Subsidiaries in Albania may take many forms but all of them are characterized by the limited liability of the shareholders and the capital owned by the foreign company. Our company formation agents can help any business open a subsidiary in Albania.
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Types of companies that ca be established
The most popular forms of business in Albania are the limited liability companies and the joint stock companies. When you open a company in Albania, the minimum share capital requirement for a Limited Liability Company (LLC/SHPK) is 1 LEK. In most situations however, it is advised to have a bigger sum than this. The management is assured by one or two managers appointed by the foreign company. The general meeting of the shareholders is responsible for the major decisions.
The joint stock company may be opened or closed. The ones with private offer must provide a share capital of at least 3.5 millions LEK while the ones with public offer must provide a capital of at least 10 millions LEK. The stocks of the public joint stock companies are registered at the stock market.
Businessmen interested in establishing a subsidiary in Albania should know that they can also opt for the partnership business structure, although this is not a common choice. There is the General Partnership option, as well as the Limited Partnership.
The company formation process
The registration procedure of a subsidiary in Albania is very easy and takes around five days if all the requirements are met and all the documents are properly deposited. The uniqueness of the name must be checked online or at one of the representative offices of the National Registration Center (which have its main location in Tirana).
The articles of association elaborated by the foreign company for its subsidiary and containing details regarding the intern al regulations of the company must be notarized in order to be registered in the National Business Center (Qendra Kombëtare e Biznesit – QKB). As a result, the Business Center will issue a Registration Certificate and a Unique Business Identification number for the newly established subsidiary. This way the company is also registered for the health insurance and social security.
The registration of an Albanian subsidirary for the specific corporate taxes is made automatically by the QKB upon company registration. The company then deals with the General Directorate of Taxes for ongoing tax compliance and reporting obligations. If you are interested in company formation in Albania, you can rely on our specialists. They are experienced and can handle any issue during this process. They can also help with any situation after the company is already established, like corporate restructuring or amendments to the company’s Articles of Association. There is also the option to get a shelf company in Albania.
The benefits of opening a subsidiary in Albania
The advantages of owning a subsidiary in Albania are numerous and are related to the network of double tax avoidance signed by Albania all over the years. This way, the company is assured that the profits are not double taxed and the withholding taxes are minimized or abolished. The country boasts numerous tax treaties with other countries, so this is a significant advantage.
Albania is not yet an EU member, however it is an EU candidate country and adheres to many international business standards. Establishing a subsidiary in Albania allows access to the regional market at a lower operational cost.
Albania currently operates with a flat corporate income tax rate for most companies, making tax planning straightforward and predictable compared to progressive tax systems found elsewhere in Europe.
Taxes for Albanian subsidiaries
Understanding the exact tax burdens is very important for financial planning. Here are the main tax rates applicable to a newly established subsidiary in Albania:
- The standard corporate income tax rate for businesses with annual turnover exceeding 14 million LEK is 15%. Companies with turnover between 5 million LEK and 14 million LEK benefit from a reduced rate of 5%;
- The withholding tax on dividends distributed by the Albanian subsidiary to the foreign parent company is set at 8%, unless a double taxation treaty specifies a lower rate or exemption;
- The standard Value Added Tax rate is 20%. Certain activities, such as international transport, are exempt from VAT. When you set up a business in Albania, this needs to register for VAT if the annual turnover reaches 5 million LEK;
- Mandatory social and health contributions for employees are calculated on a gross salary basis, which are approximately 16.7% (15% social insurance + 1.7% health insurance).
Opening a subsidiary in Albania could be a great opportunity, however it has to be treated with the utmost care and professionalism. Working with our experienced company formation agents will ensure that the launch of your business will go smoothly. Don’t hesitate to contact us for help on company incorporation in Albania!
Partner: Firmengründung in Albanien, Регистрация компаний в Албания