Liberia: Investing
According to UNCTAD's 2021 World Investment Report, FDI flows to Liberia accounted for USD 87 million in 2020, unchanged from a year ago, despite the health economic crisis triggered by the Covid-19 pandemic. The FDI stock reached USD 8.9 billion in 2020. In 2021, global FDI flows rebounded strongly, but FDI flows to African countries (excluding South Africa) rose only moderately (UNCTAD’ Investment Trends Monitor). The country's mining resources, rubber and palm oil plantations attract most of the FDI. South Korea, Germany and Singapore are the main investing countries. Several foreign companies have shown an interest in the commercial exploitation of offshore crude oil deposits along Liberia's Atlantic Coast. Moreover, the EU-Africa Infrastructure Trust Fund granted EUR 27 million for technical assistance in engineering, feasibility studies, rural electrification, and loan repayment cost reduction. Canadian company Tango Mining Ltd signed an acquisition agreement to acquire an 80% interest in the Mano River Project (diamond exploration) and Canadian Avesoro is considering expanding the New Liberty gold mine. In September 2021, a new 25-year agreement was reached with ArcelorMittal (USD 800 million), covering expansion of the mine, processing plant, rail and port facilities (Coface).
Poor infrastructure, bureaucratic red tape, high levels of corruption and unskilled labor still hamper foreign direct investment. However, the government is currently trying to increase the transparency of public procedures for investors and the country benefits from various natural resources (rubber, iron, gold, diamonds, oil). Liberia ranked 175th out of 190 countries in the latest World Bank’s Doing Business report, down one position from a year earlier.
| Liberia | Sub-Saharan Africa | United States | Germany | |
|---|---|---|---|---|
| Index of Transaction Transparency* | 4.0 | 5.5 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 1.0 | 3.5 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 6.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
| Foreign Direct Investment | 2019 | 2020 | 2021 |
|---|---|---|---|
| FDI Inward Flow (million USD) | 87 | 87 | 46 |
| FDI Stock (million USD) | 8,796.5 | 8,883.5 | 8,929.2 |
| Number of Greenfield Investments* | 4.0 | 3.0 | 3.0 |
| Value of Greenfield Investments (million USD) | 2,523 | 127 | 1,545 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Personal Income tax | Progressive rate from 0% to 25% |
| Up to LRD 70,000 | 2% |
| From LRD 70,001 to 200,000 | 5% of excess over LRD 70,000 |
| From LRD 200,001 to 800,000 | LRD 6,500 + 15% of excess over LRD 200,000 |
| LRD 800,001 and over | LRD 96,500 + 25% of excess over LRD 800,000 |
| Personal Income tax (non-residents) | 15% |
| Liberia | Sub-Saharan Africa | United States | Germany | |
|---|---|---|---|---|
| Number of Payments of Taxes per Year | 33.0 | 36.6 | 10.6 | 9.0 |
| Time Taken For Administrative Formalities (Hours) | 139.5 | 284.8 | 175.0 | 218.0 |
| Total Share of Taxes (% of Profit) | 46.2 | 47.3 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
| Setting Up a Company | Liberia | Sub-Saharan Africa |
|---|---|---|
| Procedures (number) | 5.00 | 7.51 |
| Time (days) | 18.00 | 21.30 |
Source: Doing Business.
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Latest Update: May 2022
