Albania: Seizing the opportunity for effective legal reform
Publication: Celebrating Reforms 2009
Well designed company law helps protect investors and, thus, encourage investment. Positive reforms to company law help improve a country’s business environment and stimulate the economy.
In 2006-2007, Albania’s government, legal, and business communities all felt the need for a new commercial legal framework. It was time to seize the opportunity to reform effectively. To this end, Albania’s government proceeded carefully, consulting with international experts and local stakeholders—and finally, in 2008, passed a company law designed to make a difference in the long term. This case study tracks the process and lessons learned.
- In 2007, Doing Business ranked Albania as one of the countries with the weakest minority investors protections in the world, due to cases of self-dealing—i.e., the use of corporate assets for company insiders’ personal gain. In 2008, the Doing Business Reform Unit reviewed the draft of the new company law and informed Albania’s reformers that it would indeed help improve Albania’s ranking in the “protecting investors” indicator.
- For example, the new law defined and clarified director duties and made it easier to sue directors in cases of self-dealing.