Djibouti is a country in East Africa that is located in the Horn of Africa. The Country’s official languages are French and Arabic. The local currency is the Djibouti-Franc. Djibouti is the continent’s largest free trade zone, thus starting a business there might be lucrative. Djibouti’s business policies are among the most welcoming in the world. Please keep in mind that you can establish a business in Djibouti regardless of where you live. It takes no more than 2-3 weeks to register a business in Djibouti and open a bank account there.
Single-Member Limited Liability Companies (EURL), Limited Liability Companies (LLC), Joint-Stock Companies (SA), and Subsidiaries are the most common types of enterprises in Djibouti. Registration in the business registry is handled by the Administrative Agency for Industrial and Corporate Property (Office Djiboutien de la Propriété Industrielle et Commerciale, ODPIC). The ODPIC was established in 2012 as an autonomous government body under the Ministry of Trade and Commerce.
Most investors opt to establish a Djibouti LLC, EURL, or subsidiary. Non-residents must obtain a license if their operations do not fall under one of the tax code’s exceptions. Individuals or legal entities involved in import operations in Djibouti must also get an import license.
Requirements for Registration
If you wish to start a business in Djibouti, you’ll need at least one and no more than 100 shareholders. Foreign investors in Djibouti are not needed to have a local partner, and founders can be people or legal entities. The list of legal documents required is standard. The starting capital for LLC and EURL is $6000. Any business with a turnover of $281342 or more is required to pay VAT. Individuals or businesses engaged in commercial or industrial operations must pay VAT on their profits. The VAT is 10%, the corporate tax is 25%, and the sales tax is 1%. The following is the procedure for forming a company:
Bank account
To start a new business in Djibouti, an entrepreneur must first register a bank account and deposit the necessary funds. As proof of depositing the first capital, the entrepreneur must get a receipt from the bank. The bank must investigate the source of the funds and the initial capital’s purpose. Paperwork stating the entrepreneur’s intent to start a new business must be submitted. If the capital of the company changes throughout its existence, the registrar must be notified. This operation takes two days to complete.
Company statutes
The entrepreneur then works with a lawyer to draft the company statutes. There is no legal requirement to have a lawyer prepare the business statutes, and statute templates have been available online since February 2014 at the ODPIC (Office Djiboutien de la Propriete Intelectuelle et Commerciale) website. Most entrepreneurs, however, still need a lawyer to establish their company statutes. The cost of drafting the statutes is around DJF 10,000.
Registration with the Direction des Impôts
Following that is the filing of statutes with the Direction des Impôts. All new businesses in Djibouti must register with the Direction des Impôts. The registration fee is 5% of the capital, plus stamp taxes of DJF 500 per page. On average, the procedure takes three days.
Name reservation
At the ODPIC, the firm name should be reserved. The following documents must be submitted to the ODPIC to obtain a name certificate and register with the chamber of commerce: forms CN1 and RC1, 2 copies of the representative’s power of attorney, 2 certified copies of the statutes, 2 copies of the bank deposit receipt, and 2 copies of the criminal record. Register with the Chamber of Commerce and post a notice of the start of your business. The ODPIC is also in charge of publishing the notice of the start of activity in the La Nation newspaper. The registration fee is DJF 132,500, with a name reservation charge of DJF 5000.
Application for license
Obtain a professional license and register for taxes. Entrepreneurs must apply for a license at the Service des Patentes, using the registration number obtained from the registrar. This registration is also used for tax purposes. The price ranges from DJF 100,000 to DJF 300,000.
Company seal
Create a company seal, letterhead, and books at the seal maker. Seal and letterhead cost somewhere from DJF 2000-3000 and the books may cost DJF 5000-7000.
Registration with the Social Security Administration
Then, register the business and each employee with the social security administration.
