Liberia is officially known as the Republic of Liberia. The word “Liberia” means “Land of the Free” in Latin. Liberia sits on the West African coast. It is bordered by Guinea to its north, Sierra Leone to its west, and the Ivory Coast to its east.
The Business Corporation Act (BCA), and the Incorporation law, called the “Organizing Business Corporations in Liberia Act” provide the procedures for incorporation.
Benefits
There are many benefits for incorporating in Liberia. These benefits include:
• No Taxation of Worldwide Income as Liberia has a “territorial” based income tax system. This means only income and profits earned inside Liberia borders are subject to income taxes. However, U.S. taxpayers and others residing in similar countries which tax worldwide income will not be exempt.
• Liberia’s governmental structure is based on the U.S. Constitution, but only has one political party.
• Ship Registry is a major industry where Liberia’s registered merchant ships are triple the size of the United State’s registered merchant vessels. Tax benefits are available to vessel owners who register in Liberia. For instance, foreign source shipping income of non-resident registered corporations is not taxed. This is one reason why Liberia is known as a “flag of convenience” haven for registering ships.
• Easy Incorporation: Liberia maintains a straightforward and easy incorporation process. A new Liberian corporation can be formed in as little as 48 hours.
• Similar to Delaware: Liberian corporate tax laws are similar to Delaware’s laws.
• No Annual Corporate Documents: Liberia has no annual corporate documents filing requirements.
• Low Registration Fees: Registering a company in Liberia costs as little as $700 USD and the yearly renewal fee is around $900 USD.
• No Minimum Capital: Liberia corporations do not have to make a minimum capital investment.
• U.S. Dollar: Liberia accepts U.S. Dollars at face value making banking and business convenient for Americans.
• Easy Banking: Although Liberia does not have bank secrecy laws, it is simple for corporations to open local bank accounts. Liberian corporations are no required to open bank accounts in Liberia.
Corporate Name
Liberia corporations must select a corporate name when registering which is unique and not similar to other Liberian corporation names. The corporate name can be in any language as long as the Latin alphabet is used for its characters. In addition, the corporate name must include a suffix denoting the type of corporate entity such as, “Corp.” or “Inc.”. Corporate names cannot imply that there is a connection to the Government of Liberia.
Corporate Business Liberian corporations are allowed to conduct a variety of business activities including financial services like trading or brokering foreign exchange, selling commodities or financial based derivatives, selling securities, providing investment advice to the public, selling insurance, offering investment schemes, selling mutual funds, providing payment process services, currency exchanges, transmitting funds worldwide, asset management, secure safe deposits, operating gambling and lottery activities.
Office Address and Local Agent A registered local agent and a local address are required for Liberian corporations to receive official notices and legal process service. In addition, every non-resident entity formed or registered under the Liberian Associations Law must retain The LISCR Trust Company as their corporate registered agent in Liberia.
Shareholders
Liberian corporations are required to have at least one shareholder. Shareholders can be private persons or corporate entities.
Corporations are not required to file information about shareholders. In addition, shareholders can live anywhere in the world, and can remain anonymous.
As of May 31, 2018, a new Liberian nonresident company cannot issue bearer shares. Thus, no newly formed Liberian corporations can issue shares in their bearer form. Bearer shares have the word “Bearer” rather than a person’s name on the stock certificate(s). This was a way that some people kept their ownership of a corporation private. Shareholder ownership is not a matter of public record in Liberia. So, privacy remains intact regardless of this new ruling.
Directors and Officers
To incorporate in Liberia, at least one director must be appointed. This could be a natural person or a corporation. The names of the directors and officers are kept private and not part of any public record. Directors and officers can live in anywhere and are not required to live in Liberia.
Authorized Capital
Liberian corporations are not required to maintain a minimum capital. However, most Liberian corporations state their standard authorized share capital is $50,000 USD. When issuing capital, the minimum is one share of par value, and shares that are issued must be paid in full.
Liberia permits bearer shares, registered shares, shares of no par value, redeemable shares, preference shares, and shares with or without voting rights.
Taxes
Offshore Liberian corporations are not required to pay Liberian taxes. However, there is one exception to this rule, where the corporation may be taxed if it is beneficially owned by a person liable to taxation in Liberia (such as a citizen or resident).
Liberian entities can maintain their tax exempt status as long as they do not own real estate in Liberia, conduct business within Liberia and do not operate insurance broking, banking, or mutual fund businesses.
Annual Fees
The annual renewal fee for a Liberian corporation is around $900 USD.
Public Records
The names of beneficial owners and shareholders of Liberian corporations are not included in the public records. However, business records need to be available for government inspection, but the names of the owners, directors, and shareholders do not need to be disclosed.
Accounting and Audit Requirements
Liberian corporations are not required to file financial records with the government. However, business books and records dealing with both operations and financial transactions need to be kept up-to-date in order to demonstrate the proper financial status of the corporation. In addition, such information must be made available to its shareholders. These records can be kept anywhere in the world.
Annual General Meeting
Liberia has no requirement for an Annual General Meeting.
Time Required for Incorporation
It is estimated to be completed within 1 to 3 working days.
Shelf Corporations
Shelf companies are available in Liberia for faster incorporation.
Liberia Corporation Conclusion
Liberian corporations are fairly easy and quick to form. English is spoken In Liberia whose currency uses the U.S. Dollar. In addition, the Liberian legal system aligns with the United States legal system. There are no requirements for a Liberia corporation to open bank accounts in Liberia and are free to open bank accounts worldwide. Liberia corporations do not need to pay corporate or income taxes as long as they do not conduct business within Liberian territory, nor do they need to file annual reports or audits. Privacy and confidentiality is assured as the names of the corporation owners and shareholders are never included in public documents.
