Invest in Albania Riyadh, November 29, 2016 Page 1
Country Profile Albania Located in the center of Southeastern Europe at major crossroads. Neighboring: Surface: Population: Coastline: Climate: Int. Airport: Main Ports: Montenegro, Kosovo, Macedonia & Greece 28,748 km² (Belgium: 30,355 km²) 2.9 million (average age ca. 34.7 years) 316 km north-south moderate/mild, 270-300 sunny days Mother Teresa Airport, Rinas, 11 km northwest of Tirana Durres, Saranda, Vlora, Shengjin Road network: 3,848 km of national roads Resources: Petroleum, gas, bauxite, chromite, copper, iron, nickel, salt & timber, hydropower, solar & wind energy Page 2
Marine & Ports Page 3
Ports Port Category Durrës Commercial Port (passengers & cargo) Vlora Commercial Port (passengers & cargo) Saranda Commercial Port (passengers & cargo) Shëngjin Commercial (passengers & cargo) Romano Port, Durres Petrolifera Port, Vlore Oil Terminal Oil Terminal Page 4
Strong growth potential (Albania s export has grown for the past five years and its trade with many EU countries has been surging) Competitive Human Capital Why Albania? (50% of Albania s population is under age of 35 and the average wage is one of the most competitive in the region, literacy rate 97.6%) Liberal and reformist investment climate (Government has launched major reforms to better share growth with foreign investors) Promising Sectorial Opportunities (Promising industries include manufacturing, energy, agriculture and tourism) Page 5
Economic growth Increase of foreign investments Economic Growth 2.62% in 2015 from 1.1% in 2013 Significant Increase of Foreign Investments For the first trimester of 2016: Economic growth increased to 2.96% or 0.6% higher than the average growth of the region. FDI inflows have increased significantly. FDI have increased average 9% to the GDP in 2015. One of the highest in the region. Source: Ministry of Finance Page 6
Foreign Trade The government has rolled out agriculture and textile/footwear support packages, giving a strong stimulus to domestic production. TRADE VOLUME 2005-2015 For 2015: Agricultural exports increased by 26% Exports of textile and shoes increased by 5% Source: INSTAT Page 7
Further business climate reforms Corporate tax rate - 15% VAT 20% Personal tax rate from 0-23% Favorable tax system for Small Businesses 0-5% Treaties for the Avoidance of Double Taxation with 41countries Free trade agreements with CEFTA, EFTA, Turkey. Stabilization and Association Agreement with EU Tax & customs Business climate One Stop Shop Increased efficiency of tax administration and fight against corruption Improved communication with business community through the National Economic Council and Investment Council Registration and licensing offered through one unique window,the National Registration Center (QKB) Introduction of e-registration and electronic notification of balance sheets and financial reports. The Agency for Delivery of Integrated Public Services (ADISA) provides integrated public services under the onestop model Page 8
Ranking in International Reports According to Doing Business 2017 report Albania ranked 58th in the world. The Economic Freedom Index 2016 report of Heritage Foundation ranks Albania in a very favorable position compared to other countries from the region. It marked an improvement of + 0.2 points by ranking 59th globally and 27th regionally. Best performance on economic freedom, the right to property, freedom from corruption, fiscal freedom and monetary freedom (+0.9). According to The Global Competitiveness Index report of the World Economic Forum 2015-2016, Albania has jumped 4 positions, ranking 93rd among 140 countries, improving the competitiveness abilities. Page 9
The new Strategic Investments Law The new law stimulates and supports strategic investments in fast growing sectors. It facilitates administrative procedures, increases transparency and reduces legislative complexity for strategic investments. Strategic Sectors Energy and mining; Transport, telecommunications, infrastructure and urban waste; Tourism; Agriculture and fisheries Economic zones Priority Development Areas Supportive mechanisms Fast track procedures; Support with the necessary infrastructure; Land consolidation; Provision of immovable assets to develop and implement strategic investment projects; Higher legal guaranty to foreign investments; Page 10
Where to invest best? Adriatic Jonian Corridor ROAD INFRASTRUCTURE It will link the Montenegro Coast with the Greek Coast. The entire road axis is part of the Core Network. Total length of about 380 km, divided in several segments. Must be completed within 2030. Core network standards are estimated approx. 875 MLN EURO. East West Road Corridor (Part Of Corridor VIII) This corridor, foresees to link three Balkan Region capitals Tirana Skopje Sofia together and also links the important ports in Italian coast (Bari and Brindizi) with Durresi and Vlora in Adriatic Sea with port of Varna and Burgas in Black Sea. The entire road corridor now is part of the Core Network, (total length of about 236 km), and according to the methodology must be completed within 2030. The total estimated cost for bringing this road corridor in the Core network standards is estimated approx. 468 MLN EURO. Page 11
Where to invest best? RAIL TRANSPORT INFRASTRUCTURE The Albanian Railway network comprises of 420 km of singletrack rails. In the north, it is functionally linked with Montenegro. In the east, a 2.8 km missing line would create the link to Macedonia. The feasibility study has already identified the importance and economic feasibility of the core sections of the network and in particular: Tirana - Rinas - Durrës railway section Vorë Shkodër - Hani Hotit (Border) railway section : total length=120 km - estimated cost: 160 million Euros. Durrës Elbasan Pogradec - Lin (Border) railway section: total length 140 km estimated cost: 220 million Euros. Rogozhinë - Vlorë railway section Other potential railway linkages with existing/new ports
Where to Invest best? AIR INFRASTRUCTURE KUKËSI AIRPORT Located about 3 km south of Kukësi City, northern Albania 2nd civil airport in Albania Airport specifications: Runway direction: 01/19 Runway length: 5,906 x 148 ft (1,800 x 45 m) paved lighted no ILS The GoA intents to starting negotiations for operations, in order to reactivate the airport AIRPORT IN SOUTHERN ALBANIA The development of the Airport in the Southern Albania project idea goes in line with the increase in capacity of the Albanian civil aviation sector and the increased access to the tourism potential of the Albanian southern region.
Where to invest best? AGRICULTURE Advantages 42.71% of Employment 19.63% 10.09% Contribution Contribution in GDP in Export 42.73% Unused land Potential for organic agricultural development Preferential Trade Agreements with the EU on the increase of exports and free trade agreements with Balkan countries Diverse micro-climate suitable for cultivation of different products Fertile & suitable soil, abundant water resources and optimal climatic conditions Competitive labor cost Continuing and steady sector growth in the past five years 26% increase in exports in 2015. Page 14
Key facts: Where to invest best? MANUFACTURING: Opportunities in Garment, Footwear, Pharmaceutical industry Advantages The manufacturing sector represents about 15% of GDP; Accounting for about 11.4% total employment; 10,257 companies operate in manufacturing sector, dominated by food production companies. Partnerships with major brands and retailers throughout Europe in garment and footwear. Highly skilled and cost-competitive workforce (lower salaries than other countries in the region) High quality products, experience and tradition Short-time deliveries to EU countries Comparatively low transport costs to Europe according to Eurostat Stable and favorable investment climate Government incentives Consolidated legal framework in compliance with EU and international standards Page 15
Coast Natyre, Eco, Rural Main Tourism Product Cultural and Heritage Where to invest best? Secondary Products Beach (sand and sea) Adventure hard Museums Other types of turism Beach - mixed Adventure soft Activities Health (Spa ect) Beach - rural Eco-turism UNESCO sites Wellness (physical and mental health) Rural enviroment Festivals Winter Sports Agro-turism Arts and Crafts Camping Rural heritages History Cultural activities Architectures Rural livelihoods Special Interest Products TOURISM City Break; MICE; Religious festivities; Fishing/Hunting; Bird Watching; Diving; Sea Sport WHY ALBANIA? A great diversity of nature wonders inside a small territory Good climate conditions, which makes the country an all year round destination A young & dynamic population with execellents skills in foreign languages Comparatively low operating costs; RESORTS & YACHT MARINAS Possibility for construction of Touristic Resorts & Yacht Marinas in several areas of Albanian cost line like Kakome, Orikum, Lalzy Bay, Narta, etc. Page 16
Testimonials Page 3
HYDRO ENERGY: Where to invest best? ENERGY SOLAR ENERGY Water resources are amongst Albania's most important natural resources. Eight large rivers, fed by hundreds of smaller rivers and streams, run through the country from the mountainous East to the Adriatic and Ionian seas to the West. The average height of the hydrographic territory of Albania is about 700 m above sea level. The Albania s geographical position and meteorology provide favorable conditions for a sustainable development and production of solar energy. WIND ENERGY Total installed capacity of 1,878 MW; Potential installed capacity of 4,500 MW; Average power production of 4.2 TWh; Potential annual power production of 16-18 TWh; Only 35% of hydroelectric energy potential is currently being utilized Albania has an untapped wind power potential, in particular along the Adriatic coast. The main part of the territory (app. 2/3 of the whole surface) is hilly and mountainous (east of the country). The coast line is in the direction of North-South. Average annual wind speed of 6-8 m/s Average energy density of 250-600 W/m2 Potential for at least 20 oleic electricity centrals There are already several domestic and foreign licensed investors exploring wind power production in Albania. Page 18
TEDA - Technical and Economic Development Areas Koplik On 23.09.2016 MEDTTE announced the bidding phase for the development of TEDA Spitalle. It is located in the North of Durrës District with a Total surface of 200 Ha. TEDA S INCENTIVES Albanian goods entering TEDA are exempted from VAT; Developers and users are also exempted from 50 % of the profit tax rate for a 5 years period - (currently rate 15%); Spitalla Buildings in TEDA are exempted from real estate taxes for a period of 5 years; Buildings transferred to the TEDA are not subject to the transfer tax on real estate; Salaries and social insurance contribution are 150% deductible for the first year; New expenses for salaries and social insurance contribution compared to the previous year are 150% deductible for the subsequent years; Training costs are double deductible for a period of 10 years; Research and development costs are double deductible for a period of 10 years. Page 19
Agency Profile Governmental agency with a Management Board chaired by the Prime Minister A.I.D.A. s mission is focused on: Acquisition of FDIs in Albania Strengthening the competitiveness of Albanian SME-s Promoting exports from Albania A.I.D.A. provides: direct contacts with all public & private sector key deciders project management assistance other services, i.e. market survey, information, etc. Page 3
A.I.D.A.: what we do in detail Promoting Albania as an investment destination Facilitating and supporting direct investments in Albania Qualified Information on opportunities, incentives, policies and schemes Single window for Strategic Investors Handling all applications related to strategic investments Establish contacts with the governmental bodies, authorities Helping and supporting investors to planning their investment itineraries
Albanian Investment Development Agency INVEST IN ALBANIA AIDA, Your Business Partner! Web: www.aida.gov.al Email: info@aida.gov.al fdi@aida.gov.al