Albania is located in south-east Europe, and south-west of the Balkans region. Its capital is Tirana. Its area is 28,748 km2 and population is about 3.6 million. The official language is Albanian; its currency is the Lek.

Government: Albania is a parliamentary republic where the Parliament has legislative power, while the Council of Ministers has the executive power.

Bank system: the bank system in Albania has two levels:

  1. Central Bank (Bank of Albania BOA),the local regulator;
  2. all other banks.

BOA regulates, authorizes and controls banking activities and operations throughout the National territory. The Bank of Albania reviews and monitors the activities of banks, in order to ensure that they are safe and act in accordance with existing laws and regulations.

According to Law no. 9662/2006, “For the banks of the Republic of Albania”, banks are defined as a limited company that can be owned both by Albanian and foreign shareholders. Albanian banks are controlled by the Bank of Albania and can make money transfers abroad. Anyone (whether resident or not in Albania) can open and hold a bank account in any currency, and in any bank of the Country.

Incorporation of Companies in Albania

In Albania, incorporation and operating of companies, governance, rights and duties of shareholders are ruled by Law no. 9901 of 14/04/2008, which aims at promoting and encouraging the development of private companies.

According to Law no. 9723/2007 on QKR (company’s house) and Law n. 9901/2008 on commercial companies, Albanian companies can be incorporated as:

  1. General Partnership (shoqeri kolektive)

In this company any partner has unlimited liability for company’s obligations. Each partner legally represents the company with third parties. No minimum capital is required and company dissolution is due in case of partner death, bankruptcy, and revocation of the license of commerce or inability to act of one partner. These companies prepare an annual balance sheet.

  1. Limited Partnership (shoqeri komandite)

The Limited Partnership provides two categories of partners:

  • general partners (unlimited liability);
  • limited partners (only responsible for the capital they own).

Law n. 9901/2008 mandates the rights and duties of general partners: they have the right to receive the balance sheet twice a year. The articles of association of a Limited Partnership must specify the total amount of company capital, each partner capital subscription, as well as the proportion in sharing dividends among partners.

  1. Limited Liability Company (Shoqeri me pergjegjesi te kufizuar)

The Limited Liability Company (Sh.p.k.) is the preferred form of company by foreign entrepreneurs entering the Albanian market. It can be owned by one or more shareholders, natural or legal persons, who will be liable only with the owned share capital. The contributions of share capital can be in cash or in any other economic asset;  contributions of share capital in services are not allowed. The law requires the preparation of an annual balance sheet and – for Limited Liability Company with profits above a certain limit – the appointment of auditors. The minimum capital required for LLC is currently 100 Lek (about € 1).

  1. Corporation (shoqeri aksionare)

The Albanian Corporation (Sh), unlike the Limited Liability Company, can be a public company. Minimum share capital required is:

  • Lek 10 million (about € 73,000) for a Public Company;
  • Lek 2 million (about € 15,000) for a Private Company.

The capital is divided into shares. The incorporation of  the Corporation requires the payment of at least 25% of the share capital raised in cash, and 100% of the share capital raised in different assets. It is up to the company directors to ask the shareholders for the payment of the remaining part of share capital raised in cash. Shareholders can change articles of association only with a special resolution. The Corporation can choose single-tier or dual-tier systems for its governance.

With a single-tier system, the Corporation is run  by a board of managing directors, together with independent directors with control functions.

With a double-tier system, the Corporation is run  by the board of directors, and has a supervisory board with management control functions.

The Corporation can issue different classes of shares but – in any case – in shareholders meetings shareholders vote in proportion to their shares.

For any company type, the Albanian law does not provide restrictions on the nationality or residence of shareholders or directors. Moreover, Limited Liability Companies and Corporations can choose its Directors between non-shareholders.

The Albanian legislation provides opening of branches and representative offices of non resident companies, with the same rules for the incorporation of commercial companies.

Incorporating a company

Law n. 9723/2007 regulates the National Center for Registration (QKR in Albanian).

Incorporating a new company requires the following information:

  1.  company name;
  2.  company type;
  3.  date of establishment;
  4.  personal data of the founding members;
  5.  headquarters;
  6.  purpose, if it is defined;
  7.  duration, if it is defined;
  8.  personal data of directors, their power and the duration of their office;
  9.  signatures of the persons who represent the company to third parties.

The incorporation of a trading company owned by a non-resident company in Albanian QKR,  art. 26 paragraph 4 of section 2 of Law n. 9723/2007, contains some special rules. Documents to be submitted for registration – all translated in Albanian and legalized – are:

  • a memorandum and articles of association, or otherwise the equivalent document according to foreign law;
  • documentation certifying the registration of the foreign company in the foreign jurisdiction;
  • documentation certifying the current situation of the foreign company, issued within 90 days from the date of request, with the data of registration and legal representation, including information about the absence of liquidation or bankruptcy;
  • copy of the document (e.g. shareholders resolution or directors resolution) of the non-resident company that decides to incorporate a new company in Albania.

The incorporation requires the presence in Albania of the director of the non-resident company, in order to stamp-sign the act of incorporation.

Company taxes

Albanian law n.9632 issued on 30.10.2006 provides several indirect taxes on enterprises:

  • a registration fee for the Company Register: 100 Lek;
  • a registration fee for the Department of Labour: Lek 1.000;
  • an annual fee for the Chamber of Commerce, which varies from 20,000 Lek for Sh.p.k. to Lek to 35,000 for Sh.A.


  • Tax on waste from 6,000 to 200,000 Lek per year;
  • environment Tax from 5,000 to 440,000 Lek per year;
  • sign Tax from 120 to 3,000 Lek per year;
  • annual tax on property, proportionate on m2 and  applied to any real estate property of the Company.

Tax system – taxation of legal persons

Direct taxes on individuals and legal entities are ruled by Law n. 8438 of 28 December 1998. The company tax rate is 15%.

Subject to this tax are companies, consortia and other entities both resident and non-residents, having  an office or their business in the Albanian territory. According to this law, for those taxpayers, the levy is applied on all income (even if perceived abroad).                                                                                         Dividends distributed by companies are subject 15% withholding tax.

The tax on small businesses

According to art. 10 of Law n. 9632 of 30/10/2006 and art. 12 of Law n. 8438, 28/12/1998, the natural or legal persons having an annual turnover up to 8 million Lek pay the local tax on small business, instead of the company tax.                                                                                                                                                The amount of the tax is determined by local annual turnover as follows:

  • Companies having a turnover between 0 and 2 million Lek pay a fixed amount of 25,000 Lek;
  • Companies having a turnover between 2 and 8 million Lek pay a tax equal to 7.5% of their net profit.

Tax system – taxation of individuals

The law n. 8438/1998 (as amended by Law no. 107 of 28/03/2013) provides for progressive taxation on the basis of the following rates for wages, salaries and other benefits resulting from annual employment:

  • from 0 to 30,000 Lek there is no taxation
  • from 30,001 Lek to 130.000 there is a 13% tax on gross pay.

The fixed rate of 23% is also applied on wages, salaries and other benefits  over 130.000 Lek.

Tax system – VAT

The introduction of value added in place of turnover tax was approved by the Albanian Parliament in April 1995 and entered into force effectively on 1 July 1996 with the Law n. 7928 of 27 April 1995.

The value added tax rate is 20%. The tax base is the value of goods and services, excluding value added tax. The taxable amount of imported goods includes the cost of transport and insurance, import fees, taxes, duties or tariffs.

Social security and average wage

According to Law n. 7703 of 11.05.1993 and the Law n. 7870 of 11.13.1994, employers and employees are required to pay mandatory contributions for social security and health. The basis of the contribution is calculated on minimum and maximum salary, established monthly upon decision of the Council of Ministers, which is updated annually. For the calculation of social security and health contributions, the legislation provides both a minimum monthly salary amount to 22.000 Lek, and a monthly salary maximum of 97.030 Lek, considered only for the calculation of social security contributions.

The calculation of health benefits, from 1 January 2014 refers to the monthly salary actually received by the employee, which may not be less than the aforementioned 22.000 Lek. The employer must pay each month for each employee at the Institute of Social Security, with contributions of 27.9% of the gross salary received by the employee. Small businesses have the burden to pay it on a quarterly basis. The contribution is split: 16.7% is paid by the employer and 11.2% is paid by the employee. Paid contributions is deducted from the salary received by employee and paid by the employer.


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