The government initiative is an effort to make Albania more attractive to foreign investors after the corporate income tax was raised to 15 percent this year, angering the business community
TIRANA, Feb. 5 – The Socialist Party-led government has brought back the Albania 1 Euro initiative, offering state-owned assets for a symbolic price of 1 Euro in return for investments and job creation. In a decision approved on Wednesday just few days after Prime Minister Edi Rama visited Italy and unveiled the opportunities to investors, government has specified the details. The “Albania 1 Euro” initiative had been launched by former Prime Minister Sali Berisha back since 2006 but proved unsuccessful in attracting foreign investors in these kinds of investments.
The decision foresees that state run assets with an area of 500 m2 and more can be given for 1 Euro under tender procedures for investments of Euro 10 million in manufacturing industry and in the garment and footwear industry locally known as “fa谮” for which government has not set any investment threshold.
The Economy Ministry can also propose government the signing of symbolic Euro 1 rent contracts for unsolicited offers for investments of more than 2 million Euros in sports, culture, tourism and cultural heritage. Winning companies, which will be supervised by a monitoring entity, will have to pay 10 percent in investment guarantees, before signing the contracts.
The government decision also foresees the rent of other state owned assets based on the level of investment, employment and monthly rent offered.
The government initiative is an effort to make Albania more attractive to foreign investors after the corporate income tax was raised to 15 percent this year, angering the business community which opposed the initiative as making Albania less competitive compared to other regional countries applying 10 percent flat tax regimes.
FDI, which in 2012 ranked Albania as the second largest recipient in South-East Europe, continued positively performing in the first three quarters of 2013 when it rose by 27 percent. FDI in the first nine months of 2013 rose to 712 million euros, up from 562 million euros during the same period in 2012, registering a record high for the first three quarters of a year, according to Bank of Albania data. The FDI was boosted by privatization and investments in hydropower plants.
A UN report shows Albania attracted USD 957 million in foreign direct investment in 2012, down 7.6 percent compared to 2011, but remained the second largest FDI recipient among six transition economies of the South-East Europe after Croatia.
