Hire Contractors In Albania

Albania is a stunning nation in southeast Europe. This nation's laws are crafted with foreign ownership and financial investment in mind, in an attempt to draw in international companies. 

Foreign investors can participate in any sector of the economy in Albania and do not require previous government authorization. 

Due to these advantages, Albania is desirable for numerous international enterprises for hiring. 

However, hiring independent contractors globally is easier said than done. It necessitates a thorough comprehension of Albanian Employment Law, payroll regulations, and tax requirements

But how can you easily navigate the complex laws and hire talented and skilled contractors in the country? 

In this article, we will provide a step-by-step guide on how to hire contractors in Albania in a compliant and successful manner.

How to Hire Contractors in Albania

There are two main ways you can hire independent contractors in Albania.

• You can either choose to hire directly, or
• You can also utilize the services of an AOR, such as Skuad, to facilitate the hiring process. 

To hire contractors in Albania directly, you need to define project/work requirements, source for qualified candidates, hire in compliance with local laws, negotiate pay, and manage payments all by yourself.

As a simpler alternative, you can hire contractors in Albania using Skuad’s AOR solution.

Hiring Contractors Through Skuad AOR

• With Skuad AOR, you can streamline the onboarding process, ensure legal compliance, and ensure a hassle-free international experience.
• From drafting locally compliant contracts to making quick, accurate payments in over 100 currencies, Skuad offers everything you need. 
• We help you avoid the misclassification of independent contractors and hefty penalties. 
• We also have a built-in IP protection system that guarantees the safety of your company’s IP under the laws of the country where your contracts work. 
• Later, if you plan to shift from contractors to employees, we help you seamlessly transition, keeping the employment history and records of individuals. 

How to Pay Contractors in Albania

There are two main ways you can pay independent contractors in Albania.

• Paying contractors directly: You can either pay directly without seeking the service of contractor management software or an AOR. This will give you more autonomy and flexibility over the entire payment process. However, you must also know Albania's local payroll and tax regulations to ensure compliance.

• Paying contractors through AOR Skuad: Skuad automates the entire payment process in Albania, simplifying each step, from multi-currency payouts to compliance. Its automated invoice contractor invoice creation reduces the administrative burden on your behalf and allows you to better focus your time and resources on other pressing business issues. 

Additionally, Skuad boasts other excellent features, such as customizable reports, real-time expense tracking, multiple payment options, and more.

Challenges of Hiring Contractors in Albania

The first step to hiring independent contractors in Albania is establishing a proper contractor onboarding process. However, even then, you may encounter quite a few challenges. 

1) Complicated Labor Laws

In Albania, agreements for independent contractors differ from those for regular employment. The primary legislation that puts out specific guidelines is the Albanian Civil Code. Two of its main provisions include,

• There is no specific compensation bracket or defined way to establish the compensation amount in the contract. In that case, the price is determined based on the existing rates or local customs. If disagreements arise, the court assumes full responsibility for resolving the issue. 
• Under Article 857 of the Albanian Civil Code, an independent contractor cannot subcontract the performance of work or services unless he has received specific authorization from the customer. 

A careful and thorough understanding of all these nuances is essential for you as a business owner who wishes to hire contractors in Albania. Without it, you will likely be charged with hefty penalties or, worse, face the risk of worker misclassification. 

2) Payroll Challenges

The payroll policies for contractors are different from those of employees. The process can also often get difficult to understand when you decide to hire contractors in Albania. 

It includes provisions such as,

• The personal tax income rate in Albania is currently set at 10%. 
• However, self-employed individuals with an annual turnover of Leke 2,000,000 are not required to file an Annual Tax Return. 
• Additionally, the Albanian government has introduced some specific changes, under which individuals who have reached the retirement age but continue to be registered as self-employed are no longer required to pay for compulsory social security contributions.

However, these are only some of the many regulations included in Albania's payroll system. 

To ensure full compliance, you need a powerful payroll mechanism that can sometimes be extremely difficult to implement due to monetary restrictions, especially for small businesses.

3) High Youth Unemployment Rate

The high youth unemployment rate has been a persistent issue haunting the Albanian economy. One of the main reasons for this is the significant difference in workers' skills. 

Only a tiny part of the Albanian population is well-qualified. While Albania has a tech-savvy workforce, especially among the younger generation, companies may have difficulty accessing this talent pool when hiring contractors. 

In addition, the percentage of women participating in the labor workforce is significantly lower than that of men. Several reports reveal that in urban areas, women earn as much as 6.6% lower than men.

Hiring Contractors Directly vs Hiring Contractors via Skuad

Let’s see how hiring contractors directly differs from contractor management software:

Costs of Hiring Contractors in Albania

The costs of hiring contractors in Albania usually differ based on the industry or even the contractor's level of experience. 

For example, those working in construction or building usually earn around 59,700 monthly. Similarly, employees working in the agriculture or food industry receive around 42,354 ALL per month. 

In addition, contractors with many years of experience might also charge you more because of the high level of expertise and skill set that they bring to the table.

But, by choosing to hire a contractor in Albania, you can avoid employer contributions and some employee benefits as contractors are not entitled to them. 

How To Convert A Contractor Into An Employee in Albania

Contractor management and converting them into a full-time employee in Albania does not have to be complicated if you simply follow the steps below.

• Review the rules of employee classification

Albanian labor laws lay down specific guidelines for determining whether a worker is a full-time employee or a contractor. Please carefully review all these regulations and understand the requirements before proceeding with the conversion process. 

• Offer the role to the employee

Get directly in touch with the contractor and communicate all the necessary details related to the terms of employment to them. This may include anything from expected responsibilities to salaries and benefits. 

• Collect your employee’s information

Gather the employee’s personal and professional information for tax purposes. Conduct a thorough background check and move forward with the onboarding process if required. This may involve drafting a formal written contract, adding them to the regular payroll, and converting their hourly payments to annual salary. 

In addition to all these steps, be aware of the distinction between 1099 and W-2 classifications and the pros and cons associated with each to ensure a seamless transition.

Hire Contractors in Albania with Skuad

With expertise in over 160 countries, Skuad has been a game-changer when hiring contractors globally. 

Its unified platform facilitates international hiring, from contractor onboarding to payments, invoicing, compliance, and more.

Our digital onboarding system makes making international payments easier than domestic ones. 

What’s more? You no longer need to spend hours in payroll and contractor management since Skuad handles all these aspects within minutes and is devoid of errors.

So, wait no more. 

‍Book a demo with us today and experience a seamless international hiring journey only with Skuad!

FAQs

Q1: Can I hire an independent contractor overseas?

Ans: Yes, hiring independent contractors overseas is a common strategy applied by multiple businesses worldwide to access global talent. It not only increases the business’s flexibility but also leads to reduced costs associated with hiring full-time employees. 

Q2: Do I have to notify the IRS when hiring a foreign contractor working in a foreign country?

Ans: No, you do not have to notify the IRS when hiring a foreign independent contractor working entirely in their home country of Albania, as long as the payments are not considered US-sourced income.

Q3: Do I need to issue a 1099 to a foreign contractor?

Ans: You must not issue Form 1099 to all foreign contractors. It is only required if the contractor is a US citizen located internationally or lives abroad and provides services in the US.

Q4: How does Skuad help hire independent contractors in Albania?

Ans: With Skuad as your AOR, you can simplify the entire contractor onboarding process while maintaining full compliance with labor laws in Albania. It offers robust capabilities, such as automated invoicing and payments, payroll in 100+ currencies, bullet-proof privacy, and data security, all essential for hiring contractors in Albania.

Q5: Where is the best place to find independent contractors?

Ans: Fiverr, LinkedIn, Behance, and Indeed are currently some of the most popular platforms for companies to find and hire independent contractors easily.