if you want to conduct business in a country like somalia what are the legal and political issues you might face?Briefly research the country and develop the outlines for an International company that moves there. Solution Somalia, officially the Federal Republic of Somalia, is a country located in the Horn of Africa. Somalia has a population of around 10.8 million. Somalia is not politically and Economically strong country which leads it towards a underdeveloped country. According to Human Development Index (2012)”Out of 170 countries, Somalia is among the five least developed country”. There are some political and legal reasons, which an international company faces : 1. Corruption: Somalia is one of most corrupted country in “Transparency International’s Corruption Perceptions Index”. Corruption is more of awkward and defaming condition than being problematic. The people involved in corruption seem to be hiding themselves by blaming others. However corruption affects business by Decrease in Foreign Investment, Delay in foreign growth, lack of development. 2. Private Source loan funding: Because Islamic law prohibits interest payments on loans it will be difficult for entrepreneurs to not able to finance debt. In the absence of any government support, funding must come entirely from private sources. Pvt source funding is less likely in its negative effects more for ex. (a)To cover all project costs and most do not cover indirect costs. (b) Applicants have limited influence on the decision making process. 3.Terrorism : is also another problem in Somalia. Setting up in business in Somalia brings dangers. On New Year\'s Day, the Jazeera Hotel in Mogadishu was bombed. A few months earlier it had been the venue for a youth enterprise summit organised by the Iftiin Foundation.Islamist militant group al-Shabab is battling the UN-backed government in Somalia.Al-Shabab means The Youth in Arabic. 4. Certification: Somalia’s government does not have the capacity to participate in certification schemes or to provide authenticity documentation that would enable businesses to sell goods globally. Firms instead have to find unconventional, and often costly, workarounds. 5. Trade difficulties: Somalia is not a member of any regional economic blocs, and it has few formal trade deals with other nations. The US and the European Union currently have no trade agreements with Somalia, and the country is not a member of the World Trade Organization. It also exports less than other countries: Somalia is the 171st largest exporter in the world, and it has the fourth lowest GDP per capita.Businesses have to go to great lengths to trade with other countries. This also means that businesses are less transparent. 6. Currency Reform: There were and still are several versions of the same currency (Shilling) in circulation concurrently, and most of them are fake currencies. Since the early 1990s, no bank notes have been printed officially. The collapsing of the Central Ban.

1. if you want to conduct business in a country like somalia what are the legal and political issues
you might face?Briefly research the country and develop the outlines for an International
company that moves there.
Solution
Somalia, officially the Federal Republic of Somalia, is a country located in the Horn of Africa.
Somalia has a population of around 10.8 million. Somalia is not politically and Economically
strong country which leads it towards a underdeveloped country. According to Human
Development Index (2012)”Out of 170 countries, Somalia is among the five least developed
country”.
There are some political and legal reasons, which an international company faces :
1. Corruption: Somalia is one of most corrupted country in “Transparency International’s
Corruption Perceptions Index”. Corruption is more of awkward and defaming condition than
being problematic. The people involved in corruption seem to be hiding themselves by blaming
others. However corruption affects business by Decrease in Foreign Investment, Delay in foreign
growth, lack of development.
2. Private Source loan funding: Because Islamic law prohibits interest payments on loans it will
be difficult for entrepreneurs to not able to finance debt. In the absence of any government
support, funding must come entirely from private sources. Pvt source funding is less likely in its
negative effects more for ex. (a)To cover all project costs and most do not cover indirect costs.
(b) Applicants have limited influence on the decision making process.
3.Terrorism : is also another problem in Somalia. Setting up in business in Somalia brings
dangers. On New Year's Day, the Jazeera Hotel in Mogadishu was bombed. A few months
earlier it had been the venue for a youth enterprise summit organised by the Iftiin
Foundation.Islamist militant group al-Shabab is battling the UN-backed government in
Somalia.Al-Shabab means The Youth in Arabic.
4. Certification: Somalia’s government does not have the capacity to participate in certification
schemes or to provide authenticity documentation that would enable businesses to sell goods
globally. Firms instead have to find unconventional, and often costly, workarounds.
5. Trade difficulties: Somalia is not a member of any regional economic blocs, and it has few
formal trade deals with other nations. The US and the European Union currently have no trade
agreements with Somalia, and the country is not a member of the World Trade Organization. It
also exports less than other countries: Somalia is the 171st largest exporter in the world, and it
has the fourth lowest GDP per capita.Businesses have to go to great lengths to trade with other

2. countries. This also means that businesses are less transparent.
6. Currency Reform: There were and still are several versions of the same currency (Shilling) in
circulation concurrently, and most of them are fake currencies. Since the early 1990s, no bank
notes have been printed officially. The collapsing of the Central Bank and the banking system
left a vacuum for monetary and regulatory control and totally shattered the country’s payment
system. This led to “currency substitution and the growth of the parallel currency market with
warlords and militias issuing their own currency. This means that there is a large black market
for currency. There’s a lack of capacity, and also there’s huge corruption
7. Managing oil deals and revenue: There are massive reserves, large firms were exploring the
possibility of mining oil and gas. But lack of legislation and political wrangling at regional and
national levels impede development in this sector.Oil and gas has huge potential, but the current
uncertainty surrounding federal and regional states and the lack of agreement over resource
sharing and taxation means that it will be very difficult for that sector to take off until those
issues are resolve.It remains unclear how old contracts will be resolved and who will have the
ultimate right to negotiate new deals.