Legislation and jurisdiction

Relevant legislation and regulators

What is the relevant legislation and who enforces it?

The legal basis for regulating merger control in Albania is found mainly in Law No. 9,121 on the protection of competition dated 28 July 2003 (the Competition Act), published in Official Gazette No. 71 of 2003, which aims to protect free and effective competition. The Competition Act has been amended by Law No. 10,317 dated 16 September 2010, published in Official Gazette No. 135 on 7 October 2010. The amendments became effective as of 23 October 2010.

The Competition Authority (the Authority), with the Competition Commission as its decision-making body, is principally responsible for the enforcement of the Competition Act.

Scope of legislation

What kinds of mergers are caught?

Under the Competition Act, any of the following causing a lasting change of control would constitute a merger:

  • the merger of two or more undertakings, or parts of undertakings, which previously were independent of each other;
  • any transaction in which an individual having control over an undertaking, or one or more undertakings, acquires, directly or indirectly, a controlling interest in all or parts of one or more undertakings; or
  • the establishment of a new joint company acting as an independent economic unit.

What types of joint ventures are caught?

The establishment of joint ventures is caught by the Albanian merger control rules if the new joint venture company will be acting in the market on a lasting basis as an independent economic unit.

Is there a definition of ‘control’ and are minority and other interests less than control caught?

Pursuant to the Competition Act, control may be acquired by rights, contracts or other means that, either separately or in combination, on a legal or factual basis, confer the possibility of exerting decisive influence on the activities of an undertaking, in particular by means of:

  • ownership or the right to use all or part of the assets of an undertaking; or
  • rights or contracts that allow the holder to decisively influence the composition, voting, or decision-making of the corporate governance bodies of an undertaking.

 

Control may also be exercised by a minority shareholder if the shareholding to be acquired confers the possibility of exercising decisive influence on an undertaking in the ways described above. However, Albanian merger control is only applicable in cases of an acquisition of joint or sole control. An acquisition of non-controlling minority participations in an undertaking and other interests less than control do not fall within the scope of Albanian merger control.

Thresholds, triggers and approvals

What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?

A merger will be subject to Albanian merger control law and has to be notified to the Authority if the undertakings concerned generated the following turnover in the business year preceding the concentration:

  • combined worldwide turnover of more than 7 billion leks and domestic turnover of at least one of the undertakings concerned of at least 200 million leks; or
  • combined domestic turnover of more than 400 million leks and domestic turnover of at least one of the undertakings concerned of at least 200 million leks.

 

The turnover to take into account is income generated by an undertaking’s ordinary activities, after deduction of taxes or fees directly related to income. There are rules specific to credit or financial institutions. If an undertaking is part of a group, the group’s overall external turnover needs to be taken into account.

Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?

The notification of a merger to the Authority is mandatory if the turnover threshold criteria are met.

The Competition Act provides for an exception to the application of the Albanian merger control regime where financial, credit or insurance institutions acquire shares in undertakings for the purpose of resale, provided that the acquirer does not exercise the voting rights related to the acquired shares and the resale occurs within one year of the acquisition.

Do foreign-to-foreign mergers have to be notified and is there a local effects or nexus test?

Foreign-to-foreign mergers must be notified and clearance by the Authority is required, even in cases where the undertakings involved in the merger are domiciled abroad, provided that the notification thresholds set out above are met.

The Competition Act expressly states that it applies to all undertakings, whether domestic or foreign, whose activities have a direct or indirect effect on the Albanian market. The Competition Act does not define the concept of effect. In practice, the Authority generally considers that a merger has an effect on the Albanian market even where the undertakings concerned do not have a direct presence in Albania (through subsidiaries or branch offices) or when the undertakings concerned are indirectly active in Albania (through imports or sales to independent local distributors) and thereby meet the turnover threshold test.

Are there also rules on foreign investment, special sectors or other relevant approvals?

There are no specific rules on foreign investments.

Approval or at least a notification of acquisitions of interests above or below certain thresholds is required for the energy, banking and the insurance sectors, or with regard to public companies.