Liberia: Investing
According to UNCTAD's World Investment Report 2023, FDI flows to Liberia accounted for USD 73 million in 2022, marking a 60% year-on-year increase but still well below the record level recorded in 2018 (USD 129 million). At the end of the same period, the FDI stock reached USD 9 billion, representing around 226.5% of GDP. The country's mining resources, rubber, and palm oil plantations attract most of the FDI. Hong Kong, the United States, China, Norway, the Ivory Coast, and Croatia are the main investing countries (IMF). Several foreign companies have shown an interest in the commercial exploitation of offshore crude oil deposits along Liberia's Atlantic Coast.
Poor infrastructure, expensive and unreliable electricity, bureaucratic red tape, a weak legal and regulatory framework, lack of transparency in contract awards, high levels of corruption, and unskilled labor still hamper foreign direct investment. Despite these challenges, Liberia boasts abundant natural resources. Its vast expanse of potentially fertile land coupled with ample rainfall supports agricultural ventures, while its rich mineral deposits offer lucrative opportunities for investors in extractive industries. Some large international concessionaires have successfully invested in agriculture and mining. However, negotiating agreements with the government often proves arduous and politicized, particularly for companies unwilling to engage in bribery. The fishing industry, though once vibrant, has struggled to regain pre-war levels, hampered by the need for significant improvements to meet global export standards and achieve economies of scale. Foreign and domestic entities can establish businesses in various sectors in Liberia, with land ownership restricted to citizens but non-citizens allowed long-term leases. The National Investment Commission oversees investments. While the Investment Act and Revenue Code limit certain sectors to Liberian citizens, enforcement varies. These sectors include sand supply, block making, peddling, travel agencies, retailing rice and cement, ice making, tire and shoe repair, auto repair shops below USD 550,000 investment, timber retail, gas stations, video clubs, taxis, used clothing sales, local product distribution, and used car importation (except authorized dealerships). The Investment Act imposes minimum capital requirements for foreign investors, requiring USD 500,000 for non-Liberian-owned enterprises and USD 300,000 with 25% Liberian ownership for partnerships. Liberia ranks 145th among the 180 economies on the 2023 Corruption Perception Index and 144th out of 184 countries on the latest Index of Economic Freedom.
| Liberia | Sub-Saharan Africa | United States | Germany | |
|---|---|---|---|---|
| Index of Transaction Transparency* | 4.0 | 5.5 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 1.0 | 3.5 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 6.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
| Foreign Direct Investment | 2020 | 2021 | 2022 |
|---|---|---|---|
| FDI Inward Flow (million USD) | 87 | 46 | 73 |
| FDI Stock (million USD) | 8,883.5 | 8,929.2 | 9,002.3 |
| Number of Greenfield Investments* | 3.0 | 3.0 | 2.0 |
| Value of Greenfield Investments (million USD) | 130 | 1,543 | 56 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Personal Income tax | Progressive rate from 0% to 25% |
| Up to LRD 70,000 | 2% |
| From LRD 70,001 to 200,000 | 5% of excess over LRD 70,000 |
| From LRD 200,001 to 800,000 | LRD 6,500 + 15% of excess over LRD 200,000 |
| LRD 800,001 and over | LRD 96,500 + 25% of excess over LRD 800,000 |
| Personal Income tax (non-residents) | 15% |
| Liberia | Sub-Saharan Africa | United States | Germany | |
|---|---|---|---|---|
| Number of Payments of Taxes per Year | 33.0 | 36.6 | 10.6 | 9.0 |
| Time Taken For Administrative Formalities (Hours) | 139.5 | 284.8 | 175.0 | 218.0 |
| Total Share of Taxes (% of Profit) | 46.2 | 47.3 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
| Setting Up a Company | Liberia | Sub-Saharan Africa |
|---|---|---|
| Procedures (number) | 5.00 | 7.51 |
| Time (days) | 18.00 | 21.30 |
Source: Doing Business.
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Latest Update: May 2024
