As an investor in Albania, choosing the right business structure is crucial for legal, tax, and operational efficiency. Albania’s Commercial Law (Law No. 9901, amended) and other related regulations provide several business forms. Below is a guide to help you select the best structure based on your needs:

1. Sole Proprietorship (Person Fizik)   

   –  Best for:  Small businesses, freelancers, individual entrepreneurs. 

   –  Liability:  Unlimited personal liability. 

   –  Registration:  Simple, registered at the National Business Center (QKB). 

   –  Taxation:  Personal income tax (PIT) on profits (15-23% progressive rate). 

   –  Key Consideration:  No legal separation between owner and business. 

2. General Partnership (Shoqëri e Thjeshtë)   

   –  Best for:  Small businesses with multiple owners. 

   –  Liability:  Partners have  unlimited joint liability . 

   –  Registration:  Must be registered at the Commercial Register. 

   –  Taxation:  Partners taxed individually on their share of profits. 

   –  Key Consideration:  No minimum capital requirement, but high risk. 

3. Limited Partnership (Shoqëri në Komanditë)   

   –  Best for:  Investors who want passive involvement. 

   –  Liability:   

     –  General partners  – unlimited liability. 

     –  Limited partners  – liability limited to their investment. 

   –  Registration:  Must be registered at the Commercial Register. 

   –  Taxation:  Profits taxed at the partner level. 

   –  Key Consideration:  Flexible for investors who don’t want management roles. 

4. Limited Liability Company (Sh.p.k. – Shoqëri me Përgjegjësi të Kufizuar)   

   –  Best for:  Small to medium-sized businesses (most popular choice). 

   –  Liability:  Limited to shareholders’ capital contributions. 

   –  Capital Requirement:  Minimum  1 ALL  (symbolic). 

   –  Registration:  Requires Articles of Association, registered at the Commercial Register. 

   –  Taxation:   

     –  Corporate tax:  15% on profits. 

     –  Dividend tax:  8% (if distributed). 

   –  Key Consideration:  Flexible, easy to set up, and protects personal assets. 

5. Joint Stock Company (Sh.a. – Shoqëri Aksionare)   

   –  Best for:  Large businesses, public companies, or those seeking external investment. 

   –  Liability:  Limited to shareholders’ investment. 

   –  Capital Requirement:  Minimum  2,000,000 ALL (~€18,500)  for private JSCs, 10,000,000 ALL (~€92,500)  for public JSCs. 

   –  Registration:  Requires a notarized statute, registered at the Commercial Register. 

   –  Taxation:   

     –  Corporate tax:  15%. 

     –  Dividend tax:  8%. 

   –  Key Consideration:  More complex governance (Board of Directors, General Assembly). 

6. Branch of a Foreign Company (Degë e Kompanisë së Huaj)   

   –  Best for:  Foreign companies expanding into Albania. 

   –  Liability:  Parent company is fully liable. 

   –  Registration:  Must register with the Commercial Register and tax authorities. 

   –  Taxation:  Taxed as a permanent establishment (15% corporate tax). 

   –  Key Consideration:  No separate legal entity; parent company bears risks. 

7. Representative Office (Zyrë Përfaqësuese)   

   –  Best for:  Market research, promotion (cannot engage in commercial activities). 

   –  Liability:  Parent company is liable. 

   –  Registration:  Simpler than a branch but limited operations. 

   –  Taxation:  Only administrative expenses (no profit taxation). 

Key Factors to Consider When Choosing:   

Liability Protection  (LLC and JSC offer the best protection). 

Tax Efficiency  (LLCs and JSCs benefit from 15% corporate tax). 

Capital Requirements  (JSC requires significant capital). 

Administrative Burden  (Sole proprietorship is simplest, JSC most complex). 

Future Growth & Investment Needs  (JSC is best for attracting investors). 

Registration Process (All Structures):   

1.  Reserve a company name (National Business Center – QKB). 

2.  Prepare documents (Statute, Articles of Association, etc.). 

3.  Register at the Commercial Register.   

4.  Obtain a tax ID (NIPT) from the Tax Office.   

5.  Register for social security (if hiring employees).   

6.  Open a corporate bank account.   

Final Recommendation:   

–  For small businesses/startups:   LLC (Sh.p.k.)  – simple, low cost, limited liability. 

–  For large-scale operations/investors:   JSC (Sh.a.)  – suitable for raising capital. 

–  For foreign companies:   Branch or Subsidiary (LLC/JSC)  depending on liability concerns. 

Would you like assistance with specific tax implications or drafting company statutes under Albanian law?

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