Turkey breaks Netherlands' 5-year dominance, tops foreign investment in 2024

Turkey was the leading foreign investor in Albania last year.

According to data from the Bank of Albania, for 2024, investments by companies with Turkish capital reached the value of 257 million euros, with an increase of 44% compared to the previous year. The stock of Turkish investments at the end of 2024 reached 1.3 billion euros, an increase of 23% compared to the previous year.

Turkish companies play an important role in several sectors of the Albanian economy, especially in the financial sector, the energy sector, the mining industry and even construction. The value of foreign investments includes not only new flows, but also the reinvested profits of existing companies. This item has gained an increasing weight in recent years in the structure of foreign direct investments.

After Turkey, the second largest investor for 2024 was Italy, with a total inflow of 200 million euros. Italian investments have suffered a slight decrease of 1.5% compared to the same period a year ago and are mainly oriented towards service activities.

The Italian investment stock at the end of 2024 reached 1.68 billion euros, up 16% compared to the previous year.

The increase in the investment stock is not only related to new flows (which were decreasing), but also takes into account exchange rate changes, price changes and other changes.

Based on the methodologies used to measure foreign investment, new flows are valued at the average exchange rate of the period, while the stock is valued at the rate of the last day of the period. Also, the stock of foreign investment is revalued periodically, reflecting changes in asset prices.

After leading foreign investment for five consecutive years, the Netherlands dropped to third place among foreign investors in 2024. The value of Dutch investments fell to 176 million euros, 41% less compared to the same period a year earlier. Meanwhile, the stock of Dutch investments reached 2.54 billion euros, up 14% compared to the same period a year earlier.

Among the few genuine Dutch investors in Albania is the Shell company, which is estimated to have made major investments in drilling in the Shpirag oil-bearing area in recent years.

Last year, this company decided to stop drilling oil wells in our country and has hinted that it will most likely give up on oil exploration in Albania.

Excluding Shell, the high values ​​of Dutch investments in recent years are mainly related to the fact that the Netherlands is one of the preferred countries in Europe to register holding companies, with the aim of controlling the international investments of various business groups.

The Netherlands is preferred for registering offshore companies because its legislation guarantees a high degree of confidentiality regarding share ownership. It is also a preferred jurisdiction for registering holding companies because it has an extensive network of agreements with other countries in the world to avoid double taxation.

The fourth most important investor last year, in terms of the value of new flows, was Austria, with 119 million euros, the same value as in 2023. Austrian investments in Albania are concentrated especially in the insurance market, the energy sector and hotel services. The stock of Austrian investments at the end of 2024 reached 875 million euros, an increase of 15% compared to the previous year.

Significant growth was also recorded last year in investments by enterprises from Kosovo, which reached a value of 96 million euros, an increase of 32% compared to the same period a year earlier. Kosovo's investment stock is reported at 422 million euros, an increase of 37% compared to 2023.

Earlier this year, Kosovo's business community made another major investment in Albania, perhaps the most significant to date. The company that owns the largest retail chain in Kosovo, Viva Fresh Store, announced the acquisition of Spar Albania, the second largest retail chain in Albania./ Monitor