Monrovia – Grand Kru Representative, Cllr. J. Fonati Koffa, has presented the first bill since the commencement of the 54th Legislature, seeking the reinforcement of protection of Liberian businesses.
Report by Henry Karmo – [email protected]
The Act, at the same time, seeks to empower local entrepreneurs.
The Bill dubbed Liberian Business and Economic Empowerment Act of 2018, is also intended to provide criminal penalties for violators of the 1973 Investment Act and also seeks to create fund to ensure that Liberian businesses in the subject category succeed.
The Bill, according to the framer, was necessitated by the finding of the Legislature that the “Liberianization” has minimally achieved its objectives due to circumvention and limited access to capital by Liberian.
Accordingly, the need for the creation a more restrictive environment and a stronger enforcement mechanism so that Liberianization as envisaged by the government and people of Liberia becomes full-fledged reality and not just a goal was realized.
What’s in the draft law?
The act, if passed, will ensure that businesses reserved for the exclusive ownership of natural persons who are citizens of Liberia are protected.
In the act businesses including; supply of sand, Bricks making, real estate Agencies and Real Estate Management services, Travel Agencies or Travel Agency Contract for Airlines and Distribution and retail sale of flour, Cement, and rice.
The act is also aimed at protecting businesses including; retail of stationery and office supplies, ice making and ale of ice, tire repairs shop, independent auto repair shop (not associated with a dealership), shoes repair shop, retail of timber and planks, operation of gas stations video clubs and operation as well as importation and sale of used cars (except for certified used cars imported by authorized dealership of the same make).
In the draft law presented by the grand Kru District 2 lawmaker, if passed into law foreign investors may invest or engage in businesses with investment capital is more than one million united states dollars (1,000,000) and at least twenty-five percent (25%) of the common stock share of the company is owned by natural Liberian persons or businesses wholly owned by natural persons.
“Operation of any enterprise in this section must be approved by the National Investment Commission (NIC) before any license can be issued by the relevant agencies”
Businesses under this category include; production and supply of stone and Granite, Ice Cream manufacturing, advertising agencies, graphics and commercial artists, production of poultry and poultry products and entertainment centers not connected with hotel establishment sale of animal and poultry feed.
The draft law crafted by the Grand Kru County Lawmaker will ensure that all foreign companies doing business in Liberia and enjoying duty-free services or other tax incentives will be required to source all supplies and services that are available on the local market.
Provided, however, that the requirement of this act may be waived if the cost of the goods or service is more than twenty percent (20%) when compared to ECOWAS region countries.
“Any company filing to adhere to this provision will be denied duty-free and other tax incentives on those purchases.”
In order to be considered a foreign investor for the purpose of forming a joint venture with a Liberian Citizen under this act, the foreign national must provide proof of funding of funding by the display of local bank confirmation of wired funds into the country from foreign sources.
Said, funds shall not be less five hundred thousand United States dollars (US$500,000.00) for the initial deposit.
In any area of business or industry in which a natural Liberian person or business owned by natural Liberian persons has made investment in excess of one million United States dollars (1,000,000.00), no business owned by non-Liberian shall be allowed to engage in such activities unless it is proven that the Liberian owned business is unable or incapable of meeting market demand. This does not apply to other Liberian owned businesses or natural persons.
As drafted in the act the government of Liberia will be authorize to establish a Liberian Business Development and investment fund at the Liberian Bank for development and investment (LBDI) of not less than twenty million united states dollars (US$20,000,000.00) for purpose of guaranteeing or subsidizing loans or providing incentives or financing instruments for Liberians to succeed in accordance with the goals and objectives of this act.
The Bill is co-sponsored by Representatives Dorhwon Glekia, Hanso Kiazolu, Marvin Cole, Ben Fofana, Clarence Gahr, Tiberrolse Taponweh, Samuel Enders, Dixon Sebo, Ellen Attoh, Moima Briggs-Mensah, Ivah Jones, Rostolyn Dennis, Zoe Bahway, and Clarence Massaquoi.