Sierra Leone has recorded impressive improvements in the investment climate that benefit both foreign investors and domestic companies. Sierra Leone is one of Africa’s most active reformers of laws and business regulation. Doing Business 2010, which is published by the World Bank Group, identifies Sierra Leone as having made reforms in four key areas important to investment and exports: Starting a Business, Dealing with Construction Permits, Registering Property, and Trading Across Borders.

In addition, in May 2009, the Parliament passed two very important laws - the Companies and Bankruptcy acts. The new Companies bill updates the original, which was passed in 1960, and brings Sierra Leone in line with international standards. Provisions of the new law include:

• Mandates disclosure of personal conflicts of interest by company directors and officers.
• Requires shareholder approval of large related-party transactions to reduce possible misuse of company assets.
• Provides shareholders with rights to hold the directors liable for damages to resulting in a related-party transaction.
• Offers the possibility of rescission of the transaction, in the case of a related-party transaction that is harmful to the company.
• Grants shareholders access to all relevant documents.

Other key laws include:

• Investment Promotion Agency Act: The Sierra Leone Investment and Export Promotion Agency, established by an act of parliament in 2007, became operational in May 2008 as the country’s official agency to assist and inform investors and exporters about investment and export opportunities.
• Investment Code: A new Investment Code went into effect in 2005, which was designed to provide more protection for companies investing in Sierra Leone and to promote production and value-added activities. The government encourages joint ventures, and full foreign ownership is allowed. In addition, there is no discriminatory economic or industrial strategy against foreign investors, and no limit is imposed on foreign ownership or control.
• Business Registration Act: In 2007, Parliament passed a new Business Registration Act that trims company registration procedures to four steps. There are no restrictions on the amount of equity a foreign firm may own in a local business. In addition, there are no requirements that nationals own shares, that the share of foreign equity fall over time, or that technology be transferred under certain terms. There also are no “offset” requirements.

All laws are available at www.sierra-leone.org/laws.html.