TIRANA, June 1 – The number of foreign-owned companies operating in Albania registered a 5 percent decline in 2016, with fewer companies in the construction, trade and call center dominated information and communication sector, according to a report by INSTAT, the state statistical institute.
Data shows the number of foreign-owned companies slightly dropped to 5,637 in 2016, down from a record 5,939 in 2015 apparently negatively affected by the long-ailing construction industry and the call center industry following some legal changes in Italy making the supply of services from non-EU countries such as Albania much tougher.
However, foreign direct investment in the country hit a record high of about Euro 1 billion, mainly as a result of some major energy-related projects such as the Trans Adriatic Pipelines and some big hydropower plants.
Foreign-owned or joint venture companies accounted for 3.5 percent of total active enterprises in 2016 with more than half of them being Italian-owned and 10 percent Greek-run.
Neighboring Italy and Greece are the country’s top trading partners and investors, also the host of about 1 million migrants, who have provided key support to the country’s development through investment, know-how and remittances.
INSTAT data show there were 2,661 Italian or joint Italian-Albanian ventures operating in the country at the end of 2016, down from 2,753 in 2015. Italian companies in Albania are mainly involved in the services sector and dominated by micro-enterprises employing up to 4 people while 174 companies employ more than 50 people.
Italian companies in Albania mainly operate in the garment and footwear sector producing the country top exports and the call center industry, employing about 25,000 people, which is suffering a new blow as big Italian companies are recently repatriating services as part of the Italian government’s efforts to curb outsourcing of these services to other low-cost countries serving as hubs.
The number of Greek companies operating in the country also suffered a sharp cut in 2016 when it fell to 521, down from 675 a year ago. Greek companies in Albania are involved in key sectors of the Albanian economy including banking, construction and other services, making the neighboring country which is escaping its worst-ever recession the biggest foreign direct investor in Albania.
Companies from Kosovo, Turkey and Germany follow Italian and Greek-owned enterprises. INSTAT reports there were 442 Kosovo companies in 2016, compared to 429 Turkish ones and 152 German ones at the end of 2016.
Back in 2015 there were 5,939 foreign companies, up 13 percent compared to 2014, of which 1,855 joint ventures with Albanian partners, accounting for only 4 percent of total enterprises in the country.
The number of active enterprises rose by an annual 5.5 percent to more than 160,000 at the end of 2016, mainly as a result of an ongoing nationwide campaign against informality launched in late 2015. The number also includes some 31,000 farmers who obtained tax ID numbers allowing them to legally trade their products in return for paying social security contributions.
Albanian enterprises are overwhelmingly dominated by SMEs with 91 percent being family-run micro-enterprises with 1 to 4 employees.
Only about 1.1 percent of the total enterprises, some 1,690 employ more than 50 people, but contributing to about half of total employment.
Women run only about a quarter of total enterprises in the country most of which operate in the services sector.
