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.
No distinction is made between foreign and domestic investors in Law no.7638, dated 19.11.1992, 'On Commercial Companies’. This regulates the activities of companies and establishes the type of legal structure under which companies may be formed.
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.
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 also have the right 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
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).