In Eritrea, forming a business takes roughly three months. Photocopies of ID cards or valid passports, permanent residence addresses of shareholders, property title documents, recommendations for local authorities where the firm is located, and copies of the manager/police director’s clearance certificate are all essential documents for registration.
Eritrea’s Company Registration Procedures
The registration procedures are as follows:
Opening a bank account and depositing the initial capital.
To form a corporation, an applicant must first open a bank account for the new corporation and deposit the share capital. For a private limited liability business, the minimum capital required is ERN 15,000, and for a share company, it is ERN 50,000.
Looking up a company name
The applicants must then come up with a new name for the newly formed organization. The applicants must check the commercial registry to see if the name they want is available for use, as each firm must have its unique name.
Having company statutes notarized
Following that, applicants should draft and sign the memorandum and articles of incorporation. These are usually drafted by a notary/lawyer and signed by the shareholder, along with the payment of stamp duty. It’ll set you back ERN 715.2.
Registering at the Commercial Registry
The process continues with the company’s registration with the commercial registry. In this scenario, the applicant must submit 5 or 6 signed and stamped copies of the memorandum and articles of organization to the Ministry of Trade and Industry’s license department.
Posting the notice of incorporation in the official journal
The official journal, Hadas Eritrea, publishes an incorporation notice (in both Arabic and English) announcing the company’s formation. The publication lasts at least 30 days to provide time for any objections to the company or its name to be delivered. It costs between ERN 600 and 1000.
Visiting the Inland Revenue Department to obtain a tax identification number (TIN)
If there are no objections to the company or its name, the applicants can apply for a Tax Identification Number (TIN). The corporation is recognized as a VAT taxpayer once it is registered for a taxpayer identification number with the Inland Revenue Department. It takes roughly 7 days to complete the process.
Obtaining tax clearance from the Internal Revenue Service.
After registering with the tax department, all new firms must receive tax clearance from the Inland Revenue Department.
Visiting the Ministry of Trade and Industry to apply for a business license.
Then go to the Ministry of Trade and Industry and get a business license (certificate of incorporation). Tax clearance and property title documents are required for a business license application. The business license costs between ERN 500 and ERN 1,000. The procedure takes about 14 days.
Inspection from the Ministry of Trade and Industry
When a business license application is received, a ministry inspector will visit the applicant’s office and conduct an inspection. The zoning-required business license inspection may only take a day, but it will also take a day to schedule an appointment.
Permission from the Local Government
All new enterprises must get permission from the local government. It costs 100-500 ERN.
Informing the Ministry of Labor and Human Services
All businesses must notify the Ministry of Labor and Human Welfare by receiving, filling out, and submitting a registration form to the Ministry for approval.
Creating a business seal
Although the practice is unregulated, corporations are urged to create a company seal after receiving approval from the government, which must include the company’s tax code. It costs approximately ERN 400.
Requesting for tax receipts from the Inland Revenue Department
Tax receipts from the Inland Revenue Department may also be requested by businesses. The receipts can be printed at the revenue department or they can be printed elsewhere with permission. Ten packets of receipts cost ERN 200.
