Attitude toward Foreign Direct Investment
High level government officials in Mauritania tend to explicitly express their ambition to improve the business climate in order to attract more foreign direct investment (FDI). Local businesses frequently express interest in representing U.S. companies and the number doing so is growing. There is no law prohibiting or limiting foreign investment, which can target any sector of the economy. There are no laws or regulations specifically authorizing private firms to adopt articles of incorporation or association which limit or prohibit foreign investment, participation, or control. There are no other practices by private firms to restrict foreign investment. Historically, Mauritania has been relatively open to FDI, especially in the fishing, mining, and hydrocarbon sectors. The current government, first elected in July 2009 and then re-elected in June 2014, has prioritized recruiting foreign investment in these sectors. It is working closely with the International Monetary Fund (IMF), the World Bank, and the international donor community to improve basic infrastructure and to update laws and regulations. Worldwide indices have consistently ranked Mauritania among the most corrupt business environments over the past several years, however.
Other Investment Policy Reviews
The latest investment policy review occurred in February 2008, when the United Nations Conference on Trade and Development (UNCTAD) published an investment policy review of Mauritania. The Review is available online, in French, at: http://unctad.org/en/Docs/iteipc20085_fr.pdf. The report recommends that the Government of Mauritania: diversify the economy; better realize its investment potential through increasing revenue generated by the exploitation of natural resources; accelerate required reforms; and enhance the business and investment climate. Additional recommendations included improving the regulatory framework by adopting a new investment code strengthening institutions responsible for promoting and monitoring investment; improving the quality and quantity of information about investment; and fostering competition. In 2012, the government adopted a revised Investment Code and created the Office of Promotion of the Private Sector (OPPS) to promote and monitor investment. Although the OPPS opened in 2012, it has not had the positive impact the government had hoped, and appears to be largely inactive.
In 2011, Mauritania underwent a World Trade Organization (WTO) trade policy review. The report is available online at http://www.wto.org/english/tratop_e/tpr_e/tp350_e.htm. The report states that, since 2002, the government has undertaken few reforms in the areas of customs, trade, or investment regulations. The report also highlights lack of transparency as a deficiency. Since the report was published, the government passed the revised Investment Code in June 2012 to improve transparency in the government procurement process.
Laws/Regulations on Foreign Direct Investment
The Investment Code, last updated in June 2012, was designed to encourage direct investment, by enhancing the security of investments and facilitating administrative procedures. The code provides for free repatriation of foreign capital and wages for foreign employees. The code also created free points of importation and export incentives. Small and medium enterprises (SME), which register through OPPS, do not pay corporate taxes or customs duties. The Code also created Special Economic Zones to encourage regional development. Separately, the Nouadhibou Free Zone was created with its own regulatory scheme more favorable to foreign investment. The Civil and Commercial Codes protect contracts, although court enforcement and dispute settlement can be difficult.
New companies to the Mauritanian market are required to register with a notary office. There are several notaries who specialize in the creation of new companies. The Government of Mauritania practices mandatory screening of foreign investment. These screening mechanisms are routine and non-discriminatory and done through OPPS’ Guichet Unique for all sectors except the petroleum and mining sectors, which require approval from the cabinet meeting. Prospective investors are required to obtain an Investment Certificate by presenting their proposal and all required documents to the Guichet Unique. The office of the Guichet Unique is the country investment promotion agency that is set to facilitate foreign investment. It takes up to 10 days to register a business in Mauritania.
Investors interested in energy, mining, petroleum, or fishing negotiate investment certificates directly with the Ministry of Oil, Energy, and Mines or the Ministry of Fishing and Maritime Economy. Mauritania continues to attract significant foreign direct investment in these sectors, but all have experienced a decline following the fall in commodity prices, including the price of oil, iron ore, and gold in 2014. In 2015, Mauritania renewed its four-year fisheries agreement with the European Union (EU) after a year-long lapse. Despite the economic downturn, energy, mining, petroleum, and fishing remain vital to the country’s economy. Final approval of projects falls within the purview of the Council of Ministers, which has, in practice, usually approved all recommended projects. No U.S. firms have identified the screening process as unduly unpredictable or discriminatory; however, as of April 2016, all U.S. companies investing in Mauritania have negotiated directly with relevant ministries; no U.S. firms have gone through the OPPS process, which has remained largely inactive since its creation due to staffing vacancies and the exclusion from its purview of the oil, mining, and energy sectors.
Limits on Foreign Control and Right to Private Ownership and Establishment
Mauritania has no discriminatory policies against foreign investment, imports, or exports. The mining, fishing, agricultural, banking, petroleum, and technology sectors actively seek foreign direct investment. There are no laws or regulations which limit or prohibit foreign investment, participation, or control. There are no other practices by private firms to restrict foreign investment.
Screening of FDI
The Mauritanian government has in place a mandatory screening of foreign investments to ensure compliance with the country’s laws. In general, such scrutiny is applied in a routine and non-discriminatory manner. The June 2012 update to the Investment Code established the Office of Promotion of the Private Sector (OPPS) in the Ministry of Economic Affairs and Development (MAED) to replace the MAED’s Consolidated Office for Investment. OPPS has three sections: the Office for the Promotion of Private Investment and International Cooperation; the Guichet Unique, a one-stop shop to screen potential investments for all sectors except petroleum, mining, and fishing; and the Office of Investment Development and Promotion of Environmental Affairs. However, due to the OPPS’s location outside the MAED and staffing vacancies, the OPPS has remained largely inactive.
The revised Investment Code requires investors to apply for an investment certificate at the Guichet Unique. The Guichet Unique has ten days to notify the applicant of its decision. If the applicant has not received a response within 10 days, the certificate is considered granted. The OPPS became functional in early 2013. However, many of the largest sectors of the economy, including mining, oil, and energy, are excluded from the revised Investment Code, as separate legislation regulates these industries. The updated Investment Code and OPPS cover the areas of fishing, tourism, and agriculture. Cases involving fishing companies must apply for licenses through the Ministry of Fishing and Maritime Economy.
Suppliers for large government contracts are selected through a tender process. Invitations for tenders are publicly announced in local newspapers and on government websites. After issuing an invitation for tenders, the Central Market Commission, a commission created in each Ministry under the 2012 Investment Code, selects the offer that best fulfills government requirements. If two offers—one from a foreign company and one from a Mauritanian company—are otherwise considered equal, statutes require that the government award the tender to the Mauritanian company. In practice, this has resulted in tenders being awarded to companies that have strong ties to government officials and tribal leaders, regardless of the merits of an individual offer. Preferential treatment remains common in government procurement, despite the government’s recent efforts to promote transparency in the public sector. Government officials and tribal leaders reportedly receive frequent favors, such as unauthorized exemption from taxes, fishing licenses, special grants of land, and favorable treatment during bidding on government projects.