Two pieces of legislation passed in late 2025 will change how lawyers advise clients on financial matters in Somalia: the National Payment System Law and the Foreign Investment Law. If you handle commercial transactions, banking matters, or work with international investors, you should understand what these laws require and how they will be implemented over the coming months.

The National Payment System Law creates a regulatory framework for how money moves through the Somali economy. Before this law, payment services operated in a legal grey area. Mobile money platforms, money transfer businesses, and banking services all functioned without clear rules about licensing, consumer protection, or dispute resolution. The new law addresses these gaps by establishing licensing requirements for payment service providers, setting standards for how transactions should be processed and recorded, and creating mechanisms for resolving disputes when things go wrong. For lawyers advising businesses in this space, the immediate question is whether your clients’ current operations comply with the new requirements or whether they need to restructure their services and apply for licenses.

The Foreign Investment Law

The Foreign Investment Law is aimed at international investors and the Somali businesses that partner with them. It establishes rules for how foreign capital can enter the country, what protections investors can expect, and how disputes between investors and the government will be resolved. The law includes provisions for investor guarantees and spells out the circumstances under which investments can be restricted or expropriated. These were matters that were previously unclear and that made many international investors hesitant to commit capital to Somalia.

For lawyers working on cross-border transactions, this law creates both opportunities and new compliance requirements. International investors will need local counsel who understands not only what the law says on paper but how it is likely to be implemented in practice. Government officials will need lawyers who can help them structure deals in ways that attract investment while protecting Somalia’s interests. And Somali businesses seeking foreign partners will need advice on how to structure joint ventures and partnerships to comply with the new rules. The law also creates new grounds for legal disputes, so lawyers who handle arbitration and commercial litigation should familiarize themselves with the investor protection provisions and the dispute resolution mechanisms the law establishes.

What Comes Next

Both laws will require implementing regulations to become fully operational, and the details of those regulations will matter for how the laws work in practice. This is normal for legislation of this type. The law sets the framework, and subsequent regulations fill in the specifics about application procedures, compliance standards, and enforcement mechanisms. Lawyers should watch for these regulations as they are developed and provide input if given the opportunity. In the meantime, the laws themselves are worth reading carefully, both to advise current clients and to identify practice areas that may grow as implementation proceeds.