Liberian Companies
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The Republic of Liberia is a country on the west coast of Africa, bordered by Sierra Leone, Guinea, and Côte d'Ivoire. It has recently been afflicted by two civil wars (1989–1996 and 1999–2003) that have displaced hundreds of thousands of its citizens and destroyed the Liberian economy. The United Nations Mission in Liberia (UNMIL), which maintains a strong presence throughout the country, completed a disarmament program for former combatants in late 2004, but the security situation is still volatile and the process of rebuilding the social and economic structure of this war-torn country remains sluggish.
Official language English Capital Monrovia President Ellen Johnson-Sirleaf Independence July 26, 1847 Currency Liberian dollar (United States dollar also in common use) Time zone UTC
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[edit] Liberian Companies
Liberian Companies have been used as asset holding and trading vehicles by non Liberians in the same way as companies set up in other tax havens such as the Cayman Islands. Liberian Companies are noted for their simplicity and complete absence of any form of taxation provided there is no economic activity in Liberia. Liberian Companies were popular in the 1970s and 1980s, but have fallen out of favour in recent years due to the ongoing civil war, which supposedly ended in October 2003. There are two income tax treaties with Sweden and West Germany in force.
[edit] Shipping companies
Due to favorable rules and low taxes on ships, many large ships are registered in the name of Liberian companies.
Liberia has operated a flag registration since 1948. Registering a ship in Liberia is easy and straightforward. You don’t have to fly to Liberia to form a corporation or register a ship. A Liberian Trust Company with correspondents in New York and Zurich can handle all the formalities. Because Liberia’s corporate law is modeled after Delaware Law, they are easily understood by most Americans.
The procedure generally followed goes like this. The instructions for incorporation are given by the client to a New York service company, which relays the information by cable to Liberia. Model articles of association (by-laws) are generally supplied at a modest price, and a company can be formed in as little time as 48 hours. A cable from Liberia notifies the client that the company has been registered on such and such a date, and you are officially in business.
Some people believe Liberia’s ship registration service is now the largest in the world in terms of gross tonnage, and its lead will likely increase over its archrival Panama. There are no restrictions on crew nationality or routes, or on charter, mortgage, or transfer of vessels.
The Liberian maritime regulations require Liberian ownership of Liberian registered vessels. This is complied with by forming a Liberian corporation, which then becomes the registered owner of the vessel. There are no restrictions on the nationality of shareholders, directors, or officers, and complete anonymity is available. There are no statutory annual corporate filing requirements. Income from the operation of vessels is exempt from local Liberian income taxes, unless the vessel engages exclusively in domestic Liberian traffic. There are no exchange controls on shipping income.
Liberia has a vested interest in keeping its status as a haven for shippers upright. Liberia derives substantial revenues from annual fees. The annual fee required of every ship registered in Liberia to help finance Liberia’s marine safety program was $725 in 1980, plus an additional one-cent per net registered ton.
[edit] Documentation
Liberian companies were very popular due to their very low formation costs and simple documentation, which is most importantly all in English.
[edit] Subscription Rights
The Articles and Memorandum of incorporation typically carry the subscription rights issued to bearer. The holder of the subscription rights may thus issue shares, or appoint and remove directors. It is sufficient for the subscription rights to be produced for the holder to elect himself or any third party as director. Directors Shareholders and other officers do not need to be registered in Liberia and thus it is not possible to obtain from the public record any form of evidence of directors shareholders or officers. This particular feature makes the administration of a Liberian Company particularly simple for offshore Trust Companies. Unfortunately it can sometimes create difficulties if a Liberian company is to enter into a contract, since the Counter-Party must follow the paper trail to ensure they are dealing with duly elected officials of the Company.
[edit] Accounts
Liberian companies do not need to produce accounts. An audit is thus not required.
[edit] Fees
It costs about $700 to register a company in Liberia, with an annual license fee of $250 (up from $100) payable to the government after that. It is required that you maintain a registered business agent in Liberia, and the Liberian Trust Company (in NYC or Zurich) that handled your incorporation can provide you with an agent for a nominal sum.
There is no requirement that you or any company director be physically present in Liberia at any time. If you need a nominee director (the company ordinarily has one to three), the Liberian Trust Company will provide them at no extra charge.
There are no minimum capital investment requirements to start a Liberian company, but to maintain “non-resident domestic corporation” status at least 75% (previously 50%) of the company shares (or share subscription rights) must be owned and controlled by non-residents.
[edit] No Bank Secrecy Laws
Liberia has no special bank secrecy laws like other tax havens, but this is not a deterrent as few Liberian offshore corporations actually handle their banking transactions within Liberia’s territory borders. Moreover, there is no requirement that they must bank in Liberia.
Corporate records are available for public inspection but there is no requirement that the real beneficial owners of the company be publicly disclosed.
[edit] Doing business or living in Liberia
Liberia itself is not the best place in the world to grow up in. 50% of the population is aged 18 years or less. The average life expectancy for males is 37 years. 6% of the adult population are officially infected with AIDS. The risk of infection with other tropical diseases such as protozoal diarrhea, hepatitis A, typhoid fever, malaria, yellow fever, schistosomiasis and Lassa fever is described by the CIA as "very high". Average annual income (GDP per capita) is $900. It has one of the highest infant mortality rates in the world with over 13% failing to survive until the age of one year. The average woman gives birth to more than six children and is unsurprisingly dead by the age of 40. The security situation after the ending of the civil war is still volatile.
