Home Doing Business in Albania Corporate Forms and Taxation

Legal framework

Albanian legislation, and in particular Law no.9901 of April 14, 2008 “On merchants and commercial companies” provides for the possibility of establishing limited liability commercial companies in Albania (Shoqëri me përgjegjësi të kufizuar – Sh.pk) and for shares (Shoqeri Aksionare – Sh.A) as well as the possibility of setting up branches (branches) and representative offices of foreign companies, for which the same registration procedures must be adopted in the Register of Companies of the Republic of Albania (QKB- CNI).

Law n.9901 is the legal reference for commercial companies. This law is in principle inspired by the discipline contained in the French, Italian, German and English commercial laws. The main objective is to promote and encourage the development of private companies in Albania, as well as the adaptation of the Albanian legislation to that in force in the countries of the European Union. Law No. 9901 does not apply to non-profit organizations (associations and foundations), which are governed by Law No. 8788 of May 7, 2001 “On non-profit organizations”, as represented below in the following chapter “Organizations no profit”.


Trading companies

In order to set up and organize a commercial company in Albania, the investor (also foreign) can choose whether: (i) to set up a commercial company (collective company, limited partnership, limited liability company, joint stock company); (ii) set up a branch, branch or representative office; or (iii)

set up joint ventures and de facto companies.


The personal company


Personal enterprise is the easiest way to run a business in Albania. To establish it, the foreign investor must first register with the QKB-CNI by submitting a simple request with the applicant’s personal data, the address in Albania, the commercial activity to be started and the signature filing.

The application, together with a valid identity document, may be presented by the investor to the QKB-CNI of the competent district where the commercial activity will be started.

The personal company provides unlimited liability for the debts contracted by the entrepreneur who owns the company.


Limited liability company

(Shoqëri me përgjegjësi të kufizuar – Sh.pk)

The limited liability company (Sh.pk) is the most common legal form chosen by foreign entrepreneurs and investors who enter the Albanian market. It is considered the type of typical company to be adopted for a so called start – up project on the market.

A minimum initial capital of ALL 100 (approximately USD 0.99 or EUR 0.71) is required to set up a limited liability company. It can be made up of one or more shareholders, natural or legal persons, who will be liable only in proportion to the share capital subscribed. The contributions may be in cash or in any other activity, with the exception of contributions in services that are not allowed.

Decisions relating to the company’s commercial strategies are the responsibility of the shareholders’ meeting, while ordinary management is carried out by one or more directors appointed by the same meeting, even among non-shareholders. The law requires the preparation of annual financial statements, and for limited liability companies, with profits above a certain limit, it is mandatory to appoint the auditors who will take care of preparing the annual financial statements.

The limited liability companies can be transformed into an into partnerships or a joint-stock company upon resolution of the general meeting, after the approval of the financial statements of the last two financial years.


Joint-stock company

(Shoqëri aksionare – Sh.A.)

An Albanian joint stock company (Sh.A.), unlike limited liability companies, would have the opportunity to offer its shares on the market. A joint-stock company must be incorporated with a minimum initial capital of ALL 3.5 million (approximately € 25,700) if it is intended to offer its shares on the market; this minimum capital must be at least 10 million (approximately 73,530 Euros). Initial capital is divided into shares and shareholders are liable for losses only to the extent of their participation. At least ¼ of the nominal value of the shares representing the cash contributions and all the contributions in kind must be paid when the capital is subscribed; the governing body of the company will decide on the transfer of the remainder.

The main decisions are generally taken by the general shareholders’ meetings, which can be ordinary or extraordinary. Shareholders can change the articles of association only with an extraordinary meeting.

The administration and management system of a joint stock company can be of two types: monistic or dualistic.

The companies that adopt the one-tier management system have a board of directors and directors with management control functions. Instead, the companies that choose the dualistic system have, in addition to the board of directors and directors, also a supervisory board with control functions.

The board of directors is responsible for taking all strategic decisions for the management of the company, in accordance with the provisions of the articles of association and acts under the supervision of the board of supervisors.

A public limited company can issue different categories of shares, subject to the limitations that all shareholders must respect in relation to the right to vote in proportion to their respective shares in the meetings of the general meeting.


Branch (or Branches) – Representative offices

Apart from the types of companies envisaged, a foreign investor may prefer to set up a branch or representative office in Albania. Both the branches / branches and the representative offices in Albania have the same legal personality as the so-called parent company. The branches / branches are organized and managed separately, carry out activities with third parties, in the name of the company. On the other hand, the representative offices cannot create income, but only develop and promote the activity of the so-called parent company: but the same can enter into agreements in the name and on behalf of the company.

Many foreign investors operate successfully in Albania through branches / branches which, similarly to the representative office, must be registered with the QKB-CNI; together with the corporate documents of the parent company requested. The branch / branch or representative office is represented by a legal representative authorized by the so-called parent company.


The following information is mandatory for the registration of branches and representative offices of foreign companies:


  1. a) The data referred to in letters “a”, “b”, “c”, “d”, “d”, “e” and “h” of article 32 of the Law on foreign commercial companies, including the number and the location of the recording
  2. b) The capital of the foreign company;
  3. c) Name of the branch or representative office, if different from that of the foreign company;
  4. d) Duration of the branch or representative office, if ascertained;
  5. d) Scope of the branch or representative office, if it is ascertained;
  6. f) The branch office or representative office;
  7. e) the identification data of the subjects responsible for the management and representation of the branch or a representative office in relation to third parties, proxies and their mandates;
  8. h) The signatures of the persons representing the branch or a representative office in relation to third parties “(article 37).


Registration documentation:


– Deed and statute of the foreign company, when it comes to two separate documents or, failing that, an equivalent act of creation, according to foreign law, as well as the full text of their subsequent amendments;


– Documentation proving the registration of the foreign company in a foreign jurisdiction;

– documents proving the current state of the foreign company, issued within a period not exceeding 90 days from the date of the application, with the data of the census and representation, including whether the information is in liquidation or bankruptcy;

– Company financial statements for the last financial year, maintain the standards required in the foreign country, if the foreign company has been in business for more than a year;

– Decision or other deeds of the respective foreign company under foreign law for the opening of a branch or representative office. The documents in this paragraph are replaced by the registration request when the person seeking registration is also the body competent to act only on behalf of a foreign company;

– Identity document of the legal representative of the branch (if it is the applicant). If the applicant is different from the branch’s legal representative, a power of attorney must be filed;

Registration of legal entities with a shareholder, foreign legal entity shareholder


In case of registration of legal persons or of a simple shareholder or member of a foreign legal person, in addition to the documents required by the type of subject, the request for initial registration of the attached documents referred to in letters “a”, “b” “c” and “d” of paragraph 5 of article 28 above, to foreign legal persons.


Joint venture and de facto company

(Shoqëri and thjeshte)

Albanian law does not specifically regulate joint ventures or de facto private companies. Joint ventures are provided for in the Civil Code and Albanian legislation uses the term “simple company”. Joint ventures are established through a contract, entered into between two or more individuals, natural or legal, who agree to jointly exercise an economic activity with third parties. The peculiarity is that joint ventures do not have legal personality.

In practice, before considering joining a joint venture, the parties’ expectations regarding the various and main aspects of the investment project should be carefully determined in advance. It is also recommended that partners negotiate an alternative dispute resolution mechanism (e.g. an arbitration clause) in the joint venture agreement.


General partnership

(Shoqëri kolektive)

In the company in a collective name, all members are responsible, both jointly and separately, without limitation, for the obligations deriving from the status of member. The creditors of a company in a collective name have first of all the right to act against the company as a whole and, if this is not sufficient, they can act against all the shareholders and request them to pay the debts.

There is no minimum capital for the establishment of a company in a collective name. The company in collective name under Albanian law can be configured as a reciprocal agency relationship in which each of the partners has the authority to bind the company towards third parties, without notice. Unless otherwise agreed in the articles of association filed with the QKB-CNI, all shareholders are considered directors.

The company expires on expiry of the term, due to the shareholders’ decision, bankruptcy, court decision and failure to exercise commercial activity for two consecutive years. Nonetheless, there are circumstances in which continuity can be foreseen by the statute. The annual financial statements must be filed.


Limited partnership

(Shoqëri komandite)

The limited partnership is characterized by the simultaneous presence of two categories of shareholders: limited partners and limited partners. In a limited partnership, limited partners are liable for social obligations only in proportion to their participation, while limited partners have unlimited liability for all social obligations.

Law n.9901 provides special provisions regarding the rights and obligations of general partners.

These provisions provide for the right of members to the financial report at least twice a year. However, general partners may also not participate in the administration of the company. If a general partner participates in the administration of the company, he may incur unlimited liability for social obligations. In the articles of association of a limited partnership, the total share or the value of the contributions of the individual shareholders must be specified, as well as the share or contribution made by each shareholder and the percentage of the participation of the shareholders in the company’s profit.

The death of a shareholder does not result in the immediate dissolution of the limited partnership.


Trust Company – Trust

The fiduciary registration is used to guarantee the confidentiality of anyone wishing to carry out an operation or to hold an asset without appearing, for example, in order not to solicit appetites or attentions from third parties or even as a simple passive safety measure. The fiduciary registration carries out very important functions, even when there is no need for confidentiality, in order to prevent or resolve conflicts between shareholders, or to guarantee compliance with commitments made towards creditors.

The use of a trust company creates an effective separation and autonomy of assets between different businesses or subjects, to avoid reckless and not due aggressions by future creditors or self-styled persons entitled, or more generally to create a “private” space in an increasingly “informed” and connected context, also in order to mitigate potential conflicts or instrumental uses of the same.

The intervention of the Trustee is also appropriate in cases where it is necessary to turn to a third party, independent and professional, to guarantee the fulfillment of obligations that must not be left in the powers of one of the contracting parties.

The fiduciary registration is carried out through a mandate contract pursuant to art. 1703 of the CC, where the trustee transfers a right to the trustee who has the obligation to exercise it according to the interests and instructions of the transferor or a third party. With the fiduciary registration, the trustee has the task of professionally managing, in transparency and confidentiality, the trustee’s assets. The ownership always remains exclusively of the trustee while the trustee acts according to the directives given by the trustee himself.

The Trustee guarantees anonymity, tranquility and effective separation between the personal and professional assets of the trustee, or between personal and family assets. The movable assets in the name of the trustee are managed by an intermediary authorized according to the choices and instructions of the trustee, but all takes place in the name and through the trustee. If the type of investment chosen will allow it, it will be possible to make definitive taxation without further reporting obligations, thus achieving complete anonymity even for activities maintained abroad but legally existing in Italy. For information: albaniainvestimenti@gmail.com

The foreign trust company is a company that can be useful (many times necessary) to protect its confidentiality towards third parties: it is a type of company that protects privacy towards third parties, natural or legal persons. The foreign trust company, most often authorized to operate by particular rules of the state in which it is based, however, must not (and cannot) be used as a tool to not pay the tax due to the trustee’s state of residence: the company foreign trust is a tool to protect confidentiality towards private individuals.

The real purpose of using a foreign fiduciary company can be defined as that aimed at producing a legal effect of absolute confidentiality and secrecy between the real beneficiary of an asset and the owner who is evident to the indeterminate public. The establishment of a foreign fiduciary company is a lawful and rapid legal act in the time of realization (from 24 to 48 hours).

The fiduciary heading is a mandate contract under which a subject (the trustee) transfers an asset or a right to another subject (the trustee), who will administer it or exercise it on behalf of the trustee who remains the owner. the asset or the right to satisfy certain interests.

With the Fiduciary Registration, the trustee has the task of professionally managing, in transparency and confidentiality, on behalf of the trustee, his assets.

Confidentiality is an additional protection for the trustee, who intends his assets to the trustee, legally obliged (with limits) to keep his identity secret towards third parties.

There is a recognized Trust Company in Albania.

For information www.albaniainvestimenti.com


National Register of Companies (QKB-CNI)

Law No. 9901 and Law No. 9723 of May 3, 2007 “On the National Business Center” “(CNI or QKB in Albanian) as amended, changed the registration process for businesses. We have gone from a procedure managed by the court that required a few days and numerous administrative steps, to a new rationalized, easy and rather fast administrative process. Starting a business has become easier through the online publication of the relevant documents, with the reduction of registration costs and the consolidation of the registration for taxes, health insurance and employment insurance, in a single application.

Economic activities, including for example tourism, construction, telecommunications, energy, financing, fuel trade, radio and television broadcasting, fishing, trade in medical products, require a specific license.

Law No. 10081 of February 23, 2009 “On licenses, authorizations and permits in the Republic of Albania”, as amended, provided for the establishment of a one-stop shop for licenses – National Licensing Center (“CNL or QKL”) , on the basis of the “one stop shop” principle Pursuant to Law No. 131/2015 “On the National Business Center”, the QKL and the QKR are now subject to the administration of the QKB.

The QKB was born as a new legal entity that gathers competences and offers in a “single place” the services that previously were provided separately from the QKR and the QKL.

The documentation summarily requested by the National Register of Companies (QKB-CNI) for the registration of a new company in Albania, includes among other things:

  1. The deed of incorporation and the articles of association signed by the founding members who must contain the company name, registered office, corporate purpose, initial capital, duration (in Albania it can be unlimited) and the name (s) of the shareholder (s), the director / i or the directors etc .;
  2. The completed form is filed by the company’s legal representative;
  3. the documentation concerning the company’s founding members and directors.


Registration of a branch / branch or representative office

In case of registration of a branch or a representative office, the (QKB-CNI) also requires:

  1. the deed of incorporation and statute of the so-called parent company (and any amendments);
  2. the extract issued, no more than ninety days before, by the competent Chamber of Commerce in the country of origin where the so-called parent company is registered; the latter document must indicate that: (a) the so-called parent company is duly registered in the Commercial Register, and that (b) it is not subject to dissolution or any insolvency or bankruptcy procedure (c) the composition of the administration and management bodies of the so-called parent company;
  3. the resolution of the board of directors of the so-called parent company which decides on the establishment of the branch or representative office in Albania, appointing a legal representative;
  4. the annual financial statements and related financial statements of the last year of the so-called parent company and the report of the accounting experts;
  5. the form completed and filed by the branch representative (or the office representative).






The company that wants to internationalize its business with a stable presence can opt for two different penetration strategies of foreign markets:


  1. Through the establishment of a foreign branch;




  1. by setting up a permanent foreign or branch organization;


The main difference between the two types described above consists in the fact that the foreign branch is a separate legal entity linked to the Italian company by a participatory relationship (investee or subsidiary companies) while the permanent establishment is not an autonomous legal entity but rather an organizational structure of the parent company, located in the territory of the foreign state, with the aim of carrying out all or part of the business.

The concept of permanent establishment is a purely “tax” concept that identifies, as defined by the TUIR in art. 162, paragraph 1, a “fixed place of business”.


For the establishment of a branch abroad it will be necessary to fulfill all the civil and fiscal aspects of the place where you want to settle as well as provide it with initial capital, instead in the second case it is the faculty of the Italian company to decide whether to correspond to the permanent establishment an endowment fund; since the permanent establishment is an operative articulation of the Italian company, the civil obligations will be limited to the communication of the existence of the branch (one-off) and the deposit of the annual financial statements to the bodies responsible; from a tax point of view, in particular VAT and direct taxes, the only obligations will be those relating to the activity carried out in the foreign state.

Finally, it should be emphasized that the lack of independent legal entity, Italian company and permanent establishment constitute a single entity, which determines the direct allocation of profits (or losses) to the Italian company and therefore the lack of attribution of dividends in “internal” relationships.




To set up a permanent establishment abroad, the requirements are relatively simple. For companies wishing to open a foreign branch, a resolution of the Board of Directors which will have to identify a responsible person is sufficient in itself. If, on the other hand, you want to open a branch that meets the requirements of a secondary office, a notarial shareholders’ resolution will be required that changes the articles of association and specifically the article on the office. In this case, the meeting must identify the person in charge of the secondary office. Usually the reasons that recommend the opening of a secondary office are to be found in the need to register real estate or registered movable property.




It goes without saying that in the strategic choice between a foreign branch or a branch, it is advisable to opt for a less radical and expensive solution, both in monetary terms and in terms of bureaucratic obligations, represented by the “branch”. Certainly this choice represents the simplest and most convenient solution at the beginning of a process of penetration of a foreign market.





The communications to be made by the Italian parent company in relation to the foreign permanent establishment are the opening of the local unit abroad at the Revenue Agency and the communication to the business register of the Italian Chamber of Commerce in which the company is based, of the local foreign unit, attaching the relative certificate of registration to the foreign company register (or equivalent register). It should be noted that since this certificate is produced in a foreign language, a certified translation of this certification will be required.

In the foreign country, the permanent organization will be registered and a VAT number will be opened on the spot (in some states and within certain turnover limits, this operation could be omitted).




As required by art. 14, paragraph 5, of Presidential Decree no. 600 of 1973 there is an obligation for companies, entities and entrepreneurs who carry out a business activity located abroad through permanent organizations, to separately disclose the management events affecting the branch in their accounts, determining the results for the year separately related to each of them.

Therefore, in order to correctly fulfill the obligations established by Italian law, it is advisable to keep different accounting sections for the recording of the operations of the Italian company and of the foreign branch both in the case of accounting expressed only in euro and in that of accounting in euro and in currencies other than the euro (as required by OIC no. 26).

Keeping separate accounts for management events involving the foreign branch, in foreign currency and in the local language, will also make it possible to more easily comply with the obligations established by the various regulations of foreign states.

With regard to VAT obligations abroad, in general, the permanent organization is liable for the tax in the foreign state for the operations carried out there.

Since the Italian company and its permanent establishment are considered a single subject, a particular problem concerns the internal passage of services and goods for VAT purposes. The services provided between the parent company and the permanent establishment are not relevant, whereas a different discussion must be made for the transfer of goods which instead are considered as purchases and sales of intra-community goods in the event that the branch is located in an EU state, with the consequent need for present the Intrastat model.

Otherwise, in the EXTRA-EU context, internal transfers of goods are considered to be actual imports and / or exports, subject to customs legislation.

A further clarification on the internal transfers of assets concerns: “how should these movements be accounted for in accounting and tax terms?”. Considering the foregoing, pro forma invoices or commercial invoices must be issued, depending on the specific case, between the parent company and the foreign branch.

Finally, a mention of the direct tax issue. The Irap regulation, in art. 12, paragraph 1, of Legislative Decree 466/1997, says that with regard to taxable persons resident in Italy for their activities abroad, the share of value generated abroad is deducted from the total tax base firm.

As far as Ires or Irpef taxation is concerned, the branch will have to comply with the taxation envisaged by the foreign state for the share of income produced there. In Italy, the company will declare the income inclusive of the income produced abroad, by deducting the amount already paid outright in foreign countries from the overall tax (art.165, paragraphs 1 and 2, of the TUIR).




The Italian company, if obliged to draw up the financial statements, will have to present the financial statements including all accounting movements including those of the permanent establishment. On the other hand, the permanent organization will have to fulfill only the tax obligations relating to the income produced in the foreign state and will have to file the balance sheet of the parent company translated into the language with the business register of the foreign state in addition to the branch balance sheet in the local language and currency.

It is emphasized that this financial statement is not a consolidated financial statement, but a normal financial statement, since the parent company and branch are a single entity. In the case of a foreign branch, it will be necessary to present the consolidated financial statements.


Source: Consolidated Law on Income Taxes (TUIR); Legislative Decree n. 466/1997;


Taxes generally applied to commercial companies

Under Albanian tax law, a newly incorporated company in Albania is subject to the following main taxes.

Income taxes:

›15% of the net result, unless the company is classified as a small company (with an annual turnover of up to 8 million Lek or approximately € 58,800);

›Cleaning fee (municipality tax): annual fee, depending on the type of annual income and the type of economic activity;

›Property tax (City tax): an annual tax per square meter for the area of ​​real estate owned by the company, if applicable;

›Annual education tax (municipality tax) ;;

›Annual advertising tax (municipality tax); if applicable.

%d blogger hanno fatto clic su Mi Piace per questo: