Article
3 min read
Author
Anja Simic
Published
August 12, 2021
Last Update
July 02, 2024
Table of Contents
Registering a sole proprietorship in Albania
Taxation system of sole proprietorships in Albania
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take
Albania is considered a country of significant potentials: spectacular mountains, rivers, as well as sandy and rocky beaches. Albania also provides a set of competitive advantages related to foreign investments. The free-market reforms have opened the country to foreign investments, especially in the field of power, transport, infrastructure, and tourism development.
If you are thinking about starting a business in Albania, you could opt for a sole proprietorship, as it’s the least complex business form. A sole proprietorship is formed by a single person with unlimited liability on the debts of the company.
Both a natural and a legal person with an active account at e-Albania can register a sole proprietorship. Apart from the account, the person must fill out an initial registration form.
The registration can be done electronically using the online procedure or physically at every National Registration Centre (NRC). The registration at one of the NRC desks costs ALL 100 (around EUR 0,7) while the online procedure is free.
Before registering at the NRC, you should access the online portal and conduct research and select a business name that is available. Since April 22, 2014, the National Registration Centre ensures the provision of electronically signed documents.
Resident companies or sole traders that have an annual turnover which does not exceed the amount of ALL 5,000,000 (approximately EUR 40,500) are subject to zero profit tax on small business. If the annual turnover is between ALL 5,000,001 and 8,000,000 (between EUR 40,500 - 64,500), the annual income tax rate is 5%.
VAT is a general tax on the consumption of goods and services. VAT is applied as a percentage tax on the price of goods and services and becomes required to be paid after the deduction of the VAT, which directly encumbers the cost elements of the goods and services.
Up to ALL 10,000,000, individuals are also not subject to VAT. The standard VAT rate is 20%.
For more detailed information about registering as a taxpayer in Albania visit Central Tax Administration Office website.
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