It’s still hard to do business in Albania

It’s still hard to do business in Albania
Doing business in Albania still seems to be a difficult mission and those factors that make it so hard relate to problems with electricity, properties, taxes and construction permits. All these three obstacles are making our country less credible in the eyes of investors, while neighboring countries seem to be making steps forward in this aspect. These facts have been confirmed by the World Bank in its last report “Doing Business 2018”, where Albania has lost  seven positions in the global ranking.

So, the report ranks the country on the 65th position in terms of doing business, compared to last year when it ranked 58th. This shows that from one year to another, the country is confronting those who operate a private business in its territory with more difficulties. One of the biggest problems that businesses encounter in Albania is electricity. This factor places the country 157th in the world, which is a rather low global ranking. It is a known fact that businesses in this country constantly face this problem, because many international reports which measure whether or not it’s worthy to do business in Albania, have mentioned it. The same thing can also be said on the issue of properties, which is a rather delicate issue especially for foreign companies that want to invest their money in Albania, but will have to face with court disputes about the ownership of the land. The registration of propertries ranks Albania 103rd in the world. The report continues with the difficulties in the payment of taxes. As far as this factor is concerned, the World Bank has ranked Albania 125th in the world. The country ranks 120th in terms of the enforcing contracts. All of these rankings are very low if they are compared to the general ranking which places Albania 65th in the world. Experts of the World Bank also mention the fact that Albania has registered improvements in several fields, such as access to credit and the amendment of legislation to reduce the maximum number of work hours.

Long waits by businesses for refunds of VAT

“In Albania it takes 37 weeks for Value Added Tax to be refunded”. This is another finding of Doing Business 2018 for our country, thus pointing out another difficulty that businesses face today. The report also explains the fact that the request for refund of Value Added Tax is followed by an audit of tax authorities and that at least four weeks are needed for the tax authority to carry out its audit. “Taxpayers spend 8.6 weeks with the tax audit and then wait another four weeks until the final assessment. They can only receive this refund once the audit is completed. Taxpayers must also wait five weeks for the payment and refund of VAT”, the report in question says. Meanwhile, the report also states that the procedure continues for several other weeks and several other conditions need to be fulfilled before the actual VAT amount is refunded. This gives the impression that a private company in Albania should take into account the long saga that it will go through before demanding a VAT refund.

Balkan region continues

to emerge problematic in doing business

 

The Balkan region, where Albania is part of, continues to emerge problematic for businesses that operate in its territory. According to the Doing Business 2018 report, the region continues to perform below its potential in terms of construction permits and power supply. “On average, 168 days are needed to obtain a construction permit in the region, compared to the global average of 158 days. It takes 114 days for an entrepreneur to be connected to the electricity grid in the region, compared to the global average of 92 days”, experts of Doing Business 2018 say. Meanwhile, the report adds that the best ranking economies of the region of Eastern Europe are Georgia, on the 9th position, Macedonia on the 11th position and Lithuania on the 16th position.

REFORMS

Kosovo is one of the main countries that World Bank Doing Business Report commends for its achievements, especially for the reforms that facilitate doing business. “Kosovo facilitated insolvency procedures by drafting a legal framework for the bankruptcy of corporations”, the report says. The report also says that since the Doing Business report started to be drafted, the region has undertaken a total of 673 reforms.

“The start up of a business, with 120 reforms, is the main indicator of regional reforms, followed by the payment of taxes and borrowing with 108 and 87 reforms respectively”, the report says, adding the fact that 15 years ago, 42 days were needed to start up a business in the region, while now, the time needed is 10 days.

 

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