Ways of Doing Business in Albania: Company Types and Structure

Six ways of doing business in Albania

There is no single correct way into the Albanian market. The right route depends on what the business actually does, how much liability the investor is willing to carry, and where the money has to travel. Law 9901/2008 on Entrepreneurs and Commercial Companies, together with Law 9789/2007 on economic development areas, gives a foreign investor six distinct legal shapes: two are companies in the full sense, two are extensions of a foreign parent, one sits inside a special incentive regime, and one is an unincorporated sole trader.

One misconception is worth correcting immediately. Albania is a unitary state made up of twelve counties and 61 municipalities. There is no state or federal registration layer, and no second register to satisfy. Company registration runs through a single body, the National Business Center (QKB); municipalities enter the picture only for the local business tax and activity permits. In practice this makes Albanian incorporation one of the lightest procedures in the Western Balkans.

Limited liability company (Sh.p.k.): the default choice

Shoqëri me Përgjegjësi të Kufizuar, shortened to Sh.p.k. or SHPK, is by a wide margin the vehicle foreign capital uses in Albania. The reasons are simple: the entry threshold is almost nonexistent, liability stops at the subscribed capital, and the company may carry out any commercial activity. Treating this structure as the benchmark makes every other option easier to judge.

Capital, ownership and liability

The statutory minimum share capital for an Sh.p.k. is ALL 100. At the Bank of Albania official rate for September 2026 (EUR 1=ALL 92.07) that is roughly one euro, so the figure is symbolic. Banks in practice expect visibly more working capital when they open a corporate account, which is why the legal minimum should never be used as a budgeting figure.

A single shareholder is enough; one-member companies are permitted. There is no cap on foreign ownership, 100% foreign shareholding is allowed, and neither a resident shareholder nor a resident director is required. Shareholder liability is limited to the capital subscribed, so personal assets stay outside the company's obligations. That is the sharpest difference between this structure and the branch discussed below.

When is an Sh.p.k. the right call?

For investors who will invoice local customers, employ staff, sign leases or bid for public contracts, the Sh.p.k. is the default. Corporate income tax for legal entities is 15%. Since Law 29/2023 on Income Tax entered into force on 1 January 2024, the turnover-linked zero band no longer applies to companies. For the full tax and accounting picture, tax rates in Albania and accounting obligations sets out a separate framework.

Joint stock company (Sh.a.): large capital projects

Shoqëri Aksionare is the Albanian joint stock company. Shares transfer freely, a board and an audit structure are mandatory, and reporting duties are noticeably heavier than for an Sh.p.k. Minimum share capital is ALL 3,500,000 (about EUR 38,000) where shares are not offered publicly, and ALL 10,000,000 (about EUR 108,600) where a public offering is planned.

Energy, infrastructure, mining and large tourism developments are where this form belongs. It makes sense for a multi-party consortium, for projects that will admit a financial investor later, or where share transfers need to happen without notarial deeds each time. For a two-partner consulting firm it is simply overhead.

Branch (Degë): a direct extension of the parent company

A branch is not a separate legal person; it is the foreign parent operating in Albania. The parent therefore carries unlimited liability for the branch's obligations. In exchange, the branch inherits the parent's track record, turnover and references directly, which carries real weight in tender files and in contracts with large corporate customers.

For tax purposes a branch is a permanent establishment and pays 15% corporate income tax on its Albanian-source profit. QKB registration requires the parent's incorporation documents and bylaws, a register extract no older than 90 days, the corporate resolution authorising the branch, and identity documents for the appointed representative. Every document must be apostilled and accompanied by a sworn Albanian translation.

Representative office: market entry without trading

A representative office (zyrë përfaqësimi) may not carry out commercial activity. Its function is limited to promotion, market research, supplier relations and liaison. Because it cannot invoice and generates no income, it is not subject to corporate income tax and does not file financial statements with the QKB.

The structure works as a low-cost bridge for companies that want to observe the market for a year before committing capital. The risk lies in crossing the line in practice: if sales are made or contracts signed through the office, it is treated as a permanent establishment and retrospective taxation follows. Where the activity is going to turn commercial, the conversion to an Sh.p.k. should be planned in advance rather than improvised.

Free zone (TEDA) company and its incentives

Technological and Economic Development Areas (TEDA) are governed by Law 9789/2007. The principal reliefs for companies operating inside a zone are a 50% reduction of corporate income tax for the first five years of activity, 0% VAT on domestic supplies of goods into the zone, exemption from customs duty and import VAT on goods entering the zone, a five-year building tax exemption, deduction of 20% of capital expenditure in the first three years, recognition of payroll and contribution costs at 150% in the first year, and deduction of training and R&D costs at 200% for ten years. Land is offered from EUR 1 per square metre with leases extendable to 99 years.

Two cautions belong here. The phrase "zero corporate tax in the free zone" that circulates in older sources does not match the statute; the law provides a 50% reduction for five years, not a zero rate. And the position on the ground matters: of the three designated areas, Spitallë (Durrës) and Koplik (Shkodër) are still not operational, while the Tirana/Kashar area is under development and signed its first investor agreement in 2025. Any investment plan built around TEDA needs a timeline that reflects that.

Sole trader and the ALL 14 million threshold

Person Fizik is the unincorporated sole trader. Personal liability is unlimited, so business debts reach the entrepreneur's own assets. The tax side, however, is genuinely attractive: individual entrepreneurs whose annual gross turnover stays at or below ALL 14,000,000 (roughly EUR 152,000) pay 0% income tax until 31 December 2029, with 23% applying above that threshold.

This is precisely the point most often misread. The zero rate does not extend to companies; every legal entity, an Sh.p.k. included, has paid 15% from the first lek since 1 January 2024. A second warning concerns reclassification: where 80% of income comes from a single client, or 90% from fewer than three, the earnings are treated as employment income and fall into the payroll regime. The working detail of that model is covered in the guide to freelancing and working in Albania.

Albanian company types compared

The table below sets the six structures against the four factors that most often decide the outcome.

After the structure: QKB registration and NIPT

Whichever form is chosen, the door is the same one: the National Business Center (QKB), established by Law 131/2015 and run as a one-stop shop. Registration simultaneously covers fiscal registration, social and health insurance registration, and registration with the labour inspectorate.

Registration steps

1. Choose the company name and scope of activity, and check name availability
2. Have the founding act and the statute notarised
3. File with the QKB — online through the e-Albania portal or at a one-stop office
4. Receive the NIPT (NUIS) tax identification number on registration
5. Open the corporate bank account
6. Obtain activity permits and enrol in the fiscalization (e-invoicing) system
7. File beneficial ownership data — within 30 days of registration

Documents, timeline and cost

A foreign individual shareholder supplies a passport and specimen signature. A foreign corporate shareholder supplies apostilled incorporation documents with sworn Albanian translations plus the resolution of the competent body. The founder does not need to be physically present in Albania; a representative acting under a notarised power of attorney can file the application.

Initial registration at the QKB is free of charge and normally completes in one to three working days. What actually drives the calendar is not the registration itself but the apostille, the sworn translation and the bank account; two to four weeks end to end is a realistic range. Banks usually expect the director to apply in person for a corporate account. The institutions foreign-owned companies work with most often are BKT, Raiffeisen Bank Albania, OTP Bank Albania, Credins Bank and Intesa Sanpaolo Bank Albania. Alpha Bank Albania, which still appears in older lists, is no longer a separate bank; it merged into OTP Bank Albania at the end of 2022.

For post-registration procedures and current cost items, the company formation in Albania page carries the detail, while broader trading and tax questions are answered in answers about doing business in Albania.

Six criteria that decide the structure

Liability. With a branch or a sole trader, risk reaches personal or group assets directly; an Sh.p.k. or Sh.a. caps it at the capital. The larger the contractual exposure, the stronger the case for limited liability.

Capital versus what the bank expects. The statutory minimum and the balance a bank wants to see are different numbers. Registration is possible with ALL 100, but a workable corporate banking relationship needs realistic working capital behind it.

Profit repatriation. Dividend withholding tax is 8%. Albania has an extensive treaty network, so the applicable rate should be read against the relevant double taxation agreement before the total burden is modelled. Withholding on interest and royalties is 15%.

Payroll cost. Social and health insurance contributions total 27.9%: 16.7% employer, 11.2% employee. The 2026 contributory base runs from ALL 50,000 to ALL 186,416 per month, and the statutory minimum wage is ALL 50,000 per month from 1 January 2026.

The VAT threshold. Standard VAT is 20%, with 6% on accommodation, agritourism and books and 10% on agricultural inputs. Registration becomes mandatory within 15 days of exceeding ALL 10,000,000 in annual turnover. Lawyers, architects, doctors and accountants register regardless of turnover.

Exit and transfer. Transferring a quota in an Sh.p.k. requires a notarial deed; share transfer in an Sh.a. is more flexible. If a sale within three to five years is on the table, that difference belongs in the incorporation decision. Where property forms part of the structure, it is worth noting that a company registered in Albania counts as a domestic legal person and is not caught by the land restrictions that apply to foreign individuals; owning property in Albania covers that point in full.

Albanian business culture and negotiation practice

How the other side of the table works matters as much as the legal form. First meetings are measured and formal: a handshake and direct eye contact are expected, and surnames are used until first names are offered. Using professional titles reads as respect.

Meetings do not always happen in offices. Cafés are a common venue, and the relationship built in that setting feeds directly into the commercial outcome. Schedules run loosely and time is rarely treated as the binding constraint, so a tightly packed daily calendar is a practical mistake. Gift-giving is part of the relationship; cash is not welcome, while a small memento from your own country is the right choice.

Relationship capital weighs as heavily in decisions as the written proposal. For long-term supply or distribution arrangements, framing the first visit as an introduction rather than a sales meeting tends to make the second round move faster. Where foreign staff will be posted, the unique permit (leje unike) process should run in parallel; the detail sits in visa types and residence permits in Albania. Sector priorities and the incentive map are covered in investment opportunities in Albania.