Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
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 up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business
Time to Complete
Deposit initial capital in bank account
Search for company name
Notarize company statutes
Register with the Commercial Registry
Incorporation notice published in official journal
ERN 600 –1000
Apply for tax identification number at the Inland Revenue Department
Obtain tax clearance from Inland Revenue Department
Apply for business license at Ministry of Trade and Industry
Receive business license inspection from Ministry of Trade and Industry
7 days (included in previous procedure)
Obtain approval from local municipality
Notify Ministry of Labor and Human Welfare
Make a company seal
Apply for tax receipts from the Inland Revenue Department
ERN 200 for 10 packs of receipts
* Takes place simultaneously with another procedure.