Law No. 112/2020 “The Beneficial Ownership Register,” as amended, requires every legal entity registered in Albania to declare in a state register the individuals who own or actually control it. The registry is administered by the QKB, and the key concept on which the entire obligation is built is precisely the beneficial owner.
In consultations with clients, we often encounter the same confusion: the beneficial owner is equated with the partner listed on the QKB extract. In most cases they coincide, but not always. When the partner is itself another company, when ownership is split among several individuals, or when control is exercised without any shares, the answer requires analysis according to the law's definitions.
Below you will find these definitions explained with concrete examples: the 251 TP/3T threshold, direct and indirect ownership, the case of nonprofit organizations, and the entities that have the obligation to report.
Read also: Initial beneficial owner registration
Article 3 of Law No. 112/2020 defines the beneficial owner as the individual who ultimately owns or controls the entity, and/or the individual on whose behalf a transaction or activity is being carried out.
Two elements have practical importance.
First, the beneficial owner is always an individual, a natural person with a first name and last name. A company cannot be registered as the beneficial owner of another company. When legal entities stand behind the entity, the chain is traced back to the individuals at its end.
Secondly, ownership is not the only route. The law also recognizes control through other means, so even an individual with no shares can be a beneficial owner if they actually control the entity.
For commercial companies, the law specifies ownership at the 25% threshold in two forms.
Direct ownership is ownership held by an individual of 25% or more of the shares or capital quotas or ownership interests in a reporting entity (Article 3(2)).
Example: A limited liability company with a capital of 1,000,000 lek has three partners. Besniku owns 500,000 lek (50%), Arta 300,000 lek (30%), and Endri 200,000 lek (20%). The direct beneficial owners are Besniku and Arta. Endri, with 20%, is not registered, unless he exercises control through other means.
Note that the threshold is 25% or more, so even exactly 25% satisfies the condition. In a partnership with four equal partners, each holding 25%, all four are beneficial owners. For how partners and shares work in an LLC, read our page on the legal meaning of LLC.
Indirect ownership is the ownership held or control exercised by the same individual in one or more legal entities, which individually or collectively own 25% or more of the shares or capital interests of the reporting entity (Article 3(3)).
Chain example: the company Alfa LLC (the reporting entity) is 40% owned by the company Beta LLC. Beta, in turn, is 80% owned by Arta. Arta does not appear anywhere in Alfa's extract, but she is its indirect beneficial owner because, through Beta, she controls a 40% stake.
Example with combined holdings: The trustee owns 100% of two companies, Gama and Delta. Gama holds 151 TP3T of the reporting entity and Delta holds 121 TP3T. Neither alone exceeds the threshold, but together they hold 271 TP3T, so the Trustee is an indirect beneficial owner.
Indirect ownership is the typical case for companies with foreign investors, where the partner registered in Albania is a foreign parent company. You can find how the registration works in these cases on the page. for the foreign investor in the company.
The definition in Article 3 also includes an individual who controls the entity through other means or benefits from transactions carried out by the legal person on his behalf. In practice, this covers cases where an individual, without formally owning shares, determines the entity's decisions or controls the selection, appointment, and removal of its governing bodies.
Government Decree No. 1088/2020, as amended, also provides for the procedure when no individual can be identified as the owner: after exhausting all means and in the absence of any doubts, the entity registers as beneficial owner the individual who controls decision-making, and if that person cannot be identified either, the most senior manager, always accompanied by a signed statement from the legal representative documenting the steps taken for identification.
For NGOs, the concept of ownership does not apply because they have no partners or shareholders. Article 3, section 1.1.2 addresses this through control: the beneficial owner of an NGO is the founder, the legal representative, or the individual who exercises ultimate effective control over the organization's administration and governance.
Effective ultimate control under the law is the relationship in which a person determines the decisions made by the nonprofit organization, or otherwise controls the selection, appointment, and removal of the majority of its decision-making and/or executive bodies.
In practice, every foundation, association, center, and branch of a foreign NGO in Albania has at least one beneficial owner to declare. For other NGO registration requirements, see our section on nonprofit organizations.
A trust is a fiduciary arrangement in which ownership is held by the trustee for the benefit of the beneficiary (Article 3, paragraph 11). When control over the entity is exercised through a trust or another similar legal arrangement, the settlor, the trustee, or the beneficiary is recorded as the beneficial owner, the protector, if any, the beneficiaries, or, where the beneficiaries have not yet been determined, the class of persons in whose interest the trust is created, as well as any other individual who exercises ultimate control over the trust (Article 3, paragraph 1.2).
A trust is a structure of foreign jurisdictions and is primarily encountered when the partner of an Albanian company is a foreign entity organized in this form.
According to Article 2 of the law, the obligation applies to legal entities registered in the Republic of Albania:
Note point 5: even the representative office, which does not carry out profit-making activities, has the same reporting obligation as the branch. For more on these two forms, see our pages on branches of foreign companies and the Representative offices.
Article 2, paragraph 2 of the law excludes from application:
The most important exception in practice is the first one: a business registered as a sole proprietorship has no obligation to the Register of Beneficial Owners. The obligation arises only when a legal entity is formed. This is also one of the factors weighed when choosing the legal form, as we explain in Comparison: natural person or company.
Read also: Sole Proprietorship as a Business Structure: What It Is and When to Register
According to Article 5, paragraph 1, reporting entities are required to maintain and keep adequate, accurate, and up-to-date data and supporting documents, on the basis of which beneficial owners and the nature of their control are determined. The beneficial owners themselves are required to provide the entity with all necessary information (Article 5, paragraph 2).
This obligation is monitored by the tax authorities during audits (Article 9, paragraph 4), and failure to comply is punishable by a fine of 50,000 lek (Article 13, paragraph 5).
Article 5, paragraph 3 sets out the deadlines: for new entities in the commercial register, the declaration is made simultaneously with the company's registration, for entities with indirect ownership whose application is refused, within 40 calendar days of the refusal; for NGOs, within 40 days of their registration as a legal person; and for any change of data, within 90 calendar days of the actual change.
You can find the full first declaration procedure at Initial registration of the beneficial owner, while for the changes at Change of beneficial owner's data.
The law has also established a continuous monitoring mechanism (Article 6, paragraph 3 and Chapter VI of Decree No. 1088/2020) If an obliged entity, e.g. a bank upon account opening, finds that the data in the register do not match the data it holds itself, it notifies the reporting entity and the QKB in writing within 10 calendar days of the discovery. The reporting entity then has 20 calendar days to either update the data or confirm the existing data. If it fails to act, the QKB will suspend services until the situation is clarified.
The recorded data are permanently retained in the register, and in the event of the entity's deregistration, they are retained for 10 years thereafter (Article 9).
According to Article 7, the freely accessible and public data are the beneficial owner's first name and surname, nationality, year and month of birth, the date on which they were identified as a beneficial owner, as well as the type and percentage of ownership. Other data, such as the personal identification number or address, are accessible only to competent state authorities or to persons who demonstrate a legitimate interest.
How to search for an entity in the public register and how to obtain extracts – we cover it in Verification page and access to data.
Read also: Law No. 6/2022, what changed.
Read also: The current legal framework for business registration.
The law partially aligns with the directive (EU). 2015/849 for the prevention of money laundering, the register therefore operates on the same logic as the registers of beneficial owners in EU countries.
No. The beneficial owner is always an individual. When the entity's partner is another company, the chain of ownership is traced back to the individuals at its end, and the intermediating legal entities are also recorded in the declaration.
Both. Any individual who owns 25% or more is a beneficial owner and must be declared with their own data, the date of determination, and the type and percentage of ownership.
As a rule, no, because he does not exceed the 251 TP 3 T threshold. But if this individual actually controls the entity through other means, for example by determining decisions or controlling the appointment of governing bodies, he is recorded as a beneficial owner on the basis of control.
As a rule, no. According to Government Decree No. 1088/2020, as amended, the senior manager is recorded as the beneficial owner only in the specific case when, after exhausting all means, the entity cannot identify any individual with ownership or control, and this is documented in a special declaration by the legal representative.
No. Natural person traders are expressly excluded from Article 2(2) of the law. The obligation arises only if you convert the activity into a legal entity, e.g., an LLC.