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How To Start A Business in Eritrea

Doing Business in Eritrea

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Eritrea. It examines the procedures, time and cost involved in launching a commercial or industrial firm with between 10 and 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189 economies. The most recent round of data collection was completed in June 2015.

 

No.ProcedureTime to CompleteAssociated Costs
 1Deposit initial capital in bank account
Agency: Commercial Bank

The minimum capital requirement is ERN 15,000 for a private limited liability company and ERN 50,000 for a share company.
1 day no charge
 2Search for a company name
Agency: Business License Office

The search is conducted at the Commercial Registry.
2 days no charge
 3Notarize company statutes
Agency: Notary

At this point, the memorandum and articles of association will have been signed by the shareholders, and a stamp duty will have been paid.
3 days ERN 715.2
 4Register with the Commercial Registry
Agency: Business License Office

To Register with the Commercial Registry, five or six copies of the memorandum and articles of association must be submitted at the License Department of the Ministry of Trade and Industry.
7 days no charge
 5Publish the incorporation notice in the official journal
Agency: Ministry of Information

An incorporation notice is published (in both Arabic and English) in the official journal, Hadas Eritrea, announcing the company incorporation. Protestors have 30 days to contest the company’s incorporation and name.
33 days ERN 600 –1000
 6Apply for a tax identification number (TIN) at the Inland Revenue Department
Agency: Inland Revenue Department

Once the company registers at the Inland Revenue Department for the taxpayer identification number, it is recognized as a VAT taxpayer.
7 days no charge
 7Obtain tax clearance from the Inland Revenue Department
Agency: Inland Revenue Department

All new businesses must obtain tax clearance from the Inland Revenue Department.
1 day no charge
 8Apply for a business license at the Ministry of Trade and Industry
Agency: Ministry of Trade and Industry

A business license application requires tax clearance and property title documents. The cost of the business license ranges from ERN 500 to ERN 1,000.
14 days ERN 500
*9Receive inspection from the Ministry of Trade and Industry
Agency: Ministry of Trade and Industry

The business license inspection, required for zoning purposes, may take only a day, but it also will take a day to set up an appointment.
7 days (simultaneous with previous procedure) ERN 500
 10Obtain approval from the local municipality
Agency: Local municipality

All new businesses must obtain approval from the local municipality.
2 days ERN 100-500
 11Notify the Ministry of Labor and Human Welfare
Agency: Ministry of Labor and Human Welfare

All companies must notify the Ministry of Labor and Human Welfare by completing the registration form and submitting it to the Ministry for approval.
1 day no charge
 12Make a company seal
Agency: Seal maker

The practice is not regulated, but the seal will include the tax code for the company.
3 days ERN 400
 13Apply for tax receipts from the Inland Revenue Department
Agency: Inland Revenue Department

The company may either print the receipts directly at the Inland Revenue Department or obtain permission to print them itself.
10 days ERN 200 for 10 packs of receipts