Business entities in Sierra Leone
Since 2003, Healy Consultants provides our Clients with the optimum corporate structures for doing business in Sierra Leone. The available corporate vehicle used by entrepreneurs in Sierra Leone is the limited liability company (Ltd.). Foreign legal entities looking to do business in Sierra Leone are also permitted to set up permanent establishments in the form of a branch office or a representative office.
The Sierra Leone limited liability company (Ltd)
- The Sierra Leone limited liability company is the most commonly used corporate structure for setting up foreign owned businesses in Sierra Leone. In accordance with Sierra Leone Companies Act 2009, this entity can be established by i) 1 shareholder and ii) 1 director who may be of any nationality and who can either be an individual or a body corporate. The shareholder(s) and director(s) are also not required to be ordinarily resident in Sierra Leone;
- The Sierra Leone government has since scrapped off the requirement for a minimum share capital when incorporating an LLC.
The Sierra Leone public limited liability company (PLC)
The Sierra Leone PLC is recommended for investors looking to establish large investments in Sierra Leone and with the possibility of listing the company on the stock market. This entity requires at least 2 shareholders and 1 director who may be of any nationality and must not be resident in Sierra Leone. A Sierra Leone public limited company requires a paid up minimum share capital of US$11,300 at incorporation.
The Sierra Leone branch
Foreign companies seeking to do business in Sierra Leone are allowed to set up branch offices in Sierra Leone. The branch office of a foreign company is considered a resident company and thereby abides by the laws of both Sierra Leone and its country of origin. The branch must appoint at least 1 legal representative of any nationality to officially represent the company in Sierra Leone.
The Sierra Leone representative office
Sierra Leone Companies Act allows foreign companies to setup permanent establishments in the form of representative offices in Sierra Leone. The scope of a representative office’s operations in Sierra Leone is limited to i) conducting market research and ii) promotion of the parent company’s activities and products. A Sierra Leone representative office is not permitted to engage in any commercial or profit making activity.
Comparison table between Sierra Leone business entities
|LLC||PLC||Branch office||Rep office|
|How long to set the company up?||10 weeks||10 weeks||15 weeks||12 weeks|
|How long to open company bank account?||5 weeks||5 weeks||5 weeks||5 weeks|
|Wholly foreign owned?||Yes||Yes||Yes||Yes|
|Minimum capital required?||US$1||US$11,300||US$1||US$1|
|File annual tax return?||Yes||Yes||Yes||No|
|Tax registration certificate required?||Yes||Yes||Yes||No|
|Recommended corporate bank account?||Standard Chartered Bank||Rokel Commercial Bank||Zenith Bank||Access Bank|
|Does our Client need to travel?||No||No||No||No|
|Resident director required?||No||No||No||No|
|Resident shareholder required?||No||No||No||No|
|Minimum directors allowed?||1||1||1||1|
|Tax identification code (TIN) needed?||Yes||Yes||Yes||No|
|Sierra Leone resident company secretary required?||No||No||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed?||Yes||Yes||Yes||Yes|
|Sierra Leone corporate tax rate?||30%||30%||40%||0%|
|Annual financial statements required?||Yes||Yes||Yes||No|
|Statutory audit required?||No||No||No||No|
|Regulated by?||Sierra Leone Chamber of Commerce & Industry||Sierra Leone Chamber of Commerce & Industry||Sierra Leone Chamber of Commerce & Industry||Sierra Leone Chamber of Commerce & Industry|
|Allowed to issue sales invoices?||Yes||Yes||Yes||No|
|Allowed to import and export goods?||Yes||Yes||Yes||No|
|Can rent an office space in Sierra Leone?||Yes||Yes||Yes||Yes|
|Can buy Sierra Leone property?||Yes||Yes||Yes||No|
|Can own equity in other Sierra Leone companies?||Yes||Yes||Yes||No|
|Total Sierra Leone business setup costs in Yr. 1||US$16,100||US$18,200||US$16,700||US$10,900|
|Subsequent annual costs (incl. accounting and tax fee)||US$3,650||US$3,650||US$3,650||US$3,650|
|Sample engagement invoice|