DOING BUSINESS IN AFGHANISTAN IN 2020
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.
Summary table of Afghanistan company registration
|Summary||Tax resident LLC||Fast business solution||Nominee LLC||Joint Venture LLC||Representative office|
|Also known as||Sherkat-e-Mahdud-ul-Massoliat||Shelf company||Fast nominee solution||Sherkat-Tazamoni-Mokhtalat||RO|
|Best use of company?||All products and services||Close a customer deal now||Business forbidden to foreigners||Business restricted to foreigners||Marketing and research|
|How soon can you invoice Clients/sign sales contracts?||3 months||1 week||2 weeks||3 months||Cannot trade|
|How soon can you hire staff?||3 months||1 week||1 month||3 months||2 months|
|How soon can you sign a lease agreement?||Immediately||Immediately||Immediately||Immediately||Immediately|
|How long to supply corporate bank account numbers?||4 months||2 weeks||1 month||4 months||3 months|
|How long to supply company registration/tax numbers?||3 months||1 week||1 month||3 months||2 months|
|Corporate tax rate on annual net profits?||20%||20%||20%||20%||Cannot trade|
|Limited liability entity?||Yes||Yes||Yes||Yes||No|
|Government grants available?||Yes||Yes||Yes||Yes||No|
|Government approval required for foreign owners?||Yes||Yes||Yes||Yes||Yes|
|Resident director/partner/manager/legal representative required?||No||No||Yes||Yes||Yes|
|Minimum paid up share capital?||US$1||US$1||US$1||US$1||Cannot trade|
|Can bid for Government contracts?||Yes||Yes||Yes||Yes||No|
|Corporate bank account location?||Afghan International Bank||Afghan Commercial Bank||Azizi Bank||Pashtany Bank||Afghan United Bank|
|Can secure trade finance?||Yes||Yes||Yes||Yes||No|
|VAT payable on sales to local customers?||4%||4%||4%||4%||Cannot trade|
|Average total business set up engagement costs?||US$30,450||Request a proposal||Request a proposal||Request a proposal||Request a proposal|
|Average total engagement period?||4 months||1 months||1 month||4 months||3 months|
Afghanistan company registration summary
Press the link headings below to read detailed, relevant, up to date information.
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 6% between 2007 and 2018. 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;
- A newly incorporated business in Afghanistan is likely to face less competition from other companies in the region, due to an under-developed private sector economy. As a result, it can bring in new products in the Afghani economy and generate greater profits;
- Afghanistan has a low minimum wage of US$65 per month for its workers. Therefore, it is easy for employers to source affordable and skilled workers for their companies. Moreover, the informal sector does not have any minimum wage laws for its workers.
Disadvantages of Afghanistan company registration
- Afghanistan has been at war since 2001, which even after 19 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 least peaceful country in the world;
- Afghanistan suffers from high corruption; the country was ranked 172th out of 180 jurisdictions in the 2018 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 173th best jurisdiction in the world in their annual Doing Business Survey;
- Afghanistan has been ranked as the 152th freest economy (out of 180 countries) in the 2019 Index of Economic Freedom. This is largely due to the poor regulatory efficiency of its government, limited trade freedom and volatile economic growth.
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
Tell us what you need - we’ll send you a customised proposal in 5 hours!
To help us engineer the optimum Afghanistan corporate structure, please complete the 3-minute questionnaire below; then press the submit button below.
This data remains confidential and is not sold to third-parties.
Within 5 hours, one of our senior staff will ring or email you: