January 15, 2015
Business Advisory and Legal Summary of
U.S./Afghanistan Bilateral Security Agreement (BSA)
On January 1, 2015, the Bilateral Security Agreement (BSA) between the governments of Afghanistan and the United States became effective. Formally known as the “Security and Defense Cooperation Agreement between the United States of America and the Islamic Republic of Afghanistan”, this agreement spells out the new relationship that exists between the Government of Afghanistan and all foreign contractors, including U.S. contractors and subcontractors in support of U.S. forces in Afghanistan. A NATO-Afghan Status of Forces Agreement (SOFA) mirrors the BSA agreement for all non U.S. companies.
The BSA and the SOFA specifically exempt U.S. contractors and their employees in support of U.S. Forces from taxation by Afghanistan. However, they must secure entry and exit visas for their employees and a Business Registration License for their company. Contractors must apply for an up to three year Business Registration License. There is a one-time service charge paid to the Afghan Investment Support Agency (AISA). Other ministries may also require individual registration.
It is critically important to note that U.S. contractors must register their companies as prescribed above. Only U.S. contractors providing specified “Service Support Activities” in direct support of DoD (such as commissary, exchanges, postal services) may be exempted. The BSA also importantly departs from prior practice as the Afghan government now explicitly has the right to assert criminal and civil jurisdiction over U.S. contractors suspected of being in violation of Afghanistan’s laws.
With many contractor transitions occurring, it is highly likely that a contractor status check will take place soon. The newly-elected Afghan government has pledged to regularly and carefully monitor the status of all companies doing business in their country and ensure compliance with the terms of the agreements referenced above.
Afghan Gateway Solutions, LLC stands ready to provide administrative, legal, and other support services to assist companies as they establish or re-establish their business bona fides with the Afghan government, helping to smooth the way to conducting business in Afghanistan efficiently and effectively.
Please contact us at (703) 682-1708 Ext. 700, e-mail us at info@afghangateway.com, or visit us on our website at www.afghangateway.com. We look forward to doing business with you.
To speak directly with our attorney, Thomas Lujan, regarding interpretation of the BSA or SOFA, please call (703) 682-1708 Ext. 706 or e-mail him at tom@lujanlegalcounsel.com
Sincerely,
Masud Roshan
Managing Director
Business Advisory and Legal Summary of
U.S./Afghanistan Bilateral Security Agreement (BSA)
On January 1, 2015, the Bilateral Security Agreement (BSA) between the governments of Afghanistan and the United States became effective. Formally known as the “Security and Defense Cooperation Agreement between the United States of America and the Islamic Republic of Afghanistan”, this agreement spells out the new relationship that exists between the Government of Afghanistan and all foreign contractors, including U.S. contractors and subcontractors in support of U.S. forces in Afghanistan. A NATO-Afghan Status of Forces Agreement (SOFA) mirrors the BSA agreement for all non U.S. companies.
The BSA and the SOFA specifically exempt U.S. contractors and their employees in support of U.S. Forces from taxation by Afghanistan. However, they must secure entry and exit visas for their employees and a Business Registration License for their company. Contractors must apply for an up to three year Business Registration License. There is a one-time service charge paid to the Afghan Investment Support Agency (AISA). Other ministries may also require individual registration.
It is critically important to note that U.S. contractors must register their companies as prescribed above. Only U.S. contractors providing specified “Service Support Activities” in direct support of DoD (such as commissary, exchanges, postal services) may be exempted. The BSA also importantly departs from prior practice as the Afghan government now explicitly has the right to assert criminal and civil jurisdiction over U.S. contractors suspected of being in violation of Afghanistan’s laws.
With many contractor transitions occurring, it is highly likely that a contractor status check will take place soon. The newly-elected Afghan government has pledged to regularly and carefully monitor the status of all companies doing business in their country and ensure compliance with the terms of the agreements referenced above.
Afghan Gateway Solutions, LLC stands ready to provide administrative, legal, and other support services to assist companies as they establish or re-establish their business bona fides with the Afghan government, helping to smooth the way to conducting business in Afghanistan efficiently and effectively.
Please contact us at (703) 682-1708 Ext. 700, e-mail us at info@afghangateway.com, or visit us on our website at www.afghangateway.com. We look forward to doing business with you.
To speak directly with our attorney, Thomas Lujan, regarding interpretation of the BSA or SOFA, please call (703) 682-1708 Ext. 706 or e-mail him at tom@lujanlegalcounsel.com
Sincerely,
Masud Roshan
Managing Director