Responses to Information Requests

Research Directorate, Immigration and Refugee Board of Canada, Ottawa

1. Overview

Article 26(1) of the Provisional Constitution of the Federal Republic of Somalia states the following: "Every person has the right to own, use, enjoy, sell, and transfer property" (Somalia 2012). Further information about legislation on property ownership, buying and selling of properties and businesses, and business licenses in Somalia could not be found among the sources consulted by the Research Directorate within the time constraints of this Response.

In correspondence with the Research Directorate, an independent consultant and former senior Somali government official who consulted with sources in Somalia stated that "buying or selling a property in Somalia … is neither easy nor straightforward" (Independent consultant 27 May 2016). The same source explained that buying and selling properties in Somalia, including in Mogadishu, is hampered by the lack of a land registrar, the loss of title deeds as a result of the civil war, the occupation of many properties by squatters, which necessitates costly eviction procedures, disputes caused by the sale of properties by previous governments, and the issuance of unreliable land ownership documents and rulings by "unprofessional and corrupt local authorities and courts" (ibid.). For information on land certificates and related documentation in Somalia, see Section 3 of Response to Information Request SOM104486.

2. Mogadishu
2.1 Documents Required and Procedures for Selling a Business or Property

Information on documents and procedures required for selling a business or a property in Somalia was scarce among the sources consulted by the Research Directorate within the time constraints of this Response.

In correspondence with the Research Directorate, the independent consultant provided the information in the following paragraph:

Traditionally, properties are bought and sold through a public notary, using original documents or title deeds issued by "stable" governments or authorities, "preferably" before 1990, although more recent documents are also accepted. Concerning procedures, "traditional brokers" set a property value, and "normally," market the property for the seller. Once a price is agreed upon with a buyer, the buyer requests that the property documents be presented to a public notary who verifies the "trustworthiness" of the seller "by asking others in the market to verify his claim of ownership." The public notary also verifies the documents against the last available archives of the land register, which are reportedly held by "someone who supposedly saved them from looting, but runs this local authority document from his own office somewhere in the country known only to public notary offices." Furthermore, the public notary asks the seller to provide guarantors. The buyer will then deposit the sum for the sale into an agreed upon account. If the property is occupied, the seller will not receive the payment until the property is vacated (Independent consultant 27 May 2016).

In correspondence with the Research Directorate, a representative of the International Labour Organization (ILO) whose work focuses on Somalia, provided the information in the following paragraph based on information obtained from other UN agencies:

"Normally," brokers find properties or land for sale. Given the high rate of land disputes, buyers often check whether the plot of land is free from conflict. Once "the buyer is convinced," the buyer and seller go to a public notary to legalize the transaction, and the buyer then presents a letter from the public notary as well as receipts to the local government "for the transfer of ownership." The local government charges a tax of three to five percent (ILO representative 31 May 2016).

In correspondence with the Research Directorate, a lawyer from the Mogadishu Law Office and legal scholar on Somali law since 1983 provided the following information:

For selling a business, the key documents needed include:

1. The Act of Incorporation of the business or MOA (Memorandum of Association)
2. Certificate of registration of the business
3. The business asset title and indication for the value of business
4. Power of attorney of the authorized person to sale or president/CEO of the business.

The procedure for selling a business [is as follows]:

The seller and buyer go to the notary with two witnesses to sign a title deeds transfer of the business and its assets. Following this, registration at the regional courthouse registry according [to] Art. 938 of Somali civil code (partially used).

For selling a property, the documents needed include:

1. Title deeds
2. Proof of municipal tax payment on the property
3. Municipal papers indicating lot number and zoning of the land and (Bolleta) indicating the borders of the property
4. Borders (this document is called “Sopraluogo”)

The procedure for selling a property [is as follows]: The seller and buyer go to the notary with two witnesses who answer question about the history of property, location and borders and then the seller and buyer and two witnesses will [sign] all documents of the sale of the deeds. Besides, a seller must get a “Financial Guarantor of the sale” (“DAMIINU MAAL”), who acts as a co-signer of the sale of the property and he pledges his own assets or money if a situation arises in which the original seller title documents are fake. … To prove ownership, the seller shows the original property registry record with the name of the last registered owner, the purchase-sale agreement and the receipts of the yearly land and property taxes. After the signature, the buyer applies for registration with the tax authorities (Lawyer 8 June 2016).

A capacity assessment report on the Banadir Regional Administration (BRA) in Mogadishu, produced by the Humanitarian Initiative Just Relief Aid (HIJRA), a humanitarian organization working in the Horn of Africa (HIJRA n.d.), indicates that there is a US$200 "property gain tax rate" for the sale of houses and buildings, while the Ministry of Finance levies an additional tax on the sale of undeveloped land (HIJRA Nov. 2014, Sec. 5.6.2.1). Further and corroborating information on taxation of property sales could not be found among the sources consulted by the Research Directorate within the time constraints of this Response.

2.2 Documents Required and Procedures for Obtaining a Business License

Information on documents required and procedures for obtaining a business license in Somalia was scarce among the sources consulted by the Research Directorate within the time constraints of this Response.

The independent consultant noted that since "[t]here is no strong government, and [since] law reinforcement agencies are not fully functional, … [a] lot [of] licenses are not applicable, [for business such as] retail, wholesale, bar, … restaurants and hotels (Independent consultant 27 May 2016). Without providing further detail, the same source added however, that these businesses still seek some "permission from the local government" (ibid.).

2.2.1 Issuing Authority

Radio Danan, a Mogadishu-based radio station (Radio Danan n.d.), mentions that local municipal offices of Mogadishu issue business license certificates (ibid. 22 July 2014). In November 2013, the UN Integrated Regional Information Networks (IRIN) also reported that the Mogadishu Municipality was collecting business license fees (UN 25 Nov. 2013). The independent consultant said that while the Mogadishu Municipality issues some business licenses, other types of business licenses can also be obtained from the Ministry of Commerce and Industry in Mogadishu (27 May 2016). The ILO representative explained that an "operational license" can be obtained at the municipality level for "any size of business to conduct its activities within a specified municipality," while businesses such as limited liability companies or corporations need to register with the Chamber of Commerce and the Ministry of Commerce (ILO representative 31 May 2016). The same source noted that enterprises that are sole proprietorships only require an operational license (ibid.). The lawyer indicated that business licenses are issued by the Ministry of Commerce and Industries, which provides a registration certificate (Lawyer 8 June 2016). The HIJRA report indicates that the Banadir Regional Administration (BRA) collects taxes on business licenses (HIJRA Nov. 2014, 14, 15).

2.2.2 Required Documents and Procedure

The independent consultant stated that "[a]nyone can apply for a business license at any time with no restrictions, other than proof [of] minimum age of 18" (27 May 2016).

The lawyer provided the following information:

To register a business and obtain a business license[,] [t]he following documents must be submitted to … [the] Ministry of Commerce and Industries Contact Office [,]The Director of Department of Trade:

1. Application form
2. Company profile
3. Article of association
4. Two photos (passport size)
5. Copy of passport or any other ID. (Lawyer 8 June 2016)

The same source indicated that the maximum processing time for a business license is one week (ibid.). In its BRA capacity assessment report, HIJRA indicates, without providing further information, that "[t]he business licensing process is manual" and takes seven or more days (HIJRA Nov. 2014, Sec. 5.5.2.1). The same source notes that license certificates do not have "modern security features and can be easily duplicated" (ibid.).

2.2.3 Fees and Validity Period

According to the HIJRA report, business licenses are issued per calendar year, and are valid for 12 months, while licenses issued during the year are prorated (HIJRA Nov. 2014, Sec. 5.6.2.1). The lawyer similarly indicated that the validity of a business license is one calendar year (Lawyer 8 June 2016).

IRIN reports that "[t]raders and businesses [were] expected to pay an annual license fee of US$135, collected by Mogadishu Municipality" (UN 25 Nov. 2013). In its daily media monitoring report, AMISOM, the African Union (AU)'s mission in Somalia, without providing further information, cites Radio Ergo [1] as quoting a trader in Mogadishu who stated that she paid $200 for an annual business license (AU 9 Jan. 2015).

Concerning licenses issued by the Ministry of Commerce and Industry, the independent consultant indicated that an import-export license for citizens costs US$400 per year, and a manufacturing license costs US$1,500 per year (27 May 2016). The same source added that the Municipality of Mogadishu also issues some licenses that cost US$5,500 for two years (ibid.).

The lawyer indicated that there is a $100 non-refundable application fee, while the license fee itself is $3,000 (Lawyer 8 June 2016). The same source stated that payment method is cash only (ibid.)

3. Kismayo
3.1 Documents Required and Procedures for Selling a Business or Property

Based on information collected from sources in Somalia, the independent consultant indicated that there are no document requirements, nor are there procedures in place for buying and selling properties and businesses in Kismayo (Independent consultant 27 May 2016). The same source stated that sales of property such as land, farms or cars are arranged between a seller, buyer, broker and sometimes elders as witnesses, although some people will not buy land or farms without legal documentation issued by the Siyad Barre government or the colonial administrations (ibid.). The same source noted that the administration of Jubaland [2] has not fully developed procedures for buying and selling businesses and that the procedures that do exist are not always applied (ibid.). Similarly, the lawyer indicated that the Kismayo administration was established three years ago, that business registration is imperfect, and that a business owner can sell his business only through a notary (Lawyer 8 June 2016).

The same source provided the following information:

For [the sale of] a business, the documents needed include:

• The business ownership documents, such [as] license and notary documents
• The business asset title and indication of the value of [the] business
• Power of attorney of the authorized person or president/CEO to [sell] the business.

The procedure for selling a business [is as follows]:

The seller and buyer go to the notary with two witnesses to sign a document transfer of the business and its assets. Following this, [there will be] registration at the regional courthouse.

For [the sale of] property, the documents needed include:

• Title deeds
• Proof of tax payment on the property
• Lot number and zoning of the district
• Document (Bolleta) indicating the borders of the property

The procedure for selling a property [is as follows]:

The seller and buyer go to the notary with two witnesses to sign the sales deed. To prove ownership, the seller shows the original property registry record with the name of the last registered owner, the purchase-sale agreement and the receipts of the yearly land and property taxes. After the signature, the buyer applies for registration with the tax authorities at the District Office. (Lawyer 8 June 2016)

3.2 Documents Required and Procedures for Obtaining a Business License

Without providing further information, the independent consultant provided the information in the following paragraph, based on information collected from sources in Somalia:

There are no clear procedures for obtaining a business license in Kismayo and no documents are required. Business licenses are issued by the Ministry of Business or the Chamber of Commerce. Some applicants are required to obtain a security clearance prior to obtaining a license, for which the fee is US$20. A fee of US$20 has to be paid to the Ministry of Commerce, in addition to a fee of US$25 to the Chamber of Commerce (Independent consultant 27 May 2016). Further and corroborating information could not be found among the sources consulted by the Research Directorate within the time constraints of this Response.

The lawyer provided the information in the following paragraph:

Business licenses are issued by the local municipality of Kismayo and the municipality issues a certificate of Business License with the signature of the mayor. The required document to obtain a license is a "notarized contract among members of the company." However, in Kismayo, the process for issuing a business license is "defective." There is no clear procedure, because of the intermittent war in the city. The Municipal Office location can change or the office can close for several weeks without notice, while the Ministry of Commerce is not well established in Kismayo (Lawyer 8 June 2016).

This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim for refugee protection. Please find below the list of sources consulted in researching this Information Request.

Notes

[1] Radio Ergo is a Nairobi-based Somali language radio station focusing on humanitarian news for Somalia (Radio Ergo n.d.).

[2] Jubaland is a newly created region in southern Somalia, consisting of Gedo, Middle Juba and Lower Juba [Jubba] (AU n.d., 1). Kismayo is the third largest city in Somalia and the capital city of the Lower Juba region (ibid.).

References

African Union (AU). 9 January 2015. African Union Mission in Somalia (AMISOM). "Morning Headlines - Mogadishu Traders Demand Services for Taxes." [Accessed 30 May 2016]

African Union (AU). N.d. African Union Mission in Somalia (AMISOM). Sector II Profile. Kismayo. [Accessed 16 May 2016]

Humanitarian Initiative Just Relief Aid (HIJRA). November 2014. Jimmy Barasa. Capacity Assessment Report. Banadir Regional Administration, Mogadishu, Somalia. 21st September - 1st October 2014. [Accessed 16 May 2016]

Humanitarian Initiative Just Relief Aid (HIJRA). N.d. "Who We Are." [Accessed 16 May 2016]

Independent consultant. 27 May 2016. Correspondence with the Research Directorate.

International Labour Organization (ILO) representative. 31 May 2016. Correspondence with the Research Directorate.

Lawyer, Mogadishu Law Office. 8 June 2016. Correspondence with the Research Directorate.

Radio Danan. 22 July 2014. "Closure of Business Enterprises in Mogadishu Somalia by the Somali Police Forces." [Accessed 30 May 2016]

Radio Danan. N.d. "About DBN." [Accessed 31 May 2016]

Radio Ergo. N.d. "About Radio Ergo." [Accessed 31 May 2016]

Somalia. 2012. Provisional Constitution. [Accessed 31 May 2016]

United Nations (UN). 25 November 2013. Integrated Regional Information Networks (IRIN). "Mapping Mogadishu's Revival." [Accessed 19 May 2016]

Additional Sources Consulted

Oral sources: BBC Africa Editor; Conflict Dynamics International; The Heritage Institute; Humanitarian Initiative Just Relief Aid; International Governance Institute Somalia; Jubaland Chamber of Commerce, Industry and Agriculture; Kismaayo24.com; PhD candidate, Edingburgh University; professor, Davidson College; senior research fellow, Netherlands Institute of International Relations Clingendael; Somalia – Ministry of Labor and Social Development, Ministry of Trade and Industry; Somali Chamber of Commerce and Industry; Somali Economic Forum; UN – Development Programme; World Bank.

Internet sites, including: AlJazeera; Amnesty International; BBC; ecoi.net; The Economist; Factiva; Human Rights Watch; Institute for War and Peace Reporting; Internal Displacement Monitoring Centre; International Crisis Group; IRIN; Jubaland Chamber of Commerce, Industry and Agriculture; KismaayoNews; Norway – Landinfo; Radio Ergo; Radio France internationale; Somalia – Ministry of Interior and National Security, Ministry of Trade and Industry; Somalia One; Somali Chamber of Commerce and Industry; Somali Current; SomaliPress; Transparency International; UN – Development Programme, International Labour Organization, Refworld, Reliefweb, UN Habitat, UNHCR, UN Women; US – Department of State, Embassy in Nairobi; Waayaha.