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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.
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
Registering a sole proprietorship in Albania
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.
Taxation system of sole proprietorships in Albania
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 for sole proprietorships
The VAT is a general tax on the consumption of goods and services. The 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.
Who is considered a taxable person in Albania?
- Every person, regardless of the organizational type, independently carries out an economic activity, regardless of the place, scope, or outcome of such activity.
- Economic activity is any activity performed by producers, traders, and other persons who supply goods and services, including extractive, agricultural, and professional activities.
- Every person residing in Albania, whose activity’s annual turnover exceeds ALL 5,000,000 (around EUR 40,500).
For more detailed information about registering as a taxpayer in Albania visit Central Tax Administration Office website.