You can withdraw as much of the profit as remains after liabilities have been paid, and as much as does not leave the business cash-strapped in the following months. These are two separate limits, and both must be respected. For an LLC, the regular way to withdraw profit is through dividends, which are taxed at 8% on the distributed amount.
The first limit is the available profit. Withdrawals can only be made from the profit remaining after obligations, taxes, suppliers, wages, and installments have been recognized and paid. The money in the account isn't all yours. Part of it already belongs to others; it just hasn't come out yet.
The second limit is liquidity. Even legal, taxed profit can be withdrawn at the wrong time. If after the withdrawal the business cannot cover two months of fixed expenses, the withdrawal was premature. A business left gasping for breath forces the owner to give the money back, often on worse terms.
Here a simple habit from the Control level helps. Distribute your profits regularly and in a planned way, not with sudden withdrawals when your account seems full. A planned withdrawal is a sign of financial maturity, not a restriction.
Many owners confuse these two paths. The owner's salary is compensation for the work you do each month in the business, whether as an administrator or in any other role. It is treated like any other salary, with contributions and the appropriate employment income taxes. You can find the exact rates in our Taxes section.
The dividend is a reward for your capital, not for your labor. It is distributed from profit after corporate income tax, by decision of the shareholders' assembly, and is taxed at 81% on the amount distributed. A healthy business uses both channels sensibly. A reasonable salary for day-to-day work and a dividend planned from annual profits.
A professional studio LLC in Tirana closes the year with a profit of 1,200,000 LEK after corporate tax. The owner does not withdraw the entire amount. First, she checks liquidity. The fixed monthly expenses are 200,000 LEK, so she leaves 400,000 LEK in the business as a two-month reserve.
800,000 LEK remain for distribution. The assembly decides on the dividend distribution. The dividend tax is 8%, so 64,000 LEK, and the owner receives a net 736,000 LEK. The business remains fully operational, its obligations are paid, and the withdrawal is documented and smooth. Compare it with withdrawing the same amount without a plan, in the middle of the year, one month before tax payments. The amount is the same, but the risk is completely different.
At the Resource Center you'll find a simple calendar of year-end closing and profit distribution, from the approval of the financial statements to the shareholders' meeting decision and the payment of dividend tax. The entire process on one page.
Distribution of dividends in a limited liability company requires realized profit according to the approved financial statements and a shareholders' resolution. Dividend tax is 8% on the distributed amount and is withheld at source. Be careful with undistributed profits from years before 2019, which may be subject to the old 15% rate; therefore, before distribution, verify the year in which the profit being distributed was generated. The exact deadlines for declaration and payment are checked with the tax administration before each distribution. In the client analysis, compare the total cost of the unit withdrawn via salary versus dividends, including contributions and the effect of salary as a deductible expense in corporate tax. The optimal solution is usually a combination, not a single approach.
Informal withdrawals create problems because they're treated as an obligation of the owner to the company or trigger tax consequences. The proper way is to pay wages for labor and distribute dividends for profit. If it's already happened to you, it can be fixed—but the sooner, the easier.
Two limits apply equally: available profit and liquidity. The tax treatment of a withdrawal is different from a LLC dividend and depends on your regime. See our tax section or ask your economist.
If you want a clear withdrawal plan for the year, built on your figures, we'll be happy to put it together with you. Find us at Contact page or see the packages at offer.
We take care of accounting and taxes, so you can save time, money, and focus on growing your business.
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