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Foreign Direct Investment in Central Europe: Albania

Foreign Direct Investment in Central Europe: Albania

Albania
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The global pandemic has impacted all markets, with subsequent ramifications for M&A. Investors are now seeking greater protection against general lock-downs and supply-chain disruptions, while governments aim to protect critical supplies and services by imposing new regulations on foreign investment in crucial or strategic industries.

The following overview is an extract from the Foreign Direct Investment in Central Europe publication, which gives insight into the regulations on foreign investment in strategic industries in the region.

Have FDI screening rules been implemented (or will they be implemented) in the country?

No. Regulation 2019/452 has not been adopted under Albanian legislation. The main applicable piece of legislation in Albania with regard to foreign investments is law no. 7764 dated 02.11.1993 "On foreign investors" as amended. Pursuant to Article 2 of such law, foreign investments in the Republic of Albania are not conditioned by a prior authorization. They are allowed and treated on the basis of conditions no less favourable than those recognized to domestic investments under similar conditions, with the exception of ownership of land, which is regulated by a special law.

Definition of FDI

Pursuant to Article 1 of law no. 7764 dated 02.11.1993 "On foreign investors" as amended: "Foreign investment" means any type of investment in the territory of the Republic of Albania, owned directly or indirectly by a foreign investor, which consists of:

  1. movable and immovable property, tangible and intangible, or any type other property rights;

  2. a company, rights deriving from any form of participation in a company, with shares,

  3. loans, monetary liabilities or liabilities in an activity that has economic value and are related to an investment;

  4. intellectual property, including literary and artistic works, technical-scientific, sound recordings, inventions, industrial projects, integrated circuit schemes, know-how, trademarks, trademark designs and trade names;

  5. any right recognized by law or contract, and any license or permit granted in accordance with the law

Definition of foreign investor

Pursuant to Article 1 of law no. 7764 dated 02.11.1993 "On foreign investors" as amended: "Foreign investor" means:

  1. any natural person who is a national of a foreign country; or

  2. any natural person who is a citizen of the Republic of Albania, but with permanent residence abroad; or

  3. any legal person established under the law of a foreign country;

  4. any “community company”, within the meaning of Article 49 of the Stabilization and Association Agreement, approved by law no. 9590, dated 7.2006 “On the ratification of the Stabilization and Association Agreement between the Republic of Albania and the European Communities and their member states, which directly or indirectly seeks to make or is making an investment in the territory of the Republic of Albania in accordance with its laws, or has made an investment in accordance with the laws pertaining to the period from 31.7.1990 onwards

Do the following scenarios trigger the screening?

1. Acquisition of 10% or more of voting rights in the company: N.A

2. Establishment of a new branch: N.A

3. The production of new products: N.A

4. Establishment of a new company in which foreign investor will have more than 10% voting rights: N.A

5. The transfer of use or operational rights in infrastructure or assets that are indispensable for the operation of strategic companies: N.A

6. Other screening triggers: N.A

By Sabina Lalaj, Local Partner, Deloitte Legal

Deloitte Legal Law Firm at a Glance

Deloitte Legal Adriatic is a unique law firm consisting of teams of highly specialized lawyers, providing a vast range of legal services, and part of the commercially integrated Deloitte Legal Group. Deloitte Legal Adriatic has a team of 50 legal professionals, qualified in their jurisdictions, at offices across 8 countries: Albania, Bosnia, Croatia, Kosovo, Montenegro, North Macedonia, Serbia and Slovenia. Across the Adriatic region, our offices assist clients in this interlinked, highly complex, and dynamically developing region. We are among the largest law firms in our jurisdictions and have offices in each of the most important business centers. With a multi-lingual international team, all of whom are fluent in English, we can assist clients through our dedicated language desks including in Chinese, German, French, Russian, and many other languages, including all the Balkan languages.

Deloitte Legal Adriatic’s bundled, technology-enhanced, cross-border capable service array is a step ahead in providing clients with effective business solutions, and in these challenging times is even more important than ever before in our Adriatic Region. Our team has a collaborative orientation as well as the country specific and international legal and business savvy your business needs. Like our clients, we also know that sure success, in addition to everything else, usually requires winners to simply work both harder and smarter. We are here for our clients to do just that.

Across the Adriatic, we offer a full scope of legal services in the main commercial practice areas, including: 

  1. Banking & Finance – regulatory, real estate, syndicated projects, securitization, NPLs, restructuring, and insolvencies
  2. Business Integrity – investigations, compliance, privacy, GDPR, anti-trust, and competition
  3. Corporate – day-to-day operational, governance, and family protocols
  4. Digital – technology, media, and communications
  5. Employment – full spectrum services including mobility services
  6. Environmental – internal/external due diligence, and compliance advice
  7. GDPR – privacy issues, cyber-attacks, AI, legal, technical and organizational aspect of GDPR compliance
  8. Litigation – including tax, white collar, and discovery support services
  9. M&A – including due diligence, JVs/alliances, and post-transaction restructuring
  10. Real Estate & Construction – transactions of all types as well as development & planning
  11. Commercial – including full coverage supply-chain and distribution contractual coverage

Besides traditional legal fields, we are building prominence in growing fields such as Business Integrity, Legal Management Services, Tax Litigation & Controversy, E-commerce, and Fintech. We take pride in being able to pioneer in industries and practices ahead of many other law firms. We have the benefit of accessing cutting-edge data, technical aspects, and operational realities of various industries through our internal Deloitte collaboration with various service lines (Consulting, Financial Advisory, Tax, and others). This market intelligence is again unparalleled among  our competition and presents a wealth of opportunities for genuine insights to evolving trends.

Our client service resonates with an individual approach, genuine relationship building, dedication, availability, efficiency, and high-quality communication, on top of understanding our clients’ commercial, financial and tax needs and the requirements of the market.

Authentic synergies with our financial and tax teams, as well as our colleagues’ professional experience and education, make our firm one of the most experienced, effective and efficient firms in the Adriatic region, with expertise in a wide variety of legal fields. Our positioning on the legal markets has been noticed and recognized by both mainstream international attorneys-ranking agencies – Chambers & Partners, IFLR and the Legal 500, which distinguishes us across all significant legal areas and functions.

Local contacts:

1. Albania and Kosovo

Deloitte Legal Sh.p.k

Sabina Lalaj, Attorney-at-Law, Managing Partner

slalaj@deloitteCE.com

2. Bosnia and Herzegovina

Advokatsko društvo “Legal Partners” d.o.o.

Aida Hamur, Attorney-at-Law 

ahamur@deloittece.com

3. Croatia

Krehić & Partners in cooperation with Deloitte Legal

Tarja Krehić, LL.M. (DUKE)

Attorney-at-Law, Managing Partner

tkrehic@kip-legal.hr

4. Serbia, Montenegro and North Macedonia

Law Office Antonić

Stefan Antonić, independent attorney at law in cooperation with Deloitte Legal

santonic@deloittece.com