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Guide to starting a Business in Eritrea

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 
No.ProcedureTime to CompleteAssociated Costs
1Deposit initial capital in bank account1 dayno charge
2Search for company name2 daysno charge
3Notarize company statutes3 daysERN 715.2
4Register with the Commercial Registry7 daysno charge
5Incorporation notice published in official journal33 daysERN 600 –1000
6Apply for tax identification number at the Inland Revenue Department7 days450
7Obtain tax clearance from Inland Revenue Department1 dayno charge
8Apply for business license at Ministry of Trade and Industry14 daysERN 500
* 9Receive business license inspection from Ministry of Trade and Industry7 days (included in previous procedure)ERN 500
10Obtain approval from local municipality2 daysERN 100-500
11Notify Ministry of Labor and Human Welfare1 dayno charge
12Make a company seal3 daysERN 400
13Apply for tax receipts from the Inland Revenue Department10 daysERN 200 for 10 packs of receipts
* Takes place simultaneously with another procedure.
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