Business Enabling Environment in Albania

Business Enabling Environment in Albania

Albania stands 82/183 on the most recent World Bank’s Ease of Doing Business ranking of the world’s countries, ahead of Croatia (84) and Serbia (89), but behind Montenegro (66), and Macedonia (38). This ranking is a considerable accomplishment. From 2007‐2009 Albania improved from 136 to 82, making it one of the best reformers in the world. However, nowadays the composite score, which is an average of scores on the nine Doing Business indicators, hides some glaring weaknesses. Albania ranks last in the world (183) in the category ‘closing a business’, and fares poorly in ‘dealing with construction permits’ (170), and ‘paying taxes’ (149).


Where complying with building regulations is excessively costly in time and money, many builders opt out. They may pay bribes to pass inspections or simply build illegally, leading to hazardous construction that puts public safety at risk. Where compliance is simple, straightforward and inexpensive, everyone is better off. According to data collected by Doing Business, Albania receives a no practice mark. Albania leaves behind Croatia and Bosnia- Hercegovina facing much more serious problems with construction permits.

Social security contributions 15% tax rate, Corporate income tax 15%, Health insurance contribution 1.7%, Property transfer tax 2%, Property tax AL 280, Municipal taxes ALL180000, Tax on impact on infrastructure2%, Fuel tax, Employee paid – Labor tax 11.2%, Value added tax (VAT) 20% compose in total the tax burden needed to be paid by businesses. Bosnia and Hercegovina remains at a much more worsen situation as Albania according to Doing Business.
According to data collected by Doing Business, resolving insolvency takes 2.0 years on average and costs 10.0% of the debtor’s estate, with the most likely outcome being that the company will be sold as piecemeal sale. The average recovery rate is 42.3 cents on the dollar. Meanwhile the resolving insolvency situation lies much more worsen in Croatia and Hungary facing a 14.5% debtor’s estate.

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