Somalia’s corporate legal environment is undergoing a significant transformation, driven by economic reforms, increasing foreign investment, and a push for regulatory modernisation. For businesses—both local and international—understanding the evolving legal framework is essential for sustainable growth and compliance.

Legal Foundations and Regulatory Bodies
The cornerstone of corporate law in Somalia is the Company Law (Law No. 15 of 2019), which governs the formation, management, and dissolution of companies. Oversight is provided by the Ministry of Commerce and Industry, along with the Somali Investment Promotion Office (SIPO), which supports foreign investors.

Business Registration and Licensing
Business registration has been streamlined through digital portals in major cities like Mogadishu, making incorporation quicker and more transparent. Licensing requirements, however, vary by region, and firms are advised to consult local legal experts familiar with federal and regional compliance.

Foreign Investment Climate
The Somali government has taken active steps to attract foreign capital. Investors are offered tax incentives, and certain sectors—such as infrastructure, agriculture, and telecom—receive priority. However, navigating land ownership laws, currency risks, and security challenges still requires experienced legal guidance.

Corporate Dispute Resolution
The Somali judiciary has made notable efforts to strengthen commercial courts, particularly in Mogadishu and Garowe. However, arbitration and mediation are often preferred for cross-border or complex disputes due to their relative speed and confidentiality.

Conclusion
While challenges remain, Somalia’s corporate legal landscape is gradually aligning with international standards. Businesses that take the time to understand the legal terrain—and work with qualified legal counsel—can capitalise on the country’s untapped economic potential.