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Before setting up a business in Samoa, section 5 of the Business License Act 1998 requires you to obtain a business license by applying to the Inland Revenue Services (of the Ministry of Customs and Revenue). This also applies to any foreigner (company or individual or others) who is contracted by a government ministry/agency or any local company in Samoa, to provide services or goods or both in Samoa. The Ministry is working on creating certain exceptions to this general rule and the public will be advised in due course once these changes have been approved and come into force as part of the Business License Act 1998.
Different Forms have been created for each business type:
A person is not permitted under the Business License Act 1998 (section 4) to carry out any of the following prohibited activities; and a failure to comply with this will amount to an offence:
For a new business license, we require the following documents to be submitted:
There are also additional requirements for foreign investors, companies and partnerships. For full details, please see the Operational Statement – Application Requirements for New Business Licenses.
The business license to operate a business activity is valid from 01 January to 31 December of each calendar year. Before it expires on the 31 December, you can renew your business license within December or before the 31 January of next year by completing and signing a Business License Renewal Form and submit it with the appropriate fee to the Inland Revenue office on Level 4, Development Bank Building.
For new applications only, we will prorate the amount of annual business license fee from the date the Commissioner of Inland Revenue approves your business license. For example, those apply and approve in January will pay the full amount but if you apply and approval is granted in June, you will pay for 7 months fee; or if you apply and approval is granted in November, you will pay for 2 months, etc. This prorate basis is not applicable on renew business licenses.
Business License Fees for new registration and renewals:
If you fail to renew your license by the 31 January each year, a late payment penalty of $200 is charged on top of the license fee.
Also note that business license fee is paid per location, i.e. if you have two or more different locations but with the same business activity, you will be required to pay for each location. If your business activity is supermarkets and one is in Saleufi, one in Savalalo market and one in Vaitele market, then 3 BL fees is required to pay.
If you have one location but you operate 3 different business activities, you are required to pay 3 BL fees. For example, you have one venue to operate a car rental, hair salon and supermarket, hence pay three BL fees.
For closely related business activities, please apply for the Commissioner’s approval, providing reasons why you believe you are operating closely related activities and is of the view that one Business License fee is required.
Background information
Since 2020, the Ministry of Customs and Revenue has been collecting beneficial ownership information (‘BO information’) for all companies and legal arrangements registered and are operating in Samoa (e.g. Trusts and Foundations) using BO Form IR24B.
What exactly is beneficial ownership?
A beneficial owner means any natural person who ultimately owns or controls any company or legal arrangement. The beneficial owner must always be an individual person.
Test for determining beneficial owner
To determine the beneficial owner of a company or legal arrangement, the Ministry uses the following three (3) element test:
a) An individual(s) who owns more than 25% of the entity; or
b) An individual who has effective control of the entity; or
c) An individual on whose behalf a transaction is conducted.
Supporting documents required to be submitted with BO Form IR24B
The Ministry also requires the following information to confirm the identity and address of the beneficial owner(s):
a) A form of identification that is valid for up to 6 months e.g. Citizenship certificate, driver’s license, international travel document such as a valid passport or similar travel document); and
b) At least 2 written documents confirming residential address of the beneficial owner (s) e.g. water bill, electricity bill, telecommunication bill or confirmation from bank statement.
Background information
Since 2020, the Ministry of Customs and Revenue has been collecting beneficial ownership information (‘BO information’) for all companies and legal arrangements registered and are operating in Samoa (e.g. Trusts and Foundations) using BO Form IR24B.
What exactly is beneficial ownership?
A beneficial owner means any natural person who ultimately owns or controls any company or legal arrangement. The beneficial owner must always be an individual person.
Test for determining beneficial owner
To determine the beneficial owner of a company or legal arrangement, the Ministry uses the following three (3) element test:
a) The individual in your business ( e.g. shareholder, director, partner, settlor, trustee, beneficiary, protector, or any
other person) who directly or indirectly owns any percentage of shares or voting rights of the business; or
b) An individual who has effective control of the entity; or
c) An individual on whose behalf a transaction is conducted.
For more information on the test for each legal entity and legal arrangement, refer to regulation 8 of this attached Business License Amendment Regulations 2022.
Supporting documents required to be submitted with BO Form IR24B
The Ministry also requires the following information to confirm the identity and address of the beneficial owner(s):
a) A form of identification that is valid for up to 6 months e.g. Citizenship certificate, driver’s license, international travel document
such as a valid passport or similar travel document); and
b) At least 2 written documents confirming residential address of the beneficial owner (s) e.g. water bill, electricity bill, telecommunication bill
or confirmation from bank statement.
Each new business license operator is automatically issued with a unique Tax-Identification-Number (TIN) which you will use for all your tax matters, such as:
If you are or thinking about closing your business, you need to complete a Business Cessation Form. It is important that the Inland Revenue knows that you have finished trading so we do not keep adding penalties to your account when returns are not filed or business licenses are not renewed.
| IR24A-2022 Business License – Application for Additional Activity and Location
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