Doing Business in Sierra Leone Republic of Sierra Leone Doing Business in Sierra Leone (Investment and Export Facilitation Guide) Presented by: Mrs. Sally Sulaiman-Gassama

His Excellency President Julius Maada Bio – May 2018 ‘ My administration will promote competitive, fast-growing and liberal economy led by the Private sector…..’ His Excellency President Julius Maada Bio – May 2018

ABOUT SLIEPA The Sierra Leone Investment and Export Promotion Agency (SLIEPA) is the Government Trade Promotion and Trade Support agency created by the SLIEPA ACT of Parliament in 2007 and supervised by the Ministry of Trade and Industry responsible for the co-ordination, promotion and generation of foreign and domestic investments, and also the development of traditional and non-traditional exports diversification, and value addition To promote investment opportunities in Sierra Leone and provide information to potential investors on matters relating to investments; To facilitate registration of business enterprises and assist investors in obtaining permits, licenses, certificates or clearances needed for the commencement of business (that is, acting as a “one-stop” center);

To assist potential investors in identifying joint venture partners in Sierra Leone. To develop relationship between public and private sector for the growth of investment; To offer Export development services like Market intelligence for exporters, Market linkages, and Export facilitation and special services; and To provide relevant information soft and hard copy and frequent website update on general information, Taxation, business licensing and registration, and Manage Investor visits to Sierra Leone and offer aftercare services.

Sierra Leone at a glance Population- 7, 396,190 Million GNI Per Capita (US$)- 490 (The World Bank) Inflation rate 16.57 % Doing Business 2018 160 out of 189 Starting A Business- 83 out of 160 Protecting Minority Investors 81 out of 160 Paying Taxes – 85 out of 160 Independence 27th April 1961 & Democracy is alive and thriving The investment climate is being transformed

REASONS TO INVEST IN SIERRA LEONE There are many reasons investors should consider Sierra Leone as their destination for investment. First mover advantage – 5.4 million hectares of arable land Attractive fiscal and non-fiscal incentives Significant Hydro and irrigation potentials Easy access to land with smooth facilitation process Significant untapped mineral deposits 6.1% Projected real GDP growth rate – 2018 Strong privatization and divestiture program scheduled

Strategic access to markets Natural deep water harbour at nexus of global trade routes Closest African country to Latin America Duty-free & preferred access to: AfTCA- 55 countries of the AU ECOWAS – 225 million people EU via EBA USA via AGOA 2hrs from Lagos 4hrs Sea route to Brazil 6hrs From Europe 8hrs from the Americas

Tax Incentives Sierra Leone provides the following deduction, reduction or exemption from a tax liability as An enticement: To encourage economic diversification through the promotion of specific sectors and goods; 2. To encourage investors to invest in the key priority sectors; 3. To encourage value addition; and 4. To support social policy. Tax incentives relate to Income Tax-including Corporate Income Tax , Personal Income Tax & Capital Gains Tax- and Customs Duties, Goods and Services Tax.

AGRICULTURE INCENTIVES Agricultural activity involving rice farming and tree crop farming such as cocoa, coffee, oil-palm, poultry, livestock and ruminants, cashew, ginger, chilli, vegetable, and tubers, 1- INCOME TAX For an Individual-The income of an individual derived from any agricultural activity for a period of ten years from the commencement of the agricultural activity For a Company- The income of a company incorporated in Sierra Leone derived for a period of ten years from the commencement of that agricultural activity and fifty percent of any dividend paid in that period provided the company maintains full records of all transactions relevant to the agricultural activity. .

2- CUSTOMS DUTY a. Duty-free import Entities engaged in agricultural production shall be entitled to duty-free import of agricultural inputs for a period of five years from the date of first registration . Agricultural inputs means (a) Fertilizers (b) Pesticides (c) Insecticides (d) Seeds and seedlings (e) Hybrid tree seeds (f) Seed animal for feeding purpose (g) Day-old-chicks; and

INFRASTRUCTURE INCENTIVES 1. INCOME TAX a. Income tax-exempt income Income derived from any undertaking under the Public-Private Partnership Infrastructure Projects in excess of twenty million dollars shall enjoy a corporate tax relief for fifteen years 2. CUSTOMS DUTY a. Duty-free import During the period of construction of any undertaking under the Public-Private Partnership Infrastructure Projects in excess of twenty million dollars, subject to the provision of an approved bill of quantities, the importation of plant, equipment and other inputs, excluding petroleum products, shall be duty-free.

HEALTH INCENTIVES 1. INCOME TAX a. Income tax-exempt business Any new business- (a) manufacturing drugs, medical devices, and other health-related items according to the guidelines of the World Health Organization; and (b) investing a minimum of $500,000, and (c) employing a minimum of fifty persons for that purpose; shall be eligible for a corporate tax relief not exceeding ten years in addition to other incentives the business may be eligible for.

a. Duty-free importation Any new business- (a) manufacturing drugs, medical devices, and other health-related items according to the guidelines of the World Health Organization; and (b) investing a minimum of $500,000, and (c) employing a minimum of fifty persons for that purpose; shall import duty-free raw materials for drug manufacturing by the business for a period of ten years Reduced-duty rate importation Any new business manufacturing drugs, medical devices, and other health-related items according to the guidelines of the World Health Organizations, and investing a minimum of $500,000, and employing a minimum of fifty persons for that purpose shall import intermediate goods for drug manufacturing by the business at the rate of 3% for a period of ten years

Investment Opportunities

Agriculture Contribution to Total Economy Agricultural Sector Agriculture is a priority for Sierra Leone and is a fundamental component of the “New Direction” Agriculture Contribution to Total Economy  Main crops are rice (staple crop), cassava, Maize, sweet potato, oil palm, cocoa and coffee

Agriculture: Opportunities Commodity Brief Description Rice Good growing conditions and much uncultivated land Suitable areas for mechanical cultivation include TormaBum Rice Fields (51,300 ha in Bonthe District) and Gbondapi Rice Fields (41,000 ha in Pujehun District). Oil Palm Production of Palm and Kernel Oil (PKO) and other ancillary products including soap, bio-fuel, cooking oil, etc. Opportunities for integrated production & refining of ethanol (sugar, Cassava) & biodiesel (oil palm) Sugar and Ethanol Production Excellent growing conditions Opportunity to satisfy local consumption demand (currently 50% local demand met through imports) as well as import to EU & West Africa

Agriculture: Opportunities Commodity Brief Description Cocoa, Coffee and Cashew Processing Large areas under cultivation but require rehabilitation, replanting, new planting, value addition Sierra Leone has enormous potential for improvement and growth - improved quality afforded Sierra Leone a 10% premium on world prices Carbon Trading The Gola Forest and other Protected areas offer significant potential for carbon credits, Wild life, Flowers Cassava Many opportunities for processing cassava flour, flakes, ethanol, etc, Meat Processing, Poultry and Dairy Products High Potentials, yet to be fully explored

Infrastructure Sector A number of positive strides have been taken by the Government in the various sub-sectors, with a view to improving the overall conditions and to provide a solid foundation for wider economic activities. Some of these developments range from: Airports Ports ICT Infrastructure  Roads and RailTransport Real Estate development  

Infrastructure: Opportunities Project Description Project Type Status Freetown Estuary Transport Development Project PPP Detailed data available. Construction of Lungi – Freetown Bridge PPP/BOT Ministry data available Expansion of Lungi International Airport EOI and feasibility study being conducted Deep Sea Mineral Port & Rail Detailed data available

Infrastructure: Opportunities Project Description Project Type Status Development of passenger Jetty terminals and Logistic Depot for Oil Exploration including development of a Tank Farm. PPP/BOT Ministry data available Queen Elizabeth II Quay Port Expansion Bollore had a deal which ends in September 2018. Opportunity still open. Rehabilitation of Domestic Airports

Energy Sector Sierra Leone is blessed with plentiful rainfall and sufficient topographic relief that creates substantial potential for hydro-power generation throughout the country. The country also has abundant sunlight, which is seasonal complementary to hydropower sources, thereby creating strong opportunities in solar power generation. The country’s bourgeoning bio-fuels sector has also received foreign direct investments. The Government of Sierra Leone has also demonstrated strong commitment and dedication to the establishing and expanding the sector, through a set of transparent policy measures.

Energy: Opportunities Sierra Leone’s energy sector offers a number of investment opportunities in terms of direct investments and public-private partnerships. The following are some unique opportunities Bikongor Feasibility Studies and Development Bikongor is one of the largest potential sources of hydro power in Sierra Leone; with energy generation potentials of up to 160MW when fully exploited. The Government of Sierra Leone, within the context of its PPP Framework, welcomes private sector interest in initially conducting technical feasibility studies on the potential generating capacity of the source Mini-Hydros Sierra Leone also has proven sources for hydro-power generation in various parts of the country. Many of the sources have generating potentials of between 2 MW and 12 MW.

Energy: Opportunities Solar Power Generation Sierra Leone’s sunshine offers opportunities for solar power generation, for specific aspects of energy. The national energy generating potentials significant solar power potential with 2,187 hours of sunshine a year with generation potentials estimated at between 1,460‐1,800 GWH per annum. Biomass Energy Agricultural biomass waste is expected to be significantly high over the next 3 to 5 years as a result of on going and new large scale agriculture projects in oil palm, rice, etc The waste collected from these farms can serve as major inputs in the generation of biomass energy.

Investment and Export Incentives Fiscal and Financial Incentive and Special Zones Although Sierra Leone is an attractive market in its own right, the government is currently reviewing offers, added fiscal and financial incentives to investors. Many of them are sector specific. Including the establishment of the first special economic zone operated by First Step at Newton near Freetown and the creation of more economic zones to enhance trade and investment in the country, Government under the ‘New Direction’ policy prioritises export diversification projects as a means of broadening the export portfolio and enhancing sustainable economic growth

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