Foreign real estate investors planning to buy property in Albania often ask whether forming a company is necessary or beneficial for their investment strategy. While Albanian law allows individuals to purchase property, company formation for property investors in Albania offers specific advantages depending on the type of property, tax goals, and long-term plans.
Understanding when and why to form a company is essential for investors looking to protect assets, manage rental income, or develop properties commercially.
Why Property Investors Use Companies
Many international investors choose to establish a company in Albania to:
– Legally acquire agricultural land (since individuals cannot directly own agricultural land)
– Simplify management of multiple properties under a single legal entity
– Access potential tax deductions for business expenses related to rental or development activities
– Limit personal liability by holding property through a Limited Liability Company (sh.p.k.)
– Facilitate joint ownership or investor partnerships under clear corporate rules
Forming a company also helps investors who plan to scale their operations or enter into contracts with third parties, such as construction firms, management companies, or tenants.
How the Process Works
The process for company formation for property investors in Albania follows the standard company registration steps, including reserving a company name, drafting articles of association, notarizing shareholder agreements, and registering with the National Business Center (QKB).
The company must obtain a Tax Identification Number (NIPT) and comply with tax registration requirements. If the company intends to rent properties, it must also register for VAT if revenue exceeds the legal threshold.
Foreign investors can own 100 percent of the company’s shares and do not need a local partner. The company can be administered by the foreign investor or an appointed representative.
Practical Considerations
While company formation offers flexibility and legal protections, it also brings additional obligations, including annual reporting, tax filings, and corporate governance requirements. Investors should weigh these obligations against their investment size and plans.
For buyers acquiring a single residential property for personal use, forming a company may not be necessary. However, investors purchasing multiple properties, rental portfolios, or development sites can benefit from a corporate structure.
Company formation for property investors in Albania provides key legal and operational advantages for foreign buyers seeking to acquire land, manage rentals, or develop projects.