How to Register a Sole Proprietorship (Person Fizik) in Albania

Albania offers one of the most straightforward ways to start working independently in the Balkans. Registering as a sole proprietor can usually be completed within a single day through the government online portal.

While sole proprietors remain personally liable for their business activities and must stay on top of taxes and social contributions, the structure is clear and accessible. With minimal setup costs, no capital requirements, and full legal recognition, becoming a sole proprietor is the most practical path for freelancers and small business owners in Albania who want to operate on their own terms.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a Sole Proprietorship in Albania?

In Albania, a sole proprietorship is officially called Person Fizik. It is also commonly referred to as a sole trader, self-employed worker, or independent contractor. All these terms describe one individual legally operating a business without forming a company.

How does a Sole Proprietorship (Person Fizik) work in Albania?

Person fizik vs. other business structures in Albania

In Albania, the sole proprietorship is the simplest and most common business structure, but it isn’t the only option. Entrepreneurs can also register a Limited Liability Company (Sh.p.k.) or a Joint Stock Company (Sh.a.), which follow different rules for ownership, liability, and taxation. The table below compares a Person fizik with a Limited Liability Company (Sh.p.k.) to show how the main requirements differ.

Step-by-step guide: How to register a sole proprietorship in Albania

Step 1: Check your eligibility

You must be a legal resident to register a sole proprietorship. Foreigners without Albanian residency cannot register as a Person Fizik.

Step 2: Choose your business name

You can register using your own name or propose a trade name. Use the business name search tool on the e-Albania portal via QKB to ensure the name is available.

Step 3: Gather required documents

You will need:

• Government-issued ID or passport
• Proof of business address
• Completed registration form from QKB via e-Albania

Step 4: Register with QKB

Register online through the online e-Albania by selecting “Application for initial registration of natural person” (Aplikim për regjistrimin fillestar të personit fizik). The online process is free.

If you prefer, you can also register in person at the NRC.

Step 5: Pay registration fees and contributions

Online registration is free. In-person registration costs around ALL 100 (~€0.7). No capital contribution is required for a sole proprietorship.

Step 6: Complete post-registration obligations

In Albania, sole proprietors are required to use the national electronic invoicing system known as fiskalizimi. After registering your business, you must apply for electronic fiscal certification through e-Albania. Once certified, you need to purchase invoicing software from an authorized vendor and use it for all transactions. This ensures that every invoice is automatically reported to the tax authorities in real time, keeping your business compliant with Albanian fiscal rules.

Financial and tax obligations for sole proprietors in Albania

You are responsible for:

• Income tax (Tatimi mbi të Ardhurat): Net taxable income (taxable profit) from business for commercial individuals and self-employed persons is taxed progressively at 15% for annual taxable income up to 14,000,000 lek and 23% for income exceeding that amount. Income from investments is taxed separately, with dividends taxed at 8% and other types of investment income at 15%. Unless otherwise specified by law, no deductions are allowed against investment income.
• VAT (TVSH): The standard VAT rate for the supply of goods and services, which is applied as a percentage of the taxable value, is 20%. The VAT registration threshold in Albania is an annual turnover of ALL 10 million. Any person providing taxable supplies and whose annual turnover does not exceed ALL 10 million is not required to register, although voluntary registration is possible.
• Social security contributions: The self-employed, the self-employed in a partnership, and the self-employed that hire third parties (excluding self-employed in agriculture) are liable to pay for themselves a mandatory social and health contribution made up of social insurance contribution of no less than 23% of the monthly minimum salary of ALL 40,000 and health insurance contribution of 3.4% on no less than the double minimum salary, i.e. ALL 80,000.
• Record-keeping: You are required to issue invoices through the national electronic invoicing system (fiskalizimi) and keep proper accounts of income and expenses. Records must be maintained for at least five years to comply with tax audit requirements.
• Tax reliefs and exemptions: Until 31 December 2029, entrepreneurs and self-employed individuals realizing an annual turnover up to ALL 14,000,000 shall continue to be subject to 0% tax.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

Stay independent, without the admin overload. Sign up to Deel for free today.

FAQs

What is the minimum capital required to start a Person Fizik in Albania?
There is no minimum capital required.

Does a Person Fizik need to register for VAT/GST?
If your annual turnover exceeds the VAT threshold (ALL 10 million) or you serve Albanian clients, yes, you must register and charge 20% VAT.

How much are the standard monthly or annual contributions?
Registration fees: free online or ALL 100 (~€0.7) in person. Social or health contributions depend on income level and are reported via the tax system.

Can a Person Fizik hire employees?
Yes, but you will become an employer and must comply with labor and social security regulations.

How long does it take to register as a Person Fizik in Albania?
Typically, within 1 working day if the documentation is complete.

Can foreign nationals register as Person Fizik in Albania?
Only if they are legal residents.

Does a Person Fizik need a separate business bank account?
Yes, opening and reporting a business bank account within 20 days is legally required.

What happens if I stop working as a Person Fizik?
You would need to deregister your activity via QKB and handle final tax filings via DPT.

Are there any government incentives or reduced rates for new Person Fizik?
Small-business turnover exemptions for low annual revenue (e.g., tax breaks up to certain thresholds) may apply.

Can I use Deel as a Person Fizik to get paid by international clients?
Yes. Deel allows Person Fizik and freelancers to receive payments globally, in multiple currencies, with low fees and transparent exchange rates.

Does Deel generate compliant invoices for Person Fizik?
Absolutely. Deel automatically generates invoices that meet legal and tax requirements in Albania and elsewhere.

Can Deel help me with taxes as a sole proprietor in Albania?
Yes. Deel provides downloadable tax reports and payment records for your filings. While not a substitute for an accountant, Deel makes record-keeping and compliance easier.

Does Deel offer contracts for freelancers and Person Fizik?
Yes. Deel includes contract templates compliant with local laws, enabling professional and secure client engagements.

Can I access benefits through Deel as a Person Fizik?
Yes. Deel offers optional perks like health insurance, retirement savings plans, and other benefits typically reserved for employees—offering greater security for freelancers.