Albania’s Cross-Border Company Reorganisation Bill: What Businesses Need to Know

The development

A broader framework for reorganising businesses across borders

Albania is proposing a new framework for cross-border company conversions, mergers and divisions. The bill, deposited in Parliament on 22 October 2026, would replace Law No. 110/2012 on cross-border mergers and bring the three forms of reorganisation into one legislative framework.

For Albanian businesses expanding abroad, European groups with Albanian operations, and investors reviewing their corporate structures, the proposal could provide more clearly defined ways to relocate a company’s registered office, combine companies or separate business activities while preserving the legal continuity or succession specified for each operation.

That flexibility would come with substantial preparation and scrutiny. Draft terms, management explanations, independent valuation where required, disclosure, shareholder decisions, employee involvement and checks by authorised notaries and business registries would form part of the process. A group’s internal approval alone would not complete a cross-border restructuring.

Sources: Parliament’s official bill record; draft Articles 68–69.

What would change from the existing regime?

Law No. 110/2012 already provides a specific framework for cross-border mergers involving Albanian and European companies. The new bill would repeal that law on commencement, update the merger framework and introduce dedicated rules for conversions and divisions. It should therefore not be described as Albania’s first recognition of cross-border mergers.

The explanatory memorandum identifies the absence of a comprehensive statutory procedure for cross-border conversions and divisions as a principal reason for the reform. It places the proposal within Albania’s alignment with Directive (EU) 2017/1132, as amended in particular by Directive (EU) 2019/2121.

Alignment does not itself secure completion abroad. A transaction would still need a legally available route in every relevant jurisdiction. The Albanian bill cannot, by itself, require another country to accept an Albanian company into its domestic restructuring procedure.

Sources: Law No. 110/2012, Articles 1–3; explanatory memorandum, sections I, III–V; Directive (EU) 2019/2121; draft Articles 4 and 68.

Which companies and countries would be covered?

The Albanian entities covered by the bill are limited liability companies (sh.p.k.) and joint-stock companies (sh.a.) established under Albanian law and meeting the territorial connection specified in the draft. Sole traders, branches and partnerships should not assume that they qualify as participating companies in their own right.

The core cross-border framework concerns Albanian companies and qualifying companies governed by the law of an EU Member State or a state within the European Economic Area (EEA). “European” is a defined legal term here, rather than a reference to every country geographically located in Europe. The precise corporate form and the relevant operation must also fall within the draft’s requirements.

For divisions, at least two companies involved must be governed by different countries’ laws, and the dividing company or at least one recipient must be Albanian. The proposed division procedure concerns newly formed recipient companies; it is not a general procedure for transferring a business into any existing company.

Why this matters for UK, US and Swiss investors

An investor’s nationality is different from the law governing the participating company. A UK- or US-owned Albanian sh.p.k. may meet the Albanian-company definition; foreign ownership does not itself remove it from the framework. Conversely, a UK, US or Swiss company should not assume that it qualifies as an EU/EEA company.

The text contains an important point requiring clarification: Articles 15(2)(ç), 48(2) and 63(2)(ç) refer to legal opinions in situations involving non-EU/EEA or non-member-state jurisdictions, while the core scope provisions are framed around Albania and EU/EEA companies. These references should be reconciled during the legislative process. They should not be treated as a confirmed, unrestricted route for third-country conversions or divisions.

Excluded situations

The draft excludes specified collective-investment undertakings and companies in the listed bank or central-counterparty recovery/resolution situations. It also excludes companies subject to bankruptcy or liquidation proceedings. This proposed framework should not be presented as a way to move an insolvent company abroad or avoid an existing liquidation process.

Draft Articles 2–5, 15(2)(ç), 46 and 48(2), and 63(2)(ç).

Conversion, merger or division: the legal result is different

Cross-border conversion: the same legal person under a new company law

A conversion would allow an eligible company to adopt a legal form of the destination state and transfer at least its registered office there, without dissolution or liquidation and while retaining its legal personality. It is not simply opening a branch or incorporating a separate subsidiary.

The converted company would retain its assets, liabilities, contracts, claims, rights and obligations. Shareholders would remain shareholders, except those exercising the applicable exit right, and employment rights and obligations would continue. For a business assessing relocation, the attraction is continuity; the consequence is that liabilities continue as well.

Cross-border merger: businesses combine through legal succession

The bill covers absorption into an existing company, merger into a newly formed company, and specified group structures, including wholly owned and certain common-ownership arrangements. The absorbed or merging companies cease to exist without a liquidation process, and their assets and liabilities pass to the successor as provided by the draft.

Normally, the shareholders receive shares or interests in the successor, subject to the relevant exceptions and exit rights. The ordinary merger definitions limit a cash top-up to 10% of the nominal value—or, where there is no nominal value, the accounting value—of the relevant securities or shares. Article 3(2) accommodates a higher cash payment where permitted by the relevant participating European jurisdiction. This consideration rule is separate from a dissenting shareholder’s cash-exit compensation.

Cross-border division: assets and obligations move to new recipients

A separation could be relevant where a group wants a business activity held through a new subsidiary. A partial division has a different ownership result because the allocation operates at shareholder level. Choosing between them affects control, valuation, creditor exposure and the applicable procedural exemptions.

Draft Article 3, 18, 32–33, and 65.

The commercial rationale and the legal plan would need to be documented

Each operation would begin with written draft terms. These are the transaction’s legal foundation: they describe the participating entities, proposed structure, relevant constitutional documents, timetable, employment consequences and safeguards for affected stakeholders.

The detail differs by operation. Conversion terms include the proposed destination form and registered office, compensation for dissenting shareholders and incentives or subsidies received in the state of origin during the preceding five years. Merger terms include share-exchange arrangements, relevant accounting dates, asset and liability valuations and creditor protection. Division terms require a precise allocation of assets and liabilities, including a mechanism for items not expressly allocated or not known when the terms are prepared.

Management would also have to explain the legal and economic rationale in reports addressed to shareholders and employees. The shareholder section addresses matters such as valuation, compensation, exchange ratios where relevant, and remedies. The employee section addresses employment consequences, changes in working conditions or workplace locations, and the effects on relevant subsidiaries and units.

Where required, an independent licensed expert would assess the proposed cash compensation and, for mergers and divisions, the exchange ratio. The exercise is substantive: the expert must explain the valuation methods and relevant difficulties, rather than simply certify that a number appears in the transaction documents.

Exemptions are specific, not a general waiver of protection

The draft permits unanimous shareholder waivers of specified reports. Employee-report exemptions depend on the conditions in the relevant provision, including whether the company and relevant controlled entities have employees other than members of management. A shareholder waiver does not, by itself, waive employee consultation or creditor protection.

Article 34 contains targeted simplifications for qualifying group mergers. Article 65(3) separately disapplies specified requirements, including Articles 49, 50 and 53, for a division by separation. Those exceptions must be applied to the correct transaction; they should not be extended to every intragroup restructuring.

Draft Articles 6–8, 22–24, 34, 48–50, and 65(3).

Stakeholders must have time to assess the proposal

Where management reports are required, the ordinary rule is that they are made available electronically to shareholders and employee representatives—or employees directly where there are no representatives—at least six weeks before the general meeting. Required expert reports must ordinarily be available at least one month before the meeting.

Publication requirements generally apply at least one month before the meeting. They include the draft terms and notice of the opportunity for shareholders, creditors and employees or their representatives to comment. The comment deadline is at least five working days before the meeting. Merger disclosure also includes the financial statements and activity reports specified in Article 26.

The bill allows qualifying publication on the company’s own website, provided the prescribed documents remain continuously and freely accessible for the required period and the security and authenticity requirements are met. This is not an exemption from all registry filings: the company must still supply the prescribed information and website details to the National Business Centre (QKB).

The general meeting would consider the relevant reports, employee opinions and stakeholder comments. The draft ordinarily requires three quarters of the votes of participating shareholders entitled to vote, subject to the applicable company-law rules. For mergers, the articles of association may specify a higher majority; conversions and divisions also contain a restriction by reference to the merger approval threshold. Quorum, class rights and any required individual consent must be checked separately.

Approval is not equivalent to completion. It is followed by the relevant certification, legality checks and registration steps. Following a merger approval, Article 27(6) requires publication of the decision within 30 days. For a division, Article 55 requires filing the approval decision with QKB within 14 days.

Draft Articles 7–10, 23–24 and 26–27, 49–52, and 55. Specific waivers and simplified procedures qualify these ordinary rules.

An exit right can create a material cash requirement

The bill gives qualifying dissenting shareholders a right to dispose of their shares or interests for appropriate cash compensation. Voting and procedural requirements matter: for conversions and mergers, the provisions refer to voting against the proposal and recording opposition in the meeting minutes. A shareholder should not assume that silence or absence preserves the same position.

For mergers and divisions, the exit provisions expressly address shareholders who would receive shares governed by another country’s law. The entitlement must therefore be assessed against the full wording of Article 28 or Article 53, rather than described as an unconditional right for every shareholder in every restructuring.

Exit declarations generally have to reach the company within one month after the general meeting. The subsequent payment and court deadlines, however, are significantly different:

The division provisions direct the court to determine the specified compensation and exchange-ratio claims within 30 days of filing. This statutory direction is not a reliable basis for promising a client that every dispute will be finally resolved within 30 days, including any further procedural steps.

Challenges to an exchange ratio and claims for additional compensation must also be distinguished from a challenge to the legality of the transaction. The draft prevents certain valuation complaints from being used as the sole ground for invalidating the approval resolution. It preserves the separate monetary remedies; the specified exchange-ratio proceedings do not, in themselves, block registration.

For a company planning the transaction: obtain a defensible valuation, document the offer, establish a monitored email address for exit notices and reserve the cash needed to meet valid claims. Division funding must reflect the requirement to pay before effectiveness. The division-by-separation exemption in Article 65(3) must be considered separately.

Draft Articles 10–11, 27–28, 52–53, and 65(3).

Moving or dividing a company would not remove its debts

For each operation, the draft protects creditors whose claims arose before publication of the draft terms and had not yet fallen due at that time. A creditor dissatisfied with the safeguards offered could apply to the competent court within three months after publication, provided it credibly demonstrates that the operation puts satisfaction of the claim at risk and that adequate safeguards have not been received. Any security granted under these provisions is conditional on the operation taking effect.

This is not an automatic veto for every creditor, nor does it mean that all debts must necessarily be paid before every restructuring. Existing contractual rights, security interests and public-law obligations require separate examination. The proposed protections expressly preserve the applicable rules on payment or security for obligations to public authorities.

Divisions carry an additional liability safeguard

If a creditor cannot obtain satisfaction from the company to which a liability has been allocated, the other recipients—and, for a partial division or separation, the original company—would be jointly and severally liable under the draft. For each company other than the one assigned the liability, that additional liability is capped at the value of the net assets allocated to or retained by it at the effective date. The cap is not stated as a cap on the primary debtor’s own allocated liability.

In addition, assets or liabilities left unallocated and not capable of allocation through interpretation of the terms would be attributed proportionately as specified in Article 65(4), without displacing the creditor safeguards. A complete schedule of liabilities, guarantees, disputes and contingent exposures is therefore essential.

For an outward conversion, Article 12 also preserves an Albanian jurisdiction option for qualifying pre-publication creditor claims brought within two years after effectiveness, alongside the other applicable jurisdiction rules. Relocating a registered office should not be assumed to make all earlier disputes exclusively foreign.

Draft Article 12, 28(13)–(15), 54 and 56, and 65(4).

Employee involvement must begin before the final decision

The draft distinguishes information and consultation from participation in company governance. They are related but different obligations. Providing an employee report does not necessarily complete consultation, and consultation does not itself settle any right to board-level representation.

Employees or their representatives must be informed and consulted early enough to assess the proposal and receive a reasoned response before the general meeting. The relevant provisions place the start of this process before finalisation of the terms or the associated management report. Merger Article 23/1 expressly links the process with applicable Labour Code protections, including business-transfer rules where relevant.

Employment rights and obligations would continue or transfer in the manner specified for the operation. The bill does not provide a general permission to terminate employment, reduce accrued rights or avoid consultation merely because the corporate structure changes.

Existing participation arrangements may follow the business

Special participation rules may be triggered where the relevant workforce reaches at least four fifths of the applicable national participation threshold over the specified six-month period, or where the destination arrangements do not preserve the required level or cross-border equality of participation. This is not a universal fixed employee threshold; the relevant law and existing representation arrangements must be identified.

Where the special rules apply, a negotiating body and an agreement—or applicable standard rules—may be needed. For mergers, the draft contemplates negotiations lasting up to six months, extendable by agreement to a total of one year. Qualified decisions not to negotiate, and direct application of standard rules in the specified circumstances, are also addressed. A simple assumption that an intragroup deal has no employee-governance implications would be unsafe.

The conversion, merger and division provisions include protection for participation rights in subsequent domestic or cross-border restructurings during a four-year period after the initial operation takes effect. Employee representation, legal form and board composition should therefore be considered as part of the intended long-term structure.

Draft Articles 18 and 20–21, 23/1, 33 and 35–45, and 61–62 and 65.

The notary’s review would go beyond formal document collection

Authorised notaries would examine the Albanian pre-operation requirements and issue the relevant preliminary certificate where the conditions are met. The file would include the applicable draft terms, reports, approval evidence and stakeholder material. Depending on the operation, regulatory permissions, public obligations and employee-participation steps would also need to be addressed.

The bill requires refusal of a certificate where an operation is established to have abusive, fraudulent or criminal purposes of the kind specified in the draft, including circumvention of the relevant law. The assessment is case-specific. Serious suspicions may require further information and investigation; suspicion alone should not be equated with an established prohibited purpose.

The ordinary review period is three months from the relevant receipt of documents and information. Additional scrutiny may extend that period by up to three months. The provisions also address more complex cases that cannot be completed within those periods and require notice of the reasons for delay. Neither three months nor six months should be advertised as a guaranteed end-to-end completion period.

Where deficiencies are identified, the draft provides a ten-working-day opportunity to remedy them in the circumstances specified. A complete and consistent file is therefore valuable: differences between the terms, valuation, resolutions and employee arrangements can affect certification.

Management and independent experts may be liable to shareholders for damage caused by intentional misconduct or negligence in preparing or carrying out the operation. The economic rationale, financial statements, valuation assumptions and relevant declarations should have a documented evidential basis.

Draft Articles 13 and 19, 25 and 29, and 57–59.

A division needs its own closing plan

The proposed division regime contains steps that should not be lost in a general description of corporate reorganisations:

• Financial-condition declaration: management must provide the declaration required by Article 56(3), reflecting the company’s financial position as at a date no earlier than one month before the declaration’s publication. Following reasonable checks, it must address the ability of recipients and any continuing original company to meet allocated liabilities when due.
• Security and sector consents: the application must include the applicable regulatory and stock-exchange evidence. Where shares or interests in the dividing Albanian company are pledged, Article 57 requires the pledgee’s written consent.
• Filing after approval: the approval decision goes to QKB within 14 days. The application for a pre-division certificate follows no later than 30 days after publication of the relevant registration.
• Minimum waiting period: Article 58(3)(a) states that the pre-division certificate cannot be issued before three months have elapsed after the Article 51 publication.
• Legality objections: Article 56 provides one-month windows for specified objections to the terms’ registration or the approval resolution, with different starting points. Where such a legality objection is brought, certification is linked to a court decision rejecting it.

These legality objections must be distinguished from the exchange-ratio claim under Article 53(5), which does not prevent certification or registration when the other conditions are satisfied. A creditor’s application for security under Article 54 does not, by itself, prevent the division from continuing or being registered either.

Commercial consequence: the transaction calendar should separately track publication, the meeting, shareholder notices, creditor proceedings, legality objections, certificates and each recipient’s registration. Contractual long-stop dates should leave room for the actual sequence and possible disputes.

Draft Articles 53–58.

When would the operation take legal effect?

The pre-operation certificate is an important milestone, but it is not the final legal event. The bill divides responsibility between the state of departure or the participating companies’ states and the destination or recipient jurisdictions.

For a merger ending in a European company, the applicable foreign law determines effectiveness, with notification to QKB. The draft coordinates deregistration of an outgoing Albanian entity with confirmation of the completed operation; it is not a process of first deleting the company and later attempting to establish a successor abroad.

The transfer or continuity of assets and liabilities also does not dispense with every asset-specific formality. Article 33 expressly preserves special declarations and registrations, including formalities needed for effectiveness against third parties in mergers. Property, security, licences, banking arrangements and contractual provisions should all be reviewed for their own requirements.

Once validly effective, the operations receive the protection against invalidation provided by the draft. That protection does not erase regulatory enforcement, tax obligations or criminal liability. Nor does it excuse a company from implementing employee or creditor safeguards.

Draft Articles 15–18, 30–33, 60, and 63–66.

Electronic filing and BRIS: distinguish legal design from operational readiness

The bill provides for electronic submissions and a register of cross-border operations, with certificate and information exchange through the European Business Registers Interconnection System (BRIS). Several provisions expressly link BRIS access or direct transmission to Albania’s participation, technical integration or EU accession.

Consequently, it would be premature to promise that every procedure will operate through a fully connected BRIS service immediately on the law’s commencement. Equally, those provisions do not justify saying that the entire law would apply only after EU accession: Article 69 contains the separate general commencement rule.

The Council of Ministers is authorised to establish technical procedures, application formats, QKB documents and service fees. Further ministerial formats are also contemplated. Before a transaction is launched, businesses should confirm the available filing route, certification practice, method of communication with the other registry and applicable fees. A free publication or registry-access provision should not be confused with a cost-free restructuring.

Draft Article 2(5)–(6), 9, 14, 26, 30(9), 51, and 58 and 60.

Corporate mobility would not mean automatic tax neutrality

The bill is principally a company-law framework. It should not be marketed as a general tax exemption, a tax-residence ruling or an automatic transfer of every licence. Article 4 expressly preserves competition and other regulatory or licensing requirements, and the operation-specific provisions preserve relevant public obligations.

A proposed structure should therefore be tested separately for:

• Tax and accounting: the treatment of gains, asset transfers, distributions and shareholder exits; tax residence and permanent establishments; VAT where relevant; available reliefs and their conditions; tax losses, transfer pricing and opening/closing accounting positions.
• Financing: lender consent, guarantees, pledged shares, financial covenants and any repayment or security consequences.
• Regulated activity: competition clearance where required, sector permissions and the status of licences in the resulting structure.
• Contracts and assets: change-of-control or reorganisation clauses, ownership records, leases, intellectual property and the enforceability of security.
• People and records: employment allocation, accrued entitlements, payroll continuity, personal-data handling and the transfer or retention of business records.

These are transaction-specific review points, not a statement that every item necessarily triggers a tax or consent in every case. The financial model should be prepared only after both the corporate route and the separate tax treatment have been checked in the affected jurisdictions.

Draft Article 4, 12, 23(5), 28(15), 33, 56(4), 57 and 67. The review points above are practical transaction analysis, not additional tax rules created by the bill.

Prepare the decision before committing to the transaction

Businesses do not need to reorganise simply because a bill has been filed. However, a group already considering expansion, relocation, consolidation or separation can use this stage to resolve the questions that are likely to determine whether a future transaction is workable.

1. Define the commercial objective. Decide whether the intended outcome is continuity in another jurisdiction, consolidation into one entity, or separation of a business. Compare the proposed statutory route with alternatives such as a share sale, asset transfer or new subsidiary.
2. Check eligibility on both sides. Identify the legal forms, countries, ownership structure and any insolvency or liquidation issues. Obtain advice on the counterpart jurisdiction’s route; do not assume that Albanian legislative alignment guarantees foreign acceptance.
3. Map what would move and what would remain. Prepare schedules of assets, debts, contracts, employees, licences, guarantees, pledged shares and ongoing disputes. For divisions, include unknown and contingent liabilities and an allocation mechanism.
4. Assess shareholder support and exit exposure. Review voting rights and constitutional requirements, commission the necessary valuation work and estimate the funds needed for valid cash exits or valuation adjustments.
5. Engage with finance and HR early. Identify lenders and creditors requiring attention, available security, employee representatives and existing participation arrangements. Build consultation into the decision process rather than leaving it to closing.
6. Model the total cost and timetable. Include tax analysis, notarial and expert work, translations and authentication where applicable, registry charges, creditor security and shareholder payments. Distinguish mandatory waiting periods from administrative review periods.
7. Document the legitimate business rationale. Keep board papers and supporting evidence consistent with the actual operation, financing and expected business activity. An unexplained paper restructuring is more likely to raise questions during scrutiny.
8. Use conditional commitments. Any deal relying on the new framework should account for enactment, the final wording, commencement, implementing measures, counterpart-country acceptance and required approvals. Do not treat a draft-law procedure as presently available merely because the transaction documents describe it.

Creditors considering a restructuring proposal should review the debtor’s intended allocation of assets and liabilities, the security offered and the relevant publication date. Shareholders should obtain advice before the meeting and preserve the required vote, notice and claim deadlines. Employees and their representatives should seek the information necessary to understand the proposed effect on their roles and representation.

What still needs to be confirmed before reliance on the new regime?

The most consequential points to follow during parliamentary consideration and implementation are:

• The final territorial scope: reconciliation of the EU/EEA scope with the third-country legal-opinion provisions.
• The adopted procedural text: whether the operation-specific deadlines, division waiting period and protection mechanisms remain unchanged.
• The transition for transactions already under way: Article 68 proposes repeal of the existing merger law, but the draft does not set out a detailed general grandfathering regime for pending transactions.
• Operational arrangements: application forms, fees, authorised-notary practice, QKB procedures and registry communication before full BRIS integration.
• The actual commencement date: to be calculated from Official Gazette publication of the enacted law, not the parliamentary submission date.

The proposal is significant because it could give businesses a more complete legal framework for reorganising across borders. Its usefulness for a particular client will depend on matching the right operation with a sound commercial purpose, the rules of both jurisdictions and a properly funded protection process.