Albania · Tax regime
Zero-Rate Regime for Self-Employed and Small Business Income (Law nr. 29/2023 as partially annulled)
Law nr. 29/2023 took effect 1 January 2024 and imposed 15%/23% on self-employed and free professions while deferring the same obligation for other small businesses to 2029. On 27 June 2024 the Constitutional Court unanimously annulled Article 69 of Law 29/2023 and Article 4 of VKM 753/2023 for breaching legal certainty, legitimate expectations, clarity of the norm and proportionality. Freelancers reverted to 0% up to ALL 14m until 31 December 2029, and prepaid instalments of roughly ALL 501m were refunded to about 6,450 taxpayers. This was a targeted judicial annulment of the discriminatory element — not a postponement and not a full reversal.
A 0% rate on roughly EUR 135k of business income, protected by a constitutional court rather than by administrative grace, is the most defensible low-tax position in the Balkans — and the judgment's reasoning (legal certainty and legitimate expectations) makes an arbitrary reversal harder than in most of the region. But it carries a hard expiry date that most marketing omits.
Qualifying routes
0% on taxable profit up to ALL 14m (roughly EUR 135k) until 31 December 2029; 23% above
may elect an automatic-expense-deduction regime
The facts
- Total landed cost
- Registration and accounting only — roughly EUR 1,000–3,000 a year.
- Timeline
- 1–2 months — Registration with the National Business Centre.
- Physical presence
- Tax residency at 183 days brings worldwide taxation; the regime itself has no presence test.
- Family
- individual regime; not a family status
- Permanent residency
- n/a — this is a tax status
- Citizenship
- n/a
- Language test
- none
- Dual citizenship
- Permitted
- Requirements
- registration as self-employed or small business with the National Business Centretaxable profit under ALL 14m to hold the 0% rateto avoid reclassification: serve exclusively non-resident clients with no Albanian PEannual filing
- THE 2029 CLIFF IS REAL. The 0% is a dated concession, not a structural feature. Any plan whose economics depend on it must model 23% from 1 January 2030, when everyone converges.
- THE 80/90% RECLASSIFICATION RULE. Self-employment income is recharacterised as employment income (13%/23%) where 80% or more comes from one client, or 90% or more from fewer than three. The escape is the carve-out for those serving exclusively non-resident persons or entities without an Albanian permanent establishment — which must be maintained rigorously, with no Albanian-source or PE-tainted revenue at all. This carve-out is the single most important provision for a foreign remote-earning client.
- ALBANIA'S CFC RULES BITE AT 30% PASSIVE INCOME — unusually aggressive for a jurisdiction marketed as light-touch. Resident individuals are taxed at 15% on passive income from a controlled non-resident company where passive income is 30% or more of the CFC's profit. Albania is not a passive-holding-friendly residence, whatever the 0% headline suggests.
- The former 0% low-income band on employment income was removed from 1 January 2025 — employment is now 13% from the first lek.
- Albania participates in CRS; there is no opacity here to complement the low rate.