Do I Need a Local Entity to Hire in Albania?

In Albania, a "local entity" refers to a recognized business presence, such as a subsidiary or branch office, that can act as an employer. This setup allows your company to comply with local payroll and employment obligations, ensuring that you can manage employee benefits and taxes effectively.

Without a local entity, you generally cannot register as an employer, run compliant payroll, or issue local employment contracts. However, using an Employer of Record (EOR) can provide a streamlined solution, allowing you to hire employees while avoiding the complexities of establishing a local entity.

What is Required to Employ Someone in Albania?

 
• Local employing entity required to directly employ? Usually yes (unless using an EOR)
 
• Payroll registration required? Yes (employer registration with the National Tax Directorate)
 
• Withholding/tax remittance required? Yes (mandatory payroll tax remittance applies)
 
• Social contributions required? Yes (employer must pay social security contributions)
 
• Local employment agreement required? Yes (written contracts are mandatory)
 
• Mandatory benefits to budget? Yes (statutory leave and social security coverage)
 
• Works council/collective agreements considerations? Often (some sectors have applicable collective agreements)

Best Options If You're Hiring in Albania

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should be cautious about misclassification risks.

While hiring contractors allows you to bypass the need for a local entity, Albanian labor laws are strict about worker classification. If the contractor operates under conditions resembling employment, you could face legal challenges.

 
• Ensure the contractor has independence in their work.
 
• Avoid controlling their hours or methods.
 
• Be wary if the contractor's role is integral to your business.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 2-4 weeks to establish an entity in Albania, depending on the required registrations.
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Ongoing cost categories (entity route):

 
• Accounting, bookkeeping, and statutory filings: Estimated 20,000–50,000 ALL per month ($180–$450) and social contributions are 15% employer share
 
• Payroll provider: Estimated 1,500–4,500 ALL per employee per month ($13–$40)
 
• Employer registrations and recurring compliance: Varies by complexity
 
• Corporate tax filings and annual reporting: Estimated 100,000–300,000 ALL per year ($900–$2,700)

EOR cost components (no-entity route):

 
• A per-employee EOR service fee (from $399 p/month with Playroll)
 
• Pass-through statutory costs (e.g., employer social security contributions)
 
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Albania

Hiring in Albania can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

 
• Hire employees in Albania quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
 
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
 
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
 
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
 
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.