Albania 2018

led by Prime Minister Edi Rama captured single majority in the National Assembly, with 74 seats out of 140. New government was inaugurated in the middle of September 2017. Members of Albanian unicameral parliament are elected based on party proportional representation, in 12 constituencies.

instance, the PM Edi Rama labeled some of them as public enemies and a poison of the society. Thus, hostile environment and extensive political and economic pressure contributed to high level of self-censorship among journalists. Defamation remained punishable by the law.* Press freedom score will be updated after data from primary source have been published. For more information see Methodology section.

and adjacent nominations started in October 2017, alas, also with difficulties. In March 2018, the Justice Reform Commissioner, in charge of clearing the system of incompetent or corrupt judges and prosecutors, was himself fired. Later the same month, Vetting Commission has fired a Constitutional Court judge, for failing to provide sufficient information on his assets and their origin. The vetting process continued throughout mid-2018.

A couple of MPs were banned entry into the USA because of seeming corruption. On the positive side, improved protection of whistle blowers, noticed also by the EU monitors, is expected to eventually increase the reporting on corruption. In the Transparency International`s CPI 2017 list, Albania is ranked 91-95/180, same as, for instance, BiH, with 38/100 points.

negotiations. Assistance to recent victims, such as those of human trafficking, is improving, but the practice is still a major security threat. Some minorities enjoy high level of protection and acceptance by majority, while others (such as Roma) remain discriminated. Freedom of religion is highly respected and tolerance is practiced. Once (during communism) officially an atheist country where religion was banned, Albania is nowadays a role model of a secular country in which everyone`s worldview is respected. Not so tolerant is the attitude regarding sexual minorities, who on one hand face loud proclamations of equality, anti-discrimination laws and legalization of their NGOs and public gatherings by the authorities, yet on the other hand feel pressure from within conservative society (or from hypocrite politicians), suffer occasional homophobic violence and still live in a climate of fear. Nonetheless, the improvement in this field has been enormous during this decade. In 2018, a furious debate was opened in Albania over protection of privacy, e.g. on how to protect the data on citizens, collected by public schools or health care centers, against political, pre-election manipulations.

code of civil procedure established a simplified procedure for small claims. Bankruptcy procedures are long, lasting 2 years on average, and lead to a moderate recovery rate of 44% through piecemeal sale of assets of the bankrupt company. A new bankruptcy law was introduced in May 2017, with the aims of dealing with the existing loopholes, reducing fraud and easing recover procedures. The cadaster service still remains incomplete, with a significant proportion of land without a clear title, which increases uncertainties of real estate purchases. Property registration is slow, and involves very high fees, while there is also corruption within the cadaster service. Public notaries were recently given access to registries and can now confirm ownership of land and real estate. Private property expropriation is rare, restricted mostly to infrastructure projects, but the level of compensation offered is lower than the perceived fair market value. Another problem in the area of property rights are illegal buildings, whose number is estimated at 440 000. The wide demolition campaign of the construction inspectorate does not involve due legal process, ignores citizen complaints and is partial in choosing targets. Foreign nationals face restrictions in owning agricultural land, but they can lease it for a period of up to 99 years. Commercial property, on the other hand, can be purchased but only with a guarantee of a threefold investment against the value of the acquired land. These restrictions can easily be avoided through registering a local company in Albania. There are few restrictions on foreign ownership in the country, the most notable ones regarding air transportation, electricity transmission and television broadcasting, in which foreign ownership is restricted to minority equity. The process of restitution, which started in 1993, is yet to be fully implemented. Property restitution claimants are facing many challenges in practice, due to slow judicial procedures or corruption, leading to unclear property rights. The new property compensation legislation was recently introduced in order to provide a solution to the pending claims. This legislation envisages three methods of compensation (property restitution, compensation with a property of similar value and pecuniary compensation) and a 10 year long timeframe for resolving the restitution claims. Political changes can have a significant impact on businesses and investments, due to attempts of the new government to revoke or renegotiate already settled concessions, licenses or contracts, thus significantly negatively influencing property rights.

in big companies that operate freely in the market, such as the Albtelekom. SOEs in the energy sector, KESh and OShEE, still pose a significant risk for public finances due to inefficient management and operational policies. Both companies declared losses in 2017 due to droughts, but systematic problems within their operation persist. Privatization of Albpetrol, the state oil company, has been postponed several times, and the company has recently announced restructuring. Low public consumption makes room for low taxes. Personal income tax is slightly progressive, with the rates of 13% and 23%, and a high non-taxed threshold. Corporate tax is flat and set at 15%, but there are also 5% and 0% rates for small companies with turnovers below certain thresholds. The general VAT rate is set at 20%, while the preferential rate is 6%. Relatively low level of social security contributions leads to one of the lowest labour tax wedges in Europe - below 30%.

business ventures during their first year of operation, which has been a great boost to small and micro enterprises. Issuance of construction permits finally resumed and gained momentum after the moratorium that had been enacted in 2013 in order to combat illegal construction. However, this process is complicated by numerous procedures and long time limits, lasting 10 months on average. The process of getting electricity is, on the other hand, not burdened with numerous procedures, yet it is very expensive. Tax regulations are overly complicated, with high number of annual payments. The newly introduced online system for filing and paying taxes has somewhat improved the situation, but it remains burdensome. Tax rates and corruption remain among the top problems for doing business in the country. Labour market regulations are a mix of flexible and inflexible traits. There are no limits to the maximum length of fixed-term contracts, but those are prohibited for permanent tasks. Working hours regulation has recently been made less flexible through the decrease in the maximum number of workdays during a week. Notice periods and severance pay for redundancy workers rise significantly with the yeas in tenure, thus protecting more seasoned workers. The minimum wage is relatively high as compared to the average wage. There are two types of it: the minimum wage for private and for public sector (the latter being higher by a half). Collective bargaining is mostly concentrated in public sector, while outside it is prevalent in just a few industries.

majority of the Albanian trade is conducted under the Stabilization and Association Agreement (for the EU countries) and the CEFTA for the countries from the region. Albania has been a World Trade Organization (WTO) member since 2000, so trade with countries outside Europe is conducted under WTO rules or bilateral free trade agreements. The European Commission (EC) recommended to the European Council to open accession negotiations with Albania, which may start next year, and which will have a significant impact on its trade policy, since it will have to align its technical standards and tariffs with the acquis. Albania also ratified the Trade Facilitation Agreement (TFA) in May 2016, which is expected to further liberalize foreign trade when it becomes operational. Controls on short term capital flows by the National Bank are still maintained, mainly due to the exchange rate policy and low foreign currency reserves. Work permit issuance process for foreign nationals is streamlined, but the legislation stipulates that foreign workers cannot encompass more than 10% of the total workforce of a company.