EU businesses leave Albania while the county suffers low entrepreneurship

Tirana Times
By Tirana Times June 6, 2019 13:50

EU businesses leave Albania while the county suffers low entrepreneurship

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  • It is also worrying that the orientation of enterprises remains commercial and not producer, which means that the growth of salaries or the number of employees remains stable.

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TIRANA, June 5- Albanian Institute of Statistics (INSTAT) data shows that 141 European enterprises closed their activity over the past year. Our country counted 6,259 foreign-owned businesses in total during 2018, of which 4056 were from European Union countries. But despite the collapse of businesses from the EU, there is an increase in the number of ventures from other countries outside the European Union. In the last report of the European Commission Albania is considered as problematic with regard to competition, law enforcement in relation to ownership, and the instability of fiscal policies.

Foreign investors in Albania have mostly one to four employees and operate in the trade sector. Meanwhile, enterprises with over 50 employees occupy a very small share in our economy. Most of the European businesses are from our two neighboring countries Greece and Italy. The enterprises with owners or co-owners of Italian and Greek origin represent 52.8 percent of the total foreign joint ventures. These investments are mainly concentrated in Tirana and Durres counties. Throughout 2018 in the Albanian economy 90 percent of businesses are small and have up to four employees, or more specifically they are family businesses.

Enterprises with more than 50 employees on the other hand comprise of only 1.2 percent of the total businesses, a reported indicator unchanged for several years which shows that economic development remains difficult and in the same standard. It is also worrying that the orientation of enterprises remains commercial and not producer, which means that the growth of salaries or the number of employees remains stable.

And as EU businesses are leaving Albania, less businesses are being opened in our country by the day. INSTAT figures showed that in 2018 the pace of new businesses active in the economy fell by 18 percent. Since 2015, the year that coincides with the famous anti-informality action, the number of new enterprises active in the economy has been declining. By the end of 2018 according to INSTAT, some 20,200 new businesses were registered, from about 25,000 registered in the previous year. Likewise, a year ago the number of new open businesses marked a contraction of 20 percent, while in 2016 their number was halved compared to the previous year.

The peak of newly opened businesses was in 2015, with 56780 registered new businesses, 2.2 times more than a year ago. As a result of the informal action launched in September 2015, many ambulant businesses rushed to register, but a large part of them emerged from the market in the coming years. According to economy sectors, the biggest shrinkage was in service providers, whereby 13,549 new businesses were opened in 2018, from over 17,000 that were opened a year ago, or 20 percent less. While new businesses in the production of goods were fell by 11 percent, from 7600 to 6730 businesses.

The Enterprise Register on the other hand, counted 162,835 active enterprises at the end of 2018 numbers, almost the same as 2017. From the Economic Enterprise Register 2018 published by INSTA it resulted that in 2018 small businesses decreased by 5216 subjects, falling to 93 thousand. Closure of small businesses is a phenomenon that has been starting for several years, as a result of competition from large malls and supermarket chains, but since 2018 it has been accelerated further due to a fall in the VAT threshold from 5 to 2 million lek. Meanwhile, registered farmers increased by 4,400 more, reaching 4.,9 thousand farmers as a result of measures for the formalization of agriculture and the orientation of farmers to be equipped with NIPT (taxpayer unique identification number/license),in order to benefit from subsidies. 

Tirana Times
By Tirana Times June 6, 2019 13:50