East Timor lies between Indonesia and Australia. The island is divided into East Timor, which consists of the eastern part, and Indonesia, which forms the western segment. East Timor has a lot of social and cultural heritage. Hence, investors should consider the importance of culture and heritage for doing business in Timor Leste.
Since 1975, this country has been ruled. First, it was ruled by the Portuguese people, and then by the Indonesian people. Consequently, different laws are governing the registration of companies in Timor Leste. It will be a mixture of Indonesian legislation, Portuguese civil law, and other regulations set by the government.
The main languages spoken include Tetum, which means Portuguese, English, and Bahasa. According to the World Bank Index, this country has been hit by poverty due to the rule of various forms of empires. There is a lot of unemployment in the country. The low share of citizens who received education to work in society.
This country has huge reserves of oil and gas, so it is beneficial for an investor to consider registering a company in East Timor. In addition, the tourism sector is rapidly developing, attracting people from all over the world. Hence, it would be beneficial to travel to register a company in Timor Leste.
Benefits of registering a company in Timor Leste
The following are the benefits of registering a company in Timor Leste:
- Tourism. After liberalization by the Indonesians, this country has excellent opportunities for the development of the tourism sector. There are attractive tourist destinations here in East Timor. Consequently, an investor can apply to register a company in Timor Leste due to tourism.
- Oil and gas reserves. The abundance of oil and gas reserves will attract more investors to invest in Timor Leste. Oil and gas companies are active in business in Timor Leste.
- Foreign investment. The government encourages foreign investment in Timor Leste. There are various forms of plans and subsidies provided to foreign investors and companies that decide to invest in Timor Leste.
- Market entry – The government supports foreign investment. Therefore, it will be easy to enter the Timor Leste market. A foreign investor wishing to register a company in Timor Leste will need to contact the appropriate government authority for information.
Eligible business structures for company registration in Timor Leste
The following are suitable business structures for registering a company in Timor Leste:
- Sole proprietorship
This type of business is simple and inexpensive in an institution with fewer obligations and compliance requirements, which is the term unorganized organization with full responsibility for all debts and obligations of the owner of the business within the assets of the person.
It is a company without limited liability, created by two persons or two ways under a specific name, and in which the partners assume joint responsibility for all their assets for the debts and obligations of the partnership.
- Branch / Representative Office / Subsidiary
It is a facility provided by the Timor Leste government to compel a foreign entity in the country to research and develop the country’s infrastructure and resources.
The company can be established by the applicant, subject to compliance with the regulatory framework. There are three types of companies: a limited liability company with one shareholder, a limited liability company, and a joint-stock company.
Eligibility Criteria for Registering a Company in Timor Leste
The following eligibility criteria must be sufficient for registering a company in Timor Leste:
- The minimum number of shareholders. The applicant must meet the minimum number of shareholders. For example, a company with one shareholder must have only one shareholder. A public limited company requires a minimum of three shareholders. A Limited Liability Company (LLC) requires a minimum of two shareholders.
- The name of the company. The applicant must reserve the name of the company for the registration of the company in Timor Leste. The name of the company must not violate the provisions of applicable intellectual property laws. A certificate of the uniqueness of the title must also be issued to the applicant.
- Residency Requirements – Applicant must also prove residency in Timor by at least one administrator.
- Proof of Share Capital – Applicant must also provide formal proof of share capital. The share capital, which is the declared share capital, will be deposited by the applicant with the bank.
- Shareholder’s civil status. The shareholder’s civil status must also be indicated before the authorities. It can be done by providing a marriage certificate.
- Registered office. An applicant for registration of a company in East Timor must also prove that the office is registered in East Timor. It also needs to be supplied with a map.
To register a company in Timor Leste, the following documents are required:
- The articles of association;
- Memorandum of Association;
- Shareholder identification and marital status along with evidence;
- Information on the identification of legal entities;
- Documents confirming the deposit of the company’s capital;
- General map showing the location of the registered office;
- Copies related to doing business (authorizations);
- Information about visas and passports of foreigners;
- Administrator resident status.