Sole Trader or LLC? Choosing a Business Form in Albania

One of the first decisions when starting out is choosing the right business form in Albania. For most small and medium businesses, the choice is between registering as a natural person (sole trader) and setting up a limited liability company (Sh.p.k.).

Sole trader (natural person)

A sole trader runs the business in their own name.

• Simple to set up and generally cheaper to run.
• Unlimited liability: the owner is personally responsible for the debts of the business.
• Best suited to freelancers, small shops and one-person activities.

Limited liability company (Sh.p.k.)

An Sh.p.k. is a separate legal entity, owned by one or more partners.

• Limited liability: partners are generally responsible only up to their contribution.
• Easier to bring in partners and investors.
• More formal requirements, such as a founding act, statute and annual financial statements.
• Often preferred by foreign investors and growing businesses.

Questions to help you choose

1. How much risk does your activity carry, and do you want to protect personal assets?
2. Will you have partners or investors now or in the future?
3. Do your clients or suppliers prefer working with a company?
4. How quickly do you expect the business to grow?

How registration works

Both forms are registered with the National Business Center (QKB). After registration, the business receives its tax identification number (NIPT) and must meet its tax and accounting obligations from the start.

The right form depends on your plans, not only on today’s situation. A short consultation before registering can save you a costly change later.

Need help?

We will be there for any questions you may have, as they affect both your tax and financial situations. Contact Abacus at any time.