Law and regulation of industrial and logistics investment in Albania

In Albania there are some legal incentives for strategic investments in the Industrial and Logistics sector depending on the total investment value, which varies from EUR 5 million to EUR 50 million in the technology development sector, and from EUR 30 million to EUR 50 million in the transport sector. Investments worth EUR 100 million enjoy incentives in any type of industrial sector. Generally, the incentives include:

  • land consolidation;
  • support programmes;
  • support with ancillary infrastructure;
  • access to state-owned immovable property for developing and executing the project;
  • expropriation of immovable assets owned by private individuals to enable the development and execution of a project.

2. General incentives, from which investors in the I&L sector in CEE-17 can benefit, if no specific ones are available

There are currently two technological and economic development areas (TEDA), specifically designated for the development of industrial parks and subject to incentives in Albania. The incentives dedicated to these areas are:

  • 20% of the capital expenses are deductible for two years from the start of economic activity in the area,
  • relief of 50% of the applicable CIT rate for five years, zero VAT rate for the supply of goods to TEDA,
  • relief from the tax on the impact on infrastructure,
  • relief from tax on real estate for constructed buildings in TEDA for five years,
  • relief from tax on the transfer of a right to immovable property,
  • 150% of the expenses on salaries,
  • social and health contributions paid by the employer for the employee will be deductible during the first year of activity.

3. Available tax exemptions or preferences for investors specifically in the I&L sector in CEE-17

There are currently no specific tax exemptions or preferences for the Industrial&Logistics sector. However, any project/investment in various economy sectors (including I&L) will benefit from a VAT tax exemption if the resident company in Albania imports:

  • machinery or equipment for fulfilling an investment contract whose value is equal to or exceeds ALL 50 million (approx. EUR 400,000);
  • machinery or equipment for fulfilling investment contracts in the active processing sector, regardless of the value of the investment.

4. General tax exemptions or preferences for investors in CEE-17 that would apply to the I&L sector

For companies operating in the R&D sector, CIT is reduced to 50% for the first five years of the research activity. The costs of training employees in the technology and economic development sectors, for the purpose of calculating taxable profit, are calculated for tax purposes as double their amounts for ten years from the beginning of the economic activity. For companies operating in the automotive sector, CIT is reduced to 5%, from 15%, which is usually applied in other sectors.