Doing Business In Albania: What Every Employer Needs To Know

This is the third article in a three-part series addressing employment matters in Central and Eastern Europe.

As employers increasingly look to expand their global reach, the countries of Central and Eastern Europe continue to provide attractive opportunities for entrepreneurs. Effectively closed to foreign investment and travel for decades, the Republic of Albania has undergone many changes in recent years. Strategically located in central Europe, only 45 miles from Italy and bordered by the Ionian and Adriatic seas, Albania occupies a geographically and culturally important location within Europe. Albania became a member of the North Atlantic Treaty Organization, and formally applied for entry into the European Union in 2009. Albania has become an increasingly popular tourist draw, creating jobs in its fledgling tourism sector, and attracting foreign investment. Although personal services and tourism account for the majority of cash revenue in the economy, Albania has also been opening its energy and transportation sectors to foreign investment, creating additional jobs for its citizens and opportunities for foreign investors.

Background

Although foreign investment in Albania remains relatively low, the country has been taking steps to make it easier for foreign investors to set up operations in Albania. In a 2007-2008 World Bank report, Albania was considered to be one of the top global reformers, taking steps to make it easier to establish credit, start and run businesses, and create jobs. There are no sectors of the Albanian economy that are closed to foreign investment, including the subsidized leasing of state-owned facilities, and its National Center for Registration of Businesses is set up to handle all facets of business registration in one operation. Albania's most promising business sectors are thought to be those in insurance, telecommunications, tourism, banking and energy and transportation services. The EU is Albania's largest trading partner, and its citizens enjoy a 99% literacy rate.

The Employment Relationship

In Albania, the employment relationship is largely governed by the Labor Code, which covers most Albanian workers. Additionally, in February 2010, a new law was passed mandating certain minimum requirements for employee security and safety. Although there are other laws governing employment, the Labor Code is the primary source of employment law and will be the focus of this article. Among other things, the Labor...