Estonian Company Run from Albania: Tax Rules

Many Albanian entrepreneurs — and many people who moved to Albania — form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from Albania. That works, but Albanian income tax does not look only at where a company was founded: an entity whose management and control is exercised in Albania at any time in the tax year is resident there, and the law deems this to be so when, for example, at least half of the directors and at least half of the capital are Albanian residents. Albania also has a rule on controlled foreign entities for individuals. And the Estonia–Albania tax treaty leaves a company resident in both countries to an agreement between the two tax authorities. This guide sets out these rules with the official texts, and what we do on the Estonian side.

The guide is general information, not tax advice. How your company and you are taxed depends on the facts of your case; ask an Albanian tax adviser (këshilltar tatimor) before you form or buy the company. We read the Income Tax Act (Ligji nr. 29/2023 “Për tatimin mbi të ardhurat”) in its consolidated version 6 of 11 December 2025, with the amendments up to Law no. 81/2025, in the official legal database of the Official Publications Centre (qbz.gov.al), and the Estonia–Albania tax treaty in Riigi Teataja, on 24 October 2026; the English wording of the Albanian act below is our translation.

In Estonia: an Estonian company is Estonian

A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.

In Albania: the company side

Founded or managed in Albania. An entity is resident in Albania in a tax year if it was established in Albania, or if at any time during the tax year the management and control of its affairs is exercised in Albania (Income Tax Act, Article 28(1)).
When management is deemed to be in Albania. Management and control is considered to be exercised in Albania if the meetings of the entity's board are held in Albania, or if at least two of these conditions are met: decisions on the day-to-day running of the entity are taken in Albania; at least 50 per cent of the board members or managers are resident in Albania; at least 50 per cent of the capital or of the voting rights is held directly or indirectly by persons resident in Albania (Article 28(2)).
Permanent establishment. For a non-resident, a permanent establishment is a fixed place of business through which its business is wholly or partly carried on; it includes in particular a place of management, a branch and an office (Article 5(1) and (2)).
Rate. The corporate income tax rate is 15%, and 8% for dividends (Article 41). Under the transitional provision, entities with gross income of up to 14 million lekë a year pay 0% until 31 December 2029 (Article 69(1)(dh)).

An Estonian OÜ is founded in Estonia. If you live in Albania and are its only owner and board member, two of the conditions of Article 28(2) — residents holding the capital and residents on the board — can already be met, and Albania can treat the company as resident. Your Albanian tax adviser answers that with the facts of your case.

In Albania: the owner side

Controlled foreign entity. When an individual has an interest in a controlled foreign entity whose profits are not taxed or are exempt in Albania, its undistributed profit that comes from passive income is included in the individual's taxable investment income (Article 19(1)).
When an entity is controlled. The individual, alone or with related persons, holds directly or indirectly more than 50 per cent of the voting rights or of the capital, or is entitled to more than 50 per cent of the profit, and the tax the entity actually paid on its profit is less than 50 per cent of the tax it would pay as an Albanian resident entity (Article 19(2)).
Passive income and the threshold. Passive income is interest and other income from financial assets, royalties and other income from intellectual property, dividends and income from the sale of securities, and income from financial leasing; the rule does not apply if passive income does not exceed 30 per cent of the entity's total profit (Article 19(3) and (4)).
Who is a resident individual. Among other conditions, an individual with a permanent residence in Albania, or who stays there for 183 days or more in the tax year, is resident (Article 8).

An Estonian company pays its corporate income tax only when it distributes profit, so in a year in which it keeps its profit the tax it actually paid can be low. Whether the rule reaches your company depends on its income and on whether Albania already taxes it as resident; your Albanian tax adviser answers that with your figures.

What the Estonia–Albania tax treaty says

Resident in both countries. If a person other than an individual is resident in both states, the competent authorities settle the question by mutual agreement (convention signed in Tirana on 5 April 2010, article 4(3); RT II, 15.11.2010, 4). The treaty does not decide it by itself.
Permanent establishment. A permanent establishment is a fixed place of business through which the business of an enterprise is wholly or partly carried on; it includes especially a place of management, a branch and an office (article 5(1) and (2)). The profit attributable to it may be taxed in the state where it is (article 7(1)).
Directors' fees. Fees an Albanian resident receives as a member of the board of directors or a similar organ of an Estonian company may be taxed in Estonia (article 16) — see board member fee or dividend from abroad.
Dividends. Dividends paid by an Estonian company to an Albanian resident may be taxed in Albania; if Estonia also taxes them at source, the treaty limits that tax to 5 per cent of the gross amount for a company (other than a partnership) holding directly at least 10 per cent of the capital, and 10 per cent in all other cases (article 10(1) and (2)).

So the treaty does not settle a double residence by itself: a company managed from Albania may need an agreement between the two tax administrations. The multilateral convention on tax treaty measures (MLI) can change the rules of tax treaties; how it applies to your company is a question for your Albanian tax adviser — we do not give that ruling.

What to decide before you form or buy the company

Who sits on the board and who holds the capital. Albanian residents in both roles meet two of the conditions of Article 28(2).
Where the day-to-day decisions are taken. That is the third condition, and board meetings in Albania are enough on their own.
Where the work is done. An office or other fixed place of business in Albania can be a permanent establishment.

What we do on the Estonian side

online formation for an e-resident — €950 Registered address and contact person service for one year are included., or formation by power of attorney — €1,250;
a ready-made company bought remotely — €1,200 Registered address and contact person service for one year are included.;
accounting — from €150 / month and the annual report — from €450;
the registered address and contact person after the first 12 months — €350 / year.

Our accounting covers the Estonian company's Estonian obligations. Albanian tax returns and Albanian tax advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.

Prices exclude VAT. All communication takes place by email.

Ready to start? A new Estonian company — online for e-residents or by power of attorney; Albanian tax advice is not included. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Frequently asked questions

Is my Estonian company taxed in Albania if I run it from Albania?

It can be. Albania counts as resident an entity whose management and control is exercised in Albania at any time in the tax year (Income Tax Act, Article 28(1)), and deems this so when board meetings are held there or two of three conditions are met: day-to-day decisions taken in Albania, at least half of the directors resident there, at least half of the capital or votes held by residents (Article 28(2)). In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6). Under the Estonia–Albania tax treaty the competent authorities settle such a double residence by mutual agreement (article 4(3)). Albania's controlled foreign entity rule can add the passive undistributed profit of a low-taxed company to its individual owner's income (Article 19). Ask an Albanian tax adviser before you form or buy the company; we handle the Estonian side.

Estonian company run from Albania: what is taxed where