When a physical personal has an interest in a foreign controlled entity, the profits of which are not taxable or exempt from tax in  the Republic of Albania, any retained earnings arising from 'passive income', shall be included in physical person’s taxable investment income.                                                                     Any foreign entity is considered a controlled foreign entity when the following conditions are met:
a) the physical person, or together with related persons, has a direct or indirect participation of more than 50 percent of the voting rights, or directly or indirectly owns more than 50 percent of the capital, or have the right to receive more than 50 percent of the profit of that entity; and
b) the current tax paid on its profit by the entity is less than 50 percent of the tax that would have been charged to the entity if it had been a resident entity in  the Republic of Albania.