Government data show micro-enterprises account for 95.7 percent of active enterprises, followed by small enterprises at 3.5 percent, medium-sized enterprises at 0.7 percent and big enterprises at 0.1 percent
TIRANA, Oct. 31 – The implementation of the Regulatory Impact Assessment (RIA) and the establishment of the Central Inspectorate are the two major reforms the Economy Ministry is working on to remove administrative barriers for SMEs which account for almost 99 percent of the total enterprises operating in Albania. This is announced by Deputy Economy Minister Enno Bozdo who last weekend attended a bilateral Albania-EU/OECD meeting on the self-assessment of SME polices under the Small Business Act indicators.
From June to September 2011 Albania implemented the self-evaluation toolkit on the Small Business Act, whose principles are commitments under Albania’s SAA with the EU.
“The Small Business Act principles have found implementation toward the improvement of legislation and the regulatory framework of SMEs, improving the tax and financial system, reducing costs to start a business, licensing, and e-business,” said Bozdo.
Albania ranked at an average level of 3 out of 5 suffering more in principles which include Regulatory Impact Assessment (RIA), helping SMEs to benefit more from the opportunities offered by the Single Market, and enabling SMEs to turn environmental challenges into opportunities.
Government data show micro-enterprises accounted for 95.7 percent of active enterprises in 2010, followed by small enterprises at 3.5 percent, medium-sized enterprises at 0.7 percent and big enterprises at 0.1 percent.
The establishment of one stop shops for business registration, and the launch of the Albanian Investment Development Agency are some of the reforms, but innovation development lags behind other regional countries.
Albanian SMEs have been benefiting from millions of Euros from an Italian government project worth 13.4 million Euros. Some 58 companies have benefited from soft loans of up to 50,000 Euros until October 2011, says the Ministry.
The European Fund for Southeast Europe has also contributed 40 million Euros to support Albanian SMEs.
The Regulatory Impact Assessment (RIA) involves a systematic appraisal of the costs and benefits associated with a proposed new regulation and evaluation of the performance of existing regulations. The government intends to test the light RIA until 2012 when it will decide on whether a full RIA system needs to be implemented.
Meanwhile, the government has also approved a law which reforms the inspection system in the country– cutting the number of inspectorates from 36 to 11, in an effort to increase efficiency and cut costs for businesses. The central inspectorate will be a body under the government authority with the task of supervising the inspectorates’ work and guaranteeing the transparency of their activity. One of its other main duties will be setting up an e-inspectorate system. New inspectors will have the status of tax inspector. “This inspection system has started turning into a grave burden for businesses not only for costs, but also the time it takes businesses,” said Ministry of Economy officials earlier, admitting that bribes remain an issue. The latest European Commission report identified progress in the field of enterprise and industrial policy instruments, and access to finance for SMEs through a credit support scheme financed by the Italian government, the European Fund for Southeast Europe and the setting up of the Credit Guarantee Scheme for SMEs. An agreement was signed in April 2011 with a group of six second-tier banks to facilitate the access by businesses to the 2.5 million Euro Credit Guarantee Scheme.
The EC concludes that there was some progress in simplifying the regulatory framework for businesses and on facilitating access to finance for SMEs. Institutions have been established to facilitate innovation and technological development. Preparations are moderately advanced.
The Agency for Research, Technology and Innovation (ARTI), established in 2010, is now operational but the level of investment in research is still very low (estimated at 0.2% of GDP in 2010).
The latest Global Competitiveness report published by the World Economic Forum placed access to financing and tax rates as the most problematic factors for doing business in Albania.
Some 19.2 percent of respondents placed access to financing as the most problematic factor for doing business. Second, came tax rates with 12 percent of respondents followed by corruption with 10.2 percent of those surveyed. Tax regulations, inefficient government bureaucracy, inadequate supply of infrastructure and policy instability are other factors considered as problematic for doing business in Albania.
