Corporate governance and compliance are essential pillars for sustainable business growth, investor confidence, and legal security in Albania. As the country continues to align its regulatory framework with EU standards, businesses must ensure they adhere to local laws and international best practices.
This article provides an overview of the key corporate governance and compliance requirements in Albania, highlighting relevant laws, regulatory bodies, and practical steps for businesses to maintain compliance.
Legal Framework for Corporate Governance in Albania
Albania’s corporate governance framework is primarily governed by the following laws and regulations:
1. Law No. 9901 (2008) – “On Entrepreneurs and Companies”
This is the primary legislation regulating corporate entities in Albania, covering:
– Types of business entities (SH.P.K., SHA, sole proprietorships, etc.)
– Corporate governance structures (General Assembly, Board of Directors, Executive Management)
– Shareholder rights and responsibilities
– Financial reporting and auditing obligations
2. Law No. 11031 (2021) – “On Corporate Governance of State-Owned Enterprises”
This law establishes governance standards for state-owned enterprises (SOEs), ensuring transparency, accountability, and efficiency in their operations.
3. Law No. 9918 (2008) – “On Accounting and Financial Statements”
Mandates proper financial record-keeping and reporting in line with international accounting standards (IFRS).
4. Law No. 112/2020 – “On the Prevention of Money Laundering and Terrorism Financing”
Requires companies to implement anti-money laundering (AML) compliance programs, including customer due diligence (CDD) and reporting suspicious transactions.
5. Law No. 9887 (2008) – “On Protection of Personal Data” (Albanian GDPR)
Aligns with the EU’s General Data Protection Regulation (GDPR), requiring businesses to protect personal data and report breaches.
Key Compliance Requirements for Businesses in Albania
1. Board of Directors & Internal Controls
– Companies must establish a Board of Directors (for joint-stock companies) or a management structure (for limited liability companies).
– Directors must act in the company’s best interest, avoiding conflicts of interest.
– Internal control mechanisms should be in place to prevent fraud and mismanagement.
2. Transparency & Financial Reporting
– Annual financial statements must be prepared in accordance with IFRS.
– Audits are mandatory for large companies and SOEs.
– Publicly traded companies must disclose material information to shareholders and regulators.
3. Anti-Corruption & AML Compliance
– Companies must implement internal policies to prevent bribery and corruption.
– AML obligations include appointing a compliance officer, conducting risk assessments, and reporting suspicious transactions to the General Directorate for the Prevention of Money Laundering (GDPML).
4. Shareholder Rights & Disclosures
– Shareholders must be informed of major decisions (e.g., mergers, capital increases).
– Minority shareholders are protected against abusive practices by majority shareholders.
5. Data Protection Compliance
– Companies processing personal data must appoint a Data Protection Officer (if required).
– Data breaches must be reported to the Albanian Information and Data Protection Commissioner.
Regulatory Bodies Overseeing Corporate Compliance
– Ministry of Finance and Economy – Oversees corporate governance and financial regulations.
– National Business Center (QKB) – Handles company registrations and filings.
– Albanian Financial Supervisory Authority (AFSA) – Regulates capital markets and publicly traded companies.
– General Directorate for the Prevention of Money Laundering (GDPML) – Enforces AML/CFT regulations.
Best Practices for Ensuring Compliance
1. Conduct Regular Compliance Audits – Assess adherence to laws and internal policies.
2. Implement a Code of Ethics – Promote integrity and accountability at all levels.
3. Train Employees & Directors – Ensure awareness of legal obligations.
4. Engage Legal & Financial Advisors – Stay updated on regulatory changes.
5. Use Technology for Compliance Management – Automate reporting and record-keeping.
Conclusion
Corporate governance and compliance in Albania require a proactive approach, given the evolving legal landscape. Businesses must stay informed about regulatory updates, implement robust internal controls, and seek expert legal guidance to mitigate risks.
By adhering to these principles, companies can enhance their credibility, attract investment, and operate sustainably in Albania’s growing economy.
Contact Us
For legal advice on corporate governance and compliance in Albania, reach out to Alba Legal Albanian Law Firm.