Albania is a small southeastern European country (28,748 km2) in the Balkans. The coast of the republic runs along the Adriatic and Ionian seas. The territory is crossed by the Alps.
The capital is Tirana. Closest neighbors: Greece, Serbia, Italy, Montenegro, North Macedonia, Kosovo.
Currency – Albanian Lek. The language of the official documentation is Albanian. The inhabitants of the country are multilingual (English, French, Greek), the most common language is Italian.
According to the World Bank of which the republic is a member, the population is 2.873 million people. Albania is also a nominee for EU membership and an active member of the WTO, OSCE, Council of Europe, CEFTA, Regional Cooperation Council, Black Sea Economic Cooperation, and the Organization of Islamic Cooperation. The country has 40 DTA contracts with the states of Europe and Asia.
Opening a company in Albania and opening an account in an Albanian bank will serve as an excellent opportunity to open a large business and enter European markets.
For those who are interested in registering a company in Albania, we present the following list of the country’s business advantages:
- Stable economic and political environment;
- Geographically advantageous location;
- Developed banking sector;
- Modern transport infrastructure;
- Broad prospects for the development of the small, medium, and large businesses;
- A positive attitude of the authorities towards foreign investment;
- Availability of a qualified workforce;
- Loyal tax system;
- Availability of 5 free economic zones (Koplik, Spitale, Shkoder, Durres, Vlore);
- More than 38 DTA agreements with countries in Europe and Asia.
Basic organizational and legal forms
If you are planning to open a company in Albania remotely, then first, you will need to decide on the choice of a suitable form of business. In particular, the following types of business will be available to you:
- Limited Liability Company (Tax Resident LLC);
- Free Zone LLC;
- Representative Office (RO);
- Branch of a foreign company (B).
The most profitable from an economic point of view, as well as an easy-to-manage OPF for foreign entrepreneurs, will be a Free Zone LLC. For those who plan to register a company in the territory of this jurisdiction, this organizational and legal form will be the priority.
Registration procedure
After choosing an OPF, you will need to fulfill the following requirements of the local Regulator:
- The unique name of the enterprise (mandatory indication at the end of the selected OPF);
- The required number of directors is from 1 or more;
- The required number of shareholders is from 1 or more;
- Individuals and legal entities can manage the enterprise;
- There are no residency requirements;
- A secretary is optional;
- The authorized capital of a company can be as low as 1 EUR;
- The presence of an open account for the company in the bank of Albania;
- A registered office and address is optional;
- Submission of financial statements.
Tax regime
Registration of a company in Albania will also require a detailed study of the taxation system of this state, which applies to corporate persons:
The standard income tax rate is 15%. For companies whose income is more than 60 thousand EUR, a 5% rate is provided;
Value Added Tax – 20%. Free Zone LLCs are tax-exempt;
Tax on interest, royalties, and dividends – 15%.
Let’s consider some important points
- Registration of a company in Albania is carried out within 5 days from the date of placing your application in a special registration authority. As a result, the company receives its fiscal code for reporting, as well as a VAT number;
- Income tax is paid only by those persons who are on the territory of the state for 183 days a year or more. The maximum tax rate is 30%;
- Before paying taxes, a legal entity that is registered in Albania deducts the following payments:
- income and dividends received from the ownership of shares;
- interest;
- rent;
- income received from the use of copyright / intellectual property rights;
- costs caused by management needs, technical conditions;
- payment for installation, assembly, and other related activities;
- payment for performances of musicians, actors, athletes.
- Source tax is not levied if the recipient is an Albanian taxpayer;
- If in the plan of your enterprise there is a development of production for 10 or more years, you can be exempted from taxes for 4 years. Income tax will be reduced by 60% if you invest the profit in the reinvestment of production;
- If your company is engaged in the development of the tourism sector, you are legally exempted from paying taxes for up to 5 years.
