diff --git a/internal/pkg/config/config.go b/internal/pkg/config/config.go
index fa367857d..198f49f16 100644
--- a/internal/pkg/config/config.go
+++ b/internal/pkg/config/config.go
@@ -34,16 +34,20 @@ const (
 	ServiceAccountCustomEndpointKey = "service_account_custom_endpoint"
 	SKECustomEndpointKey            = "ske_custom_endpoint"
 
+	ProjectNameKey = "project_name"
+
 	AsyncDefault            = false
 	SessionTimeLimitDefault = "2h"
 )
 
-// Backend config keys
 const (
-	configFolder        = "stackit"
+	configFolder = "stackit"
+
 	configFileName      = "cli-config"
 	configFileExtension = "json"
-	ProjectNameKey      = "project_name"
+
+	profileFileName      = "cli-profile"
+	profileFileExtension = "txt"
 )
 
 var ConfigKeys = []string{
@@ -72,17 +76,14 @@ var ConfigKeys = []string{
 	SKECustomEndpointKey,
 }
 
-var folderPath string
+var configFolderPath string
 
 func InitConfig() {
 	configDir, err := os.UserConfigDir()
 	cobra.CheckErr(err)
-	configFolderPath := filepath.Join(configDir, configFolder)
+	configFolderPath = filepath.Join(configDir, configFolder)
 	configFilePath := filepath.Join(configFolderPath, fmt.Sprintf("%s.%s", configFileName, configFileExtension))
 
-	// Write config dir path to global variable
-	folderPath = configFolderPath
-
 	// This hack is required to allow creating the config file with `viper.WriteConfig`
 	// see https://github.com/spf13/viper/issues/851#issuecomment-789393451
 	viper.SetConfigFile(configFilePath)
@@ -107,22 +108,9 @@ func InitConfig() {
 	viper.SetEnvPrefix("stackit")
 }
 
-func createFolderIfNotExists() error {
-	_, err := os.Stat(folderPath)
-	if os.IsNotExist(err) {
-		err := os.MkdirAll(folderPath, os.ModePerm)
-		if err != nil {
-			return err
-		}
-	} else if err != nil {
-		return err
-	}
-	return nil
-}
-
 // Write saves the config file (wrapping `viper.WriteConfig`) and ensures that its directory exists
 func Write() error {
-	if err := createFolderIfNotExists(); err != nil {
+	if err := createFolderIfNotExists(configFolderPath); err != nil {
 		return fmt.Errorf("create config directory: %w", err)
 	}
 	return viper.WriteConfig()
diff --git a/internal/pkg/config/file_utils.go b/internal/pkg/config/file_utils.go
new file mode 100644
index 000000000..44b0ab38a
--- /dev/null
+++ b/internal/pkg/config/file_utils.go
@@ -0,0 +1,40 @@
+package config
+
+import (
+	"fmt"
+	"os"
+)
+
+// createFolderIfNotExists creates a folder if it does not exist.
+func createFolderIfNotExists(folderPath string) error {
+	_, err := os.Stat(folderPath)
+	if os.IsNotExist(err) {
+		err := os.MkdirAll(folderPath, os.ModePerm)
+		if err != nil {
+			return err
+		}
+	} else if err != nil {
+		return err
+	}
+	return nil
+}
+
+// readFileIfExists reads the contents of a file and returns it as a string, along with a boolean indicating if the file exists.
+// If the file does not exist, it returns an empty string and no error.
+// If the file exists but cannot be read, it returns an error.
+func readFileIfExists(filePath string) (contents string, exists bool, err error) {
+	_, err = os.Stat(filePath)
+	if err != nil {
+		if os.IsNotExist(err) {
+			return "", false, nil
+		}
+		return "", true, err
+	}
+
+	content, err := os.ReadFile(filePath)
+	if err != nil {
+		return "", true, fmt.Errorf("read file: %w", err)
+	}
+
+	return string(content), true, nil
+}
diff --git a/internal/pkg/config/file_utils_test.go b/internal/pkg/config/file_utils_test.go
new file mode 100644
index 000000000..b3453c661
--- /dev/null
+++ b/internal/pkg/config/file_utils_test.go
@@ -0,0 +1,89 @@
+package config
+
+import (
+	"os"
+	"testing"
+)
+
+func TestCreateFolderIfNotExists(t *testing.T) {
+	tests := []struct {
+		description  string
+		folderPath   string
+		needsCleanUp bool
+	}{
+		{
+			description: "folder exists",
+			folderPath:  "test-data/folder-exists",
+		},
+		{
+			description:  "folder does not exist",
+			folderPath:   "test-data/folder-does-not-exist",
+			needsCleanUp: true,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.description, func(t *testing.T) {
+			err := createFolderIfNotExists(tt.folderPath)
+			if err != nil {
+				t.Errorf("create folder: %v", err)
+			}
+
+			// Check if the folder was created
+			_, err = os.Stat(tt.folderPath)
+			if os.IsNotExist(err) {
+				t.Errorf("expected folder to exist but it does not")
+			}
+
+			// Clean up
+			if tt.needsCleanUp {
+				err = os.RemoveAll(tt.folderPath)
+				if err != nil {
+					t.Errorf("remove folder: %v", err)
+				}
+			}
+		})
+	}
+}
+
+func TestReadFileIfExists(t *testing.T) {
+	tests := []struct {
+		description string
+		filePath    string
+		exists      bool
+		content     string
+	}{
+		{
+			description: "file exists",
+			filePath:    "test-data/file-with-content.txt",
+			exists:      true,
+			content:     "my-content",
+		},
+		{
+			description: "file does not exist",
+			filePath:    "test-data/file-does-not-exist.txt",
+			content:     "",
+		},
+		{
+			description: "empty file",
+			filePath:    "test-data/empty-file.txt",
+			exists:      true,
+			content:     "",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.description, func(t *testing.T) {
+			content, exists, err := readFileIfExists(tt.filePath)
+			if err != nil {
+				t.Errorf("read file: %v", err)
+			}
+			if exists != tt.exists {
+				t.Errorf("expected exists to be %t but got %t", tt.exists, exists)
+			}
+			if content != tt.content {
+				t.Errorf("expected content to be %q but got %q", tt.content, content)
+			}
+		})
+	}
+}
diff --git a/internal/pkg/config/profiles.go b/internal/pkg/config/profiles.go
new file mode 100644
index 000000000..186af0b02
--- /dev/null
+++ b/internal/pkg/config/profiles.go
@@ -0,0 +1,51 @@
+package config
+
+import (
+	"fmt"
+	"os"
+	"path/filepath"
+	"regexp"
+)
+
+// GetProfile returns the current profile to be used by the CLI.
+//
+// The profile is determined by the value of the STACKIT_CLI_PROFILE environment variable, or, if not set,
+// by the contents of the profile file in the CLI config folder.
+//
+// If the environment variable is not set and the profile file does not exist, it returns an empty string.
+//
+// If the profile is not valid, it returns an error.
+func GetProfile() (string, error) {
+	profile, profileSet := os.LookupEnv("STACKIT_CLI_PROFILE")
+	if !profileSet {
+		profileFilePath := filepath.Join(configFolderPath, fmt.Sprintf("%s.%s", profileFileName, profileFileExtension))
+		contents, exists, err := readFileIfExists(profileFilePath)
+		if err != nil {
+			return "", fmt.Errorf("read profile from file: %w", err)
+		}
+		if !exists {
+			return "", nil
+		}
+		profile = contents
+	}
+
+	err := validateProfile(profile)
+	if err != nil {
+		return "", fmt.Errorf("validate profile from env var: %w", err)
+	}
+	return profile, nil
+}
+
+// validateProfile validates the profile name.
+// It can only use letters, numbers, or "-" and cannot be empty.
+// If the profile is invalid, it returns an error.
+func validateProfile(profile string) error {
+	match, err := regexp.MatchString("^[a-zA-Z0-9-]+$", profile)
+	if err != nil {
+		return fmt.Errorf("match string regex: %w", err)
+	}
+	if !match {
+		return fmt.Errorf("profile name can only contain letters, numbers, and \"-\" and cannot be empty")
+	}
+	return nil
+}
diff --git a/internal/pkg/config/profiles_test.go b/internal/pkg/config/profiles_test.go
new file mode 100644
index 000000000..8e96a6e88
--- /dev/null
+++ b/internal/pkg/config/profiles_test.go
@@ -0,0 +1,59 @@
+package config
+
+import "testing"
+
+func TestValidateProfile(t *testing.T) {
+	tests := []struct {
+		description string
+		profile     string
+		isValid     bool
+	}{
+		{
+			description: "valid profile with letters",
+			profile:     "myprofile",
+			isValid:     true,
+		},
+		{
+			description: "valid profile with uppercase letters",
+			profile:     "myProfile",
+			isValid:     true,
+		},
+		{
+			description: "valid with letters and hyphen",
+			profile:     "my-profile",
+			isValid:     true,
+		},
+		{
+			description: "valid with letters, numbers, and hyphen",
+			profile:     "my-profile-123",
+			isValid:     true,
+		},
+		{
+			description: "invalid empty",
+			profile:     "",
+			isValid:     false,
+		},
+		{
+			description: "invalid with special characters",
+			profile:     "my_profile",
+			isValid:     false,
+		},
+		{
+			description: "invalid with spaces",
+			profile:     "my profile",
+			isValid:     false,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.description, func(t *testing.T) {
+			err := validateProfile(tt.profile)
+			if tt.isValid && err != nil {
+				t.Errorf("expected profile to be valid but got error: %v", err)
+			}
+			if !tt.isValid && err == nil {
+				t.Errorf("expected profile to be invalid but got no error")
+			}
+		})
+	}
+}
diff --git a/internal/pkg/config/test-data/empty-file.txt b/internal/pkg/config/test-data/empty-file.txt
new file mode 100644
index 000000000..e69de29bb
diff --git a/internal/pkg/config/test-data/file-with-content.txt b/internal/pkg/config/test-data/file-with-content.txt
new file mode 100644
index 000000000..d89fbd214
--- /dev/null
+++ b/internal/pkg/config/test-data/file-with-content.txt
@@ -0,0 +1 @@
+my-content
\ No newline at end of file
diff --git a/internal/pkg/config/test-data/folder-exists/dummy.txt b/internal/pkg/config/test-data/folder-exists/dummy.txt
new file mode 100644
index 000000000..e69de29bb