Albania’s Strategic Legal Framework: A Gateway for AI and Tech Investors Near the EU

Albania is actively fostering a conducive environment for foreign investors in the Artificial Intelligence (AI) and technology sectors, aligning its legal framework with European Union (EU) standards to promote innovation and economic growth. The government’s commitment to integrating AI into national strategies and streamlining legislative processes underscores its dedication to creating a favorable investment climate.
 
Legal Framework and Business Structures
 
Foreign investors can establish AI and tech businesses in Albania under several legal structures:
• Limited Liability Company (Shoqëri me Përgjegjësi të Kufizuar - SH.P.K): Ideal for small to medium-sized enterprises, offering simplicity and limited liability protection.
• Joint Stock Company (Shoqëri Anonime - SH.A): Suitable for larger enterprises seeking to raise capital through share issuance, requiring a higher minimum capital investment.
• Start-ups: The enactment of Law No. 25/2022 “On the Support and Development of Start-ups” facilitates the creation and growth of innovative businesses, providing financial grants and support measures during their development phases.
 
Streamlined Registration Process
 
The National Business Center (Qendra Kombëtare e Biznesit - QKB) manages business registrations, offering a simplified and efficient process:

• Application Submission: Entrepreneurs can submit applications online through the e-Albania portal, including necessary documents such as identification and Articles of Association.
• Processing Time: Applications are processed within one business day; if no decision is communicated within this timeframe, the application is automatically approved.
• Registration Fee: Registration is now completed online and free of charge.

 
Compliance with Data Protection and Industry Regulations
 
Businesses handling personal data must adhere to data protection regulations:
• Data Protection Registration: Companies are required to register with the Commissioner for the Right to Information and Protection of Personal Data, ensuring compliance with national laws aligned with EU standards.
• Industry-Specific Licenses: Depending on the nature of the tech business, additional licenses or permits may be necessary from relevant authorities.
 
Incentives for Tech Investments
 
Albania offers various incentives to attract tech investments:
• Tax Incentives for IT Sector: Certain tech companies involved in software development benefit from a reduced income tax rate of 5%, aiming to attract foreign investors and outsourcing opportunities.  
• Support for Digital Nomads: Law No. 36/2023 provides support for digital nomads, allowing them to operate without being considered tax residents for a period of 12 months upon obtaining a unique permit.
• Technological and Scientific Parks: Law No. 58/2022 promotes high-tech and innovation industries through technological and scientific parks, offering incentives such as 0% corporate income tax for 15 years, VAT exemptions, and designation as customs-free zones.
 
Alignment with EU Standards
 
Albania is proactively integrating AI into its national strategies, developing a comprehensive National AI Strategy to establish a structured policy framework for ethical and responsible AI adoption. The government is also leveraging AI to streamline legislative processes, collaborating with OpenAI’s ChatGPT to expedite the translation and integration of EU laws into Albanian legislation, thereby accelerating the country’s EU accession efforts.  
 
Albania’s strategic location near the EU, coupled with its evolving legal framework and incentives, presents a compelling opportunity for foreign investors in the AI and technology sectors. By understanding and navigating the legal requirements and leveraging available support measures, investors can successfully establish and grow their tech ventures in Albania. Consulting with local legal and financial experts is advisable to ensure compliance and maximize the benefits of investing in Albania’s burgeoning tech landscape.