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Albania “Difficult To Do Business” According To US State Department

American investors perceive Albania as a difficult place to do business and are put off by corruption at every level of society, lack of transparency and unfair competition. 

This is what the US State Department writes in the report on ‘Investment Climate 2020’ in Albania.

Below Exit.al lists the main points of the report:

– ubiquitous corruption, inequality before the law, excessive bureaucracy and lack of transparency are the main obstacles of the business community.

– Business groups have raised concerns about unfair competition and monopolies, assessing the issue as one of the most worrying problems damaging the business climate.

– Many foreign investors complain that endemic judicial corruption and inefficient court proceedings undermine judicial protection in Albania and require international arbitration to resolve disputes.

– Although the government has adopted a law on strategic investments, so far no major foreign investors have benefited from the law.

– Investors say that institutions use laws and regulations that are difficult to interpret or that change frequently as tools to keep foreign investors away and to favor Albanian companies associated with politics.

– The increasing use of public-private partnership (PPP) contracts has reduced opportunities for competition and competition. Poor cost-benefit analysis and lack of technical expertise in drafting and monitoring PPP contracts are ongoing concerns.

– In the years 2019-2020, the investment effort of an American company is suspected to have been thwarted by several court decisions and dubious actions of stakeholders involved in an investment dispute.

– The Transparency International Corruption Perceptions Index 2019 ranked Albania at 106th out of 180 countries, a decrease of 7 countries from 2018. Consequently, Albania and Northern Macedonia are now perceived as the most corrupt countries in the Western Balkans.

– Property rights remain another challenge in Albania, as property titles are difficult to achieve. There have been cases of individuals manipulating the judicial system to obtain illegal land titles.

– Compensation for land confiscated by the former communist regime is difficult to obtain and inadequate. There are many lawsuits related to properties confiscated during the communist regime. Identification of ownership is an ongoing problem in Albania that makes it difficult to return expropriated property and, consequently, to do business.

– Albania also fell by 19 places in the World Bank study ‘Doing Business 2020’ , ranking 82nd from 63rd in 2019. Although this change can be partly attributed to the implementation of a new methodology, the country continues to perform poorly in the areas of building permits, paying taxes, enforcing contracts, registering property, obtaining electricity, and protecting minority investors.

– There is no institution to provide all services and information for business in one place.

– During the last ten years, there have been three investment disputes between the Albanian government and American companies, two of which resulted in international arbitration.

US investors involved in government disputes reported a lack of dialogue with government officials, who often hesitated to resolve disputes before escalating to the level of international arbitration, or before the international community put pressure on the government to resolve the issue.

– The US is not among the countries that have more direct investments in Albania. According to the Bank of Albania, the countries with the most direct investments are Switzerland, the Netherlands, Canada, Turkey, Austria and Greece.

– The Albanian government meets only the minimum standards for fiscal transparency and debt obligations, as well as for political decision-making processes.

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