Decree number 45/2020, of 24th April, reducing the Minimum Social Capital to form Limited Liability Mercantile Companies in the Republic of Equatorial Guinea.
-“Decree number 45/2020, of 24th April, reducing the Minimum Social Capital to form Limited Liability Mercantile Companies in the Republic of Equatorial Guinea.
Basic Law, in article 26, specifies that the economic system in Equatorial Guinea is based on the principles of the free market and the company, implying among other things the mandate of Public Powers to facilitate the deployment of private initiative, removing obstacles that directly or indirectly impede or obstruct the execution of their investment projects, and it can be seen that the current Regime of Creation of Limited Liability Companies is one of those obstacles.
CONSIDERING that the Legislation of the Organisation for the Harmonization of Business Law in Africa (OHADA), applicable in our country in this matter, in the past already stated that the Minimum Social Capital necessary to form a Limited Liability Company was one million (1,000,000) FCFA. However, the sum is extremely burdensome for the small trader in their private initiative.
CONSIDERING that many entrepreneurs, due to a lack of liquidity or sufficient capacity to borrow, have refrained from their aim to invest, and in some cases prefer to do so on the margins of what is legal, thus becoming involved in what is known as the submerged economy.
TAKING INTO ACCOUNT the recent reforms introduced under Article 331 of the OHADA Uniform Act, relating to the Right of Mercantile Companies and Economic Interest Groups which enables National Legislators to educate the regime for the creation of the aforementioned Limited Liability Mercantile Companies in the needs and specific circumstances in place in their respective countries by reducing or increasing the necessary Minimum Social Capital.
CONSIDERING that the current process of expansion of the economy in Equatorial Guinea seeks to reduce the Minimum Social Capital required to form Limited Liability Mercantile Companies in order to motivate, incentivise and support national private initiative, thus creating business awareness and attitudes which guarantee the economic regime in Equatorial Guinea.
In virtue of the above, at the behest of the Ministry for Justice, Worship and Penitentiary Institutions, following deliberations and proposals from the Interministerial Council at its meeting of 21st April 2020.
Single Article.- A sum of ONE HUNDRED THOUSAND (100,000) FCFA is set as the Minimum Social Capital to form Limited Liability Companies in the Republic of Equatorial Guinea.
The promoters of projects to form Limited Liability Mercantile Companies, whose application is in progress, may adapt to the provisions of this Decree within a period of ninety (90) days from the moment it comes into force.
The Ministry of Justice, Worship and Penitentiary Institutions is empowered to take whatever steps are necessary for the correct, effective application of this Decree.
Any provisions of equal or inferior scope which oppose that set out in this Decree are repealed.
This Decree will come into force from the date of its publication in the National Media, without prejudice to its publication in the Official State Bulletin.
I thus order through this Decree, issued in Malabo on the twenty-fourth day of the month of April, two thousand and twenty.
Source: Equatorial Guinea Press and Information Office