The Law no. 55/2015 “For strategic investments in the Republic of Albania”, determines the procedures and rules applied by state bodies for the examination, approval, and support by the Albanian government of strategic investments in Albania, both domestic and foreign. The deadline for obtaining ‘Strategic Investment’ status, after being postponed several times, expired on 31 December 2023, however now a new amendment pending approval by the parliament, aims – among other things – to extend the benefits of the law until 31 December 2027.
Draft Law Proposes Unified Investment Thresholds
Based on the sustained interest in this legal package and the current peak in both the inflow and accumulated stock of foreign investments, reaching the highest figures observed in the past decade in Albania, the amendment envisages extending the deadline for submission of applications to obtain ‘Strategic Investment’ status, until December 31, 2027. Until now, 88 investment projects have sought to obtain the ‘Strategic Investment’ status since 2016. Out of these, 40 projects have benefited, 14 have been rejected, and 34 are currently under evaluation, with the primary focus being the tourism sector.
In addition, based on the new draft law, there will no longer be distinct criteria for different investment sectors to obtain the Strategic Investment status; instead, all applications will adhere to unified investment thresholds, contingent upon the specific procedure they apply for.
To obtain the “Strategic Investment – Assisted Procedure” status, the proposed investment must be valued at 50 million euros or more, create a minimum of 300 new jobs, or target priority development areas. Meanwhile, projects that seek to obtain the “Strategic Investment – Special Procedure”, are required to offer an investment equal to or greater than 100 million euros or, the generation of a minimum of 500 jobs.
Investments obtaining “Strategic Investment – Assisted Procedure” status can benefit from priority treatment of preparation of documents, issuance of opinions and following of procedures which are in the scope of activity of state administrative bodies, land consolidation, support through auxiliary infrastructure financed by the government and the making available of state-owned immovable properties based on the applicable law.
Investments that obtain the ‘Strategic Investment – Special Procedure’ status on the other hand, in addition to the above, can benefit from the expropriation of private property to enable the development and implementation of the project and, approval by the Parliament of the relevant contracts of strategic investment to increase the security of the relationship between the investor and the government.
Increased Efficiency of the Review Process
The proposed amendments to the law also aim to streamline the application and review procedures, to make the process more efficient and easier to follow.
Initiating the procedure involves submitting a letter of interest to the Albanian Investment Development Agency (the “Agency“), with a noteworthy improvement being the reduction in the initially required extensive list of documents required for the initial application. The draft law emphasizes an early analysis of the investor profile by the Agency, cadastral identification of the proposed investment site, consultations with relevant authorities and cooperation of the Agency with the potential investor to prepare the application.
Following the submission of complete required documentation by the applicant, the Agency delivers the application to the responsible line ministry for review and approval, in which case the ministry must engage to review the file within 20 days. Following approval of the proposed investment and proposed support measures, the ministry delivers the proposal to the Strategic Investment Commission, which is the body in charge of rendering the final decision on whether the ‘Strategic Investment’ status will be granted or not. The procedure is finalized with the approval of the proposed strategic investment contract and support measures, by the Albanian Council of Ministers.
Overall, considering the more active role of the Agency in the procedures, the proposed changes will potentially reduce the processing time required to obtain the Strategic Investment status.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
By Oltion Myftari, Senior Associate, Karanovic & Partners