Who can create an NPO?

Article 46 of Law no.8417, dated 21.10.1998 “Constitution of the Republic of Albania”, as amended, guarantees everyone’s right to be organized collectively for any lawful purpose, and that the registration of organizations or associations in court is completed according to the procedure as provided by law. Organizations or associations that pursue unconstitutional goals are prohibited by law.

Moreover, based on Article 4 of Law no.8788, dated 7.5.2001 “On non-profit organizations”, as amended, any natural or legal person, domestic or foreign, has the right to establish a non-profit organization, to be a member of or participate in the governing bodies or in the administrative staff of the non-profit organization.

What are the main legal forms of NPOs?

An NPO can be organized in the following 3 (three) legal forms, as provided by  Article 2 of Law no. 8788, dated 7.5.2001 “On non-profit organizations”, as amended (herein referred to as the ‘Law on NPOs’),

  1. Association
  2. Foundation
  3. Center

and their activity develops independently and without being influenced by the state.

The Law on NPOs, in Article 3, expressly excludes as subjects: trade unions, political parties and those other non-profit organizations whose activity, organization and functioning are regulated by a separate specific law.

  • Non-profit organizations are divided into non-profit organizations with membership and non-profit organizations without membership. Non-profit organizations with membership are ‘associations’. Non-profit organizations with membership are established by the free will of natural or legal persons. The minimum number of founding members is at least 5 (five) natural persons or at least 2 (two) legal persons. Non-profit organizations without membership are ‘foundations’ and ‘centers’. Non-profit organizations without membership are created by 1 (one) or more persons or by formal will.
  • Non-profit organizations are divided by law into domestic non-profit organizations and foreign non-profit organizations. Domestic non-profit organizations are those that have been established, recognized and registered as such under Albanian law, while foreign non-profit organizations are those organizations established, recognized and registered as such under the law of another country other than Albania, which conduct temporary activities in Albania without being registered or they exercise activity in Albania through their registered branch in Albania.
  • Law n8788, dated 7.5.2001 “On non-profit organizations”, as amended.

Is Social Enterprise a specific legal form of NPOs?

Social enterprise cannot be considered as a special legal form of organization for NPOs. According to Law no. 65/2016 dated 09.06.2016 “On social enterprise in the Republic of Albania”, article 12, the legal form of social enterprise is a non-profit organization, according to the provisions of the legislation applicable to non-profit organizations.

Social enterprises are organized and operate according to Law no.65/2016, dated 09.06.2016 “On social enterprises in the Republic of Albania”, and the recognition of the status of an NGO as a social enterprise, i.e. for an entity created and registered as an NPO, is done by order of the Minister in charge for social issues in the Republic of Albania.

What documents are needed to establish an NPO?

Based on Law no.80/2021 “On the registration of non-profit organizations”, the acts required for the initial registration of non-profit organizations are:

  1. Request for initial registration completed with all mandatory data;
  2. Statute and Establishment Act;
  3. The act for determining the legal representative of the non-profit organization, if it is not included in the above stated by-laws.

For foundations that are established on the basis of a testamentary deed, together with the request for initial registration, completed with all the mandatory data according to this law, the will and the statute are filed in the cases when they are approved and signed by the testator of the will.

Branches of foreign non-profit organizations, in addition to fulfilling other requirements of the legislation in force, are registered by filing the request for initial registration, completed with all mandatory data as provided by Law no. 80/2021 “On the registration of non-profit organizations”, as well as:

  1. the act of establishment and the charter of the foreign non-profit organization, when these are two separate documents or, in the absence thereof, the equivalent act of establishment according to foreign legislation, as well as their full text with subsequent amendments;
  2. the documentation proving the registration of the foreign non-profit organization in the foreign jurisdiction;
  3. documentation certifying the current state of the foreign non-profit organization, issued not earlier than 90 (ninety) days prior to the date of submission of the formal request to the court, with registration and representation data, including information on whether it is subject to liquidation or bankruptcy;
  4. the decision or other acts of the competent body of the foreign non-profit organization prepared and executed according to the relevant foreign legislation for the opening of the branch in Albania.

The competent authority for NPOs registration?

Non-profit organizations, once established, must register with the NPOs Registry which is held at Tirana First Judicial Instance Court, in accordance with the conditions and procedures provided by the law and this must be followed by the registration with the relevant regional tax office and municipality tax section.

The initial registration at court and the depositing of other resolutions of non-profit organizations is carried out by submitting a request for depositing to Tirana First Judicial Instance Court, within 30 (thirty) days from the day of establishment of the NPO.

Non-profit organizations acquire legal personality on the date when the court judgement on NPO registration becomes final. Upon acquiring legal personality, non-profit organizations are registered by the electronic registry secretariat in the electronic registry of non-profit organizations (NPOs Registry).

Registration with the tax authorities and equipment with the Tax Identification Number Certificate (NIPT) is done by submitting the court judgment and other required documents to the regional tax office of the administrative district where the NPO activity will take place.

What documentation is needed to register an NPO to the regional tax office?

The documentation submitted for registration to the regional tax office according to Law no.9920, dated 19.5.2008 “On tax procedures in the Republic of Albania”, as amended,  is as follows:

  • Court Judgement, Statute and Establishment Act, duly notarized;
  • Photocopy of the ID or Passport of the Executive Director or legal representative of the NPO;
  • Legal title for the property of the legal seat (lease. Loan-for-use or ownership act);
  • The registration form (as filled in by the applicant).

Upon receipt of the Tax Registration Number Certificate (NIPT), the NPO is provided the password that will serve for online declarations. For more information on the NPO registration, read here .

After the registration with the regional tax office, the NPO ought to be registered also with the municipality tax section.

Is the process of establishing and registering an NPO costly?

The process of establishment and registration of NPOs is associated with certain costs. Costs can vary from 7,000 to 35,000 Lek (this includes printing costs, notarizations, court fees, transportation, labor costs, etc.).

Can changes be made to NPO by-laws after it was registered? What changes should be deposited to the responsible authorities?

Each NPO that performs the initial registration also bears the obligation to deposit/record any changes on the data which are notified officially and accordingly and in the accompanying documents that are deposited in the electronic NPOs Registry.

In the case of changes to the statute of NPO, their full text is also filed, reflecting the subsequent changes. For branches of foreign non-profit organizations, the statute of the foreign non-profit organization or the equivalent document of establishment, according to foreign legislation, with the full text reflecting the changes made, ought to be filed.

According to Law no.80/2021 “On the Registration of Non-Profit Organizations”, non-profit organizations must register and file the relevant acts, as follows:

  1. any amendment to the statute of NPO;
  2. annual financial statements kept according to legal requirements, in cases where the keeping of these documents is mandatory;
  3. the appointment of the liquidator, as well as his identification data;
  4. acts of dissolution, closure or distribution, acts of transformation, merger, division, opening of administration, liquidation or reorganization procedures, as and other intermediate acts, provided by the legislation in force. For the branches of foreign non-profit organizations, the acts of transformation, merger, division, opening and closing of liquidation or bankruptcy procedures of the foreign non-profit organization are also registered;
  5. other places of activity, other than the legal seat;
  6. powers of representation of management bodies or of the liquidator(s);
  7. name, surname, date of birth and value of property contributions of the founding fund (if any);
  8. any other mandatory registration according to the legal provisions in force.

The changes that are filed to the relevant Regional Tax Directorate and Local Tax Section in the relevant Municipality are as follows:

  • Reflection of changes made by Court Judgement, especially those related to the Executive Director, the economic activity, the legal seat of the NPO;
  • Opening / closing of secondary addresses and issuance of relevant certificates;
  • Change of tax responsibilities (addition / removal).

Read for more:→ Change Form

If the organization has no activity, can it switch into passive status?

If the NPO does not declare for a period longer than 12 consecutive months, or it has decided to terminate its activity for a period of longer than 12 months or indefinitely, and the NPO officially announces this decision, the NPO may become officially into passive status.

How to switch to passive status?

The transition to passive status of NPOs is done upon the request of the NPO or by the relevant regional tax office when the following legal conditions are met:

  • Upon the official request of the NPO – when the latter decides to stop the activity for a period longer than 12 months or indefinitely;
  • From the regional tax office – in case the entity submits declarations without activity (with zero) or when it does not declare for a period longer than 12 consecutive months.

Based on Article 44 of Law no.9920, dated 19.05.2008 “On tax procedures in the Republic of Albania”,  as amended, the tax administration transfers the registration of the taxpayer from the active register to the passive register, in the event that at least one of the following conditions is met: a) NPO no longer engages in activity for a tax period of 12 consecutive months; b) does not submit the tax return for a tax period of 12 consecutive months; c) declares suspension of activity in the regional tax office and pays all tax liabilities.

For the entire period that the NPO entity is in “Passive” status, it does not have the obligation to submit tax returns (the generation of returns is stopped automatically).

How to transfer the NPO into active status?

When the taxpayer resumes activity, the tax administration automatically transfers the registration from the passive register to the active register.

Based on Instruction no.24, dated 02.09.2008 “On Tax Procedures in the Republic of Albania”, as amended, taxable persons transferred to the passive register, if they will resume economic activity, at any time, may request to switch to active registry. The activation of the taxpayer and his transition from the register of passive taxpayers to the register of active taxpayers is done upon the request of the taxpayer, but also by the tax administration based on data established and information administered by it.

In all cases and for all categories of taxpayers, the transition from the passive register to the active register (reactivation) takes place immediately, without being conditioned by unpaid tax liabilities and/or undelivered declarations of the taxpayer. For unpaid liabilities and/or undelivered tax statements, all procedures are applied and all legal steps are taken until these liabilities and obligations are paid and/or fulfilled.

For taxpayers who seek to be reactivated at the regional tax office, as a result of the resumption of the activity/activity, the activation will be done immediately in the system by the relevant Regional Tax Directorate, according to the procedures approved by the General Tax Department. The activation date will be the date of the request of the NPO for reactivation, and the tax liabilities will be those that the taxpayer had on the date when this taxpayer switched to passive status.

For cases where the taxpayer exercises activity even though the taxpayer is in “Passive” status, the legislation on tax procedures provides that the taxpayer will be subject to the corresponding penalties (see Law no.9920, dated 19.05.2008 “On tax procedures in the Republic of Albania”,  as amended, and the relevant implementing instruction of the Minister of Finance).

What are the steps for the de-registration of an NPO?

Based on Law no.80/2021 “On Registration of Non-Profit Organizations”, de-registration of a non-profit organizations is carried out:

  1. voluntarily upon the initiative of the non-profit organization;
  2. based on a court judgment;
  3. according to the provision of special laws.

The de-registration of non-profit organizations from the electronic NPO Registry results in the extinguishment of the legal personality of the NPO.

To de-register an NPO, the following steps are followed:

  • The NPO applies to the Court for the initiation of the de-registration procedure;
  • After receiving the notification from the Court for the start of the de-registration procedure, the relevant regional tax administration verifies the situation of the NPO  regarding the fulfillment of legal obligations and liabilities on its part (declarations and payments of tax liabilities and social security contributions and health insurance contributions);
  • The regional tax office notifies the Court of the above (confirms or opposes the de-registration).

NOTE: According to the Decision of the High Judicial Council, the electronic NPOs Registry will not be ready prior to December 2023. Meanwhile, all the procedures for initial registrations of NPOs or the depositing of resolutions by NPOs will continue to be followed by submitting the hard copies of the documents at Tirana First Judicial Instance  Court, which administers the NPOs Registry.