What if you’re caught running an unregistered business in Cameroon?

Can you start a business in Cameroon without registering it? The short answer is yes, and it’s not uncommon to see unregistered businesses operating across the country. But, before you jump into it, there are important things you need to know.

Why Registering Your Business Matters

In Cameroon, business owners are required by law to finish certain steps to legally run. Yet, many people still ask me if they can start a business without going through the registration process. While it’s possible to run an unregistered business, doing so comes with significant risks and limitations.

You can run an unregistered business in Cameroon as long as it’s legal and you meet tax and licensing requirements. But, if your business isn’t registered as a limited liability company, you won’t have protection against personal liability in case of any loss or damage related to your business.

The Risks of Running an Unregistered Business

Running without a business license or registration can put you in a vulnerable position. For one, your business won’t have a recognized license to run, which means you not have a legitimate business location or can publicly advertise your services.

If your unregistered business is discovered by authorities, they force you to shut it down and impose fines. Additionally, without registering your business as a limited liability company (something we can help you with), you’re personally liable for any debts incurred by the business. This means that if someone sues your business, they are essentially suing you.

The Impact on Your Business Reputation

Customers also question your credibility if they find out you’re operating without proper registration. This severely damages your reputation and your ability to attract and keep clients.

How to Legally Run a Business in Cameroon

To legally run a business in Cameroon, there are specific procedures you must finish. For sole proprietorships, partnerships, and limited companies, you need to register with the Trade and Personal Property Credit Register. If you’re running a small business with a turnover under XAF 10,000,000, registration with the local council is mandatory. Freelancers, on the other hand, need to obtain a Unique Identification Number (UIN) and make sure they pay the required income taxes.

If your business activity requires a license, you must obtain it within 15 days of starting operations.

Penalties for Operating an Unregistered Business

In Cameroon, anyone conducting business without proper registration is the to a fine of XAF 100,000 per month. If your business requires a license and you fail to obtain it, you face more penalties, including a fine ranging from 50% to 100% of the total business license tax due. Not paying your business license tax on time also results in fines, with penalties ranging from 10% to 30% of the due amount for each month of delay.

Operating an illegal or prohibited business activity lead to even harsher penalties, including a 100% surcharge on the business license tax—although, in such cases, the license itself wouldn’t be issued.

Running an Unregistered Business Legally—Is It Possible?

While it’s technically possible to run an unregistered business in Cameroon, the risks and consequences are large, especially if your business requires a license. You must be ready to follow tax obligations and obtain a UIN to make sure you meet legal requirements.

But, the safest and most advisable route is to register your business with the Trade and Personal Property Credit Register. This way, you’ll secure a business license and protect yourself from personal liability.

If you’re ready to take the step toward legal operation, contact us at OpenHub Consulting. We specialize in company formation and can guide you through every step of the registration process, ensuring your business is fully compliant with Cameroonian law.