DOING BUSINESS IN SOUTH SUDAN IN 2020
Since 2011, Healy Consultants Group PLC has assisted our Clients with business registration in South Sudan. Our services include i) South Sudan company incorporation ii) government license registration iii) corporate bank account opening in South Sudan and abroad iv) employee recruitment v) visa strategies and vi) office rental solutions.
Summary table of South Sudan company registration
|Summary||Tax resident LLC||Fast business setup solution||Limited partnership||Representative office||Branch office|
|Also known as||LLC||Nominee LLC||Partnership||RO||Branch|
|Best use of company?||All products and services||Close a customer deal now||Professional services||Marketing & research||Specific projects|
|How soon can you invoice Clients/sign sales contracts?||4 months||2 months||4 months||Cannot trade||4 months|
|How soon can you hire staff?||4 months||2 months||4 months||4 months||4 months|
|How soon can you sign a lease agreement?||2 weeks||2 weeks||2 weeks||2 weeks||2 weeks|
|How long to supply corporate bank account numbers?||2 months||2 months||2 months||2 months||2 months|
|How long to supply company registration/tax numbers?||4 months||2 months||4 months||4 months||4 months|
|Corporate tax rate on annual net profits?||20%||20%||0%||0%||20%|
|Limited liability entity?||Yes||Yes||Yes||No||No|
|Government grants available?||Yes||Yes||Yes||No||Yes|
|Government approval required for foreign owners?||No||No||No||No||No|
|Resident director/partner/manager/legal representative required?||Yes||Yes||Yes||Yes||Yes|
|Minimum paid up share capital?||US$1||US$1||US$1||US$1||US$1|
|Can bid for Government contracts?||Yes||Yes||Yes||No||Yes|
|Corporate bank account location?||Ecobank||Eden Commercial Bank||International Commercial Bank||Qatar National Bank||Commercial Bank of Ethiopia|
|Can secure trade finance?||Yes||Yes||Yes||No||Yes|
|VAT payable on sales to local customers?||15%||15%||15%||None||15%|
|Average total business set up engagement costs?||US$17,700||US$43,500||US$17,700||US$18,050||US$18,700|
|Average total engagement period?||6 months||4 months||6 months||6 months||6 months|
South Sudan company registration summary
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Advantages and disadvantages
Advantages of South Sudan company registration
- It is possible to register a limited liability company in South Sudan with only one director and one shareholder. The directors and business owners can be of any nationality and are not required to live in South Sudan. Our Clients do not need to travel to South Sudan to complete the engagement;
- While it is complex to invest in South Sudan, the local authorities have adopted the following incentives:
- Companies incorporated in South Sudan are allowed to repatriate their earnings and capital gains overseas free of capital controls, provided that they fulfilled their local corporate tax obligations;
- The South Sudan authorities have taken steps to simplify South Sudan company formation procedures for foreigners by creating the One Stop Shop Investment Center (OSSIC), a single agency centralizing all company formation procedures and other registrations required for foreign investment in South Sudan;
- The Investment Promotion Act allows foreigners to start a business in South Sudan. It also provides them with legal protection against future expropriation by the South Sudan authorities;
- Companies incorporated in South Sudan are allowed to forward their business tax losses for a maximum period of up to 5 years.
- South-Sudan is an oil-rich country and has the 3rd largest oil reserves in Africa. In 2017, the country exported approximately US$1.22 billion worth of crude petroleum to its main trading partners: China and India. By mid-2020, South Sudan aims to produce crude oil of more than 350,000 bpd thereby attracting an increasing number of foreign investors in the oil and energy sector of the country.
Disadvantages of South Sudan company registration
- South Sudan is suffering from an ongoing war with its neighbor Sudan, from which it became independent in 2011. It is also one of the poorest countries in the world, with a population of only 11 million inhabitants, half of them living with less than US$1 per day;
- South Sudan is one of the most complex places to start a business in the world because:
- Foreigners need to invest at least US$100,000 in South Sudan in order to be allowed to form a local company;
- Some industries including i) transportation ii) lease and buying of land and iii) foreign exchange are closed to foreigners. In other sectors including i) import/export and ii) wholesale and retail trade, foreigners are only allowed to be minority shareholders (up to 49%);
- In accordance with the South Sudan Companies Act 2012, every resident company must also have at least one resident shareholder, who will hold at least 31% shares in the company. If our Client requires nominee shareholder and director services (click link), Healy Consultants will be pleased to assist;
- The country became independent only in 2011 and local regulations are consequently constantly changing, with inexperienced administration implementing unclear regulations about licensing requirements and how to close down a business (for which the country is currently ranked as the world place in the world according to the World Bank);
- It takes more than four months to obtain a construction permit in South Sudan. Getting access to electricity is even worse: foreigners starting business in South Sudan should expect to wait over 1.5 years for the authorities to approve meter installation and turn on electricity;
- Companies having local employees in South Sudan are required to open separate corporate bank accounts to pay their monthly social security contributions, as the country is yet to establish a social security fund;
- For all the reasons listed above, South Sudan is currently ranked by the World Bank as the 3rd most difficult place in the world to do business.
- The tax system of South Sudan is complex and can be confusing to investors. For instance, there is no standard corporate tax rate applicable, as actual rates are set according to the amount of annual turnover of a company;
- Companies are likely to face major infrastructural challenges in South Sudan, including i) inadequate availability of infrastructural facilities; and ii) lack of inter-state and intra-state road connectivity. Moreover, less than 2% of the population in the country has proper access to electricity and a very limited access to water, energy and telecommunication services.
Best uses for a South Sudan company
- Due to its remote location, absence of a domestic market and political instability, the only foreigners willing to do business in South Sudan are those seeking investment opportunities in the oil and gas industries.
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- Time to incorporate: Five weeks
- Cost to set up: US$17,700
- Minimum capital: US$100,000
- Physical office required: Yes
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: No
- Corporate tax rate: 10/15/20%
- Corporate tax base: Territorial
- Shelf companies: No
- Main company type: Limited company