Foreign investors planning to open a business in Albania often ask about the difference between an sh.p.k. and a joint-stock company (sh.a), the two main company types under Albanian law.
Both are legally recognized structures, but they serve different business needs, governance models, and investment scales.
Choosing the right structure depends on factors like company size, number of shareholders, capital requirements, and long-term goals.
What Is an sh.p.k.
An sh.p.k. (Shoqëri me Përgjegjësi të Kufizuar) is Albania’s equivalent of a Limited Liability Company (LLC). It is the most common structure for small and medium-sized businesses, offering a simple setup and flexible management.
The key features of an sh.p.k. include:
– Personal liability of shareholders is limited to their capital contribution
– Minimum share capital requirement is low
– Can be formed by one or more shareholders
– Shares are not publicly traded
The sh.p.k. is ideal for entrepreneurs, family businesses, or investors who want to limit liability while maintaining direct control.
What Is an sh.a
A joint-stock company (sh.a) is a corporate structure designed for larger enterprises that may seek external investment or plan to list shares publicly. It has a more formal governance system, including a board of directors and shareholder meetings.
Key characteristics of an sh.a include:
– Higher minimum share capital required by law
– Shares can be publicly traded or privately held
– Must appoint a board of directors and statutory auditor
– Subject to stricter reporting and disclosure requirements
The sh.a is suitable for businesses planning large-scale operations, fundraising from multiple investors, or entering capital markets.
Main Differences to Consider
The main difference between an sh.p.k. and a joint-stock company in Albania lies in their complexity, capital structure, and governance obligations. An sh.p.k. is simpler and easier to manage, while an sh.a provides a framework for broader investment but requires more formalities.
Foreign investors should also consider that transferring shares in an sh.a may follow stricter legal procedures, while sh.p.k. shares are transferred through a notarial act but without securities regulations.
Understanding the difference between an sh.p.k. and a joint-stock company in Albania is critical for selecting the right business structure. Both offer legal protection for shareholders, but they differ in scale, management complexity, and capital requirements.