An sh.p.k. company in Albania is a legal form of business known as a Limited Liability Company (LLC). The abbreviation sh.p.k. stands for “Shoqëri me Përgjegjësi të Kufizuar” in Albanian, which translates to “company with limited liability.”
This structure is the most common and popular business form for both local and foreign investors because it offers flexibility, legal protection, and a straightforward registration process. It is similar to LLC structures used in many other countries.
Why Investors Choose an sh.p.k.
The key advantage of an sh.p.k. company in Albania is that shareholders’ personal assets are protected from company debts or liabilities. Liability is limited to the value of their contributions to the company’s share capital. This legal protection makes it an attractive option for entrepreneurs, property investors, and small to medium-sized businesses.
Foreign investors can own 100 percent of an sh.p.k. without needing a local partner. The company can have a single shareholder or multiple shareholders, and the minimum share capital requirement is low, allowing easy entry into the market.
Legal and Operational Features
An sh.p.k. operates as a separate legal entity, meaning it can own property, enter contracts, sue or be sued, and conduct business independently from its shareholders. The company is governed by its administrator, who acts as the legal representative and manages day-to-day operations.
The company’s internal rules and decision-making processes are outlined in its articles of association, which are filed during registration. Any changes in shareholders, capital, or administrators must be officially registered with the National Business Center to take legal effect.
Tax and Compliance
An sh.p.k. is subject to Albanian corporate taxes, including corporate income tax, VAT (if applicable), payroll contributions for employees, and local municipal taxes. The company must maintain accounting records, issue tax-compliant invoices, and file regular reports to the tax authorities.
While the compliance framework is business-friendly, foreign owners are advised to work with a local accountant or tax advisor to navigate Albanian tax laws and reporting obligations.
Common Uses of an sh.p.k.
Foreign investors often use an sh.p.k. company in Albania not only to operate a business but also as a legal vehicle to own agricultural land, which is restricted for direct foreign individual ownership under Albanian law. By registering an Albanian company, foreign nationals can purchase, develop, and manage agricultural or rural properties through the company structure.
An sh.p.k. is also commonly used for real estate investments, construction projects, tourism businesses, retail operations, and service-based companies.
An sh.p.k. company in Albania offers foreign investors a flexible, protective, and legally accessible business structure to operate in the Albanian market. It is suitable for a wide range of commercial activities and is often the preferred choice for property ownership and development.