FDI flows towards Albania have been rising steadily since the early 2000s, averaging above USD 1 billion per year for the period 2008-2020. According to UNCTAD’s 2022 World Investment Report, FDI inflows amounted to USD 1.2 billion in 2021, marking an 11.3% year-on-year increase and returning close to the pre-pandemic level. In the same year, the stock of FDI reached USD 10 billion, around 55% of GDP. Foreign investments are essentially directed towards the extractive industries, the energy sector, banking and insurance, information and communication technology, and real estate (U.S. Department of State). Data from the Central Bank shows that in the first three quarters of 2022 FDI flows totalled EUR 984 million, with the Netherlands (EUR 147 million), Italy (EUR 98 million) and Germany (EUR 75 million) as the main investing countries. In terms of stocks, Switzerland has the highest share, followed by the Netherlands, Canada, and Italy.
Albania has set up reforms to boost FDI. The state has adopted a tax reform that is advantageous to foreign investors and aims at reducing corruption and administrative difficulties that can be discouraging to investors. The long-winded procedures to obtain operating licences in the trade, construction and tourism industries have slowed down investment progress. A lack of transparency in public procurement and poor enforcement of contracts also hinder FDIs to Albania. In addition, investments continue to suffer from the lack of infrastructure and poorly defined property law; and property rights continue to be a challenge because a clear title is difficult to obtain. The country declared to target foreign investment in the following sectors: energy and mining, transport, telecommunications, infrastructure and urban waste, tourism, agriculture and fisheries. Foreign investors can fully own local companies, except in certain sensitive sectors such as domestic and international air passenger transport and television broadcasting. Albania currently lacks an investment-review mechanism for inbound FDI. The country ranks 84th out of 132 in the 2022 Global Innovation Index and 101st out of 180 in the Corruption Perception Index.
|Foreign Direct Investment||2020||2021||2022|
|FDI Inward Flow (million USD)||1,108||1,234||1,434|
|FDI Stock (million USD)||9,608||10,081||11,397|
|Number of Greenfield Investments*||5||3||7|
|Value of Greenfield Investments (million USD)||339||113||160|
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Albania is a developing country that needs foreign investors to develop large parts of its economy, which offers many interesting opportunities.
Albania is one of the least developed countries in Europe and the Albanian economy remains fragile and highly dependent on external institutional support. The main obstacles to the country's development and the attraction of foreign investors are:
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Latest Update: September 2023