Foreign investors hiring employees to conduct their business in Albania should be aware of the rules applicable under Albanian employment and tax legislation.

Pursuant to the Albanian Labour Code, an employment contract may be entered into and amended verbally or in writing in an agreement between the parties. When an employment contract is verbal, the employer should, within 30 days, compile a written document that contains the information required by the Labour Code. Failure to do so is subject to a penalty of 30 times the minimum salary imposed by labor authorities to the employer. The parties may choose a foreign law to govern their relationship, but such choice must not deprive the employee from the rights granted under the Albanian Labour Code insofar as the work is performed in Albania.

The written contract should contain at least the following information: identity of the parties; place of work; general job description; commencement date; duration, in case of a limited-duration contract; duration of paid leave; notification period for employment termination purposes; salary details and payment date; normal weekly working hours; and the collective contract in force (if any). All the mentioned elements must be clearly specified by the parties in order to avoid any potential claim in the process of employment termination.
The first three months of employment will be considered a probation period. This period can be reduced or removed upon mutual agreement between the parties.

An employer also is required to perform several declarations following the hiring of new employees (either local or foreign). Specifically, any employer must declare newly hired employees with the tax authorities at least 24 hours prior to the commencement of employment.
Foreign entities should become aware of a recent practice of tax authorities that requires commercial companies and Albanian branches or representative offices of foreign entities to declare the administrators in the monthly payroll, even if these individuals do not reside in Albania. In Albania, the employer is liable to withhold the personal income tax and social charges of its employees; this is applicable in the case of the administrator as well.

An employer should also declare with the competent labour office any vacant job position within seven days, any newly hired employee for that vacant job position, and the number of employees and the list of their names every three months.