Company Registration in East Timor- An Overview
East Timor is present between Indonesia and Australia. The island is divided into East Timor which comprises of the eastern part and Indonesia which forms the western part. There is lot of social and culture present in East Timor. Hence investors have to consider the importance of culture and heritage for carrying out business in East Timor.
The population of East Timor consists of more than 70% individuals who are abroginal. These include Malayans, Papuans and Polynesians. Apart from this, some of the inhabitants include Indonesian and Chinese. Since 1975 this country was rules. First it was ruled by the Portuguese people and then ruled by the Indonesian People. Hence there are different laws that regulate Company registration in East Timor. It would be a mixture of Indonesian laws, civil laws made by Portugal and other rules which are made by the government.
The main languages spoken include Tetum which means Portuguese, English and Bahasa. As per the World Bank Index, this country has been struck by poverty due to ruling by different forms of empires. There is lot of unemployment affecting the country. The low proportion of citizens who are educated to work in the society.
This country has abundance of oil and gas reserves which make beneficial for an investor to consider Company Incorporation in East Timor. Apart from this, the tourism sector is booming which attracts different forms of individuals from all over the world. Hence it would be beneficial to go for company registration in East Timor.
Benefits of Company Registration in East Timor
The following are the benefits of company registration in East Timor:
- Tourism- Since liberalisation from Indonesians, this country has thriving opportunities for development of the tourist sector. There are attractive destinations for tourists to consider here in East Timor. Hence an investor can go for company registration in East Timor due to tourism.
- Oil and Gas Reserves- The abundance of oil and gas reserves would attract more investors to invest in East Timor. Oil and Gas companies have prominent business activities in East Timor.
- Foreign Investment- The government promotes investment by foreigners in East Timor. There are different forms of plans and subsidies provided to foreign investors and companies that decide to invest in East Timor.
- Market Entry- The government supports foreign investment. Hence entering into the market in East Timor would be quite straightforward. A foreign investor going for company registration in East Timor would have to contact the respective government authority to secure information.
Eligible Business Structures for Company Registration in East Timor
The following are the eligible business structures for company registration in East Timor:
- Sole Proprietorship
This kind of business is simple and not expensive to set up with less obligation and requirement of compliance which is term as non-incorporated entity with entire liable of all debt and liabilities of the owner for business to the extent of person’s assets.
It is a company without limited liability, formed between two persons or mode under a specific name and in which partners assume joint responsibility, to the extent of all their entire personal assets, for the partnership debts and liabilities.
- Branch/Representative office/Subsidiary
Foreign company can established a Branch office, representative office or Subsidiary in country. It a means provided by government of East Timor to get the foreign entity in country to explore and develop the infrastructure and resources of country.
Company can be formed by applicant subject to compliance of regulatory framework. There are all together three kinds of company i.e. Single Shareholder Limited Liability Company, Limited Liability Company and Joint Stock Company.
Eligibility Criteria for Company Registration in East Timor
The following eligibility criteria should be sufficed for company registration in East Timor:
- Minimum Shareholders- The applicant must satisfy the requirement of minimum number of shareholders. For example a single shareholder company must have only one shareholder. For a Joint Stock Company, minimum of three shareholders are required. For a Limited Liability Company (LLC) minimum of two shareholders are required.
- Company Name- The applicant must reserve the name of the company for company registration in East Timor. The name of the company must not breach the provisions relating to intellectual property law in force. A certificate of uniqueness of the name must also be granted to the applicant.
- Residency Requirements- The applicant has to also prove the residency in Timor of at least one administrator.
- Share Capital Proof- Formal proof of the share capital must also be provided by the applicant. The share capital which is the authorised share capital would be deposited by the applicant in the bank.
- Civil Status of the Shareholder- The civil status of the shareholder must also be provided before the authority. This can be carried out by providing the marriage certificate.
- Registered Office- The applicant for company registration in East Timor also has to prove that the office is registered in East Timor. This has to be provided with a map also.
Procedure for Company Registration in East Timor
The following procedure can be adopted for company registration in East Timor:
- Deposit the Required Amount in the Bank
First and foremost, the applicant has to deposit the required amount in the bank. As per the Companies Law of East Timor shareholders or founders are free to decide the requirements related to capital of the company. The minimum amount of capital which has to be deposited in the bank is more than USD 1. Usually this would take only one working day for the applicant to deposit the money in the bank.
- Register the Company
In the next step, the applicant has to register the company. This can be done by applying for the registration certificate (CRC), tax identification number (TIN) and Business License Number (AEA). The applicant has to approach the Serviço de Registo e Verificação Empresarial (SERVE) which would carry out the process of company registration in East Timor. This authority is a one stop shop which carries out all the requirements for company registration in East Timor. There is no cost for registering the company. This process would take about seven days to complete. Along with this documents must be submitted.
- Review the Application
SERVE would take about 5 to 7 working days to review the application. However, if there are any inconsistencies in the application then the process can be delayed. SERVE may ask the applicant for further information on the application.
If the documents and application are in order, the SERVE would provide the certificate of registration to the applicant. This certificate is known as Certificado de Registo Comercial, CRC which is the commercial registration certificate of the company. Along with this certificate the TIN (Tax Identification Number) and the Business License Number (AEA) would be provided to the applicant.
Once the process of registration is complete; the name of the company would be published in the following website. http://www.serve.gov.tl/pt/new-registration.
- Liaising with the Ministry of Finance
After this, the applicant would have to register the name of the company with the MOF. This ministry is known as Ministério das Finanças. Companies are required to register with this Ministry after receiving the TIN number. Confirmation of this number is mandatory to receive any form of information. This procedure would take about four days to carry out.
- Company Stamp
Companies can carry out the stamping procedure. The stamping of the company is not required by the SERVE. However, it would be beneficial to secure this stamp. This stamp would help when the applicant is liaising with government agencies. This stamp can be obtained by a private seal maker which would take about two days.
- Register with Social Security Authority
The applicant would have to register with the respective social security authority. This authority would be the Ministério da Solidariedade Social. This would take about one working day to complete.
Compliances for Company Registration in East Timor
The following compliances have to be carried out for company registration in East Timor:
- Corporate Tax
Companies are levied an annual corporate tax at the rate of 10%. Corporate tax return has to be filed with the respective tax authority.
- Annual General Meeting
Shareholders meetings have to be conducted annually.
- Board Meetings
Meetings with the Board of Directors have to be carried out once.
Apart from this, companies have to register with the Ministry of Finance, after securing the tax identification number (TIN).
The following documents are required for company registration in East Timor:
- Articles of Association
- Memorandum of Association
- Shareholders Identification Information and their marital status along with proof
- Information on identification of corporate bodies
- Documents indicating that the capital of the company is deposited
- General map indicating the location of the registered office
- Copies related to carrying out business (Authorisations)
- Foreigners Visa and Passport Information
- Residency status of administrator