DOING BUSINESS IN AFGHANISTAN IN 2018
Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with registering a business in Afghanistan. We offer services including i) company incorporation ii) licence registration iii) visa solutions iv) office space rental solutions and v) employee recruitment.
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Advantages and Disadvantages
Advantages of Afghanistan company registration
- An Afghanistan company can be incorporated with 1 director and 1 shareholder, who can be of any nationality. While there is no minimum share capital requirement, our Clients may be required to deposit a certain amount commiserating with the demands of their project;
- Afghanistan may offer certain strategic advantages for foreigners including:
- Afghanistan has extensive deposits of natural gas, coal, petrol, gold and several other valuable minerals. In addition to the known deposits of natural resources, the country is estimated to have significant amounts of other non-fuel mineral resources that are yet to be discovered, estimated to be worth between US$1 trillion and US$3 trillion;
- Afghanistan experienced an annual GDP growth rate of over 11% between 2003 and 2015. This growth rate is a testament to the myriad business opportunities available for our Clients in the recovering economy;
- Afghanistan is very close to two major markets – China and Russia. Furthermore, the Government is signing several multi-billion dollar trade and investment deals with several jurisdictions including US, India and China;
- Lastly, corporate taxation in Afghanistan is relatively low at 20%. Furthermore, the newly installed government is focused on improving competitiveness of the economy by offering several business incentives over the coming years;
Disadvantages of Afghanistan company registration
- Afghanistan has been at war since 2001, which even after 15 years ceases to abate. As a result, the country is a highly unsafe jurisdiction for civilians and soldiers alike. This state of the country is reflected in the annual Global Peace Index by the Economist Intelligence Unit which ranks it as the 2nd least peaceful country in the world;
- Afghanistan suffers from high corruption; the country was ranked 166th out of 167 jurisdictions in the 2015 Corruption Perceptions Index by Transparency International. Consequently, entrepreneurs should expect under-the-table bribes in order to expedite business operations;
- Despite attempts to eradicate it, opium is still produced in-mass in the country, with 90% of the world’s opium produced here. Opium is currently the largest export and the economic growth and success of the country is directly tied to the production and sale of the drug. As international authorities try to step anti-opium trade laws, the economy can face negative shocks;
- Rule of law is fragile in Afghanistan, with confidence in the government low due to an inability to enforce basic rights. Property rights are frequently disregarded and embezzlement is common;
- Trade in Afghanistan is expensive, due to an inefficient customs system, high corruption and security-related costs. The financial system is fragile, with one of the major banks, Kabul Bank, requiring a government bailout to stay afloat.
- English is spoken by only about 8% of Afghans, with Pashto and Dari being the official and most common languages. Uzbek, Turkmen, Balohi, Pashayi, and Nuristani are also widely spoken first languages, with language barriers serving as a frequent deterrent to business. Consequently, all official documents during the registration process must be translated in to either Pashto or Dari;
- As a result of the points mentioned above, Afghanistan has been ranked by the World Bank as the 177th best jurisdiction in the world in their annual Doing Business Survey.
Best uses for a Afghanistan companySpice trading companies can set up in Afghanistan to get closer to the country’s large spice-growing industry, which represents one of the country’s largest exports. Companies in the fashion item supply chain can also make use of a business in Afghanistan due to its large production of cotton.
- Time to incorporate: Seven weeks
- Cost to set up: US$30,450
- Minimum capital: US$1
- Physical office required: Yes
- Shareholders: 2
- Directors: 1
- Company secretary: No
- Resident director: No
- Corporate tax rate: 0-20%
- Corporate tax base: Territorial
- Shelf companies: Unavailable
- Main company type: LLC