Setting Up an LLC (SH.P.K.) in Albania: A Complete Guide, Pitfalls, and Real Costs for Foreigners

Setting up a limited liability company (known locally as SH.P.K.) is a popular step for foreigners, especially when buying coastal property and looking to secure their assets properly. However, the whole process comes with strict rules, legal obligations, and hidden costs that you must know in advance.

After 11 years of living and doing business in Albania, we bring you a realistic overview of what company formation and maintenance actually entail.

1. How Company Registration Works and What You Need First

Many foreign investors think that setting up a foreign company is just a matter of filling out an online form. The reality in Albania is specific:

• Foreigners cannot register alone: The entire process is handled digitally via the e-Albania portal. This requires a local Albanian electronic identity, tax registration, and communication exclusively in Albanian. You cannot manage this without a local representative or accountant.

• Mandatory Registered Address (Office): Before you even submit your application, you must have a secured and documented real business address in Albania (such as a lease agreement or a property owner’s consent). Without a valid address, the system will not approve the registration.

• Share Capital: While the minimum statutory share capital is symbolic (starting from 1 ALL / ~0.01 €), you must account for operational capital and initial administrative expenses.

2. Main Pitfalls and Risks Ordinary Agents Won’t Tell You

If you are buying property in Albania and considering putting it under a company name, watch out for these key factors:

• The “Dormant Company” Myth: Many people think they can just “put the company to sleep” (leave it inactive with zero operations) after buying an apartment to avoid paying anything. In Albania, this carries a huge risk—if a company remains inactive and fails to meet its obligations, the Albanian state can liquidate and strike it off the registry after roughly 2 years. Having your real estate tied to a terminated company is a major legal nightmare.

• Nowhere to Transfer the Property: Once you buy real estate under a company, you cannot just close or throw it away. Liquidating the entity or transferring assets back to an individual takes time, money, and is subject to taxes. You must maintain the company permanently.

• Strict Electronic Fiscalization: Albania has an extremely strict online fiscalization system. Every invoice and financial transaction must be reported to the tax authorities in real time. Any mistake means heavy fines.

3. How Much Does Company Maintenance Cost?

An active company in Albania brings fixed monthly and annual expenses that you must pay even if the company generates zero revenue:

1. Licensed Accounting Firm: The law requires your bookkeeping and monthly reports to be managed by an accredited local accounting firm (handling fiscalization as well). Costs vary depending on the scope of work.

2. Mandatory Social and Health Insurance for the Administrator: The company must have a registered administrator. The official minimum wage in the country is 50,000 ALL (approx. 500 € per month), from which the company must pay mandatory social and health security contributions to the state (totaling roughly 140–150 € per month in employer/employee contributions). These must be paid even if you have no other employees.

3. Corporate and Dividend Taxes:

   • Corporate Income Tax (CIT) is standardly 15% on net profits.

   • Dividend withholding tax when distributing profits to shareholders is 8%.

Conclusion: Avoid Costly Mistakes

Setting up a company and buying property abroad require precise preparation and deep local knowledge. Don’t rely on amateur internet advice.

With 11 years of experience in Albania, we provide complete, secure, turnkey service—from securing your legal address and company registration via e-Albania to reliable accounting and property management.

Looking for professional guidance? [Contact us via the website form / Send us a direct message] to discuss your investment project individually.