Somaliland
Corporate Guide

What are the different types of companies that can be incorporated in Somaliland?

Under Article 6 of the Act, a company incorporated in Somaliland can either be a private or public company. 

In accordance with Article 5 of the Regulations, the application for incorporation should specify whether the company is:

• A private company: Defined as one which restricts the right to transfer its shares, limits the number of its shareholders to 30 and prohibits invitation to the public to subscribe for any shares (Article 7 of the Act).
• Company limited by shares or limited by guarantee (Article 4 of the Act): Defined as a company whose members’ liability is limited to their paid-up shares and, on the other hand, a company whose liability is limited by a guarantee.
• Unlimited company: Described as one which can be either public (formed by seven or more persons) or private (formed by two or more persons).
• Single-member company: Defined as a company that has only one shareholder (Article 7 of the Act) and which is also presumed to be a private company.
• Public company: All companies with more than seven members are assumed to be public companies unless it is stated in its application that it is a private company.

In addition to the above, the law recognises other business entities that are eligible for registration i.e. sole proprietorship, general partnership, cooperative and commercial agency. 

Companies incorporated outside of Somaliland can do business in Somaliland by registering a branch and obtaining authority to do business and conduct activities by filing a Statement of Foreign Entity Authority with the Ministry of Commerce (Ministry) (Article 99). 

The Statement of Foreign Entity Authority should contain the following information:

• The company’s true name and its assumed entity name
• The jurisdiction under which it is incorporated
• The form of the entity under which it is recognised in its country of original incorporation and an authenticated copy of the certificate of incorporation 
• The official address of its principal office
• The date it expects to commence transacting or conducting activities in Somaliland

If the name that a foreign entity wishes to use as its foreign entity name is not available for use as a company name under Article 16, the foreign entity shall assume another available name. 

The statement of the foreign entity should be accompanied by the following documents, submitted in Somali and English: 

• An authenticated copy of the certificate of incorporation from the company’s country of origin / original incorporation
• Address and principal office of the foreign company 
• A declaration indicating the representative or agent of the company in Somaliland (power of attorney)
• A copy of the applicant’s passport and a passport-size photograph

It is important to also recognise that as a Muslim state, Somaliland adheres to Shariah law and, consequently, certain businesses that are not Shariah compliant may be precluded.