The first law granting the right to association was passed in 1990. In 1994, a Civil Code further regulated the work of the sector by recognizing the right of citizens to voluntary establish non-profit organizations and defined associations and foundations as two types of non-profit organizations.
The overall CSO legal framework was passed in May 2001. The legal package includes three legal acts: Law Nr. 8781, dated 3.5.2001 on “Some Additions and Amendments to the Law Nr. 7850, dated 29.7.1994 on the Civil Code of the Republic of Albania”; Law Nr. 8789, dated 7.5.2001on “The registration of non-profit Organizations in Albania”; and Law Nr. 8788, dated 7.5.2001 on Non-profit Organizations. The legal framework contained a number of significant provisions according to which: organizational forms were defined; all natural and legal persons, including foreigners, can set an NGO, individuals have the right to establish informal, unregistered associations; it provides a procedure for international and foreign organizations to obtain legal entity status; enables organizations to engage in economic activities; organizations can receive grants and donations from any private or public person from Albania or abroad and limits state powers to terminate an NGO involuntarily.
On paper, the above legal framework is favorable and in line with accepted international standards and regional practice. However, there is a lack of clear regulations associated with the key CSO law and its implementation which means that many procedures remain unclear. For example, registration and regulation of trades unions, political parties and other forms of non-profit organization lie outside this Law. The procedures for registration of CSOs are considered clear and simple, but the requirement to register centrally at the District Court of Tirana has proved a barrier for many smaller grassroots organizations from outside Tirana.
NGO legislation has improved but it still remains incomplete on many aspects such as taxation and NGO engagement in economic activity for public benefit. In practice, there are still cases when NGOs face difficulties in achieving tax requirements and in understanding the procedures required to benefit from tax exemption status. In addition, many tax officials lack the necessary knowledge on NGO tax status to advise NGOs. Changes in the legal framework affecting civil society do not involve consultation with the sector and no information sessions are organized for civil society after these laws and regulations are approved. This has created skepticism among civil society organizations and Government.