Capital "flight", Albanian businesses and individuals have invested 1.57 billion euros abroad

Throughout 2017–2024, Albania has shown a gradual but steady increase in the level of investments that Albanian businesses and individuals make abroad.

A report by the Vienna International Institute for Economic Studies (wiiw) found that in just 7 years, Albania's investments abroad have quadrupled, from 393 million euros in 2017 to 1.57 billion euros in 2024.

Some of the largest Albanian companies in sectors such as telecommunications, construction, banking and energy have begun to expand their presence in Kosovo, North Macedonia and other Balkan regions, by establishing branches or investing in partnerships.

Some family groups that have consolidated considerable capital in the last decade are diversifying their portfolios through investments abroad, especially in markets with low costs or strong cultural and linguistic ties such as Kosovo.

Also, gradual integration with the EU and regional agreements have facilitated the flow of capital.

The improvement of the banking system and access to international financial services has helped in the easier transfer of funds for investments abroad.

Some Albanian companies have been attracted by the lighter tax regimes in the region, particularly in Kosovo and Macedonia, using these countries as operational or business registration centers.

In some cases, “outbound” investment involves capital moving from Albania to initiatives led by Albanians in the diaspora, in Italy, Switzerland or Germany, especially in the real estate, transport and trade sectors.

However, Albania has a limited manufacturing base and a small number of corporations with the capacity for international expansion. Low-skilled human capital and a lack of capacity to compete in value-added sectors limit expansion abroad.

The increase in outward FDI from Albania is a positive indicator of the growing capacity of the Albanian economy to export capital and experience.

The total stock of outbound investments in the 6 Western Balkan countries was 9.4 billion euros in 2024. Serbia dominates with 5.1 billion euros, while other countries such as Albania (1.6 billion euros), Kosovo (1.2 billion euros) and Bosnia (793 million euros).

Albania and other Western Balkan countries have made modest progress, but lag far behind their eastern EU neighbors. Outward investment is a key indicator not only of economic strength, but also of the integration of national companies into international value chains. For Western Balkan countries, bridging this gap will require more structural reforms, technical assistance and access to free capital, according to experts from the Vienna Institute./ Monitor