Land ownership rights are strongly upheld within Somaliland. Both foreigners and Somalilanders are freely able to purchase and sell property as they wish. 

Property transfers are registered with the Appeal Court in the region where the transaction takes place, after the tax on the transfer of the property is payable to the Municipality which oversees the transfer, as well as a three percent (3%) national property transfer tax payable to the Ministry of Finance. When purchasing land, however, investors should note that land records are currently being developed across Somaliland and the ability for an investor to properly perform an extensive title search is currently limited. Investors can search information from the local governments which control the area.

Once a land transfer has been registered with the Appeals Court and the transfer taxes have been paid, the owner of the land will be able to exercise control over the land without restriction. Municipalities are responsible for issuing of land titles after a Deed has been registered with the Appeals Court.

The property may also be easily leased in Somaliland. There are few restrictions on a foreign or domestic investor’s ability to lease land. The rights and duties of the leasehold are largely taken from the terms of the lease between the land owner and the lessee, and Somaliland’s courts generally will uphold the terms of the lease as agreed by both the parties.

Considerations for Corporate Structuring Authorized Corporate Forms

Companies may be formed with liability limited to either an investor’s share investment or by guarantee. The corporate structure of a venture is also flexible where both public and private companies are allowed to be registered and operate in Somaliland. Companies that have less than 30 shareholders are defined as private companies and companies that have more than 30 shareholders are defined as public companies. Public companies have higher disclosure requirements than private companies. Partnerships and Sole Proprietorship Ventures are possible in Somaliland and they are governed by the Civil Code.

Minimum Capital

The minimum capital required under the Company’s Act is left to the discretion of the Registrar of Companies which is located within the Attorney General’s office. In practical terms, the Registrar of Companies at this time has established flexible minimum capital requirements which are not overly onerous for many investors but will depend on the contemplated enterprise’s area of operations.

Director’s Liability

The Members of the Board of Directors of Somaliland registered companies enjoy strong protection under the Company’s Act. Directors enjoy a strong application of the business judgment rule in Somaliland, and are well insulated under the Company’s Act from suits by those shareholders who may be affected by their business decisions. Directors have nearly complete discretion to perform their business oversight and direction functions as long as they stay within the objects clause of the company. The Board of Directors decides the dividend payable to the shareholders, if the enterprise was profitable in the previous year. For further information please check the link below: