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Key Considerations for Employers Hiring in Albania: Labor Law Compliance and Best Practices

10.04.2025

Albania has an evolving labor market that offers opportunities for both local and foreign businesses. However, employers must navigate the country’s labor laws to ensure compliance and protect both their interests and those of their employees. This article outlines key legal considerations for employers hiring in Albania, covering employment contracts, working hours, employee rights, termination procedures, and hiring foreign workers.

Employment Contracts in Albania

Albanian labor law requires that all employment relationships be formalized through a written contract. This contract must clearly define the job title and description, specify the salary and payment terms, outline working hours, rest periods and probation period, which is up to three months. Additionally, it should state whether the contract is for a fixed term or indefinite term. Employers who fail to formalize contracts in writing may face legal disputes and financial penalties, making it essential to ensure that employment agreements are properly drafted and legally compliant.

Working Hours and Overtime Regulations

The Albanian Labor Code sets clear parameters regarding working hours. The standard workweek consists of forty hours, typically distributed over five days. When it comes to overtime, employers must compensate extra working hours at an increased rate. Work performed on a weekly rest day must be compensated with at least a twenty-five percent wage supplement or equivalent paid leave, plus an additional paid rest of at least twenty-five percent of the hours worked. Work performed on public holidays that fall on a regular workday must be compensated with a wage supplement of at least twenty-five percent, along with paid leave equal to the hours worked.

Employers should carefully track employee working hours and ensure compliance with overtime regulations to prevent potential disputes and legal consequences.

Employee Rights and Employer Obligations

Employers in Albania must adhere to a set of regulations designed to protect employees’ rights. One key aspect is the minimum wage, which is set by the government and must be honored in all employment agreements. Employees are also entitled to 22 work days of paid annual leave, a crucial component of maintaining work-life balance. Parental leave is another significant benefit, with maternity leave extending for one year, including a mandatory period of thirty-five days before childbirth and sixty-three days post-birth. Fathers are also granted paternity leave. Furthermore, employers must contribute to the social security and health insurance schemes for their employees, ensuring that workers have access to essential benefits. Compliance with these obligations is crucial for fostering a fair and lawful workplace.

Termination of Employment

Terminating an employment contract in Albania must be handled carefully to comply with legal requirements and prevent wrongful dismissal claims. The notice period for termination varies depending on the length of employment but typically ranges from one to three months. In cases where an employee is dismissed without just cause and without following the procedures, they may be entitled to severance compensation. To avoid legal complications, employers should document any performance-related concerns and ensure clear communication before proceeding with termination.

Work Permits for Foreign Employees

Businesses seeking to hire foreign nationals in Albania must comply with visa and work permit requirements. The process generally involves obtaining a residence and work permit (unique permit) for the employee. It is important to note that Albanian citizens are given priority in employment opportunities. The National Agency for Employment and Skills reviews and approves the employment of foreign workers, ensuring that local labor market needs are met before allowing the hiring of non-Albanian employees.

Employers must also demonstrate that the foreign hire meets the necessary qualifications or experience required for the job. Additionally, the employer is responsible for registering the foreign employee with the Albanian tax and social security system. Failure to obtain the appropriate permits may result in fines and legal restrictions, making it essential for businesses to adhere to immigration and labor regulations when hiring foreign staff.

Employer Tax and Contribution Obligations

Employers in Albania are required to contribute to social and health insurance on behalf of their employees. These contributions are shared between the employer and the employee:

• Social Insurance Contributions: Employers contribute 15% of the employee’s gross salary, while employees contribute 9.5%.
• Health Insurance Contributions: Both employers and employees contribute 1.7% each.

Additionally, businesses must deduct personal income tax from employees’ salaries. Personal income tax is calculated based on the gross salary, as follows:

Salary Income in ALL/month		Taxable Income in ALL/month		Tax Rate in Percentage/month
From	Until	From	Until
0	50.000	0	50.000	0%
50.001	60.000	0	35.000	0%
		35.001	60.000	13% of the amount over 35.000 ALL
60.001	More	0	30.000	0%
		30.001	200.000	13% of the amount over 30.000 ALL
		200.001	More	22.100 + 23% of the amount over 200.000 ALL

Net Salary = Gross Salary – (9.5% of Gross Salary) – (1.7% of Gross Salary) – Personal Income Tax.

Proper calculation and timely payment of these contributions are crucial to ensuring compliance with Albanian tax laws and avoiding penalties.

How we can help

Navigating labor law requirements in Albania can be complex, but ECOVIS Albania is here to assist businesses in ensuring compliance and optimizing their employment practices.

It is crucial for employers to establish well-drafted contracts, comply with working hour regulations, respect employee rights, follow proper termination procedures, and manage foreign hires appropriately.

By staying informed and seeking legal guidance, businesses can create a lawful and efficient work environment while avoiding costly labor disputes.

Labor & Employment Law in Croatia – 2025 Edition

10.04.2025

Croatia at a Glance

• Capital: Zagreb
• Area: 56,594 square kilometers (21,851 square miles)
• Population: Approximately 4 million (as of 2023)
• Location: Croatia is located in Southeast Europe, bordering the Adriatic Sea to the west. It shares land borders with Slovenia to the northwest, Hungary to the northeast, Serbia to the east, and Bosnia and Herzegovina and Montenegro to the southeast
• Political System:  parliamentary republic
• Head of State: The President, currently Zoran Milanović (as of 2025)
• Head of Government: The Prime Minister, currently Andrej Plenković
• EU Membership: Croatia has been a member of the European Union since 01st July 2013
• Currency:  EURO as of 01st January 2023
• Official Language: Croatian
• Economy:
  • GDP: Croatia’s GDP in 2023 was approximately $73 billion USD.
  • GDP Growth Rate: The economy has shown steady growth over the past years, with a growth rate of around 4.5% in 2023.

Hiring in Croatia at a Glance

General premises and requirements

• Written contract
• Gender equality
• Protection of pregnant employees, protection of employees on maternity/paternity leave
• Protection from harassment
• Protection from discrimination
• Protection of whistleblowers
• Minimum rights guaranteed by law
• Employer may always grant more benefits than set by law

Minimum salary (gross)

• 970,00 EUR (gross)

Minimum salary (total cost for the employer)

• 1.130,05 EUR (health contribution calculated)

Standard working week

• 40 hours

Annual leave

• 4 full weeks minimum

Types of employment

• Full time
• Part-time
• Indefinite period
• Definite period (maximum of 3 years)
• Combinations of all the above possible.

Mandatory (statutory) benefits

• Pension insurance
• Health insurance

Common non-mandatory benefits

• Public transportation allowance
• Warm meal allowance
• Bonuses
• Work from home options
• Supplementary health and/or pension insurance

Notice periods

• Between 2 weeks and 3 months
• Increased for employees over 50

Employment of foreigners

• EU and EEA citizens – allowed to work in Croatia without any type of permit; have certain obligations regarding registration of residence
• Third (non EU/non EEA) countries – work and residence permit required

Key regulations

• Labour Act
• Employment by-laws (mandatory for employers with 20 + employees)
• Collective bargaining agreements (for industries, professions, big companies)
• Foreigners’ Act (for employment of third-country citizens)

Employment Contract

As set by the provisions of the Labour Act, employment relations are established by the employer and employee entering into a written employment contract.

Mandatory minimum content of the employment contract as set by the Labour Act:

• names, addresses and Personal identification number (OIB) of the parties;
• date of the conclusion of the employment contract and date of commencement of work;
• place of work;
• work position, i.e. job description, nature and type of work the employee will be performing,
• whether the contract is concluded as an open-ended or a fixed-term contract, and the date of termination or the expected duration of the contract in the case of a fixed-term employment contract;
• duration of paid annual leave;
• procedure in case of dismissal and the notice periods that the employee or employer must comply with;
• gross salary, including the gross amount of the basic or contracted salary, allowances and other payments and payment periods, and other payments to which the employee is entitled;
• daily and weekly working hours duration;
• whether full-time or part-time work is contracted;
• right to education, training and professional development;
• duration and conditions of the probationary period, if contracted (maximum is 6 months).

Duration of employment

• As a rule, employment is contracted for an indefinite period
• Labour Act specifies situations where definite duration of employment may be contracted (fixed-term employment) e.g. replacement of a temporarily absent worker, performance of work duration of which, due to the nature of its performance, is limited by a deadline or an occurrence of a particular event
• Maximum duration of fixed-term employment is 3 years
• Probationary period up to 6 months may be contracted for both indefinite employment and fixed-term employment

Working hours

• Regular working week is 40 hours (8 hours per day, distributed over the course of 5 days)
• employee working at least 6 hours per day is entitled to a minimum 30 minutes break each day, included in the working hours
• employees are entitled to a daily minimum rest period, i.e. daily rest between two successive working days of at least 12 consecutive hours
• employees are entitled to a weekly rest period, i.e. at least 24 consecutive hours – to which a daily rest is added – which generally means that they do not work on Sundays
• in case of rescheduled working hours, which must be justified by special business needs, working week may be extended to 48 hours. Exceptionally, the working week may be extended to 56 hours per week, but only if the employee gave his consent and if that possibility was foreseen by the collective bargaining agreement.
• different regulation for seasonal work
• overtime work is only allowed under special circumstances and at the employer’s written request, with a cap of 10 hours of overtime work per week and 180 hours per year
• for some categories of employees, their consent is required for overtime work
• overtime work is to be compensated for
• working on weekends and public holidays must be justified by a special business need in order to be lawful and is paid extra (in cases of work on Sundays, the minimum increase is 50%)
• heavy-duty work and night-shift work is also paid extra.

Salary

• Government-mandated minimum wage – Regulation on the minimum wage rendered by the Government, once per year
• In 2025, minimum wage is 970,00 EUR; gross amount (so called “gross 1”)
• To the gross 1 amount, health contribution is added, thus making the complete cost for the employer (so called “gross 2”) 1.130,05 EUR
• Paying salary lower than the minimum is an offence
• Certain professions have regulated minimum wage
• Collective bargaining agreements for industries, professions and/or companies often set minimum wages for the area they regulate
• Any decrease in the salary must be agreed by both parties, employer and employee

Paid annual leave (holiday)

• employee is entitled to a paid annual leave of at least 4 weeks per year
• public holidays and statutory non-working days are not included in the annual leave
• employees working on jobs with harmful consequences and under-age employees are entitled to 5 weeks of paid annual leave per year
• increased annual leave may be stipulated by the collective bargaining agreements, employment by-laws or individual employment contracts
• if the employment contract is terminated, the employee is entitled to compensation for the unused part of their annual leave
• payment in lieu of holiday is not permitted
• unused annual leave is transferred to the next year and must be spent until 30th June
• in addition, employees are entitled to up to 7 days of personal leave due to reasons such as the death of a family member, moving, wedding etc.

Sick leave

• employees are required to notify their employer immediately on their temporary inability to work due to illness
• employee are also required to provide a medical certificate within a period of 3 days
• during the period of sick leave the employee is entitled to receive sick pay based on their average salary, but not less than 70%
• if the employee´s sick leave lasts longer than 42 days, then sick pay is to be paid by the Croatian Health Institute.

Termination of employment

• An employment contract may be terminated:
  • by the death of the employee;
  • by the death of the employer who is a natural person
  • by the death of the employer who is a sole proprietor, if there has been no transfer of sole proprietorship in accordance with a special regulation
  • by the cessation of sole proprietorship by force of law in accordance with a special regulation
  • by the expiry of the time for which the fixed-term employment contract has been concluded
  • when the employee reaches 65 years of age and 15 years of pensionable service, unless otherwise agreed by the parties
  • by mutual agreement of the employee and the employer
  • on the day of notification to the employer of the finality of the decision on the recognition of the right to disability pension due to complete loss of working capacity
  • by dismissal (termination, notice)
  • by a decision of the competent court.
• Notice (dismissal) must be in written form and stating the reasons therefore, as well as the payments to be made to the employee upon the termination of the employment
• Notice periods are proportional to the employee’s duration of service with the same employer and range from a minimum of two weeks to three months; after 20 years of service, the notice period increases by two weeks for employees aged at least 50 years and by one month for employees aged at least 55 years.
• During the notice period the employee is entitled to receive their salary and all other entitlements under statute.
• 3 types of notices – business-caused notice, personal notice and summary notice; all require valid and specific reasons
• Certain categories of employees are protected from notice
• Severance pay is compulsory with business-caused and personal notice and after 2 years of service with the same employer

Summary

Employment is a heavily-regulated field in Croatia. Employees are well protected in comparison to other countries and dismissing employees is challenging. Employers are also subject to numerous heavy fines in case of non-compliance with the legislation; consequently requiring them to invest in human resources and legal support.

Mergers and Acquisitions in the Dominican Republic: Insights and Considerations

10.04.2025

Mergers and acquisitions (M&A) are powerful tools for businesses seeking to expand, consolidate, or diversify their operations. In the Dominican Republic, the growing economy and favorable investment climate have made M&A transactions increasingly common. However, navigating the legal, financial, and operational complexities of these deals requires careful planning and specialized expertise.

Working with a multi-disciplinary firm like ECOVIS VS+B can provide the comprehensive support needed to ensure a successful transaction. From due diligence and legal structuring to tax optimization and post-merger integration, a coordinated approach can mitigate risks and maximize value.

Understanding the Legal Framework

M&A transactions in the Dominican Republic are primarily governed by the General Law of Commercial Entities and Limited Liability Companies (Law 479-08), along with other sector-specific regulations. The legal framework covers aspects such as shareholder rights, corporate governance, and regulatory approvals.

Key legal considerations include:

• Due Diligence: Conducting a thorough legal review to assess the target company’s compliance, liabilities, and contractual obligations.
• Regulatory Approvals: Certain sectors, including financial services, telecommunications, and energy, may require government or regulatory authority approval.
• Contractual Negotiations: Drafting and negotiating sale and purchase agreements (SPAs), shareholder agreements, and other essential contracts to safeguard the interests of all parties.

Additionally, M&A transactions often involve particular challenges in the Dominican Republic. Issues related to employment contracts, intellectual property rights, and government permits are frequently encountered. Labor laws require careful analysis to ensure the proper treatment of employee benefits and liabilities during a transfer of ownership. Likewise, the management of intellectual property, including trademarks, patents, and copyrights, must be properly addressed to prevent post-transaction conflicts.

The experienced legal professionals at ECOVIS VS+B provide expert guidance in navigating these complexities, ensuring compliance, and reducing the risk of legal challenges.

Impact on Free Competition

Another important consideration in M&A transactions is the potential impact on market competition. The Dominican Republic’s General Law of Competition (Law 42-08) regulates actions that could restrict or distort free competition.

The National Commission for the Defense of Competition (ProCompetencia) has the authority to review and approve mergers and acquisitions that may significantly affect market dynamics. Companies may be required to notify ProCompetencia of the transaction if the deal exceeds certain financial thresholds or involves key industries.

Key factors assessed include:

• Market Concentration: Evaluating whether the transaction will create a dominant market position.
• Consumer Impact: Analyzing how the deal could influence pricing, quality, and market innovation.
• Barriers to Entry: Determining if the transaction could prevent or discourage market entry by new competitors.

ECOVIS VS+B’s legal team provides comprehensive support in navigating competition law compliance, preparing merger notifications, and representing clients before ProCompetencia when required.

Employment Law Considerations

M&A transactions often have significant labor implications. The Dominican Labor Code ensures strong protections for employees, requiring careful planning to manage labor obligations.

Key considerations include:

• Employee Rights and Severance: Employees are entitled to severance payments if terminated without justified cause. Severance liabilities can significantly impact the transaction value.
• Acquired Rights: Employers must honor any additional benefits or agreements beyond legal requirements, including bonuses, insurance, and allowances.
• Joint Liability: In mergers or business transfers, the acquiring company may be jointly liable for all previous labor obligations.

ECOVIS VS+B assists clients in navigating these labor law complexities, ensuring proper compliance and minimizing risks.

Tax Law Implications

The Dominican Tax Code, as well as Decree 408-10 on Business Reorganization, imposes specific requirements on M&A transactions. Tax authorities must be notified in advance of any planned mergers.

Key tax considerations include:

• Capital Gains Tax: Applied to the sale of shares or assets, calculated as the difference between the sale price and the acquisition cost.
• Transfer Taxes: Real estate and vehicle transfers incur taxes of 3% and 2%, respectively, based on the higher of the sale price or appraised value.
• Tax Loss Carryforwards: Losses from the companies involved in a merger cannot be transferred or deducted by the surviving entity.

ECOVIS VS+B’s tax advisors ensure compliance with tax regulations, manage filing obligations, and identify opportunities for tax efficiency.

Sector-Specific Regulations

Certain sectors in the Dominican Republic require government approval for M&A transactions. Agencies such as Indotel for telecommunications, the Monetary Board for financial institutions, and the Insurance Superintendence for insurance companies, regulate sector-specific approvals.

Key regulated sectors include:

• Telecommunications: Mergers in this sector are subject to approval by Indotel to ensure market competition.
• Banking and Finance: Transactions involving financial institutions require prior authorization from the Monetary Board.
• Energy and Electricity: The Electricity Superintendence assesses mergers to prevent market monopolization.

ECOVIS VS+B’s regulatory specialists guide clients through the approval processes, ensuring compliance with sector-specific regulations.

Financing M&A Transactions

Financing is a critical aspect of M&A. Transactions in the Dominican Republic are commonly financed through:

• Bank Loans: Both local and foreign banks provide acquisition financing, often secured by the target company’s assets.
• Private Equity: Private equity funds are increasingly involved in M&A transactions, providing capital in exchange for equity.
• Debt Financing: Bonds and other securities may be issued to fund acquisitions.

ECOVIS VS+B’s financial advisors provide strategic advice on selecting the optimal financing structure and negotiating favorable terms.

About ECOVIS VS+B in the Dominican Republic

At ECOVIS VS+B, we offer a comprehensive range of legal, tax, and financial advisory services tailored to the complexities of M&A transactions. Our team of experienced professionals is equipped to guide clients through every stage of the process, providing strategic insights and practical solutions.

With a deep understanding of the Dominican market and access to the global ECOVIS International network, we offer the local knowledge and international expertise needed to navigate cross-border and domestic transactions alike.

Whether you are considering an acquisition, merger, joint venture, or divestiture, ECOVIS VS+B is your trusted partner for achieving successful outcomes.

Contact us today to learn how we can support your M&A strategy in the Dominican Republic.