The new law protects investments and investors and sets clear rules for fair treatment.
Somalia has enacted Law No. 11, the Investment and Investor Protection Act. The law establishes protections for investments and investors in line with the Constitution.
The Act was enacted to give investors confidence in Somalia's legal environment. Its purpose is to protect investments, guarantee fair treatment, and create the predictable conditions that encourage both domestic and foreign investment.
Law No. 11, the Investment and Investor Protection Act was enacted and entered into force on March 20, 2023.
Investment flows to places where investors believe their rights will be respected. This law was designed to give Somalia that reputation by setting clear protections in law.
Article 2 (General Principle) states the law's primary goal of protecting investments and investors in accordance with the Constitution and the laws of the country. Article 3 (Definitions) defines key terms such as investor, foreign investor, and direct investment, giving the law clarity.
A central protection is the guarantee of fair treatment. Article 6 (Fair and Equitable Treatment) requires the state to maintain a fair administrative system for investors, helping to ensure that they are treated consistently and without arbitrary interference.
The law sets out the rights and protections available to investors, creating a predictable framework within which investment decisions can be made.
By defining who qualifies as an investor and what protections apply, the law gives both Somali and foreign investors a clear basis for engaging with the economy.
This law is important because it gives investors clear legal protections and a guarantee of fair treatment. Predictable rules reduce risk and encourage both domestic and foreign investment, which supports job creation and economic growth. A reputation for protecting investors also strengthens Somalia's standing as a place to do business.
“Investment depends on confidence, and confidence depends on clear legal protection. By guaranteeing fair and equitable treatment and defining investor rights, this Act gives Somalia a stronger foundation for attracting capital. Consistent application of these protections in practice is what will turn the law into real investor confidence.”
, Aweis Osman Ahmed, M.Sc. (Master of Science in Information Systems), LL.B. (Bachelor of Laws)
Managing Partner at Mogadishu Law Office
This release is provided for general information and does not constitute legal advice. Professional legal advice should be obtained before acting on any matter discussed here.