For a business incorporated abroad, a representative office in Albania or a local branch provides direct access to the Balkans' developing market. These structures offer a lawful, low-cost basis for commercial operations or a marketing presence. As Albania progressively aligns its legislation with European Union directives, corporate, tax and immigration procedures are becoming clearer to overseas groups.
Neither structure requires share capital. Albanian corporate law allows the overseas parent to exercise full control over the office's financial flows and staffing policy. The parent also faces fewer administrative formalities if it closes or restructures the office.
In this guide, I examine in detail the requirements applied by Albania's National Business Center (Qendra Kombëtare e Biznesit, QKB) when foreign businesses establish a local presence. The following sections explain these requirements, the precise procedures for interacting with public authorities and the applicable tax rates.
A Representative Office Compared with an Albanian Branch
Albanian law provides two options. A branch (Dega) handles business operations; a representative office (Zyra e Përfaqësimit) maintains contacts, promotes the business and assesses demand without earning revenue. When planning either arrangement, I first define what the office may do, then assess its tax position and how much liability the parent bears.
Branch: Dega
Establishing an Albanian branch creates no separate legal person. The overseas parent holds the rights and bears the debts and contractual risks; counterparties' claims are directed against it. The office's commercial remit extends to contracting, supplying services, selling goods, recruiting staff, working with suppliers, and making and receiving payments.
Creditors can readily identify whom to pursue. Internally, however, the parent needs rigorous controls: before operations start, it must define the manager's authority, transaction limits, signing procedures and financial reporting arrangements.
Choosing an Albanian branch allows an overseas business to serve local customers directly without setting up a subsidiary. This arrangement suits trading projects, service centres, construction support, logistics, IT services, engineering work and local support for international contracts.
Representative Office: Zyra e Përfaqësimit
An Albanian representative office supports negotiations and marketing without producing commercial revenue. It provides a presence for researching the market, promoting the brand, liaising with partners and coordinating work in the parent's interests.
Its remit excludes selling goods, charging for services, issuing invoices or earning profits from Albanian sources. Exceeding it increases the risk that the activities will be reclassified and tax liabilities will arise. Actual working practices are particularly significant: contracts, correspondence, invoices, advertising and job descriptions must contain no indication of independent sales or services supplied for payment.
Before sales begin, this office can be used to assess demand, hold meetings, evaluate partners and plan the licensing process. The business can also examine the labour market through this office and determine whether it needs a branch or subsidiary.
Requirements Before Establishment
Two matters are central to registering either type of office: the overseas business must demonstrate its legal standing and properly document its decision to open the office. Representative offices have no minimum capital requirement; neither does an Albanian branch.
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Requirement |
What must be established or supplied |
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Corporate approval |
The overseas business must adopt a resolution authorising the opening. It must specify the type of office, address, permitted functions, appointed representative and extent of that person's authority. Management powers are verified against the law where the business was incorporated. I check who can approve the opening, who can sign documents in Albania and which actions the local office may take. |
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Evidence of legal standing |
The application requires a register extract or equivalent current-status document issued within 90 days before submission. It must contain registration particulars, details of representatives and confirmation of whether liquidation or bankruptcy proceedings exist. |
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Balance sheet |
If the parent has operated for over a year, a balance sheet covering the latest financial period is required. Preparation follows the accounting standards used where the parent was incorporated; the balance sheet cannot replace evidence confirming current status. Recently established businesses are usually exempt from this requirement. The parent's operating history must be checked against registration records. |
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Foreign documents |
Certified translations into Albanian are required. Both private and official papers originating abroad require legalisation or an apostille, unless an international agreement grants an exemption. Where versions differ, the Albanian wording prevails in dealings with third parties. |
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Electronic filing |
Each applicant needs an electronic signature for submission through e-Albania, whether registering an Albanian branch or a representative office. For an application filed by a representative, the power of attorney must expressly authorise filing. |
Procedure: Register a Branch in Albania or a Representative Office
The government's electronic services portal, e-Albania, provides the application channel. QKB receives the dossier and records the relevant particulars in two registers: the Commercial Register and the Register of Beneficial Owners. The stages below apply to branch registration in Albania and representative office registration:
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Taxes and Local Charges
After registration, tax liabilities depend on the commercial nature of the activities, with different treatment for a representative office and an Albanian branch.
Corporate Income Tax: Tatimi mbi Fitimin
Income and legal status determine the treatment:
- Standard assessment An Albanian branch conducting commercial operations is taxed at 15% on taxable profit, calculated by deducting documented expenses from gross income.
- Small-business relief Annual revenue no higher than ALL 14,000,000 (approximately EUR 135,000) qualifies for the 0% rate. I emphasise, however, that inspectors closely examine financial flows through branches of overseas companies. They check for schemes that artificially divide a large business to obtain this relief.
- Non-commercial activities Representative offices cannot earn income and therefore incur no liability for this tax. Filing a nil return remains an annual obligation.
Value Added Tax: TVSH — Tatimi mbi Vlerën e Shtuar
For either office type, VAT registration depends on the activities undertaken. VAT is charged at 20% of the sale value of goods and services. Imports intended for resale require registration at any turnover level. Exporting by itself creates no registration obligation while turnover remains below the general threshold. In other cases, registration becomes compulsory above ALL 10,000,000 in annual turnover (approximately EUR 96,000).
Withholding Tax: Tatimi në Burim; Municipal Charges
The following rules cover profit remittances and municipal payments:
- Profit remittances. Income bears the standard 15% corporate tax; once this has been paid, sending the remaining funds abroad attracts no additional levy.
- Municipal payments. Local offices pay annual charges to their municipality (Bashkia), with amounts varying by region. They include commercial property tax and charges for educational infrastructure development and waste disposal.
Conclusion
My support in establishing an Albanian branch or a representative office covers e-Albania registration, preparation of the corporate resolution, document translation and legalisation, beneficial ownership disclosure, and setting up tax accounting. I also check the legal basis for the foreign manager's stay. The overseas company can then open its Albanian office without unnecessary administrative burdens, with its own liability clearly defined.
