Albania Info
Joined: 20 Apr 2007
Posts: 14
Home Country: albania
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 Posted: Fri May 04, 2007 9:48 am Post subject: DOING BUSINESS IN ALBANIA / ALBANIA BUSINESS GUIDE |
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DOING BUSINESS IN ALBANIA
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Limited liability company (Shpk)
Minimum Capital Requirement: 100,000
City: Tirana
Registration Requirements:
Procedure 1. Search for a unique company name
Time to complete: 1 day
Cost to complete: no charge
Procedure 2. Deposit the initial capital in a bank and obtain a bank statement
Time to complete: 1 day
Cost to complete: no charge
Comment: Deposit of the initial capital may also be completed in front of a notary public. A fee of Lek 4.000 (approx $38) applies.
Procedure 3. Notarise the incorporation documents
Time to complete: 1 day
Cost to complete: Lek 10,500
Comment: Costs include:
Notarisation of Articles of Incorporation - Lek 2,500
Notarisation of Statute - Lek 2,500
Notarisation of request to court for company's registration - Lek 2,500;
An eventual special proxy to an attorney - Lek 3,000.
As far as concerned to draft of Articles of Incorporation and Statute the legal fee varies greatly from the quality services of legal counselors, from $100 to over $1,000. The above mentioned professional fees are mostly charged in Euros.
Procedure 4. File the documents with the Office for the Registration of Companies in the District Court of Tirana and obtain a registration number
Time to complete: 20 days
Cost to complete: Lek 1500
Comment: Attached to the request and deposited in the register's appendix are also: articles of incorporation, constitution act signed in the presence of a public notary; the act for the appointment of the administrators; documents reflecting the capital disbursement, etc. Registration fee is paid directly to the Commercial Registry.
Procedure 5. Register the company with Labour Inspectorate Office
Time to complete: 1 day
Cost to complete: no charge
Procedure 6. Register for the membership with the Chamber of Commerce and Industry
Time to complete: 1 day
Cost to complete: Lek 20,000
Comment: On the basis of the Law 7804, dated 10/03/1994 "On the Chambers of Commerce and Industry," the membership in the Chamber is compulsory for tradesmen, commercial companies and state enterprises. The Lek 20,000 is an annual membership fee.
Procedure 7. Pay the local fees and tariffs and obtain a final statement on the payment of local fees and tariffs to the office of Alba Post SHA
Time to complete: 1 day
Cost to complete: Lek 25,000
Comment:
Lek 12,000, national tax on company's registration; paid once at the moment of the initial registration with the tax authorities
Lek 6,000 (commercial activity) - 80,000 (production activity) per year, environmental tax; depending on the type of activity exercised and its impact on the environment
Lek 5,000 green tax.
Lek 1,500 (in Albanian) -3000 (in foreign language) per year, billboard fee;
Lek 200/sq.m per year, property tax, (assuming 100 sq.m. in space); applied to any immovable property owned by the company.
Alba Post SHA is a state-owned company, which provides mailing services. Companies need to pay local fees and taxes via Alba Post. Obtain the payment evidence.
Procedure 8. Register with the tax office and obtain a company tax number
Time to complete: 7 days
Cost to complete: Included in procedure 7
Comment: File the payment evidence of taxes
Procedure 9*. Register in VAT sector and obtain the VAT number and Fiscal Certificate
Time to complete: 8 days
Cost to complete: no charge
Comment: The company should submit the court decision on the establishment of the company, Articles of Incorporation, Statute, Contract with Institute of Social Securities, membership certificate issued by Chamber of Commerce, final statement on the payment of local fees and tariffs and should declare a forecasted turnover of the company to be achieved during the current fiscal year. Companies with a turnover more than 8 million Lek per year is required to register for VAT. At the end of such procedure, the company is provided with VAT number and Fiscal Certificate.
Procedure 10. Register with the Public Institute of Social Security for social security and health insurance
Time to complete: 1 day
Cost to complete: no charge
Comment: The registration with this authority is formal. The calculation and collection of the social security contributions to be born by both employer and employee are no longer handled by the district branch of social securities institute but instead by the district tax office, the latter acting as an agent of the former. The contribution to the social securities scheme is 41.9%, from which, the employer contributes to 30.7% and the employee contributes to 11.2%. Such contributions cover illnesses, pregnancy period and after-birth period, pensions, health insurance, work accident indemnities and unemployment fund.
Procedure 11. Make a company seal
Time to complete: 4 days
Cost to complete: Lek 3,000 - 5,000
Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).
FORMS OF BUSINESS ORGANISATION
Sole proprietorship, partnership, limited liability company, joint stock company.
The limited liability company is the most common form of business organisation in Albania. Partners are only liable up to the value of their contribution to the company. Sole proprietorships are the simplest form of business organisation.
The law treats foreign and domestic firms equally and guarantees them from expropriation or nationalisation. Most sectors of the economy are open to foreign investment.
Registration and licensing procedures
The foundation documents must record, inter alia, the company's name and activities, names, addresses and capital contributions of its founders, the amount of statutory capital, rights and duties of founders, management structure, its by-laws. Registration is carried out by the State Register.
Legal framework
Initial registration requires the submission of a registration application (names and addresses of the partners, name and address of the registered office of a legal person, list of activity), the foundation documents, any necessary licenses, and any other documents required in specific cases, along with a registration fee. Once registered, a company is assigned a State registration number and a registration certificate.
TAXATION
Corporate tax
Main rate: 20%
Resident companies are taxed on their worldwide income; non-resident companies pay tax only on Albanian-source income. Companies generally are treated as resident if they are registered under Albanian law. A flat rate of 20% applies. Income from dividends is considered as taxable income.
The tax rate for companies with foreign participation engaged in exploration and exploitation activities relating to oil and gas is 50%.
Individual tax
Progressive rates up to 20%
Resident individuals are taxable on worldwide income; non-residents pay tax only on Albanian-source income. An individual is deemed to be resident if permanently domiciled in Albania or if present in the country for more than 183 days in any 365-day period. Income tax rates rise progressively to a top rate of 20%.
Capital gains
Generally taxed as income
Capital gains are taxed as income. Capital gains on the sale of a company’s fixed assets are taxed as part of the company’s business income.
Indirect tax
Standard rate: 20%
Value-added tax (VAT) applies to most transactions. The export of goods and services is zero-rated. Exemptions include postal services, non-profit organisation supplies, supplies of drug and medicinal equipment, supplies of electronic and written media for advertising, supplies of services on casinos, hippodromes, hydrocarbons operation, diplomats, etc.
Registration is compulsory for businesses whose taxable turnover is over LEK 8m in any previous period not exceeding 12 months. A non-resident company making supplies in Albania must register for VAT through an accredited representative.
Excise tax is levied on “special” goods and various kinds of oil, cigarettes and coffee.
Tax administration and compliance
Tax year: Calendar year
Companies must make monthly advance payments of tax, based generally on the adjusted taxable profits of the previous year. A final payment of tax is due on March 31st following the tax year. Any balance of tax due shown on the annual tax return must be paid when the tax return is filed.
Additional tax information
Withholding taxes: Dividends 10%, Interest and Royalties 10%. Rates may be reduced by tax treaty.
Tax treaties: Albania has concluded 16 treaties and is in negotiation with several countries.
Dividends: Dividends paid between resident companies are exempt provided certain conditions are satisfied.
Revenue protection: There are transfer-pricing and thin-capitalisation rules.
Groups: There is no provision for group taxation.
Incentives: Research and development credits.
Other taxes: Payroll tax, Real property tax, Customs duties. |
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