Transformation of Foreign Companies’ Branches into Subsidiaries in Albania

Alban Alimema

Academic Journal of Interdisciplinary Studies, 2014, vol. 3

Abstract: The transformation of foreign companies’ branches into subsidiaries in Albania does not have a clear legal arrangement. The mergers and divisions of commercial companies are regulated under the Albanian Company Law but this law does not include provisions concerning the so-called spin-off transaction which is the most important form of division in most countries. It provides only the possibility of a partial spin-off, described as transfer of assets of a company in the form of contribution of capital in kind to a newly established or existing joint stock company, without defining clear procedures for this transaction. Meanwhile, the Albanian Bank Law, (amended in 2011) provides the establishment of a new bank through the transformation of a foreign bank’s branch exercising activity in Albania into its subsidiary. Following these amendments, until now two foreign banks have transformed their branches in Albania into subsidiaries. However, the situation of foreign companies with branches in Albania (not performing banking activities) is different due to the lack of clear legal provisions concerning the partial spin-off transactions. The aim of this paper is to analyze the legal possibilities for transformation of foreign companies’ branches into subsidiaries under Albanian legislation. The analysis will focus on company law, tax law and labour law, and it will also include a brief summary of the situation in other countries. First, it will analyze the legal possibilities of transformation of foreign companies’ branches into subsidiaries. Then the study will focus on the ways of transformation, legal procedures and legal consequences.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:bjz:ajisjr:900

DOI: 10.5901/ajis.2014.v3n6p81

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