For three decades, the Balkans exported workers. Now countries across the region are increasingly importing them from Nepal, the Philippines, Vietnam, Indonesia and elsewhere in Asia.

Albania signed labour agreements with Vietnam and Indonesia within 24 hours last month, while Croatia, further along the same path, had 101,300 foreign workers in the country as of January.

Both countries spent much of the post-communist period losing people to richer economies. Now their own labour markets are running short of workers as construction, tourism and other sectors expand while populations shrink.

Croatia has lost close to a fifth of its population since independence, while the six Western Balkan states have lost about 2.5mn people over two decades. More than one in five citizens of the region now lives abroad.

The result is a group of small labour markets with growing demand and a diminishing domestic workforce, forcing governments to turn increasingly to countries with large pools of potential workers.

The shift mirrors a process that Germany, Poland and the Czech Republic began years ago. But for the Balkans, it is happening rapidly and in countries with little institutional experience of receiving large numbers of non-European migrants.

Croatia leads the way

Croatia provides the clearest indication of where the trend could lead. The number of foreign workers rose from just over 80,000 in 2021 to 120,000 in 2022 and more than 170,000 in 2023. The country issued about 206,500 residence and work permits in 2024, a 20% annual increase, with around 75,000 going to construction, 56,000 to tourism and hospitality and 28,500 to industry.

The nationality breakdown shows how dramatically the sources of labour have changed. Bosnians remained the largest group in 2024, receiving around 38,100 permits, but Nepalese workers were close behind with 35,600. Serbs received about 28,000 permits and Indians 20,500, followed by Filipinos.

Permits issued to Nepalese citizens increased from about 4,700 in 2021 to more than 35,000 three years later. By early 2025, more permits were being issued to Nepalese than Bosnians, marking a fundamental change in Croatia's traditional labour migration patterns.

The administrative change came in 2021, when Croatia abolished annual quotas for third-country workers and introduced a labour market test. Employers need to establish that no registered domestic worker can fill a vacancy before recruiting from abroad.

Interior Minister Davor Bozinovic said in January that Croatia had 101,300 foreign workers, arguing that the figure contradicted earlier predictions that the country could end up with half a million foreign workers. About half of the workforce comes from Asia and Africa.

The figures are also beginning to show signs of a more settled migrant population. Around 40% of permits issued in 2025 were extensions rather than permits for first-time arrivals.

The inflow has slowed in 2026, with both immigration and emigration falling in the first half of the year while net migration remained positive. Foreign arrivals continue to include large numbers from neighbouring Bosnia, Serbia, Kosovo and North Macedonia, but Nepalese, Filipinos and Indians are increasingly prominent.

Croatian employers in tourism and construction still report vacancies they cannot fill domestically, and seasonal workers have been demanding higher pay on the strength of it.

Albania moves faster

Albania is at an earlier stage but is moving quickly. Economy and Innovation Minister Delina Ibrahimaj signed an agreement with Vietnam's home affairs ministry on July 29 covering the recruitment of Vietnamese workers. The deal provides for equal treatment on wages, working conditions and social benefits, while employers are to cover recruitment and travel costs before workers leave Vietnam.

Vietnam estimates that Albania needs between 20,000 and 30,000 foreign workers, particularly in tourism, hospitality, manufacturing, construction, high-tech agriculture and transport.

The following day, Ibrahimaj signed a memorandum in Jakarta with Indonesia's minister for the protection of migrant workers, Mukhtarudin. Implementation is targeted for the end of 2026, with a business forum and technical agreement planned as the next steps.

Those two deals sit on top of a long-running negotiation with the Philippines over as many as 40,000 workers, and follow the government's stated aim, set out in 2024, of bringing in 40,000 foreign employees. Against that ambition the current stock is small: around 15,000 foreign workers, with 12,000 to 15,000 permits issued a year, mostly in construction, hotels and tourism.

Demand is being driven by a construction boom linked to Riviera tourism developments, expansion around Tirana and Durres and internationally financed infrastructure. Employers are reporting shortages of bricklayers, electricians, plumbers, welders and carpenters.

Albania is also changing its migration rules. Foreign workers will no longer need to deposit funds in an Albanian bank as a financial guarantee, while employers will be able to seek market-based permits after demonstrating that workers cannot be recruited domestically or from neighbouring Balkan countries. Highly skilled workers will be eligible for a two-year "Blue AL Card" modelled on the EU Blue Card.

Tirana's own worry is that it is building a corridor to somewhere else. Albanian officials excluded Bangladesh, Nepal, Sri Lanka and India from early recruitment precisely because those countries were seen as transit routes to Western Europe. Migration specialists quoted by the Tirana Times say many Asian workers arrive legally on contracts and leave within months, treating Albania as a stepping stone rather than a destination - a reasonable calculation in a country whose own prime minister campaigns on the freedom to leave, and roughly 100,000 of whose citizens emigrated to the EU in two years.

The demographic arithmetic

Croatia's population stood at 4.7mn in the 1991 Yugoslav census, its highest recorded level. By the 2021 census it had fallen to 3.8mn.

Emigration accelerated after Croatia joined the European Union in 2013, peaking in 2017 when more than 47,000 people left. Low fertility has compounded the decline: the fertility rate was 1.53 children per woman in 2022, well below the replacement rate of 2.1.

Croatia recorded 32,170 births in 2024, compared with about 55,000 in 1997. UN projections put the population at around 3.2mn by 2050 and 2.5mn by the end of the century.

Zagreb has responded with a Ministry of Demography and Immigration, created in 2024, as well as higher birth grants and longer paternity leave, according to a commentary by the Centre for Eastern Studies (OSW). But demographic incentives operate over decades, while labour shortages hit businesses immediately.

The same problem is evident across the Western Balkans, where governments are struggling to reverse demographic decline. The region is forecast to lose another 3mn people by 2050. Serbia, which has a labour shortage estimated at about 50,000 workers, issued 52,000 permits in 2023, mainly to Russians, Chinese, Turks and Indians.

Montenegro is the only Western Balkan country where the population is increasing, but immigration by Russians, Turks and Ukrainians rather than higher birth rates is driving the rise.

Governments have responded with financial incentives for families, but their impact has so far been limited. The Balkans are therefore confronting a global demographic problem earlier than many richer economies: emigration and falling fertility arrived together, leaving businesses needing workers long before governments can reverse population decline.

Recruitment is easier than integration

The bigger challenge may now be what happens after workers arrive. Croatia continues to approach migration primarily as a labour-market issue rather than an integration policy. Migrant workers who do not speak a South Slavic language are required to pass a basic Croatian language and Latin-script examination after their first year if they want to extend their permits.

Yet opportunities to learn the language remain limited, with courses provided mainly by NGOs and local initiatives. In a survey of 400 workers from Asia and Africa by the Institute for Migration Research, many planned to stay for years or permanently and more than half intended to bring their families. Set against that, only a third report an improved quality of life in Croatia.

The weaknesses extend to recruitment. Workers who borrow money to finance their journey can become heavily dependent on the employer sponsoring their permit, creating a power imbalance that recruitment agencies can exploit.

Andrea Spehar, Associate Professor of Political Science and Director of the Centre for European Research (CERGU) at the University of Gothenburg, Sweden, called the result segmented migration governance in a study published in International Migration in January: policy liberalised to meet market demand while institutional oversight stayed weak, integration underdeveloped and the political narrative split. The centre-right governs the issue as a technocratic matter and depoliticises it; the far right supplies a cultural threat story; migration duly became a live issue in the 2024 national elections. Her recommendations are the unglamorous ones: stronger oversight of recruitment agencies, real labour protections, inclusive integration policy.The political consequences are already visible. Migration became a significant issue in Croatia's 2024 parliamentary election, with the centre-right government largely presenting it as an economic necessity while the far right has framed it as a cultural threat.

Albania is now writing the rules for its own migration system. It can either reproduce those weaknesses or build safeguards into the system from the start.

The first phase of the Balkan migration shift was about getting workers through the door. Croatia's experience suggests that the harder question comes afterwards: whether those workers are treated as temporary labour, or as people who may eventually build lives in countries whose own citizens have spent decades trying to leave. 

Nearly half of Western Balkan citizens have considered emigrating as EU accession hopes faded, and the countries they would leave are now betting that people from Kathmandu and Hanoi will want to stay in the places their own citizens are leaving.