The northern territory, which is more tribally homogenous and stable than the rest of Somalia, broke away in 1991 and has been striving to attain international recognition ever since, without success.
As vote tallying began shortly after 6:00 pm (1500 GMT), a social media blackout was imposed. The national electoral commission said the move was necessary to prevent interference from outside the borders of the semi-autonomous state and speculation over the outcome.
No incidents of violence, unrest or disruption were reported during the day's voting.
Three candidates are vying for the state's top office: seasoned politicians Muse Bihi of the ruling Kulmiye party and opposition leaders Abdirahman Iro and Faysal Ali Warabe, who was defeated in a previous election in 2010.
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Incumbent Ahmed Mohamud Silaanyo is not seeking re- election.
Elections are meant to be held every five years, however the poll was delayed for two years due to drought and technical issues.
Somalia's election earlier this year saw a president chosen via a limited electoral process in which handpicked clan elders selected delegates who were allowed to vote.
Ahead of the Somaliland election, the three main candidates held a televised debate to present their political agendas, focusing on the economy, jobs and international recognition.
"This is a very critical election... for the youth, they need a leader who can develop the economy and bring jobs so that everybody can stay in their country to enjoy their lives," said university student Ismail Mohamed.
The poll is set to be the most sophisticated yet with some 700,000 voters registered using biometric eye scanners to identify them before voting.
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