TIRANA, Dec. 24 – Albania continues lagging behind most regional competitors when it comes to doing business, according to a report by US-based Forges magazine.
This year’s 2019 ‘Best countries for business,’ placed Albania 74th out of 161 nations, leaving behind only Bosnia and Herzegovina among its regional EU aspirant Western Balkan competitors.
“Complex tax codes and licensing requirements, a weak judicial system, endemic corruption, poor enforcement of contracts and property issues, and antiquated infrastructure contribute to Albania’s poor business environment making attracting foreign investment difficult,” says the Forbes report.
This year’s report shows Albania’s has only made substantial improvement in property rights, a long-standing concern for foreign investors to the country due to unclear property titles hampering investment in key sectors, primarily the emerging tourism sector.
Yet, property rights, which Albania is trying to settle through new legal changes, rank the country 102nd, in the worst performance out of ten indicators measuring innovation, taxes, technology, corruption, freedom, red tape and investor protection.
The tax burden, another top concern for local and foreign companies operating in the country, ranks Albania 102nd, worse than other regional competitors applying flat tax regimes of around 10 percent, and with the overall tax level even higher compared to Serbia, the region’s largest economy.
Albania’s best indicators in the report are trade, monetary and personal freedom, red tape, innovation and technology ranking the Balkan country among the world’s top 60 performers.
The Forbes report notes the Albanian economy is still vulnerable to developments in its main trading partners Italy and Greece, the hosts of around 1 million Albanian migrants.
“Close trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of possible debt crises and weak growth in the euro zone,” says Forbes.
Albania has been losing ground in the Forbes ranking since 2014 when it ranked 58th out of 146 countries, reflecting an increase in the tax burden after the country switched to progressive taxation and increased the corporate income tax and the withholding tax on dividends, rents and capital gains by 5 percent to 15 percent.
The latest World Bank Doing Business report showed Albania climbed only two steps to rank 63rd out of 190 global economies for the ease of doing business, continuing to lag behind most of its regional competitors ranking in the top 50.
