ENTRY & ESTABLISHMENT
Sierra Leone is a member of the WTO. As described in the SIERRA LEONE AT A GLANCE section, the GoSL encourages the entry and establishment of FDI, however limitations on entry and establishment remain in the services sector. Sierra Leone’s schedule in the WTO’s GATS details the full list of restrictions. These cover a range of professional services, auxiliary transport, internal waterway and rail transport and qualifications for establishing an insurance firm or a bank. Requirements imposed on foreign investors in these sectors take various forms and can include the establishment of partnerships or joint ventures with Sierra Leoneans, a minimum amount of assigned capital (usually twice that of a local firm), and a minimum number of years’ experience in the relevant business.
Through its membership of the broader West African community, Sierra Leone has concluded a number of international agreements with the EU and the US. These agreements form part of a strategy to reduce barriers to trade and increase flows of investment into West Africa, signalling a more positive approach towards foreign investors from the EU and US. Examples include:
- Economic Partnership Agreements, which are trade and development agreements negotiated between the EU and African, Caribbean and Pacific regions. The EU has recently concluded an Economic Partnership Agreement with West Africa which covers trade in goods and services (including provision for further negotiations) and contains other investment and trade-related rules. The signing process is ongoing. It is noted that the UK is a major trading and investment partner for Sierra Leone, and further that the UK government’s intention is to withdraw the UK from the EU (commonly known as “Brexit”). At the moment it is unclear whether the UK and Sierra Leone will be able to continue to trade and invest in reliance on the terms of this Economic Partnership Agreement (once it enters into force) following Brexit.
- The US has signed a Trade and Investment Framework Agreement with ECOWAS. The US Government describes the Trade and Investment Framework Agreement as providing a mechanism for expanding trade and investment both between the US and the 15 ECOWAS member states, and also across the entire ECOWAS
- The US is currently exploring a potential framework trade agreement with the MRU.
MRU nationals benefit from full equivalency or “national treatment”, meaning that they are treated in the same way as Sierra Leone nationals and are not subject to any of the restrictions found in the WTO’s GATS.
With limited exceptions, “national treatment” is also generally granted to ECOWAS It should be noted that the definition of “national treatment” has not been formalised at a domestic level, so there may be some uncertainty as to its scope within the domestic legal framework.
As set out above, the IPA is the foundation of the legal framework for foreign investment in Sierra Leone.
Under the IPA, the majority of business sectors are open to foreign ownership. Only a small number of industries are subject to statutory ownership restrictions. As mentioned above, the main restrictions on FDI into Sierra Leone lie in the services sector.
Entry limitations apply to the maritime and airport services sectors preventing foreign persons or firms from holding licences for clearing or forwarding air or sea freight cargo operations. These facilities are delivered directly by the GoSL through the Ministry of Transport and Aviation.