Branches and Representative Offices in Albania
This summary covers all key aspects for the registration and operation of branches and representative offices of foreign companies in Albania, including required documents, registration information, fiscal requirements, and local taxes. References are based on Law No. 9901, dated 14.04.2008, Law No. 9723, dated 3.5.2007, Law No. 23/2023, and Law No. 9632, dated 30.10.2006.
Definitions and Reasons for Opening Branches and Representative Offices
Branches
- Definition: A branch of a foreign company is a registered entity operating in Albania that conducts economic activities on behalf of the parent company. According to Article 9 of Law No. 9901, a branch is part of the parent company but is authorized to operate independently for economic and commercial purposes.
- Reasons for Opening:
- Market Expansion: The branch allows the parent company to offer products and services in the Albanian market.
- Full Economic Activity: The branch can conduct activities that generate income.
Representative Offices
- Definition: A representative office is an administrative unit that represents the interests of the foreign company in Albania without engaging in commercial activities that generate income. According to Article 9 of Law No. 9901, representative offices are mainly for support and promotional purposes.
- Reasons for Opening:
- Market Research and Business Support: A representative office assists in analyzing the market and establishing local contacts.
- Limited Fiscal Obligations: Since the office does not generate income, it is not subject to corporate income tax.
Required Information for Registration
According to Article 32 of Law No. 9723, the following information is required for the initial registration of a branch or representative office:
| Required Information | Description |
| Name | Full name of the foreign company and name of the branch or representative office if different. |
| Legal Form | The legal type of the foreign company. |
| Establishment Date | The establishment date of the parent company. |
| Address | The address of the parent company’s headquarters and the branch or representative office in Albania. |
| Activity Scope | Description of the activities to be conducted by the branch or representative office (if specified). |
| Duration | The duration of the branch or representative office’s activity (if specified). |
| Capital of the Parent Company | The capital of the parent company to support the branch or representative office. |
| Responsible Persons for Management and Representation | Identification details of the persons responsible, their roles, and their terms of representation. |
Documentation for Registration
To register a branch or representative office, a complete set of documents must be submitted to the National Business Registration Center (QKB). All documents must be translated into Albanian and legalized with an apostille (Law No. 9723, Articles 26, 28, and 37).
| Required Documents | Branch of a Foreign Company | Representative Office |
| Articles of Incorporation and Statute of the Parent Company | ✔ | ✔ |
| Registration Certificate of the Company in the Country of Origin (no older than 90 days) | ✔ | ✔ |
| Resolution for Opening the Branch or Representative Office | ✔ | ✔ |
| Documentation Confirming the Current Status of the Parent Company (e.g., liquidation or bankruptcy proceedings) | ✔ | ✔ |
| Latest Financial Statements of the Parent Company, if the company has been active for more than one year | ✔ | ✔ |
| Identification Document of the Legal Representative for the Branch or Representative Office | ✔ | ✔ |
| Signature Specimen of Authorized Representatives | ✔ | ✔ |
Taxes and Fiscal Obligations for Branches and Representative Offices
Corporate Income Tax for Branches
- Corporate Income Tax Rate: For income generated in Albania, the standard corporate income tax rate is 15%, according to Articles 26 and 28 of Law No. 23/2023.
- Exemption from Corporate Income Tax: Branches with an annual turnover of up to 14,000,000 ALL are exempt from corporate income tax and can benefit from a tax-free regime.
- Annual Financial Statements: Branches are required to file their annual financial statements with the QKB and the General Tax Directorate, in accordance with Articles 43 and 46 of Law No. 9723.
Value Added Tax (VAT)
- VAT Registration: Branches are required to register for VAT if they generate an annual turnover above 8,000,000 ALL, according to the VAT Law.
- VAT Rate: The standard VAT rate is 20% on transactions within Albania, including goods and services provided by the branch.
Tax Obligations for Representative Offices
- Exemption from Corporate Income Tax: Since representative offices do not generate income, they are not subject to corporate income tax.
- Financial Statement Requirement: Representative offices are not required to file the parent company’s financial statements, as they do not engage in income-generating activities and are not obligated to report to the QKB or the Tax Directorate.
5. Local Taxes
In Albania, in addition to national taxes, branches and representative offices are subject to local taxes, including Cleaning and Public Lighting Tax:
- Cleaning and Public Lighting Tax: According to Article 7 of Law No. 9632, this tax is imposed on all buildings used for economic or representative activities and aims to cover costs for cleaning and lighting of public spaces.
