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In the last year, the Albanian legal market has not seen a great deal of activity. In fact, there has been little to speak of....

In the last year, the Albanian legal market has not seen a great deal of activity. In fact, there has been little to speak of. "There has been no change," says one partner, "we've seen more or less the same as before. It's a good sign for the moment. Stability is sometimes better than development."

The capital markets in the country have been at an embryonic stage for years. Despite having the legal framework fully in place, the financial market is not very effective. "The fact is, companies are not interested in listing shares," says one partner. Crucially, the lack of trust in the financial markets (a result of the public suffering big losses from failed financial schemes) hinders development.

Furthermore, there are few tax benefits and virtually no incentives for companies to list. "Our politicians make no effort or offer anything to change the situation," says one partner.

In the aftermath of the crisis, the banking system held up quite well. This was mainly due to the fact that the sector is comparatively closed and there is little integration into the European market. However, according to one partner: "There were psychological issues with the public. They started to withdraw [money] but this reaction stopped and for the rest, there was not much impact."

The banks also suffered a bit from real estate development projects and the lack of international investors saw projects delayed so there were delays in the repayment of loans. "There's a lot of reluctance to invest in the building industry, banks are not financing this," says one partner, adding: "Many buildings can't be finished or are not finished because of the lack of sale or financing." In this sense, there is the feeling that Tirana, especially, is "overbuilt".

However there is some interest from investors in the energy sector. To this end, there has been a good deal of purely private investments in renewables such as hydro and wind power. Concessions granted to local and some international investors facilitate such interest and lately there has been interest from Italian companies eying up Albania as a potential market for renewables to transfer back to Italy. M&A is the preferred approach for investors and it is the main way Italian companies access the Albanian market. Although there has been some activity this year (especially in energy), one should not be under any illusions, as such activity is described only as stable. Looking ahead there is hope for some new activity as the market anticipates a fresh drive toward privatisation from a government looking to rid itself of its remaining public assets.

In the legal market, one trend that has materialised is the lure of Kosovo with most of the high-end firms seeking to exploit the business opportunities that have arisen there. "Kosovo is a very young place. All the biggest firms have been there and tried to send their lawyers," says one partner. Other big news on the market is the demerger of last year's tier two firm, Zaka Kosta & Tashko Law Firm into Zaka & Kosta and Tashko Pustina. The market will wait to see how the two new firms fair and which areas of business they will target.