GENERAL COSTS FOR THE CONSTITUTION OF A COMPANY

According to Albanian tax legislation, when registered with the local tax office, the following should be considered in principle for the new company:

Profit tax: from 0% to 15% maximum
“Cleaning” tax: Lekë 6,000 – 200,000 (equivalent to E 43 – 1438) {annual};
Signage tax – Lekë 1,000 – 3,000 (equivalent to E 7.10 – 21) {annual};
Property tax – variable: Lekë / m2, applied to any real estate property owned by the new {annual} company.

The new company must declare the person (s) employed or about to become one to the employment office; a service fee of 1,000 Lekë is foreseen (equivalent to Euro 7.10); as well as registration with the Chamber of Commerce (annual fee: Lekë 20,000 equivalent to or 143).
The administrative and notarial costs for setting up the new company at the Commercial Register are approximately ALL 17,000 – 20,000 (equivalent to approximately 122 – 143 Euros).

The cost of labor and the advantages of productivity

According to Albanian legislation, the gross monthly minimum wage is ALL 26,000, equivalent to approximately Euro 210. The average monthly gross wage in Albania is approximately Euro 260, therefore very competitive globally. Average gross wages range from € 315 per month for customer service employees to just over € 415 for data entry workers and € 500 for accountants. The average gross wages per manager is around € 800 – 1,000 per month. This being the level of wages in the service sector, investors can make significant savings on labor costs compared to other areas of Eastern Europe. Personnel in the Albanian business services sector produce at good rates of good productivity and at low cost.

In addition, according to the decisions of the Council of Ministers of the Republic of Albania based on Law No. 7995 of 20 November 1995, “For the promotion of employment”, as amended, a series of economic contributions are provided by the Albanian Government in worker recruitment.

These contributions are paid through different programs, regulated by the aforementioned decisions of the Council of Ministers.

PRIVATE PUBLIC PARTNERSHIP (PPP) AND CONCESSIONS

The Public Private Partnership (PPP) and Concessions are commonly used by the Albanian Government in order to finance public projects. The main legal instruments of PPP are: Leasing, Emphyteusis, Public Procurement, Joint – Venture and Concession.

PUBLIC PROCUREMENT

Public Procurement in Albania is also published on the website (www.app.gov.al).
If envisaged, the companies concerned may also set up a joint venture to present their offer.
The works and / or services subcontracted by the winner to third parties must not exceed 40% of the contract value.
The Public Procurement Agency controls public procurement and has various specific tasks such as advising the contracting authority and tenderers in the legal framework of public procurement; management of on-line publication of tenders; annulment of the decisions of the contracting authorities when they violate the law; taking initiatives to improve the legal framework for public procurement; ect.
The Ombudsman is an administrative body that investigates, either for its own initiatives or on the basis of requests from other parties, regarding irregularities in public procurement and reports its conclusions to the Public Procurement Agency and to the other competent authorities.
The public procurement legal framework provides for an administrative review of the decisions taken by the contracting authority and an investigation procedure conducted by the Public Procurement Agency.
In addition, interested parties can submit their requests to the Tirana District Court.
Companies that participate in public contracts and that at the end of the process complain to their respective procedures, will have to pay a fee in advance, in order for their complaint to be considered.
The set fee is 0.5% of the tender amount. In the event that the complaint of the economic operator is considered lawful and founded, the entire sum is returned to the same; otherwise, the contribution is transferred to the State Budget. The high number of complaints received in the past by the Public Procurement Commission and also the excessive protraction of the tender processes led to the application of this tariff.

CONCESSIONS

Concessions are foreseen in the following sectors:

Transport (highways and roads, engineering structures, railways, canals, ports, airports, bridges and tunnels);
Production, transmission and distribution of electricity and heating;
Water supply including production, administration, cleaning and distribution; treatment,
accumulation and distribution of black water, irrigation, drainage, cleaning of water channels and dams;
Administration, collection, transportation, processing and disposal of solid waste;
telecommunications;
Education and sport;
Health sector;
Infrastructure in the prison sector;
Projects relating to the recovery of land and forests in industrial areas, parks and information technology maintenance services;
Natural gas supply;
Agreements on the management and implementation of public services, included in the sectors mentioned above.

The Council of Ministers, on the proposal of the Minister of Economy, can authorize the implementation of concessions in other sectors.

Interested parties may submit, even if not required, concession plans. If these projects are approved, a bonus credit is attributed to the party that submitted the project for the preparatory work for the realization of the unsolicited projects. This bonus gives the best bidder an advantage over other competitors during the selection of the concessionaire for the realization of the project.

Companies may form joint ventures in order to submit the offer for a concession project.

In any case, the special purpose vehicle (SPV) must be set up for the implementation of the concession project.

The transfer of ownership of shares and / or shares of the aforementioned SPVs is subject to approval by the contracting authority.

In special cases, the Council of Ministers can offer concessions at the symbolic price of 1 Euro or to local or foreign investors for the enhancement of investments in the sectors indicated or in other sectors of primary importance for the development of the country, on the basis of strategic objectives. The Minister of Economy proposes to the Council of Ministers for his approval the list of assets to be granted under concession at the symbolic price of 1 Euro.

The Concession Agency assists the contracting authority for the entire procedure, from the identification of any concessions to the signing of the agreement.

Also for concessions, the Ombudsman protects the interests of the bidder, examines the requests and complaints of the bidders, investigates any violations of laws and reports the results to the contracting authority and the Concession Agency.

The legal framework for public procurement also provides for administrative concessions of the contracting authority’s decisions and an investigation procedure conducted by the Concession Agency. In addition, interested parties can always submit their requests to the Tirana District Court .