The aim of this study was to identify the structural barriers that hindered the effective functioning of the state aid system in Albania in the context of European integration processes. The results of the study revealed substantial transformations in Albania’s state aid system between 2020 and 2023. A comparative analysis with European Union practices revealed considerable discrepancies, particularly in transparency, monitoring effectiveness, diversification of support instruments, and institutional independence of regulatory authorities. A critical analysis of the decisions of Albania’s State Aid Commission demonstrated an insufficient level of competition impact assessment, a lack of clear selection criteria, and limited monitoring mechanisms. The practical significance of the study lay in the possibility of using its results by Albanian state institutions for reforming the state aid system, by European experts for developing recommendations on legislative harmonisation, and by scholars and analysts for further research into the transformation of economic systems in EU candidate countries.