An entity must be registered with the Liberia Business Registry (LBR) (www.lbr.gov.lr) in order to commence business activities in Liberia.
Pre-authorization
Businesses are responsible for obtaining approval from applicable sector ministries prior to beginning operations. Depending on the sector, the Ministries of Health, Gender, Agriculture, Finance and Development Planning, Justice, Public Works, and the Ministry of Land, Mines, and Energy can be responsible for granting approval to sectoral activities. Other agencies granting sectoral approval are the Central Bank of Liberia, Environmental Protection Agency, Forestry Development Authority, Liberia Maritime Authority, Liberia Produce Marketing Corporation, Liberia Petroleum Refinery Company, and Liberia Medicines, and Health Products Regulatory Authority. For example, a transport business would need to seek approval from the Ministry of Transport.
Validity of registration
Business registrations are valid for a period of 12 months. Failure to register or maintain registration validity while carrying on commercial activities in Liberia may result in the levying of fines and/or penalties.
These are the forms of business that the LBR registers or formalizes: (click on each items and see registration requirements.
Articles of Incorporation, Legal ID document of the applicant, Legal ID document (s) of the shares subscribers and including beneficiary and ultimate beneficial owners. Application for authority to do business in the Republic of Liberia, a board resolution and a certificate of good standing, passport copy of the representative.
Articles of Incorporation, Legal ID document of the applicant, Legal ID document (s) of the shares subscribers (Foreign Not-For-Profit Corporation required: Application for authority to do business in the Republic of Liberia, a board resolution and a certificate of goodstanding, passport copy of the representative).
Partnership Agreement/Limited Partnership Agreement, a legal ID document of each of the partners, , (Foreign Not- For-Profit Corporation required: Application for authority to do business in the Republic of Liberia, a board resolution and a certificate of goodstanding, passport copy of the representative
Certificate of Formation, Legal ID document of the applicant and/or member (s). (Foreign Not-For-Profit Corporation required: Application for authority to do business in the Republic of Liberia, a board resolution and a certificate of goodstanding, passport copy of the representative).
Legal ID document of the proprietor/proprietress and a passport-sized photograph
Articles of Incorporation, legal ID document of the applicant and/or any of the incorporators (Foreign Not-For- Profit Corporation required: Application for authority to operate in the Republic of Liberia, a board resolution and a certificate of goodstanding, passport copy of the representative).
A national identification document, and a passport-sized photograph
Management Articles, Memorandum of Endowment, Declaration by the Officers, Specimen of Signature (s), Consent to act as Secretary/Officer, Legal ID documents the Secretary and Officers.
Instrument of Trust, Registered Agent Acceptance, Specimen of signature, Confirmation of Trustee, Legal ID documents of all natural and legal person’s representatives.
Business name, legal ID document of the applicant
IMPORTANT
- Registration: You register your business and obtain a Taxpayer Identification Number (TIN). Registration of businesses can be done at the Liberia Business Registry (LBR) on Ashmun & King Sao Baso Street (old French cable). You can either register your business as a sole proprietorship, partnership, corporation, joint venture or other applicable form of business. Business registration certificate is required to be renewed on an annual basis at the LBR and no business should have more than one TIN.
For an individual taxpayer who is not a business owner, you are only required to obtain TIN from LRA Office.
- Filing of returns: Once you have started operations, you are required to file your income to the LRA on a monthly, quarterly or annual basis depending on the applicable tax kind. Payroll taxes are filed on a monthly basis for example, while business income tax are filed on a quarterly basis (every three months).
You file by completing the appropriate tax return form and submitting the completed return to the LRA Office. A taxpayer is expected to voluntarily and truthfully declare his/her income. In the case where income is not earned, the taxpayer is still required to file a return and can file a non-tax due return
- Payment of taxes: You pay taxes based on what you earn during the period. Personal income tax is paid by natural persons usually on a monthly basis. Business income tax is paid in advance on a quarterly basis. Payment can be made in US dollars or in Liberian dollars at the current exchange rate as published by the Central Bank of Liberia (CBL)
- Financial and/or Activity report: You are required to submit copies of your audited financial reports along with completed annual return form if you are a medium or large taxpayer. This is optional for small taxpayers.
- Other general operational information: You are required to report to the LRA activities or issues that will affect the level of taxes you pay or your ability to pay taxes or the LRA’s ability to monitor your compliance. Example of some these issues include:
¨ Reduction in payroll
¨ Periods of inactivity
¨ Change of business location
¨ Update in rent/lease agreement
¨ Change of business activity
¨ Changes in partnership agreement or articles on incorporation
¨ Temporary or permanent closure of business
- Attend LRA Tax Clinics or other awareness engagements: You are strongly encouraged to attend tax awareness engagements organized by the LRA to ensure that you understand all pertinent tax issues relating to the running of your business. This will enable you to understand your rights and obligations with respect to payment of taxes.
- Temporary or Permanent Closure of business: In the case of temporary or permanent closure of your business, your are required to inform the LRA to ensure that your tax accounts are suspended or closed in the tax system. This is to avoid unnecessary charges being raised against you and also to ensure that the tax roll is current
- Other obligations: Do not bribe an officer of the LRA and you donot need to compensate them for services offered.
Taxes businesses pay
Monthly Tax Payments
Personal Income Tax
Withholdings on wages and salaries Due Dates: Due no later than the 10th day of the following month. Target: Employees whose gross annual income is 70,000 Liberian dollars
Contract Services Withholding on Services Rendered
Due no later than the 10th day of the following month. Targets: Contractors whose contract value is 100, 000 Liberian dollar or more or if the payment is expected to be 1,000,000 Liberian dollars or more for the contractor’s tax year.
Goods and Services Tax
(7%-15%) – Due on or no later than the 21st day of the following month. Targets: Restaurants, Hotels, Car Renters, Telecommunications companies and Manufacturers
Excise Tax
Due on or no later than the 21st day of the following month. Targets: Producers and sellers of alcoholic and non-alcoholic beverages, tobacco products, luxury goods, cosmetic, sugar and gambling equipment
Quarterly Tax Payments
Presumptive Tax (4%)
Due no later than 15 days after each quarter ( i.e., 1st quarter payment is due April 15th) Targets: Small business whose gross annual sales are $LD 200,000.00 – LD3,000,000.00. I opine that the highlighted sentence above be deleted and the focus just be on the payor of the tax instead of the due date for payment.
Advance Payment on Corporate Income Tax (2%) –
Minimum Tax - Targets: All medium and large taxpayers whose gross sales are above $LD 3, 000,000,00
Annual Tax Payments
Income Tax Return (Filing and Payment)
Due no later than March 31st of each calendar year (Corporate Income Tax, Personal Income Tax), Targets: All businesses whose annual income is more than 3 Million Liberian Dollars, and natural persons earning income from a Liberia source income, and derives less than 90 percent of gross income from employment income.
Real Estate Tax
Due between January 1st and July 1st. Targets: All real property including land and buildings
