COUNTRY PROFILE. Capital: Tirana. Surface: 28,748 km². Coastline Length: 316 km. Climate: mild ( sunny days)

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Claude Turner
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2 COUNTRY PROFILE Capital: Tirana Surface: 28,748 km² Coastline Length: 316 km Climate: mild ( sunny days) Located in the center of crossroads of major corridors in Europe Natural Resources: Petroleum, Gas, Bauxite, Chromites, Copper, Iron, Nickel, Salt, Timber, Potential to produce significant amount of hydro, solar and wind energy 4 main sea ports: Durres, Vlora, Shengjin, Saranda

3 WHY INVEST IN ALBANIA? 1 STRATEGIC LOCATION 2 FREE MARKET ACCESS 3 BUSINESS FRIENDLY ENVIRONMENT 4 ONE STOP SHOP MODEL

4 WHY INVEST IN ALBANIA? 5 STRATEGIC INVESTMENT OPPORTUNITIES 6 SUPPORTIVE FDI LEGAL FRAMEWORK 7 COMPETITIVE WORKFORCE 8 A GLOBAL RECOMMENDED TOURIST DESTINATION

Extensive Free Trade Agreements Free Trade advantage CEFTA is a market of 26

within CEFTA CEFTA 1 Can reach any major city in Europe within 3 days by

620 million customers EU 2 Albania is a Member of WTO and applies WTO rules

5 Extensive Free Trade Agreements Free Trade advantage CEFTA is a market of 26 million customers 7 million is the size of the Albanian speaking market within CEFTA CEFTA 1 Can reach any major city in Europe within 3 days by truck Albania will be part of the EU s market, the largest in the world, of 620 million customers EU 2 Albania is a Member of WTO and applies WTO rules on import licensing Bringing down trade barriers Trade agreements with the US World 3

6 WORLDWIDE RANKINGS

7 COMPETITIVE HUMAN CAPITAL The minimum wage in Albania is 22,000 ALL (approx. 157 Euro). - Average monthly payment 37,496 ALL (approx. 266 Euro) ; Social insurance is 27.9% of the gross salary, with the employer paying 16.7% and the employee 11.2% Source: Federation of European Employers, SIEPA, INSTAT

education system C Professional Training

8 Source: Albanian Investment Development Agency COMPETITIVE HUMAN CAPITAL A B Dynamic Workforce 57% of the population is under the age of 35 Language Skills English, Italian and Greek are widely spoken French and German included in the education system C Professional Training Professional Trainings driven by market needs D Workforce availability Approximately 116,000 students register annually in all the universities

9 Favorable FDI legal framework No limitation and full openness The implementation of the economic reforms constitutes the main engagement of the Government for the country s social-economic development, with the final goal of integration with the European Union No prior government authorization is needed and no sector restrictions to foreign investments There is no limitation on the percentage share of foreign participation in companies- 100% foreign ownership is possible Full protection and equal treatment Full protection of foreign investment Foreign investment may not be expropriated or nationalized directly or indirectly, except in special cases, in the interest of the public us as defined by law Foreign investors have the right to expatriate all funds and contributions in kind of their investment Equal and unbiased treatment In all cases and at all times investments will have an equal and unbiased treatment, and will have complete protection In any case foreign investment will have a treatment equal to what common international practice allows

10 Favorable FDI legal framework No restriction on capital movement No restrictions on repatriation of profits Simplified tax procedures Competitive tax rate

Favorable FDI legal framework 5 6 Tax & customs Corporate tax rate - 15 %, VAT 20%

5% Treaties for the Avoidance of Double Taxation with 40 countries Business climate Gov t

National Economic Council 7 One Stop Shop The application for initial registration of new

11 Favorable FDI legal framework 5 6 Tax & customs Corporate tax rate - 15 %, VAT 20% Personal tax rate from 0-23 % Favorable tax system for Small Businesses - 7.5% Treaties for the Avoidance of Double Taxation with 40 countries Business climate Gov t increasing the efficiency of tax administration and fight against corruption through the National Economic Council 7 One Stop Shop The application for initial registration of new businesses may be done in 24 hours with less than one euro; requests for licenses/permits follow the same rule

12 ALBANIA IN FIGURES GDP Growth (in %) Export by year Unemployment (%) Inflation Rate Average Exch.Rate ALL/EUR

13 FDI INFLOW (mln EURO)

14 FDI STOCK FDI Stock by Country origin FDI Stock by Economic Activity

15 TRADE

16 Trade Relations with Czech Republic Exports/Million Euro Czech Republic ,6 7,4 4,07 6,8 5,7 Most exported products: Textile & shoes, food & beverages Imports/Million Euro Çeki ,2 57,6 39,6 29,4 25,09 Most imported products: machinery, equipment and spare parts; chemical and plastic products

17 Czech Presence in Albania There are 7 Czech companies that operate in Albania in Electricity and gas; Manufacturing industry; Water supply management activities and waste treatment; Professional, scientific and technical services; Wholesale and retail; Repair of motor vehicles and motorcycles.

18 PRIORITY SECTORS Renewable energy Mining Industry Manufacturing Agriculture Transport & Logistics Tourism ICT Sector

RENEWABLE ENERGY Albania is the most dynamic renewable energy country in Europe.

benefits: Attractive feed-in tariffs for small hydropower plants (HPP) New electricity

1,726 MW; Potential installed capacity of 4,500 MW; Average power production of 4.

19 RENEWABLE ENERGY Albania is the most dynamic renewable energy country in Europe. For investors in the renewable sector, the Government of Albania offers the following benefits: Attractive feed-in tariffs for small hydropower plants (HPP) New electricity market laws Albania has huge potential for hydroelectric energy: Total installed capacity of 1,726 MW; Potential installed capacity of 4,500 MW; Average power production of 4.2 TWh; Potential annual power production of TWh; Only 35% of hydroelectric energy potential is currently being utilized.

20 RENEWABLE ENERGY HYDROPOWER Eight large rivers, fed by hundreds of smaller rivers and streams, run through the country from the mountainous East to the Adriatic and Ionian Seas in the West. The average height of the hydrographic territory of Albania is about 700 m above sea level. SOLAR ENERGY Albania is part of the Mediterranean climatic zone. For this reason, the country has very favorable conditions for the development of solar energy including: Average daily solar radiation of 4.1kWh/m2 Average sunshine hours per year of 2,400 WIND ENERGY Average annual wind speed of 6-8 m/s Average energy density of W/m2 Potential for at least 20 oleic electricity centrals PETROLEUM AND GAS ENERGY Albania has a significant volume of oil reserves, producing more than 1.2 million tons in The Albanian oil, gas and byproducts market is a free, open, and liberalized market, predominately operated by private companies, and where the Government of Albania plays only a regulatory role.

21 MINING INDUSTRY The Mining Industry has traditionally been the backbone of the Albanian economy. 764 local and foreign companies equipped with mining licenses 154 local and foreign companies equipped with mining licenses for search, search-prospection and prospection Key areas of mining include: CHROMIUM: Albania has large reserves of chromium currently estimated at 36.9 million tons of which 12.8 million tons have between 30% and 42% Cr2 O3. COPPER: The copper subsector in Albania is underdeveloped and offers sizeable investment opportunities. NICKEL: Albanian reserves of nickel currently estimated at 322 million tons of which 220 million tons are iron-nickel and 102 million tons are nickel silicate. However, the total potential for reserves is considerably higher.

MANUFACTURING Key facts to note about the manufacturing sector include: In 2014, exports in manufacturing increased by 24,6% or 165 million dollars.

22 MANUFACTURING Key facts to note about the manufacturing sector include: In 2014, exports in manufacturing increased by 24,6% or 165 million dollars new jobs were created within the year 14% increase in imports of machineries and equipment. Partnerships with major brands and retailers throughout Europe Major markets in Italy, Germany, France, Holland, Denmark and Greece The government has rolled out the Textile and Footwear Industry Package 2014, giving a strong stimulus to the fashion industry through a range of incentives. For the first time, the Government also provides a symbolic tariff of 1 leasing contract, when renting government property.

23 MANUFACTURING Key advantages of the textiles and footwear industries in Albania Highly skilled and cost-competitive workforce High quality products, Experience and tradition Short-time deliveries to EU countries Comparatively low transport costs to Europe Competitive labor expenses due to lower salaries than the other countries in the region Excellent language skills Stable and favorable Investment climate A consolidated legal framework in compliance with international standards Government policy support for this business

AGRICULTURE There are many reasons to invest in the agriculture sector in Albania: Favorable climate o Average 16 degrees in the costal areas o

on the increase in exports Steady growth in the last 5 years o The agricultural sector has grown steadily in the past five years o This sector has

24 AGRICULTURE There are many reasons to invest in the agriculture sector in Albania: Favorable climate o Average 16 degrees in the costal areas o Diverse micro-climate that is suitable for different products Suitable soil and abundant water Advantages from preferential trade agreements with EU on the increase in exports Steady growth in the last 5 years o The agricultural sector has grown steadily in the past five years o This sector has not been affected by the European debt crisis o In 2014 the Government launched a new package to support the sector o 18% increase in exports within the year.

25 TRANSPORT & LOGISTICS Albania s location at the center of a natural crossroad of European transport corridors places the country in a unique geographical position. INFRASTRUCTURE INVESTMENT OPPORTUNITIES MAJOR PROJECTS ROAD TRANSPORT The Adriatic Ionian Road Corridor East West Road Corridor (part of Corridor VIII) MARITIME TRANSPORT New port of Shengjin: AIR TRANSPORT Airport in southern Albania RAIL TRANSPORT GoA intention is to revive the railway sector and to improve the Core and Comprehensive railway network in Albania, (corridor VIII and the railway connection with Montenegro) as an important transport mean to increase trade in the region and connecting the region with the European Railway Network

TOURISM Unique Development Potentials Attractive coastline, part of Eastern Adriatic Sea, with long sandy beaches and clear water; Long, hot and

tourist destination; Albania is ranked 3-rd among 15 best destinations tourism for 2015 according to L Express Magazine.

26 TOURISM Unique Development Potentials Attractive coastline, part of Eastern Adriatic Sea, with long sandy beaches and clear water; Long, hot and sunny summer season; Proximity to major European cities by air; Its range of archaeological, historical and religious sites A global-recommended tourist destination; Albania is ranked 3-rd among 15 best destinations tourism for 2015 according to L Express Magazine. Albania was listed fourth on the New York Times 52 places to go in 2014 ; Albania is ranked the first among 3 most special destinations in Europe, according to Albatross Agency in Scotland.

TOURISM Key tourism segments to develop businesses: Beach resorts Nature tourism (including trekking, climbing and rafting) MICE tourism Health tourism (SPA and

27 TOURISM Key tourism segments to develop businesses: Beach resorts Nature tourism (including trekking, climbing and rafting) MICE tourism Health tourism (SPA and Thermal) Indicators for hotels, rooms & beds, 2013 Source: INSTAT Thereof rooms Total Hotels Rooms Single rooms Doubl e rooms Others Beds

28 ICT ICT sector remains on the focus of Government plans. The Government is working on three main directions to set measurable objectives: 1. To improve and promote digital services, e-services for citizens and business. 2. To increase the transparency and improvement of public administration services in accordance with the principles of Open Government Partnership initiative. 3. Massive introduction of services in education to overpass the digital divide and to enable youth. The consolidation of digital infrastructure in the territory of the Republic of Albania, strictly respecting European principles of free and fair competition.

29 TECHNICAL AND ECONOMIC DEVELOPMENT AREAS

30 Technical and Economic Development Areas (TEDAs) The Albanian Government has taken important steps towards a new political approach implementing preferential specific legal packages, result oriented, in order to improve the investment climate and business environment. Successful steps are taken in order to create new Technical and Economic Development Areas (TEDAs), specially designated for industrial parks development that will benefit from special legislation and investment incentives. Selected developer(s) for these properties will be offered exclusive development and operator rights as provisioned by the domestic legal framework.

31 TEDA KOPLIK Profile Zone: Potential Industrial Hub 61 ha of flat land by Shkodra Lake Connection hub for Montenegro, Serbia and Kosovo 15 km from Monte Negro (Hani - Hotit custom point ) 34 km from the Port of Bar (Montenegro) 127 km from the Port of Durrës 2 km from Koplik 20 km from Shkodra 115 km from the capital Tirana Electronics Mechanical Industry Light industry Agro-processing Automotive Industries Trade and storage of goods Services (excluding call- centers) Employable population 150,942 Current Unemployed High school Diploma 32% University Diploma 14%

32 TEDA KOPLIK

33 61 ha of flat land Excellent for light industry, electronics, auto parts manufacturing, construction Near the biggest city in the north, with educated workforce and outstanding natural beauty Near the border with Montenegro, enjoying reasonable access to two ports

34 TEDA SPITALLA World Class location 209 ha situated on the suburbs of Durrës, second most developed city in Albania 36 km from the capital Tirana Direct exchange with Tirana Durrës motorway Highest concentration of businesses in Albania 6.4 km away from Durrës Seaport Main Albanian seaport One of the largest in the Adriatic and Ionian seas Potential Industrial Hub Electronics Mechanical Industry Light industry Agro-processing Automotive Industries Trade and storage of goods Services (excluding call- centers) Export (ton) 2,185,118 2,171,981 Import (ton) 1,340,996 1,349,284 Total (ton) 3,526,114 3,521,265 TEU Total 79,699 87,662 Employable population 512, km from Tirana International Airport Nënë Tereza Crossroad of Corridor 8 and Adriatic-Ionian highway (Blue Corridor) Current Unemployed 162,004 High school Diploma 42% University Diploma 37%

35 TEDA SPITALLA

36 213 ha of accessible land Excellent for industrial and agro-processing, light industry and electronics, auto parts manufacturing, trade and storage of goods Close to the Port of Durres and Tirana International Airport, on major road routes Close to a highly educated work force

37 TEDA VLORA Largest TEDA in Albania 289 ha Development in phases Strategic location 6 km from Vlorë Economic and touristic hub in Southern Albania 5.7 km from Port of Vlorë Port of Vlora Surface area 5.3 ha Aquarium area 18,000 m2 Min. depth 4.6 m Max. depth 11 m Number of quays 2 (cargo and ferry) Max. goods processing capacity 5,400 ton/24hr (loading-unloading) 151 km from the capital Tirana Part of Corridor 8 Adjacent to Adriatic- Ionian Highway 147 km from Tirana National Airport Nënë Tereza Potential Industrial Hub Electronics Mechanical Industry Light industry Agro-processing Automotive Industries Trade and storage of goods Services (excluding call- centers) Employable population 125,954 Current Unemployed 41,118 High school Diploma 35% University Diploma 17%

38 TEDA VLORA

39 Approximately 230 ha of accessible land Excellent for various types of industrial and environmentally friendly development Close to the major national road networks and ports Drawing on a highly educated work force and at the gateway to Southern Albania

40 TEDA s INCENTIVES Albanian goods that enter TEDA are exempted from VAT taxation ; Capital expenses are 120 percent deductible during a period of 2 years if developers and users invest in TEDA within three years of its operation; Developers and users are also exempted from 50 percent of the profit tax rate (currently at a rate of 15 percent) for a period of 5 years; A developer s project is exempted from infrastructure taxes; Buildings in TEDA are exempted from real estate taxes for a period of 5 years; Buildings transferred to the TEDA are not subject to the transfer tax on real estate; Wages and social costs are 150 percent deductible for the first year, and new expenses for wages and social costs compared to the previous year are 150 percent deductible for the subsequent years; Training costs are doubly deductible for a period of 10 years; Research and Development costs are doubly deductible for a period of 10 years.

41 1. Trusted information AIDA Albanian Investment Development Agency 2. Communication and links 3. Project managment support 4. Investor Services and Aftercare

42 What we will do? WHAT WE DO? Facilitate and support direct investment in Albania, through the identification and promotion of investment opportunities, offering services and support to existing or potential investors; Increase the competitiveness of small and medium-sized enterprises, enabling the improvement of products and services and the technology they use, offering mechanisms to increase their technical capacity and skills renovation; Promote and support exports of goods and services by providing support services as well as financial assistance to exporting companies, and export promotion, by governmental or donors programs. 42

43 How we can help? HOW AIDA CAN HELP? Studies, research on the business climate; Information about business conditions and opportunities in Albania; Contacts within national and regional government agencies Links with potential partners; Detailed statistical and survey data about Albania and its key sectors; Identification of sites and buildings; Project management support throughout the investment cycle.

44 Thank You

Economic Performance. Economic Growth 3.4% in 2016 from 1.1% in Increase of new registered domestic and foreign businesses

Economic Performance. Economic Growth 3.4% in 2016 from 1.1% in Increase of new registered domestic and foreign businesses Economic Performance Economic Growth 3.4% in 2016 from 1.1% in 2013 4 3.5 3 2.5 2 1.5 1 0.5 0 1.1 Economic growth in 2016-3,4% compared to 2,6% in 2015; one of highest economic growth in the region Source: