Albania has quickly attracted investors’ attention as a key player in Southeastern Europe, especially these last few years. While still a developing country, it’s seen considerable growth thanks to its natural resources, expanding infrastructure, and a government committed to encouraging business development.
However, to truly capitalize on these opportunities, a thorough study must be conducted before deciding and evaluating whether investing here is the right move for you. Here’s what we suggest doing before looking into the Albanian investment scene:
1. Research the Albania’s Economy
Albania’s economy has shown resilience and growth in recent years. In 2024, the country’s economic growth was projected to remain strong at 3.3%, driven by private consumption, tourism, and construction.
Looking ahead, growth is expected to moderately accelerate to 3.4% in 2025. This positive trend is accompanied by a decline in poverty levels, attributed to rising labor income and increased employment, particularly in the private sector.
In 2025, Albania’s inflation rate is expected to rise towards 3%, as the central bank projects a gradual increase to meet its target. The inflation rate averaged 2% in the third quarter of 2024, showing a significant slowdown compared to the previous year. As the country navigates a period of price stabilization, the central bank’s monetary policy aims to keep inflation in check while supporting economic growth.
2. Choose the Right Investment Sector
When it comes to investing in Albania, you’ll want to consider what is likely to grow in the coming years and be aware of potential risks. Albania is still a developing market, so predicting long-term trends can be challenging. While certain sectors, like tourism, real estate, and renewable energy, show strong growth potential, you should recognize that such markets can be volatile, before investing.
Political changes, economic fluctuations, and unexpected global events can all have an impact on investments. Plus, since Albania is not as established as other European markets, so regulatory changes or delays in infrastructure development can affect returns.
Here are some of the industries that stand out and have the potential to continue growing in the future:
Tourism
Over the past two decades, Albania’s tourism and travel sector has significantly boosted the country’s economy, contributing over 8% to the gross domestic product (GDP) (statistic from 2023). This growth has not only created numerous jobs but also accounted for 38% of the country’s total exports.
The Bank of Albania reported that the travel balance for the first half of 2024 was €740 million, showing a 28% improvement from the previous year.
On the same note, Albania’s economy is expected to expand in 2025, driven by the strong performance of the tourism and construction sectors.
Based on these statistics and the strong potential for growth in this industry, tourism is certainly a sector worth considering. Investing in hotels, resorts, or tour operations could be lucrative and a smart move, especially given the rise in tourist arrivals in recent years and those expected this year.
Agriculture
Albania’s fertile land proposes ideal conditions for cultivating a variety of fruits, vegetables, and herbs. The country has a long agricultural tradition, and the demand for high-quality produce continues to rise both locally and internationally. Organic farming, in particular, is gaining traction, driven by the global shift toward healthier and more sustainable food options.
Renewable Energy
Albania has abundant water resources, so hydroelectric power is a highly viable and profitable investment. The country’s vast rivers and natural resources are perfect for expanding hydropower generation.
The government is exploring solar and wind energy projects, which are in line with global sustainability trends.
Real Estate
Albania’s real estate sector is experiencing a period of significant growth, due to factors like urbanization, increasing foreign interest, and the government’s focus on infrastructure development.
Tirana, the capital city, has especially become a hotspot for both residential and commercial property investments. The city’s real estate market has seen an increase in property prices, a trend that is expected to continue as demand for housing and office spaces grows, especially from the rising middle class and foreign investors.
The Albanian government is heavily investing in infrastructure projects, such as the expansion of Airports, the development of a new road axis (Thumanë-Kashar), and improvements to public transport networks.
Albania’s real estate market is becoming more attractive to foreign investors also due to favorable property laws. Foreign nationals can now buy property in Albania with fewer restrictions. Albania’s low property taxes compared to Western European countries also make it a competitive market for real estate development and investment.
The rise in tourism has led to an increased demand for short-term rental properties, particularly in popular tourist destinations like the Albanian Riviera and cities such as Saranda and Vlora. This trend also presents opportunities for both residential and commercial investments, as short-term rentals are often more profitable than traditional leasing.
Market Growth and Projections
The Albanian real estate market is projected to reach a value of approximately $94.44 billion by 2025, with the residential segment accounting for about $82.45 billion of this total.
From 2025 to 2029, the market is expected to grow at an annual rate of 5.99%, reaching a volume of $119.20 billion by 2029.
The residential real estate market in Albania is projected to grow by 6.08% annually from 2025 to 2029, resulting in a market volume of $104.40 billion by 2029.
3. The Law on “Foreign Invesments”
Albania has established a legal environment that protects foreign investments. The Law on Foreign Investments ensures equal treatment and non-discrimination for foreign investors. It guarantees the right to transfer abroad the proceeds of the sale or liquidation of investments, profits, and dividends. Foreign investors have the right to employ qualified technical staff, including foreign citizens, in accordance with Albanian legislation.
4. Registering Your Business
Setting up a business in Albania is relatively straightforward. The National Business Center (QKB) serves as a one-stop-shop for business registration and licensing. You’ll need to provide the necessary documentation, including identification and proof of address.
The process is streamlined; however, if you need professional consulting, don’t hesitate to reach out.
5. Financial Incentives to Attract Investors
The Albanian government offers various incentives to attract foreign investors, such as tax exemptions and subsidies, especially in sectors like tourism and renewable energy. It’s beneficial to research and understand these incentives to maximize your investment. For instance, the Law on Strategic Investments outlines specific incentives for strategic sectors.
Strategic sectors and several fiscal incentives regarding them
6. Build Local Partnerships
Forming partnerships with local businesses and professionals can be highly beneficial. They offer valuable market insights, assist with logistics, and help you navigate cultural differences. Local partners can also make it easier to enter the market and provide a better understanding of consumer behavior, something that sets the foundation of an effective business operation.
7. Stay Informed
Last, but not least, always stay updated with new laws, economic trends, and developments. Engage with local chambers of commerce and industry associations, participate in business forums, to get valuable insights and networking opportunities. We also suggest you keep an eye on reports from international organizations to get a better insight of the country’s economic outlook and potential for growth.
Seek Professional Advice
Investing in Albania presents exciting opportunities, but like any investment, it requires thorough research and careful planning. If you need help navigating the investment potentials, at Expatax.al, we’re happy to assist you every step of the way.
Kilder
Albania’s Economic Growth Stays Strong and Projected to Moderately Accelerate in 2025
Albania’s inflation to accelerate in 2025 – c-bank
Albania transformed by mass tourism
Real Estate in Albania Statistics
Residential Real Estate in Albania Statistics
