In Brief: Main Features of Albania’s Merger Control Legislation
Legislation and jurisdiction
Relevant legislation and regulators
What is the applicable law and who enforces it?
The legal basis for merger control regulation in Albania is mainly found in Law No. 9121 on Protection of Competition of July 28, 2003 (Competition Law), published in the Official Gazette No. 71 of August 1, 2003, which aims to protect free competition and effective competition. The Competition Law was amended by Law No. 10,317 of September 16, 2010, published in Official Gazette No. 135 of October 7, 2010. The amendments entered into force on October 23, 2010.
The Competition Authority (the Authority), with the Competition Commission as its decision-making body, is primarily responsible for the application of competition law.
Scope of legislation
What types of mergers are affected?
Under the Competition Act, any of the following resulting in a lasting change of control constitutes a merger:
- the merger of two or more businesses or parts of businesses that were previously independent of each other;
- any operation in which a natural person who controls a company, or one or more companies, acquires, directly or indirectly, a majority holding in all or part of one or more companies; Where
- the creation of a new joint company acting as an independent economic unit.
What types of joint ventures are covered?
The creation of joint ventures is subject to Albanian merger control rules if the new joint venture operates permanently in the market as an independent economic unit.
Is there a definition of “control” and are minority and other interests less than control taken into account?
In accordance with competition law, control may be acquired by rights, contracts or other means which, separately or in combination, on a legal or factual basis, confer the possibility of exercising a decisive influence on the activities of a company, in particular by means of:
- ownership or the right to use all or part of a company’s assets; Where
- rights or contracts that allow their holder to decisively influence the composition, voting or decision-making of the governance bodies of a company.
Control may also be exercised by a minority shareholder if the stake to be acquired confers the possibility of exercising decisive influence over a company in the manner described above; however, Albanian merger control is only applicable in case of acquisition of joint or sole control. The acquisition of a non-controlling minority stake in a company and other less than controlling interests fall outside the scope of Albanian merger control.
Thresholds, triggers and approvals
What are the jurisdictional reporting thresholds and are there any circumstances in which transactions below these thresholds may be investigated?
A merger will be subject to Albanian law on merger control and must be notified to the Authority if the companies concerned have achieved the following turnover during the financial year preceding the merger:
- aggregate worldwide turnover of more than 7 billion lekes and domestic turnover of at least one of the companies concerned of at least 200 million lekes; Where
- a combined domestic turnover of more than 400 million lekes and a domestic turnover of at least one of the undertakings concerned of at least 200 million lekes.
The turnover to be taken into account is the income generated by the ordinary activities of a company, after deduction of taxes or royalties directly linked to the income. There are specific rules for credit or financial institutions. If a company is part of a group, the overall external turnover of the group must be taken into account.
Is the deposit compulsory or voluntary? If required, are there any exceptions?
Notification of a merger to the Autorité is mandatory if the turnover threshold criteria are met.
The Competition Law provides an exception to the application of the Albanian merger control regime when financial, credit or insurance institutions acquire shares of companies with a view to reselling them, provided that the acquirer does not does not exercise the voting rights attached to the shares acquired and that the resale takes place within one year of the acquisition.
Do mergers between foreigners have to be notified and is there a local effects or nexus test?
Mergers between foreigners must be notified and the authorization of the Authority is required, even in cases where the companies participating in the merger are domiciled abroad, provided that the notification thresholds are respected.
The Competition Law expressly states that it applies to all companies, whether domestic or foreign, whose activities have a direct or indirect effect on the Albanian market. The Competition Act does not define the notion of effect.
In practice, the Authority generally considers that a merger has an effect on the Albanian market even in cases where the companies involved do not have a direct presence in Albania (through subsidiaries or branches) or where the companies concerned are indirectly active in Albania (through imports or sales to independent local distributors) and fulfill the turnover threshold criterion.
Are there also rules on foreign investment, special sectors or other relevant approvals?
There are no specific rules on foreign investment.
Approval or at least notification of equity investments above or below certain thresholds is required for the energy, banking and insurance sectors or in the case of public companies.