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Starting a Business in

Eritrea

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Eritrea. It examines the procedures, time and cost involved in launching a commercial or industrial firm with between 10 and 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 190 economies. The most recent round of data collection was completed in June 2016.

Compare Eritrea to 189 other economies.

  • No. Procedure Time to Complete Associated Costs
    1

    Deposit initial capital in bank account

    Agency: Commercial Bank

    The minimum capital requirement is ERN 15,000 for a private limited liability company and ERN 50,000 for a share company.
    1 day no charge
    2

    Search for a company name

    Agency: Business License Office

    The search is conducted at the Business License Office.
    2 days no charge
    3

    Notarize company statutes

    Agency: Notary

    The memorandum and articles of association is signed by the shareholders before a notary, and a stamp duty is paid.
    3 days ERN 715.2
    4

    Register with the Commercial Registry

    Agency: Business License Office

    To register with the Commercial Registry, five or six copies of the memorandum and articles of association must be submitted at the License Department of the Ministry of Trade and Industry.
    7 days no charge
    5

    Publish the incorporation notice in the official journal

    Agency: Ministry of Information

    An incorporation notice is published (in both Arabic and English) in the official journal, Hadas Eritrea, announcing the company incorporation. Protestors have 30 days to contest the company’s incorporation and name.
    33 days ERN 600 –1000
    6

    Apply for a tax identification number (TIN)

    Agency: Inland Revenue Department

    Once the company registers at the Inland Revenue Department for the taxpayer identification number, it is recognized as a VAT taxpayer.
    7 days no charge
    7

    Obtain tax clearance from the Inland Revenue Department

    Agency: Inland Revenue Department

    All new businesses must obtain tax clearance from the Inland Revenue Department.
    1 day no charge
    8

    Apply for a business license

    Agency: Ministry of Trade and Industry

    A business license application requires tax clearance and property title documents. The cost of the business license ranges from ERN 500 to ERN 1,000.
    14 days ERN 500
    * 9

    Receive inspection from the Ministry of Trade and Industry

    Agency: Ministry of Trade and Industry

    The business license inspection, required for zoning purposes, may take only a day, but it also will take several days to set up an appointment.
    7 days (simultaneous with previous procedure) ERN 500
    10

    Obtain approval from the local municipality

    Agency: Local municipality

    All new businesses must obtain approval from the local municipality.
    2 days ERN 100-500
    11

    Notify the Ministry of Labor and Human Welfare

    Agency: Ministry of Labor and Human Welfare

    All companies must notify the Ministry of Labor and Human Welfare by completing the registration form and submitting it to the Ministry for approval.
    1 day no charge
    12

    Make a company seal

    Agency: Seal maker

    The practice is not regulated, but the seal typically includes the tax code for the company.
    3 days ERN 400
    13

    Apply for tax receipts from the Inland Revenue Department

    Agency: Inland Revenue Department

    The company may either print the receipts directly at the Inland Revenue Department or obtain permission to print them itself.
    10 days ERN 200 for 10 packs of receipts

    * Takes place simultaneously with previous procedure.