Short answer
The business category under Article 4 of Law No. 25/2018 is micro, small, medium, or large. It is determined on the reporting date by the two-out-of-three rule based on assets, operating revenue, and the average number of employees during the period.
Verified on from Andi Haxhillari, Certified Accountant. In accordance with Article 4 and Annex 1 of Law No. 25/2018 on Accounting and Financial Statements, as amended by Law No. 87/2026. On November 12, 2026, it was clarified that the number of employees is measured as an average over the reporting period, not as of the balance sheet date.
Law No. 25/2018 divides businesses into four categories: microenterprise, small enterprise, medium enterprise, and large enterprise. The category is determined by three figures as of the balance sheet date: assets, revenue, and number of employees, using the two-out-of-three rule. The overwhelming majority of Albanian businesses are microenterprises, and this is the category with the lightest obligations.
According to Article 4 of Law No. 25/2018, the thresholds are as follows.
| Category | Active until | Revenues to date | Employee until |
|---|---|---|---|
| Micronation | 35,000,000 LEK | 70,000,000 LEK | 10 |
| Small unit | 350,000,000 LEK | 700,000,000 LEK | 50 |
| Middle unit | 2,000,000,000 LEK | 4,000,000,000 LEK | 250 |
| Large unit | on the thresholds of the middle unit |
The rule reads like this. You remain in a category as long as you don't exceed at least two of its three thresholds on the balance date—that is, December 31 for most businesses. You only have to exceed one threshold and nothing changes. Exceed two, and you move into the next higher category.
For the final transition from one category to the next, the law requires that the thresholds be met over a consecutive period. This protects you from a single exceptional year; an outstanding season won't immediately saddle you with new obligations.
The table's limits are those of the 2025–2027 reporting period. From the 2028 reporting period, the micro-unit thresholds increase, but the exact figures remain to be verified. Annex 1 of Law No. 25/2018, published on our full-text website, provides for the year 2028 values of 47,500,000 lek assets and 95,000,000 lek revenues. Law No. 87/2026 replaces that annex, and its text, as received today, is expected before the annex, so we do not confirm any figure for 2028 until the new annex is read from the official source. That law was published in the Official Gazette No. 176, dated August 7, 2026, but its Annex 1 postpones the new thresholds to the 2028 reporting period, so today the table's limits apply. What changes have been explained in The accounting law changed..
Take a small construction company in Durrës. As of December 31, it has assets of 60,000,000 LEK, annual revenue of 180,000,000 LEK, and 35 employees.
Try the micro-entity thresholds. Assets of 60,000,000 exceed the 35,000,000 threshold. Revenues of 180,000,000 exceed the 70,000,000 threshold. Employees of 35 exceed the 10 threshold. Two out of three—so it is not a micro-entity.
Try the small unit thresholds. Asset 60,000,000 does not exceed 350,000,000. Revenue 180,000,000 does not exceed 700,000,000. Employees: 35 do not exceed 50. No threshold has been exceeded, so the firm is a small unit. It will apply full SKK but not the requirements for medium and large units.
Michael Gerber, in The E-Myth Revisited, advises building your business as if it's going to grow tomorrow. Conducting threshold checks once a year, before closing the books, is part of that system that keeps you one step ahead of events.
You don't have to do these calculations by hand. On the main page Finance and Accounting Find tool A: you are a micronation. Enter the three digits and get the category immediately. You can find other formats and calculators in the Resource Center.
The basis is Article 4 of Law No. 25/2018. Two points warrant professional attention. First, assets and revenues are read as of the reporting date, while the number of employees is taken as the average during the reporting period, according to Article 4(1). Second, a change of category does not occur with a single year but only after the thresholds are consistently exceeded. The classification entails the standard under Article 5 and the format of the statements, so the annual reevaluation of the category must be a fixed item on the year-end closing list.
Not necessarily. A single year above the threshold won't change your category; you need to cross it repeatedly. See it as a good sign: business is growing, and it's time to prepare calmly.
Operating revenues are taken from the income and expense statement, excluding the VAT collected on behalf of the government. If you're at the threshold limit, this distinction can determine the category, so it's worth checking with your economist.
If you want someone to handle your category every year-end without you having to think about it, check out our packages at offer.
Read also: Capital gains tax for 2026, rates of 15% and 23% and thresholds