Starting a Sole Proprietorship in Albania: A Guide for Digital Nomads & Foreign Expats

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Albania is fast becoming a top destination for digital nomads and foreign expats due to its low cost of living, scenic landscapes, and business-friendly environment. For those looking to start their own businesses in Albania, a sole proprietorship is an ideal structure, particularly for freelancers and remote workers.

Whether you’re looking to start a freelance consultancy, operate a digital agency, or run a service-based business, Albania provides a straightforward setup process and an attractive tax system.

In this comprehensive guide, we’ll walk you through the steps for establishing a sole proprietorship in Albania as a digital nomad or foreign expat, including key details about immigration, taxes, and benefits that will help you thrive while working in this stunning Balkan country.

What is a Sole Proprietorship in Albania?

A sole proprietorship (or Person Fizik) is the simplest business structure in Albania, particularly popular among digital nomads and freelancers. It’s owned and operated by a single individual, making it a flexible and efficient way for foreign nationals to enter the Albanian market.

Key Features:

Why Albania is an Attractive Destination for Digital Nomads & Foreign Expats

a. Simplified Business Registration Process

The business registration process for a sole proprietorship in Albania is simple and efficient. The applicant must submit an online request through the National Business Center (QKB) portal. Required documents include a completed registration form, identification (passport or ID card), and proof of business address. The process is usually completed within two business day, and once registered, the business receives a unique identification number (NUIS/NIPT). No minimum capital is required, and the sole proprietor is personally liable for the business’s obligations.

b. Digital Nomad-Friendly Tax System

Albania offers some of the most favorable tax policies for foreign digital nomads, with low rates and benefits designed to support entrepreneurs and remote workers. These policies allow you to maximize your profits and minimize your tax burden.

Immigration for Digital Nomads in Albania

Albania has been actively encouraging digital nomads by offering special visa programs and residence options for foreigners looking to start their businesses in the country.

a. Digital Nomad Visa

Albania now offers a Digital Nomad Visa, which allows remote workers and freelancers to live and work in the country while running their businesses.

b. Visas & Residency

90-Day Stay: Citizens from many countries (including the EU, US, Canada, and UK) can enter Albania without a visa for up to 90 days.
Temporary Residency Permit: If you plan to stay longer than 90 days, you will need to apply for a temporary residence permit. This is valid for one year and can be renewed as long as you are operating a registered business in Albania.

c. Work Permits

As a self-employed individual, you will need a work permit to operate in Albania if you are from a non-EU country. This is generally an easy process for digital nomads, especially if you are starting a sole proprietorship.

Taxation in Albania for Sole Proprietors: Key Information for Digital Nomads

Albania offers an attractive tax system, especially for foreign entrepreneurs and digital nomads. Here’s a breakdown of the most important tax details:

a. Value Added Tax (VAT)

No VAT for Foreign Clients: If your clients are foreign (i.e., they have no residential or business address in Albania), no VAT is applied to your services. This is a significant advantage for digital nomads offering services to clients outside Albania.
VAT for Albanian Clients: If you are offering services to local clients in Albania, you will need to charge 20% VAT unless you are below the VAT exemption threshold (ALL 8 million annual turnover).
Small Business Exemption: Businesses earning below ALL 8 million annually do not need to register for VAT.

b. Social Security & Health Contributions

Albania has tax treaties with many countries to prevent double taxation. If your home country has such a treaty with Albania, you may be eligible for tax reductions or exemptions.

Additional Considerations for Digital Nomads & Foreign Expats

a. Business Bank Accounts

To facilitate business transactions and keep your finances in order, you will need to set up a business bank account in Albania. This process is straightforward and can typically be completed in one day at local banks. Ensure that you choose a bank that supports international transactions.

b. Language & Documentation

While English is commonly spoken in urban areas, official documents and business filings must be in Albanian. Oracle Solicitors Albania can help you to navigate the administrative processes.

c. Low Cost of Living

Albania boasts one of the lowest costs of living in Europe, which is a significant draw for digital nomads. From affordable accommodation and low utility costs to cheap public transport, you can maintain a comfortable lifestyle while building your business in Albania.

How Oracle Solicitors Albania Can Help You

At Oracle Solicitors Albania, we specialize in helping foreign expats and digital nomads set up their sole proprietorships and navigate the business, immigration, and tax landscape in Albania.

Our services include:

Business Registration: Helping you register your sole proprietorship and comply with all legal requirements.
Immigration Guidance: Assisting with Digital Nomad Visas, residency permits, and work permits.
Tax Consultation: Providing comprehensive tax advice to ensure you meet Albania’s tax obligations while minimizing liabilities.
Ongoing Legal Support: Offering ongoing support to help you grow and manage your business in Albania.