Liberia: A General Business Law Overview
Introduction
Liberia is an English-speaking country of a little over five million citizens located on the West Coast of Africa that boasts significant deposits of gold, diamonds, iron ore and other mineral resources as well as extensive water bodies – plus the largest rainforest in West Africa. As a resource-rich and infrastructure-deficient country, the exploration and extraction of Liberia’s mineral and forest resources have been a source of significant foreign direct investment, while its infrastructure deficit has generated increased roads, energy, ports and related infrastructure project financing – generally awarded and structured as public-private partnerships (PPPs).
The current development programme of the Liberian government (2025–2029) is aimed at promoting business and economic development by prioritising agriculture, roads, rule of law, education, sanitation and tourism (the “ARREST Agenda”). The roads component of the development agenda is a shorthand for infrastructure development while the rule of law aspect promotes investment in the country though the provision of a stable, US-style common law legal system and business-friendly legal rules that protect sanctity of contracts, provide guarantees against expropriation and enforce choices of foreign law and courts as well as international arbitration in the resolution of commercial and investment disputes.
Business and Investment Development
Economic growth in Liberia is led mainly by the extractive sectors, infrastructures projects, trade and an emerging manufacturing sector. The dominant operators in the extractive sectors are multinational mining companies from Europe and Asia while infrastructure projects present a fair mix of investors from nearly all regions of the world including Africa. Since 2025, the energy sector has attracted the most investment projects with one hydro project and a solar project coming online, while about three other projects are being tendered – or in the process of being tendered – to increase solar power generation along with a battery energy storage system park. The intent is to at least double Liberia’s current energy supply of about 194–234 MW.
Most of the projects are PPPs that are awarded through international competitive bidding pursuant to procurement laws and rules implemented by a dedicated public procurement and concession commission. Concessions agreements and PPPs are signed with the government and generally provide:
- protection against expropriation;
- tax incentives, including stabilising of some provisions of the tax codes; and
- the right to repatriate capital, profits, dividends and other returns without any controls whatsoever.
One key attraction of Liberia as a place of investment is that it is a fully dollarised economy, and the US dollar is explicitly stated in the banking laws of Liberia as a legal tender in Liberia. Businesses and individuals open and operate US dollars accounts and freely remit US dollars of any sum in and out of Liberia without any control or having to make any declaration to anybody whatsoever – save that any amount above USD10,000 should be sent only through bank transfers.
The use of the US dollars as a legal tender has helped Liberia to maintain the level of inflation and overall price stability. Hence, while other countries are facing ever-increasing double-digit inflation, Liberia’s inflation was 5.1% in 2025 and is currently (as at 31 March 2026) 4.5%.
Project Development and Financial Challenges
Interest and accompanying investment in Liberia’s mineral resources and massive ongoing infrastructure developments face significant structural and regulatory challenges that have been the subject of repeated calls for reform. Three of the major challenges are:
- an inefficient and bureaucratic licensing and registration system;
- restrictions on land ownership; and
- labour law that focuses on local concerns and is felt to be biassed in favour of employees.
Regarding licensing and registration, the regulatory regime and the offices responsible for the registration of businesses and the granting of other operational licences and permits are generally agreed to not be fit for purposes. There is no period prescribed by law or service charters for when a registration or licence may be granted or a notice given in response to an application or request for information. As a result, the incorporation of a business corporation takes an undefined time for completion, and such time may be up to ten or more days. The same can be said for a business registration licence, a building permit, an environmental permit, etc.
Ownership of land in Liberia is restricted to Liberian citizens, and its citizenship provisions restrict eligibility to persons identified as Black or of African descent. A non-Liberian may lease land, but a lease of land by a non-Liberian can only be for a certain period of up to 25 years, plus an option to renew for a period of up to ten more; and the terms and conditions of this optional extension period including the land rental cannot be defined or agreed until at the time of the exercise of the option. This restrictive rule of land ownership and use has hindered real estate development, which in turn has left Liberia with an acute shortage of decent housing.
The labour law of Liberia prohibits the employment of anyone not a Liberian unless the employer can demonstrate that no competent Liberian national is available to perform the job for which a non-Liberian is being hired. Termination of an employee must also be for a cause sufficient in law, which cause covers only a limited range of action and conduct. Significantly, an employee may be dismissed for theft, but only after such theft is established by a competent court of law which convicts the employee. An employee dismissed for theft must be reinstated (or paid wrongful termination compensation) if his or her prosecution is discontinued by the state or results in an acquittal, and this rule remains even if there is clear, video evidence of the theft.
These challenges along with a poor road network and inadequate and irregular electricity/power supply are among the challenges investors must assess and plan to manage if deciding to invest in Liberia.
Dispute Resolutions: Established Recognition of Choices of Laws and Foreign Forum
The major means of dispute resolution is litigation, and this is even though arbitration has been a part of Liberia statutory law and a detailed chapter of the country’s civil procedure law since 1973.
Litigation in Liberia is costly in terms of effort, time and other resources, and both opaque and potentially susceptible to opportunism. The Constitution of Liberia and the Civil Procedure Law provide a right to jury trial in both civil and criminal cases, unless waived. There is consensus that the jury system in Liberia is very inefficient and leads to frequent miscarriages of justice for many reasons including inadequate knowledge.
Additionally, the Constitution of Liberia establishes appeal to the highest court of the country – a five-person supreme court – as a matter of constitutional right, which means everyone faced with an adverse judgment has a right to have such judgment reviewed by the Supreme Court of Liberia before such judgment can become final and enforceable. Naturally, a failure to announce an appeal is considered professional misconduct or inadequate assistance of counsel unless the client had instructed counsel not to appeal. As a result of the constitutional right to appeal, the docket of the Supreme Court is congested, and many civil cases end up for years at the Supreme Court pending final argument and disposition. Complicating matters is the fact that there is no consistent implementation of the calendaring/docket system provided for by statute, whereby cases are to be docketed in the order of their time of filing or the perfection of their appeals.
The response to this inefficient litigation regime has led to efforts to restrict appeals. One measure established by the Liberia Commercial Court is that a condition for perfecting an appeal is payment of the judgment amount in an escrow account. This and a few similar measures have not made much difference.
Arbitration is therefore one effective form of dispute resolution being promoted in Liberia. In fact, nearly all the investment contracts, concessions and PPPs concluded in Liberia include international arbitration clauses and many commercial agreements choose foreign law as their governing law. Liberian statutes and case law consistently and explicitly declare the validity and enforceability of arbitration – domestic or international – as well as foreign choice of law and choice of foreign forum clauses in agreements of any and all kinds.
Additionally, Liberia is a member of the New York Convention on the enforcement and recognition of foreign arbitral awards. Hence, an investor seeking to invest in Liberia would be well served to include in their commercial or investment contracts choice of a reliable foreign law; a foreign forum and/or foreign arbitration with respect to resolution of any disputes with the host government or a local partner.