In the context of the governmental program to establish a regulatory and institutional basis which supports and favors the creation and development of new businesses with high growth potential, in the field of technology and innovation, known as Innovative Start-up, the Albanian Parliament has approved the Law no. 36/2023 on “Amendments and supplements to the Law no. 25/2022 on “Support and development of start-ups” (the “Amendment”), which was entered into force on 28 June 2023.
One of the main novelties of the Amendment is the regulation, support, and development of the support schemes for the Digital Nomads.
Digital Nomads are defined by the Law as foreign citizens, who use communication technology to provide their professional services and/or perform these services on behalf of entities outside the territory of the Republic of Albania, without having a registered office or headquarters, who receive the status and the benefits of the "Digital Nomad" in accordance with the provisions of the legislation in force “On foreigners”.
Support schemes for Digital Nomads
According to the Amendment the following fiscal facilities will be undertaken by the government to incentive the activity of Digital Nomads in the territory of the Republic of Albania:
a) As an exemption from the tax residence definition, Digital Nomads will not be considered tax residents in the Republic of Albania for a period of 12 months.
b) Despite any provisions of the Law on Income Tax, a non-resident entity shall not be considered to have established a permanent seat in the Republic of Albania just because it receives services from a Digital Nomad or only because it has hired a Digital Nomad.
c) The activity of the Digital Nomad will not be considered to have established a fixed place of business and the Digital Nomad will not be considered to be acting as an independent agent of a non-resident entity in the Republic of Albania provided that does not have the authority to conclude contracts on behalf of the non-resident entity, or does not engage in any activity that is not related to his role as Digital Nomad.
d) The Digital Nomads can exercise their activity after being provided with the Unique Permit, in accordance with the provisions of the Law "On Foreigners". Another important amendment that affects all start-ups is the determination of a 24 (twenty-four) months incubation period, from the moment of self-declaration in the start-up register, with the right of renewal. During these periods the entities can hold the status as “Start-up” and benefit the facilities provided by the Law.
The Amendment also provides for the establishment of the Agency responsible for the development and support of start-ups (the “Agency”). The Agency will be the competent authority for the administration of the Register of Start-ups, as well as the management and monitoring unit for the implementation of financial support schemes provided by public funds or third parties funds for initiatives in the start-ups ecosystem.
The Agency will be responsible for development and support of start-ups during the incubation period, until the end of the implementation of the project financially supported as a start-up or facilitator of start-ups. It will periodically monitor start-ups and facilitators of start-ups that have received support measures through grants.
Additionally, two new bodies will be established for evaluation of requests from start-ups and start-up facilitators, respectively the “Evaluation Commission” and the “Appeal Commission”.
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