of foreign arbitral awards) and the Geneva Convention on Execution of Foreign Arbitral Awards. The Overseas Private Investment Corporation (OPIC), a US-government sponsored entity, can make available insurance and project finance resources to US investors in Albania. OPIC's three main activities are risk insurance, project finance and investment funds.
Albania has been a member of the WTO since September 2000.
Dispute Resolutions
Investors in Albania are entitled to judicial protection of the rights related to their investments. Parties to a dispute may agree to submit claims for consideration by an arbitration institution. Foreign investors have the right also to submit disputes to an Albanian court or to the Arbitration Court in Tirana. Provisions on domestic and international commercial arbitration are incorporated in the Code of Civil Procedure.
Trade and Economic Cooperation Agreements
These agreements are intended to create a legal basis for promoting the trade of goods and services and lead to a broader economic cooperation. Each party undertakes to encourage and create favourable conditions for the export or import of goods and services originating from the other party and to accord to them the same treatment it accords its own products or traders.
Albania has agreements in place with France, Greece, Germany, Romania, Italy, Turkey, USA, Netherlands, China, Poland, Croatia, Malaysia, Austria, Bulgaria, Czech Republic, Egypt, Russia, Switzerland, Macedonia, Argentina, Uruguay, Israel, Serbia & Montenegro. An agreement with Slovenia was abolished in 2005 and one with the Ukraine has yet to enter into force.
Treaties for the Avoidance of Double Taxation
Albania has signed Conventions for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital with many countries, which have priority over Albanian domestic law.
The following tax treaties are in force:
Poland, Hungary, Czech Republic, Italy, Sweden, Greece, Malta, Belgium, Netherlands, France, Norway, Switzerland, Rumania, Bulgaria, Macedonia (FYROM), Croatia, Moldova, Federal Republic of Yugoslavia, Kosovo (UNMIK), Turkey, Russian Federation, Malaysia, China, Egypt, Serbia, Montenegro, Korea, Austria and Latvia.
Bilateral Investment Protection and Promotion Agreements
BITs are treaties that ensure the investors of respective countries receive national or most-favoured nation treatment and provide mechanisms for the settlement of disputes. They are in force with:
Greece, Germany, Italy, France, Austria, Netherlands, United Kingdom, Denmark, Sweden, Portugal, Belgium, Spain, Finland, Poland, Hungary, Slovenia, Czech Republic, Switzerland, USA, Turkey, Romania, Bulgaria, Macedonia, Croatia, Russia, Israel, Tunisia, Egypt, China, Malaysia, Serbia & Montenegro, South Korea, Kosovo (UNMIK), Ukraine, Serbia, Montenegro, Moldavia, OPEC fund for international development and Lithuania.
