- Company Registration: The Liberian LLC
- Taxation, No Reports, Double Tax Treaties
- Tax-Planning & Business environment
Company Registration: The Liberian LLC
Liberia’s legislation is based on Anglo-American common law and the governing law for Liberian entities is the Liberian Associations Law with the most commonly used form of business entity being the Liberia non-resident Limited Liability Company (LLC) of limited liability whereby the liability of the beneficiaries of the company is limited to the amount, if any, unpaid on their respective shares, in other words the liability of the members is limited up to the amount contributed to the capital of the company.
The LLC is used as a Shipping company and an offshore company.
The information below relates to LLC registration procedure and the information & documentation that must be provided to our Law Firm by the client in order to register a Liberian LLC:
A name-checking service is available and names can be reserved.
Every company name can be in any language so long as it is in Roman characters.
Every name must include a suffix such as Limited, Corporation, Incorporated, Société Anonyme, Sociedad Anónima, Aktiengesellschaft, Gesellschaft mit beschränkter Haftung, or any other suffix indicating that the corporation is not a natural person, or the relevant abbreviations.
There are special provisions to enable a name to be recorded in Chinese characters also and for the corporation to trade using the name in Chinese.
A name may not be the same as or too similar to an existing name, and there are restrictions on using names which may mislead or imply a connection with or the patronage of the Government of Liberia.
Directors, Shareholders, Secretary & Registered Office
Details of beneficial directors and shareholders such as nationality, country of residence, address, profession etc.
Scanned and notarized copy of the passport of the directors and beneficiary shareholders.
Scanned copy of a recent (not older than 3 months) utility bill, i.e. electricity bill, being proof of residence of the beneficiary shareholders and the directors.
The LLC must be incorporated with one director per shareholder, directors can be individuals or companies of any nationality and there is no requirement for a local resident director. Furthermore, a director cannot be secretary at the same time.In the event of more than three shareholders, the number of directors is three.
The LLC can be incorporated with one shareholder, and shareholders can be individuals or companies.
The LLC can be incorporated with 100% foreign ownership and must be owned at least 75% by non-residents.
The LLC can be incorporated with nominee directors and/or nominee shareholders provided relevant Nominee Agreements & Deed of Indemnity are signed in favor of our Law Firm.
The LLC can hold the annual meetings of shareholders anywhere.
The LLC must be incorporated with a secretary.
The LLC must be incorporated with a registered office where a register of directors, shareholder, secretary and minutes of general and director meetings are kept and this is provided by the agent in Liberia.
The LLC can be managed from any jurisdiction.
The LLC can be subject to re-domiciliation.
The LLC cannot trade within Liberia or own real estate in
Liberia, and cannot undertake banking, insurance, insurance broking or mutual fund business anywhere.
The standard authorized share capital is $US 50, 000.
The minimum paid-up share capital is $US 1.
In the case of a corporation or registered business company this includes the capitalization tax on either 500 shares at no par value or authorized capital of $US50, 000 with shares of par value. If the authorized capital exceeds this amount, additional capitalization tax is payable and will be calculated at the time of incorporation.
Corporations and registered business companies can be formed with registered and/or bearer shares.
The LLC can be incorporated with nominee directors and/or nominee shareholders.
The names of the directors and the shareholders are not publicly accessible therefore Liberia Companies are usually registered with nominee directors and nominee shareholders so that it is they who appear instead in the public records.
Beneficial ownership does not have to be disclosed to the authorities.
Time schedule & delivery
The process of company registration & apostil takes a minimum of 3 to 5 working days, plus the time to deliver the company via express courier (DHL).
Taxation, No Reports, Double Tax Treaties
Non-resident Liberian entities such as the Limited Liability Company (whether used as offshore or shipping company) are not liable for any Liberian tax, unless beneficially owned by a person liable to taxation in Liberia,
There are no statutory foreign exchange controls in Liberia, and funds may generally be freely remitted into and out of the country.
There is an annual government license fee of US$450 which must be paid by the LLCon the anniversary date of formation in order to operate and that is included in the annual fees of our Law Firm.
Annual Reporting Requirements
There is no obligation to prepare accounts but no obligation to file accounts to the authorities.
There is no obligation to submit audited accounts to the authorities.
There are no publicly accessible accounts.
There is no obligation to submit annual returns.
The normal books of record of a legal entity and financial records should be maintained to reflect the entity’s financial status and to satisfy the obligation to disclose information to, for example, the shareholders. The records can be maintained in any location selected by the directors/managers and can be in paper or maintained electronically.
Double Tax Treaties & International Agreements
Liberia maintains Double Tax Treaties with the following countries: Germany & Sweden.
A treaty with Canada has been signed but is not in effect while a treaty to avoid double taxation on shipping and aircraft income is in force with New Zealand. In 1982 Liberia and the United States also signed a treaty exempting shipping and aircraft earnings from double taxation. This exemption applies to the operation of ships and aircraft registered in the signatory countries.
Liberia is a party to a number of international environmental agreements, including those relating to: Biodiversity, Desertification, Endangered Species, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83 and Tropical Timber 94. Agreements signed, but not ratified, include the Climate Change, Environmental Modification, and Law of the Sea, Marine Dumping, and Marine Life Conservation agreements.
In February, 2004, the governments of Liberia and the United States signed a landmark co-operation agreement covering measures to suppress the proliferation of weapons of mass destruction (WMD) and associated delivery systems and materials carried on vessels. The Liberian Registry is the first ship registry to put in place the Proliferation Security Initiative, which is designed to prohibit the international spread of illegal weapons of mass destruction. The US-Liberia accord underlines both the position of the Liberian Registry at the cutting edge of measures to improve international security at sea and the international importance of the Registry. The agreement also provides US protection to the quality ships flying the Liberian flag.
Tax-Planning & Business environment
The ultimate choice of the Liberia jurisdiction for a company will be dependent on the following factors:
Liberia is also a corporate haven for offshore company and shipping company registration.
Liberia’s success story has been its shipping registry, which after some problems in the 1980s is now rapidly growing back to its former prominence. Currently it is the world’s second largest registry with over 2,600 vessels is registered under the Liberian flag, second only to Panama.
Many corporations such as the non-resident Limited Liability Company (LLC) are registered under Liberian Law as non-resident domestic corporations (offshore companies). Since they are not permitted to do business in Liberia, Liberian offshore companies are not subject to Liberian tax. They are not regulated by the Ministry of Commerce or any similar regulatory agency nor are they subject to any enactment intended to regulate the conduct of business in Liberia.
Foreign companies can operate in Liberia through local agents, a local corporation or a branch.
There are no statutory foreign exchange controls in Liberia, and funds may generally be freely remitted into and out of the country.
The Liberian Registry is operated by LISCR (Liberian International Ship and Corporate Registry) as agent of the Minister of Foreign Affairs of the Republic of Liberia.
Liberian entities can be formed on the same day that formation instructions are received, by email or fax, in either Liberian Corporate Registry offices of LISCR in Virginia (USA), Zurich or Vienna.
The Liberian Shipping Registry, the second largest in the world, includes over 3,500 ships of over 113 million gross tons, which is over 10 percent of the world’s ocean going fleet. According to the U.S. Maritime Administration, Liberian-flagged vessels carry more than one-third of the oil imported into the United States.
The Liberian Shipping Registry is administered by the Liberian International Ship & Corporate Registry (LISCR, LLC), a U.S. owned and operated company that provides the day-to-day management for the Republic of Liberia’s (ROL) ship and corporate registry.
In addition to its regional offices in the major maritime centers of the world, the Liberian Registry is also supported by a worldwide network of over 220 Nautical Inspectors and 120 qualified Security and Safety Auditors.
The Liberian Registry is open to any ship owner in the world. In order to enter the Liberian registry a vessel must be less than 20 years of age and must meet high safety standards.
Liberian flagged ships are able to trade anywhere in the world. There are no crew nationality restrictions and taxes on Liberian vessels are at conservative rates based on the net tonnage. Registration of vessels is eligible to Liberian entities or registered business entities incorporated under other jurisdictions and registered as a Liberian Foreign Maritime Entity.
Liberia, on the west coast of Africa, has an area of 99,067 sq km. The capital is Monrovia, which together with the newer port of Buchanan are amongst the most modern ports on the west coast of Africa. There are direct scheduled flights from both Europe and the US to Roberts International Airport on the outskirts of Monrovia.
There is a dual system of statutory law based on Anglo-American common law for the modern sector and customary law based on unwritten tribal practices for the indigenous sector. Non-resident companies, i.e. those with external ownership, are not subject to taxation.
The foundation and initial colonization of Liberia in the 1820s resulted from a number of initiatives in which enslaved African Americans returned to Africa in an eventually successful attempt to create a republic on libertarian lines. By 1840 a number of Liberian colonies had united in a Commonwealth. The Liberian settlers were relatively few in number, and invited participation in their economy from indigenous African tribes. Eventually these migrants outnumbered the colonists; by now, descendants of the original settlers make up no more than 5% of the total population of 3.4m.
Liberia has plentiful water, mineral resources, forests, and a climate favorable to agriculture, and has been an exporter of raw timber, rubber, diamonds, iron ore, coffee and cocoa. The fairly small manufacturing sector has been mostly foreign owned. External confidence in the key diamond extraction industry has largely been re-established, with Canadian company Diamond Fields to the fore in resuming foreign investment. GDP has been growing strongly: 9.7% in 2007 and 7.8% in 2008.
There are no discriminatory laws against foreign persons or entities desirous of doing business in Liberia. Foreign corporations and foreign maritime entities can operate in Liberia directly upon authorization by the Minister of Foreign Affairs or indirectly through local agents, who may be individuals, partnerships, or corporate entities.
Foreign citizens’ resident in Liberia, subject to compliance with the Immigration and Labor Laws of Liberia, are also permitted to establish businesses in Liberia consistent with the provisions of the Business Corporation Act (BCA) and the rules and regulations promulgated by the Ministry of Commerce, Trade and Industry.
In addition to complying with the requirements of the BCA, all business entities authorized to do business in Liberia, must register the business with the Ministry of Commerce, Trade and Industry, and obtain a business license as a condition precedent to commencement of operations.
The Prevention of Money Laundering Law of 2002 gives effect to international requirements in respect of due diligence, record keeping, report of suspicious conduct, the offence of laundering the proceeds of criminal conduct and international cooperation in identifying, freezing and confiscating the proceeds of criminal conduct in another jurisdiction.