Attitude toward Foreign Direct Investment
In his global policy statement at the National Assembly on February 5, 2015, new Prime Minister Paul Kaba Thieba expressed his desire to improve Burkina Faso’s “Doing Business” rating. For him, the current economic situation of Burkina Faso is characterized by a lack of attractiveness, lack of competition and few funding opportunities adapted to productive activities. To address this situation, the government announced a series of reforms as part of a global strategy to make the national economy viable and competitive. These measures seek to align Burkina Faso’s business climate with international best practices in order to bring the country into the ranks of the Top 10 African countries.
Other Investment Policy Reviews
There have been no investment policy reviews by the WTO or UNCTAD in the past five years. The most recent UNCTAD review of Burkina Faso is from 2010. In July 2014, the organizations Réseau Africain de Journalistes pour l’Intégrité et la Transparence and the Natural Resource Governance Institute published a report entitled «Impact of Tax and Customs Regimes on the Mining Sector and on the EITI Reports in Burkina Faso».
Laws/Regulations on Foreign Direct Investment
The investment code, revised in 2010, 2012 and 2013, demonstrates the government's interest in attracting FDI to create industries that produce export goods and provide training and jobs for its domestic workforce. The code provides standardized guarantees to all legally established firms operating in Burkina Faso, whether foreign or domestic. It contains four investment and operations preference schemes, which are equally applicable to all investments, mergers, and acquisitions. In light of the policy declaration of the new Prime Minister and his background in the finance sector, it is likely that the investment code will be revised again.
Burkina Faso's regulations governing the establishment of businesses include most forms of companies admissible under French business law, including: public corporations, limited liability companies, limited share partnerships, sole proprietorships, subsidiaries, and affiliates of foreign enterprises. With each scheme there is a corresponding set of related preferences, duty exceptions, corporate tax exemptions, and operation-related taxes.
Under the investment code, all personal and legal entities lawfully established in Burkina Faso, both local and foreign, are entitled to the following rights: fixed property; forest and industrial rights; concessions; administrative authorizations; access to permits; and participation in state contracts.
Burkina Faso’s National Assembly passed a law in 2012 establishing a special tax and customs regime for investment agreements signed by the state with large investors. This scheme provides significant tax benefits. Burkina Faso further strengthened the legal and institutional framework for investment through the adoption in May 2013 of general investment guidelines. This included the creation of a deposit institution that provides financing for small and medium-sized enterprises, public-private partnerships, and real estate investments, among others.
To further encourage business and investment, the GoBF created the Presidential Council for Investment which met for the first time in 2009. It is an advisory body, chaired by the head of state, whose mission is to make recommendations on the development and implementation of policies to stimulate investment and economic growth.
In March 2013, the GoBF created the Burkina Faso Investment Promotion Agency (API-BF). This and the establishment of the Presidential Council fulfilled recommendations of a 2009 UNCTAD Investment Policy Review. The website is investburkina.com.
To simplify the registration process for companies wishing to establish a presence in Burkina Faso, the government created eight enterprise registration centers called Centres de Formalités des Entreprises, known by their French acronym as CEFOREs. The CEFOREs are one-stop shops for company registration. On average a company can register its business in 13 days with three procedures. The CEFOREs are located in Ouagadougou, Bobo-Dioulasso, Ouahigouya, Tenkodogo, Koudougou, Fada N’Gourma, Kaya, Dedougou and Gaoua.
In 2014, Burkina Faso strengthened protections for minority investors by enhancing access to shareholder actions and by increasing disclosure requirements on related-party transactions. This helped Burkina move up 14 places to 122 of 189 in the World Bank rankings on Protecting Minority Investors.
Other sites of interest:
Chambre des Mines du Burkina Faso: chambredesmines.bf
AmCham Burkina: amchambf.org
A description of tax and administrative procedures can be found at: http://burkinafaso.eregulations.org/
Among the 21 countries covered by the World Bank’s Investing Across Sectors indicators in the Sub-Saharan Africa region, Burkina Faso is one of the more open economies to foreign equity ownership. Most of its sectors are fully open to foreign capital participation, although the law requires companies providing mobile or wireless communication services to have at least 1 domestic shareholder. Furthermore, the state automatically owns 10% of the shares of all companies active in the mining sector. The government is entitled to nominate 1 member of the board of directors for such companies. Select additional strategic sectors are characterized by monopolistic market structures. In particular, the oil and gas sector, the electricity transmission and distribution sectors, and the fixed-line telephony sector are dominated by publicly owned enterprises, making it difficult for foreign investors to engage
The investment code provides additional incentives for investments in the areas of agriculture, silviculture, animal breeding, and fish farming and for companies investing at least fifty kilometers outside of the cities of Ouagadougou and Bobo-Dioulasso.
In the mining sector, the National Transitional Council adopted a revised Mining Code on June 26, 2015. The new draft seeks to strike a balance and ensure that Burkina Faso derives maximum benefit from its mineral resources while maintaining an attractive climate for investment. The revised mining code imposes a new tax on surplus production and increases from 0.25% to 1% the portion of revenues that must be deposited in a Community Investment Fund. The Fraser Institute recently ranked Burkina Faso second in Africa and 29th in the world on the attractiveness of its mining sector.
The government also established a Center for Construction Facilitation (CEFAC) to improve the process of issuing construction permits. The CEFAC has made it possible for companies to obtain and process all the paperwork required for construction permits from one office, reducing the average number of procedures from 46 to 12, and the average amount of time from 226 days to 98 days.
Limits on Foreign Control and Right to Private Ownership and Establishment
There are no laws or regulations specifically authorizing private firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control.
GoBF announcements for privatization bids are widely distributed, targeting both local and foreign investors. Bids are published in local papers, international magazines, mailed to different diplomatic missions, e-mailed to interested foreign investors, and published on the Internet on sites such as http://www.dgmarket.com.
Foreign investors receive the same treatment and timetable as local investors in the bidding process. Bidding criteria are established and enforced by the government tenders regulation authority, l’Autorité de Regulation de la Commande Publique (ARCOP). Bidding requirements are the same for all bidders. ARCOP, which was reorganized in May 2014, advocates for free access to government tenders, equality in the bidding process, and transparency of procedures.
Screening of FDI
The government of Burkina Faso does not screen foreign direct investment.
Competition matters are reviewed by the Commission Nationale pour la Concurrence et la Consommation. Some competition matters are under the aegis of the West African Economic and Monetary Union (WAEMU).