Liberia

Executive Summary

The Republic of Liberia is located on the Western coast of Africa near Sierra Leone, Cote d’Ivoire and Guinea. It covers a total area of slightly less than 111,500 sq km. Liberia was founded by freed slaves from the US who named the capital of the country in honor of the president James Monroe – Monrovia. Independence from the US has been obtained in 1847. A significant political instability in the 80ies of the 20th century devastated the country’s economy and killed thousands of people; the country is now recovering and starts experiencing economic growth.

English is the official language of the country. The president of the country is the head of the state and the head of the government. Legislative power belongs to the bicameral parliament. Iron ore, rubber and timber have always been main export categories of Liberia. Rice is main agricultural product; cattle goat and pigs are raised in a number of farms across the country. Many products, though, are imported. The country depends on foreign investments, it has a low GDP per capita and extremely high unemployment rate. Financial services industry is being developed in the country.

The Liberian dollar (LRD) is the national currency.

Geography

The landscape of Liberia is flat near coasts, becoming hilly in the North-Eastern part of the country. Rainforests and elephant grass are typical vegetation species of the most part of the country’s territory. Three main rivers of the country flow into the Atlantic Ocean. Mount Wuteve is the highest peak of the country, which raises at 1,380 metres above the sea level.

Liberia has a hot equatorial climate with rainy summer periods and windy dry seasons.

Map, Flag and Coat of Arms

 

 

Types of Company

Corporation

Shareholders and directors are not personally liable to debts and obligations of a corporation, which is usually incorporated with the purpose of conducting a business in Liberia, and which has perpetual duration.

Hybrid Corporation

It is a corporation that conducts a for-profit business, issues shares, and along with shareholders has non-shareholding members.

Foreign Corporation

Company registered in a foreign country, which obtains permit to conduct business in Liberia, by submitting all the requested documents to the local authorities.

Non-Resident Corporation

This type of company is used for international trade and investment purposes, and is generally not liable to pay taxes in the jurisdiction if not beneficially owned by a person who is liable for taxation in Liberia. Moreover, this company cannot conduct business in Liberia and cannot own a property there. This structure is not appropriate for conducting banking, insurance or mutual fund business. This entity can be managed from any country of the world, its directors and shareholders need not be residents or citizens of Liberia. A company must have its registered office within the jurisdiction. Beneficial ownership need not be disclosed to the authorities.

Registered Business Company

This type of company may be incorporated at least by one person, whose liability is limited by shares or by guarantee. Every shareholder must specify the number of shares he holds. The company name must end with the world “Limited” or “Ltd”. It is restricted to transfer its shares; the number of shareholders must not exceed 50 at any time.

Limited Liability Company (LLC)

A limited liability company may conduct any lawful business activity, for and not for profit, excluding banking, insurance and several other types of financial activities. Its name must end with “Limited Liability Company” or “LLC”. Such a company can redomicile to and from Liberia, following a precisely outlined procedure.

General Partnership

A partnership is a structure, within which two or more persons cooperate together under a single name. Rights of every partner must be precisely specified. In order to be formed a partnership agreement must be created and signed by all the partners. A partnership usually conducts a for-profit business. All the partners are fully liable for all the debts and obligation of a partnership.

Limited Partnership

At least one general partner with unlimited liability and at least one limited partner with liability limited up to the capital invested can form a limited partnership. This partnership may conduct the same types of activities as a general partnership.

Private Foundation

It is a registered legal entity, which may not conduct any trading activities, may not become a general partner of a partnership and director of a company. Charitable purpose need not, but may be the main existence and operations objective of a foundation.  The assets of a foundation must be irrevocably transferred by one or more donors. Its name should end with the words: “Private Foundation”. At least three officers must be assigned to administer a private foundation. Beneficiaries and persons directly related to them may not become officers.

Non-for-profit corporation

Such a company may make contracts, receive properties and other assets, and professionally act as a trustee to the principal object of the corporation. Its administrators should execute all the necessary activities in order to preserve and enlarge the capital of the corporation. And administrator, whether a corporate entity or a private person, must be resident in Liberia. If at any time a non-for-profit corporation fails to have a registered agent in the jurisdiction, it may no longer conduct any kind of activities in Liberia and/or must be dissolved.

Shipping Company

Liberia is the second largest shipping registry jurisdiction, providing a favourable environment for shipping companies.

Taxation

Personal

Income tax has a scalable nature in Liberia starting at a rate of 2% and reaching a maximum of 35%. Social security contributions are payable at a rate of 3% of a gross salary.

Corporate

Corporations that conduct a business activity locally are liable to pay corporation tax at a rate of 35%. Among other taxes, such as property tax, fuel tax, vehicle tax, tax on interest, VAT, as well as stamp duty are levied.

More Information

Click here for more information about creating a Liberia Offshore Company.