Opportunities for the Development of Agritourism

Agritourism combines agriculture and tourism to create unique experiences in rural areas. Albania, with its pristine landscapes and rich traditions, has great potential for this sector. Farms like Farma Sotira and Ferma Lile are successful examples offering accommodations, local food, and natural activities.

Why does Albania have potential for agritourism?

• Growth in tourism: 10 million tourists in 2023.

• Agriculture contributes 19.3% of GDP and supports 33.8% of employment.

• Government support: grants, favorable loans, and VAT reductions for agritourism businesses.

Successful business models include:

• Family farms offering local food and accommodations.

• Activities such as camping, horseback riding, food tastings, and cooking courses.

• Integration of local heritage to attract visitors.

Support for entrepreneurs:

• Grants up to €5,000 and low-interest loans.

• Tax exemptions and programs like the "Mountain Package".

Agritourism in Albania is an opportunity for economic development and improving life in rural areas. With proper support, this sector can become a vital pillar of the Albanian economy.

Types of Agritourism Businesses

Having observed some existing projects, let’s take a closer look at the different business models that are helping develop agritourism in Albania.

Farm Business Models

In Albania, the collaboration between agriculture and tourism has led to several successful models. Family farms are the foundation of this initiative, offering authentic experiences for visitors. This model is supported by small farms, typical of Albanian agriculture.

A notable example is Mrizi i Zanave, which started as a restaurant and transformed into a complete complex with accommodations, agricultural production, a wine cellar, and a distillery. This business employs around 70 people and collaborates closely with local farms.

Polycultural farms, like UKA Farm, combine organic products with a wine cellar and a “farm-to-table” concept restaurant. Visitors can enjoy the natural beauty and vineyards that this farm offers.

On the other hand, specialized farms such as Enol Winery focus on wine and organic local food tasting, while Agrotourism Alpeta integrates viticulture, a farmhouse, and a restaurant for a complete experience. These different models demonstrate how unique experiences can be built, moving further to the activities that bring these businesses to life.

Common Agritourism Activities

Beyond the business models, the activities offered in agritourism farms are what make these experiences memorable.

Farm stays are a major activity, allowing visitors to participate in the daily farm work. Another highly favored activity is food tasting. For instance, Agrotourism Gjepali offers traditional dishes prepared with local and seasonal products.

Outdoor activities are also important. Some farms offer opportunities such as horseback riding, fishing, or boating. Agrotourism Huqi offers a relaxing lakeside experience with fishing and boat rides, while Kodra e Kuajve combines accommodation, a restaurant, and horseback riding experiences for a comprehensive offer.

Cooking and harvesting courses are an opportunity for visitors to learn more about food production processes. Kantina Nurellari offers vineyard tours, wine tasting, and participation in harvesting processes. Meanwhile, Blerina Farm provides a mini-farm, a restaurant with local products, and a hotel with 20 rooms for accommodation. These activities are further enriched by the cultural elements that accompany them.

Using Local Heritage and Traditions

Albanian heritage, rich with influences from ancient traditions, the Ottomans, and Europe, adds a special dimension to agritourism. This includes marvelous landscapes, rare traditions, and unique flavors.

Traditional music and dances are a key part of the experience. Polyphonic iso-folk music, recognized by UNESCO as intangible cultural heritage, is an element that attracts many visitors. One example is the National Folk Festival of Gjirokastra, organized every five years, gathering artists from all over Albania.

Traditional gastronomy also plays a significant role. Many agritourism farms offer Albanian cuisine based on local ingredients. Moreover, some wine cellars offer tastings and activities related to wine production.

Local festivals are another way to attract visitors. In Elbasan, for example, the "Day of Summer" festival is celebrated on March 14th. During this day, 'ballokume', a traditional cookie symbolizing abundance, is prepared.

With over 270 agritourism enterprises in Albania, integrating cultural and local heritage elements can create rich and memorable experiences for visitors.

Building Profitable Agritourism Businesses

Now that we've discussed successful models, let's focus on the practical steps for creating a sustainable business in agritourism. This sector requires good preparation, thoughtful investments, and smart use of available resources.

Investment and Foundation Requirements

Starting an agritourism business involves a combination of physical, financial, and human resources. For example, choosing land suitable for both agricultural and tourism activities is a key step. Also, building the necessary infrastructure for accommodation and services is essential. Investing in modern equipment and hiring a skilled team help in providing a quality experience for visitors. These elements create the necessary foundation for building a successful funding strategy.

Funding Sources for Agritourism

In Albania, the government has taken steps to promote agritourism, especially in mountainous areas. These include low-interest loans and grants for entrepreneurs. An important example is the "Mountain Package", which offers financial support and tax incentives for returning Albanian emigrants and local residents. An interesting aspect of this package is the symbolic transfer of public land for €1 for those who have used it for more than 10 years. To benefit from these programs, entrepreneurs can submit their projects to local municipalities.

Another funding opportunity comes from the government program for the years 2021-2025, which offers grants up to €5,000. Moreover, the Sustainable Rural Development Program, implemented by GIZ and financed by the Swiss Agency for Development and Cooperation with a budget of $4.5 million, aims to support rural tourism and strengthen the capacities of public and private institutions.

After securing funding, it is essential to understand the tax benefits this sector offers.

Tax Advantages

One of the main benefits for agritourism businesses is the reduced VAT rate of 6%. Furthermore, investors can enjoy other tax exemptions, such as a 10-year exemption from property tax for certain major hotel brands. Also, five-star hotels and resorts, including agritourism facilities, benefit from a VAT rate of 6%.

Using Business Network Albania for Development

By taking advantage of these financial and tax opportunities, Business Network Albania plays a significant role in helping agritourism entrepreneurs. This platform connects entrepreneurs, investors, and Albanian business owners worldwide, creating opportunities for new partnerships.

Through membership plans such as "Small Owner" (€150 per year) and "Executive" (€200 per year), members receive personalized advice for business development, financial management, and marketing. The "Entrepreneur" plan (€250 per year) offers international training and mentoring, while the "Investor" plan (€350 per year) includes VIP access to events and networking with startups.

Additionally, Business Network Albania assists in promoting businesses through podcasts and digital magazines, enhancing the visibility of agritourism and connecting businesses with new investors and customers.

Legal and Tax Regulations for Agritourism

If you aim to build a sustainable business in the field of agritourism in Albania, it is essential to be aware of the legal regulations that govern this sector. These rules not only ensure investment protection but also create a favorable environment for local and diaspora entrepreneurs. Let’s take a closer look at the legal requirements, tax benefits, and infrastructure projects supporting this sector.

Legal Requirements for Agritourism

In January 2024, the Council of Ministers approved a set of new standards for certifying agritourism businesses. These standards clearly define the criteria farms and businesses must meet to operate in this sector. According to these regulations, agritourism activities must be developed on farms that meet specific conditions related to land size or livestock scale.

• Farms must have at least one hectare of cultivated land or 0.5 hectares of greenhouses.

• In the case of livestock, at least 10 cattle, 100 goats or sheep, or 200 chickens are required.

Furthermore, agritourism businesses must offer core services such as accommodation, food and beverages, or recreational activities. For accommodation, facilities must have between 6 and 30 rooms and comply with the urban planning criteria of the area, preserving the local traditional style. For restaurants, high hygiene standards are required, with a capacity of 6 to 60 tables. Another requirement is that at least 30% of food and beverage products must come from the farm, while 30%-70% must be local products from farmers in the same municipality.

The certification of these businesses will be done by a five-member commission, which will assess whether all specified criteria are met.

Tax Benefits for Agritourism Businesses

In addition to legal regulations, the government has provided tax incentives that make this sector more attractive to investors. One of the main measures is the reduction of the corporate income tax from 15% to 5% for licensed agritourism businesses. This favorable rate applies for a 10-year period.

Moreover, the first 500 applicants benefit from a 10-year tax exemption according to a government program. To benefit from these reliefs, entrepreneurs must follow the specified licensing procedures.

Another financial support comes in the form of a €250 million fund, which offers agricultural loans with a low-interest rate of just 2%. This gives entrepreneurs the opportunity to develop their agritourism projects with low financing costs.

Development of Rural Infrastructure

The Albanian government has emphasized improving rural infrastructure to encourage the development of agritourism. With programs such as "Invest in Your Land" and "Mountain Package", the aim is to support investments in rural areas and improve existing infrastructure.

A €250 million fund is dedicated to rural development and agriculture, addressing challenges such as difficulties in obtaining loans and lack of infrastructure. Currently, only 2.1% of bank loans go to the agricultural sector, making this support even more critical.

The "Sustainable Food Systems in the Mediterranean" (SFS-MED) project has organized local dialogues to find effective ways to improve agritourism, including the infrastructure aspect. One of the goals is to create a national map for the development of food systems and improve landownership in rural areas.

Investment Opportunities for Local and Diaspora Investors

Agritourism in Albania is experiencing rapid expansion, opening doors for investments both for local entrepreneurs and those from the diaspora. With a contribution of 26.4% to GDP, tourism is one of the main pillars of the Albanian economy. Projections show that by 2025, this sector is expected to reach a value of 685.3 billion lek (approximately $7.3 billion).

Market Demand for Agritourism

Albania is becoming a favored spot for those seeking authentic and sustainable experiences. In 2024, the country hosted 11.7 million international visitors, while protected nature areas attracted over 4.5 million visitors and cultural sites welcomed over 1 million tourists.

With increasing demand for eco-tourism and unique experiences, Albania offers affordable alternatives for farm stays and eco-lodges, competing with destinations like Italy, France, or Spain, without compromising on quality.

In just the first nine months of 2024, tourism generated €3.8 billion in revenue. Furthermore, the budget for 2025 increased by 7.9%, reaching 3.9 billion lek. This increase has paved the way for more diaspora investments, which we will examine below.

Investments by the Albanian Diaspora in Agritourism

The Albanian diaspora plays a significant role in developing agritourism, contributing to the local economy and creating new jobs, especially in rural areas. One of the key initiatives is the "Mountain Package," a program aimed at attracting investments from the diaspora in mountainous regions. This package includes incentives like tax exemptions and land transfers.

"The Mountain Package is a recent initiative launched by the Albanian government to encourage Albanian migrants to return and invest in their homeland." - Eurofast

The program encourages the diaspora to develop projects that include eco-resorts, agritourism, and organic farming, collaborating with local residents to ensure long-term land use for at least 10 years.

A successful example is the Lile family, who manage a farm and restaurant near the Thermal Baths of Bënja in the Vjosa Wild River National Park. They produce traditional Albanian and Greek foods, including wine, gliko, and raki, all from their own harvests.

Support Programs for New Entrepreneurs

Supportive policies are empowering diaspora investments and encouraging new entrepreneurs to enter the agritourism sector. A €250 million financing scheme has been created to develop rural areas and agriculture, including agritourism.

Organizations like Business Network Albania offer a platform for entrepreneurs seeking assistance to develop their agritourism businesses. This includes personalized consultations, investment opportunities, and mentoring programs. The "100 Villages" project is another initiative aiming to revitalize rural areas through investment networks in agritourism and ecotourism, creating new jobs.

New entrepreneurs can seek help from the Eurofast office in Tirana for developing business plans, licensing, and legal support. Also, at Business Network Albania, we have member law firms offering legal and fiscal advice to ensure compliance with investment incentives.

These initiatives offer a strong foundation for developing agritourism in Albania, combining the diaspora's potential with the energy of new local entrepreneurs.

Conclusion: The Potential of Agritourism in Albania

Agritourism in Albania is a significant opportunity for economic development while simultaneously preserving nature and traditions. With tourism making up about 17% of GDP, combining this sector with agriculture creates a strong foundation for long-term development. This clearly highlights the importance of investing in agritourism.

The increasing demand for authentic and sustainable experiences is a positive signal. Albania, where 85% of cultivated land is managed by family farms with an average size of 1.2 hectares, has extraordinary potential to develop this sector.

What makes Albania unique are its natural beauties, rich biodiversity, and rich culinary traditions. Most agritourism businesses follow the "farm to table" model, preserving agricultural biodiversity and promoting sustainable practices.

An important example of cooperation in this field are local dialogues organized by FAO in Belsh, Përmet, and Shkodër during 2022. These meetings brought together farmers, entrepreneurs, microfinance institutions, and community representatives to discuss ways to enhance agritourism.

"I learned that agritourism entrepreneurs need to act as guides for farmers in their area: how to produce, what to produce, and when it will be needed. So, they should combine their business with the small family businesses around them. This happens already, but it's sporadic; we must push this more as a business model because there is agritourism potential everywhere in Albania's rural areas."
– Eldi Ceco, ABA Centre

In this direction, Business Network Albania plays a significant role by offering support for entrepreneurs who want to develop sustainable businesses in the agritourism sector. This approach helps not only in local economic development but also in preserving cultural heritage.

By linking agriculture, tourism, infrastructure, marketing, and local economies, agritourism creates new opportunities for women and youth, reducing the gaps between rural and urban areas. With institutional support, diaspora investments, and local entrepreneurs' engagement, agritourism can become a key pillar for Albania's rural development, securing a better future for future generations. This aligns with previous strategies and paves the way for sustainable development in this sector.

How to Start an Agritourism Business in Albania

To start an agritourism business in Albania, you must follow some important steps. Begin by registering your business through the e-Albania online platform and open a dedicated bank account for the business. These are the first steps to ensure your activity operates legally.

Next, create a detailed business plan. This plan should include your main goals, the strategies you will use to achieve them, and the resources you will need. A well-structured plan will help you remain focused and organized throughout the process.

To turn your dreams into reality, make sure you have the necessary financing. You can use your savings, apply for bank loans, or seek grants dedicated to agritourism. These financial resources will be essential to cover start-up costs and develop your business.

Additionally, it is crucial to obtain the necessary permits from local and central authorities. This includes any documentation required to ensure your business complies with regulations and legal standards.

Finally, focus on creating a unique and sustainable experience for your visitors. Utilize the natural assets and traditions of your area to offer an experience that reflects the authenticity and beauty of Albania. This will help attract tourists and build a strong reputation for your business.

What opportunities does the Albanian government offer to financially and fiscally support agritourism?

Supporting Entrepreneurs in Agritourism

Entrepreneurs operating in the agritourism sector in Albania can benefit from several government-provided facilities designed to boost the sector's development. Here are some of them:

• Tax exemptions and reductions: These measures are designed to encourage investments in agriculture and tourism, making it easier for entrepreneurs to develop their projects.

• Financial support: Providing funds for projects that promote the development of rural areas, including improving infrastructure and preserving the environment.

• Programs and strategic plans until 2025: These initiatives aim to create a sustainable foundation for the sector's growth, including projects that combine natural assets and cultural heritage.

These incentives are created to support not just local entrepreneurs but also those from the diaspora, helping them build sustainable and successful businesses in a sector with great development potential.

How can the Albanian diaspora help in the development of agritourism in Albania?

The Albanian diaspora has a significant impact on developing agritourism in Albania. Through investments in rural projects, sharing their experiences and knowledge, and promoting Albanian culture abroad, they make a valuable contribution to this sector.

With financing, training, and organizing intercultural activities, the diaspora helps create new opportunities for economic development and cultural heritage preservation. These efforts not only empower rural areas but also support the overall growth of the agritourism sector.