Optimal Legal Status For Your Business In Albania

Published on October 4, 2025 and written by Cyril Jarnias

Albania, a country experiencing robust economic growth, offers numerous opportunities for foreign entrepreneurs looking to establish their businesses there. However, choosing the right legal structure is a crucial step that will significantly impact the development and management of your activity. In this article, we will explore the different options available to you and guide you through this important decision.

The Albanian entrepreneurial landscape: fertile ground for investors

Before diving into the details of legal structures, it’s essential to understand the Albanian economic context. In recent years, Albania has experienced sustained economic growth, with a GDP growth rate of 3.5% in 2024 according to the World Bank. The Albanian government has implemented various reforms to improve the business climate and attract foreign investors.

• Attractive taxation with a corporate tax rate of 15%
• Simplified procedures for business creation
• Facilitated access to the European market thanks to its strategic geographical position

These favorable conditions have contributed to a significant increase in the number of foreign businesses establishing themselves in Albania, with a 12% growth in foreign direct investments in 2024 compared to the previous year.

Main legal structures for doing business in Albania

Albanian corporate law offers several options for entrepreneurs to structure their activities. Here are the most common legal forms:

1. Sole proprietorship (Personi Fizik)

This legal form is ideal for entrepreneurs looking to start a small-scale activity. It has the advantage of being simple to create and manage, with reduced administrative formalities.

• No minimum capital required
• Unlimited liability of the entrepreneur on personal assets
• Taxation on personal income

2. Limited liability company (SHPK – Shoqëri me Përgjegjësi të Kufizuar)

This is the most popular legal form in Albania, particularly suitable for small and medium-sized enterprises. It offers protection of partners’ personal assets and flexibility in management.

• Minimum share capital of 100 leks (less than 1 euro)
• Partners’ liability limited to their contributions
• Possibility to have a single partner (SHPK me ortak të vetëm)
• Taxation on company profits

3. Joint stock company (SHA – Shoqëri Anonime)

This form is generally chosen for larger projects or those requiring significant fundraising. It allows for a clear separation between ownership and management of the company.

• Minimum share capital of 3.5 million leks (approximately 28,000 euros) for closed companies, and 10 million leks (approximately 80,000 euros) for companies making public offerings
• Shareholders’ liability limited to their contributions
• More complex governance structure with a board of directors
• Possibility to issue shares and bonds

4. Branch (Degë e Shoqërisë së Huaj)

For foreign companies wishing to establish themselves in Albania without creating a separate legal entity, the branch is an interesting option.

• No minimum capital required
• The parent company is responsible for the branch’s debts and obligations
• Activities limited to those of the parent company
• Taxation on profits made in Albania

Sole proprietorship or company: what to choose for your project in Albania?

The choice between a sole proprietorship and a company depends on several factors related to your project and personal objectives. Here are some elements to consider:

Advantages of sole proprietorship

Simplicity and speed of creation: A sole proprietorship can be created in just a few days, with reduced administrative formalities. According to the National Business Registration Agency (QKB), the average creation time for a sole proprietorship in Albania is 3 business days.

Reduced creation and management costs: There is no minimum capital required and accounting fees are generally lower than for a company.

Flexibility in management: The entrepreneur has total control over their activity and can make decisions quickly without having to consult partners.

Disadvantages of sole proprietorship

Unlimited liability: The entrepreneur is personally responsible for their business debts on their entire personal assets.

Difficulty raising funds: Banks and investors are generally more reluctant to finance a sole proprietorship than a company.

Less professional image: In some business sectors, a corporate structure may be perceived as more credible by clients and partners.

Advantages of creating a company

Protection of personal assets: In an SHPK or SHA, the liability of partners or shareholders is limited to their contributions.

Increased credibility: A corporate structure can inspire more confidence in clients, suppliers, and financial partners.

Ease in raising funds: Companies generally have more ease obtaining bank financing or attracting investors.

Tax optimization: Companies benefit from certain tax advantages, particularly the possibility to more easily deduct certain expenses.

Disadvantages of creating a company

More complex administrative formalities: The creation and management of a company involve more paperwork and legal obligations.

Higher creation and management costs: Incorporation fees, accounting, and audit costs are generally higher for a company.

Less flexibility in decision-making: Important decisions often need to be made in agreement with other partners or shareholders.

Key steps to create your business in Albania

Regardless of the chosen legal form, here are the main steps to follow to create your business in Albania:

1. Business name reservation

The first step is to check the availability of your chosen business name with the National Business Center (QKB). This procedure can be done online on the QKB website.

2. Preparation of incorporation documents

For a company, you will need to prepare the articles of association and the incorporation deed. These documents must be drafted in Albanian and signed by all partners or shareholders. It is recommended to hire a local lawyer to ensure these documents comply with Albanian legislation.

3. Opening a bank account

For companies, it’s necessary to open a bank account to deposit the share capital. The main banks in Albania are Raiffeisen Bank, Banka Kombëtare Tregtare (BKT), and Credins Bank.

4. Registration with QKB

Your business registration is done with the National Business Center (QKB). This procedure can be done online or in person at one of the QKB offices. The average registration time is 24 hours for a sole proprietorship and 1 to 3 days for a company.

5. Obtaining the tax identification number (NIPT)

The NIPT is automatically assigned during registration with QKB. This number is essential for all tax and administrative procedures of your business.

6. Registration with social security and health insurance

You must register your business and your employees with the Social Security Institute (ISSH) and the Compulsory Health Insurance Institute (FSDKSH).

7. Obtaining specific licenses and authorizations

Depending on your business sector, you might need to obtain specific licenses or authorizations. QKB can inform you about the requirements specific to your field.

Tax aspects to consider

The Albanian tax regime is relatively advantageous for businesses. Here are the main taxes to know:

Corporate tax

• 0% for businesses with annual turnover below 5 million leks (approximately 40,000 euros)
• 5% for businesses with annual turnover between 5 and 14 million leks

VAT

• 6% for tourist accommodation services
• 0% for exports and certain services related to international trade

Personal income tax

For sole proprietorships, profits are subject to personal income tax, with progressive rates ranging from 0% to 23%.

Social contributions

Social contributions are due by the employer (15% of gross salary) and the employee (9.5% of gross salary).

Conclusion: Making the right choice for your project in Albania

Choosing the right legal structure for your business in Albania is a crucial decision that will have long-term implications for your activity. Whether you opt for a sole proprietorship, an SHPK, or another legal form, it’s essential to carefully weigh the advantages and disadvantages of each option based on your project, your growth objectives, and your personal situation.

Albania offers a favorable environment for foreign entrepreneurs, with simplified procedures and attractive taxation. However, it’s recommended to be accompanied by local professionals (lawyer, accountant) to navigate the subtleties of Albanian business law and optimize your company’s structure.

By taking the time to carefully consider your choice of legal structure and surrounding yourself with the right advice, you will lay solid foundations for the success of your business in Albania.