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Liberia


Liberia

LIBERIA

HISTORY AND POLITICAL STRUCTURE

Liberia, on the west coast of Africa, is bordered by Sierra Leone, Guinea, and Cote d’Ivoire and has an area of 111,369 sq. km (43,000 sq. miles). The Atlantic coastline, characterized by lagoons, mangrove swamps, and river deposited sandbars, is 560 km (348 miles) long, of which over half is sandy beach. Lying parallel to the shore are three distinct belts: a low coastal belt is well watered by shallow lagoons, tidal creeks and mangrove swamps; then comes a gently undulating plateau, 500-800m high, partly covered with dense forests; finally, inland and to the north, is a mountain region which includes Mount Nimba at 1,752m and Waulo Mountain at 1,400m.

The climate is tropical, hot and humid. There are dry winters with hot days and cool to cold nights. Summers are wet and cloudy with frequent heavy showers.

The capital City of Monrovia, with an estimated population of 750,000, has one of the world’s largest natural harbours, and is amongst the most modern ports on the west coast of Africa. Other Sea Ports include Harper, Greeneville and Buchanan.

The founding and establishment of a colony on the West Coast of Africa in the 1820s, which later became the Republic
of Liberia, resulted from a number of initiatives in which freed slaves from the United States of America, through the
instrumentality of the American Colonization Society, returned to Africa in an eventually successful attempt to create
a republic on libertarian lines. The first settlement, around Cape Mesurado, was named Christopolis, later renamed
Monrovia, after the American President, James Monroe, and the Colony as a whole was referred to as Liberia. Other
colonization Societies soon followed, and established colonies in diverse parts including Buchanan, Sinoe, Harper,
and Robertsport. In 1839, these colonies, except Harper and Sinoe merged and created the Commonwealth of Liberia,
adopted a new Constitution and appointed a Governor. Sinoe joined the Commonwealth in 1842, and five years later,
on July 26, 1847, Liberia declared its independence, thus becoming the first independent Black African nation.

For several years, Liberia existed side by side with its indigenous African tribes, and through a gradual process ,
involving agreements, purchase of territories, and extension of its authority, Liberia came to encompass a vast terri-
tory between Sierra Leone on the West, then under British Colonial domination, and Guinea and Ivory Coast on the
North and East, respectively, both then under French Colonial domination. However, the relationship was marred at
diverse times by bloody battles between the freed settlers and the indigenous tribal peoples on the one hand, and by
encroachments upon Liberian territory by its neighbouring colonial powers on the other. Although Liberia maintained
its sovereignty and territorial integrity, its political arrangement was to be the cause of its eventual instability. For 133
years, the settlers, although outnumbered by the indigenous tribal peoples, developed a hegemony through which they
entrenched and completely dominated the political, economic and social spheres of Liberian, to the exclusion of the
indigenous tribes.

So on April 12, 1980, the Americo-Liberian True Whig Party Government was toppled, and President William R. Tolbert, Jr. along with several of his Cabinet Minsters assassinated, in a bloody coup d’etat led by a relatively unknown Master Sergeant, Samuel Kanyan Doe. While this coup d’etat brought to an end 133 years of Americo-Liberian political dominance over Liberia, it, unfortunately, heralded a period of instability for several years to come.

Expecting a new era of democracy in Liberia, the hopes of many Liberians were dashed when the Government of
Master Sergeant Samuel Kanyan Doe suspended the Constitution, banned political party politics, declared marshal
law, and became increasingly characterized by gross and persistent human rights violations committed with impunity.
Under internal pressure, the ban on political parties was lifted, a new Constitution adopted in 1986 and elections held
in which the Master Sergeant Kanyan Doe was declarecd the winner amidst widespread fraud and irregularities.

In December 1989, Charles Ghangay Taylor, under the banner of the National Patriotic Front of Liberia (NPFL), launched
an incursion into Liberia from the Ivory Coast, which in less than six months not only escalated into a full blown civil
war, but led to the disintegration of the Doe Government, and became increasingly characterized by indiscriminate
killings, destruction of property, and massive internal and external displacement of Liberians. It is estimated that over
250,000 persons were killed during the conflict. Concerned that the war in Liberia would have the potential of spill-
ing over and undermining the peace and security of the subregion, the Economic Community of West African States
(ECOWAS) intervened in the conflict and deployed a peace keeping force (ECOMOG) to maintain law and order. An
Interim Government was installed and after several peace agreements, under the banner of ECOWAS and the United
Nations, elections were held in 1998. Charles Ghankay Taylor, the erstwhile leader of the NPFL, emerged as winner, and
was inaugurated as Liberia’s 23rd President for an initial six year term. However, Taylor’s presidency was short lived.
In addition to widespread human rights abuses, Taylor demonstrated gross incapacity to address the deplorable and
deteriorating social and economic conditions, of Liberia. His involvement in the conflict in neighbouring Sierra Leone
through the supply of arms to the Revolutionary United Front (RUF) in exchange for diamonds resulted in sanctions
against him and his government. Unable to contain the advances by Liberians United for Reconciliation and Democ-
racy (LURD) and Movement for Democracy in Liberia (MODEL) (two waring groups), and under intense international
pressure, Taylor resigned as President of Liberia on August 11, 2003, and paved the way for the establishment of a
Transitional Government, which has now brought peace to Liberia.

 Liberia’s population is estimated at 3.44m (2009), 40% of whom are Christian, 20% Muslim, and 40% with indigenous beliefs.

 

English is the official language, but there are about 16 other indigenous languages, of which only a few can be written.

ECONOMY

For several years, up to the advent of the civil war in 1990, the Liberian economy relied on the extractive sector, which consisted mainly of iron ore and which generated over fifty percent of Liberia’s export earnings. Other basic products such as raw timber, rubber, diamonds, iron ore, coffee and cocoa accounted for the remaining 50%. The manufacturing sector remained relatively small and predominantly foreign-owned. Political instability introduced by the military coup d’etat of 1980 and superimposed upon by ten years of civil war, has had a devastating impact on the Liberian economy. The iron ore sector has come to a complete stop, as the three major concessions in Bong Mines, Nimba and Bomi Hills were constrained to close their operations.

Endowed with plentiful water, mineral resources, forests and a climate favourable to agriculture, Liberia’s major export earnings today come from raw timber and rubber with, diamonds, coffee and cocoa on a lesser scale. Prospects also exist for commercially exploitable offshore crude oil deposits in Liberia. The local commercial economy remains dominated by foreigners, mainly Lebanese.

Liberia’s success story, however, has been its shipping and corporate registry, which after some problems in the 1980s is now rapidly growing back to its former prominence. Currently it is the world’s second largest maritime registry - previously it was the largest registry - and continues as the premier quality open registry for safety, security and compliance with international environmental protection requirements.

The revitalization of the economy, and the restoration of basic infrastructure and services, destroyed as a result of the civil war, depend on the re-establishment of a conducive environment for peace and stability in the country, coupled with good governance, and the implementation of sound macro- and micro-economic policies, including the encouragement of foreign investment, and generous support from donor countries.

A Governance and Economic Management Action Plan was created in October 2005 by the International Contact Group for Liberia to help ensure transparent revenue collection and allocation - something that was lacking under the Transitional Government and that has limited Liberia’s economic recovery. The reconstruction of infrastructure and the raising of incomes in this ravaged economy will largely depend on generous financial support and technical assistance from donor countries.

The local currency is the Liberian dollar (LRD), quoted at 55-60 to the US dollar in 2005, after a period of rapid inflation. In March 2009, one US dollar was worth LRD66.

In its report on the Liberian economy in January 2008, the International Monetary Fund (IMF) noted that the government has continued to make good progress in implementing key policies under an IMF-monitored programme, despite severe capacity limitations.

The economy continued to recover during 2008, growing at about 7.5%, after growth of 9.7% in 2007. Inflation peaked at 27% in August, 2008, and unemployment is rife. GDP per head is USD500.

International trade is conducted in the US dollar.

WHY CHOOSE LIBERIA WHEN STARTING A BUSINESS?

There are no discriminatory laws against foreign persons or entities desirous of doing business in Liberia. Foreign corporations and foreign maritime entities can operate in Liberia directly upon authorization by the Minister of Foreign Affairs or indirectly through local agents, who may be individuals, partnerships, or corporate entities. Foreign citizens resident in Liberia, subject to compliance with the Immigration and Labour Laws of Liberia, are also permitted to establish businesses in Liberia consistent with the provisions of the Business Corporation Act (BCA) and the rules and regulations promulgated by the Ministry of Commerce, Trade and Industry.

Liberia is also a maritime and corporate haven. Many corporations are registered under Liberian Law as non-resident domestic corporations(offshore companies) . Since they are not permitted to do business in Liberia, Liberian offshore companies are not subject to Liberian tax. They are not regulated by the Ministry of Commerce or any similar regulatory agency nor are they subject to any enactment intended to regulate the conduct of business in Liberia. As a maritime haven, over 2,600 vessels are registered under the Liberian flag, second only to Panama.

In addition to complying with the requirements of the BCA, all business entities authorized to do business in Liberia,
must register the business with the Ministry of Commerce, Trade and Industry, and obtain a business licence as a con-
dition precedent to commencement of operations. The Ministry may also conduct an on-site inspection of the business
premises.

This formality apart, Liberia has a very liberal business climate intended to attract foreign investment and spur econom-
ic growth and development in the country. Through a liberal Investment Incentive Code, Liberia offers several financial
benefits, including exemption from custom duties, income tax, stamp fees and other benefits, to new and expanding
business enterprises for approved investments projects in areas such as manufacturing, agriculture, forestry, fishing,

and mining. Other potential areas for investment incentives include building and construction and transport and communication. Approved investment projects may also be eligible for support in securing loans and guaranteeing credit by the Central Bank.

There are no statutory foreign exchange controls in Liberia, and funds may generally be freely remitted into and out of
the country. The Prevention of Money Laundering Law of 2002 gives effect to international requirements in respect of
due diligence, record keeping, report of suspicious conduct, the offence of laundering the proceeds of criminal con-
duct and international cooperation in identifying, freezing and confiscating the proceeds of criminal conduct in another
jurisdiction.

The Electronic Transactions Law of 2002 regulates trade conducted electronically; currently there are no explicit data protection laws in force in Liberia, but drafts are in circulation for early implementation. A firm that locates a server in the country is in danger of creating a permanent establishment in tax terms; additionally many Internet activities if conducted by a Liberian corporation, would require a business licence, only available to a resident entity.

Given the damage and destruction occasioned by the civil war, electricity and communication services are liable to
interruption, sometimes for significant periods of time. The official Liberia Telecommunications Corporation was offered
for sale in July, 2006, but the winning bid by United Telephone Exchange (UTE), was contested by Infotel Italia.

In August, 2006, the Liberian Senate confirmed the Chairman and Board of Commissioners of the newly established Liberia Telecommunications Authority (LTA). The body is to oversee the scope and operations of the country’s telecommunications industry.

In February 2008, LTC signed two Memoranda of Understanding with Alink, an Ivorian telecommunications company, and ZTE Corporation, a Chinese manufacturer of CDMA telecommunication equipment. The first MoU turned over the telecommunication equipment to LTC, while the other gave full ownership and control of the entire network systems. The Freeport of Monrovia, together with the port of Buchanan, are amongst the most modern ports on the west coast of Africa; they are regular ports of call for major steamship lines operating between Europe, the US and the Far East. There are direct scheduled flights from both Europe and the US to Roberts International Airport on the outskirts of Monrovia. Airmail services are good and the international courier services are well established.

Advantages of the Jurisdiction of Liberia

 

There are many advantages in forming a Liberian company which include the following:

 

•     All services under one roof: vessel & corporation registration,   mortgage recordation, technical assistance, licens-

ing of marine personnel, radio authority etc.

•     fast registration process

•     low fees

•     International lending institutions and ship builders have confidence in the Liberian Registry

•     Advantages for international operations.

 

a. Corporate directors, officers and shareholders may be of any nationality and may reside anywhere in the world.

b. Corporations may serve as directors.

c. The location of the corporation’s executive office is at the discretion of the corporation.

d. Corporation organizational and management meetings may be held anywhere in the world.

e. Business activities may be conducted in any location.

 

•     Privacy of ownership and operation.

 

a. Names of corporate officers, directors and shareholders need not be filed or listed in Liberia either at incorporation or on an annual basis.

b. Annual reports, tax forms and audit statements are not required in Liberia.

c. Bearer shares are permitted.

d. The same person may serve as the director and hold the offices of president, secretary and treasurer.

e. With less than three shareholders, a corresponding number of directors is permitted - i.e. one shareholder allows one director.

 

•     Flexible financial structures.

 

a. Liberian corporations have no minimum capital requirement.

b. Issuance of shares is not reported or recorded in Liberia

c. If shares have a par value, it may be expressed in any currency.

d. Liberian corporations incur no Liberian tax liability if business activities are conducted outside Liberia.

e. If authorized in Articles, bearer shares may be exchanged for registered shares.

 

•     Convenient formation and maintenance requirements.

 

a. Legal existence can be obtained in one working day.

b. Corporate names can be at once checked for availability and reserved.

Placing an order for the formation of a company

The Liberian Government has an exclusive franchise with one company, which is licensed to incorporate all nonresident companies. Companies are incorporated after receipt of name approval by submission of the proposed Corporation’s Articles of Incorporation. There is a dual system of statutory law based on American/Anglo Common Law for the modern sector, and customary law based on unwritten tribal practices for the indigenous sector. The Principal Corporate Legalisation is the Liberian Associations Law, which incorporates the Business Corporation and Partnership Acts. The Liberian Registry is operated by LISCR, LLC (Liberian International Ship and Corporate Registry) as agent of the Minister of Foreign Affairs of the Republic of Liberia.

The establishment and operation of companies in Liberia is regulated under the Liberian Associations Law. The formation of a Liberian International Business Company can take place by using an order form which can be provided by the Registry Agent.

The Registry Agent will check the name availability of the company (whether there is no company under such name already). In Liberia the law requires that all financial service providers know the identity of their client so the actual contact details must be indicated at the Registry Agent.   This information remains confidential.

 

Requirements for the Registration of an IBC

 

•   Director: Minimum of one Director. Corporations are permitted.

•   Secretary: A secretary is required.

•   Shareholder: Minimum of two shareholders.

•   Shares & Capital: The standard authorised share capital is 500 shares with no par value, or a capital with a stated
      par value up to US$ 50,000. The authorised share capital may be expressed in any currency. The minimum issued
      share capital is either one share of no par value or one share of par value.

•   Name of the Company: Names of Companies with limited liability must have the suffix Limited or Ltd., Corpora-
     
tion, Incorporated, Aktiengesellschaft, Gesellschaft mit beshrδnkter Haftung, Sociθtθ Anonyme, Sociedad Anσni-
      ma or the relevant abbreviations.

•   Company must have a registered office and a registered agent in Liberia.

 

Required Documents to register the company:

 

•   Notarized copy of your Passport.

•   Notarized Copy of utility bill for address verification less than 3 months old

•   Application documents.

 

When all the details are confirmed and the payment for the relevant fees received, the Registry Agent will prepare the Memorandum and the Article of Association of the new International Business Company. These will be filed with the Registry of International Business Companies in Liberia. There is no need to sign any statutory info, the initial company formation documents are prepared and signed on your behalf by the Registered Agent always under the procedures set by the Liberian Associations Law. The Registered agent will file the corporate documents of the company, will pay the applicable registration fees and arrange for the documents to be submitted to the Liberian Registrar of companies for registration. All the relevant documents will be kept in the Registered Agents office.

 

Corporate documents of an IBC

 

•   Original certification of incorporation of IBC

•   Memorandum and article of Association

•   First minutes and Corporate Resolutions containing the appointment of directors, allocation of shares, share cer-
      tificates, copies of the Registry of Directors and the Registry of shareholders if they need them.

•   Share transfer forms, trust declarations, appointments of representative (power of attorney) and the Corporate
     
Seal.

 

Liberia is the oldest democracy in Africa which was founded in 1847.

In 1948, the Republic of Liberia adopted maritime and associations laws to serve the needs of world commerce. Liberia was one of the first offshore, zero tax jurisdictions.

Its excellent safety record and low loss ratio are attributed to its mandatory safety inspection program for vessel hull,
machinery, safety and communications equipment, crew training and qualifications. Liberia has been an active mem-
ber in the International Maritime Organization (IMO) since 1959 and has worked to transform IMO policy into effective
action.

For more than 50 years, Liberia has operated a premier ship registry with one of the largest fleets of merchant ships in the world. About 1900 ships fly the Liberian Flag. Vessel types include tankers, bulk cargo, general cargo, containers, reefers, offshore drilling units, barges, passenger vessels, fishing vessels, yachts and other small craft.

The soundness of the Liberia Maritime Program, the high quality of the vessels and the professional skills with which they are administered are internationally recognised by lending institutions and shipyards that accept mortgages on vessels as security for payment.

Alongside its premier ship registry, which is currently administered by the Liberian International Ship and Corporate
Registry (LISCR), Liberia operates two additional ship registration programs the Domestic Watercraft Program, estab-
lished 24 years ago, based in Liberia and managed by the Bureau of Maritime Affairs, deals with registration of fish-
ing vessels and smaller watercraft operating in the territorial waters of Liberia, and the Pleasure and Small Watercraft
Program, the newest of three, deals with the registration of vessels (yachts, smaller watercraft) of less than 500 gross
tons, operating in and outside the territorial waters of Liberia. The administrative headquarter of this program is in New
York City, where all ship mortgages are recorded and other official documents are issued. It has several offices and

contacts around the world.

 

GENERAL OVERVIEW

Location

West Coast of Africa.

Time zone

GMT.

Population

3,954,979

Capital

Monrovia.

Airport(s)

Robertsfield (Monrovia).

Language

English.

Currency

US Dollar.

Political system

Republic with Constitutional Democracy based on US model.

International dialling code

+231.

Legal system

Based on US Common Law, but supports use of UK precedent.

Centre’s expertise

World's premier Ship and Offshore Corporate Registries since 1948.

TAX

Personal income tax

N/A.

Corporate income tax

Nil for offshore entities and no requirement to file tax return.

Exchange restrictions

None.

Tax treaties

Maritime and corporate bilaterals (US, Greece, other maritime juristictions), no bilaterals on mutual assistance on matters of taxation.

SHARE CAPITAL

Permitted currencies

All.

Minimum authorised capital

No minimum requirement, can be limited by guarantee.

Minimum share issue

One, unless limited by guarantee.

TYPE OF ENTITY

Shelf companies

Aged corporations available, same day incorporation for corporations with current date.

Timescale for new entities

Same day, with delivery of documents in all locations with LISCR office.

Incorporation fees

$713.50, to include registered agent fees and first year tax and fee to registered agent.

Annual fees

US $450.

DIRECTORS

Minimum number

One.

Residency requirements

None.

Corporate directors

Corporate directors and officers permitted.

Meetings/frequency

As directors determine, business can be conducted by resolution without meetings.

SHAREHOLDERS

Disclosure

No.

Bearer shares

Yes.

Minimum number

One, unless limited by guarantee, when none required.

Public share registry

No.

Meetings / frequency

Annual, but business, including AGM, can be conducted by resolution without meetings.

ACCOUNTS

Annual return

No.

Audit requirements

None.

OTHER

Registered office

Automatically provided by registered Agent, The LISCR Trust Company as part of annual fee.

Domicile issues

Re-domicilation in and out of Liberia permitted and entities can convert from one legal form to another.

Company naming restrictions

No duplication, no use of "Bank" or "Insurance", Registrar has discretion to refuse name likely to mislead.

Leader

A leader is one who knows the way, goes the way, and shows the way