1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment (FDI)
Government officials frequently announce that “Liberia is open for business” and formed a Business Climate Working Group (BCWG) to improve the investment climate in 2018. A March 2019 BCWG-led forum resulted in the cancellation of Import Permit Declaration requirements and extended residency visas and work permits from one to five years. However, a weak legal and regulatory framework, lack of transparency in contract award processes, and corruption continue to inhibit foreign direct investment.
The 2010 Investment Act prohibits and restricts market access for foreign investors, including U.S. investors, in certain economic sectors or industries. See “Limits on Foreign Control and Right to Foreign Ownership and Establishment”, below for more detail.
Charged with facilitating foreign investment in Liberia, the National Investment Commission (NIC) develops investment strategies, designs investment policies, and executes investment programs to attract foreign investment and negotiate investment contracts or concessions.
The NIC and private sector groups, such as the Liberia Chamber of Commerce (LCC), facilitate dialogue through formal business roundtables on investment climate issues. They also meet with investors and government officials to discuss and suggest solutions to critical policy issues. However, some business leaders report difficulties in obtaining meetings with government representatives to discuss new policies perceived to damage the business climate.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign and domestic private entities may own and establish business enterprises in many sectors. Only Liberian citizens, however, may own land. Per the Investment Act (“The Act”) and Revenue Code, only Liberian citizens may operate businesses in the following sectors and industries:
(1) Supply of sand
(2) Block making
(4) Travel agencies
(5) Retail sale of rice and cement
(6) Ice making and sale of ice
(7) Tire repair shops
(8) Auto repair shops with an investment of less than USD 550,000
(9) Shoe repair shops
(10) Retail sale of timber and planks
(11) Operation of gas stations
(12) Video clubs
(13) Operation of taxis
(14) Importation or sale of second-hand or used clothing
(15) Distribution in Liberia of locally manufactured products
(16) Importation and sale of used cars (except authorized dealerships, which may deal in certified used vehicles of their make)
The Act also sets minimum capital investment thresholds for foreign investors in certain other business activities, industries, and enterprises. (See Section 16 of the Act ) For enterprises owned exclusively by non-Liberians, the Act requires no less than USD 500,000 in investment capital. For foreigner investors partnering with Liberians, the Act requires no less than USD 300,000 in total capital investment and at least 25 percent aggregate Liberian ownership. The Liberian constitution restricts land ownership to citizens, but non-Liberians may hold long-term leases. See Real Property, below for further detail.
Liberia does not maintain an investment screening mechanism for inbound foreign investment.
Other Investment Policy Reviews
The government has not undergone a third-party investment policy review in the past three years.
All businesses must register with and obtain authorization from the to conduct business or provide services in Liberia. LBR services are available to local and foreign companies at its head office in Monrovia. See .
Most of Liberia’s commercial laws and regulations are not publicly available online.
The NIC chairs an ad hoc cabinet-level Inter-Ministerial Concessions Committee (IMCC) that convenes often lengthy bidding and negotiation processes for long term investment contracts such as concessions. The establishment of a concession requires ratification by the national legislature, approval by the President, and printing of handbills. The Liberia Revenue Authority (LRA) handles tax payment processes and administration. The National Social Security and Welfare Corporation (NASSCORP) handles related social security processes.
According to the World Bank, establishing a business requires five procedures and 18 days. Foreign companies must obtain investment approval from the NIC if they seek investment incentives. Foreign companies must use local counsel when establishing a subsidiary. If the subsidiary will engage in manufacturing and international trade, it must obtain a trade license from the LBR.
The government neither promotes nor incentivizes outward investment but neither does it restrict Liberian citizens from investing abroad.
5. Protection of Property Rights
Liberian law protects property rights and interests, but with weak enforcement mechanisms. “Long term” mortgages or construction loans of up to 10 years are only available through the . Only Liberians may own land, with the limited exception provided in Article 22(c) of the Constitution that non-citizen missionary, educational, and other benevolent institutions shall have the right to own property, as long as that property is used for the purposes for which acquired; property no longer so used shall revert to the Republic.
Other foreigners and non-resident investors may acquire leases, which ordinarily run for 25-50 years. Liberian law provides for no official waiver mechanisms to limitations on foreign land ownership.
Although the (LLA) encourages property owners to identify and register land titles, it does not have systemic enforcement programs. The LLA estimates that less than 20 percent of the country’s total land is formally registered. Conflicting land ownership records are common. Investors sometimes experience costly and complex land dispute issues, even after concluding agreements with the government. In the interest of minimizing lost productivity and in the absence of government adjudication, companies often make additional community level payments or agreements to resolve competing land claims, although such settlements may still not resolve future disputes. See Limits on Foreign Control and Right to Private Ownership and Establishment, above, for further information, including implementation of the Land Rights Act. Also, see .
Foreign companies seeking to lease land may lease privately- or publicly-held land. Frequently, foreign companies seeking to acquire land leases do so through direct negotiations with the relevant landlords/owners. In September 2018, Liberia enacted the long-awaited Land Rights Act, designed to resolve historical land problems that have caused conflicts and communal strife in the past. With implementation still underway, the Act categorizes land ownership as:
- Public land, which is owned, but currently not used by the government
- Government land, which is used by government agencies (for office buildings or other purposes)
- Customary land, on which the livelihoods of most rural communities depend
- Private land, owned by private citizens.
Intellectual Property Rights
The Liberia Intellectual Property Act covers domain names, traditional knowledge, transfer of technology, and patents/copyrights; enforcement is weak. The Liberia Intellectual Property Office (LIPO) operates as a semi-autonomous agency functioning under the administrative oversight of MOCI. It lacks the technical skill to address IPR infringements. However, in November 2019, MOCI and LIPO established the Copyright Society of Liberia (COSOL) to develop legal and international frameworks agreements to guide the collection and distribution of royalties. The government also committed to fast-tracking the ratification of outstanding international IP treaties and legal instruments in line with WTO standards.
There is not a system to track and report on seizures of counterfeit goods. The government does not prosecute IPR violations. Many Liberians are unfamiliar with IPR, and IP and industrial property rights infringement is prevalent, including unauthorized duplication of movies, music, and books. Counterfeit drugs, apparel, cosmetics, mobile phones, computer software, and hardware are sold openly.
8. Responsible Business Conduct
Liberian authorities do not clearly define responsible business conduct (RBC) and have not established policies or a national action plan to promote or encourage them. The government does not factor RBC concepts into its procurement decisions, nor does it effectively and fairly enforce domestic laws regarding human rights, labor rights, consumer protection, or environmental protections intended to protect individuals from adverse business impacts. Foreign companies are encouraged, but not required, to publicly disclose their policies, procedures, and practices to highlight their RBC practices. Some non-governmental organizations (NGOs), civil society organizations (CSOs), and workers organizations/unions promote or monitor foreign company RBC policies and practices. However, NGOs and CSOs monitoring or advocating for RBC do not conduct their activities in a structured and coordinated manner, nor do they tend to monitor locally-owned companies.
Most Liberians are generally unaware of RBC standards. Generally, the government expects foreign investors to offer social services to local communities and contribute to a development fund for the area in which the enterprise conducts its business. Some communities complain that these contributions to social development funds do not reach them. The government frequently includes clauses in concession agreements that oblige investors to provide social services such as educational facilities, health care, and other essential services. There have been reports that local communities expect foreign investors to provide additional benefits to those outlined in formal concession agreements.
Liberia is a member of the Extractive Industries Transparency Initiative (EITI). The monitors and evaluates concession company compliance with concession agreements, but it does not design policies to promote and encourage RBC.
Liberia suffers from corruption in both the public and private sectors. Some officials engage in corrupt practices with impunity. Liberia has laws against economic sabotage, mismanagement of funds, bribery, and other corruption-related acts, including conflicts of interest. In 2019, Transparency International lowered Liberia’s rank from 120 to 137 out of 180 countries in its corruption perception index. See .
The (LACC) cannot directly prosecute corruption cases. It must first submit/refer cases to the (MOJ) for prosecution. If the MOJ does not prosecute within 90 days, the LACC may then take those cases to court. The LACC continues to seek public support for the establishment of a specialized court to exclusively try corruption cases.
Foreign investors generally report that corruption is most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems. Multinational firms often report paying fees not stipulated in investment agreements. No laws explicitly protect NGOs that investigate corruption.
Liberia is signatory to the Economic Community of West African States (ECOWAS) Protocol on the Fight against Corruption, the African Union Convention on Preventing and Combating Corruption (AUCPCC), and the UN Convention against Corruption (UNCAC).
Resources to Report Corruption
Contact at government agencies responsible for combating corruption:
Baba Borkai, Chief Investigator
Liberia Anti-Corruption Commission (LACC), Monrovia,
Toll free: (+231) 777-313131
Contact at a “watchdog” organization (local or nongovernmental organization operating in Liberia that monitors corruption):
Anderson Miamen, Executive Director
Center for Transparency and Accountability in Liberia (CENTAL)
Tel: (+231) 886-818855
10. Political and Security Environment
President George Manneh Weah’s inauguration in January 2018 marked the first peaceful transfer of power from one democratically elected president to another since 1944. Increasing freedom of speech for Liberians as well as the relatively free media landscape in the country has led to vigorous pursuit of civil liberties, resulting in active, often acrimonious political debates and organized, non-violent demonstrations. In 2019, the government signed into law the Kamara Abdullah Kamara Act of Press Freedom to strengthen its commitment to several legal instruments it previously signed, such as the Freedom of Information Act and the Table Mountain Declaration. Numerous radio stations and newspapers distribute news throughout the country. The government has identified land disputes and high rates of youth and urban unemployment as potential threats to security, peace, and political stability.
The Government of Liberia has shouldered national security responsibility since the United Nations Mission in Liberia (UNMIL) officially withdrew from the country in March 2018. Protests and demonstrations may occur with little warning. The United States and other international donors continue to assist in the education and training of the Armed Forces of Liberia and law enforcement agencies.