SOMALILANDsomalilandgov.com/.../uploads/2012/06/doing-business-in-Somaliland.pdf · Cosob airline Punt Air Suhura airways Telecoms Telephone companies Africa on Line National Link

The Republic of Somaliland 1

SOMALILAND

INVESTMENT CLIMATE &

INCENTIVES

Ministry of National Planning&

Development

www.SLMinistryOfPlanning.org

The Republic of Somaliland

Table of contents

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Brief Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . 3Geography . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Government . . . . . . . . . . . . . . . . . . . . . . . . . . 4Economy .. . . . . . . . . . . . . . . . . . . . . . . . . 5Minerals and Hydrocarbons . . . . . . . . . . . . . . . . . . . . . . . . . . 6Industries . . . . . . . . . . . . . . . . . . . . . . . . . . 7Exports (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . 7Imports (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . 7Transportation (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . 8Telecoms . . . . . . . . . . . . . . . . . . . . . . . . . . 8Finance . . . . . . . . . . . . . . . . . . . . . . . . . . 8Health (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . 9Education (2009-2010) . . . . . . . . . . . . . . . . . . . . . . . . . . 9Foreign Investment . . . . . . . . . . . . . . . . . . . . . . . . . . 10Export/Import License . . . . . . . . . . . . . . . . . . . . . . . . . . 14


General Information


Brief Introduction

Somaliland was a British Protectorate from 1887 until 1960. So-maliland’s 26 June 1960 independence was followed by it entering into a union with its neighbour to the south on 1st July to form the Somali Republic. In 1991 the collapse of the Somali government gave way to widespread civil war. The union ended disastrously for Somaliland leading to its eventual withdrawal. What Somaliland inherited, total ruins and mine-laden streets, was a far cry from the nation that became independent in 1960.

Geography

Location 08⁰00’ -12⁰27’ Parallel North42⁰35’ - 49⁰00 Meridian East

Area 137,600 Sq KmCoast line 850 KmRainfall 100 – 500 mm rainfallHumidity 63 – 92% humidityTemperature 25-35 Average daily temperature


Government Executive

Executive - President (elect) and cabinetLegislativeLegislative – House of Parliament (elect), House of el-ders (appointed)

JudiciaryDistrict courtsRegional courtsAppeal courts (regional)Supreme court, which is constitutional court as well

DemocracyLocal Government Election 2002Parliamentary Election 2005Presidential Election 2003 and 2010

Administrative jurisdictions Regions 13Districts 81Capital Hargeisa - 800-900,000 populationOther main towns: Berbera, Borama, Burao, Erigavo, Las Aanod

People

Population (2010) 3.85 million Religion Islam-SunniLanguage Somali, Arabic and English in business


Economy

Livestock (2010)Contribution to National income 60%Sheep - 8.6 millionGoats - 8.3 millionCamels - 1.7 millionCattle - 0.4 million

AgricultureArable land 10%Main crops Sorghum, Maize, Vegetables, Fruits

FisheriesStock- 200,000 tonsAnnual sustainable production - 40,000 tons

Fish types:Different types of tunasnappersgroupers gruntstrevally emperors barracudas goatfishparrotfish Spanish mackerels Sharks (for fins)

Fish canneries: Las Qoray 1-2.5tons/day


Minerals and hydrocarbons Gemstones

Emerald AquamarineRuby SapphireGarnet Opal

MineralsGypsum QuartzGold ColumbiteIron Kyante (mercuric chloride)Lead –barite Salt (evaporation)Polimetalic mineralization (lead, copper, zinc)

HydrocarbonsOilGasCoal


Industries Type

Beverages Metal and aluminium worksChemicals TanneriesBuilding material Furniture

Exports (2010)

Livestock 2.8 million headsHides and skins 6.9 million piecesFrankincense 3,884 MT

Imports (2010)

Sugar 133,500MTRice 60,270 MTWheat flour 56,052 MTPasta 28,589 MTCooking oil 17,949 MTFuel 58,855 MTCloths 20,514 MTSoap 9,992 MTBuilding material 214,248MT Vehicle spare parts 18,008 MT


Transportation (2010) Main port Berbera

Vessels calling on Berbera port 663 vessels

Main airports:Hargeisa Berbera Borama Burao

Air traffic2,776 flights 95,063 passengers

Main airlinesDaallo African Express airwaysEast Africa Express Jubba airwaysCosob airline Punt Air Suhura airways

Telecoms Telephone companies

Africa on Line National Link TelcomTelesom Solteco Somtel

Postal Service Private parcel and postal service DHL

Finance Banks

Bank of Somaliland - Government (branches in 6 towns)Banque pour le Commerce et l’industrie Mer Rouge (BCIMR) (1 representative office) SalamaDahabshiil


Money Transfer CompaniesDahabshiilQaran ExpressAmal ExpressKaah ExpressTelesom (Zaad mobile payment service)Salaama Mustaqbal ExpressTawakal ExpressWorld RemitWestern Union

Health (2010)

Hospitals 26Health centres 87Health posts 165

Education (2009/2010)

Primary schools 917Secondary schools 84Universities and colleges 16 Primary enrolment 232,999Secondary enrolment 26,018University enrolment (about) 15,000


Foreign Investment

Foreign investorAny foreign juridical or physical person

Legal Frame work• The Companies Law of Somaliland (Law No. 25/2004)• Promotion, Protection and Guarantees of Foreign Investment

Law (Law No. 29/2004(& 2008)

Foreign investment registration procedure• Pick an application form for Approval and registration from the

Foreign Investment Promotion Office at the Ministry of Trade • Complete the form • Mail it or hand it to the Foreign Investment Board, within the

Ministry of Trade• The Board is the supreme decision maker. It consists of:• DGs of the Ministries of Planning, Foreign Affairs, Finance,

Commerce, Industry, Health & Labour, Central bank, Chamber of Commerce.

• The chairman of the Board is the Director General (DG) of the Ministry of Commerce

• The Board takes decisions by simple majority vote

Registration time (time it takes to register)• Within 60 days of receipt of application, the Board shall notify

the applicant• If application is approved the Board shall issue ‘Certificate of

Foreign Investment in an Approved Enterprise’ as soon as the investor has affected the transfer of assets

• The certificate shall be valid for 18 months within which the foreign investor must invest

• If investor wants to make additional investment, investor must apply and get approval again


Priority investment areas• Investment that puts productive use country’s human and natu-

ral resources• Investment that introduces innovative technology• Investments that generate foreign exchange or substitute im-

ports• Agriculture• Livestock• Fishing • Minerals, • Oil & gas • Industries that use local inputs• Utilities (Water, energy)• Tourism

Foreign investment forms• Convertible currency• Machinery, equipment , material• Patent rights, trade marks• Technical studies and documentation

Guarantee for Foreign investment• Foreign investment enterprises shall receive the same favourable

treatment as domestic enterprise• Foreign investment shall not be expropriated except where

public interest cannot be satisfied other than expropriation, in which case, compensation shall be made

Tax incentives• Foreign investment shall not pay tax on profits for the first three

years, after which it shall be entitled to 50% reduction on tax on profit

• Machinery, equipment and material shall be exempt from im-port tax


Facilities for Foreign personnel• The Board shall ensure that immigration authorities facilitate

the granting of entry permits and residence visas to foreign personnel

• Foreign personnel may freely transfer up to 50% of their sala-ries, wages, gratuities, and allowances paid in Somaliland.

Reinvestment of profits• Profits may be reinvested in the registered enterprise in which

case, the Board shall be notified. The Board shall register amount reinvested in the ‘Certificate of foreign investment reg-istered’.

• The investor shall submit a new application if they want to in-vest in an enterprise other than the one registered

Repatriation of capital and profits• Profits from registered enterprises may be freely repatriated. In

case only part of the profit is repatriated, the remaining can be repatriated in any year following.

• Original investment plus profit reinvested shall be freely trans-ferable after three years from the date of registration

• The transfer of capital shall be affected in original currency in physical equipment and material

Taxation• Income tax 6%• Corporation tax 10%• Sales tax 5%

Labour Cost• Manual labour wage=$100-150/month• Skilled labour salary= $300-500/month• Professional labor salary=$500 – 1,000/month

Labour Cost flexibility• No minimum wage required


Settlement of disputesDisputes shall be settled in a manner agreed with the investor.In the absence of an agreement, disputes will be settled within the framework of agreements between Somaliland and the investor’s home country.

International Companies Represented• Baoding Jeronimo Group of Industries • Coca Cola • DHL • Western Union • Caterpillar • Ophir Energy• Prime Resources• Asante Oil• Nubian Gold Corporation• BCIMR

Documentation

Office Document Required LanguageMinistry of commerce, Industry, Culture and Tourism

ApplicationMemorandumArticles of association

English, SomaliEnglish, SomaliEnglish, Somali

In-Land Revenue Of-fice

Letter from the Ministry of Trade & Memorandum and Articles

Prosecutor office Receipt of payment of taxes and a letter from the Land Revenue Office showing that no tax is owedSignature in person before the prosecutor

Ministry of commerce, Industry, Culture and Tourism

Receipt and signed documents from the prosecutor

The whole process takes about 3-4 weeks depending on the availability of the officers concerned.


Import/ Export License

Documents Required for Issuance of Import/Export Licence

IndividualsIdentity card• Passport photocopy (foreign resident)• Original bank statement for 5,000,000 Somaliland shillings

($750)• 2 passport size photos• Fixed assets USD 10,000 or 30,000,000 Somaliland shillings• Penal Certificate issued by the Attorney General’s Office• Tax clearance certificate from Land Revenue Office• Chamber of Commerce Registration•

Corporate• Certificate of the registration of the company issued by the At-

torney General’s Office• Memorandum and Articles of Association of the company• Licence fee – 2,0884,000 Somaliland Shillings ($300)• Tax Clearance Certificate from the Land Revenue Office• Chamber of commerce registration


Shipping documents required for imports

1. Commercial Invoice in triplicate which must contain all neces-sary information to establish cost, Insurance and Freight (CIF) value of goods

2. A bill of lading or airway bill3. Health and special certificates4. Packing lists containing the marks and numbers of packages,

weight of each package and careful description of each package and lists contents

5. Declaration of Entries • Nature and kind of goods in each package• The weight measurement of the goods gross and net• Country of origin • Country shipped from • Destination place and country (for export)

Each Entry must be accompanies with:• Manufacturer’s invoice• The invoice of freight charge • The invoice of all insurance charges


Berbera Port

Berbera Port

Location 10⁰.26North, 45⁰.01 EastWharf 650m longBerths 5 linear 1 Ro-RoDepth 9-12mHandling Mobile cranes, Fork liftsStorage Open yard=64,000sq meters

Container yard=20,000sq meters Storage capacity=120,000 tons

Hargeisa Airport

Runway length 7480 ft.Runway elevation 4423ftWorld Area Code HGAGMT Offset +3.0

Berbera Airport

Runway Length 13615 ftRunway Elevation 30 ft. Longitude 44° 6’ 0” E Latitude 9° 29’ 0” N (?)World Area Code 573GMT Offset +3.0

