Djibouti is among the perspective African countries that create favorable conditions for doing business. It has huge and well-known points that attract many foreign investors: ports, an international airport, and free trading zones. Apart from these benefits, the incorporation of a new business in Djibouti or any other city of this state can open extra advantages to all interested foreign investors.
Why Open a Company in Djibouti?
Establishing a company in Djibouti can make available the next advantages to your business:
- strategic geographical location;
- entrance to a huge market;
- ease of starting a new business, remote registration is available;
- lots of benefits and incentives within free trade zones (including the exemption from corporate tax as well as duty-free regimes);
- absence of foreign currency control limitations.
Legal and Organizational Forms
The easiest way to start a company in Djibouti is to choose the option of a limited liability company. The promoters will not be in charge of any hypothetical losses and other results of its operation in excess of the funds that were previously contributed. There are no formal statutory requirements regarding the starting capital but it still has to be equivalent to the company’s business goals. This entity can have 1-100 shareholders, either nationals or foreigners, each of them may be an individual or body corporate.
As an alternative to a limited liability company, it is possible to incorporate a joint-stock company, branch, or register a sole proprietorship. Contact Prifinance attorneys to get more details.
Steps to Register a Business in Djibouti
The process of opening a company in Djibouti in any case will comprise these steps:
- Choosing and verifying the uniqueness of a trading name for a future company.
- Drafting and executing corporate documents, including the articles of association and resolutions of founders.
- Arranging office premises for a new entity.
- Collecting and formalizing correctly all the must-have details about the company’s promoters, managers, final beneficiaries, and a mother company (if any).
- Paying registration fees and lodging the registration package for consideration, the online option is available. Entering the information about a new company in the local Commercial Register.
- Formalization of a new company for the purposes of paying taxes and compulsory social security payments.
- Opening corporate bank accounts.
- Applying for and obtaining specific licenses that may be compulsory for shortlisted types of regulated activities.
Legal and Regulatory Aspects
The local legal regulations are business-friendly and encourage the flow of foreign capital. 100% foreign ownership is acceptable according to the applicable laws. The rules for company incorporation are simple and straightforward to apply. It is generally possible to incorporate a company in 2-3 weeks here. Carrying out specific kinds of regulatory activities will still require getting licenses. It is possible to repatriate the profits and capital from Djibouti without any difficulties.
Taxation in Djibouti
Any investor who wants to establish a company in Djibouti should keep in mind these important tax highlights:
- Profit tax (for business) – 25%
- Income tax (for individuals) – a progressive scale is applied depending on the income (the maximal rate is 30%)
- Sales tax (VAT alternative) – 10%
- Withholding tax (for non-residents) – (1) dividends – 0% (2) interests – 0% (3) royalties – 15%
- Capital gains tax – vary depending on the type of assets (the standard profit/income tax rate is usually applied).
How Prifinance Attorneys Can Assist You
If you wish to create a new or buy a company in Djibouti among the existing ones, Prifinance attorneys are prepared to implement practically either of these business decisions. Lawyers have already more than 11 000 completed registration cases and versatile expertise in this field. Submit the request and enjoy fully professional and personalized legal support.