Strategic and foreign investments in Albania: structural incentives, governance challenges, and the risks of corrupt clientelism

Albania has a total land area of 28,748 square kilometres. About 24% of the land is classified as agricultural, while another 16% is permanent pasture and meadow. The country also has a 316-kilometre coastline along the Adriatic and Ionian seas, as well as 73 kilometres of shoreline along inland lakes.

Albania has abundant natural resources. The southwestern area is rich in oil and natural gas reserves, while the northeastern part of the country contains sizable mineral deposits. Notably, these include chromium, copper, and iron-nickel, along with large reserves of bitumen ⁽¹⁹⁾.

Albania’s terrain is mostly hilly and mountainous. Administratively and legally, the country is divided into 12 counties and 61 municipalities ⁽²⁰⁾.

As of January 1, 2025, Albania’s population was recorded at 2,363,314, signifying a 1.2% decline from January 1, 2024. The median age increased from 43.5 years in 2024 to 44.3 years in 2025 ⁽²¹⁾

Regarding the labour force and its potential for development investment—especially in strategic sectors such as agriculture, tourism, energy, and mining—there has been a notable decline. This decrease primarily results from high emigration levels from these regions, which have gradually reduced the active workforce over time. As a result, all sectors have lost labour capacity; however, the strategic sectors have been the most severely affected by outward migration.

As previously discussed, reference was made to the overall legal framework governing foreign investments in Albania, emphasising that the level of legal protection provided to such investments is both comprehensive and intended to offer preferential treatment to foreign investors. The next section will then shift focus to a detailed analysis of Law No. 55/2015 “On Strategic Investments in the Republic of Albania”.

Alongside the law on foreign investments ⁽²²⁾, which aims to promote key sectors such as tourism, fisheries, agriculture, mining, and innovation, Albania has also passed legislation specifically regulating investment activities of a strategic nature. These legal frameworks are part of a broader system aligned with the country’s European Union integration goals and are intended to support growth in priority sectors vital to national development.

The Republic of Albania has identified several sectors of the economy as “strategic” based on their vital role in national development, economic growth, and regional competitiveness. Law No. 55/2015, On Strategic Investments in the Republic of Albania, aims to stimulate sectors with tangible development potential for the country—especially those capable of creating jobs, reducing migratory flows, and, ideally, encouraging Albanian emigrants to return to their homeland. The law, in both its structure and purpose, seeks to attract significant economic capital that can help guide Albania toward European integration. In doing so, it supports broader goals of modernisation, innovation, and increased competitiveness compared to other countries in the Western Balkans and the European Union.

Since 1990, migration has significantly reduced Albania’s labour force. Although there have been sector-specific changes in population movements over the years, the ongoing “migration haemorrhage” has had a long-term effect on the country’s human capital. This demographic outflow has led many foreign investors—both current in Albania and those considering future investments—to view the viability of projects in key strategic service sectors and production industries with growing scepticism.

A modest but notable investment trend has emerged within Albania’s strategic sectors, particularly involving returnee investors—Albanian nationals who had previously emigrated and have now returned to their country of origin. This pattern is especially observable among individuals aged 38 to 50, who are choosing to reinvest in Albania, primarily in the agriculture and tourism sectors ⁽²³⁾.

Returnee investors often bring not only capital but also enhanced managerial skills, technological expertise, and innovative approaches gained during their time in host countries ⁽²⁴⁾. This process exemplifies a form of “knowledge remittance,” where migrants returning from more developed economies transfer intangible assets—such as business models, labour standards, and service innovation—into Albania’s emerging sectors ⁽²⁵⁾

These individuals—often operate as sole proprietors or through limited liability companies (sh.p.k.), and sometimes partnering with foreign stakeholders—are increasingly investing their savings in establishing agro-cultural and tourism-oriented businesses. The primary form of investment remains centred on family-based agricultural production and agrotourism, reflecting a shift toward sustainable, community-driven economic models (Domi, 2019).

This phenomenon is happening amid an ongoing demographic decline. According to the Albanian Institute of Statistics (INSTAT, 2025), the country lost 28,836 people from its active labour force in 2025 alone, mainly due to emigration trends. This outflow of working-age individuals highlights the urgent need for policies that encourage return migration and support diaspora-led investment in key sectors.

The ongoing challenges from emigration, combined with a steady decline in birth rates, have led to a continuous decrease in Albania’s population. This demographic shrinkage is expected to accelerate, with an annual net loss of approximately 50,000 people due to low fertility rates, rising mortality rates, and outward migration. The resulting imbalance in the birth-death-emigration-labour force ratio raises serious concerns about Albania’s long-term socio-economic stability (INSTAT, 2025).

Forecasts suggest that by 2027, Albania’s population could decline to about 2.2 million residents, which will significantly limit the active labour force capable of supporting or attracting foreign direct investment (FDI), especially in key sectors. These sectors include tourism, fisheries, agriculture, mining, and innovation—areas that are prioritised and regulated by specific laws such as Law No. 55/2015, On Strategic Investments in the Republic of Albania.

Without sufficient policy measures to address labour shortages and curb emigration, the country risks structural obstacles that could hinder large-scale investment projects and weaken Albania’s broader efforts to integrate with the European Union (World Bank, 2023; UNDP, 2021).

The special legislation regulating strategic investments in Albania was enacted in 2015, supplementing the broader legal framework governing foreign investment in the country. The Law on Strategic Investments in the Republic of Albania specifically aims to encourage and attract both domestic and foreign investments in sectors identified by the law as strategic.

According to Article 1, the law’s goal is to promote strategic investments by establishing favourable, efficient, and streamlined administrative procedures, along with support mechanisms and public services designed to meet the needs of investors ⁽²⁶⁾.

These mechanisms aim to foster a more efficient and investor-friendly institutional environment, thereby boosting Albania’s competitiveness in regional and European markets.

As reflected in the law’s stated objectives, investor entities—whether foreign or domestic, including those covered by Law No. 7764, dated November 2, 1993, On Foreign Investments, as amended - are eligible for special treatment under the strategic investment regime, provided they meet the criteria outlined in the law.

Once these conditions are met, such investors are legally recognised as “privileged entities”, thereby gaining preferential access to administrative and fiscal procedures governed by the applicable Albanian legal framework ⁽²⁷⁾.

This designation aims to streamline investment procedures, eliminate bureaucratic barriers, and create a more attractive and predictable environment for high-impact capital projects.

To fully implement the strategic investment framework, the Council of Ministers has approved a comprehensive set of ten secondary normative acts designed to regulate the enforcement of this law. These acts cover both administrative and judicial procedural aspects of the law, thereby closing potential legal gaps and improving institutional clarity and consistency in applying strategic investment provisions.

This secondary legislation plays a vital role in standardising inter-institutional cooperation, investor procedures, and outlining the rights and responsibilities of public authorities involved in approval, monitoring, and dispute resolution processes related to strategic investment projects.

According to the law ⁽²⁸⁾, the following are designated as strategic sectors eligible for preferential legal treatment under the strategic investment framework:

• a)

  the energy and mining sector;

• b)

  the transport, infrastructure, electronic communications, and urban waste management sector;

• c)

  the tourism sector, specifically related to tourism infrastructure and facilities;

• ç)

  the agriculture (large-scale farming) and fisheries sector;

• d)

  the technological and economic development zones;

• dh)

  priority development areas.

These sectors are considered vital to the national economy. They are prioritised for accelerated investment procedures and institutional support, in line with the overarching objectives of the law.

These sectors are further divided into interconnected sub-sectors, designed to support and strengthen one another in the effective execution of strategic investments. This functional interdependence is officially recognised and governed by a decision ⁽²⁹⁾ issued by the Council of Ministers of the Republic of Albania.

The classification of strategic sub-sectors facilitates the implementation of the broader strategic categories outlined in the law ⁽³⁰⁾. It also clarifies the roles of government agencies responsible for evaluating, coordinating, and approving strategic investment proposals. This layered structure ensures a consistent policy approach to investments that involve multiple sectors, such as large infrastructure projects, integrated tourism zones, or technologically advanced agricultural clusters.

The strategic sectors include all key areas of national development considered essential to sustainable economic growth. These sectors directly align with priority sectors outlined in the European Union Enlargement Agenda for 2024–2029, reflecting a policy alignment between Albania’s national development strategy and the EU’s regional integration goals ⁽³¹⁾.

Strategic sectors, including energy, infrastructure, digital communication, agriculture, and tourism, are not only essential for domestic development but are also prominently featured in the EU’s roadmap to support Western Balkan countries in meeting accession benchmarks. This alignment highlights the dual role of Albania’s strategic investment legislation as both a national legal tool and a regional convergence mechanism within the context of European integration ⁽³²⁾

An important aspect established under Law No. 55/2015 is the requirement that the value of the strategic investment and the number of new jobs created must be proportional to the specific sector in which the domestic or foreign investor plans to operate. This proportionality principle ensures that the scale and impact of the investment align with the sector’s strategic importance and growth potential, thereby optimising the allocation of public support and regulatory assistance.

The legal framework thus sets different thresholds and conditions depending on the sector—such as energy, agriculture, tourism, or infrastructure—acknowledging that each area needs a specific investment-to-employment ratio for a project to be considered “strategic” under Albanian law ⁽³³⁾.

As outlined, classifying an investment as “strategic” depends on both financial thresholds and employment growth targets, which vary by sector.

Specifically, the law sets a minimum investment of $1 million for smaller strategic initiatives and more than $50 million for high-impact projects. At the same time, the employment requirement mandates creating at least 80 new jobs for smaller investments and over 600 jobs for significant projects in priority sectors.

These thresholds aim to ensure that the economic impact of strategic investments is not only capital-intensive but also labour-inclusive, thereby supporting national employment goals and regional economic development.

It is understood that the classification of a project as a strategic investment, as well as the assessment of newly created jobs, is carried out on a case-by-case basis, based on the specific nature of the sector in which the investment is intended.

Furthermore, the law offers an exceptional provision for large-scale investments exceeding €100 million. In these cases, the investor—after completing the procedural review—automatically gains the status of Strategic Investor under the “special procedure,” even if the investment is not explicitly classified within one of the pre-established strategic sectors outlined in the law. This exception is intended to provide flexibility for high-impact projects of national importance. It supports the law’s goal of attracting transformative capital investments, regardless of sector classification, provided public interest and economic benefits are demonstrated.

Under the framework of the Law on Strategic Investments ⁽³⁵⁾ It describes three specific categories for recognising strategic investments.

The first of these is the “Potential Strategic Project” designation:

A Potential Strategic Project is a prospective investment initiative that is expected to have a strategic impact on national development and public interest. This is an initial status assigned to projects that demonstrate potential for strategic classification, prior to their official recognition as a “Strategic Investment” or “Strategic Investor.”

In this context, the designation applies to project ideas or proposals that are still in the planning or exploratory stage but are expected to stimulate specific geographic areas, promote job creation, and align with Albania’s economic development priorities. The temporary nature of this status enables competent authorities to facilitate early administrative engagement and to evaluate the strategic potential of such projects in relation to national policy objectives.

The proposal for a potential strategic project may come from two primary sources:

• a)

  the relevant line ministries, or

• b)

  private investors.

When the initiative comes from a line ministry, it addresses a sector-specific or regional development need, where the designated area or industry requires stimulation through strategic public investment or alternative legal mechanisms, such as public-private partnerships (PPP) or concessions, as outlined in Law No. 125/2013, as amended, On Concessions and Public-Private Partnerships.

This provision allows institutional actors to proactively identify investment gaps or economic opportunities aligned with national or regional priorities, and to direct them through legally established strategic frameworks that may include state involvement, co-financing, or delegated project execution under regulated partnership models.

When a private investor, whether domestic or foreign, submits a Strategic Investment Proposal, the applicant must meet specific initial requirements, depending on the chosen procedural model—either the Assisted Procedure or the Special Procedure, as defined by law.

Specifically, the investor needs to submit a complete project dossier that includes the following elements:

• –

  a detailed project description and scope of investment;

• –

  the estimated monetary value of the investment;

• –

  the number of new employment opportunities to be created;

• –

  project implementation timelines;

• –

  the anticipated economic impact and macroeconomic contributions;

• –

  the public interest benefits derived from the project;

• –

  a detailed financial analysis and financial guarantees;

• –

  an environmental impact assessment (EIA);

• –

  the nature of the technology to be employed;

• –

  the comparative competitive advantage of the proposal vis-à-vis other investors;

• –

  the added value generated by the investment, taking into account the operational risks involved.

This application framework is designed to promote transparency, feasibility, and strategic alignment, enabling competent authorities to thoroughly assess the proposal’s potential contribution to national development and its consistency with Albania’s long-term economic plans.

Gaining the status of a Strategic Investor provides a notably privileged set of legal and procedural protections compared to situations where an investor must compete through general public procurement processes or other competitive selection methods under Albanian law.

This privileged position comes from the fact that administrative procedures for preparing and implementing a strategic investment project are prioritised and processed quickly by the public administration.

The process for recognising strategic investor status must be completed within specific legal deadlines ⁽³⁶⁾, and in no case later than 30 business days from the submission of a complete application.

Furthermore, under Article 24, once the strategic status is granted, the investor receives priority and faster access to all necessary permits, authorisations, and licenses. These are issued by the appropriate administrative authority through urgent and preferential procedures, ensuring minimal bureaucratic delays and full institutional support for the project’s implementation.

Upon being granted Strategic Investor status and depending on the sector in which the investment will be implemented, the Albanian government assumes a series of supportive obligations aimed at facilitating the execution of the strategic project. These include, but are not limited to:

• –

  the provision of supporting public infrastructure;

• –

  the right to utilise coastal areas and public domain assets (domanial rights);

• –

  the possibility of expropriation of private immovable property for the purposes of public interest;

• –

  and the ratification by the Albanian Parliament of investment-related contractual agreements when such ratification is required under the law.

It is important to note that the last two support categories—expropriation and parliamentary ratification—apply only to projects processed under the Special Procedure ⁽³⁷⁾.

Additionally, for certain key sectors, the state reserves the right to participate as an equity shareholder in strategic investments, thereby strengthening its commitment and long-term alignment with the investor’s goals.

Equally important is the tax treatment of strategic investments. Depending on the specific type of strategic sector involved, the investor may qualify for preferential tax treatment, such as tax reductions or exemptions from specific duties, under Albanian fiscal laws and international investment agreements.

In the tourism sector, the fiscal system, guided by the national strategic priority assigned to tourism, offers a 0% corporate tax rate for eligible businesses. Additionally, investors may receive a 99-year land use agreement for the real estate where the strategic tourism project is located, under long-term concession terms.

For strategic investments in the field of information and communication technology (ICT), a reduced corporate income tax rate of 5% is applied to company profits, aligning with fiscal stimulus mechanisms aimed at promoting innovation, digital infrastructure, and integrating Albania into the regional tech economy ⁽³⁸⁾.

Meanwhile, in the textile and garment sector, strategic investors benefit from a 0% import tax on machinery and equipment needed to establish and operate production facilities. This exemption aims to encourage industrial renewal and export-driven manufacturing, especially in labour-intensive areas.

These specific fiscal incentives are part of Albania’s overall economic development plan, aiming to attract high-value investments, generate jobs, and promote technological progress in key sectors

The fiscal relief and economic incentives available to strategic investors in Albania act as strong tools to promote capital inflow and accelerate project implementation. These mechanisms provide investors with quicker returns on investment (ROI), a favourable and proportionate profit margin, and access to preferential bank guarantees, thereby increasing the overall financial viability and predictability of strategic projects.

The taxation framework, as previously explained through sector-specific examples, varies depending on the nature and classification of the strategic sector or sub-sector in which the investment occurs. This differentiated fiscal regime reflects the government’s aim of attracting targeted investments aligned with national development priorities while maintaining a flexible policy structure that can adapt to market demands and regional competitiveness. Such financial instruments not only reduce operational costs but also enhance investor confidence and lower risk exposure—factors essential for long-term sustainability in complex investment environments.

Although Albania has implemented a comprehensive judicial reform over the past eight years—most notably through Law No. 84/2016, On the Transitional Re-Evaluation of Judges and Prosecutors in the Republic of Albania, commonly known as the “vetting law”—public perception of corruption within government institutions remains consistently high.

The vetting process, a key part of Albania’s judicial reform aligned with European Union accession benchmarks, has led to the dismissal or resignation of many magistrates. However, despite its structural importance, the reform has yet to succeed in restoring public trust in the rule of law or protecting strategic investment decisions from political influence ⁽⁴¹⁾.

This perception gap—between formal legal progress and the lived experience of institutional integrity—continues to influence how both domestic and foreign investors evaluate the predictability and neutrality of Albania’s legal environment, particularly regarding high-value strategic sectors.

The vetting process was established as a key part of Albania’s justice reform, mainly aimed at removing potentially corrupt judges and prosecutors from the judiciary (European Commission, 2024). As part of this broader institutional overhaul, the Albanian government created the Special Anti-Corruption and Organised Crime Structure (SPAK)—a specialised prosecutorial agency with authority over high-level corruption, abuse of power, and organised crime cases involving public officials and elected representatives.

SPAK is responsible for investigating and prosecuting criminal offences within its jurisdiction, especially those involving abuse of public office, illegal enrichment, and systemic corruption in government institutions. It operates independently and collaborates with the National Bureau of Investigation (NBI), serving as the main element of Albania’s efforts to rebuild public trust, promote accountability, and establish a rule-based framework for strategic economic growth (SPAK 2024).

Although SPAK has initiated several high-profile investigations, its long-term effectiveness depends heavily on political support, judicial cooperation, and institutional independence, all of which are crucial for enhancing legal certainty and boosting investor confidence.

As a result of the vetting process, more than 35% of Albania’s judicial personnel—including judges, prosecutors, and legal advisers—have been dismissed from office for failing to meet the standards for integrity, professional competence, or financial disclosure outlined in the re-evaluation framework. Notably, about 40% of these individuals have re-entered the legal system, mainly by registering as attorneys under the provisions of Law No. 55/2018, On the Legal Profession in the Republic of Albania.

During the 2024–2025 period, the Special Anti-Corruption and Organised Crime Structure ⁽⁴²⁾ (SPAK)——launched and conducted a series of criminal investigations into high-level corruption schemes, resulting in indictments and ongoing prosecutions of various public officials. These efforts represent a significant, though still fragile, step toward enforcing accountability in governance and strengthening the legal foundations for foreign and strategic investment.

The most common criminal offences attributed to public officials and elected representatives in Albania involve active and passive corruption, abuse of office, and money laundering, often carried out by structured criminal groups, as defined in the Albanian Criminal Code ⁽⁴³⁾

Individuals involved in these offences have included high-ranking political figures, especially those in ministerial or executive roles. Investigations have shown that these officials have engaged in unlawful favouritism by helping designate certain commercial entities—mainly LLCs—as strategic investors, even though these companies either failed to complete the approved investment projects or carried them out in violation of legal and regulatory standards.

These cases illustrate how strategic investment policies are susceptible to state capture and corrupt clientelism, particularly when control mechanisms are weak, and public procurement or licensing processes lack transparency and accountability.

One of the most notable cases that led to the launch of “strategic” criminal investigations concerns the waste management and recycling sector. Soon after the enactment of Law No. 55/2015, On Strategic Investments in the Republic of Albania, the first project to be granted the status of Strategic Investor was the incinerator project, which involved the construction of waste treatment facilities in Tirana and Elbasan ⁽⁴⁴⁾

The incinerator initiative was initially promoted as a model public-private partnership (PPP) designed to modernise Albania’s waste management infrastructure, boost energy efficiency, and bring the country in line with EU environmental standards.

However, the project has since become the focus of widespread criminal investigations led by the Special Anti-Corruption and Organised Crime Structure (SPAK), due to allegations of procedural violations, financial misconduct, and illicit favouritism in granting strategic status.

This mega-project, with a declared investment of €430 million, has become one of the largest corruption scandals impacting Albania’s strategic sectors, dating back to 2016 and continuing in subsequent years. The involved entities were entirely Albanian-registered companies ⁽⁴⁵⁾ that maintained direct clientelist and corrupt ties with high-ranking ministerial officials at the time.

Following investigations by the Special Anti-Corruption and Organised Crime Structure (SPAK), several public officials were indicted and later convicted by the Special Court for Corruption and Organised Crime. They included the former Minister of Environment, the former Secretary General of the Ministry of Environment, and multiple civil servants involved in the irregular and unlawful granting of strategic investor status, as well as in the subsequent administrative facilitation of the project ⁽⁴⁶⁾

This case highlights the systemic risks associated with the misuse of the strategic investment framework and underscores the urgent need for institutional safeguards, particularly in public procurement and administrative discretion.

In this ongoing criminal case, the former Deputy Prime Minister of Albania, who was also directly involved in initiating the first strategic investor designation process following the adoption of the relevant legislation, is currently under investigation by the judiciary. This case has become a landmark example of state-level collusion in misusing the legal framework for strategic investment.

In this high-profile scandal, both government officials and private actors were convicted.

These included corporate shareholders and administrators of the commercial companies that, in 2016, were granted Strategic Investor status in the national infrastructure sector, specifically regarding the urban waste incineration industry. The evidence presented during trial proceedings demonstrated coordinated actions by political decision-makers and private beneficiaries, raising serious concerns about the integrity and transparency of Albania’s strategic investment process.

However, concerns about corruption and clientelism in the process of designating strategic investors remain. The flaws in this institutional mechanism are apparent from the increasing number of cases involving high-ranking public officials and civil servants, many of whom are currently under investigation for alleged abuse of office and favouritism in granting strategic investment status ⁽⁴⁷⁾.

As of the latest reporting period, the Special Prosecution Office Against Corruption and Organised Crime (SPAK) has launched a formal investigation into the awarding of strategic investor status in the land infrastructure sector to a domestic commercial entity, for a project valued at approximately €435 million. The investigation assesses procedural irregularities and potential undue influence and favouritism in the handling of the investment application (Transparency International, 2025).

This ongoing case contributes to a growing body of evidence that raises concerns about the transparency, accountability, and integrity of the procedures outlined in Law No. 55/2015, On Strategic Investments, affecting stakeholders and foreign investors alike.

The investigation focuses on one of the country’s main transportation routes, the Kashar–Thumanë highway. The Special Anti-Corruption Prosecutor’s Office (SPAK) is actively examining the procedural integrity of the strategic investor selection process and the subsequent public contracting procedures. Early findings suggest that high-level political favouritism and corruption may have influenced the procedures, which involved senior officials with decision-making authority and contracting power. The case remains under detailed prosecutorial review as of mid-2025.

Another high-profile case, currently under investigation in the tourism sector, involves a former Member of Parliament from the ruling Socialist Party. In 2022, the Strategic Investments Committee granted individual strategic investor status to a project located in a state-owned coastal zone. When it was approved, his spouse was serving as Minister of Defense, raising serious concerns about conflicts of interest, abuse of power, and potential violations of procurement transparency and legal ethics. The case has led to a broader investigation of political ties in strategic investment governance.

The ongoing investigation concerns serious allegations involving corrupt clientelism, conflict of interest, abuse of official duty, money laundering, and document forgery. Although several of these cases remain under prosecutorial review, the patterns observed thus far reveal systemic vulnerabilities in the legal and administrative frameworks governing strategic investment status in Albania.

While the designation of “Strategic Investor” provides significant fiscal and administrative advantages intended to encourage development and attract foreign investment, the evidence suggests that, when poorly regulated, this system can be exploited for high-level corruption, undue influence, and illicit financial activities.

The dual nature of this legal tool—acting both as a means for economic growth and as a potential avenue for criminal abuse of public authority—raises urgent questions about transparency, accountability, and institutional safeguards in Albania’s strategic investment governance.

Given the substantial financial thresholds required to attain the status of a strategic investor, authorities must exercise rigorous due diligence regarding the background of applicant entities. This includes tracing the origin of financial resources, assessing the long-term viability of investment forecasts, examining potential political connections or clientelist ties, and conducting a thorough review of the personal and professional backgrounds of company shareholders and executive managers.

Nevertheless, despite these inherent risks, it is important to highlight the positive developments made by Albania’s Special Anti-Corruption Prosecutor’s Office (SPAK). According to Transparency International’s Corruption Perceptions Index (2025) ⁽⁴⁸⁾, Albania currently ranks 80th out of 180 countries, indicating a moderate but improving level of perceived corruption. This numerical indicator helps understand the social and legal mechanisms in the country, especially when considered alongside the legal guarantees involved in the process of granting strategic investor status.

Despite the penal cases highlighted above, it is important to note that the Strategic Investment Committee issued 116 official decisions from 2016 to 2025, granting the status of Strategic Investor to various applicant entities. According to data published by the Albanian Investment Development Agency (AIDA, 2025), the majority of these investments have been made by domestically financed companies, with only a small number involving mixed-capital or wholly foreign-owned entities.

This data reveals a pattern where investment efforts in Albania primarily rely on local funds, which may suggest that Albania’s potential for attracting foreign investment is not being fully utilised and that international investors still harbour doubts, especially in sectors governed by Law No. 55/2015 on Strategic Investments.

From a judicial perspective, it is essential to acknowledge that Albania, as a sovereign and independent country with a constitutional history spanning over 113 years, maintains a robust framework of international legal commitments. The nation has ratified numerous multilateral and bilateral agreements aimed at protecting foreign direct investment, promoting free trade, and upholding the principles of due process, legal certainty, and procedural fairness.

As a signatory to various international conventions, including but not limited to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) and the ICSID Convention (Washington, 1965), Albania has legally committed itself to providing judicial guarantees to investors and protecting them against arbitrary or discriminatory treatment.

Furthermore, through its Stabilisation and Association Agreement ⁽⁴⁹⁾ (SAA) with the European Union, Albania has committed to aligning its domestic legal framework with the acquis communautaire, especially in areas such as competition law, investment protection, and judicial independence.

The legal framework for arbitration in Albania is established by Law No. 52/2023, “On Arbitration in the Republic of Albania,” which governs both domestic and international arbitration cases when the arbitration seat is located in Albania. This law demonstrates Albania’s commitment to providing a stable and predictable environment for dispute resolution, thereby attracting both foreign and local investors. According to international best practices, the law aligns with the UNCITRAL ⁽⁵⁰⁾ Model Law on International Commercial Arbitration. It fully complies with the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Albania is a signatory. Consequently, it ensures the recognition and enforcement of arbitral awards issued in Albania or abroad, providing legal certainty for cross-border investments and commercial disputes (UNCITRAL, 2021).

By codifying principles of party autonomy, procedural fairness, and neutrality of the arbitral process, Law No. 52/2023 enhances Albania’s arbitration framework by providing comprehensive rules on:

• –

  the formation of the arbitral tribunal,

• –

  competence-competence and separability doctrines,

• –

  interim measures

• –

  enforcement and annulment of awards.

Furthermore, the law affirms judicial non-interference as a core principle, ensuring limited court involvement in arbitration proceedings, thereby making Albania a more arbitration-friendly jurisdiction in the region.