Somalia business laws receive presidential approval including new Investment Law creating SOMINVEST agency and Payment System Law. Key changes for investors and businesses.
Parliament passed three major pieces of legislation that will change how business gets done in Somalia. We have been watching these developments closely because they affect almost every client who does business here.
The Somalia Investment Law got final approval from the Senate on November 29. This creates a new agency called SOMINVEST that will handle investments under $100 million. The law sets up what they call a “one-stop-shop” for investors, which should make the approval process faster than the current system where you have to visit multiple ministries.
What this means for our clients is clearer rules but also new requirements. The law includes stronger protection for both local and foreign investors, which is good news. But businesses will need to follow new registration procedures through SOMINVEST rather than dealing directly with individual ministries as before.
The National Payment System Law passed the Lower House in November with almost unanimous support. This gives the Central Bank of Somalia much more authority over digital payments and mobile money services. According to government officials, the law works together with the payment systems they launched this year to create a unified digital network.
For businesses using mobile money or digital payments, this means the Central Bank can now regulate these services directly. Companies providing payment services will face new supervision requirements. We expect the Central Bank to issue detailed regulations once President Hassan signs the law.
The petroleum law that President Farmaajo signed in early December establishes Somalia’s complete control over oil and gas resources. The law creates a revenue sharing system between the federal government and states. This matters because it gives international oil companies the legal framework they need to bid on exploration rights.
All three laws represent the biggest changes to Somalia’s business regulations in years. We reviewed our recent coverage of banking developments and export regulations to see how these fit together. The investment law connects with the banking reforms we wrote about last week, while the petroleum law will affect the international trade procedures we discussed earlier this month.
Businesses should prepare for new compliance requirements as these laws take full effect. We are studying the implementation timelines and will advise clients on specific requirements as the relevant ministries publish their guidance.
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This article is general information, not legal advice. Reading it does not create a lawyer and client relationship.