ERITREA INTRODUCES STRINGENT FINANCIAL REPORTING REGULATIONS FOR SELECT COMPANIES

In an effort to strengthen financial transparency and accountability, Eritrea has introduced a comprehensive framework for financial reporting, requiring certain companies to adopt International Financial Reporting Standards (IFRSs).

Scope of the Regulations

The new regulations apply to:

• Government-owned enterprises
• Newly privatized large taxpayers (LTOs)
• Banks
• Insurance companies

These entities are required to submit their financial reports in compliance with IFRSs, accompanied by an audit report verifying adherence to the standards.

Benefits of the Regulations

The implementation of these regulations is expected to:

• Enhance financial governance and transparency in Eritrea’s business sector
• Improve the reliability of financial information
• Facilitate informed decision-making
• Boost investor confidence

Global Trend

Eritrea has joined a growing list of jurisdictions worldwide that have recognized the importance of international accounting standards in ensuring financial stability and transparency. This move is seen as a significant step towards promoting financial stability and transparency globally.

Impact on Business Environment

The implementation of these regulations is expected to:

• Attract foreign investment
• Promote economic growth
• Provide stakeholders with reliable and accurate information about the country’s companies

Overall, this development marks a major milestone in Eritrea’s efforts to modernize its financial reporting framework and enhance its business environment.