Initial business registration is one of the most critical decisions an entrepreneur can make. It is a process inherently linked to understanding the consequences of registration, increased obligations, and responsibilities—but also to the endless opportunities for achieving success.
At this stage, it is vital to forecast business income and expenses to be well-prepared and to make decisions at the right time.
Following the initial steps of business registration, certain procedures and preliminary practices must be implemented. Some of these are subject to strict deadlines that must be respected, while others are mandatory to officially begin operations.
This is a standard process associated with the responsibilities of starting a business. These matters should not be viewed merely through the "fear" of fines, but rather as the foundation for a successful start. The truth is, there is often a lack of clear information regarding the steps to follow; therefore, a practical and simplified explanation of these procedures is essential.
To keep it simple, the steps businesses should follow are listed below:
- Opening a Business Account on the Government Portal e-Albania. This is the first necessary step to gain access to other online services. Since the majority of other services are no longer obtained through physical applications or visits to various institutions, opening and activating a business account on this portal is required. This should not be confused with your personal e-Albania account, but rather the business account therein. If you are a legal entity, the registration of the business account is performed through your personal account; whereas, if you are a physical person (sole proprietor), the application is performed from the individual's personal account.
- Opening a tax account. This process is also a necessary part of tax procedures. From there, periodic tax declarations, the addition and removal of employees, and the general administration of your responsibilities as a taxpayer will be managed moving forward. This registration is also quite simple. The activation of the tax account needs to be carried out the day after the business registration (the date of initial registration). Tax account registration is performed here: https://efiling.tatime.gov.al/cats_public/Account/LogOno create your tax account, you only need your unique identification number (NUIS, otherwise known as NIPT). The initial password used to access your account is Tatimetemia12. Afterward, you will be required to set a new password. Be careful to save the set password; however, even if lost, you will have the opportunity to generate a new password through your business account in e-Albania (as mentioned in the point above).
- Signing the lease agreement or the document proving the use of the premisesThis document must be deposited in electronic form through your Tax account. Besides use through a lease agreement, a business may use the premises even if they are owned by the business itself (the entity, not the individual), or through a loan-for-use agreement. The legal framework provides for the obligation of the property user to withhold tax at the source at a rate of 15%, if the Lessor is not registered with the tax authorities and collects the rent as a simple individual. Additionally, the law has also provided for the minimum payable tax. The minimum monthly rent, solely for tax purposes, cannot be lower than 0.3% of the reference value of the property. If you are a physical person and use a property owned by yourself or your family members, you do not have the obligation to calculate, withhold, and pay tax at the source. Refer to VKM No. 469 for the Determination of the minimum rental value. If you will be paying tax at the source in the future, you must add the tax liability for withholding tax.
- Opening a bank account To have the possibility of making payments on behalf of the business and receiving expected business revenues, a business checking account must be opened in the name of the business. This process is also a legal obligation of the business/taxpayer, who is required to open and electronically deposit the bank account information within no more than 20 calendar days from the date of initial registration. The necessary documentation required by banks in this case includes: (a) the Historical Extract generated from e-Albania, (b) the Registration Certificate (or NIPT) generated also from e-Albania, (c) in cases of legal entities, the Statute and the Act of Incorporation, and (d) the identification document of the legal representative. We also advise using e-banking services as a very good and practical opportunity to perform future payments. You can choose to open bank accounts in one of the licensed second-tier banks in Albania: https://www.bankofalbania.org/Mbikeqyrja/Subjekte_te_licencuara/Banka/
- Fiscalization The fiscalization process is one of the most positive steps and important decisions of 2021. Currently, every entity in Albania that accepts and issues invoices is obliged to adapt its invoicing system. This process has been accompanied by unknowns and often treated as an obstacle for businesses due to a lack of understanding or increased costs. In reality, this is a completely normal and very positive process that was bound to happen as part of technological developments in this field. This is a very good opportunity for businesses to have real-time information and simplify the process of issuing and receiving invoices. What has essentially changed is only the replacement of the method of issuing/receiving invoices—no longer through physical paper invoices, but in electronic form. Like any new process, it is accompanied by unknowns and normal resistance to change, but so far, and with further positive effects expected in the future, this process has significantly eased the daily work of businesses. To have the possibility of receiving and issuing invoices, a business must follow these two steps: (a) obtain the Fiscalization Certificate, which is provided by this application: https://e-albania.al/eAlbaniaServices/UseService.aspx?service_code=13691.The cost of this service, payable as an annual fee to the public institution AKSHI (National Agency for Information Technology), is 4,000 ALL/year, and (b) choose to use one of the recognized software solutions for issuing/receiving electronic invoices from the list of certified companies: https://www.tatime.gov.al/c/424/494/lista-e-subjekteve-te-certifikuara One of the recognized software solutions for the issuance and receipt of electronic invoices must be selected.
- Inquiry and follow-up on procedures for obtaining licenses and permits depending on your activity This is also one of the most important points to be followed at this stage. Certain types of activities you may choose to perform are accompanied by the preliminary acquisition of a license or permit from the relevant institutions. If you have not preliminarily obtained such a document, you may not have the legal right to conduct your activity. For instance, if you are opening a dental clinic, your entity must be preliminarily licensed to function as such. Information regarding the types of licenses and the procedures for obtaining them can be found at this link: https://qkb.gov.al/informacion-mbi-proceduren/regjistri-i-licencave-autorizimeve-dhe-lejeve/informacion-mbi-licensat-autorizimet-dhe-lejet/.
- Application in the Register of Beneficial Owners. One of the key points of the initial procedure that must be followed is the application for the initial registration of Beneficial Owners. While this matter is somewhat sensitive, there is no cause for concern as long as you provide the required documentation and adhere to the deadlines to avoid penalties. This application is performed only by legal entities, while physical persons (sole proprietors) are exempt from this obligation. To complete this application, you must: (a) obtain an electronic signature in the name of the legal representative, which can be acquired via this link: https://e-albania.al/eAlbaniaServices/UseService.aspx?service_code=13521 and (b) subsequently apply for the register of owners here: https://e-albania.al /eAlbaniaServices/UseService.aspx?service_code=14519. The necessary documentation and information required in this case include the Historical Extract, the Statute/Act of Incorporation, IDs of the Beneficial Owners, information on the percentage of ownership, and the personal data of the beneficial owners.
- Inquiry regarding the payment of local taxes Local tax payments in Albania are mostly settled once a year. The standard deadline for paying these taxes is April 20th of the current year. In the case of a new registration, the payment deadline is one month after the initial registration date.
- Preparing a business stamp It is a good idea to have a business stamp to formalize your internal procedures. Additionally, the stamp is often required for various applications or official correspondence with public institutions.
- Inquiry regarding work permits and subsequent residence permits for foreign nationals In the event of employing foreign nationals in Albania, an initial application for a work permit is required. For citizens residing in the European Union and Kosovo, the law provides for a simplified procedure to obtain a Work Permit. Subsequently, if the employee intends to remain in Albania, they must be provided with a Residence Permit.
Following these matters individually, beyond simply fulfilling a legal obligation, represents a successful start to your business administration. This process should not be viewed with anxiety or as a frantic race against deadlines, but rather as a legal responsibility inherent to the business and the commitment you have undertaken. We recommend that, regardless of the engagement of external personnel to manage these procedures, you remain an active part of the decision-making process and stay informed about what is happening with your business.
We hope that this information is valuable to you and serves to clarify the necessity of following these procedures, beyond their mere legal requirement. This is only the beginning of a demanding journey in an economic environment that changes so frequently.
Source: Alprofit Consult