Attitude toward Foreign Direct Investment
The Ivoirian government understands that an annual growth rate of over 8 percent cannot be sustained without foreign investment. As part of its post-crisis economic reconstruction plan, the government actively encourages FDI and is committed to doubling foreign investment over the next several years. Although the government encourages all foreign investment, French firms have traditionally dominated key sectors of the Ivoirian economy. Among other large investments, French companies currently own the national electric and public water utility companies as well as a share in the national airline. They also manage a portion of the Port of Abidjan, the airport, and the country’s only railroad. A French company maintains a controlling interest in the country’s national telecommunications provider and is a major force in wireless telecommunications.
Foreign companies are free to invest and list on the regional stock exchange (BRVM), which is based in Abidjan and dominated by Ivoirian and Senegalese firms. With the inception of the regional exchange, the West African Economic and Monetary Union (WAEMU) members established the Regional Council for Savings and Investment, a regional securities regulatory body.
There are no laws that limit foreign investment in most sectors of the Ivoirian economy. However, there are restrictions on foreign investment in the health sector, law and accounting firms, and travel agencies, particularly in terms of required local licenses. Generally speaking, foreigners are not allowed to own rural land, so most foreign investors opt for long term leases in rural areas, especially for forestry or agribusiness ventures. Despite regulations designed to control land speculation, in urban areas, foreigners own significant amounts of land. Free-hold tenure outside of urban areas is difficult to negotiate and prohibits investment. Land tenure disputes exist all over the country. Most businesses, including agribusinesses and forestry companies, circumvent this by acquiring long-term leases. Those companies that wish to purchase land must have the property surveyed before obtaining a title. Surveying, which is a tightly controlled monopoly, can cost more than the value of the parcel of land.
Other Investment Policy Reviews
Cote d’Ivoire has not conducted an investment policy review (IPR) through the OECD.
A Trade Policy Review was last done by the WTO in July 2012 and can be found at https://www.wto.org/english/tratop_e/tpr_e/tp366_e.htm.
UNCTAD does not provide an IPR for Cote d’Ivoire; however, there are statistics on FDI (inward and outward) at http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx and a country profile at http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx and a country profile at http://unctadstat.unctad.org/CountryProfile/384/en384GeneralProfile.html.
The government of Cote d’Ivoire provides sector policies and business opportunities in priority sectors in various reports. More information can be found at: www.cepici.gouv.ci/en/ or at: www.gcpnd.gouv.ci/
Laws/Regulations on Foreign Direct Investment
The major law affecting foreign investment is the 2012 Investment Code (replacing the 1995 Investment Code). This code offers incentives, including tax reductions and in some cases exemptions from value added taxes (VAT), on equipment for private investors. This code also includes planned industrial zones, which offer benefits to investors such as special tax treatment for periods ranging from 8 to 15 years, depending on the location of the investment. There are also incentives to promote sectors (low-cost housing construction, factories, and infrastructure development) that are key to the country’s economic development. In return, investors commit to technology transfer, compliance with environmental regulations, job training, and job promotion.
Cote d’Ivoire adopted a new Mining Code in 2014 in the hope of attracting foreign investors and increasing transparency. Some in the mining industry have hailed the code as the best in the region, but certain parts of the code are not clearly defined. The main changes over previous legislation include the extension of the period for holding permits from seven to ten years, with a possibility of exceptional extension for two more years; the reduction of the permit area from 1,000 to 400 square kilometers; and a new tax and fee structure. Politicians and government employees with strategic knowledge of the mining sector are prohibited from holding shares in the mining industry for five years after leaving office.
As part of its 2016 fiscal support measures to businesses, the government grants 100 percent export duty exoneration to cocoa and coffee processing industries that export finished products. For housing construction, 50 percent reduction on income tax is granted as incentives for investments, and for building 10,000 homes during a period of 7 years, the GOCI grants an 80 percent reduction on income. Also, for businesses that make construction materials, the GOCI grants a total exemption. Part of the 2015 fiscal measures include a VAT exoneration on all acquisitions of assets through leasing, and land tax exoneration is also granted to agri-businesses that provide free housing to their employees at plantation sites. In 2012, a four-percent tax on tourism development was instituted that affects hotels, restaurants, casinos, and travel agencies.
The government does not use tax, labor, environment, or health and safety laws to impede or distort investment. Well-entrenched foreign companies historically have formed relationships with officials—who frequently influence the awarding of tenders. Larger firms, which in many cases are foreign companies, face specific government requests (e.g. requests for sponsorship of social projects) and barriers (e.g. caps on market share or pressure with regard to pre-payment of taxes). Smaller firms, which in many cases are Ivoirian companies, are less likely to face these. There is no sector, however, where American investors have been formally refused the same treatment as other foreign investors.
More information on Cote d’Ivoire laws and regulations can be found at: https://guce.gouv.ci/cepici; www.apex-ci.org/; www.cepici.gouv.ci/
Online registration is not yet operational; however the Government’s Center for the Promotion of Investment in Cote d’Ivoire (CEPICI) plans in the pipeline. For the moment, all of the necessary documentation for registration is available online. There is a one-stop-shop for business registration that takes a maximum of 24 hours. This “single window” business registration center has all agencies under a single roof, allowing for a more simplified approach to business creation.
CEPICI’s role is to facilitate foreign investment and its services are available to all investors regardless of the amount of the investment or the number of employees. Online registration documents can be found at:
http://www.cepici.gouv.ci/?tmp=doc&cat=1 (registration forms)
http://www.cepici.gouv.ci/?tmp=doc&cat=4 (codes, decrees and annexes)
The law in Cote d’Ivoire subdivides and defines micro, small, and medium-sized enterprises as follows:
A micro enterprise is an enterprise that continuously employs less than 10 people or which has an annual turnover of less than or equal to $50,000 excluding tax.
A small business is defined as an enterprise that continuously employs between 10 and 50 employees, or has an annual turnover excluding tax exceeding $50,000.
A medium-sized enterprise is defined as an enterprise that continuously employs between 51 and 200 employees, or has an annual turnover exceeding $250,000 but less than $1.7 million, excluding tax.
The Government of Cote d’Ivoire has continued its efforts to improve the economy’s competiveness and to mobilize resources. Its $49 billion 2016-2020 National Development Plan includes plans for infrastructure development and poverty reduction. The Government hopes that two-thirds of the $49 billion will be financed by the private sector through public-private partnership projects, while the remaining one-third will come from the government. Further support is expected from the African Development Bank, the West Africa Monetary Union (WAEMU) along with individual donor nations and multilateral bodies. The Government’s industrial policy fits its vision to make Cote d’Ivoire an emerging economy by 2020; it plans to increase the share of the industrial sector in the economy from 25 percent today to 40 percent by 2020.
Targeted sectors are energy, agribusiness, rural development, transportation with trans-shipment and port expansion, telecommunications, water, and sanitation. The National Steering Committee in the Office of the Presidency is responsible for the coordination of projects concerning public private partnerships. (http://www.ppp.gouv.ci/contact.html). Investors may also consult the website of the investment authority, the Center for the Promotion of Investment in Cote d’Ivoire (CEPICI), at www.cepici.gouv.ci/ for more information on investment priorities.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign investors generally have access to all forms of remunerative activity on terms equal to those enjoyed by Ivoirians. The government encourages foreign investment, including in the privatization of state-owned and public firms, although in most cases the state reserves an equity stake in the new company. Fifteen state-owned firms in the banking, agribusiness, and mining sectors were scheduled to be privatized by the end of 2015, but the process has been slow to take hold, except in the banking sector (see below).
There are no significant limits on foreign investment, nor are there differences in the treatment of foreign and national investors, either in terms of the level of foreign ownership or sector of investment. There are no laws specifically authorizing private firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control, and no such practices have been reported.
Banks and insurance companies are subject to licensing requirements, but there are no restrictions designed to limit foreign ownership or to establish subsidiaries of foreign companies in this sector. There are no restrictions on foreign investment in computer services, or education and training services. There are restrictions on foreign investment in the health sector, law and accounting firms, and travel agencies, especially as it pertains to local licensing requirements. Investments in these sectors are subject to prior approval and require appropriate licenses and association with an Ivoirian partner; however; foreign companies operate successfully in all of these service sectors.
In 2014, the Government proposed a program to privatize a quarter of public enterprises including approximately 15 public or semi-public enterprises, banks, the sugar company Sucrivoire (SIFCA), and $232 million of investments the government holds in Industrial Promotion Services (IPS)-Aga Khan Foundation projects. On May 5, 2014, the Ivoirian Council of Ministers agreed to privatize some public banks, either totally or partially and in September 2014, the government liquidated the Agriculture Finance Bank (Banque pour le Financement de l'Agriculture- BFA). On March 11, 2015, Morocco's Attijariwafa bank acquired an additional 24 percent of SIB (Societe Ivoirienne de Banque), now owning a total of 75 percent of the bank. In 2015, the GOCI began the sale of banks such as Versus Bank, NSIA Bank (formerly Banque Internationale pour l'Afrique occidentale -- BIAO), and the housing finance bank (Banque de l’Habitat de Cote d’Ivoire - BHCI). Finally, some public banks, which fill a social investment niche, will remain in government hands. These include the national investment bank (Banque Nationale d'Investissement - BNI) and the national savings bank (Caisse Nationale des Caisses d’Epargne - CNI), both of which are currently undergoing restructuring.
Firms privatized in recent years were purchased in part by foreign entities through a bidding process. The GOCI’s first major privatization phase began approximately 20 years ago. In past privatizations, such as for management of the Port of Abidjan and for management of the electric and water companies, well-entrenched companies with extensive histories in Cote d’Ivoire purchased the companies, which led to allegations of corruption by losing investors.
Screening of FDI
The government does not screen investments and has no overall economic and industrial strategy that discriminates against foreign-owned firms. Cote d'Ivoire’s Investment Promotion Center (CEPICI) provides investment information and assistance for entrepreneurs interested in starting a business or foreign enterprises interested in investing in Cote d'Ivoire. CEPICI provides a “one-stop-shop” for investors, an outreach program to match opportunities with potential investors, and a public-private liaison program. American companies that have worked with CEPICI have reported to the Embassy that its services are straightforward and effective. CEPICI also maintains a file of projects seeking foreign investment.
There is no official competition law; however, the National Authority for the Regulation of Public Tenders is responsible for reviewing the awards of contracts. While the government has expressed its commitment to a free and fair bidding process, bids are not always made public. Instead, the GOCI will sometimes simply choose from among companies that have proactively contacted it about an investment opportunity rather than proceeding through a public bid process. The GOCI reported that in 2015, 30.5 percent of its funds were spent on no-bid contracts, which is an increase from 22 percent in 2014. Cote d’Ivoire is compliant with WAEMU’s public procurement directive requiring the separation of auditing and regulatory functions. Nonetheless, some issues remain concerning transparency in public bids (see more on bidding in the “Transparency of the Regulatory System” section below.)