The results of the fifth business survey by DIHA show that Albania continues remaining one of the least attractive destinations in Central and Eastern Europe to German investors along with Kosovo, Hungary and Slovenia
TIRANA, April 28 – Transparency of public procurement, fight against corruption and crime, the research and development and the predictability of economic policies are the top concerns for German businesses operating in Albania and their Albanian partners, a survey conducted by the German Association of Industry and Trade (DIHA) has found.
This year’s survey showed the perception of doing business in Albania has slightly improved but the current economic situation is rated good and satisfying by only 53 percent of respondents, compared to 39 percent a year ago.
The qualification of employees, labour costs, adequacy of higher education, productivity and motivation of employees and availability of skilled staff are rated as the most positive factors in Albania’s business environment.
Expectations about the economic situation in 2015 when the economy is expected to accelerate to 3 percent have slightly improved with 35 percent of businesses expecting a better situation, 48 percent saying it will remain unchanged and 16 percent expecting tougher times.
The businesses own situation appears more critical with only around a quarter reporting their situation has improved for 2015, registering the poorest result since DIHA’s first survey in 2011.
Only 22 percent of businesses expect to increase their investments for 2014 and only around 28 percent say they will hire more staff.
Only one out of five companies say the Albanian work force is well-prepared for the companies needs by the national education system. However, only around half of enterprises expressed readiness to contribute financially to an organization for vocational training in courses of limited time for already employed staff.
The results of the fifth business survey by DIHA show that Albania continues remaining one of the least attractive destinations in Central and Eastern Europe to German investors along with Kosovo, Hungary and Slovenia.
Only 66 percent of German enterprises say they would still invest in Albania if they were given the opportunity once again compared to 86 percent a year ago. Anette Kasten, the director of the DIHA, attributed the situation to the fact that Albania is little known abroad.
The predictability of economic policies and the increased tax burden seems to have had a bad impact on the perception of the business climate in Albania.
Since January 2014, the corporate income tax has been raised to 15 percent, up from 10 percent previously when Albania applied a 10 percent flat tax regime on corporate and personal income taxes. The tax burden for 2015 has further increase by raising the withholding tax on dividends and rents and capital gains, increasing the circulation tax on fuel and imposing higher excise rates on tobacco.
The DIHA survey on the business environment included 1,435 companies from 16 central and eastern European countries. Some 33 companies, part of DIHA, participated in the Albania survey.
German companies are already present in Albania operating in several key sectors.
The biggest German investments in Albania can be found in the Tirana International Airport, the Durres Port, the Tirana Business Park.
German-owned ProCredit bank also plays an important role, offering loans to SMEs and most recently to renewable energy projects.
German companies in Albania are also actively engaged in other important sectors such as construction, production, retail sales and logistics. Tirana Business Park, a Euro 100 million investment led by Germany’s Lindner Group, is being built outside Tirana.
Germany is one of Albania’s main trade partners and foreign investors.
The German development cooperation with Albania was launched in 1988, just before the collapse of the communist regime. Since then, the German federal government has made available around 1 billion euros in financial cooperation projects throughout the country. The focus is on improving municipal infrastructure and energy supply and strengthening the financial sector.
