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The Status of FDI in Albania

The Status of FDI in Albania

Issue 9.11
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With interesting transactions taking place recently and an overall uptick in FDI numbers, it would appear that Albania is fertile ground for high ROI. Deloitte Legal Local Partner Sabina Lalaj and Kalo & Associates Co-Managing Partner Eni Kalo zero in on the status of FDI investments in Albania, explore the most appealing sectors and investors, and make predictions for the future.

Legal Framework

“In general terms, the Albanian legal framework for FDI is firmly established on the principles of non-discrimination and equal treatment,” Lalaj begins. “The 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 favorable than those recognized to domestic investments under similar conditions – with the exception of ownership of land – which is regulated by a special law,” she explains.

“To incentivize and promote FDI, Albania has built institutions such as the Agency for Promotion of Foreign Investment, Agency for Export Promotion, Agency for SMEs, etc. and has signed and is implementing free market agreements with other countries in the region,” Kalo says. “Laws that affect foreign investments are also other pieces of legislation like the law on foreigners, labor code, civil code, banking laws, securing charges law, investment schemes, capital markets, etc. and also the respective regulatory frameworks.”

Biggest Investments and Their Origin

“Albania offers great investment opportunities in sectors with stable economic growth,” Kalo reports, pointing primarily to the energy and mining industry, transport and logistics, tourism, agriculture, and manufacturing. “Logically, the biggest market entries can be found in those areas, especially in oil and gas, construction, energy, mining, and financial services,” she reports.

Specifically, in recent times, there have been significant moves made primarily by Hungarian investors. “The largest market entries in the last years come from the Hungarian market,” Lalaj says, pointing to OTP Bank acquisitions. “In 2019, the OTP Group acquired a 100% interest in the Albanian unit of France’s Societe Generale, which was renamed OTP Bank Albania.” Then, in December 2021, OTP Bank acquired a “100% interest in Alpha Bank Albania SH.A., the Albanian unit of Greece’s Alpha Bank.” Lalaj reports that OTP Group plans to “complete the integration of Alpha Bank Albania with its local subsidiary OTP Bank Albania in 2023, creating a banking group with a market share of about 11% in terms of assets.”

Furthermore, Lalaj reports that, in 2021, “4iG Plc has signed a final agreement to acquire 80.27% of the shares of ALB Telecom, Albania’s leading fixed line internet and TV operator, the largest owner of a fiber network in the country, and a mobile operator with a significant network of its own.” Then, in March 2022, “4iG Plc has acquired a 99.899% indirect stake in One Telecommunications,” Lalaj reports. According to her, the Albanian mobile operator, with a history of 25 years, has an outstanding infrastructure in the region. With this acquisition, she says, Hungarian 4iG has “become a leader in the Albanian telecommunications market” and is currently ranked among the largest foreign investors in the country. “The merger of One Telecommunications and ALB Telecom is expected to be finalized shortly, further consolidating the position of 4iG in the Albanian telecommunications market,” she reports.

Additionally, Kalo says there are investors from European countries such as Austria, Switzerland, Greece, Italy, Netherlands, Italy, and Turkey most frequently. “Canada and Germany have also marked a constant investment rate, while the US, Kosovo, and Bulgaria have recently shown an increase in investment rates,” she reports. Specifically, Kalo explains that “Switzerland, the Netherlands, and Canada are currently the countries with the highest Direct Investment Stock values. Until 2017, Greece was the country with the highest value but, since 2018, it was replaced by Switzerland, which is mainly focused on energy, such as the Trans Adriatic Pipeline and the Ballshi factory investments.” 

Currently, Swiss FDI makes up for 17.4% of all investments and Kalo reports that, with the Netherlands growing its investment to EUR 1.65 billion, it takes second place with 16%. Dutch presence manifests itself in Albania “through operations of Shell and some other companies operating in Albania as branches or subsidiaries of companies registered in the Netherlands, including Vodafone Albania, Devoll Hydropower, Solar Karavasta, American Hospital, etc.,” Kalo explains. Rounding out the list of largest investors is Canada, with 13% of the total FDI stock.

Areas of (Long-Term) Interest

In addition to the telecommunications deals mentioned above, Lalaj stresses that “the energy sector has become a hot topic,” with “many new initiatives for investments in energy from investors from the US and Europe.” She also reports that LNG is an attractive area, “with the government launching a project for an LNG terminal in Vlora Bay and the reconstruction of Vlora Power Plant. On the other hand, the latest decision for the expansion of the Trans Adriatic Pipeline capacities enhances the opportunities relating to transmission and sale of gas in the Balkan region, and further in Europe.”

Additionally, Lalaj stresses that “the tourism sector is also seeing a lot of attention,” and “considering that Albania is one of the last undiscovered countries in Europe, the developments in tourism will continue to grow, also due to the incentivizing fiscal regime approved lately.”

Kalo agrees, adding that tourism and agriculture represent “high investment values,” reaching investments as high as EUR 50 million.” Also, she adds the oil industry to the list, as well as the banking and finance sectors. “There is a gradual increase of demand for capital to commercial banks,” Kalo reports.

Looking at the longevity of investments, Kalo reports that “the biggest deals, such as the ones in energy or gas, include projects that require many years to be implemented, so they are so far investments made once, but they might include more transactions to be made in order to finalize them successfully.” According to her, there are structural factors at play in favor of direct investment. “The government has created a one-stop-shop service, the Albanian Investment Development Agency, to assist the investor by carrying out all preparatory work and the relevant applications under an accelerated procedure,” she explains. 

In addition, Kalo reports that the government has “accelerated procedures and shortened deadlines for giving priority to applications rendered by the strategic investors and by offering to grant the right to use immovable property in support of investments,” all as means of incentivizing FDIs.


Looking at the bigger picture, it would appear that Albania has vibrant, diversified, and attractive market sectors which draw in various foreign investors. The best part? It does not seem to be slowing down.

“Currently, foreign investments in Albania are at an all-time high, with FDIs reaching 23% of the property market value in Albania,” Kalo reports. Moreover, she shares that the “first trimester of 2021, with a total of EUR 59 million, marked almost twice the amount of investment conducted in the same period of 2020” in Albania’s real estate.

“In the first half of 2022, FDI reached a record of EUR 634 million, the highest historic level ever registered for this time of year,” Kalo continues. “So far, the statistics have recorded a 35% increase in FDIs compared to last year. The second trimester, on its own, marked a record flux of foreign investments, at EUR 337 million, which is 43% higher than last year and the highest amount ever recorded in one trimester,” she reports. During this trimester, investments focused primarily on the “hydrocarbon sector at 18%, energy at 13%, financial mediation at 5%, and communications at 2%.”

With the numbers telling a tale of strength, the regulators are looking to make the most of it. Kalo reports several incentives, such as the “feed-in-tariffs or contracts for difference, allowing solar and wind power producers to sell their energy to public off-takers, in the first case, and the market, in the second case.” In addition, there are import duty exemptions “for machinery used in solar power plant construction, excise tax refunds for fuel used in electricity production … and customs duties and VAT exemptions for solar panel systems for … buildings or technological processes in industry,” under certain conditions.

Considering all these incentives and figures, “the Albanian FDI market seems to be on a definite rise,” Kalo concludes. 

This article was originally published in Issue 9.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here

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Local contacts:

1. Albania and Kosovo

Deloitte Legal Sh.p.k

Sabina Lalaj, Attorney-at-Law, Managing Partner


2. Bosnia and Herzegovina

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

Aida Hamur, Attorney-at-Law 


3. Croatia

Krehić & Partners in cooperation with Deloitte Legal

Tarja Krehić, LL.M. (DUKE)

Attorney-at-Law, Managing Partner


4. Serbia, Montenegro and North Macedonia

Law Office Antonić

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