Foreign companies in Albania don’t use the money they earn here to expand their activity, but transfer them to their countries.
Economic expert Selami Xhepa said that this is very concerning, since the main source of investments are the profits.
“We don’t expect new massive investments as we had in the past 30 years, but reinvestment of the profits is the main source of foreign investments in Albania”, he said.
According to the IMF, the foreign investments in Albania that come from reinvested profits make just 15% of the total, the lowest in Europe.
Why are foreign investors rushing to transfer their profits abroad, rather than reinvesting them back in? Xhepa says that the main reason is the risk they perceive.
“The risk comes from political uncertainties, frequently changing laws and the business climate. Unfortunately, many reports made by business organizations and financial institutions show that the business climate in Albania remains problematic”, Xhepa explained.
Besides the risk, there is a second reason, tied to the demographic developments. “The market and the population in Albania is shrinking. This makes the market not very interesting, and foreign companies see fewer opportunities for expansion”.
Last year, the foreign companies that have invested in Albania transferred 291 million EUR of profits in their countries, or 35% more than in 2016.
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