“Nothing really big is happening at the moment,” says Anisa Rrumbullaku, Partner at CR Partners in Tirana. "Not much has happened recently — it’s been pretty stable for the past three months.”
In fact, she says, "there’s certainly no shortage in terms of investments, but no major new investments either.” Perhaps not completely coincidently, she reports that “the legal market is pretty stable as well. The law firms are more or less consolidated, and there are no real spin-offs or new firms being created.”
Still, Rrumbullaku confirms that overall business is good. "Work has been better this year than last year, which was an election year.” And she insists that, while some of her peers expressed relatively bleak outlooks on the past, recent developments justify a cautious optimism. "Negative observations about Albania are quite true — we see them a lot — but there is hope,” she says, "because of the judicial reform in Albania. The government’s commitment to change — in part because of the pressure exerted by foreign actors like the US and the EU — is good.” She explains that reconstitution of two major institutions — the High Prosecutorial Council and the High Judicial Council —marks a crucial step forward of the judicial reform. "Just this month, in December, that process was finished,” she reports. "So we think there will be more progress and as a result, more hope and increased confidence in foreign investors.”
That business, Rrumbullaku reports, is coming from a variety of sectors, though she points in particular to increased interest by foreign investors in the Albanian tourism sector, with investors — “four and five star brand name hotels” — looking both in Tirana and along the Albanian coastline for business opportunities. "There is a good incentive packages for the tourism industry in place,” she says, and though she notes that at the moment most investors are only expressing interest, she says that commitments are expected soon. Already, in fact, Hilton Garden Inn and Hyatt Regency have recently entered the Albanian market, in Tirana.
She also points to the major contract awarded by Albania’s Ministry of Energy and Industry this past August to Indian energy company India Power Corporation Limited to build a 100 MW solar park on the Akerni salt flats on the south-eastern Adriatic, with a 50 MW section awarded a 15-year tariff of EUR 59.9 per MWh, and the remaining 50 MW to be sold to the local retail electricity market. She describes this deal as "the highlight in the energy sector in recent months.”
In general, Rrumbullaku says, “the current government is pretty stable so far.” There have been protests recently, she says, but mainly by university students objecting to the costs of university educations — “and they don’t affect the investment climate.” And there is a particularly business-friendly development in the country’s tax regime, which will see the tax rate on dividends drop from 15% to 8% in 2019, "with retroactive effect for the past three years.” She says that “many companies had chosen not to proceed with dividends pay-outs in the past, but this is positive news for investors; a lower dividend tax rate is always good.”
Ultimately, Rrumbullaku says, the country is heading in a positive direction. “We see growth from last year, and I hope that’s a positive trend that will continue into 2019.”