4 December 2017

New Companies Law approved in Timor-Leste meets global best practice and will reduce cost of doing business

PSDI has been supporting the Government of Timor-Leste’s ongoing commercial and economic legislative reforms. A successful outcome of this support was the approval of a new Companies Law on 17 May 2017 (Law 10/2017), which is designed to raise Timor-Leste’s companies framework to global standards and increase access to the formal sector. PSDI’s support included a legal and registry diagnostic, the hosting of consultative workshops with a public-private taskforce to review proposals, and policy and legal drafting recommendations to simplify and modernize the law.

Many recommendations were incorporated in the new law, including:
the elimination of bearer shares, in line with international best practice on the prevention of money laundering and terrorism financing;
the disclosure of beneficial ownership, in line with the Financial Action Task Force's October 2014 note “Transparency and Beneficial Ownership”; and,
the reduction of minimum share capital requirements and the elimination of unnecessary mandatory corporate bodies in order to decrease the costs of doing business.

As part of its commitment to disseminate legal information and increase access to legislation in Timor-Leste, PSDI has now prepared an unofficial English translation of the new law, as well as the new Business Registration and Verification Services, and Business Registration laws. These can be downloaded below.

Law 10/2017: New Commercial Companies Law
Decree-law 7/2017: Business Registration and Verification Services, P.I.
Decree-law 16/2017: Business Registration