Investor incentives
Investors can be granted general and sector-based tax concessions, relief on customs duties, and non-tax incentives for new enterprises and development projects. Which ones apply depends on the sector, the size of the investment and the number of people employed.
The legal basis
The incentives come from the Income Tax Act 2000 and the Finance Acts passed since 2010. They include exemptions from income tax, deductions for tax purposes, exemptions from import duty and exemptions from goods and services tax. Each depends on meeting its criteria, including the need to improve local content.
General incentives
- Income tax relief on plant, machinery and equipment
- A three-year grace period on import duty for new and existing businesses importing plant, machinery or equipment
- Lower import duty on raw materials
- 100% tax deduction for spending on research and development, training and social services such as schools and hospitals
Special economic zones
- Exemption from import and export duty
- Three-year corporate tax holidays
- Faster government services, including customs, immigration and registration
Incentives that depend on the investment
| Sector or activity | Who qualifies | What is offered |
|---|---|---|
| Rice and tree crops | Farming rice, or tree crops such as cocoa, coffee and oil palm | Income tax exemption for 10 years |
| Agricultural inputs | Importers of agricultural inputs, plant and machinery | Duty-free import of inputs for 5 years, and of plant and machinery for 3 years |
| Poultry, livestock and ruminants | An investment of at least USD 500,000 | Income exempt for 3 years, and 50% of any dividend paid exempt for 10 years |
| Fish farming | A farm with at least ten ponds covering at least 200 square metres | Exemption from income tax on fish farming income, and on 50% of dividends, for five years |
| Large-scale agriculture: foreign investors | Irrigating at least 500 hectares, cultivating at least 2,500 hectares, or investing at least USD 1 million in livestock | Corporate income tax exemption and 50% exemption from withholding tax on dividends; no import duty on farm machinery, agro-processing equipment and agro-chemicals for the project; 3 years' duty exemption on other plant and equipment; a 3% duty rate on other raw materials |
| Large-scale agriculture: Sierra Leonean investors | Irrigating at least 100 hectares, cultivating at least 500 hectares, or investing at least USD 0.5 million in livestock | The same package as for foreign investors |
| Businesses with Sierra Leonean ownership | At least 20% Sierra Leonean ownership. For 5 years: at least 100 full-time employees and a minimum investment of $5 million. For 10 years: at least 150 employees and at least $7.5 million | Corporate tax exemption for the period shown |
| Plant and machinery | A new business investing at least $10 million, or an existing business investing at least $5 million in expansion | Duty-free import of plant and machinery for three years (not spare parts or general-purpose vehicles, and not for resale) |
| Solar and efficient appliances | An investment of at least USD 500,000, at least 50 employees, and products that meet IEC standards | Duty-free import of photovoltaic equipment and energy-efficient appliances for three years from registration |
| Stoves, cookers and LPG | Businesses assembling stoves and cookers, or importing or producing liquid petroleum gas | Duty-free import for three years |
| Tourism | Any tourism undertaking | Income exempt from tax for up to five years from the start of operations, up to 150% of the capital invested; capital allowances deductible from profits; payroll tax relief for expatriate staff employed to develop tourism |
| Qualifying research and training | Large-scale agricultural investors | A 125% tax deduction for research and development, training and export promotion, 100% loss carry-forward, and a three-year income tax exemption for skilled expatriate staff where treaties allow |
These terms do not override agreements that Parliament has ratified with the Government. Renewable energy projects funded by donors may qualify for further incentives, which are discussed with the Ministry of Energy.
What an exemption can cover
Customs duties
Capital goods and equipment, raw materials, spare parts and building materials for approved projects.
Corporate income tax
Tax holidays that depend on the sector and the size of the project, so earnings can be reinvested.
Value added tax
Relief on imported and locally bought goods and services for projects in key sectors.
Withholding tax
Reduced or no withholding tax on dividends, royalties and interest, especially where profits are reinvested in the country.
Land and property
NIB helps investors acquire land and may support reductions in land-related fees.
How to apply
Write to NIB
Send an application letter to the National Investment Board.
Attach your papers
Include a business plan, financial statements and the relevant documents.
Review
NIB reviews the application with the ministries responsible for the sector, and approves it with them.
Applications are examined against the NIB Act and the tax laws. The current text of each incentive is in the Handbook of Tax Incentives.