This document has been provided by the
International Center for Not-for-Profit Law (ICNL).
ICNL is the leading source for information on th e legal environment for civil society and public
participation. Since 1992, ICNL has served as a resource to civil society leaders, government
officials, and the donor community in over 90 countries.
Visit ICNL’s Online Library at
for further resources and research from countries all over the world.
Disclaimers Content. The information provided herein is for general informational and educational purposes only. It is not intended and should not be
construed to constitute legal advice. The information contai ned herein may not be applicable in all situations and may not, after the date of
its presentation, even reflect the most current authority. Noth ing contained herein should be relied or acted upon without the benefit of legal
advice based upon the particular facts and circumstances pres ented, and nothing herein should be construed otherwise.
Translations. Translations by ICNL of any materials into other languages are intended solely as a convenience. Translation accuracy is not
guaranteed nor implied. If any questions arise related to the accuracy of a translation, please refer to the original language official version of
the document. Any discrepancies or differences created in the tr anslation are not binding and have no legal effect for compliance or
Warranty and Limitation of Liability. Although ICNL uses reasonable efforts to include ac curate and up-to-date information herein, ICNL
makes no warranties or representations of any kind as to its a ccuracy, currency or completeness. You agree that access to and u se of this
document and the content thereof is at your own risk. ICNL discl aims all warranties of any kind, express or implied. Neither ICNL nor any
party involved in creating, producing or delivering this document shall be liable for any damages whatsoever arising out of access to, use of
or inability to use this document, or any e rrors or omissions in the content thereof.
INVESTMENT INCENTIVE CODE
Section 2. Definition:
As used in the act, unless the context otherwise requires, the following
terms shall mean.
– Certain Customs Duty, Income Tax and other benefits
which the Government is to offer under this Act to a new and
expanding business enterprise for the purposes of promoting the
economic growth and the development of Liberia.
– The final plan describing the planned Operation,
the required investment, and containing projected balance sheets and
profit statements. The project proposal also contains the incentives
requested. The project proposal is submitted with a draft Investment
Incentive Contract as proposed by the sponsor. When approved, the
Project Proposal becomes a part of the Investment Incentive Contract.
Investment Incentive Contract
– A contract, supported by the
approved Project Proposal, between the Government of the Republic of
Liberia and the sponsor of an Investment Project setting out the
customs duty, income tax and other benefits (incentives) granted by
the Government of the Republic of Liberia in respect of Investment
Approved Investment Project-
An Investment Project in respect of
which an Investment Incentive Contract has been signed by the
Government of the Republic of Liberia and the Sponsor. An Investment
Project may become an Approved Investment Project whether the
project is a completely new enterprise or the essential expansion of an
existing enterprise where essential expansion shall mean an increase
of existing facilities through an incremental investment amounting to
at least 25% of the sum total of capital hitherto invested and
associated with commensurate increase in employment.
– One or more person(s), partnership(s), corporation(s) or
other entity (entities) or any combination wherefore that undertake,
finance and operate an Approved Investment Project in Liberia. The
term Sponsor shall include sponsor or assignee if the assignment is
made in according with Section 15 of this act.
– Capital, plant and equipment, machinery and
know-how imported for use in creation of the facilities of an Approved
Investment Project; furthermore, raw materials, semi-finished
products auxiliary materials and other supplies required in the
production processes of the final products.
Goods which are being produce in Liberia that are comparable in
quality and price to goods intended to be imported determined by the
Government shall be excluded from approved import goods considered
by the sponsor as approved imports shall be specified in the project
proposal and in the case of the existence of competing local supplies,
the once verifying insufficiency of such rest with the sponsor and must
be detailed in the project proposal.
Section 3- The Application of This Act:
1) Incentives may be granted to sponsors undertaking Approved
Investment Projects in Liberia, that:
Process, fabricate, manufacture finished and semi-finished goods from
raw materials and or assemble finished goods from component parts,
i.e., enterprise of the manufacturing sector.
2) Incentives may also be granted to sponsors undertaking other
Approved Investment Projects in Liberia that belong to the sector of:
a. Agriculture, Forestry and fishing; or
b. Mining and Quarrying; or
c. Electricity, Gas and Water, to the extent that this is not
contrary to the Public Authority Laws; or
d. Building and Construction; or
e. Transportation and Communication; or
f. Those sub-sectors of the service sector which provide
technical services to the sectors listed in subsection (1) and
in paragraphs (a) through (c) in the present subsection, or
g. Those sub–sectors of trade and services that provide
services and supplies to tourism.
3) An Approved Investment Project may be a combination of activities
belonging to more then one of the sectors and sub-sectors listed in
sub-sectors (1) and (2) above.
4) All persons or entities seeking duty, tax or other privileges as incentive
for a new investment or investment essential expansion of existing
business in Liberia shall do so under this act provided that all rights
and privileges which have been granted as to as will as obligations of
enterprises during business in Liberia prior to the enactment of this act
shall remain unaffected by the operation of the Act.
5) An investment incentive contract shall be negotiated and signed by the
Government of the Republic of Liberia with the sponsor of an approved
Section 4 – Conditions
No enterprise shall be accorded the approved investment project
status; that is no incentives shall be granted unless it satisfies the
1) Fall within the overall priority as established by the National Planning
2) Ensure the permanent employment of Liberians at all levels and carries
out approved training schemes and in case of expansion increases,
employment and augment training activities harmony with the volume
3) Levels an option for Liberians to contribute to the enterprise by
purchasing shares or otherwise participating in the ownership.
4) Provide a local value added amounting to not less then 25% of the
value of gross output.
5) Takes its raw materials and other supplies of Liberian origin and
imports other such items of which the local product is not available in
sufficient quantity and or its quality or price is not approximately equal
with the intended imports as determined by the Government.
Section 5 – Incentives:
1) Enterprise that are granted Investment Incentive Contract shall be
entitled to the following customs duty benefits in respect of the
Approved Investment Project;
a) Approved imports of machinery and equipment to be used in
establishing the Approved Investment Project shall be exempt from
import duty up to 90% of the dutiable value of such imports. No
exempt shall be made for construction materials and spare parts
on non-capital equipment. Any equipment with less than a three-
year lifespan may be considered non-capital.
b) Approved non-capital materials semi-finished product and other
supplies used in the production operation of the approved
investment project shall be exempt from import duty up to 90% of
the dutiable value of such import.
c) Approved imports listed under paragraphs (a) and (b) above shall
not be exempt from counselor fees.
2) Enterprise that are granted Investment Incentive Contract shall be
entitle to the following income tax benefits in respect of the Approved
a) Profits reinvested into fixed assets shall be exempt from income
tax. Exemption of reinvestment into housing for employees must
receive prior approval from the Concession and Investment
b) All the remaining profits of the enterprise shall be exempt from
50% income tax that would be otherwise payable.
3) Enterprises that are granted Investment Incentive Contract shall be
entitled to full rebate on import duties and full refund of income tax as
well as excise tax paid by them in respect of the manufactured goods
exported from the production of the Approved Investment Project.
4) Sponsors of enterprises having Investment Incentive Contract in
respect of an Approved Investment Project may be granted by the
Government, upon application by the sponsor in the project proposal,
one or more of the following additional benefits;
a) The lease of available land for plant site in government owned
industrial pack at a preferential rate during the term of lease
together with the possible assistance by Government in making
available other necessary infrastructure facilities,
b) Support in securing loans and /or contribution to equity capital of
pertinent Government agencies with priority give in this respect to
c) Reasonable tariff protection has to be calculated so as to protect
the local ex-factory price inclusive of excise tax, if any,
d) Loss carry-forward provisions as regulated by the income tax law
e) Accelerated depreciation and an initial depreciation as regulated by
the income tax law of Liberia,
f) The government and its agencies shall purchase products from the
production of the approved investment project provided quantities
are sufficient and the quality and price of the products are equal to
those intended to be purchased from elsewhere. The sufficiency of
quantities and the similarity of quality and price of goods are to be
determined by the Government of Liberia,
g) Furthermore, an indirect benefit flows from what is stipulated in
paragraph (3) in sector 4, of this act.
Section 6 – Period and Degree of Incentive:
1) Incentive described in sub-section (1), (2) & (3) as well as paragraph
(c) of sub section (4), Section (5) shall be granted for a period not
exceeding five (5) years.
2) The beginning of this period should commence from the date of arrival of
the machinery and equipment at the port in respect of Incentive under
Section 5, sub-section (1) and from the date when marketable
production starts in respect of Incentives under Section 5, sub-section
2, 3 and in paragraph (e) of sub-section 4.
3) These two dates have to be specified in the project proposal and the
Investment Incentives Contract,
4) Other Incentives described in Section 5 but not specifically mentioned in
sub-section (1) of this section shall extend for the life of the Investment
5) The possibility of an extension of the incentive period as described in
sub-section 1 and 2 above is regulated by Section 10 of this act.
Certain incentives may be granted fully or partially depending on the
fulfillment by the Approved Investment Project of certain national
development strategy criteria: such as national development priority,
location, employment, linkage effects. This applies to Incentives