Attractiveness of Albania for Foreign Firms: An Analysis of Opportunities and Challenges

This paper examines Albania’s evolving landscape as a burgeoning destination for foreign direct investment (FDI), underscored by its strategic geographical location, economic reforms, and sectoral growth opportunities. Using a literature review methodology, we focus into an analysis of peer-reviewed articles, government reports, and international indices to construct a nuanced understanding of Albania’s economic environment, the palpable sectoral opportunities for investment, and the persistent challenges that foreign firms may encounter. This analysis reveals that Albania presents a compelling case for foreign investment, particularly in sectors like tourism, energy, agriculture, and manufacturing. Conversely, the investigation highlights significant challenges that could impede foreign investment, such as bureaucratic inefficiencies, corruption, infrastructural deficits, and legal and regulatory uncertainties. This study contributes to the broader discourse on FDI in emerging markets, offering insights into Albania’s unique position within the Western Balkans region and providing a framework for policymakers and investors to harness the full spectrum of opportunities while addressing the challenges to ensure mutual long-term benefits. Received: 19 February 2024 / Accepted: 15 March 2024 / Published: 23 March 2024