“Liberia: An Investor-Friendly Paradise” goes the famous NIC chant. But exactly what does that mean, and how can you do business in Liberia?
Below I will show you three paths investors typically follow to do business in Liberia and explain how each path works. Based on that, you can decide where your business fits and subsequently choose a path.
The Liberian private sector consists of two types of business; formal and informal. Regardless of the size or nature of the business, the Business Laws and regulations of Liberia considers a business as formal if the business has a valid business registration from the Liberia Business Registry (LBR), an article of incorporation, and a valid tax clearance from the Liberia Revenue Authority (LRA). If the business does not have the above mentioned documents, it is considered an informal business.
The current status of the Liberian private sector host a large number of micro, small, and medium enterprises (MSME) mostly in informal trading, sustenance agriculture, small scale manufacturing and value addition, and service, on the one hand; and huge mining and agriculture Transnational Companies(TNC) commonly known as Concessions on the other hand.
Normally, any investor, domestic or international seeking to start a business in Liberia must take one of three paths: A Standard Business; Special Investment Incentives; and Concession or Private Public Partnership. Each of these paths are equally important and beneficial to the growth and stability of Liberia.
1. Standard Business – no incentive required
A standard business is one where the investor, without any assistance from the government, registers his business and begins transaction with the domestic and international markets. In this category, the investor is not seeking any incentive from the Government of the Republic of Liberia. He or she is simply interested in doing business in the Liberian market place.
Typically, these are usually small businesses with capital less than US $500,000, but some larger business fall into this category as well.
It’ll take about 6 days to a week to set up your business. That includes; Registration, paying taxes and Incorporation.
You will also need specific licenses and permits depending on the sector your investment is in. For information on licenses and permits for LNIC’s priority sectors,Contact.
2. Special Investment Incentives
The Liberia Special Investment Incentives as set forth in the Economic Empowerment Tax Amendment Act of 2016 provides special fiscal and non-fiscal incentives for signature investments in one of the 15 priority sectors.
The incentives are applicable to any business, both domestic and international investing no less than $500,000.00 over a period of five years.
$50,000.00 for those investing in clinics and medical facilities.
It’ll take about 3 months to have all relevant application documents evaluated in order to obtain the incentives.
Extra consideration from the government in the form of Concessions or Public Private Partnerships are granted only for businesses that invest greater than US $10 Million.
This process is usually longer and requires ratification from the Legislature.
For info on the process for negotiating a concession, visit here.
These are the three paths you must follow to do business in Liberia, except you intend to operate as an informal business. In that case you can ditch these steps and get right into it. But I highly recommend against it.
I’ll tell you why in my next post.
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