Identifies common practices to be aware of when selling in this market, e.g., whether all sales material need to be in the local language.
Most of the trade goes through the Port of Durres, which handles more than 90% of maritime trade. Albania also has two smaller ports: Vlore in the south and Shengjin in the north. Land-based trade can clear customs at border-crossings with Greece, North Macedonia, Kosovo, or Montenegro. Albania can also serve as hub for distribution into neighboring markets of Kosovo and North Macedonia.
The primary distribution centers are in the capital Tirana and its neighboring city Durres, which both house close to 40% of the nation’s population. Majority of sales occurs in the outlets across the country, while the online, telemarketing, door-to-door sales are still in their infancy. Small private shops, many of which carry Italian and Greek goods, dominate the retail sector, though retail chains, including international supermarket chains Spar and Conad, have proliferated in recent years. Local chains of grocery markets have gained market share in recent years. Inditex, which owns brands including Zara, Pull&Bear, Massimo Dutti, Bershka, and Stradivarius, entered the market in 2014. Other large domestic retailers include Megatek (DIY), and on electronics and appliances GoTech, Globe, and Neptun. The first shopping mall (QTU) opened in 2005, followed by City Park shopping mall in 2009, Tirana East Gate (which houses Spar and Inditex) in 2011, the Ring Shopping Mall in 2015, and Toptani Shopping Center in central Tirana in 2017. Shopping malls have also opened in other major urban areas in Albania.
Capital goods and specialized equipment are normally sold directly to manufacturers and businesses. When selling capital goods or equipment to businesses an agent is essential. Consumer-oriented trade shows are also an important part of the retail scene in Albania.
Distribution & Sales Channels
Using an Agent or Distributor
No legal requirement exists to use an agent or distributor in Albania. To conduct business effectively, however, it is important for U.S. firms to select local sales partners. Collecting meaningful information and gaining access to markets can be difficult without local representatives, who have the contacts and expertise to do business in this small, but complex market. Many foreign firms have judged it more efficient and cost effective to hire a local agent or distributor rather than conduct direct sales. U.S. companies that aim to market and distribute their goods will find a considerable number of merchants, agents, intermediaries, wholesalers, and retailers in Albania.
All the typical distribution channels are available in Albania, although they often lack the sophistication of distribution networks found in Western markets.
National Business Center offers valuable information on companies registered in Albania and their financial situation.
The following consulting offices, law firms, and other professional organizations may aid in evaluating the credibility of a potential business partner.
- Grant Thornton
- PBM Accounting, Auditing, & Financial Consulting
- Frost & Fire Consulting
- Kalo Associates
- Boga & Associates
- Wolf Theiss
- HM&H Law
- Tonucci & Partners
The U.S. Embassy can provide a series of complimentary and fee-based services to help locate potential partners and facilitate the entrance of U.S. companies to the Albanian market. For more details, please contact:
Ms. Edi Jacellari
United States Embassy Tirana
Establishing an Office
Albanian law recognizes a variety of legal forms for businesses entities. For more information on how to register an office in Albania and obtain assistance, please visit the National Business Center.
The 2008 Law on Entrepreneurs and Commercial Companies governs the activities of companies and establishes legal structures under which companies may operate. The law aligns Albanian legislation with the EU’s acquis communitaire. The legal types of business entities that can be registered with the NRC include:
The Sole Entrepreneur may register to do business under his or her own name, or under a business name. Individuals interested in establishing this type of business should file an application and identity document with the National Registration Center (NRC) in the district where business is to be conducted. The application form should include identification data, address, type of business, and an exemplar of the sole proprietor’s signature.
All partners have unlimited and joint liability for debts of the entity. Creditors can claim against a partner for the debts of the partnership, but only if they have failed in their claims against the entire partnership. In unlimited partnerships, the partners are all considered administrators of the partnership, unless stipulated otherwise in the bylaws. Each partner represents the partnership with third parties. An unlimited partnership should issue annual financial reports. The rights, duties, and obligations of partners are governed by written bylaws, which should be filed with the NRC.
A limited partnership, seldom used in practice, consists of one or more general partners with unlimited liability and one or more partners whose liability is limited to the amount of their initial capital contribution. A limited partner may not participate in the management of the partnership, even by proxy, otherwise incur unlimited liability. The articles of incorporation of the limited partnership should contain:
- The total amount or value of the contributions of all partners;
- The amount or value of the contribution made by each general or unlimited partner;
- The percentage of the participation of all general partners and of each limited partner in the partnership’s profits and in the remaining value after its dissolution; and
- A declaration that all decisions shall be made in conformity with the articles of incorporation.
Limited Liability Company (LLC) (Shpk)
LLCs are the most common business vehicle in Albania. LLC members enjoy limited liability and, unless specified otherwise in the bylaws, have the right to transfer shares to others by decision of three-fourths of the shareholders. Capital is divided into shares and there is no requirement for nominal value. Capital contributions may be in cash or any asset, tangible or intangible. The law does not permit contributions in services. Administrators nominated through the general assembly of the shareholders manage the limited liability company. Extraordinary decisions, increases or decreases in the share capital, and mergers and acquisitions, must be approved by at least three-fourths of the capital shareholders. The law requires annual financial statements to be prepared by the company. The transformation of LLCs into unlimited or limited partnerships is subject to approval by three-fourths of the shareholders and upon approval of financial statements during the previous two years.
Joint Stock Company (JSC)
JSC capital is divided into shares, with shareholders responsible for losses only to the extent of their capital contribution. The minimum initial capital required is 2 million lek (approx. USD 18,100) for companies with no public offering, and 10 million lek (approx. USD 90,600) for public offerings. Capital is fully subscribed when the partners bring assets to the company in cash or in kind. At subscription, at least one quarter of the nominal value of the shares representing contributions in cash must be paid. Payment of the remaining value shall be made in installments upon the decision of the management bodies of the company. Shares of contributions in-kind must be fully paid at subscription. The law does not permit contributions in services. The shares of a joint stock company may be ordinary or privileged.
Branches and Representative Offices
Under the Commercial Law, a foreign investor in Albania may operate through a branch or representative office. The branch or representative office should be registered in the National Registration Center and a legal representative should be appointed to administer the office. For tax purposes, the branch is treated in the same manner as an Albanian entity.
Joint ventures are overseen by the provisions of the Civil Code (articles 1074 -1112) and may be concluded by two or more persons, whether individuals or legal entities, foreign or national, agreeing to engage in an economic activity to share profits. There is no minimum capital requirement. Unless otherwise agreed, every partner may take part in the management of the partnership and has full power to carry out acts within the scope of the partnership. Every partner is entitled to receive a share of the profits after the accounts have been approved, unless otherwise agreed. Partners are jointly responsible for fulfilling the obligations imposed by law and the partnership agreement.
No specific registration or government approval is required to establish a franchise enterprise. Increased domestic demand for merchandise and services from western markets has positioned Albania as a promising destination for franchises, including in the advertising, hotel, restaurant, catering, equipment, and apparel sectors. Current U.S. franchisees in Albania include Western Union, MoneyGram, Hilton Garden Inn, Century 21, ReMax, Best Western, My Dollarstore, Hertz, Avis, KFC, and Burger King. Franchise opportunities in hospitality sector are growing fueled by rapid development of tourism sector. Many international brands have entered or have announced intentions to enter the market including U.S. brands Hyatt, Hilton Hotel & Resorts, Radisson, Best Western, and Marriot.
Social media has quickly become a popular and effective medium for advertising with Facebook, Instagram, and WhatsApp all widely used. Mail is also a common form of direct marketing in Albania. Consumers receive direct marketing mail from local supermarkets, electronics and home appliance stores, restaurants, and personal service providers. Telemarketing is also not common.
Existing legislation permits joint ventures, mixed ownership investment, and foreign and domestic investment. In the most common joint venture scheme, a foreign company provides capital, equipment, and merchandise, while the local company provides buildings, warehouses, office space, personnel, and distribution channels. U.S. firms considering such ventures should review the viability of potential local partners. Information about licenses, permits and authorizations, sectors, requirements, and application procedures can be found at the National Licensing Center.
Dozens of couriers, logistics, and freight forwarding companies operate in the Albanian market. Online shopping from U.S. market is small, because of distance, shipping costs, and customs clearance procedures. In 2016, the GOA reduced from 150 euros to 22 euros the de minimis amount, which had a negative impact on cross-border online shopping.
A list of major companies that offer express delivery is shown below.
- Fed Ex
- Albanian Post Office
- Albanian Courier
A list of cargo and freight forwarders is shown below:
- MCS Tirana
- CMA-AMG Albania
- Shega Trans
- Interliner DOO
- SBA (http://sba.group/)
Companies should perform appropriate due diligence when selecting their local business partners and agents. Companies might consider fee-based services offered by the U.S. Embassy’s commercial office, including International Partner Search, Gold Key Service, International Company Profile, or customized services to help U.S. companies enter business partnerships with confidence.