Recently, the Albanian Council of Minister has approved a series of Decisions (DCM no. 337 dated 31.05.2023; DCM no. 416, 417 and 148 dated 07.07.2023), with immediate effect from publication in Official Gazette determining the implementing provisions for the selection of developers and users of technological and scientific parks, as well as tax incentives. These sub-legal acts are issued in accordance with the Law no. 58/2022 "On the creation, organization and operation of technological and scientific parks" (the "Law"). The Law, approved in 2022 by the Albanian Parliament, promotes the development of high-tech and innovation industries, research and development of new products and services and improvement of the existing ones as well the scientific and technology professionals
According to the Law, any sole entrepreneur or legal entity is eligible to develop a technological and scientific park, upon fulfillment of criteria and requirements provided by the Law and abovementioned secondary legislation. The technological and scientific parks are subject to various fiscal and legal supporting schemes to promote development of new technological products and services and to improve the existing one.
Activities allowed in the technological and scientific parks
The activities which are allowed to be performed in a technological and scientific park are limited to research and development as per the following list:
- research and development for the purposes of benefiting from new technological or scientific knowledge which enabled the development of products or services;
- creation of new production methods of products/services or usage of advanced technology in software production, data processing or similar activities;
- improvement of products and services in a way that brings substantial change, not of an aesthetic nature, in parts or in function, compared to existing products;
- training and professional capacity building for the purposes of developing and producing innovative products and services.
Tax and other supporting schemes
The developers and users of the parks benefit from various tax and legal supporting schemes which are materialized in the respective contracts entered between the developer and the competent state authority. The main tax, legal, and other facilities consist of, but are not limited to the following:
- Application for permits and licenses from the developer or user are to be processed within 15 - 30 working days;
- The Government undertakes to construct the general infrastructure up to the park borders;
- The supply of Albanian goods destined to be placed in the park, in function to the development of innovative products will be considered as export and subject to 0% tax rate.
- Corporate income tax at 0% rate will be applied for 15 consecutive years from the beginning of activity.
- The personnel working for research and development are exempt from all taxes applicable for a period of 10 years.
- The personnel working for research and development pay health & social insurance contributions at the level of the national minimum monthly salary, regardless of the declared gross salary.
- The supply of goods, equipment, and services used in the site for the purposes of development of innovative products are VAT exempt.
- The constructions made in the park benefit exemption from the tax on infrastructure.
- The buildings in the park are exempt from the real estate tax for a period of 10 years.
- Training costs for the researchers and developers may be refunded by the Government based on the specific criteria and rules approved through a DCM.
- The developer can benefit a part of the income generated by the intellectual property of the creations developed by the users and duly registered with the competent Albanian authorities, for a period of 5 years, etc.
The technological and scientific parks are awarded with the status of the customs free zone.
The developers are eligible to benefit from the above incentive schemes only after obtaining the approval for development of parks and start of economic activity. The tax incentives can be granted only after the authorized user has notified the relevant authorities for the start of the activity. The transfer of an existing activity in the Albanian territory to the park for the purposes of benefiting from the facilities provided for technological and scientific parks is strictly prohibited by the legislation.
Selection of the developers and users of the technological and scientific parks
Procedure for selection of parks developers
Under the DCM no. 337 date 31.05.2023 "For determining the procedures and the criteria for the selection of the developers of the technological and scientific parks" the selection of developers of technology and scientific parks is done based in one of the following procedures:
- Bidding procedure for parks constructed on state-owned real estates - The Bidding procedure for the selection of the developer is a procedure in which any interested applicant can participate. The bidding procedure shall be notified by the competent authority in the Official Announcements Bulletin.
- Procedure for selecting developers for parks constructed on private owned real estates - The selected developer must be approved by the Council of Ministers and published in the Official Announcement Bulletin.
The activity of developers of the parks will start after the approval for operation of the park is awarded by the Council of Ministers and the area, entry and exit gates and the operation of the customs point are specifically determined.
Procedure for selection of parks users
The procedures for the selection of the User in the technological and scientific parks are defined in the DCM no. 418 date 07.07.2023 "For determining the procedures for the selection of the user of the technological and scientific parks" which provides that any sole entrepreneur or legal entity, either local or foreign, are allowed to submit a request to the developer for carrying out activity as a park user. Upon approval of the user, the developer must report to the competent authority regarding the contract with the users, investment value and user's employee's number.
KPMG team remains at your disposal for any inquiries you may have, or assistance needed.