---
name: er-company-formation
description: "Source-cited draft: company formation & entity choice for Eritrea (tax year 2025) — rates, thresholds and rules with primary-source citations. Unverified; pending local-accountant review."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/er-company-formation"
  jurisdiction: "ER"
  tax_year: "2025"
  last_updated: "2026-07-13"
  review_status: "pending_review"
---

# Eritrea Company Formation & Entity Choice

## Entity types, capital and incorporation

- **Overview** — Business entities in Eritrea are established under the Eritrean Transitional Commercial Code, with registration handled through the relevant commercial registry and licensing authorities. Common forms are the private limited company (PLC) and the share company. Capital figures below are reported by formation guides and should be confirmed.
- **Sole proprietorship** — Single owner with unlimited personal liability; simplest and most common form  _(Eritrean Transitional Commercial Code — https://generisonline.com/how-to-register-a-business-in-eritrea/)_
- **Partnership** — Two or more partners sharing profits and liabilities; general partnership has joint liability  _(Eritrean Transitional Commercial Code)_
- **Private limited company (PLC)** — Limited-liability company; minimum one shareholder and one director (any nationality)  _(Eritrean Transitional Commercial Code — https://maxishr.com/en/eritrea/company-registration)_
- **Minimum share capital — private limited company** — ERN 15,000 ERN ERN ((approx — confirm))  _(Eritrean Transitional Commercial Code — https://maxishr.com/en/eritrea/company-registration)_
- **Share company** — Public/share company requiring at least 5 shareholders  _(Eritrean Transitional Commercial Code — https://maxishr.com/en/eritrea/company-registration)_
- **Minimum share capital — share company** — ERN 50,000 ERN ERN ((approx — confirm))  _(Eritrean Transitional Commercial Code — https://maxishr.com/en/eritrea/company-registration)_
- **Core incorporation steps** — Reserve name; draft Articles of Association; deposit capital; register with commercial registry; obtain business/trade licence and tax registration ((approx — confirm))  _(Eritrean Transitional Commercial Code — https://www.healyconsultants.com/eritrea-company-registration/setup-llc/)_
- **Typical registration timeline** — Approximately 1–4 weeks depending on entity type and approvals ((approx — confirm))  _(Eritrean Transitional Commercial Code — https://generisonline.com/how-to-register-a-business-in-eritrea/)_
- **Foreign investment approval** — Foreign investors typically require an investment licence/approval from the relevant investment authority ((approx — confirm current statute))  _(Investment Proclamation (Eritrea))_
- **Core annual compliance** — Annual income tax return, maintenance of accounting records, and licence/registration renewals ((approx — confirm))  _(Income Tax Proclamation No. 24/2011)_

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---

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> **General reference only.** This document does not constitute tax, legal, or
> financial advice. Verify figures against the cited primary sources or with a
> licensed professional before relying on them.

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-07-13. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `er-company-formation` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/er-company-formation. If neither is available, confirm every figure against the official source pages cited above before relying on it.