In order to attract investors, a number of measures have been implemented by the Albanian government and a set of fiscal policy was applied. The National Register Center represents the entry point for all type of business and all the related processes (work inspection authority, the social and healthcare security) on which our consultants in company formation in Albania provide the necessary legal support.
The entrepreneurs have a number of company types to choose when starting doing business in Albania, related to their needs and possibilities.
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Main business forms in Albania
Sole entrepreneurs in Albania or sole proprietorships are the least complex forms of business, formed by a person with unlimited liability on the debts of the company. The procedure of registration is made by submitting information regarding the owner, business type, location, the estimated annual income, annual turnover, tax on turnover.
Albanian general partnerships can be formed by two or more partners with unlimited liability on the obligations of the company. The contribution of the partners must be equal, but no minimum share capital is required.
The company is managed equally by the partners unless agreed otherwise. If one of the partners is willing to transfer his rights to a third person, the approval from the remaining partner is required.
The limited partnership in Albania is composed by two entities: the general partner and the limited partner. The limited partner is responsible for the company obligations up to the limits of his contributions, opposed to the general partner. Also, there is no minimum share capital required.
The limited liability company in Albania (Shoqëri me Përgjegjësi të Kufizuara- Sh.p.k.) is formed by shareholders who must subscribe a minimum share capital equally divided into shares. The General Meeting of the Shareholders has the power of taking decisions. Sh.p.k can also have one or two managers, who equally share power.
Joint stock companies (Sh.a) are formed by partners responsible for the company’s debts and gains only up to their contribution to the initial capital.
The contributions can be formed by cash or property. There are two types of join stock businesses: private (for which the share capital is minimum ALL 2 million) and public (with a basic capital of ALL 10 million). The main difference is that the stocks of the public joint stock companies are registered at the stock market.
Expanding a foreign company on the Albanian market
Besides the company types presented above, foreign investors can open a company in Albania by expanding on the local market through a branch office or a subsidiary.
A foreign company may open a branch if the business requires it. This is recommended in case the parent company abroad wishes to hold full ownership on the entity (this includes its liability, management, etc.). The procedure for company incorporation in Albaniain this case is very simple and usually doesn’t take longer than a day.
In order to open a branch, the foreign investor must submit a number of documents at the National Register Center: a decision of opening a branch, issued during the General Meeting of the foreign company, the proof of registration of the foreign company and notarized foundation chart.
After the application, the branch must be registered with the Tax Office in order to receive the Identification Number as a Taxable Person and the tax certificate.
Is it possible to register a representative office in Albania?
Yes, among the types of companies in Albania regulated by the local legislation, foreigners may also register representative offices (or liaison offices), which are set up for non-commercial purposes, in the sense that they can’t engage in economic activities. However, they can create business connection with local partners, initiate marketing campaigns, etc.
Taxation matters
When investing on a new market, businessmen are always interested in tax policies applicable to their new businesses. It must be noted that all types of companies in Albania are taxed, even though the tax rules may vary. We also mention that non-profit organizations set up here are liable to taxation as well, even though they are not set up primarily for commercial purposes.
Considering these, our consultants, specialized in company formation in Albania, have prepared a short list on some of the basic tax rules available here:
- investors who will set up a company in Albania are required to pay employment taxes, which are charged at rates of 0%, 13% and 23%, depending on the salary threshold the employee reaches;
- according to theGeneral Directorate of Taxes, companies that generate a turnover below ALL 8 million benefit from a simplified profit tax (we can offer more details on this tax rule);
- legal entities in Albania that sell products or services liable to the payment of the value added tax (VAT) can register on a voluntary basis with the tax authorities provided that their annual turnover is above ALL 5 million;
- the current standard VAT rate is 20%, but it must also be noted that some services and products are taxed with lower VAT rates (6% and 0%).
There are many other requirements that must be met during the process of company formation in Albania (such as obtaining a registered address, opening a bank account, complete employment formalities, etc.), and this is why we recommend youaddress our consultants for full legal assistance.
Partner: Firmengründung in Albanien, Регистрация компаний в Албания