How To Start A Business in Somalia

How to Start a Business in Somalia - Step by Step Guide

Starting a business in Somalia involves several key steps for both local and foreign investors. This guide outlines the process, including relevant fees, taxes, and the expected duration, to help you successfully navigate the business setup in Somalia.

Step-by-Step Guide for Locals

1. Choose Your Business Structure: Common business structures in Somalia include Sole Proprietorships, Partnerships, and Limited Liability Companies (LLC).
2. Register Your Business: All businesses must register with the Ministry of Commerce and Industry.
   Ministry of Commerce and Industry
   Fees: Business registration fee ranges from SOS 50,000 to SOS 150,000 depending on the business type.
3. Obtain a Taxpayer Identification Number (TIN): Apply for a TIN from the Somali Revenue Authority (SRA).
   Somali Revenue Authority (SRA)
   Fees: Free.
4. Register for VAT: Businesses with an annual turnover exceeding SOS 50 million are required to register for VAT.
   Fees: Free, but monthly VAT returns are required.
5. Social Security Registration: Employers are required to register with the Somali National Social Security Fund (SNSF) to make contributions on behalf of their employees.
   Somali National Social Security Fund (SNSF)
   Fees: 5% total contribution, split between employer and employee.
6. Obtain Relevant Permits and Licenses: Depending on the nature of your business (e.g., tourism, healthcare, etc.), you may need additional permits or licenses from the relevant authorities.
   Fees: Varies based on the business type.
7. Open a Business Bank Account: After completing your business registration, open a business bank account with a local bank.
   Fees: Varies depending on the bank.

Step-by-Step Guide for Foreign Investors

1. Choose Your Business Structure: Foreign investors may opt for a Limited Liability Company (LLC) or a Joint Venture with a local partner.
2. Register Your Business: Foreign businesses must also register with the Ministry of Commerce and Industry.
   Ministry of Commerce and Industry
   Fees: Business registration fee ranges from SOS 100,000 to SOS 200,000 for foreign investors.
3. Obtain a Taxpayer Identification Number (TIN): Like local businesses, foreign investors must obtain a TIN from the Somali Revenue Authority (SRA).
   Somali Revenue Authority (SRA)
   Fees: Free.
4. Register for VAT: Foreign investors must also register for VAT if their annual turnover exceeds SOS 50 million.
   Fees: Free, but VAT returns are required.
5. Social Security Registration: Foreign businesses employing staff must also register with the Somali National Social Security Fund (SNSF).
   Somali National Social Security Fund (SNSF)
   Fees: 5% total contribution, with 2.5% from the employer and 2.5% from the employee.
6. Obtain Necessary Permits and Licenses: Foreign investors must ensure they acquire all necessary licenses for their specific business type.
   Fees: Varies based on the business type.
7. Open a Business Bank Account: Foreign investors need to open a business bank account with one of Somalia's commercial banks.
   Fees: Varies depending on the bank.

Estimated Duration

• For Locals: 1-2 weeks
• For Foreign Investors: 2-3 weeks (including registration with relevant authorities)

Useful Resources

• Ministry of Commerce and Industry
• Somali Revenue Authority (SRA)
• Somali National Social Security Fund (SNSF)