Albania

1. Openness To, and Restrictions Upon, Foreign Investment

Albanian government leaders have acknowledged that private sector development and increased levels of foreign investment are critical to supporting sustainable economic development. Albania maintains a liberal foreign investment regime designed to attract FDI. The Law on Foreign Investment outlines specific protections for foreign investors and allows 100 percent foreign ownership of companies, except in the areas of domestic and international air passenger transport and television broadcasting. Albanian legislation does not distinguish between domestic and foreign investments.

The Law on Strategic Investments approved in 2015 offers incentives and fast-track administrative procedures, depending on the size of the investment and number of jobs created, to both foreign and domestic investors who apply before December 31, 2023.

The Albanian Investment Development Agency (AIDA) is the entity responsible for promoting foreign investments in Albania. Potential U.S. investors in Albania should contact AIDA to learn more about services AIDA offers to foreign investors (  http://aida.gov.al/  ). The Law on Strategic Investments stipulates that AIDA, as the Secretariat of the Strategic Investment Council, serves as a one-stop-shop for foreign investors, from filing the application form to granting the status of strategic investment/investor. Despite supporting legislation, very few foreign investors have benefited from the “Strategic Investor” status, and almost all projects have been granted to domestic companies operating in the tourism sector.

Foreign and domestic investors have equal rights of ownership of local companies, based on the principle of “national treatment.” There are only a few exemptions regarding ownership restrictions:

Domestic and international air passenger transport: foreign interest in airline companies is limited to 49 percent ownership by investors outside the Common European Aviation Zone, for both domestic and international air transportation.

Audio and audio-visual broadcasting: An entity, foreign or domestic, that has a national audio or audio-visual broadcasting license cannot hold more than 20 percent of shares in another audio or audio-visual broadcasting company. Additional restrictions apply to the regional or local audio and audio-visual licenses.

Agriculture: No foreign individual or foreign incorporated company may purchase agricultural land, though land may be leased for up to 99 years. However, if the company registers in Albania, this limitation on agricultural land does not apply.

Albania currently lacks an investment-review mechanism for inbound FDI. However, in 2017, the government introduced a new provision in the Petroleum Law, which allows the government to reject a petroleum-sharing agreement or the sale of shares in a petroleum-sharing agreement to any prospective investor due to national security concerns.

Albanian law permits private ownership and establishment of enterprises and property. To operate in certain sectors, licenses are required but foreign investors do not require additional permission or authorization beyond that required of domestic investors. Commercial property may be purchased, but only if the proposed investment is worth three times the price of the land. There are no restrictions on the purchase of private residential property. Foreigners can acquire concession rights on natural resources and resources of the common interest, as defined by the Law on Concessions and Public Private Partnerships.

Foreign and domestic investors have numerous options available for organizing business operations in Albania. The 2008 Law on Entrepreneurs and Commercial Companies and Law Establishing the National Business Center (NBC) allow for the following legal types of business entities to be established through the NBC: sole proprietorship; unlimited partnership; limited partnership; limited liability company; joint stock company; branches and representative offices; and joint ventures.

The World Trade Organization (WTO) completed a Trade Policy Review of Albania in May 2016 (  https://www.wto.org/english/tratop_e/tpr_e/tp437_e.htm   ). In November 2017, the United Nations Conference on Trade and Development (UNCTAD) completed the first Investment Policy Review of South-East European (SEE) countries, including Albania (  http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1884   ).

The National Business Center (NBC) serves as a one-stop shop for business registration. All required procedures and documents are published online http://www.qkb.gov.al/information-on-procedure/business-registration/  . Registration may be done in person or online via the e-Albania portal. Many companies choose to complete the registration process in person, as the online portal requires an authentication process and electronic signature and is only available in the Albanian language. When a business registers in the NBC it is also automatically registered with the Tax Office, Labor Inspectorate, Customs, and the respective municipality. According to the 2020 World Bank Doing Business Report, it takes 4.5 days and five procedures to register a business in Albania.

Albania neither promotes nor incentivizes outward investment, nor does it restrict domestic investors from investing abroad.

Algeria

1. Openness To, and Restrictions Upon, Foreign Investment

The Algerian economy is challenging yet potentially highly rewarding. While the Algerian government publicly welcomes FDI, a difficult business climate, an inconsistent regulatory environment, and sometimes contradictory government policies complicate foreign investment. There are business opportunities in nearly every sector, including agribusiness, consumer goods, conventional and renewable energy, healthcare, mining, pharmaceuticals, power, recycling, telecommunications, and transportation.

The urgency for Algeria to diversify its economy away from reliance on hydrocarbons has increased amid low and fluctuating oil prices since mid-2014, a youth population bulge, and increased domestic consumption of energy resources. The government reiterated its intention to diversify in its August 2020 plan to recover from the COVID-19 crisis. The government has sought to reduce the country’s persistent trade deficit through import substitution policies, currency depreciation, and import tariffs as it attempts to preserve rapidly diminishing foreign exchange reserves. On January 29, 2019, the government implemented tariffs, known as DAPs, between 30-200 percent on over 1,000 goods it assessed were destined for direct sale to consumers. In January 2022, the Ministry of Commerce said it would expand the number of items subject to DAPs to 2,600; it has yet to publish the new list of affected goods.  Companies that set up local manufacturing operations can receive permission to import materials the government would not otherwise approve for import if the importer can show materials will be used in local production. Certain regulations explicitly favor local firms at the expense of foreign competitors, and frequent, unpredictable changes to business regulations have added to the uncertainty in the market.

There are two main agencies responsible for attracting foreign investment, the National Agency of Investment Development (ANDI) and the National Agency for the Valorization of Hydrocarbons (ALNAFT).

ANDI is the primary Algerian government agency tasked with recruiting and retaining foreign investment. ANDI runs branches in Algeria’s 58 states (wilayas) which are tasked with facilitating business registration, tax payments, and other administrative procedures for both domestic and foreign investors. U.S. companies report that the agency is understaffed and ineffective. Its “one-stop shops” only operate out of physical offices and do not maintain dialogue with investors after they have initiated an investment. The agency’s effectiveness is undercut by its lack of decision-making authority, particularly for industrial projects, which is exercised by the Ministry of Industry in general, the Minister of Industry specifically, and in many cases the Prime Minister. While the government operates an ombudsman’s office (Mediateur de la Republique), the office’s activities are not explicitly targeted toward investment retention.

ALNAFT is charged with attracting foreign investment to Algeria’s upstream oil and gas sector. In addition to organizing events marketing upstream opportunities to potential investors, the agency maintains a paid-access digital database with extensive technical information about Algeria’s hydrocarbons resources.

Establishing a presence in Algeria can take any of four basic forms: 1) a liaison office with no local partner requirement and no authority to perform commercial operations, 2) a branch office to execute a specific contract, with no obligation to have a local partner, allowing the parent company to conduct commercial activity (considered a resident Algerian entity without full legal authority), 3) a local company with 51 percent of capital held by a local company or shareholders, or 4) a foreign investor with up to 100% ownership in non-strategic sectors. A business can be incorporated as a joint stock company (JSC), a limited liability company (LLC), a limited partnership (LP), a limited partnership with shares (LPS), or an undeclared partnership. Groups and consortia are also used by foreign companies when partnering with other foreign companies or with local firms.

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity. However, the 51/49 rule requires majority Algerian ownership in all projects involving foreign investments in the “strategic sectors” of energy, mining, defense, transportation infrastructure, and pharmaceuticals (with the exception of innovative products), as well as for importers of goods for resale in Algeria.

The 51/49 investment rule poses challenges for investors. For example, the requirement hampers market access for foreign small and medium-sized enterprises (SMEs), as they often do not have the human resources or financial capital to navigate complex legal and regulatory requirements. Large companies can find creative ways to work within the law, sometimes with the cooperation of local authorities who are more flexible with large investments that promise significant job creation and technology and equipment transfers. SMEs usually do not receive this same consideration. There are also allegations that Algerian partners sometimes refuse to invest the required funds in the company’s business, require non-contract funds to win contracts, and send unqualified workers to job sites. Manufacturers are also concerned about intellectual property rights (IPR), as foreign companies do not want to surrender control of their designs and patents. Several U.S. companies have reported they have policies that preclude them from investing overseas without maintaining a majority share, out of concerns for both IPR and financial control of the local venture, which thus prevent them from establishing businesses in Algeria.

Algerian government officials defended the 51/49 requirement as necessary to prevent capital flight, protect Algerian businesses, and provide foreign businesses with local expertise. For sectors where the requirement remains, officials contend a range of tailored measures can mitigate the effect of the 51/49 rule and allow the minority foreign shareholder to exercise other means of control. Some foreign investors use multiple local partners in the same venture, effectively reducing ownership of each individual local partner to enable the foreign partner to own the largest share.

The Algerian government does not officially screen FDI, though Algerian state enterprises have a “right of first refusal” on transfers of foreign holdings to foreign shareholders in identified strategic industries. Companies must notify the Council for State Participation (CPE) of these transfers. In addition, initial foreign investments remain subject to approvals from a host of ministries that cover the proposed project, most often the Ministries of Commerce, Health, Pharmaceutical Industry, Energy and Mines, Telecommunications and Post, and Industry. U.S. companies have reported that certain high-profile industrial proposals, such as for automotive assembly, are subject to informal approval by the Prime Minister. In 2017, the government instituted an Investments Review Council chaired by the Prime Minister for the purpose of “following up” on investments; in practice, the establishment of the council means FDI proposals are subject to additional government scrutiny. According to the 2016 Investment Law, projects registered through the ANDI deemed to have special interest for the national economy or high employment generating potential may be eligible for extensive investment advantages. For any project over 5 billion dinars (approximately USD 35 million) to benefit from these advantages, it must be approved by the Prime Minister-chaired National Investments Council (CNI). The CNI previously met regularly, though it is not clear how the agenda of projects considered at each meeting is determined. Critics allege the CNI is a non-transparent mechanism which could be subject to capture by vested interests. In 2020 the operations of the CNI and the CPE were temporarily suspended pending review by the former Ministry of Industry, and in November 2021 the Prime Minister reported that almost 2,500 projects are awaiting approval from the council once it resumes activities.

Algeria has not conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD) or the World Trade Organization (WTO). The last investment policy review by a third party was conducted by the United Nations Conference on Trade and Development (UNCTAD) in 2003 and published in 2004. Civil society organizations have not provided reviews of investment policy-related concerns.

Algeria offers an online information portal dedicated to business creation, www.jecreemonentreprise.dz, though the business registration website www.cnrc.org.dz is under maintenance and has been for more than two years. The Ministry of Commerce is currently developing a new electronic portal at https://cnrcinfo.cnrc.dz/qui-somme-nous/ . The websites provide information about several business registration steps applicable for registering certain kinds of businesses. Entrepreneurs report that additional information about requirements or regulation updates for business registration are available only in person at the various offices involved in the creation and registration process. The Ministry of Foreign Affairs also recently established an Information Bureau for the Promotion of Investments and Exports (BIPIE) to support Algerian diplomats working on economic issues abroad, as well as provide local points of contact for Algerian companies operating overseas.

Algeria does not restrict domestic investors from investing overseas, though the process for accessing foreign currency for such investments is heavily regulated. The exchange of Algerian dinars outside of Algerian territory is illegal, as is the carrying abroad of more than 10,000 dinars in cash at a time (approximately USD 72; see section 7 for more details on currency exchange restrictions).

Algeria’s National Agency to Promote External Trade (ALGEX), housed in the Ministry of Commerce, is the agency responsible for supporting Algerian businesses outside the hydrocarbons sector that want to export abroad. ALGEX controls a special promotion fund to promote exports, but the funds can only be accessed for limited purposes. For example, funds might be provided to pay for construction of a booth at a trade fair, but travel costs associated with getting to the fair – which can be expensive for overseas shows – would not be covered. The Algerian Company of Insurance and Guarantees to Exporters (CAGEX), also housed under the Ministry of Commerce, provides insurance to exporters. In 2003, Algeria established a National Consultative Council for Promotion of Exports (CCNCPE) that is supposed to meet annually. Algerian exporters claim difficulties working with ALGEX including long delays in obtaining support funds, and the lack of ALGEX offices overseas despite a 2003 law for their creation. The Bank of Algeria’s 2002 Money and Credit law allows Algerians to request the conversion of dinars to foreign currency in order to finance their export activities, but exporters must repatriate an equivalent amount to any funds spent abroad, for example money spent on marketing or other business costs incurred.

Andorra

1. Openness To, and Restrictions Upon, Foreign Investment

Andorra has established an open framework for foreign investments, allowing non-residents to create companies in the country, open businesses, and invest in all kinds of assets.

The Foreign Investment Law came into force in July 2012, completely opening the economy to foreign investors. Since then, foreigners, whether resident or not, may own up to 100 percent of any Andorra-based company. The law also liberalizes restrictions on foreign professionals seeking to work in Andorra. Previously, a foreigner could only begin to practice in Andorra after twenty years of residency. Under the current regulations, any Andorran legal resident from a country that has a reciprocal standard can work in Andorra, although special working permits are required for specific professions.

The government of Andorra created Andorra Business ( https://www.andorrabusiness.com ), Andorra’s economic development and promotion office, to provide counseling services to both Andorran companies looking to grow and foreign investors wanting to start new businesses in Andorra. Andorra Business’ mission is to increase competitiveness, innovation, and the sustainability of the economy.

Andorra Business’ five key objectives are:

Promoting key sectors for the diversification of the economy.

Being a motor in the improvement of the public sector and microeconomic environment.

Attracting and supporting both foreign and local investment in key sectors.

Providing support to Andorran businesses to be more competitive on a National and International scale.

Creating favorable conditions for innovation and entrepreneurship, in both the public and private sectors, to create an environment for testing new innovations at the country level.

The Andorran Chamber of Commerce, Industry, and Services of Andorra ( https://www.ccis.ad/ ) aims to promote and strengthen Andorra’s financial and business activity as well as provide services to foreign companies. The Chamber’s activities include organizing a census of commercial, industrial, and service activities; the protection of the general interests of commerce, industry, and services; promoting fair competition; and issuing certificates of origin and other commercial documents.

The Andorran Business Confederation (CEA) provides support to national companies to navigate within Andorra’s new legal, labor, and fiscal framework and facilitates companies’ international expansion projects. CEA also works to foster international investment into the country through its Iwand project , which provides information about Andorra’s economic and fiscal environment ( www.cea.ad ).

The Andorran legal framework has also adapted to international standards. The most relevant laws passed by Parliament to accompany the economic openness include the law of Companies (October 2007), the Law of Business Accounting (December 2007), and the Law of Foreign Investment (April 2008 and June 2012).

The OECD removed Andorra from its “tax haven list” in 2009 after the country signed the Paris Declaration, formally committing to sharing fiscal information outlined by the agreement. With the approval of the Law 19/2016, of November the 30th, on automatic exchange of information on tax matters, Andorra will exchange financial information with signatories of the “Common Reporting Standard” (CRS), developed by the G20 and approved by the OECD Council in July 2014.

From 2011 to 2019, the Parliament approved direct corporate, non-resident, capital gains, and personal income taxes. At 10 percent, well below the European average, Andorra’s corporate tax is more competitive than rates in neighboring Spain or France.

While foreigners may own 100 percent of a trading enterprise or a holding company, the Government must approve the establishment of any private enterprise. The approval can take up to one month and can be rejected if the proposal is found to negatively impact the environment, the public order, or the general interests of the principality.

On June 2021, the IMF released a report  detailing Andorra’s macro-economic trends and investment climate. In the past five years the Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), or the United Nations Conference on Trade and Development (UNCTAD) have not conducted an investment policy review. The government of Andorra, in responding to the economic downturn of COVID, released Horizon 23, an economic recovery roadmap to increase investment competitiveness

In the past five years, civil society organizations have not provided reviews of investment policy-related concerns.

Andorra established Andorra Business, a public/private agency, made up of several ministries, government agencies, associations, and organizations from the private sector. It aims to increase competitiveness, innovation, and sustainability. It provides counseling services to Andorran companies and potential foreign investors to facilitate investment and economic diversification.

Andorran regulations allow for two types of commercial companies: Limited Liability Company (Societat de Responsabilitat Limitada – SL), which has a minimum capital requirement of 3,000 euros; and Joint Stock Company (Societat Anonima – SA) which is normally required for multiple shareholders and has a minimum capital requirement of 60,000 euros.

The business establishment procedures and for share acquisitions or transfers are quite similar to those of other countries, requiring the filling of a simple application form, with the additional unique condition of the presentation of any prior investment authorization received in the country. This same procedure is applicable for incorporation, establishment, extension, branching, or other form of business expansion. Once the company is registered, the foreign investment is established, and the investor is required to deposit the share capital with an Andorran banking entity and proceed to public deed of incorporation before a notary.

The Government’s Andorra Business programs provide grants, counseling, and online resourced to small and medium size companies to foster competitiveness and facilitate internationalization.

The Andorran Chamber of Commerce ( www.ccis.ad ) helps companies search for business opportunities abroad and organizes, with the government, trade missions to explore international business exchanges.

Angola

1. Openness To, and Restrictions Upon, Foreign Investment

Angola is actively seeking FDI to diversify capital inflows, boost economic growth, and diversify the country’s economy. Angola has maintained its privatization program (PROPRIV), started in 2019, despite the difficulty attracting investment during the COVID-19 pandemic. PROPRIV offers investment opportunities for foreign investment in state-owned enterprises and other publicly owned assets as the government seeks to liquidate its stake in assets across sectors such as transportation, telecommunications, and banking. Angola has also modernized its tendering process to make it more transparent. Despite the increased openness and concerted effort to attract foreign investors, Angola passed local content regulations for the oil sector in October 2020 restricting the concept of “national company” to companies fully owned by Angolan citizens, as opposed to a companies with at least 51 percent ownership by Angolan entities. The regulation has three regimes determining the types of services that must be contracted with local entities and which can be contracted with foreign entities. The local content regulations apply to all companies providing goods and services to oil sector as well as oil companies.

Angola’s trade and investment promotion agency AIPEX  provides an online investment window platform for investors to register their investment proposals. AIPEX and the Institute of State Assets and Shares work together on roadshows to promote PROPRIV for foreign investors. AIPEX is also responsible for providing institutional support and monitoring investment project execution.

Foreign and domestic private entities can establish and own business enterprises with limitations on foreign entities holding the majority stake in companies in specific sectors. The 2018 Private Investment Law (PIL) establishes the general principles of private investment in Angola for domestic and foreign investors and applies to private investments of any value. Under the PIL, the acquisition of shares of an Angolan entity by a foreign investor is deemed to be a private investment operation. If the investor wishes to transfer funds abroad, the private investment project must be properly registered and executed, and appropriate taxes must be paid before transferring.

Majority foreign shareholding restrictions persist in specific industries such as the oil and gas sector (49 percent cap) and the maritime sector, specifically for shipping, due to their significance in the Angolan economy. Mining rights are granted to private investors by the national diamond company ENDIAMA. The PIL lifted restrictions on having Angolan partners for several strategic sectors such as he telecommunications, hospitality and tourism, transportation and logistics, and information technology.

At the government’s request, the last Investment Policy Review (IPR) of Angola’s business and economic environments was completed in 2019 by the United Nations Conference on Trade and Development (UNCTAD). The full report and policy recommendations are accessible at UNCTAD TPR . The WTO’s last IPR was more than five years ago; OECD has never conducted an IPR of Angola.

There are no recent policy recommendations by civil society organizations based on reviews of investment policy related concerns.

Presidential Decree No 167/20, of June 15, 2020, created the “ Single Investment Window ” (Janela Única de Investimento, or JUI), which is aimed at simplifying the contact between the investor and all the public entities involved in the approval of foreign investment projects.

To incorporate a company, investors must obtain a certificate of availability of the corporate name from the Ministry of Justice and Human Rights; deposit share capital and show proof of deposit to a notary; submit a draft incorporation deed, articles of association, and shareholder documents. The company must then register with the Commercial Registrar to register the company’s incorporation in the Angola’s Official Gazette (Diário da República).

Despite efforts to reduce the bureaucracy related to incorporating a business, it still takes around 30 days to incorporate. The business then must register with Tax Authority , the National Institute for Statistics , and the National Institute for Social Security . The business can then initiate licensing procedures.

Angola is also negotiating with the EU on a Sustainable Investment Facilitation Agreement , the EU’s first bilateral agreement on investment facilitation. The sides have had two rounds of negotiations in June and December 2021. The agreement intends to simplify procedures and encourage e-governance and public-private dialogue, while diversifying Angola’s economy and helping small and medium sized enterprises invest. Its goal is to support Angola’s ability to attract and retain investment by improving the investment climate for foreign and local investors.

The Angolan government does not promote or incentivize outward investment, nor does it restrict Angolans from investing abroad. Investors are free to invest in any foreign jurisdiction.

Domestic investors often prefer to invest in Portuguese-speaking countries, with few investing in neighboring countries in Sub-Saharan Africa. The bulk of investment is in real estate, fashion, fashion accessories, and domestic goods.

Due to foreign exchange constraints, there has been very limited investment abroad by domestic investors.

Antigua and Barbuda

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of Antigua and Barbuda encourages foreign direct investment, particularly in industries that create jobs, enhance economic activity, earn foreign currency, and have a positive impact on its citizens. Diversification of the economy remains a priority.

Through the ABIA, the government facilitates and supports foreign direct investment in the country and maintains an open dialogue with current and potential investors. All potential investors are afforded the same level of business facilitation services. ABIA offers complementary support services to investors exploring business opportunities, including facilitation of incentives and concessions, project monitoring, and general assistance. The government launched an additional website in early 2021 to serve as a “business hub for potential investors,” http://antiguabarbuda.com .

While the government welcomes all foreign direct investment, it has identified tourism and related services, manufacturing, agriculture and fisheries, information and communication technologies, business process outsourcing, financial services, health and wellness services, creative industries, education, yachting and marine services, real estate, and renewable energy as priority investment areas. Uncertainty about the trajectory of economic recovery of the tourism, commercial aviation, and cruise industries impacts the potential for projects in those sectors.

Local laws do not place any limits on foreign control of investment and ownership in Antigua and Barbuda. Foreign investors may hold up to 100 percent of an investment. Local and foreign entrepreneurs need approximately 40 days from start to finish to transfer the title on a piece of property. In 1995, the government established a permanent residency program to encourage high-net-worth individuals to establish residency in Antigua and Barbuda for up to three years. As residents, their income is free of local taxation. In 2020, the government established the Nomad Digital Residence Visa program in which eligible remote workers can apply for a two-year special resident authorization. Under this program, the visa holders are also exempt from paying local income taxes. These programs are separate from the Citizenship by Investment program.

The ABIA evaluates all foreign direct investment proposals applying for government incentives and provides intelligence, business facilitation, and investment promotion to establish and expand profitable business enterprises. The ABIA also advises the government on issues that are important to the private sector and potential investors to increase the international competitiveness of the local economy.

The government of Antigua and Barbuda treats foreign and local investors equally with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

The OECS, of which Antigua and Barbuda is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

Established in 2006, the ABIA facilitates foreign direct investment in priority sectors and advises the government on the formation and implementation of policies and programs to attract investment. The ABIA provides business support services and market intelligence to all investors. It also offers an online guide that is useful for navigating the laws, rules, procedures, and registration requirements for foreign investors. The guide is available at https://www.theiguides.org/public-docs/guides/antiguabarbuda .

All potential investors applying for government incentives must submit their proposals for review by the ABIA to ensure the project is consistent with national interests and provides economic benefits to the country.

To register a business. the general practice is to retain a local attorney who prepares all the relevant incorporation documents. A business must register with the Intellectual Property and Commercial Office, the Inland Revenue Department, the Medical Benefits Scheme, the Social Security Scheme, and the Board of Education.

The Antigua and Barbuda Science Innovation Park (ABSIP) launched in 2019 to support and create business startup opportunities that will generate sustainable business enterprises. ABSIP provides business incubation and financing, access to business financing, branding, training, partnership establishment, and other services. ABSIP’s website is  http://absip.gov.ag  .

The Prime Minister’s Entrepreneurial Development Programme (EDP) supports the creation of micro and small businesses with the intent of increasing the Antiguan and Barbudan ownership share of the country’s economy. Priority sectors in which EDP grants loans are agriculture and agro-processing, manufacturing, information technology, e-business, and tourism.

Although the government of Antigua and Barbuda prioritizes investment return as a key component of its overall economic strategy, there are no formal mechanisms in place to achieve this. To sustain future economic growth, Antigua and Barbuda’s economy depends on significant foreign direct investment.

Local laws do not place any restrictions on domestic investors seeking to do business abroad. Local companies in Antigua and Barbuda are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME).

Argentina

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of Argentina identified its top economic priorities for 2022 as reaching an agreement with the IMF to renegotiate the 2018 Stand-By Arrangement, controlling inflation, and continuing the post-pandemic economic recovery. When the Fernandez administration took office in late 2019, the Ministry of Foreign Affairs, International Trade, and Worship became the lead governmental entity for investment promotion.  The Fernandez administration does not have a formal business roundtable or other dialogue established with international investors, although it does engage frequently with domestic and international companies.

Market regulations such as capital controls, trade restrictions, and price controls enhance economic distortion that hinders the investment climate in the country.

Foreign and domestic investors generally compete under the same conditions in Argentina. However, foreign investment is restricted in specific sectors such as aviation and media. Foreign ownership of rural productive lands, bodies of water, and areas along borders is also restricted.

Argentina has a National Investment and Trade Promotion Agency that provides information and consultation services to investors and traders on economic and financial conditions, investment opportunities, and Argentine laws and regulations. The agency also helps small and medium- sized companies (SMEs) export their products, provides matchmaking services, and organizes roadshows and trade delegations. Upon the change of administration, the government placed the Agency under the direction of the Ministry of Foreign Affairs (MFA) to improve coordination between the Agency and Argentina´s foreign policy. The Under Secretary for Trade and Investment Promotion of the MFA works as a liaison between the Agency and provincial governments and regional organizations. The new administration also created the National Directorate for Investment Promotion under the Under Secretary for Trade and Investment Promotion, making the Directorate responsible for promoting Argentina as an investment destination. The Directorate´s mission also includes determining priority sectors and projects and helping Argentine companies expand internationally and/or attract international investment.

The agency’s web portal provides information on available services ( https://www.inversionycomercio.org.ar/ ). The 23 provinces and the City of Buenos Aires also have their own provincial investment and trade promotion offices.

Foreign and domestic commercial entities in Argentina are regulated by the Commercial Partnerships Law (Law 19,550), the Argentina Civil and Commercial Code, and rules issued by the regulatory agencies. Foreign private entities can establish and own business enterprises and engage in all forms of remunerative activity in nearly all sectors.

Full foreign equity ownership of Argentine businesses is not restricted, for the most part, with exceptions in the air transportation and media industries. The share of foreign capital in companies that provide commercial passenger transportation within the Argentine territory is limited to 49 percent per the Aeronautic Code Law 17,285. The company must be incorporated according to Argentine law and domiciled in Buenos Aires. In the media sector, Law 25,750 limits foreign ownership in television, radio, newspapers, journals, magazines, and publishing companies to 30 percent.

Law 26,737 (Regime for Protection of National Domain over Ownership, Possession or Tenure of Rural Land) establishes that a foreigner cannot own land that allows for the extension of existing bodies of water or that are located near a Border Security Zone. In February 2012, the government issued Decree 274/2012 further restricting foreign land ownership to a maximum of 30 percent of national land and 15 percent of productive land. Foreign individuals or foreign company ownership is limited to 1,000 hectares (2,470 acres) in the most productive farming areas. In June 2016, the Government of Argentina issued Decree 820 easing the requirements for foreign land ownership by changing the percentage that defines foreign ownership of a person or company, raising it from 25 percent to 51 percent of the social capital of a legal entity. Waivers are not available.

Argentina does not maintain an investment screening mechanism for inbound foreign investment. U.S. investors are not at a disadvantage to other foreign investors or singled out for discriminatory treatment.

Argentina was last subject to an investment policy review by the OECD in 1997 and the fifth trade policy review by the WTO in September 2021 ( https://www.wto.org/english/tratop_e/tpr_e/tp512_e.htm ). The United Nations Conference on Trade and Development (UNCTAD) has not done an investment policy review of Argentina.

In 2019, automotive sector representatives, including the Association of Automobile Manufacturers (ADEFA, or Asociación de Fábricas de Automotores) and the Asociación of Auto Parts Manufacturers (AFAC, or Asociación de Fábricas Argentinas de Componentes), published Plan 2030, a strategic plan for investment and development in the automotive sector. (http://www.cafas.org.ar/assets/img/noticias/Plan2030.pdf ) In 2022, the Industrial Union of Argentina (UIA, or Unión Industrial Argentina) published a White Book of recommendations to promote development and increase productivity in Argentina. (https://www.uia.org.ar/general/3889/propuestas-para-un-desarrollo-productivo-federal-sustentable-e-inclusivo-libro-blanco/ ) The Rosario Board of Trade (BCR, or Bolsa de Comercio de Rosario) published regular reports and recommendations for agricultural trade and investment policies. ( https://www.bcr.com.ar/es )

In 2019, stemming from the country’s deteriorating financial and economic situation, the Argentine government re-imposed capital controls on businesses and consumers, limiting their access to foreign exchange.  The government continued to update and increase both capital controls and taxes on imports and exports throughout 2021, generating continued uncertainty in the business climate.

With the stated aim of keeping inflation under control and avoiding production shortages during the COVID-19 pandemic, the government increased market interventions in 2020, creating further market distortions that may deter investment. During 2021, bans and other limits on beef exports were introduced to address rising domestic prices. Argentina currently has s a consumer goods price control program, Precios Cuidados, a voluntary program established in 2014.The Argentine Congress also passed the Shelves Law (No. 27,545), which regulates the supply, display, and distribution of products on supermarket shelves and virtual stores. Key articles of the Law are still pending implementing regulations. Private companies expressed concern over the final regulatory framework of the Law, which could affect their production, distribution, and marketing business models.

In August 2020, the government issued an edict freezing prices for telecommunication services (mobile and land), cable and satellite TV, and internet services until December 2020, later extending the measure into 2021. Some telecommunication companies appealed through the courts and were granted protection from the edict. The health sector was also subject to limits on price increases. In February 2021, the Secretary of Trade took administrative action against major consumer firms and food producers for purportedly causing supermarket shortages by withholding production and limiting distribution. Companies are currently contesting this decision. In March 2021, the Secretary of Domestic Trade issued Resolution 237/2021 establishing a national registry to monitor the production levels, distribution, and sales of private companies. If companies fail to comply, they could be subject to fines or closure. Tighter import controls imposed by the Fernandez administration have affected the business plans of private companies that need imported inputs for production. The private sector noted increased discretion on the part of trade authorities responsible for both approving import licenses and obtaining access to the foreign exchange market to pay for imports.

The Ministry of Production eased bureaucratic hurdles for foreign trade through the creation of a Single Window for Foreign Trade (“VUCE” for its Spanish acronym) in 2016. The VUCE centralizes the administration of all required paperwork for the import, export, and transit of goods (e.g., certificates, permits, licenses, and other authorizations and documents). The Argentine government has not fully implemented the VUCE for use across the country.

Argentina subjects imports to automatic or non-automatic licenses that are managed through the Comprehensive Import Monitoring System (SIMI, or Sistema Integral de Monitoreo de Importaciones), established in December 2015 by the National Tax Agency (AFIP by its Spanish acronym) through Resolutions 5/2015 and 3823/2015. The SIMI system requires importers to submit detailed information electronically about goods to be imported into Argentina. Once the information is submitted, the relevant Argentine government agencies can review the application through the VUCE and make any observations or request additional information. The list of products subject to non-automatic licensing has been modified several times since the beginning of the SIMI system. Due to the Covid-19 pandemic, the government reclassified goods needed to combat the health emergency previously subject to non-automatic import licenses to automatic import licenses. During 2021, the number of non-automatic import licenses did not significantly change, although obtaining dollars from the Argentine Central Bank to pay for imports was often difficult for importers. Approximately 1,500 tariff lines are currently subject to non-automatic licenses.

The Argentine Congress approved an Entrepreneurs’ Law in March 2017, which allows for the creation of a simplified joint-stock company (SAS, or Sociedad por Acciones Simplificada) online within 24 hours of registration. However, in March 2020, the Fernandez administration annulled the 24-hour registration system. Industry groups said this hindered the entrepreneurship ecosystem by revoking one of the pillars of the Entrepreneurs’ Law.

In December 2020, the government issued the regulatory framework for the Knowledge Based-Economy Law, which was passed in October 2020. The Law establishes tax benefits for entrepreneurs until December 2029. The complete list of activities included in the tax benefit can be found at: http://servicios.infoleg.gob.ar/infolegInternet/verNorma.do;jsessionid=56625A2FC5152F34ECE583158D581896?id=346218 .

Foreign investors seeking to set up business operations in Argentina follow the same procedures as domestic entities without prior approval and under the same conditions as local investors. To open a local branch of a foreign company in Argentina, the parent company must be legally registered in Argentina. Argentine law requires at least two equity holders, with the minority equity holder maintaining at least a five percent interest. In addition to the procedures required of a domestic company, a foreign company establishing itself in Argentina must legalize the parent company’s documents, register the incoming foreign capital with the Argentine Central Bank, and obtain a trading license.

A company must register its name with the Office of Corporations (IGJ, or Inspección General de Justicia). The IGJ website describes the registration process, and some portions can be completed online (https://www.argentina.gob.ar/justicia/igj/guia-de-tramites ). Once the IGJ registers the company, the company must request that the College of Public Notaries submit the company’s accounting books to be certified with the IGJ. The company’s legal representative must obtain a tax identification number from AFIP, register for social security, and obtain blank receipts from another agency. Companies can register with AFIP online at www.afip.gob.ar  or by submitting the sworn affidavit form No. 885 to AFIP.

Details on how to register a company can be found at the Ministry of Productive Development’s website: https://www.argentina.gob.ar/produccion/crear-una-empresa . Instructions on how to obtain a tax identification code can be found at: https://www.argentina.gob.ar/obtener-el-cuit-por-internet .

The enterprise must also provide workers’ compensation insurance for its employees through the Workers’ Compensation Agency (ART, or Aseguradora de Riesgos del Trabajo). The company must register and certify its accounting of wages and salaries with the Secretariat of Labor, within the Ministry of Labor, Employment, and Social Security.

The Ministry of Productive Development offers attendance-based courses and online training for businesses. The training menu can be viewed at: https://www.argentina.gob.ar/produccion/capacitacion .

The National Directorate for Investment Promotion under the Under Secretary for Trade and Investment Promotion at the MFA assists Argentine companies in expanding their business overseas, in coordination with the National Investment and Trade Promotion Agency. Argentina does not have any restrictions regarding domestic entities investing overseas, nor does it incentivize outward investment.

Armenia

1. Openness To, and Restrictions Upon, Foreign Investment

The government of Armenia officially welcomes foreign investment. The Ministry of Economy is the main government body responsible for the development of investment policy in Armenia. Armenia has achieved respectable rankings on some global indices measuring the country’s business climate. Armenia’s investment and trade policy is relatively open; foreign companies are entitled by law to the same treatment as Armenian companies. Armenia has strong human capital and a well-educated population, particularly in the science, technology, engineering, and mathematics fields, leading to significant investment in the high-tech and information technology sectors. Many international companies have established branches or subsidiaries in Armenia to take advantage of the country’s pool of qualified specialists and position within the Eurasian Economic Union (EAEU). However, many businesses have identified challenges with Armenia’s investment climate in terms of the country’s small market (with a population of less than three million), limited consumer buying power, relative geographic isolation due to closed borders with Turkey and Azerbaijan, and concerns related to weaknesses in the rule of law.

Following a peaceful revolution in 2018 fueled in large measure by popular frustration with endemic corruption, Armenia’s government launched a high-profile anti-corruption campaign. The fight against corruption needs to be institutionalized in the long term, especially in critical areas such as the judiciary, tax and customs operations, and health, education, military, and law enforcement sectors. Foreign investors remain concerned about the rule of law, equal treatment, and ethical conduct by government officials. U.S companies have reported that the investment climate is tainted by a failure to enforce intellectual property rights. There have been concerns regarding the lack of an independent and strong judiciary, which undermines the government’s assurances of equal treatment and transparency and reduces access to effective recourse in instances of investment or commercial disputes.  Representatives of U.S. entities have raised concerns about the quality of stakeholder consultation by the government with the private sector and government responsiveness in addressing concerns among the business community. 

Government officials have publicly responded to private sector concerns about perceptions of slow movement in the government bureaucracy as a function of needing to guard against corruption-related risks. The Armenian National Interests Fund and Investment Support Center (Enterprise Armenia) are responsible for attracting and facilitating foreign direct investment.

There are generally very few restrictions on foreign ownership or control of commercial enterprises. There are some restrictions on foreign ownership within the media and commercial aviation sectors. Local incorporation is required to obtain a license for the provision of auditing services.

The Armenian government does not maintain investment screening mechanisms in general, and for foreign direct investment, in particular. Government approval is required to take advantage of certain tax and customs privileges, and foreign investors are subject to the same requirements as domestic investors where regulatory approvals may be involved.

An Armenian ecological NGO recently published an article claiming that many mines in Armenia do not have corporate social responsibility obligations, which are required by law. However, it was unclear from the article if the mines in question were still actively operating.    

https://www.business-humanrights.org/en/latest-news/?&language=en

Link to Global Witness country-specific reports: https://www.globalwitness.org/en/all-countries-and-regions/

Link to conflicts listed on Environmental Justice Atlas, under “basic data,” select country: https://ejatlas.org/

In 2019, the U.N. Conference on Trade and Development (UNCTAD) published its first investment policy review for Armenia. The World Trade Organization (WTO) published a Trade Policy Review for Armenia in 2018.

Companies can register electronically here.  This single window service was launched in 2011 and allows individual entrepreneurs and companies to complete name reservation, business registration, and tax identification processes all at once.  The application can be completed in one day.  An electronic signature is needed in order to be able to register online.  Foreign citizens can obtain an e-signature and more detailed information from the e-signature portal.  In 2019, the government launched an e-regulations platform that provides a step-by-step guide for business and investment procedures.  The platform is available at https://armenia.eregulations.org/ . According to the latest estimates, it takes four days to complete the company registration process in Armenia.

The Armenian government does not restrict domestic investors from investing abroad.

Australia

1. Openness To, and Restrictions Upon, Foreign Investment

Australia is generally welcoming to foreign direct investment (FDI), with foreign investment widely considered to be an essential contributor to Australia’s economic growth. Other than certain required review and approval procedures for designated types of foreign investment described below, there are no laws that discriminate against foreign investors.

A number of investment promotion agencies operate in Australia. The Australian Trade Commission (often referred to as Austrade) is the Commonwealth Government’s national “gateway” agency to support investment into Australia. Austrade provides coordinated government assistance to promote, attract, and facilitate FDI, supports Australian companies to grow their business in international markets, and delivers advice to the Australian Government on its trade, tourism, international education and training, and investment policy agendas. Austrade operates through a number of international offices, with U.S. offices primarily focused on attracting foreign direct investment into Australia and promoting the Australian education sector in the United States. Austrade in the United States operates from offices in Boston, Chicago, Houston, New York, San Francisco, and Washington, DC. In addition, state and territory investment promotion agencies also support international investment at the state level and in key sectors.

Within Australia, foreign and domestic private entities may establish and own business enterprises and may engage in all forms of remunerative activity in accordance with national legislative and regulatory practices. See Section 4: Legal Regime – Laws and Regulations on Foreign Direct Investment below for information on Australia’s investment screening mechanism for inbound foreign investment.

Other than the screening process described in Section 4, there are few limits or restrictions on foreign investment in Australia. Foreign purchases of agricultural land greater than AUD 15 million (USD 11 million) are subject to screening. This threshold applies to the cumulative value of agricultural land owned by the foreign investor, including the proposed purchase. However, the agricultural land screening threshold does not affect investments made under the Australia-United States Free Trade Agreement (AUSFTA). The current threshold is AUD 1.25 billion (USD 925 million) for U.S. non-government investors. Investments made by U.S. non-government investors are subject to inclusion on the foreign ownership register of agricultural land and to Australian Tax Office (ATO) information gathering activities on new foreign investment.

The Foreign Investment Review Board (FIRB), which advises Australia’s Treasurer, may impose conditions when approving foreign investments. These conditions can be diverse and may include: retention of a minimum proportion of Australian directors; certain requirements on business activities, such as the requirement not to divest certain assets; and certain taxation requirements. Such conditions are in keeping with Australia’s policy of ensuring foreign investments are in the national interest.

Australia has not conducted an investment policy review in the last three years through either the OECD or UNCTAD system. The WTO reviewed Australia’s trade policies and practices in 2019, and the final report can be found at: https://www.wto.org/english/tratop_e/tpr_e/tp496_e.htm .

The Australian Trade Commission compiles an annual “Why Australia Benchmark Report” that presents comparative data on investing in Australia in the areas of Growth, Innovation, Talent, Location, and Business. The report also compares Australia’s investment credentials with other countries and provides a general snapshot on Australia’s investment climate. The 2021 Benchmark Report can be found at: http://www.austrade.gov.au/International/Invest/Resources/Benchmark-Report .

Australia’s private sector frequently provides policy recommendations to the government, including as part of annual federal budget reviews and ad hoc policy reviews. In 2021 the American Chamber of Commerce in Australia published a report titled “The Opportunity is Now: Attracting U.S. Investors to Australia,” which provides a range of recommendations to government relating to Australia’s investment screening and general investment environment. The report is available via the following link: https://www.pwc.com.au/amcham-pwc-opportunity-is-now.html

Business registration in Australia is relatively straightforward and is facilitated through a number of government websites. The government’s business.gov.au website provides an online resource and is intended as a “whole-of-government” service providing essential information on planning, starting, and growing a business. Foreign entities intending to conduct business in Australia as a foreign company must be registered with the Australian Securities and Investments Commission (ASIC). As Australia’s corporate, markets, and financial services regulator, ASIC’s website provides information and guides on starting and managing a business or company in the country.

In registering a business, individuals and entities are required to register as a company with ASIC, which then gives the company an Australian Company Number, registers the company, and issues a Certificate of Registration. According to the World Bank “Starting a Business” indicator, registering a business in Australia takes two days, and Australia ranks 7th globally on this indicator.

Australia generally looks positively towards outward investment as a way to grow its economy. There are no restrictions on investing abroad. Austrade, Export Finance Australia (EFA), and various other government agencies offer assistance to Australian businesses looking to invest abroad, and some sector-specific export and investment programs exist. The United States is the top destination, by far, for Australian investment overseas.

Austria

1. Openness To, and Restrictions Upon, Foreign Investment

The Austrian government welcomes foreign direct investment, particularly when such investments have the potential to create new jobs, support advanced technology fields, promote capital-intensive industries, and enhance links to research and development.

There are limited restrictions on foreign investment. American investors have not complained of discriminatory laws against foreign investors. Austria’s investment screening law, which requires government approval of transactions leading to 10 percent or more foreign ownership in sensitive sectors, has resulted in an increase in the number of investments screened, from less than three per year, to 50 completed screenings from July 2020 to July 2021, the first full year law has been in effect. The majority of these screenings (31 in total) were for U.S.-based investments. Please see the “Laws and Regulations on Foreign Investment” section below for further details on the law and its applications.

The corporate tax rate, a 25 percent flat tax, is above the EU average. The government is planning to reduce it to 24 percent in 2023 and 23 percent in 2024. U.S. citizens and investors have occasionally reported that it is difficult to establish and maintain banking services since the U.S.-Austria Foreign Account Tax Compliance Act (FATCA) Agreement went into force in 2014, as some Austrian banks have been reluctant to take on this reporting burden.

Potential investors should also be aware of Austria’s lengthy environmental impact assessments in their investment decision-making. Some sectors also suffer from heavy regulation that may affect certain investments. For example, the requirement that over 50 percent of energy providers must be publicly owned places a potential cap on investments in the energy sector. Strict liability and co-existence regulations in the agriculture sector restrict research and virtually outlaw the cultivation, marketing, or distribution of biotechnology crops. The mining and transportation sectors are also heavily regulated.

Austria’s national investment promotion organization, the Austrian Business Agency (ABA), is a useful first point of contact for foreign companies interested in establishing operations in Austria. It provides comprehensive information about Austria as a business location, identifies suitable sites for greenfield investments, and consults in setting up a company. ABA provides its services free of charge.

The Austrian Economic Chamber (WKO) and the American Chamber of Commerce in Austria (Amcham) are also good resources for foreign investors. Both conduct annual polls of their members to measure their satisfaction with the business climate, thus providing early warning to the government of problems identified by investors.

There is no principal limitation on establishing and owning a business in Austria. A local managing director must be appointed to any newly established enterprise. For non-EU citizens to establish and own a business, the Austrian Foreigner’s Law mandates a residence permit that includes the right to run a business. Many Austrian trades are regulated, and the right to run a business in regulated trade sectors is only granted when certain preconditions are met, such as certificates of competence, and recognition of foreign education.

There are limited restrictions on foreign ownership of private businesses. Austria’s investment screening law, requires an investment screening process to review potential foreign acquisitions of 25 percent or more of a company essential to the country’s infrastructure, lowering the threshold to 10 percent for sensitive sectors (see the “Laws and Regulations on Foreign Investment” section below for further details). In April 2019, the EU Regulation on establishing a framework for the screening of foreign direct investments into the Union entered into force. It creates a cooperation mechanism through which EU countries and the European Commission will exchange information and raise concerns related to specific investments which could potentially threaten the security of EU countries.

The American Chamber of Commerce (AmCham) commented on Austria’s strengthened investment screening law following implementation in 2020, that the two-month screening process takes too long and places an undue administrative burden on companies. The AmCham advocated for expedited screenings for proposed investments with no clear threat to national security. Business interest groups, such as the Austrian Economic Chamber and the Federation of Austrian Industries also commented during the legislation’s draft and review process that the strengthened screening measures would impose an undue administrative burden on businesses, the definition of sectors requiring screening was too wide, and the updated legislation would reduce the attractiveness of Austria as an investment location.

Austria generally ranked in the top 30 countries in the world in the past World Bank “Ease of Doing Business” reports, but starting a business takes time. The average time to set up a company is 21 days, while the average time in OECD high income countries is 9.2 days.

To register a new company or open a subsidiary in Austria, a company must first be listed on the Austrian Companies Register at a local court. The next step is to seek confirmation of registration from the Austrian Economic Chamber (WKO) establishing that the company is really a new business. The investor must then notarize the “declaration of establishment,” deposit a minimum capital requirement with an Austrian bank, register with the tax office, register with the district trade authority, register employees for social security, and register with the municipality where the business will be located. Finally, membership in the WKO is mandatory for all businesses in Austria.

For sole proprietorships, it is possible under certain conditions to use an online registration process via government websites in German to either found or register a company: https://www.usp.gv.at/Portal.Node/usp/public/content/gruendung/egruendung/269403.html, or www.gisa.gv.at/online-gewerbeanmeldung. It is advisable to seek information from ABA or the WKO before applying to register a firm.

The website of the ABA contains further details and contact information and is intended to serve as a first point of contact for foreign investors in Austria: https://investinaustria.at/en/starting-business/.

The Austrian government encourages outward investment. Advantage Austria, the “Austrian Foreign Trade Service,” is a special section of the WKO that promotes Austrian exports and also supports Austrian companies establishing an overseas presence. Advantage Austria operates five offices in the United States (Washington D.C., New York, Atlanta, Los Angeles, and San Francisco). Overall, it has about 100 trade offices in 70 countries across the world, reflecting Austria’s strong export focus and the important role the WKO plays. (https://www.wko.at/service/aussenwirtschaft/aussenwirtschaftscenter.html#heading_aussenwirtschaftscenter) The Ministry for Digital and Economic Affairs and the WKO run a joint program called “Go International,” providing services to Austrian companies that are considering investing for the first time in foreign countries. The program provides grants for market access costs and provides “soft subsidies,” such as counseling, legal advice, and marketing support.

Azerbaijan

1. Openness To, and Restrictions Upon, Foreign Investment

The Azerbaijani government actively seeks foreign direct investment.  Flows of foreign direct investment to Azerbaijan have risen steadily in recent years, primarily in the energy sector.  Foreign investment in the government’s priority sectors for economic diversification (agriculture, transportation, tourism, and ICT) has thus far been limited.

Foreign investments enjoy complete and unreserved legal protection under the Law on the Protection of Foreign Investment, the Law on Investment Activity, and guarantees contained within international agreements and treaties.  In accordance with these laws, Azerbaijan will treat foreign investors, including foreign partners in joint ventures, in a manner no less favorable than the treatment accorded to national investors.  Azerbaijan’s Law on the Protection of Foreign Investments protects foreign investors against nationalization and requisition, except under specific circumstances.  The Azerbaijani government has not shown any pattern of discriminating against U.S. persons or entities through illegal expropriation.

Azerbaijan’s primary body responsible for investment promotion is the Azerbaijan Export and Investment Promotion Agency (AzPromo).  AzPromo is a joint public-private initiative, established by the Ministry of Economy and Industry in 2003 to foster the country’s economic development and diversification by attracting foreign investment into the non-oil sector and stimulating non-oil exports.  A January 2018 decree called for new legislation, which has not yet been introduced, to ensure Azerbaijan conforms to international standards to protect foreign investor rights.  The Azerbaijani government meets regularly with the American Chamber of Commerce (AmCham) to solicit the input from the business community, particularly as part of AmCham’s biennial white paper process.  In June 2021, AmCham Azerbaijan organized a press conference for publicly presenting subsequent publication of its White Paper on observations and recommendations for improving Azerbaijan’s business climate. The 2021 White Paper covered issues in several fields, including taxation, customs procedures, finance, and information and communications technology. 

Foreigners are allowed to register business entities by opening a fully owned subsidiary, acquiring shares of an existing company, or by creating a joint venture with a local partner.  Foreign companies are also permitted to operate in Azerbaijan without creating a local legal entity by registering a representative or branch office with the tax authorities.

Foreigners are not permitted to own land in Azerbaijan but are permitted to lease land and own real estate.  Under Azerbaijani laws, the state must retain a controlling stake in companies operating in the mining, oil and gas, satellite communication, and military arms sectors, limiting foreign or domestic private ownership to a 49 percent share of companies in these industries.  Foreign ownership in the media sector is also strictly limited.  Furthermore, a special license to conduct business is required for foreign or domestic companies operating in telecommunications, sea and air transportation, insurance, and other regulated industries.  Azerbaijan does not screen inbound foreign investment, and U.S. investors are not specifically disadvantaged by any existing control mechanisms.

Azerbaijan has not conducted an Organization for Economic Cooperation and Development (OECD) investment policy review, a United Nations Conference on Trade and Development (UNCTAD) investment policy review, or a WTO Trade Policy Review.

Azerbaijani law requires all companies operating in the country to register with the tax authorities.  Without formal registration, a company may not maintain a bank account or clear goods through customs.  Registration takes approximately three days for commercial organizations.  Companies may e-register at http://taxes.gov.az.

Azerbaijan does not actively promote or incentivize outward investment, though Azerbaijani entities, particularly the State Oil Company of Azerbaijan (SOCAR) and the State Oil Fund of Azerbaijan (SOFAZ), have invested in various countries, including the United States.  SOFAZ investment is typically limited to real estate, precious metals, and low-yield government securities.  SOCAR has invested heavily in oil and gas infrastructure and petrochemicals processing in Turkey and Georgia, as well as gas pipeline networks in Greece, Albania, and Italy as part of the Southern Gas Corridor that transports Azerbaijani gas to European markets.  The government does not restrict domestic investors from investing overseas.

Bahrain

1. Openness To, and Restrictions Upon, Foreign Investment

The GOB has a liberal approach to foreign investment and actively seeks to attract foreign investors and businesses. Increasing FDI is a top GOB priority. The GOB permits 100 percent foreign ownership of a business or branch office, without the need for a sponsor or local business partner. The GOB does not tax corporate income, personal income, wealth, capital gains, withholding or death/inheritance. There are no restrictions on repatriation of capital, profits or dividends, aside from income generated by companies in the oil and gas sector, where profits are taxable at the rate of 46 percent. Bahrain Economic Development Board (EDB), charged with promoting FDI in Bahrain, places particular emphasis on attracting FDI to the manufacturing, logistics, ICT, financial services, tourism, health, and education sectors. As a reflection of Bahrain’s openness to FDI, the EDB won the 2019 United Nations Top Investment Promotion Agency in the Middle East award for its role in attracting large-scale investments. U.S. investors have never alleged any legal or practical discrimination against them based on nationality.

In January 2021, the U.S. Commerce Secretary and the Bahraini Commerce Minister signed an MOU to establish the United States Trade Zone (USTZ) in Bahrain. Located near Bahrain’s critical port, aviation, and logistics facilities, the USTZ will enable U.S. companies to own and operate full turnkey industrial manufacturing, logistics, and distribution facilities in a unified commercial zone in order to access the wider GCC market. In February 2022, the Bahraini government allocated a small land plot and organized an expedited groundbreaking ceremony to formally open the USTZ to accommodate initial U.S. company interest. The Bahraini government must now tender out dredging and other construction services to reclaim land from the sea before building out the bulk of the USTZ’s infrastructure, which could take up to three years.

The GOB permits foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity. The GOB imposes only minimal limits on foreign control, and the right of ownership and establishment of a business. The Ministry of Industry, Commerce, and Tourism (MoICT) maintains a small list of business activities that are restricted to Bahraini ownership, including press and publications, Islamic pilgrimage, clearance offices – such as expeditors and document clearance companies — and workforce agencies. The U.S.-Bahrain FTA outlines all activities in which the two countries restrict foreign ownership.

U.S citizens may own and operate companies in Bahrain, though many such individuals choose to integrate influential local partners into the ownership structure to facilitate quicker resolution of bureaucratic issues such as labor permits, issuance of foreign visas, and access to industrial zones. The most common challenges faced by U.S firms are those related to bureaucratic government processes, lack of market information, customs clearance, and preregistration requirements to bid on local tenders.

The World Trade Organization (WTO) conducted a Trade Policy Review of Bahrain in November 2021.

Bahrain ranked 43 out of 190 countries on the World Bank’s overall Ease of Doing Business Indicator in 2020.

The CBB’s regulatory sandbox allows local and international FinTech firms and digitally focused financial institutions to test innovative solutions in a regulated environment, allowing successful firms to obtain licensing upon successful product application.

The MoICT operates the online commercial registration portal “Sijilat” ( www.sijilat.bh ) to facilitate the commercial registration process. Through Sijilat, local and foreign business owners can obtain a business license and requisite approvals from relevant ministries. The business registration process normally takes two to three weeks, from start to finish, but can take longer if a business requires specialized approvals. In practice, some business owners retain an attorney or clearing agent to assist them through the commercial registration process.

In addition to obtaining primary approval to register a company, most business owners must also obtain licenses from the following entities to operate their businesses:

  1. MoICT
  2. Electricity and Water Authority
  3. The Municipality in which their business will be located
  4. Labour Market Regulatory Authority
  5. General Organization for Social Insurance
  6. National Bureau for Revenue (Mandatory if the business revenue exceeds BD 37,500)

To incentivize foreign investment in Bahrain’s targeted sectors and investment zones, the GOB provides industrial lands at reduced rental rates; customs duty exemptions for industrial and manufacturing projects, including imports of raw material, plant machinery equipment, and spare parts; and a five-year exemption of the “Bahrainization” recruitment restriction.

The GOB neither promotes nor incentivizes outward investment. The GOB does not restrict domestic investors from investing abroad.

Bangladesh

1. Openness To, and Restrictions Upon, Foreign Investment

Bangladesh actively seeks foreign investment. Sectors with active investments from overseas include agribusiness, garment and textiles, leather and leather goods, light manufacturing, electronics, light engineering, energy and power, ICT, plastic, healthcare, medical equipment, pharmaceutical, ship building, and infrastructure. It offers a range of investment incentives under its industrial policy and export-oriented growth strategy with few formal distinctions between foreign and domestic private investors.

Foreign and domestic private entities can establish and own, operate, and dispose of interests in most types of business enterprises. Four sectors, however, are reserved for government investment:

  • Arms and ammunition and other defense equipment and machinery.
  • Forest plantation and mechanized extraction within the bounds of reserved forests.
  • Production of nuclear energy.
  • Security printing (items such as currency, visa foils, and tax stamps).

The Bangladesh Investment Development Authority (BIDA) is the principal authority tasked with supervising and promoting private investment. The BIDA Act of 2016 approved the merger of the now-disbanded Board of Investment and the Privatization Committee. BIDA is directly supervised by the Prime Minister’s Office and the Executive Chairman of BIDA holds a rank equivalent to Senior Secretary, the highest rank within the civil service. BIDA performs the following functions:

  • Provides pre-investment counseling services.
  • Registers and approves private industrial projects.
  • Issues approval of branch/liaison/representative offices.
  • Issues work permits for foreign nationals.
  • Issues approval of royalty remittances, technical know-how, and technical assistance fees.
  • Facilitates import of capital machinery and raw materials.
  • Issues approvals of foreign loans and supplier credits.
  • Provides aftercare facilities.

BIDA’s website has aggregated information regarding Bangladesh investment policies, incentives, and ease of doing business indicators: http://bida.gov.bd/ 

In addition to BIDA, there are three other Investment Promotion Agencies (IPAs) responsible for promoting investments in their respective jurisdictions.

  • Bangladesh Export Processing Zone Authority (BEPZA) promotes investments in Export Processing Zones (EPZs). The first EPZ was established in the 1980s and there are currently eight EPZs in the country. Website:
  • Bangladesh Economic Zones Authority (BEZA) plans to establish approximately 100 Economic Zones (EZs) throughout the country over the next several years. Site selections for 97 EZs have been completed as of February 2022, of which 10 private EZs are already licensed and operational while development of several other public and private sector EZs are underway. While EPZs accommodate exporting companies only, EZs are open for both export- and domestic-oriented companies. Website:
  • Bangladesh Hi-Tech Park Authority (BHTPA) is responsible for attracting and facilitating investments in the high-tech parks Bangladesh is establishing across the country. Website:

Foreign and domestic private entities can establish and own, operate, and dispose of interests in most types of business enterprises. Bangladesh allows private investment in power generation and natural gas exploration, but efforts to allow full foreign participation in petroleum marketing and gas distribution have stalled. Regulations in the area of telecommunication infrastructure currently include provisions for 60 percent foreign ownership (70 percent for tower sharing). In addition to the four sectors reserved for government investment, there are 17 controlled sectors that require prior clearance/ permission from the respective line ministries/authorities. These are:

  • Fishing in the deep sea.
  • Bank/financial institutions in the private sector.
  • Insurance companies in the private sector.
  • Generation, supply, and distribution of power in the private sector.
  • Exploration, extraction, and supply of natural gas/oil.
  • Exploration, extraction, and supply of coal.
  • Exploration, extraction, and supply of other mineral resources.
  • Large-scale infrastructure projects (e.g., elevated expressway, monorail, economic zone, inland container depot/container freight station).
  • Crude oil refinery (recycling/refining of lube oil used as fuel).
  • Medium and large industries using natural gas/condensate and other minerals as raw material.
  • Telecommunications service (mobile/cellular and land phone).
  • Satellite channels.
  • Cargo/passenger aviation.
  • Sea-bound ship transport.
  • Seaports/deep seaports.
  • VOIP/IP telephone.
  • Industries using heavy minerals accumulated from sea beaches.

While discrimination against foreign investors is not widespread, the government frequently promotes local industries, and some discriminatory policies and regulations exist. For example, the government closely controls approvals for imported medicines that compete with domestically manufactured pharmaceutical products and it has required majority local ownership of new shipping and insurance companies, albeit with exemptions for existing foreign-owned firms. In practical terms, foreign investors frequently find it necessary to have a local partner even though this requirement may not be statutorily defined. In certain strategic sectors, the GOB has placed unofficial barriers on foreign companies’ ability to divest from the country.

BIDA is responsible for screening, reviewing, and approving investments in Bangladesh, except for investments in EPZs, EZs, and High-Tech Parks, which are supervised by BEPZA, BEZA, and BHTPA respectively. Both foreign and domestic companies are required to obtain approval from relevant ministries and agencies with regulatory oversight. In certain sectors (e.g., healthcare), foreign companies may be required to obtain a No Objection Certificate (NOC) from the relevant ministry or agency stating the specific investment will not hinder local manufacturers and is in line with the guidelines of the ministry concerned. Since Bangladesh actively seeks foreign investments, instances where one of the Investment Promotion Agencies (IPAs) declines investment proposals are rare.

In 2013 Bangladesh completed an investment policy review (IPR) with the United Nations Conference on Trade and Development (UNCTAD):  https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=756  

A Trade Policy Review was done by the World Trade Organization in April 2019 and can be found at:  https://www.wto.org/english/tratop_e/tpr_e/tp485_e.htm   

In February 2018, the Bangladesh Parliament passed the “One Stop Service Bill 2018,” which aims to streamline business and investment registration processes. The four IPAs – BIDA, BEPZA, BEZA, and BHTPA – are mandated to provide one-stop services (OSS) to local and foreign investors under their respective jurisdictions. Expected streamlined services include company registration, taxpayer’s identification number (TIN) and value added tax (VAT) registration, work permit issuance, power and utilities connections, capital and profit repatriation, and environment clearance. In 2019 Bangladesh made reforms in three key areas: starting a business, getting electricity, and getting credit. BIDA offers 56 services under its OSS as of February 2022and has a plan to expand to 154 services covering 35 agencies. The GOB is also planning to integrate the services of all four investment promotion agencies under a single online platform. Progress on realizing a comprehensive OSS for businesses has been slowed by bureaucratic delays and a lack of interagency coordination.

Companies can register their businesses at the Office of the Registrar of Joint Stock Companies and Firms (RJSC): www.roc.gov.bd . However, the online business registration process, while improving, can at times be unclear and inconsistent. Additionally, BIDA facilitates company registration services as part of its OSS, which is available at:  https://bidaquickserv.org . BIDA also facilitates other services including office set-up approval, work permits for foreign employees, environmental clearance, outward remittance approval, and tax registration with National Board of Revenue. Other agencies with which a company must typically register are:

  • City Corporation – Trade License.
  • National Board of Revenue – Tax & VAT Registration.
  • Chief Inspector of Shops and Establishments – Employment of Workers Notification.

It takes approximately 20 days to start a business in the country according to the World Bank. The company registration process at the RJSC generally takes one or two days to complete. The process for trade licensing, tax registration, and VAT registration required as of 2021 seven days, one day, and one week respectively.

Outward foreign direct investment is generally restricted through the Foreign Exchange Regulation Act of 1947. As a result, the Bangladesh Bank plays a key role in limiting outbound investment. In September 2015, the government amended the Foreign Exchange Regulation Act of 1947 by adding a “conditional provision” that permits outbound investment for export-related enterprises. Private sector contacts note the few international investments approved by the Bangladesh Bank have been limited to large exporting companies with international experience. However, the government is considering an overseas investment guideline to allow outbound investment opportunities for local exporters and any company operating in the domestic market for 10 years. This will allow local companies and NGOs with outbound investments to enlist in foreign stock markets. However, Bangladesh’s total outbound investment in a single fiscal year would be capped at 5 percent of the central bank’s foreign exchange reserves for that fiscal year under the regulation being considered. Bangladesh Investment Development Authority (BIDA) has been working to formulate a workable policy regarding this since 2016.

Barbados

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of Barbados, through Invest Barbados, welcomes foreign direct investment with the stated goals of creating jobs, earning foreign exchange, transferring technology, enhancing skills, and contributing to economic growth. In 2021, the government announced plans to focus on encouraging foreign direct investment in renewable energy, manufacturing, technology, and biogenetic engineering.

According to Invest Barbados, Barbados encourages investment in the following key sectors: international financial services, information technology, and ship registration, as well as emerging sectors like financial technology, creative industries, agricultural processing, medical schools, medical tourism, and renewable energy. In the international financial services sector, the government maintains regulatory oversight via the Central Bank of Barbados to prevent money laundering and tax evasion.

Through Invest Barbados, the government facilitates domestic and foreign private investment. Invest Barbados’ mandate is to actively promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors. Invest Barbados also provides customized support for investors to assist with the expansion and sustainability of the initial investment. It also serves as the primary liaison for existing investors. In 2021, the government announced plans to establish a Barbados Free Economic Zone to help attract foreign direct investment.

Investors interested in doing business in Barbados must register with the country’s Corporate Affairs and Intellectual Property Office (CAIPO). In 2021, the Government of Barbados fully digitized the registration process and all other services provided by CAIPO.

Local laws do not place any limits on foreign control in Barbados. Nationals and non-nationals may establish and own private enterprises and private property in Barbados. These rights extend to the acquisition and disposition of interests in private enterprises.

No industries are closed to private enterprise, although the government reserves the right not to allow certain investments. Some activities, such as telecommunications, utilities, broadcasting, franchises, banking, and insurance require a government license. There are no quotas or other restrictions on foreign ownership of a local enterprise or participation in a joint venture.

In 2012, the government introduced a special entry permit for high net-worth individuals who wish to reside in Barbados while working remotely. Individuals must have one of the following to apply: a net worth of USD five million, property valued above USD two million, and skills of critical need to the development of the country. Applicants must generally be 60 years or older although special provisions can be made for applicants under 60 years of age. The program is administered by the Barbados Immigration Department.

In 2020, the government introduced the Barbados Welcome Stamp visa program, which allows eligible remote workers to apply for special residency status for up to one year. Under this program, the visa holder is exempt from local income taxes. The visa holder can also apply for an extension of the visa with the repayment of applicable fees. The program is administered through the Ministry of Tourism and International Transport.

Barbados has not conducted a trade policy review in the last three years. No civil society organization has provided a review of investment policy-related concerns in the past five years.

Invest Barbados is the main investment promotion agency that attracts and facilitates foreign investment. Invest Barbados offers guidance and direction to new and established investors seeking to pursue investment opportunities in Barbados. The process is transparent and considers the size of capital investment as well as the economic impact of a proposed project.

Invest Barbados offers a website that is useful for navigating applicable laws, rules, procedures, and registration requirements for foreign investors. This is available at  http://www.investbarbados.org . Invest Barbados’ iGuide website is an online guide that provides local and foreign investors with up-to-date information required to make certain investment decisions, including steps for setting up a business, opportunities for investment, labor and other business costs, and legal requirements, among other data. This is available at  https://www.theiguides.org/public-docs/guides/barbados . The Corporate Affairs and Intellectual Property Office (CAIPO) maintains an online e-registry filing service for matters pertaining to the Corporate Registry. It is available to registered agents, who are usually attorneys. Information is available at  www.caipo.gov.bb .

In general, when starting a business, companies retain an attorney to prepare relevant incorporation documents. The business must register with CAIPO, the Barbados Revenue Authority, the Customs and Excise Department, and any relevant sector-specific licensing agencies.

The Government of Barbados continues to facilitate programs and partnerships to assist entrepreneurs who are women and/or people with disabilities. The Government of Barbados remains committed to working with civil society and other organizations to meet the UN Sustainable Development Goals by 2030.

While no incentives are offered, Barbados generally encourages local companies to invest in other countries, particularly within the Caribbean region. The government actively encourages local companies in Barbados to take advantage of export opportunities related to the country’s membership in the Caribbean Community (CARICOM) and the Caribbean Single Market and Economy (CSME). The Barbados Investment Development Corporation provides market development support for domestic companies seeking to enhance their export potential.

Belarus

1. Openness To, and Restrictions Upon, Foreign Investment

Attracting FDI is one of the government’s stated foreign policy priorities. Net inflows of FDI have been included in the list of government performance targets since December 2015.  The GOB plans to attract a total of $5.5 billion net FDI in 2021-2025, largely through the China-Belarus “Great Stone” industrial park and Belarus’ six free economic zones.

The imposition of wide-ranging sanctions by the United States and many likeminded countries due to Belarus’ facilitation of the Russian invasion of Ukraine has made Belarus a less attractive destination for FDI. So, too, have the numerous restrictions and fees placed on investments from “unfriendly countries” by the GOB. An official decree signed by Lukashenka on March 14 provides for special fees for any early termination of contracts; prevents business partners from “unfriendly” countries from selling their shares in Belarusian joint stocks; increases taxation on any income of foreign partners, including dividends, royalties, and interests; and orders all debts to foreign partners be paid in Belarusian rubles.

Belarus does not have any specific requirements for foreigners wishing to establish a business. On paper, investors, whether Belarusian or foreign, receive legal protections and have the same right to conduct business operations in Belarus by incorporating legal entities.  However, selective application of existing laws and practices often discriminate against the private sector, including foreign investors, regardless of the country of their origin.

Belarus’ investment promotion agency is the National Agency of Investments and Privatization (NAIP). The NAIP is tasked with representing the interests of Belarus as it seeks to attract FDI. The NAIP is a one-stop shop with services available to all investors, including: organizing fact-finding missions to Belarus; assisting with visa formalities; providing information on investment opportunities, special regimes and benefits, and procedures necessary for making investment decisions; selecting investment projects; and providing solutions and post-project support.  NAIP has a 24/7 support hotline service via a Telegram channel and email account to help foreign investors address their problems and concerns in Belarus.

To maintain an ongoing dialogue with investors, Belarus has established the Foreign Investment Advisory Council (FIAC), chaired by the Prime Minister. FIAC activities include developing proposals to improve investment legislation; participating in examining corresponding regulatory and legal acts; and approaching government agencies for the purpose of adopting, repealing or modifying the regulatory and legal acts that restrict the rights of investors. FIAC includes the heads of government agencies and other state organizations subordinate to the GOB, as well as heads of international organizations and foreign companies and corporations. According to representatives of major foreign investors in Belarus, there were no reports of FIAC taking any meaningful effort to promote the FDI agenda in 2021 or 2022.

While the GOB claims foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity, in reality the GOB imposes limits on a case-by-case basis. The limits on foreign equity participation in Belarus in terms of the size of individual investments are above average for the 20 countries covered by the World Bank Group’s Investing Across Borders indicators for Eastern Europe and the Central Asia region. In particular, Belarus limits foreign equity ownership in service industries. Sectors such as fixed-line telecommunications services, electricity generation, transmission and distribution, and railway freight transportation are closed to foreign equity ownership. In addition, a comparatively large number of sectors are dominated by government monopolies, including, but not limited to, those mentioned above. These monopolies make it difficult for foreign companies to invest in Belarus. Finally, the government may restrict investments in the interests of national security (including environmental protection, historical, and cultural values), public order, morality protection, and public health, as well as rights and freedoms of people.

While Belarus has no formal national security investment screening mechanism, it retains significant elements of a Soviet-style command economy and screens investments through an informal and hierarchical process that escalates through the bureaucracy depending on the size of the investment or the size of incentives an investor seeks from the GOB. Lukashenka and his administration review and approve even multi-million-dollar foreign investments.

Additionally, Belarus’ Ministry of Antimonopoly Regulation and Trade is responsible for reviewing transactions for competition-related concerns (whether domestic or international).

The UN Conference on Trade and Development reviewed Belarus’ investment policy in 2009 and made recommendations regarding the improvement of its investment climate:  http://unctad.org/en/Docs/diaepcb200910_en.pdf   

Individuals and legal persons can apply for business registration via the web portal of the Single State Register (  http://egr.gov.by/egrn/index.jsp?language=en  ) – a resource that includes all relevant information on establishing a business and provides a single window for securing all necessary clearances and permissions from municipal authorities, tax and social security administrations, etc. Business registration normally takes no more than one day.

Belarus has a regime allowing for a simplified taxation system for all foreign-owned businesses.  Under the 2010 law on supporting small and medium-sized entrepreneurship Belarus defines enterprises as follows: Micro enterprises – fewer than 15 employees; Small enterprises – from 16 to 100 employees; Medium-sized enterprises – from 101 to 250 employees.

The government does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad.  According to government statistics, Belarusian businesses’ outward investments in January-June 2021 totaled USD 2.78 billion, of which FDI was 94 percent. The GOB classified investment data following this period and no further investment information is publicly available.

Belgium

1. Openness To, and Restrictions Upon, Foreign Investment

Belgium maintains an open economy, and its prosperity is highly dependent on international trade.  Since WWII, making Belgium attractive to foreign investors has been the cornerstone of successive Belgian governments’ foreign and commercial policy.  Competence over policies that weigh on the attractiveness of Belgium as a destination for foreign direct investment (FDI) lie predominantly with the federal government, which is responsible for developing domestic competition policy, wage setting policies, labor law, and most of the energy and fiscal policies.  Attracting FDI, however, is the responsibility of Belgium’s three regional governments in Flanders, Wallonia, and the Brussels-Capital Region.  Flanders Investment and Trade (FIT), Wallonia Foreign Trade and Investment Agency (AWEX) and Brussels Invest and Export (BIE) are the three investment promotion agencies responsible for attracting FDI to Belgium.  One of their most visible activities is organizing the Royal Trade Missions, which are led by Princess Astrid (the king’s sister), as well as the economic part of the state visits by King Philippe.  In June 2022, Princess Astrid plans to lead a Royal Trade Mission to Atlanta, New York City, and Boston with more than 500 participants. Neither the federal nor the regional governments currently maintain a formal dialogue with investors.

There are no laws in place that discriminate against foreign investors.  [While U.S. companies continue to play key and long-standing roles in the development of the Belgian economy, a major U.S.-based multinational firm operating in the chemical cluster near the Port of Antwerp has raised concerns that Flemish government officials have unfairly regulated the company and subjected it to strict limitations not applied to other companies operating in the same sector and space.  The firm and the Flemish government remain in regular contact to seek a fair and equitable solution; however, the perceived lack of regulatory certainty could lead to a reduction of industry investment and operations in Belgium if unresolved.

There are currently no limits on foreign ownership or control in Belgium, and there are no distinctions between Belgian and foreign companies when establishing or owning a business or setting up a remunerative activity.

Belgian authorities are, however, developing a national security-based investment screening law that will likely establish certain restrictions based on national security concerns.  The draft law is not expected to be finalized and delivered to Parliament for vote before the end of 2022.

In July 2019 the OECD published an in-depth productivity review of Belgium: https://www.oecd.org/belgium/in-depth-productivity-review-of-belgium-88aefcd5-en.htm .  Belgium was included in the WTO Trade Policy Review of the European Union which took place February 18-20, 2020: https://www.wto.org/english/tratop_e/tpr_e/tp495_e.htm . In June 2021, Belgium was subject of an IMF Article IV mission: https://www.imf.org/en/News/Articles/2021/06/29/mcs062921-belgium-staff-concluding-statement-of-the-2021-article-iv-mission 

To set up a business in Belgium, one must:

1. Deposit at least 20% of the initial capital with a Belgian credit institution and obtain a standard certification confirming that the amount is held in a blocked capital account;

2. Deposit a financial plan with a notary, and sign the deed of incorporation and the by-laws in the presence of a notary, who authenticates the documents and registers the deed of incorporation. The authentication act must be drawn up in French, Dutch, or German (Belgium’s three official languages); and

3. Register with one of the Registers of legal entities, VAT and social security at a centralized company docket and obtain a company number.

In most cases, the business registration process can be completed within one week. https://www.business.belgium.be/en/setting_up_your_business 

Based on the number of employees, the projected annual turnover, and the shareholder class, a company will qualify as a small or medium-sized enterprise (SME) according to the terms of the Promotion of Independent Enterprise Act of February 10, 1998. For a small or medium-sized enterprise, registration is possible once a certificate of competence has been obtained. The person in charge of the daily management of the company must prove his or her knowledge of business management with diplomas and/or practical experience.

A company is expected to allow trade union delegations when employing 20 or more full-time equivalents (FTEs).

The three Belgian regions each have their own investment promotion agency, whose services are available to all foreign investors.

Belgium does not actively promote outward investment.  There are no restrictions for domestic investors to invest in certain countries, other than those that fall under UN or EU sanction regimes.  In June 2022, the Belgian government plans to lead a Royal Trade Mission to Atlanta, New York City, and Boston with more than 500 participants. The mission will promote both Belgian investment into the United States and encourage foreign direct investment into Belgium.

Belize

1. Openness To, and Restrictions Upon, Foreign Investment

Belize’s government encourages FDI to relieve fiscal pressure and transform the economy.  In November 2021, the Government of Belize hosted its first national Investment Summit under the theme “Belize: Open for Business.” The Government of Belize also conducted trade missions to the United States to promote itself as an investment destination and credible export market. In April 2022, senior Belizean government representatives hosted a diaspora tour in the United States to encourage Belizean-Americans to invest in Belize. The estimated Belize diaspora is 300,000 persons. While the government is interested in attracting FDI, certain bureaucratic and regulatory requirements impede investment and growth.

Public debt declined from 133 percent of GDP in 2020 to 108 percent in 2021. This was in large part due to the Blue Bond Agreement, a successful marine protection and conservation-driven financial transaction. Under this deal, The Nature Conservancy (TNC) lent funds to Belize to buy back its Superbond (totaling US $553 million or 30 percent of GDP) at a discounted price of 55 cents per dollar. In exchange, Belize committed to increase expenditure on marine conservation until 2041 and to expand its Biodiversity Protection Zones to 30 percent by 2026.

There are no laws that explicitly discriminate against foreign investors.  In practice, however, investors complain that lack of transparency, land insecurity, bureaucracy, delays, and corruption are factors that make it difficult to do business in Belize. U.S. firms have identified challenges in participating and competing in areas related to the bidding, procurement, and dispute settlement processes, in particular relating to State Owned Enterprises (SOEs).

The Belize Trade and Investment Development Service (BELTRAIDE; www.belizeinvest.org.bz ) is the investment and export promotion agency.  It promotes FDI through various incentive packages and identified priority sectors.  Export-orientated businesses operating in less developed areas also receive preferential treatment. The Economic Development Council, https://edc.gov.bz , is a public-private sector advisory body established to advance public sector reforms, to promote private sector development and to inform policies for growth and development.

Belize acknowledges the right for foreign and domestic private entities to establish and own business enterprises and engage in remunerative activities.  Foreign and domestic entities must first register their business before engaging in business. They must also register for the appropriate taxes, including business tax and general sales tax, as well as obtain a social security number and trade license.

Generally, Belize has no restrictions on foreign ownership and control of companies; however, foreign investments must be registered with the Central Bank of Belize and adhere to the Exchange Control Act and related regulations.  To register a business name, foreigners must apply with a Belizean partner or someone with a permanent residence. Requirements differ based on the applicant’s residency status and whether the individual is seeking to establish a local or foreign currency account.

Foreign investments must be registered and obtain an “Approved Status” from the Central Bank to facilitate inflows and outflows of foreign currency and repatriate funds gained from profits, dividends, loan payments, and interest.  The Exchange Control Regulation Act was amended in 2020 to relax the requirement for non-residents to obtain prior permission from the Central Bank to conduct transaction in securities and real estate. The amendment now requires for prior written notice to the Central Bank with full particulars of the transaction.

Some investment incentives show preference to Belizean-owned companies.  For example, to qualify for a tour operator license, a business must be majority-owned by Belizeans or permanent residents of Belize ( http://www.belizetourismboard.org ).  This qualification is negotiable, particularly where a tour operation would expand into a new sector of the market and does not result in competition with local operators.  The government does not impose any intellectual property transfer requirements.

Foreign investors seeking to avail themselves of various incentives programs are required to adhere to screening guidelines outlined in the specific program. These may include updating their shareholders registry, obtaining requisite Central Bank of Belize approvals, and fulfilling performance requirements. Foreign investors undertaking large capital investments are also advised to adhere to environmental laws and regulations.  The government requires developers to prepare an Environmental Impact Assessment (EIA) for certain projects. When purchasing land or planning to develop in or near an ecologically sensitive zone, the government recommends the EIA fully address any measures by the investor to mitigate environmental risks.  The Department of Environment website, http://www.doe.gov.bz  has more information on the Environmental Protection Act and other regulations, applications, and guidelines.

In the past three years, there has been no investment policy review of Belize by the Organization for Economic Cooperation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD).  Belize concluded its third Trade Policy Review in the World Trade Organization (WTO) in 2017.

In the past five years, civil society organizations concerned with investment policy lobbied directly with government. As an example, the Belize Chamber of Commerce and Industry, the Belize Network of NGOs, and the opposition were represented on the National Oversight Committee during the height of the COVID- 19 pandemic.

BELTRAIDE ( http://www.belizeinvest.org.bz  ), a statutory body of the Government of Belize, operates as the country’s investment and export promotion agency.  Its investment facilitation services are open to all investors, foreign and domestic.  While there are support measures to advance greater inclusion of women and minorities in entrepreneurial initiatives and training, the business facilitation measures do not generally distinguish by gender or economic status.

The GoB made progress on the ease of doing business through trade license, stamp duty, exchange control, and land reforms to streamline business applications and related processes. Myriad government services are going digital. Business and personal income tax offices amalgamated into the Belize Tax Service which launched an online tax payment system. Belize’s Financial Inclusion Strategy also expands access of financial services to underserved populations. Businesses must register with the tax department and local government to pay business and general sales tax and obtain a trade license.  An employer should also register employees for social security. Permission from the Central Bank is required for all overseas investments between residents and non-residents

The Belize Companies and Corporate Affairs Registry (tel: +501 822 0421; email: info@belizecompaniesregistry.gov.bz ; website: https://belizecompaniesregistry.gov.bz ) is responsible for the registration process of all local businesses and companies.

Belize does not promote or incentivize outward investments.  The government does not restrict domestic investors from investing abroad.  However, the Central Bank places currency controls on investment abroad, with Central Bank approval required prior to foreign currency outflows.

Benin

1. Openness To, and Restrictions Upon, Foreign Investment

The Beninese government encourages foreign investment, which it views as critical for economic development and successful implementation of the $20.6 billion PAG. In 2021 alone, the GOB raised €1.5 billion on the international Eurobond market. APIEX is dedicated to increasing Beninese exports and foreign direct investment and reducing administrative barriers to doing business. APIEX serves as the single investment promotion center and conduit of information between foreign investors and the Beninese government. It is the technical body responsible for reviewing applications for approval under the Investment Code and the administrative authority for SEZs. The agency has significantly reduced processing times for registering new companies (from 15 days to one day) and issuing construction permits (from 90 to 30 days). In practice, APIEX faces capacity constraints, processing times can be longer than stated, and its website is often out of date and lacks information on the latest regulations and laws. The Investment Code, amended in 2020, establishes conditions, advantages, and rules applicable to domestic and foreign direct investment. Additional information on business startup is available at https://monentreprise.bj/  .

Beninese law guarantees the right to own and transfer private property. The court system enforces contracts, but the judicial process is inefficient and suffers from corruption. Enforcement of rulings is problematic. Most firms entering the market work with an established local partner and retain a competent Beninese attorney.

In 2015, the Beninese government conducted the most recent joint investment policy review (IPR), with the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), and the United Nations Conference on Trade and Development (UNCTAD). Further to a 2016 fact-finding mission, the UNCTAD Report on the Implementation of the IPR of Benin assesses progress in implementing the original recommendations of the IPR and highlights policy issues to be addressed in the investment climate. The full report may be found at: https://investmentpolicy.unctad.org/investment-policy-review/23/benin 

In an effort to facilitate business travel and tourism, Benin implements a visa-free system for African nationals and an online e-visa system for other foreign nationals. The country is working to open four new trade offices abroad to enhance Benin’s international business opportunities. One is already underway in Shenzhen, China

Benin’s 2017 Property Code made property registration simpler and less expensive in order to boost the real estate market, improve access to credit, and reduce corruption in the registration process. The measures apply to real personal property, estate and mortgage taxes, and property purchase receipts. In order to register property, individuals and businesses must present a taxpayer identification number (registration for which is free). Land registration and property purchase certifications are free, but there is a fee for obtaining a property title. The GOB has announced that as of 2023 real personal property transactions cannot take place without producing a land title.

Benin Control is charged with expediting customs clearances and minimizing processing barriers to clearing cargo at the Port of Cotonou. Benin Control makes it possible to obtain cargo clearance within as little as 48 hours after its off-loading at the Port, though in practice this can take longer. The reinstitution of the cargo inspection and scanning program known as PVI, first tried in 2012, resumed operations at the Port in 2017. Under the PVI program, Benin Control scans between 30 and 45 randomly selected shipping containers per hour. Benin Control bills all containers exiting the Port– regardless of whether they are selected for scanning – at the rate of $60 (XOF 35,400) for a 20-foot container and $79 (XOF 47,200) for a 40-foot container (https://benincontrol.com/services/scanning).

The government, through the state-owned Benin Water Company (SONEB) and Beninese Electric Energy Company (SBEE), provides service connections to potable water and electricity free of charge to small and medium size enterprises and industries.  Eligible companies are responsible for paying the water and electricity meter installation fees.  Online application is available at https://www.soneb.bj/soneb15/pme-pmi-raccordement-gratuit and https://www.sbee.bj/site/demande-de-raccordement-des-pme-pmi-conditions/. 

The Beninese government has no policies or incentives in place to encourage Beninese businesspeople to invest abroad. The Beninese government does not restrict domestic investors from investing abroad.

Bolivia

1. Openness To, and Restrictions Upon, Foreign Investment

In general, Bolivia remains open to FDI.  The 2014 Investment Law guarantees equal treatment for national and foreign firms. However, it also stipulates that public investment has priority over private investment (both national and foreign) and that the Bolivian government will determine which sectors require private investment.

Bolivia abrogated the BIT it signed with the United States in 2012.  The government under former president Evo Morales claimed the abrogation was necessary for Bolivia to comply with the 2009 Constitution.  Companies that invested under the U.S.–Bolivia BIT will be covered under its terms until June 10, 2022, but investments made after June 10, 2012, are not covered.

Pursuant to Article 320 of the 2009 Constitution, Bolivia no longer recognizes international arbitration forums for disputes involving the government.  The parties also cannot settle the dispute in an international court.

Specifically, Article 320 of the Bolivian Constitution states:

  1. Bolivian investment takes priority over foreign investment.
  2. Every foreign investment will be subject to Bolivian jurisdiction, laws, and authorities, and no one may invoke a situation for exception, nor appeal to diplomatic claims to obtain more favorable treatment.
  3. Economic relations with foreign states or enterprises shall be conducted under conditions of independence, mutual respect, and equity.  More favorable conditions may not be granted to foreign states or enterprises than those established for Bolivians.
  4. The state makes all decisions on internal economic policy and will not accept demands or conditions imposed on this policy by states, banks or Bolivian/foreign financial institutions, multilateral entities, or transnational enterprises.
  5. Public policies will promote internal consumption of products made in Bolivia.

Article 262 of the Constitution states:

“The fifty kilometers from the border constitute the zone of border security.  No foreign person, individual, or company may acquire property in this space, directly or indirectly, nor possess any property right in the waters, soil or subsoil, except in the case of state necessity declared by express law approved by two-thirds of the Plurinational Legislative Assembly.  The property or the possession affected in case of non-compliance with this prohibition will pass to the benefit of the state, without any indemnity.”

The judicial system faces a huge backlog of cases, limited staffing, scarce resources. It is also believed to be influenced by political actors.  Swift resolution of cases, either initiated by investors or against them, is unlikely.  The Marcelo Quiroga Anti-Corruption law of 2010 makes companies and their signatories criminally liable for breach of contract with the government, and the law can be applied retroactively.  Authorities can use this threat of criminal prosecution to force settlement of disputes.  Commercial disputes can often lead to criminal charges, and cases are often processed slowly.  See our Human Rights Report as background on the judicial system, labor rights, and other important issues.

Article 129 of the Bolivian Arbitration Law No. 708, established that all controversies and disputes that arise regarding investment in Bolivia will have to be addressed inside Bolivia under Bolivian laws.  Consequently, international arbitration is not allowed for disputes involving the Bolivian government or state-owned enterprises (SOEs).

Bolivia does not have an investment promotion agency to facilitate foreign investment.

There is a right for foreign and domestic private entities to establish and own business enterprises and engage in remunerative activity.

Investors may judge that preferential treatment is being given to their Bolivian competitors, for example, in key sectors where private companies compete with state-owned enterprises.  Additionally, foreign investment is not allowed in matters relating directly to national security.

The Constitution specifies that all hydrocarbon resources are the property of the Bolivian people and that the state will assume control over their exploration, exploitation, industrialization, transport, and marketing (Articles 348 and 351).  Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) is an SOE that manages hydrocarbons transport and sales and is responsible for ensuring that the domestic market demand is satisfied at prices set by the hydrocarbons regulator before allowing any hydrocarbon exports.  YPFB benefitted from government action in 2006 that required operators to turn over their production to YPFB and to sign new contracts that gave YPFB control over the distribution of gasoline, diesel, and liquid petroleum gas (LPG) to gas stations.  The law allows YPFB to enter joint venture contracts with national or foreign individuals, and with companies wishing to exploit/trade hydrocarbons or their derivatives.  For companies working in the industry, contracts are negotiated on a service-contract basis, and there are no restrictions on ownership percentages of the companies providing the services.

The Constitution (Article 366) specifies that every foreign enterprise that conducts activities in the hydrocarbons production chain will submit to the sovereignty of the state, and to the laws and authority of the state.  No foreign court case or foreign jurisdiction will be recognized, and foreign investors may not invoke any exceptional situation for international arbitration, nor appeal to diplomatic claims.

According to the Constitution, no concessions or contracts may transfer the ownership of natural resources or other strategic industries to private interests.  Instead, temporary authorizations to use these resources may be requested at the pertinent ministry (mining, water and environment, public works, etc.).  The Bolivian government needs to renegotiate commercial agreements related to forestry, mining, telecommunications, electricity, and water services, to comply with these regulations.

The Telecommunications, Technology and Communications General Law from 2012 (Law 164, Article 28) stipulates that the licenses for radio broadcasts will not be given to foreign persons or entities.  Further, in the case of broadcasting associations, the share of foreign investors cannot exceed 25 percent of the total investment, except in those cases approved by the state or by international treaties.

The Central Bank of Bolivia is responsible for registering all foreign investments.  According to the 2014 Investment Law, any investment will be monitored by the relevant ministry for each sector.  Each Ministry assesses industry compliance with the incentive objectives.  To date, only the Ministry of Hydrocarbons and Energy proposed incentives that were enacted by Congress to incentivize the exploration and production of hydrocarbons.

Bolivia underwent a World Trade Organization (WTO) trade policy review in 2017.  In his concluding remarks, the WTO Chair noted several WTO members raised challenges impacting investor confidence in Bolivia, due primarily to Bolivia’s abrogation of 22 BITs following the passage of its 2009 constitution.  However, some WTO members also commended Bolivia for enacting a new investment promotion law in 2014 and a law on conciliation and arbitration, both of which increased legal certainty for investors, according to those members.

As of April 2022, the functions of FUNDEMPRESA, which used to register and certify new businesses, were turned over to the Servicio Plurinacional de Registro de Comercio (SEPREC). SEPREC is a public entity overseen by the Ministry of Productive Development and Plural Economy.

The steps to register a business are: (1) register and receive a certificate from SEPREC; (2) register with the Bolivian Internal Revenue Service (Servicio de Impuestos Nacionales) and receive a tax identification number; (3) register and receive authorization to operate from the municipal government in which the company will be established; (4) if the company has employees, it must register with the national health insurance service and the national retirement pension agency in order to contribute on the employees’ behalf; and (5) register with the Ministry of Labor (if the company has employees).  The process takes about 30 days from start to finish.  All steps are required, and there is no simplified business creation regime. A user can download the required forms from the website and fill them out online but then must either mail or deliver the completed forms to the relevant offices. The forms ask for a national identification card, but foreign users can enter their passport numbers instead.  The registration process takes between 2-4 working days after all requirements are submitted.

Bolivia does not have a national investment screening mechanism.

The Bolivian government does not promote or incentivize outward investment.  Nor does the government restrict domestic investors from investing abroad.

Bosnia and Herzegovina

1. Openness To, and Restrictions Upon, Foreign Investment

Bosnia and Herzegovina struggles to attract foreign investment. Complex labor and pension laws, the lack of a single economic space, and inadequate judicial and regulatory protections deter investment. Under the BiH constitution, established through the Dayton Accords that ended the 1990s war, Bosnia and Herzegovina (henceforth “the state”) is comprised of two “entities,” the Federation of BiH (the Federation) and the Republika Srpska (RS). A third, smaller area, the Brčko District, operates under a special status. The Federation includes ten cantons, each with its own government and responsibilities. There are also 143 municipalities in BiH: 63 in the RS and 80 in the Federation. As a result, BiH has a multi-tiered legal and regulatory framework that can be duplicative and contradictory, and is not conducive to attracting foreign investors.

Employers bear a heavy burden toward governments. They must contribute 69 percent on top of wages in the Federation and 52 percent in the RS to the health, unemployment, and pension systems. The labor and pension laws are also deterrents to investment, though both are being reformed to decrease burdens on employers. While corporate income taxes in the two entities and Brčko District are now harmonized at 10 percent, entity business registration requirements are not harmonized. The RS has its own registration requirements, which apply to the entire entity. Each of the Federation’s ten cantons has different business regulations and administrative procedures affecting companies. Simplifying and streamlining this framework is essential to improving the investment climate. EU reforms target changes that should improve the investment climate by clarifying and simplifying regulation and procedures while decreasing fees faced by businesses at the entity, canton, and municipal levels — but lack of political will has stalled even the most basic of reforms.

Generally, BiH’s legal framework does not discriminate against foreign investors. However, given the high level of corruption, foreign investors can be at a significant disadvantage in relation to entrenched local companies as well as some foreign investors, such as the People’s Republic of China, especially those with formal or informal backing by BiH’s various levels of government.

The Foreign Investment Promotion Agency (FIPA) is a state-level organization mandated by the Council of Ministers to facilitate and support FDI ( www.fipa.gov.ba ). FIPA provides data, analysis, and advice on the business and investment climate to foreign investors. All FIPA services are free of charge.

BiH does not maintain an ongoing, formal dialogue with foreign investors. Sporadically, high-ranking government officials give media statements inviting foreign investments in the energy, transportation, and agriculture industries; however, the announcements are rarely supported by tangible, commercially-viable investment opportunities.

According to the Law on the Policy of FDI, foreign investors are entitled to invest in any sector of the economy in the same form and under the same conditions as those defined for local residents. Exceptions include the defense industry and some areas of publishing and media where foreign ownership is restricted to 49 percent; and electric power transmission, which is closed to foreign investment. In practice, additional sectors are dominated by government monopolies (such as airport operation), or characterized by oligopolistic market structures (such as telecommunications and electricity generation), making it difficult for foreign investors to engage. There have been no significant privatizations of government-owned enterprises in the past few years.

In the past three years, the BiH government has not conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD); the World Trade Organization (WTO); or the United Nations Conference on Trade and Development (UNCTAD).

Establishing a business in BiH can be an extremely burdensome and time-consuming process for investors. The World Bank estimates there are an average of 13 procedures (actual number depends on the type of business), taking a total of 81 days, to register a new business in the capital city of Sarajevo. Registration in BiH can sometimes be expedited if companies retain a local lawyer to follow up at each step of the process. The RS established a one-stop shop for business registration in the entity. On paper, this dramatically reduced the time required to register a business in the RS, bringing the government-reported time to register a company down to an average of 7 to 14 days. Some businesses, however, report that in practice it can take significantly longer.

The entity, cantonal, and municipal levels of government each establish their own laws and regulations on business operations, creating redundant and inconsistent procedures that facilitate corruption. It is often difficult to understand all the laws and rules that might apply to certain business activities, given overlapping jurisdictions and the lack of a central information source. It is therefore critical that foreign investors obtain local assistance and advice. Investors in the Federation may register their business as a branch in the RS and vice versa.

The most common U.S. business presence found in BiH are representative offices. A representative office is not considered to be a legal entity and its activities are limited to market research, contract or investment preparations, technical cooperation, and similar business facilitation activities. The BiH Law on Foreign Trade Policy governs the establishment of a representative office. To open a representative office, a company must register with the Registry of Representative Offices, maintained by the BiH Ministry of Foreign Trade and Economic Affairs (MoFTER), and the appropriate entity’s ministry of trade.

Additional English-language information on the business registration process can be found at:

BiH Ministry of Foreign Trade & Economic Relations (MoFTER):
Ph: +387-33-220-093
www.mvteo.gov.ba 

BiH Foreign Investment Promotion Agency (FIPA):
Ph: + 387 33 278 080
www.fipa.gov.ba 

Republika Srpska Company Registration Website:
http://www.investsrpska.net 

The government does not restrict domestic investors from investing abroad. There are no programs to promote or incentivize outward investment.

Botswana

1. Openness To, and Restrictions Upon, Foreign Investment 

The GoB publicly emphasizes the importance of attracting Foreign Direct Investment (FDI) and drafted an investment facilitation law recommended by the 2014 Organization for Economic Co-operation and Development (OECD) Investment Review.  While the draft was completed in 2016 with technical assistance from UNCTAD, it was never enacted.  The draft is still under review and will be presented to Parliament for approval.  The GoB has launched initiatives to promote economic activity and foreign investment in specific areas, such as establishing a diamond hub which brought more value-added businesses (i.e., cutting and polishing) into the country.  Additional investment opportunities in Botswana include large water projects, electricity, transportation, telecommunication infrastructure projects, horticultural production, and agro processing. Economists have also noted Botswana’s considerable potential in the mining, mineral processing, beef, tourism, solar energy, and financial services sectors.  BITC assists foreign investors with projects intended to diversify export revenue, create employment, and transfer skills to the citizens of Botswana.  The High-Level Consultative Council (HLCC), chaired by the President, and an Exporter Roundtable organized by BITC and Botswana’s Exporters and Manufacturers Association (BEMA), are mechanisms employed by the GoB to focus on a healthy business environment for FDI.

Botswana’s 2003 Trade Act reserves licenses for citizens in 19 sectors, including general trading establishments, gas stations, liquor stores, supermarkets (excluding chain stores), bars (other than those associated with hotels), certain types of restaurants, boutiques, auctioneers, car washes, domestic cleaning services, curio shops, fresh produce vendors, funeral homes, hairdressers, various types of rental/hire services, laundromats, specific types of government construction projects under a certain dollar amount, certain activities related to road and railway construction and maintenance, and certain types of manufacturing activities including the production of furniture for schools, welding, and bricklaying.  The law allows foreigners to participate in these sectors as minority joint venture partners in medium-sized businesses.  Foreigners can hold the majority share if they obtain written approval from the trade minister.  Foreign companies have access to about 46 trading licenses in different categories.  It takes approximately five working days to obtain a license.

The Ministry of Investment, Trade, and Industry (MITI) administers the citizen participation initiative and takes an expansive interpretation of the term chain stores, so that it encompasses any store with more than one outlet.  This broad interpretation has resulted in the need to apply exemptions to certain supermarkets, simple specialty operations, and general trading stores.  These exceptions were generally granted prior to 2015 and many large general merchandise markets, restaurants, and grocery networks are owned by foreigners as a result.  Since 2015, the GoB has denied some exception requests, but reports they have approved some based on localization agreements directly negotiated between the ministry and the applying company.  These agreements reportedly include commitments to purchase supplies locally and capacity building for local workers and industry.  BITC conducts due diligence on companies that are looking to invest in the country and the Directorate of Intelligence Services (DIS) handles background checks for national security.

Botswana has been a World Trade Organization (WTO) member since 1995.  In 2016, the WTO conducted a trade policy review of the Southern African Customs Union to which Botswana belongs ( https://www.wto.org/english/tratop_e/tpr_e/tp322_e.htm ).

Botswana underwent an ICT Policy Review and e-Commerce strategy review with UNCTAD and the report was released in October 2021 (https://unctad.org/system/files/official-document/dtlstict2021d4_en.pdf).  Botswana sees this as a critical move to diversify the economy and position the country to be a bigger player in the global economy.

To operate a business in Botswana, one needs to register a company with the GoB’s CIPA through the OBRS at: https://www.cipa.co.bw/types-of-entities 

CIPA asserts that the company registration process can be completed in a day and is integrated with BURS which allows for a fast-tracked tax registration in 30 days.  Additional work is required to open bank accounts and obtain necessary licenses and permits.

BITC ( www.bitc.co.bw ), the GoB’s integrated investment and trade promotion authority, was designed to serve as a one-stop shop to assist investors in setting up a business and finding a location for operation.  BITC’s ability to streamline procedures varies based on GoB entity and bureaucratic requirements.  BITC assesses investment projects on their ability to diversify the economy away from its continued dependence on diamond mining, contribute towards export-led growth, and job creation for and skills transfer to Batswana citizens.  BITC also hosts the Botswana Trade Portal ( https://www.botswanatradeportal.org.bw ) that is designed to ease trade across borders.  It is a single point of contact for all information relating to import and export to and from Botswana and represents relevant ministries and parastatals.

Botswana has several incentives and preferences for both citizen-owned and locally based companies.  Foreign-owned companies can benefit from local procurement preferences which are usually required for government tenders.  MITI instituted a program in 2015 to give locally based small companies a 15 percent preferential price margin in GoB procurement, with mid-sized companies receiving a 10 percent margin, and large companies a five percent margin.  Under this policy, MITI defines small companies as having less than five million pula in annual revenue reflected in their financial statements, medium companies with five to 20 million pula in revenue, and large companies with revenues exceeding 20 million pula.  The directive applies to 27 categories of goods and services ranging from textiles, chemicals, and food, as well as a broad range of consultancy services.  The government can also offer up to 50 million pula in funding through the Citizen Entrepreneurial Development Agency (CEDA) to joint ventures between foreign and citizen owned companies.

For Companies Act registration purposes, enterprises are classified as:  Micro Enterprises – fewer than six employees including the owner and an annual revenue below 60 thousand pula; Small Enterprises – fewer than 25 employees and an annual revenue between 60 thousand and 1.5 million pula; Medium Enterprises – fewer than 100 employees and annual revenue between 1.5 and 5 million pula; Large Enterprises – over 100 employees and an annual revenue of at least 5 million pula.  This classification system permits foreigners to participate as minority shareholders in medium-sized enterprises in the 35 business sectors reserved for citizens.

The GoB neither promotes nor restricts outward investment.

Brazil

1. Openness To, and Restrictions Upon, Foreign Investment

Brazil was the world’s seventh-largest destination for foreign direct investment (FDI) in 2019, with inflows of $58 billion, according to the United Nations Conference on Trade and Development (UNCTAD). The GoB actively encourages FDI – particularly in the automobile, renewable energy, life sciences, oil and gas, mining, and transportation infrastructure sectors – to introduce greater innovation into Brazil’s economy and to generate economic growth. GoB investment incentives include tax exemptions and low-cost financing with no distinction made between domestic and foreign investors in most sectors. Foreign investment is restricted in the health, mass media, telecommunications, aerospace, rural property, maritime, and insurance sectors.

The Brazilian Trade and Investment Promotion Agency (APEX-Brasil) plays a leading role in attracting FDI to Brazil by working to identify business opportunities, promoting strategic events, and lending support to foreign investors willing to allocate resources to Brazil. APEX-Brasil is not a “one-stop shop” for foreign investors, but the agency can assist in all steps of the investor’s decision-making process, to include identifying and contacting potential industry segments, sector and market analyses, and general guidelines on legal and fiscal issues. Their services are free of charge. The website for APEX-Brasil is: http://www.apexbrasil.com.br/en . 

In 2016, the Ministry of Economy created the Direct Investments Ombudsman (OID) at the Board of Foreign Trade and Investments (CAMEX), to provide assistance to foreign investors through a single body for issues related to FDI in Brazil. This structure aims to help and eventually speed up foreign investments in Brazil, providing foreign and national investors with a simpler process for establishing new businesses and implementing additional investments in their current companies. Since 2019, the OID has acted as a “single window” of the Brazilian government for FDI. It supports and guides investors in their requests, recommending solutions to their complaints (Policy Advocacy) as well as proposing improvements to the legislation or administrative procedures to public agencies whenever necessary. The OID is responsible for receiving requests and inquiries on matters related to foreign investments, to be answered together with government agencies and entities (federal, state and municipal) involved in each case (Focal Points Network). This new structure provides a centralized support system to foreign investors, and must respond in a timely manner to investors’ requests.

A 1995 constitutional amendment (EC 6/1995) eliminated distinctions between foreign and local capital, ending favorable treatment (i.e. tax incentives, preference for winning bids) for companies using only local capital. However, constitutional law restricts foreign investment in healthcare (Law 8080/1990, altered by 13097/2015), mass media (Law 10610/2002), telecommunications (Law 12485/2011), aerospace (Law 7565/1986 a, Decree 6834/2009, updated by Law 12970/2014, Law 13133/2015, and Law 13319/2016), rural property (Law 5709/1971), maritime (Law 9432/1997, Decree 2256/1997), and insurance (Law 11371/2006).

Brazil does not have a national security-based foreign investment screening process. Foreign investors in Brazil must electronically register their investment with the Central Bank of Brazil (BCB) within 30 days of the inflow of resources to Brazil. In cases of investments involving royalties and technology transfer, investors must register with Brazil’s patent office, the National Institute of Industrial Property (INPI). Since the approval of the Doing Business Law in 2021, companies are no longer required to have an administrator residing in Brazil, but they must appoint a local proxy attorney to receive legal notifications. Portfolio investors must have a Brazilian financial administrator and register with the Brazilian Securities Exchange Commission (CVM). Brazil does not have an investment screening mechanism based on national security interests. A bill was proposed in the Chamber of Deputies in 2020 (PL 2491) to change the parameters under which to review foreign investments could be reviewed, but the bill has not yet been analyzed by the necessary commissions.

To enter Brazil’s insurance and reinsurance market, U.S. companies must establish a subsidiary, enter a joint venture, acquire a local firm, or enter a partnership with a local company. The BCB reviews banking license applications on a case-by-case basis. Foreign interests own or control 20 of the top 50 banks in Brazil, but Santander is the only major wholly foreign-owned retail bank.

Since June 2019, foreign investors may own 100 percent of capital in Brazilian airline companies.

While 2015 and 2017 legislative and regulatory changes relaxed some restrictions on insurance and reinsurance, rules on preferential offers to local reinsurers remain unchanged. Foreign reinsurance firms must have a representational office in Brazil to qualify as an admitted reinsurer. Insurance and reinsurance companies must maintain an active registration with Brazil’s insurance regulator, the Superintendence of Private Insurance (SUSEP), and maintain a solvency classification issued by a risk classification agency equal to Standard & Poor’s or Fitch ratings of at least BBB-.

Foreign ownership of cable TV companies is allowed, and telecom companies may offer television packages with their service. Content quotas require every channel to air at least three and a half hours per week of Brazilian programming during primetime. Additionally, one-third of all channels included in any TV package must be Brazilian.

The National Land Reform and Settlement Institute administers the purchase and lease of Brazilian agricultural land by foreigners. Under the applicable rules, the area of agricultural land bought or leased by foreigners cannot account for more than 25 percent of the overall land area in a given municipal district. Additionally, no more than 10 percent of agricultural land in any given municipal district may be owned or leased by foreign nationals from the same country. The law also states that prior consent is needed for purchase of land in areas considered indispensable to national security and for land along the border. The rules also make it necessary to obtain congressional approval before large plots of agricultural land can be purchased by foreign nationals, foreign companies, or Brazilian companies with majority foreign shareholding. In December 2020, the Senate approved a bill (PL 2963/2019; source: https://www25.senado.leg.br/web/atividade/materias/-/materia/136853 ) to ease restrictions on foreign land ownership and the Chamber of Deputies began to deliberate on the bill; however, the bill was shelved with no plans to advance it further after President Bolsonaro expressed concerns regarding the legislation.

Brazil is not yet a signatory to the World Trade Organization (WTO) Agreement on Government Procurement (GPA), but submitted its application for accession in May 2020. In February 2021, Brazil formalized its initial offer to start negotiations.  The submission establishes a series of thresholds above which foreign sellers will be allowed to bid for procurements. Such thresholds vary for different procuring entities and types of procurements. The proposal also includes procurements by some states and municipalities (with restrictions) as well as state-owned enterprises, but it excludes certain sensitive categories, such as financial services, strategic health products, and specific information technologies. Brazil’s submission is currently under review with GPA members.

By statute, a Brazilian state enterprise may subcontract services to a foreign firm only if domestic expertise is unavailable. Additionally, U.S. and other foreign firms may only bid to provide technical services when there are no qualified Brazilian firms. U.S. companies need to enter into partnerships with local firms or have operations in Brazil in order to be eligible for “margins of preference” offered to domestic firms participating in Brazil’s public sector procurement to help these firms win government tenders. Nevertheless, foreign companies are often successful in obtaining subcontracting opportunities with large Brazilian firms that win government contracts, and since October 2020 foreign companies are allowed to participate in bids without the need for an in-country corporate presence (although establishing such a presence is mandatory if the bid is successful). A revised Government Procurement Protocol of the trade bloc Mercosul (Mercosur in Spanish) signed in 2017 would entitle member nations Brazil, Argentina, Paraguay, and Uruguay to non-discriminatory treatment of government-procured goods, services, and public works originating from each other’s suppliers and providers. However, none of the bloc’s members have ratified the protocol, so it has not entered into force. Despite the restrictions within Mercosul, in January 2022 Brazil and Chile entered into an agreement which includes government procurement.

The Organization for Economic Co-operation and Development’s (OECD) December 2021 Economic Forecast Summary of Brazil summarized that with the COVID-19 vaccination campaign accelerating throughout the year, economic activity underpinned by reduced private consumption and investment restarted as restrictions were lifted, and exports benefited from the global recovery, the robust demand for commodities, and a weak exchange rate. However, supply bottlenecks, lower purchasing power, higher interest rates, and policy uncertainty have slowed the pace of recovery. The labor market is experiencing a lag in recovering from the pandemic, and by the end of 2021 unemployment remained above pre-pandemic levels. The residual effect of the government’s significant fiscal stimulus spending in 2020 to reinvigorate the economy contributed to inflationary pressure, further compounded by constrained global supply chains pushing prices up. In response, the COPOM chose to incrementally increase its benchmark SELIC rate from 2 percent in March 2021 to 11.75 percent in March 2022. The COPOM announced that it would continue tightening its monetary policy in an effort to curb inflation and anchor expectations. Prospects for economic growth are weak for 2022 and 2023. The OECD recommended that Brazil strengthen and adhere to its fiscal rules to increase market confidence in establishing sustainable finances and exercising more efficient public spending to create fiscal space for growth-enhancing policies, along with developing a more inclusive social protection program.

The IMF’s 2021 Country Report No. 2021/217 (published in September 2021) for Brazil highlighted that its economic performance for the year had been better than expected, partly due to the government’s fiscal response to the pandemic which propelled the economy back to pre-pandemic levels for most sectors. In addition, the IMF noted a favorable economic momentum supported by booming trade and robust private sector credit growth. The IMF assessed that currency depreciation and a surge in commodity prices had led to headline inflation, and that expectations remained negative. The report noted Brazil’s lagging labor market, especially among youths, women, and Afro-Brazilians. The IMF also expressed concerns that emergency cash transfers (which expired in December 2021) were only a short-term solution, and recommended addressing poverty and inequality by strengthening a more permanent social safety net. The IMF concluded that near-term fiscal risks were low, but the high level of public debt continued to pose a medium-term risk. Restoring high and sustained growth, increasing employment, raising productivity, improving living standards, and reducing vulnerabilities would require longer-term policy efforts to eliminate bottlenecks and foster private sector-led investment.

The WTO’s 2017 Trade Policy Review of Brazil noted the country’s open stance towards foreign investment, but also pointed to the many sector-specific limitations (see above). The three reports listed below, with links to the reports, highlight the uncertainty regarding reform plans as the most significant political risk to the economy.

  1. OECD Report:
  2. IMF Report:
  3. WTO Report:

A company must register with the National Revenue Service (Receita Federal) to obtain a business license and be placed on the National Registry of Legal Entities (CNPJ). Brazil’s Export Promotion and Investment Agency (APEX) has a mandate to facilitate foreign investment in Brazil. The agency’s services are available to all investors, foreign and domestic. Foreign companies interested in investing in Brazil have access to many benefits and tax incentives granted by the Brazilian government at the municipal, state, and federal levels. Most incentives target specific sectors, amounts invested, and job generation. Brazil’s business registration website can be found at: https://www.gov.br/pt-br/servicos/inscrever-ou-atualizar-cadastro-nacional-de-pessoas-juridicas  .

Brazil enacted its “Doing Business” law, which entered into force on August 26, 2021. The law simplified the process to open a business, sought to facilitate foreign trade by eliminating redundancy as well as further automating its trade processes, and expand the powers of minority shareholders in private companies.

Adopted in September 2019, the Economic Freedom Law 13.874 established the Economic Freedom Declaration of Rights and provides for free market guarantees. The law includes several provisions to simplify regulations and establish norms for the protection of free enterprise and free exercise of economic activity.

On August 20, 2021, the Brazilian government included the Foreign Trade Secretariat (SECEX) in the Brazilian Authorized Economic Operator Program (Programa OEA), run by Receita Federal (Internal Federal Revenue service), allowing Government of Brazil-designated OEA certified operators to maintain a low-level risk to achieve benefits in their foreign trade operations related to drawback suspension and exemption regimes.

Through the digital transformation initiative in Brazil, foreign companies can open branches via the internet. Since 2019, it has been easier for foreign businesspeople to request authorization from the Brazilian federal government. After filling out the registration, creating an account, and sending the necessary documentation, business entities can make the authorization request on the Brazilian government’s online portal through a legal representative. The electronic documents will then be analyzed by the Brazilian National Department of Business Registration and Integration (DREI) team. DREI will inform the applicant of any missing documentation via the portal and e-mail and give a 60-day period for the applicant to submit any additional information. The legal representative of the foreign company, or another third party who holds a power of attorney, may request registration through this link: https://acesso.gov.br/acesso/#/primeiro-acesso?clientDetails=eyJjbGllbnRVcmkiOiJodHRwczpcL1wvYWNlc3NvLmdvdi5iciIsImNsaWVudE5hbWUiOiJQb3J0YWwgZ292LmJyIiwiY2xpZW50VmVyaWZpZWRVc2VyIjp0cnVlfQ%3D%3D    

The regulation of foreign companies opening businesses in Brazil is governed by article 1,134 of the Brazilian Civil Code and article 1 of DREI Normative Instruction 77/2020. English-language general guidelines to open a foreign company in Brazil are not yet available, but the Portuguese version is available at the following link: https://www.gov.br/economia/pt-br/assuntos/drei/empresas-estrangeiras  .

For foreign companies that will be a partner or shareholder of a Brazilian national company, the governing regulation is DREI Normative Instruction 81/2020 (https://www.in.gov.br/en/web/dou/-/instrucao-normativa-n-81-de-10-de-junho-de-2020-261499054 ). The contact information of the DREI is drei@economia.gov.br and +55 (61) 2020-2302.

References:

  1. provides investment measures, laws and treaties enacted by selected countries.
  2. provides links to business registration sites worldwide.

Brazil does not restrict domestic investors from investing abroad. APEX-Brasil supports Brazilian companies’ efforts to invest abroad under its “internationalization program”: http://www.apexbrasil.com.br/como-a-apex-brasil-pode-ajudar-na-internacionalizacao-de-sua-empresa  . APEX-Brasil frequently highlights the United States as a worthwhile destination for outbound investment. APEX-Brasil and SelectUSA (U.S. Department of Commerce) signed a memorandum of cooperation in February 2014 to promote bilateral investment.

Brazil incentivizes outward investment. APEX-Brasil organizes several initiatives aimed at promoting Brazilian investments abroad. The agency´s efforts include trade missions, business round tables, promoting the participation of Brazilian companies in major international trade fairs, and arranging technical visits for foreign buyers to Brazil as well as facilitating travel for decision-makers seeking to learn about the Brazilian market and performing other commercial activities designed to strengthen the country’s branding abroad.

The main sectors of Brazilian investments abroad are financial services and assets (totaling 62.9 percent of total investments abroad); oil and gas extraction (12 percent); and mineral metal extraction (6.5 percent). Including all sectors, Brazilian investments abroad totaled $448 billion in 2020. The regions that received the largest share of Brazilian outward investments are the Caribbean (43.3 percent), concentrated in the Cayman Islands, British Virgin Islands and Bahamas, and Europe (37.9 percent), primarily the Netherlands and Luxembourg.

Regulations on investments abroad are outlined in BCB Ordinance 3,689/2013 (foreign capital in Brazil and Brazilian capital abroad): https://www.bcb.gov.br/pre/normativos/busca/downloadNormativo.asp?arquivo=/Lists/Normativos/Attachments/48812/Circ_3689_v1_O.pdf

Sales of cross-border mutual funds are only allowed to certain categories of investors, not to the general public. In 2020, international financial services companies active in Brazil submitted a proposal to Brazilian regulators to allow opening these mutual funds to the general public, and the Brazilian Securities and Exchange Commission is expected to approve their recommendation by June 2022. Discussions with regulators about increasing the share percentages that pension funds and insurers can invest abroad (currently 10 percent for pension funds, 20 percent for insurers, and 40 percent for qualified investors) are ongoing, along with discussions about tax deferral mechanisms to incentivize Brazilian investment abroad.

Brunei

1. Openness To, and Restrictions Upon, Foreign Investment

Brunei has an open economy favorable to foreign trade and FDI as the government continues its economic diversification efforts to limit its long reliance on oil and gas exports.

FDI is important to Brunei as it plays a key role in the country’s economic and technological development. Brunei encourages FDI in the domestic economy through various investment incentives offered by the Ministry of Finance and Economy.

Improving Brunei’s Ease of Doing Business status by upgrading the domestic business regulatory environment through a whole-of-nation approach has been a priority for the government. The World Bank Ease of Doing Business report indicated that Brunei ranked 66th overall out of 190 world economies in 2019. Brunei ranked first in the report’s “Getting Credit” category, tied with New Zealand, indicative of Brunei’s strong credit reporting mechanisms.

Brunei amended its laws to make it easier and quicker for entrepreneurs and investors to establish businesses. The Business License Act (Amendment) of 2016 exempts several business activities (eateries, boarding and lodging houses or other places of public resort; street vendors and stalls; motor vehicle dealers; petrol stations, including places for storing petrol and inflammable material; timber store and furniture factories; and retail shops and workshops) from needing to obtain a business license. The Miscellaneous License Act (Amendment) of 2015 reduced the wait times for new business registrants to start operations, with low-risk businesses like eateries and shops able to start operations immediately.

There is no restriction on foreign ownership of companies incorporated in Brunei. The Companies Act requires locally incorporated companies to have at least one of the two directors—or if more than two directors, at least two of them—to be residents of Brunei, but companies may request exceptions. The corporate income tax rate is the same whether the company is locally or foreign owned and managed.

All businesses in Brunei must be registered with the Registry of Companies and Business Names at the Ministry of Finance and Economy. Foreign investors can fully own incorporated companies, foreign company branches, or representative offices, but not sole proprietorships or partnerships. Brunei does maintain its right to screen investment to ensure that foreign investments do not contradict and cause negative impact to the overall National Development Plan and to the national interest.

More information on incorporation of companies can be found on the Ministry of Finance and Economy website .

The World Trade Organization (WTO) Secretariat prepared a Trade Policy Review of Brunei  in December 2014 and a revision in February 2015.

As part of Brunei’s effort to attract foreign investment, the government established the Brunei Economic Development Board (BEDB) and Darussalam Enterprise (DARe) as facilitating agents under the Ministry of Finance and Economy. These organizations work together to smooth the process of obtaining permits, approvals, and licenses. Facilitating services are now consolidated into one government website .

BEDB is the government’s frontline agency that promotes and facilitates foreign investment into Brunei. BEDB is responsible for evaluating investment proposals, liaising with government agencies, and obtaining project approval from the government’s Foreign Direct Investment and Downstream Industry Committee.

Outward Investment

A major share of outward investment is made by the government through its sovereign wealth funds, which are managed by the Brunei Investment Agency (BIA) under the Ministry of Finance and Economy. No data is available on the total investment amount due to a strict policy of secrecy. It is believed that the majority of sovereign wealth funds are invested in foreign portfolio investments and real estate. Despite the limited availability of public information regarding the amount, the funds are generally viewed positively and managed well by BIA.

Bulgaria

1. Openness To, and Restrictions Upon, Foreign Investment 

There are no legal limits on foreign ownership or control of firms. With some exceptions, foreign entities are given the same treatment as national firms and their investments are not screened or otherwise restricted.

The Invest Bulgaria Agency (IBA), the government’s investment attraction body, provides information, administrative services, and incentive assessments to prospective foreign investors. Its website (www.investbg.government.bg/en)  contains general information for foreign investors. IBA serves as a one-stop shop for foreign investors and certifies proposed investments for eligibility for administrative services.

There are no limits to foreign and domestic private entities establishing and owning businesses in Bulgaria. The Offshore Company Act lists 28 activities (including government procurement, natural resource exploitation, national park management, banking, insurance) in which companies registered in offshore jurisdictions with more than 10 percent foreign participation are banned from participating. The law, however, allows those companies to do business if the physical owners of the parent company are Bulgarian citizens and known to the public, if the parent company’s stock is publicly traded, or if the parent company is registered in a jurisdiction with which Bulgaria enjoys a bilateral tax treaty for the avoidance of double taxation (including the United States).

Bulgaria has no specific law or coordinated mechanism in place for screening individual foreign investments. A potential foreign investment can be scrutinized on the grounds of its potential national security risk or through the Law on the Measures against Money Laundering. As each ministry is responsible for screening investments within its purview, interagency coordination is lacking, and there are no common standards. As of April 2022, Bulgaria has not publicly reported any initiative on the introduction of a national investment screening mechanism.

There have been no recent Investment Policy Reviews of Bulgaria by multilateral economic organizations. An Investment Policy Review by the Organization for Economic Cooperation and Development (OECD) is planned for 2022. In January 2022 the OECD decided to open accession discussions with Bulgaria. A key milestone toward Bulgaria’s overarching OECD Action Plan was its having joined the Nuclear Energy Agency (NEA) in January 2021. In 2019, the OECD published reviews of Bulgaria’s healthcare sector and state-owned enterprises, and in January 2021 the OECD published an Economic Assessment in which it acknowledged the successful integration of Bulgarian manufacturing firms into global production chains and sound macroeconomic policies prior to the pandemic. At the same time the report highlighted as key policy challenges Bulgaria’s high income inequality, relative poverty, and an ageing and rapidly shrinking population. In February 2021 the OECD published a study of Bulgarian municipalities that acknowledged solid progress in local governance standards but also noted insufficient progress in bridging regional disparities.

Bulgaria typically supports small- and medium-sized business creation and development in conjunction with EU-funded innovation and competitiveness programs and with a special emphasis on export capacity. The state-owned Bulgarian Development Bank has committed to supporting small- and medium-sized businesses in Bulgaria, including through the post-COVID-19 recovery period. Typically, a new business is expected to register an account with the state social security agency and, in some cases, with the local municipality as well. Electronic company registration is available at: https:// portal.registryagency.bg/commercial-register . Women receive equitable treatment to men, and the Bulgarian law does not discriminate against minorities doing business.

There is no government agency for outward investment promotion, and no restrictions exist for local businesses to invest abroad.

Burkina Faso

1. Openness To, and Restrictions Upon, Foreign Investment

Following the 2020 reelection of former President Kabore for his second term, a new national socioeconomic development plan (PNDES-II, 2021-2025) was adopted to replace a previous plan (2016-2020). The plan covered four strategic goals: (1) the consolidation of resilience, security, social cohesion, and peace, (2) the deepening of institutional reforms and modernization of public administration, (3) improving sustainable human development, and (4) promoting high impact sectors of the economy and jobs. However, it remains unclear how PNDES II will be impacted by the January 24 coup d’état.

After overthrowing the government on January 24, 2022, LTC Paul-Henri Sandaogo Damiba met with the private sector on February 1 to allay the concerns of the business community and other investors. A Transitional legislative assembly, a transitional government and a transitional charter and agenda were adopted on March 1, 2022, for a 36-month transition that would lead to presidential and legislative elections. However, in an April 1 address to the nation, interim president LTC Damiba indicated that the 36-month transition timeline to democracy could be revised, should the security situation improve.

In a speech to the Transitional Legislative Assembly on April 04, 2022, Prime Minister (PM) Albert Ouedraogo laid out four major pillars or priorities for his government: (1) fighting terrorism and restoring territorial integrity, (2) Responding to the humanitarian crisis, (3) refoundation (or restoration) of the state and improving governance, (4) working towards national reconciliation and social cohesion. PM Ouedraogo indicated plans for a new development plan for the transition period that would incorporate major strategic projects from the PNDES II.

Article 8 of the investment code stipulates that there is to be no discrimination against foreign investors. For any foreign investor to benefit from the exemptions provided for by the investment code, it is required to submit a request to the General Directorate for the Promotion of the Private Sector.

Burkina Faso hosts a certain number of trade fairs and exhibitions to attract foreign investments. These initiatives encompass several sectors, including the bi-annual International Cotton and Textile Fair (SICOT), the annual West Africa Mining Activities Week (SAMAO), the bi-annual Ouagadougou International Arts and Crafts Fair (SIAO) and the bi-annual Panafrican Film and Television Festival of Ouagadougou (FESPACO). SICOT—which was supposed to place on January 27-29 but was postponed due to the coup d’état—convenes cotton sector actors to advance the cotton value chain in Burkina Faso, Africa and globally. SICOT aspires to be the international forum for promoting African cotton by marketing the sector to the world, promoting industrial processing, attracting investment, and boosting industrial cotton production. Burkina Faso is the third largest producer of cotton in Africa, producing 518,545 tons in the 2021-2022 harvest. Burkina Faso also organizes the Burkina Economic days (JEB) to engage potential investors and foster mutually beneficial partnership opportunities. Previous JEB events have been held in Ouagadougou and across the world, including Canada, Paris, Vienna, and Seoul, among others.

Burkina Faso is a member of the Organization for the Harmonization of Corporate Law in Africa (OHCLA). All the Uniform Acts enacted by this organization are applicable in the country. Regarding business structures, OHCLA allows most forms of companies admissible under French business law, namely public corporations, limited liability companies, limited share partnerships, sole proprietorships, subsidiaries, and affiliates of foreign enterprises. Each kind of company has a corresponding set of related preferences, duty exceptions, corporate tax exemptions, and operation-related taxes.

From 1995 to 2018, Law 062-95, which was amended several times, governed investments in Burkina Faso. However, to adapt this code to the new exigencies of the world economy and to respond to the fierce competition between states to attract foreign investment, the National Assembly adopted a new Investment Code (Law 038) on October 30, 2018. It replaces Law 062-95 of December 14, 1995, which had several shortcomings, including the non-coverage of investments in renewable energies and other energy sources. According to Article 5 of the Investment Code, certain sectors of activity may be subject to restrictions on foreign direct investment. Foreign companies wishing to invest in these sectors must follow a specific procedure specified by decree. However, Burkina Faso has not yet established a procedure to scrutinize foreign direct investment. 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 government procurement process.

The Investment Code establishes a special tax and customs regime for investment agreements signed by the state with large investors—from approximately US$ 162,000 (100,000,000 FCFA) to $1.62 million (1,000,000,000 FCFA). This scheme provides significant tax benefits. U.S. investors are not specifically targeted regarding ownership or control mechanisms.

In March 2013, the GoBF created the Burkina Faso Investment Promotion Agency (API-BF). The establishment of the Presidential Council fulfilled recommendations of a 2009 UNCTAD Investment Policy Review. The website is www.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 (CEFOREs). The CEFOREs are one-stop shops for company registration. On average, a company can register its business in nine days according to the 2019 Doing Business report. The CEFOREs are in Ouagadougou, Bobo-Dioulasso, Ouahigouya, Tenkodogo, Koudougou, Fada N’Gourma, Kaya, Dedougou and Gaoua.

In 2018, Burkina Faso strengthened protections for minority investors by enhancing access to shareholder actions and by increasing disclosure requirements on related-party transactions. The 2020 Doing Business report ranked Burkina Faso 151 of 190 in minority investor protection.

Other sites of interest:

Among the 21 countries covered by the World Bank’s Investing across Sectors indicators in Sub-Saharan Africa, 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 one domestic shareholder. Furthermore, the state automatically owns 10 percent of the shares of all companies active in the mining sector. The government is entitled to nominate one member of the board of directors for such companies. Select additional strategic sectors the oil and gas sector, and the electricity transmission and distribution sectors, are characterized by monopolistic market structures.

The Burkinabe Government tries to promote inward investment via the Investment Promotion Agency of Burkina Faso or l’Agence de Promotion des Investissements du Burkina Faso (API-BF), which sits under the Presidential Council for Investment (Conseil Presidentiel pour l’Investissement). The API-BF’s mission is to promote the economic potential of Burkina Faso to attract investment and spur economic development. Burkina Faso currently imposes no restrictions for investors interested in investing abroad, within the framework of the Economic Community of West African States (ECOWAS) and West African Economic and Monetary Union (WAEMU) regional markets.

Burma

1. Openness To, and Restrictions Upon, Foreign Investment

Although the military regime has told investors and foreign chambers of commerce it welcomes foreign investment, its actions have undercut pre-coup efforts to improve the enabling environment for investment. A number of foreign investors have withdrawn from the market, evacuated foreign national employees, or suspended their operations in Burma.

The 2016 Myanmar Investment Law (MIL) and the 2018 Companies Law continue to govern treatment of foreign investment. The MIL includes a “negative list” of prohibited and restricted sectors for foreign investment. The Companies Law implemented August 1, 2018, permits foreign investment of up to 35 percent in domestic companies— which also opened the stock exchange to limited foreign participation.

The Directorate for Investment and Company Administration (DICA), which is part of the Ministry of Investment and Foreign Economic Relations (MIFER), serves as Burma’s investment promotion agency. However, following the coup, the regime named former military major Aung Naing Oo to lead the Ministry and he terminated staff he deemed unsupportive of the regime. DICA as a consequence has limited operations because of staff boycotts and firings. Previously, DICA encouraged and facilitated foreign investment by providing information, fostering networks between investors, and providing market advice to potential investors.

The regime maintains a private sector advisory forum with the Union of Myanmar Chamber of Commerce and Industry, which principally includes domestic businesses. However, military authorities have summoned business leaders for command appearances rather than to conduct voluntary consultations. The U.S. Trade Representative suspended the U.S.-Myanmar Trade and Investment Framework in March 2021. Foreign Chambers of Commerce have limited interactions with the military regime following the coup, mainly by issuing letters of protest to regime economic policies that undermine the private sector. Regime-controlled media regularly praises PRC and Russian business cooperation.

Limits on Foreign Control and Right to Private Ownership and Establishment

Generally, foreign and domestic private entities have the right to establish and own business enterprises and engage in remunerative activity with some sectoral exceptions. Under Article 42 of the Myanmar Investment Law, the Burmese government restricts investment in certain sectors. Some sectors are only open to government or domestic investors. Other sectors require foreign investors to set up a joint-venture with a citizen of Burma or citizen-owned entity or obtain a recommendation from the relevant ministries.

The State-Owned Economic Enterprises Law, enacted in March 1989, stipulates that SOEs have the sole right to carry out a range of economic activities in certain sectors, including teak extraction, oil and gas, banking and insurance, and electricity generation. However, in practice many of these areas have been opened to private sector investment. For instance, the 2016 Rail Transportation Enterprise Law allows foreign and local businesses to make certain investments in railways, including in the form of public-private partnerships.

The Myanmar Investment Commission (MIC), “in the interest of the State,” can also make exceptions to the State-Owned Enterprises Law. The MIC has routinely granted exceptions, including through joint ventures or special licenses in the areas of insurance, mining, petroleum and natural gas extraction, telecommunications, radio and television broadcasting, and air transport services, although whether such exceptions will continue to be granted after the coup is unclear.

As one of their key functions, DICA and the MIC are responsible for screening and approving inbound foreign investment to ensure it does not pose a risk to national security, as well as to determine if the investment furthers Burma’s growth and development. However, since the coup, the military regime has independently approved many foreign investments, including electricity generation projects, for example, that were not submitted to the DICA or MIC.

The regime frequently favors regime-owned or affiliated businesses as well as those run by cronies.

In 2020, the OECD conducted an investment review for Myanmar, which can be found at http://www.oecd.org/investment/countryreviews.htm 

In February 2021, the World Trade Organization produced a trade policy review for Myanmar based on pre-coup information, which can be found at http://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm 

Following the coup, the military regime’s approach to governance has caused a sharp reduction in commercial activities including in Yangon and Mandalay. Many routine services that businesses require like customs, ports, and banks were not fully operational as of April 2022. Many companies report difficulty accessing bank funds to pay employees and suppliers, and there is limited foreign and local currency available. The security situation is volatile and unpredictable, and some companies’ local staff have been killed by security forces and foreign-owned factories have been burned. The civilian government previously provided limited business facilitation services through DICA, but services are restricted at present.

The previous civilian government instituted online company registration through “MyCo” ( https://www.myco.dica.gov.mm ). Investors were able to submit forms, pay registration fees, and check availability of a company name through a searchable company registry on the “MyCo” website. However, military regime officials have publicly threatened to take down the company registration website so it may not continue to operate, and military-imposed restrictions on internet and mobile access limit businesses’ ability to access this website.

The MIC is responsible for verification and approval of investment proposals above USD5 million. Companies can use the DICA website to retrieve information on requirements for MIC permit applications and submit a proposal to the MIC. If the proposal meets the criteria, it is supposed to be accepted within 15 days. If accepted, the MIC will review the proposal and is supposed to reach a decision within 90 days. In 2016, state and regional investment committees were granted the right to approve any investment of less than USD5 million. The World Bank assessed pre-coup that it takes on average seven days to start a business in Burma involving six procedures. Following the coup, it is likely to take substantially longer to register a business because of the suspension of many government services, bank closures, and internet access restrictions and suspensions. Post-coup, the MIC has approved several pending investment applications. According to DICA data, the number of new companies registered has declined 87 percent in the last 12 months compared to the year earlier.

Burundi

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of Burundi (GoB) is generally supportive of FDI and seeks investments to promote economic growth.  During the reporting period, the GoB implemented new laws and regulations, including a revised June 2021 investment code (last updated in 2008), and the first national industrialization policy and its accompanying implementation strategy.  These regulations offer the same advantages to both Burundian and foreign investors.  The regulations also raised the minimum investment amounts to be eligible for certain benefits in the investment code from $50,000 to $500,000 for all investors, with the stated purpose of attracting only quality investments that will create decent jobs.  Industry experts believe the new investment regulations will boost development of the industrial sector, which so far contributes only about 17 percent of GDP.  An overview of the legal framework for foreign investment can be found at: https://www.investburundi.bi/index.php/espace-medias1/publications/depliants-et-brochures

Along with the new investment code, the Burundi Development Agency (ADB) officially replaced the Investment Promotion Agency (API). The ADB has taken over all the missions of the API and is currently the only entry portal and interlocutor for all investors looking for business opportunities in Burundi.  The ADB is the government authority responsible for promoting investment, improving the business climate, and facilitating market entry for investors in Burundi.  ADB offers a range of services to potential investors, including assistance in acquiring the licenses, certificates, approvals, authorizations, and permits required by law to set up and operate a business enterprise in Burundi. ADB has set up a “one-stop shop” to facilitate and simplify business registration in Burundi, although investors must be physically present in country to register with ADB.  ADB is also tasked with providing investors with information on investment and export promotion, assisting them with legal formalities, including obtaining the required documents, and intervening when laws and regulations are not properly applied.  While ADB is the initial and primary point of entry for investors, relevant government ministries also regularly meet with private investors to discuss regulatory and legal issues.

Foreign and domestic companies have the same rights to establish and own businesses in the country and engage in all forms of activities.  However, there are restrictions on foreign investments in weaponry, ammunition, and any sort of military or para-military enterprises.  There are no other restrictions nor are there any other sectors in which foreign investors are denied the same treatment as domestic firms.  There are no general limits on foreign ownership or control.

Article 63 of the 2013 mining code stipulates that the GoB must own at least 10 percent of shares in any foreign company with an industrial mining license and state participation cannot be diluted in the event of an increase in the share capital.

Burundi does not maintain an investment screening mechanism for inbound foreign investment.

No investment policy review from a multilateral organization has taken place in the last three years.  The most recent review was performed in 2010 by UNCTAD.

In addition to fiscal advantages provided in the new investment code, Burundi has approved reforms designed to improve ease of doing business, including reinforcing the capabilities of the one-stop shop at ADB, simplifying tax procedures for small and medium enterprises, reducing the time and cost of registering a business (about four hours at the cost of approximately $21), launching an electronic single window for business transactions, and harmonizing commercial laws within the East African Community.  For more details and information on registration procedures, deadlines and costs, investors can visit the ADB at https://www.investburundi.bi/.

The ADB is also responsible for assisting investors in obtaining entry visas, work permits and operating licenses, connections to water and electricity, amicable resolution of disputes between investors and state-owned entities, as well as any other related appropriate assistance.

During the reporting period, the ADB indicates it assisted registering more than 4,000 Burundian companies, certified eight foreign investors with a capital of more than $25 million and granted 21 certificates of eligibility for the advantages provided in the 2021 investment code to investors with a combined capital of more than $170 million.  ADB reports the companies created and during the rating period have already invested more than $85 million in Burundi and have created more than 2,327 jobs.

There is no specific mechanism for ensuring equitable treatment of women and underrepresented minorities.

The host government does not have mechanisms for promoting or incentivizing outward investment.  The host government does not restrict domestic investors from investing abroad.

Cabo Verde

1. Openness To, and Restrictions Upon, Foreign Investment

Cabo Verde seeks both domestic and foreign investment to drive economic recovery, diversification, and growth following the COVID-19 crisis. The government’s Ambition 2030 strategy emphasizes development of sustainable tourism, transformation of the country into a transportation and logistics platform, renewable energy, blue and digital economy, and export-oriented industries. The government promotes a market-oriented economic model under which all investors, regardless of nationality, have the same rights and are subject to the same duties and obligations under the law. Improving the business climate to attract investment remains an economic priority, as does reducing the state’s role in the economy, though the COVID-19 pandemic has pushed back plans to privatize state-owned enterprises.

In 2021, approved investment projects reached an all-time high of USD 1.9 billion, confirming continued investor confidence in Cabo Verde despite pandemic uncertainties. Foreign investment continues to be concentrated in tourism and light manufacturing. In 2021, over 98 percent of the approved investment projects were in the tourism sector.

Cabo Verdean law offers tax benefits and grants permanent residence to foreign citizens with an investment exceeding 180 million escudos (USD 2 million). In December 2021, the government approved creation of a permanent residence permit for foreigners who own second homes in Cabo Verde. The new law also allows for exemption from excise duties on assets. The legal framework establishes conditions for investment in the country by Cabo Verdean emigrants, including fiscal incentives.

Investment promotion agency Cabo Verde TradeInvest (CVTI) is a one-stop shop for all investors. Through CVTI, the government maintains dialogue with investors using personalized and virtual meetings, round tables, conferences, and workshops. CVTI offers investors a “One-Stop Shop for Investments” electronic platform and help in formalizing expressions of interest and monitoring the investment process. It also provides investors and exporters information about trade agreements and benefits (including those related to the U.S. African Growth and Opportunity Act (AGOA) and Cabo Verde’s membership in the Economic Community of West African States (ECOWAS)), market information, details on trade fairs and events, and contacts with other state institutions and potential partners. In addition, CVTI can assist with securing authorizations and licensing, tax and customs incentives, work permits for foreign workers, visas for company workers, social security registration for workers, and introductions to service providers, such as banks, lawyers, accountants, and real estate agents.

For investments of less than USD 500,000, government entities Pro-Empresa and the Casa do Cidadao (Commercial Registry Department) provide similar services.

The International Business Center (Centro Internacional de Negocios – CIN) provides tax and customs benefits for companies that do international business, with the aim of promoting, supporting, and strengthening the emergence of new industrial, commercial, and service provision activities in Cabo Verde.

The Investment Law applies to both foreign and domestic investors, and it enshrines the principle of freedom of investment regardless of nationality. However, sector-specific legislation requires that foreign operators have at least 51 percent participation from Cabo Verdean partners in the fisheries sector and at least 25 percent in interisland maritime transport. The Investment Law further protects against direct and indirect expropriation. Private property is protected from unilateral requisition and nationalization, except for public interest reasons, in accordance with the law and the principle of non-discrimination, subject to prompt, full, and fair compensation.

An approval process serves as a screening mechanism for inbound foreign investment. The process begins with submission of a formal expression of interest to investment promotion agency Cabo Verde TradeInvest in accordance with the Investment Law. Relevant government entities (depending on the sector and of the nature of the investment) then conduct an integrated review of the investment project and provide an opinion. If the opinion is favorable, Cabo Verde TradeInvest, in coordination with relevant agencies, approves the project and issues an investor certificate no later than 45 days from the submission of interest. Tourism-related projects can obtain tourism utility status in addition to the certificate, and for investments considered of special national interest based on the volume of investment and number of jobs created, the government may offer exceptional fiscal and other incentives.

During 2018, the United Nations Conference on Trade and Development (UNCTAD) conducted an Investment Policy Review (IPR) at the request of the Government of Cabo Verde. The report contains strategic analysis on how Cabo Verde can utilize foreign direct investment (FDI) in the tourism sector to advance sustainable development objectives. https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2248 

In the last five years, civil society organizations have not conducted reviews of investment policy concerns.

Cabo Verde offers benefits to attract private-sector investment. Although equality of treatment and non-discrimination are granted to all investors, certain investment projects, given their nature or size, may receive special treatment and support from the government.

In an effort to reduce approval time for investment projects, the government has established a maximum period of 15 days for analysis and 30 days for approval of investment and export projects. In addition, Cabo Verde has adopted measures to facilitate and stimulate business activity, including lowering the maximum personal income tax (IRPS) one percentage point to 24 percent, eliminating double taxation, and waiving tax installment payments for taxpayers who had negative results or began their business activity in the previous year. Investments of at least 500 million escudos (USD 4.8 million) qualify for contractual benefits such as reduction of or exemption from customs and stamp duties, property taxes, and some other fiscal duties. Those investments that create a minimum number of jobs or expand into new strategic sectors qualify for a 50 percent investment credit, which can be deducted over 15 years.

The law commits the government to paying its bills within 45 days and interest on late payments to ensure predictability in the payment of the state’s obligations to companies. The 2021 budget prioritizes expenditures on assistance for families and support for companies and jobs in the context of the pandemic. It also includes benefits to attract private sector investments and improve the business environment.

Registering a company is straightforward. The Commercial Registry Department (Casa do Cidadao) is a one-stop shop where a company can be created and registered in less than a day. Information on business registration procedures is available at https://portondinosilhas.gov.cv/  and http://caboverde.eregulations.org/show-list.asp?l=pt&mid=1 . Step-by-step information on procedures, time, and cost involved in starting a company can be found at http://www.doingbusiness.org/data/exploreeconomies/cabo-verde/starting-a-business/ . The CVTI website also offers information on investing in Cabo Verde, including Cabo Verde’s Investment Law, the Code of Fiscal Benefits, and the Contractual Tax Benefits-Incentives: https://cvtradeinvest.com/ .

The government does not restrict domestic investors from investing abroad. There is no data available on outward investments.

Cambodia

1. Openness To, and Restrictions Upon, Foreign Investment

Cambodia has a liberal foreign investment regime and actively courts FDI. In 2021, the RGC enacted a new Law on Investment to attract more FDI in emerging sectors including agro-processing, electronics/machinery, health, industrial parts, infrastructure, and green energy. The government permits 100 percent foreign ownership of companies in most sectors. In a handful of sectors, such as cigarette manufacturing, movie production, rice milling, and gemstone mining and processing, foreign investment is subject to local equity participation or prior authorization from authorities.  While there is little or no official legal discrimination against foreign investors, some foreign businesses report disadvantages vis-a-vis Cambodian or other foreign rivals that engage in acts of corruption or tax evasion or take advantage of Cambodia’s weak regulatory environment.

The Council for the Development of Cambodia ( CDC ) is the principal government agency responsible for providing incentives to stimulate investment. Investors are required to submit an investment proposal to either the CDC or the Provincial-Municipal Investment Sub-committee to obtain a Qualified Investment Project (QIP) status depending on capital level and location of the investment in question.  QIPs are then eligible for specific investment incentives.

The CDC also serves as the secretariat to Cambodia’s Government-Private Sector Forum (G-PSF), a public-private consultation mechanism that facilitates dialogue within and among 10 government/private sector working groups.

Cambodia has created special economic zones (SEZs) to further facilitate foreign investment. As of 2021, there are 25 SEZs in Cambodia.  These zones provide companies with access to land, infrastructure, and services to facilitate the set-up and operation of businesses. Services provided include utilities, tax services, customs clearance, and other administrative services designed to support import-export processes. Cambodia offers incentives to projects within the SEZs such as tax holidays, zero rate VAT, and import duty exemptions for raw materials, machinery, and equipment. The primary authority responsible for Cambodia’s SEZs is the Cambodia Special Economic Zone Board (CSEZB). The largest of its SEZs is in Sihanoukville and hosts primarily Chinese companies.

There are few limitations on foreign control and ownership of business enterprises in Cambodia. Foreign investors may own 100 percent of investment projects except in the sectors mentioned above. According to Cambodia’s new Law on Investment and related sub-decrees, there are no limitations based on shareholder nationality nor discrimination against foreign investors except for land ownership as stipulated in the Constitution of the Kingdom of Cambodia.

For property, land title must be held by one or more Cambodian citizens.  For state-owned enterprises, the Law on Public Enterprise provides that the Cambodian government must directly or indirectly hold more than 51 percent of the capital or veto rights in state-owned enterprises.

For agriculture investments, foreign investors may request economic land concessions, if they meet certain criteria including provisions on land use, productivities, job creation, and environmental protection and natural resource management.

There are some limitations on the employment of foreigners in Cambodia. A QIP allows employers to obtain visas and work permits for foreign citizens as skilled workers, but the

employer may be required to prove to the Ministry of Labor and Vocational Training that the skillset is not available among Cambodia workers. The Cambodian Bar has periodically taken actions to restrict or impede the work of foreign lawyers or foreign law firms in the country.

The OECD Investment Policy Review of Cambodia in 2018 is available at the following link .

The World Trade Organization (WTO) last reviewed Cambodia’s trade policies in 2017, which can be found at this link .

All businesses are required to register with the Ministry of Commerce (MOC), the General Department of Taxation (GDT), and the Ministry of Labor and Vocational Training (MOLVT).  Registration with MOC is possible through an online business registration portal at this link , while the GDT’s online portal is also available here .  To further facilitate the process, the Ministry of Economy and Finance (MEF) in 2020 launched the “ Single Portal ” – found at here , where businesses can register at the three ministries through a single online platform.

In addition, new businesses may also be required to register with other relevant ministries governing their sector and business activities. For example, travel agencies must also register with the Ministry of Tourism, and private universities must also register with the Ministry of Education, Youth, and Sport.

There are no restrictions on Cambodian citizens investing abroad. Some Cambodian companies have invested in neighboring countries – notably, Thailand, Laos, and Myanmar.  Cambodia’s foreign direct investment abroad reached approximately $127 million in 2020.

Cameroon

1. Openness To, and Restrictions Upon, Foreign Investment

Creating a conducive business environment to attract foreign direct investments is a corner stone of Cameroon’s development strategy. Governance and strategic management of the state constitutes one of the four pillars of the 2020-2030 National Development Strategy 2030, which was launched November 2020. The Government of Cameroon acknowledges that the challenging nature of the domestic business climate remains a concern. To fight corruption, rebuild a weak legal system, and modernize an inefficient public service, the National Development Strategy has adopted a holistic approach to governance, which includes political and institutional governance, administrative governance, economic and financial governance, regional governance, and social and cultural governance.

Cameroon has put in place an arsenal of institutions and laws to improve governance. The government created the Special Crime Tribunal on corruption and economic crimes in 2012 to prosecute crimes related to the misappropriation of public funds of $100,000 or more. The Court specifically targets custodians of public funds as well as officials who have the authority to collect or spend money on behalf of the state. The Court reported it had tried 225 cases and recovered $323 million as of July 2020. Another institution, the Audit Bench of the Supreme Court, reports directly to the President and is charged with conducting audits and investigations of public funds. The National Anti-Corruption Commission also reports to the President and investigates corruption allegations. However, corruption and administrative mismanagement continue to hamper the business climate in Cameroon. Cameroon consistently ranks in the bottom half of the Transparency International’s Corruption Perceptions Index (144 of 180 in 2021). In 2020, Cameroon ranked 167 of 190 on the Ease of Doing Business index.

Despite the active presence of state-owned companies in important sectors of the economy, private entities – both domestic and foreign – can create and own businesses that engage in all forms of legal remunerative activities. They can also enter joint ventures and public-private partnerships with the government.

The Cameroon Investment Promotion Agency (CIPA) was created in 2010 and is a state-owned entity with a mission of attracting investment to Cameroon in collaboration with other state institutions. The agency seeks also to foster an enabling environment for investments in Cameroon. As of 2021, CIPA had signed 172 investment agreements and generated the creation of over 60,000 jobs.

CIPA offers investment incentives covering existing and emerging economic sectors. The agency also serves as a one-stop-shop facilitator through the assistance it provides to foreign and domestic investors. It processes application files for approval in compliance with its investment charter and assists in the alignment of projects with the general tax code. It can support potential foreign investors for visa applications. The agency also follows up to monitor the implementation of commitments made by approved companies.

CIPA’s sector coverage

Cameroon Investment Promotion Agency (CIPA) Sector Coverage

Sources: National Institute of Statistics, IMF, estimates 2019-2020

The government maintains dialogue with business associations such as the Groupement Inter-Patronal du Cameroun (GICAM) and Enterprise Cameroon through the Cameroon Business Forum, which is sponsored by the World Bank. Over the past two years, GICAM has been critical of the government’s handling of the negative impacts of COVID-19 and global inflationary pressures on business.

There are no general economy-wide (statutory, de facto, or otherwise) limits on foreign ownership or control. Apart from the national defense and security areas, there are no sector-specific restrictions, limitations, or requirements applied to foreign ownership and control. Despite an active government presence in most sectors of the economy, private entities – both domestic and foreign – can create and own businesses that engage in all forms of legal remunerative activities. They can also enter joint ventures and public-private partnerships with the government.

Cameroon has no laws or regulations that expressly prohibit investment, equity caps, mandatory domestic joint venture partners, licensing restrictions, or mandatory intellectual property/technology transfer requirements. Cameroon has a screening process, which is applicable to all domestic and foreign investments.  This screening process ensures that investors meet the criteria, such as employment and export quantities, to qualify for private investment incentives.

The IMF approved a three-year, $689.5 million hybrid Extended Credit Facility-Extended Fund Facility arrangement in July 2021. The arrangements are built around five pillars: (i) mitigating the health, economic, and social consequences of the pandemic while ensuring domestic and external sustainability; (ii) reinforcing good governance and strengthening transparency and the anti-corruption framework; (iii) accelerating structural fiscal reforms to modernize tax and customs administrations, mobilize revenue, improve public financial management, increase public investment efficiency, and reduce fiscal risks from state-owned enterprises; (iv) strengthening debt management and reduce debt vulnerabilities; and (v) implementing structural reforms to accelerate economic diversification, boost financial sector resilience and inclusion, and promote gender equality and a greener economy. The IMF completed a First Review of the program on February 23, 2022 and found Cameroon’s overall program performance to be mixed. While macroeconomic performance is broadly satisfactory, and efforts to promote good governance and transparency are gaining momentum, progress on structural reforms is slow. Copies of the review can be found on the IMF website .

Civil society organizations and business associations have provided investment related policy recommendations. Following the introduction of an electronic payment tax, which includes mobile money, in the 2022 finance law, Cameroon’s largest business association GICAM noted “mobile money taxes can have a negative impact on excise tax receipts as consumers are pushed into non-traceable cash transactions, and on the size of remittances from abroad.” GICAM recommended the government enhance consumer purchasing power by reducing some taxes, reviewing remuneration policy, and amending its price regulation policies. Following reform proposals from the road transport syndicate on freight conditions on the Douala-Bangui Corridor, the government approved the construction of rest areas along the corridor as well as the reduction of police checkpoints in 2021.

Entrepreneurs obtain a unique tax identifying number when they open a company in Cameroon. Within 15 days after the registration for a new business, the Directorate General of Taxation issues a permanent taxpayer identification number, known as the Unique Identification Number (UIN).

According to the World Bank, it takes 14 procedures and 82 days to establish a foreign-owned limited liability company in Douala, Cameroon’s largest city and economic capital. This process is longer and more complex than regional and global averages. For foreign investors, a declaration of foreign investment to the Ministry of Finance is mandatory 30 days prior to the beginning of operations. In addition, if the company wants to engage in international trade, registration in the importers’ file is required to obtain an automated customs systems number (Système Douanier Automatisé, or “sydonia”). This number facilitates the entry and exit of goods produced by the company. The authentication of the parent company’s documentation abroad is required only to establish a subsidiary. Foreign-owned resident companies that wish to maintain foreign currency bank accounts must obtain prior approval. The Minister of Finance issues such authorization, which is subject to approval from the Bank of Central African States (BEAC) as per Section 24 of the exchange control regulations. This approval takes on average 38 days to obtain. There is a minimum paid-in capital requirement of CFA 1,000,000 (~$1,800) for establishing LLCs.

In Cameroon, business registration is most often manual, although the Ministry of Small and Medium-Sized Enterprises launched an electronic registration portal designed to automate the process at https://cameroun.eregistrations.org/ . Due to internet access challenges, the website is not always operational. To manually register, entrepreneurs must go to a Ministry of Small and Medium Sized Enterprises regional center for the creation of enterprises, which can complete the registration procedure within one week.

The Cameroonian government does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad.

Canada

1. Openness To, and Restrictions Upon, Foreign Investment

Canada actively encourages FDI and maintains a sound enabling environment. Investors are attracted to Canada’s proximity to the United States, highly skilled workforce, strong legal protections, and abundant natural resources. Once established, foreign-owned investments are treated equally to domestic investments. As of 2020, the United States had a stock of USD 422 billion of foreign direct investment in Canada. U.S. FDI stock in Canada represents 44 percent of Canada’s total investment. Canada’s FDI stock in the United States totaled USD 570 billion.

The USMCA modernizes the previous NAFTA investment protection rules and investor-state dispute settlement provisions. Parties to the USMCA agree to treat investors and investments of the other Parties in accordance with the highest international standards, and consistent with U.S. law and practice, while safeguarding each Party’s sovereignty and promoting domestic investment.

Invest in Canada is Canada’s investment attraction and promotion agency. It provides information and advice on doing business in Canada, strategic market intelligence on specific industries, site visits, and introductions to provincial, territorial, and municipal investment promotion agencies. Still, non-tariff barriers to trade across provinces and territories contribute to structural issues that have held back the productivity and competitiveness of Canada’s business sector.

Foreign investment in Canada is regulated under the provisions of the Investment Canada Act (ICA). U.S. FDI in Canada is also subject to the provisions of the World Trade Organization (WTO), the USMCA, and the NAFTA. The ICA mandates the review of significant foreign investments to ensure they provide an economic net benefit and do not harm national security.

Canada is not a party to the USMCA’s chapter on investor-state dispute settlement (ISDS). Ongoing NAFTA arbitrations are not affected by the USMCA, and investors can file new NAFTA claims by July 1, 2023, provided the investment(s) were “established or acquired” when NAFTA was still in force and remained “in existence” on the date the USMCA entered into force. An ISDS mechanism between the United States and Canada will cease following a three-year window for NAFTA-protected legacy investments.

The Canadian government announced revised ICA foreign investment screening guidelines on March 24, 2021. The revised guidelines include additional national security considerations such as sensitive technology areas, critical minerals, and sensitive personal data. The new guidelines are aligned with Innovation, Science, and Economic Development Canada’s April 2020 update on greater scrutiny for foreign investments by state-owned investors, as well as investments involving the supply of critical goods and services. The 2020-21 Investment Canada Act Annual Report (released February 2, 2022) indicated a record high 24 investments were subject either to formal national security review or heightened screening despite historically fewer total foreign investments in Canada due to COVID-19-related factors. In contrast, a total of 21 investments were subject to similar screening in the four years from 2016 to 2020. Still, some Canadian elected officials and national security experts assess national security standards should be heightened. The government is exploring proposed amendments to the National Security Review of Investments Regulations which would introduce a voluntary filing mechanism for investments by non-Canadians that do not require an application or a notification.

Foreign ownership limits apply to Canadian telecommunication, airline, banking, and cultural sectors. Telecommunication carriers, including internet service providers, that own and operate transmission facilities are subject to foreign investment restrictions if they hold a 10 percent or greater share of total Canadian communication annual market revenues as mandated by The Telecommunications Act. These investments require Canadian ownership of 80 percent of voting shares, Canadians holding 80 percent of director positions, and no indirect control by non-Canadians. If the company is a subsidiary, the parent corporation must be incorporated in Canada and Canadians must hold a minimum of 66.6 percent of the parent’s voting shares. Foreign ownership of Canadian airlines is limited to 49 percent with no individual non-Canadian able to control more than 25 percent by mandate of the 2018 Transportation Modernization Act. Canadian airlines cannot be directly or indirectly controlled by non-Canadians to meet Canadian Transportation Agency “control in fact” licensure requirements. Foreign banks can establish operations in Canada but are generally prohibited from accepting deposits of less than USD 112,000. Foreign banks must receive Department of Finance and the Office of the Superintendent of Financial Institutions (OSFI) approval to enter the Canadian market. Investment in cultural industries also carries restrictions, including a provision under the ICA that foreign investment in book publishing and distribution must be compatible with Canada’s national cultural policies and be of net benefit to Canada.

The World Trade Organization conducted a trade policy review of Canada in 2019. The report is available at: https://www.wto.org/english/tratop_e/tpr_e/tp489_e.htm . The Organization of Economic Cooperation and Development completed an Economic Forecast Summary and released the results in December 2021. The report is available at: http://www.oecd.org/economy/canada-economic-snapshot/ .

Individuals from Canadian civil society organizations, industry, and academic institutions regularly comment on and assess investment policy-related concerns. In January and February 2022, for example, subject matter experts gave evidence to Canada’s House of Commons Standing Committee on Industry and Technology regarding an investment policy decision concerning a high-profile critical mineral sector investment.

The Canadian government provides information necessary for starting a business at: https://www.canada.ca/en/services/business/start.html . Business registration requires federal or provincial government-based incorporation, the application of a federal business number and corporation income tax account from the Canada Revenue Agency, the registration as an extra-provincial or extra-territorial corporation in all other Canadian jurisdictions of business operations, and the application of relevant permits and licenses. In some cases, registration for these accounts is streamlined (a business can receive its business number, tax accounts, and provincial registrations as part of the incorporation process); however, this is not true for all provinces and territories.

Canada prioritizes export promotion and outward investment as a means to enhance future Canadian competitiveness and productivity. Canada’s Trade Commissioner Service offers a number of funding opportunities and support programs for Canadian businesses to break into and expand in international markets: https://www.tradecommissioner.gc.ca/funding_support_programs-programmes_de_financement_de_soutien.aspx?lang=eng&wbdisable=true . Canada does not restrict domestic investors from investing abroad except when recipient countries or businesses are designated under the government’s sanctions regime.

Chad

1. Openness To, and Restrictions Upon, Foreign Investment

The GOC’s policies towards foreign direct investment (FDI) are generally positive. Chad’s laws and regulations encourage FDI, and there are few formal restrictions on foreign trade and investment. Under Chadian law, foreign and domestic entities may establish and own business enterprises.

The National Investment Charter of 2008 permits full foreign ownership of companies in Chad. The only limit on foreign control is on ownership of companies deemed related to national security. The National Investment Charter guarantees both foreign companies and individuals equal standing with Chadian companies and individuals in the privatization process. In principle, tenders for foreign investment in state-owned enterprises (SOEs) and for government contracts are conducted through open international bid procedures. The National Investment Charter also offers incentives to certain foreign companies establishing significant operations in Chad, including up to five years of tax-exempt status.

Chad’s National Agency for Investment and Exports (ANIE, Agence Nationale des Investissements et des Exports), an agency of the Ministry of Industrial and Commercial Development & Private Sector Promotion, facilitates foreign investment. ANIE’s mandate is to contribute to the creation of a business environment that meets international standing, promote investment and exports, support the development of SMEs, and inform GOC decision makers about economic policy. ANIE acts as a one-stop shop for new investors.

Chad has demonstrated few signs of prioritizing investment retention or maintaining an ongoing dialogue with investors, such as through a formal business roundtable or Ombudsman. The Presidential Council for Improving the Investment Climate has met only twice since its 2021 establishment and is still working to clarify its work plan.

There are no limits on foreign ownership or control. There are no sector-specific restrictions that discriminate against market access for U.S. or other foreign investors, and no de facto anti-foreign discriminatory practices. In terms of investment screening mechanisms, the government reviews potential investment projects in a holistic and project-by-project way but has not made public any fixed criteria or standardized methodology.

UNCTAD published a French-language Investment Policy Review (IPR) on Chad in July 2019 ( https://investmentpolicy.unctad.org/publications/1212/investment-policy-review-of-chad ).

The World Trade Organization (WTO) published a joint trade policy review for Chad, Cameroon, Republic of Congo, Gabon, and Central African Republic in 2013 ( https://www.wto.org/english/tratop_e/tpr_e/tp385_e.htm ), and a standalone trade policy review for Chad in 2007 ( https://www.wto.org/english/tratop_e/tpr_e/tp275_e.htm ).

The OECD has not published any investment policy reviews of Chad.

Civil society groups have not shared useful reviews of investment policy-related concerns, though many Chadians at large have voiced concern about the negative effects of Chad’s onerous and lethargic tourist visa process as dissuading potential foreign investment, compared to other countries which boast inexpensive, hassle-free visas on arrival. To date, the government has shown little interest in addressing this common complaint. A Chamber of Commerce does exist, though has published little information regarding policy-related investment concerns.

Foreign businesses interested in investing in or establishing an office in Chad should contact ANIE, which offers a one-stop shop for filing the legal forms needed to start a business. The process officially takes 72 hours and is the most important legal requirement for investment. ANIE’s website ( www.anie-tchad.com ) provides additional information. An easy step to facilitate business (that the government has not taken) would be completing online business registration via the Global Enterprise Registration web site ( www.GER.co ) and the Business Facilitation Program ( www.businessfacilitation.org ). The World Bank estimated in 2019 that it took, on average, 58 days to start a business in Chad.

Contracts are tailored to each investment and often include additional incentives and concessions, such as permissions to import labor or agreements to work with specific local suppliers. Some contracts are confidential. Occasionally, government ministries attempt to change the terms of contracts or apply new laws broadly, even to companies that have pre-existing agreements that exempt them. Chad’s judicial system is weak, and rulings, including those relating to contract disputes, are susceptible to government interference. There is limited capacity within the judiciary to address commercial issues, including contract disputes. Frivolous lawsuits are expensive and difficult to resolve. Parties usually settle disputes directly or through arbitration provided by the Chamber of Commerce, Industry, Agriculture, Mining, and Crafts (CCIAMA) or through an outside entity, such as the International Chamber of Commerce (ICC) in Paris.

The GOC does not offer any programs or incentives encouraging outward investment. The GOC does not restrict domestic investors from investing abroad.

Chile

1. Openness To, and Restrictions Upon, Foreign Investment

Historically and for more than four decades, promoting FDI has been an essential part of the Chilean government’s national development strategy. The country’s market-oriented economic policy creates significant opportunities for foreign investors to participate. Laws and practices are not discriminatory against foreign investors, who receive treatment similar to Chilean nationals. Chile’s business climate is generally straightforward and transparent, and its policy framework has remained consistent despite developments such as civil unrest in 2019 and the COVID-19 pandemic. However, the permitting process for infrastructure, mining, and energy projects is contentious, especially regarding politically sensitive environmental impact assessments, water rights issues, and indigenous consultations. In July 2021, Chile began a constitutional reform process that is expected to produce a new constitution by July that Chileans will vote on whether to enact in September. Key issues under discussion through the Constitutional Assembly process include the political structure of the country, water rights, mining rights, environmental regulation, and the status of indigenous communities.

InvestChile is the government agency in charge of facilitating the entry and retention of FDI into Chile. It provides services related to investment attraction (information about investment opportunities); pre-investment (sector-specific advisory services, including legal); landing (access to certificates, funds and networks); and after-care (including assistance for exporting and re-investment).

Regarding government-investor dialogue, in May 2018, the Ministry of Economy created the Sustainable Projects Management Office (GPS). This agency provides support to investment projects, both domestic and foreign, serving as a first point of contact with the government and coordinating with different agencies in charge of evaluating investment projects, which aims to help resolve issues that emerge during the permitting process.

Foreign investors have access to all productive activities, except for the domestic maritime freight sector, in which foreign ownership of companies is capped at 49 percent. Maritime transportation between Chilean ports is open since 2019 to foreign cruise vessels with more than 400 passengers. Some international reciprocity restrictions exist for fishing.

Most enterprises in Chile may be 100 percent owned by foreigners. Chile only restricts the right to private ownership or establishment in what it defines as certain “strategic” sectors, such as nuclear energy and mining. The current Constitution establishes the “absolute, exclusive, inalienable and permanent domain” of the Chilean state over all mineral, hydrocarbon, and fossil fuel deposits within Chilean territory. However, Chilean law allows the government to grant concession rights and lease agreements to individuals and companies for exploration and exploitation activities, and to assign contracts to private investors, without discrimination against foreign investors. The Constitutional Assembly is reviewing proposals that if enacted could affect mining operations of foreign investors.

Chile has not implemented an investment screening mechanism to protect key national security priorities. FDI is subject to pro forma screening by InvestChile. Businesses in general do not consider these screening mechanisms as barriers to investment because approval procedures are expeditious, and investments are usually approved. Some transactions require an anti-trust review by the office of the national economic prosecutor (Fiscalía Nacional Económica) and possibly by sector-specific regulators.

The World Trade Organization (WTO) has not conducted a Trade Policy Review for Chile since June 2015 (available here: https://www.wto.org/english/tratop_e/tpr_e/tp415_e.htm ). The Organization for Economic Co-operation and Development (OECD) has not conducted an Investment Policy Review for Chile since 1997 (available here: http://www.oecd.org/daf/inv/investment-policy/34384328.pdf ), and the country is not part of the countries covered to date by the United Nations Conference on Trade and Development’s (UNCTAD) Investment Policy Reviews.

The Chilean government took significant steps towards business facilitation during the past decade. Starting in 2018, the government introduced updated electronic and online systems for providing some tax information, complaints related to contract enforcement, and online registration of closed corporations (non-public corporations). In June 2019, the Ministry of Economy launched the Unified System for Permits (SUPER), a new online single-window platform that brings together 182 license and permit procedures, simplifying the process of obtaining permits for investment projects.

According to the World Bank, Chile has one of the shortest and smoothest processes among Latin American and Caribbean countries – 11 procedures and 29 days – to establish a foreign-owned limited liability company (LLC). Drafting statutes of a company and obtaining an authorization number can be done online at the platform HYPERLINK hError! Hyperlink reference not valid.. Electronic signature and invoicing allow foreign investors to register a company, obtain a tax payer ID number and get legal receipts, invoices, credit and debit notes, and accountant registries. A company typically needs to register with Chile’s Internal Revenue Service, obtain a business license from a municipality, and register either with the Institute of Occupational Safety (public) or with one of three private nonprofit entities that provide work-related accident insurance, which is mandatory for employers. In addition to the steps required of a domestic company, a foreign company establishing a subsidiary in Chile must authenticate the parent company’s documents abroad and register the incoming capital with the Central Bank. This procedure, established under Chapter XIV of the Foreign Exchange Regulations, requires a notice of conversion of foreign currency into Chilean pesos when the investment exceeds $10,000. The registration process at the Registry of Commerce of Santiago is available online.

The Government of Chile does not have an active policy of promotion or incentives for outward investment, nor does it impose restrictions on it.

China

1. Openness To, and Restrictions Upon, Foreign Investment

FDI has played an essential role in China’s economic development. Though the PRC remains a relatively restrictive environment for foreign investors, PRC government officials tout openness to FDI, promising market access expansion and non-discriminatory, “national treatment” for foreign enterprises through improvements to the business environment.  They also have made efforts to strengthen China’s regulatory framework to enhance market-based competition.

MOFCOM reported FDI flows grew by about 15 percent year-on-year, reaching USD 173 billion, however, foreign businesses continue to express concerns over China’s pandemic restrictions.  In 2021, U.S. businesses’ concerns with China’s COVID-19 restrictive travel restrictions were at the top of the agenda, along with concerns over PRC’s excessive cyber security and data-related requirements, preferential treatment for domestic companies – including state-owned enterprises – under various industrial policies, preference for domestic technologies and products in the procurement process, an opaque regulatory system, and inconsistent application of laws protecting intellectual property rights (IPR). U.S.-China geopolitical tensions were also cited as a significant concern. See the following:

China’s International Investment Promotion Agency (CIPA), under MOFCOM, oversees attracting foreign investment and promoting China’s overseas investment. Duties include implementing overseas investment policy; guiding domestic sub-national and international investment promotion agencies; promoting investment in industrial parks at the national, subnational, and cross-border level; organizing trainings in China and abroad for overseas investment projects; and, engaging international and multilateral economic organizations, foreign investment promotion agencies, chambers of commerce, and business associations. The agency has offices worldwide, including CIPA Europe in Hungary, CIPA Germany, and a representative office in the Hague to promote investment in the Benelux area. CIPA maintains an “Invest in China” website which lists laws, regulations, and rules relevant to foreign investors. The China Association of Enterprises with Foreign Investments (CAEFI) is a non-profit organization overseen by MOFCOM. The association and corresponding provincial institutions have hotlines to receive foreign investor complaints.

Entry into China’s market is regulated by the country’s “negative lists,” which identify the sectors in which foreign investment is restricted or prohibited, and a catalogue for encouraged foreign investment, which identifies the sectors and locations (often less developed regions) in which the government encourages investment.

In restricted industries, foreign investors face equity caps or JV requirements to ensure control by a PRC national and enterprise.  Due to these requirements, foreign investors that wish to participate in China’s market must enter partnerships, which sometimes require transfer of technology. However, even in “open” sectors, a variety of factors, including ability to access local government officials and preferences, enhanced ability to impact local rules and standards, perceptions of better understanding of the PRC market, and access to procurement opportunities, led many foreign companies to rely on the JV structure to operate in the PRC market.

Below are a few examples of industries where investment restrictions apply:

  • Preschool to higher education institutes require a PRC partner with a dominant role.
  • Establishment of clinical trials for new drugs require a PRC partner who holds the IPR tied to data drawn from the clinical research.

Examples of foreign investment sectors requiring PRC majority stake include:

  • Radio/television market survey.
  • Basic telecommunication services outside free trade zones.

The 2021 negative lists made minor modifications to some industries, reducing the number of restrictions and prohibitions from 33 to 31 in the nationwide negative list, and from 30 to 27 in China’s pilot FTZs. Notable changes included openings in the automotive and satellite television broadcasting manufacturing sectors. Sectors that remain closed to foreign investment include rare earths, film production and distribution, and tobacco products.  However, the government continues to constrain foreign investors in a myriad of ways beyond caps on ownerships. For instance, in the pharmaceutical sector, while JV requirements were eliminated in the 1990s, foreign companies must partner with local PRC institutions for clinical trials. Other requirements that place undue burden on foreign investors include but are not limited to: applying higher standards for quality-related testing, prohibitions on foreign parties in JVs conducting certain business activities, challenges in obtaining licenses and permits, mandatory intellectual property sharing related to certain biological material, and other implicit and explicit downstream regulatory approval barriers.

The negative list regulating pilot FTZ zones will lift all barriers to foreign investment in all manufacturing sectors, widen foreign investor access to some service sectors, and allow foreign investment into the radio and TV-based market research sector.  For the market research sector, caveats include a 33 percent foreign investor ownership cap and PRC citizenship requirements for legal representatives. While U.S. businesses welcomed market openings, foreign investors remained underwhelmed by the PRC’s lack of ambition and refusal to provide more significant liberalization.  Foreign investors noted the automotive sector openings were inconsequential since the more lucrative electric vehicle (EV) sector was opened to foreign investors in 2018, whereas the conventional auto sector is saturated. Foreign investors cited this was in line with the government announcing liberalization mainly in industries that domestic PRC companies already dominate.

In addition to the PRC’s system for managing foreign investments, MOFCOM and NDRC also maintain a system for managing which segments of the economy are open to non-state-owned investors. The most recent Market Access Negative List  was issued on December 10, 2020.

The Measures for Security Reviews on Foreign Investments  came into effect January 18, 2021, revising the PRC’s framework for vetting foreign investments that could affect national security. The NDRC and the Ministry of Commerce will administer the new measures which establish a mechanism for reviewing investment activities across a range of sectors perceived to implicate PRC national security, including agriculture, energy and resources, cultural products, and more.

China is not a member of the Organization for Economic Co-Operation and Development (OECD), but the OECD Council established a country program of dialogue and co-operation with China in October 1995. The OECD completed its most recent investment policy review for China in 2022.

China’s 2001 accession to the World Trade Organization (WTO) boosted its economic growth and advanced its legal and governmental reforms.  The WTO completed its most recent trade policy review for China in 2021, highlighting FDI grew at a slower pace than in previous periods but remains a major driver of global growth and a key market for multinational companies.

Created in 2018, the State Administration for Market Regulation (SAMR) is responsible for business registration processes.  Under SAMR’s registration system, parties are required to report when they (1) establish a Foreign Invested Enterprise (FIE); (2) establish a representative office in China; (3) acquire stocks, shares, assets or other similar equity of a domestic China-based company; (4) re-invest and establish subsidiaries in China; and (5) invest in new projects.  Foreign companies still report challenges setting up a business relative to their PRC competitors. Many companies offer consulting, legal, and accounting services for establishing operations in China. Investors should review their options carefully with an experienced advisor before investing.

Since 2001, China has pursued a “going-out” investment policy.  At first, the PRC encouraged SOEs to invest overseas, but in recent years, China’s overseas investments have diversified with both state and private enterprises investing in nearly all industries and economic sectors.  China remains a major global investor and in 2021, total outbound direct investment (ODI) increased for the first time in four years to reach $153.7 billion, a 12 percent increase year-on-year, according to the 2020 Statistical Bulletin of China’s Outward Foreign Direct Investment .

China’s government created “encouraged,” “restricted,” and “prohibited” outbound investment categories to suppress significant capital outflow pressure in 2016 and to guide PRC investors to more “strategic sectors.” The Sensitive Industrial-Specified Catalogue of 2018  further restricted outbound investment in sectors like property, cinemas, sports teams, and non-entity investment platforms and encouraged outbound investment in sectors that supported PRC national objectives by acquiring advanced manufacturing and high-tech assets.  PRC firms involved in sectors cited as priorities in the Strategic Emerging Industries, New Infrastructure Initiative, and MIC 2025 often receive preferential government financing and subsidies for outbound investment.

In 2006, the PRC established the Qualified (QDII) program to channel domestic funds into offshore assets through financial institutions. While the quota tied to this program has fluctuated over the years based on capital flight concerns, in 2021 the State Administration of Foreign Exchange (SAFE) approved new quotas for 17 institutions under the program to allow a potential $147.3 billion in outbound investment.

In 2013, the PRC government established a pilot program allowing global asset management companies more opportunities to raise RMB-denominated funds from high net-worth PRC-based individuals and institutional investors to invest overseas. These programs include the Qualified Domestic Limited Partnership (QDLP) pilot program and the Shenzhen-specific Qualified Domestic Investment Entity (QDIE) program. In 2021, the China Securities Regulatory Commission (CSRC) and SAFE expanded the pilot areas to at least seven jurisdictions and quotas for the QDLP to $10 billion, respectively. In April, the Shenzhen Financial Regulatory Bureau amended the Administrative Measures of Shenzhen for Implementation of the Pilot Program for Overseas Investment by Qualified Domestic Investors (“Shenzhen QDIE Measures”) to include investments in the securities market that aligns it with the QLDP program.

Colombia

1. Openness To, and Restrictions Upon, Foreign Investment

The Colombian government actively encourages foreign direct investment (FDI). The economic liberalization reforms of the early 1990s provided for national treatment of foreign investors, lifted controls on remittance of profits and capital, and allowed foreign investment in most sectors. Colombia imposes the same investment restrictions on foreign investors that it does on national investors. Generally, foreign investors may participate in the privatization of state-owned enterprises without restrictions. All FDI involving the establishment of a commercial presence in Colombia requires registration with the Superintendence of Corporations and the local chamber of commerce. All conditions being equal during tender processes, national offers are preferred over foreign offers. Assuming equal conditions among foreign bidders, those with major Colombian national workforce resources, significant national capital, and/or better conditions to facilitate technology transfers are preferred.

ProColombia is the Colombian government entity that promotes international tourism, foreign investment, and non-traditional exports. ProColombia assists foreign companies that wish to enter the Colombian market by addressing specific needs, such as identifying contacts in the public and private sectors, organizing visit agendas, and accompanying companies during visits to Colombia. All services are free of charge and confidential. Priority sectors include business process outsourcing, software and IT services, cosmetics, health services, automotive manufacturing, textiles, graphic communications, agribusiness, and electric energy. ProColombia’s “Invest in Colombia” web portal offers detailed information about opportunities in agribusiness, manufacturing, and services in Colombia ( www.investincolombia.com.co/sectors ). The Duque administration – including senior leaders at the Presidency, ProColombia, and the Ministry of Commerce, Industry, and Trade – continue to stress Colombia’s openness to foreign investors and aggressively market Colombia as an investment destination. The government of Colombia does not have a national security-based investment screening mechanism in place.

Foreign investment in the financial, hydrocarbon, and mining sectors is subject to special regimes, such as investment registration and concession agreements with the Colombian government, but is not restricted in the amount of foreign capital. The following sectors require that foreign investors have a legal local representative and/or commercial presence in Colombia: travel and tourism agency services; money order operators; customs brokerage; postal and courier services; merchandise warehousing; merchandise transportation under customs control; international cargo agents; public service companies, including sewage and water works, waste disposal, electricity, gas and fuel distribution, and public telephone services; insurance firms; legal services; and special air services, including aerial fire-fighting, sightseeing, and surveying.

According to the Colombian constitution and foreign investment regulations, foreign investment in Colombia receives the same treatment as an investment made by Colombian nationals. Foreign investment is permitted in all sectors, except in activities related to defense, national security, and toxic waste handling and disposal. There are no performance requirements explicitly applicable to the entry and establishment of foreign investment in Colombia.

Foreign investors face specific exceptions and restrictions in the following sectors:

Media: Only Colombian nationals or legally constituted entities may provide radio or subscription-based television services. For National Open Television and Nationwide Private Television Operators, only Colombian nationals or legal entities may be granted concessions to provide television services. Foreign investment in national television is limited to a maximum of 40 percent ownership of an operator.

Accounting, Auditing, and Data Processing: To practice in Colombia, providers of accounting services must register with the Central Accountants Board and have uninterrupted domicile in Colombia for at least three years prior to registry. A legal commercial presence is required to provide data processing and information services in Colombia.

Banking: Foreign investors may own 100 percent of financial institutions in Colombia, but are required to obtain approval from the Financial Superintendent before making a direct investment of ten percent or more in any one entity. Foreign banks must establish a local commercial presence and comply with the same capital and other requirements as local financial institutions. Every investment of foreign capital in portfolios must be through a Colombian administrator company, including brokerage firms, trust companies, and investment management companies.

Fishing: A foreign vessel may engage in fishing activities in Colombian territorial waters only through association with a Colombian company holding a valid fishing permit. If a ship’s flag corresponds to a country with which Colombia has a complementary bilateral agreement, this agreement shall determine whether the association requirement applies for the process required to obtain a fishing license. The costs of fishing permits are greater for foreign flag vessels.

Private Security and Surveillance Companies: Companies constituted with foreign capital prior to February 11, 1994 cannot increase the share of foreign capital. Those constituted after that date can only have Colombian nationals as shareholders.

Transportation: Foreign companies can only provide multimodal freight services within or from Colombian territory if they have a domiciled agent or representative legally responsible for its activities in Colombia. International cabotage companies can provide cabotage services (i.e. between two points within Colombia) “only when there is no national capacity to provide the service.” Colombia prohibits foreign ownership of commercial ships licensed in Colombia. The owners of a concession providing port services must be legally constituted in Colombia, and only Colombian ships may provide port services within Colombian maritime jurisdiction, unless there are no capable Colombian-flag vessels.

The WTO most recently reviewed Colombia’s trade policy in June 2018. https://www.wto.org/english/tratop_e/tpr_e/tp472_e.htm 

New businesses must register with the chamber of commerce of the city in which the company will reside. Applicants also register using the Colombian tax authority’s portal at: www.dian.gov.co  to obtain a taxpayer ID (RUT). Business founders must visit DIAN ( Dirección de Impuestos y Aduanas Nacionales) offices to obtain an electronic signature for company legal representatives, and obtain – in-person or online – an authorization for company invoices from DIAN. In 2019, Colombia made starting a business a step easier by lifting a requirement of opening a local bank account to obtain invoice authorization. Companies must submit a unified electronic form to self-assess and pay social security and payroll contributions to the Governmental Learning Service (Servicio Nacional de Aprendizaje, or SENA), the Colombian Family Welfare Institute (Instituto Colombiano de Bienestar Familiar, or ICBF), and the Family Compensation Fund (Caja de Compensación Familiar). After that, companies must register employees for public health coverage, affiliate the company to a public or private pension fund, affiliate the company and employees to an administrator of professional risks, and affiliate employees with a severance fund.

According to the World Bank’s “Doing Business 2020” report, recent reforms simplified starting a business, trading across borders, and resolving insolvency. According to the report, starting a company in Colombia requires seven procedures and takes an average of 10 days. Information on starting a company can be found at http://www.ccb.org.co/en/Creating-a-company/Company-start-up/Step-by-step-company-creation ; https://investincolombia.com.co/how-to-invest.html ; and http://www.dian.gov.co .

Colombia does not incentivize outward investment nor does it restrict domestic investors from investing abroad.

Costa Rica

1. Openness To, and Restrictions Upon, Foreign Investment

Costa Rica actively courts FDI, placing a high priority on attracting and retaining high-quality foreign investment.

PROCOMER and CINDE lead Costa Rica’s investment promotion efforts. CINDE has had great success over the last several decades in attracting and retaining investment in specific areas, currently services, advanced manufacturing, life sciences, light manufacturing, and the food industry. In addition, the Tourism Institute (ICT) attends to potential investors in the tourism sector. CINDE, PROCOMER, and ICT are strong and effective guides and advocates for their client companies, prioritizing investment retention and maintaining an ongoing dialogue with investors.

Costa Rica recognizes and encourages the right of foreign and domestic private entities to establish and own business enterprises and engage in most forms of remunerative activity. The exceptions are in sectors that are reserved for the state (legal monopolies – see #7 below “State Owned Enterprises, first paragraph) or that require participation of at least a certain percentage of Costa Rican citizens or residents (electrical power generation, transport services, professional services, and aspects of broadcasting). Properties in the Maritime Zone (from 50 to 200 meters above the mean high-tide mark) may only be leased from the state and with residency requirements. In the areas of medical services, telecommunications, finance and insurance, state-owned entities dominate, but that does not preclude private sector competition. Costa Rica does not have an investment screening mechanism for inbound foreign investment, beyond those applied under anti-money laundering procedures. U.S. investors are not disadvantaged or singled out by any control mechanism or sector restrictions; to the contrary, U.S. investors figure prominently among the various major categories of FDI.

On May 25, 2021, Costa Rica officially became the 38th OECD member. A comprehensive review of the Costa Rican economy was published by the OECD at the conclusion of the accession process, which offered valuable insights into challenges faced by the economy, “OECD Economic Surveys Costa Rica 2020: https://www.oecd.org/countries/costarica/oecd-economic-surveys-costa-rica-2020-2e0fea6c-en.htm . In the same context, the OECD offered a March 2020 review of international investment in Costa Rica: https://www.oecd.org/investment/OECD-Review-of-international-investment-in-Costa-Rica.pdf . For the index of OECD reports on Costa Rica, go to https://www.oecd.org/costarica/ 

The World Trade Organization (WTO) conducted its 2019 “Trade Policy Review” of Costa Rica in September of that year. Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member countries’ trade and related policies are examined and evaluated at regular intervals: https://www.wto.org/english/tratop_e/tpr_e/tp492_e.htm  .

The United Nations Conference on Trade and Development (UNCTAD) produced in 2019 the report Overview of Economic and Trade Aspects of Fisheries and Seafood Sectors in Costa Rica:

https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2583  .

The Environmental Justice Atlas – https://ejatlas.org/country/costa-rica  – highlights a number of environmental disputes involving foreign investors, some moribund and some ongoing.

A new company in Costa Rica must typically register with the National Registry (company and capital registry), Internal Revenue Directorate of the Finance Ministry (taxpayer registration), National Insurance Institute (INS) (basic workers’ comp), Ministry of Health (sanitary permit), Social Security Administration (CCSS) (registry as employer), and the local Municipality (business permit). Legal fees are the biggest single business start-up cost, as all firms registered to individuals must hire a lawyer for a portion of the necessary paperwork. Costa Rica’s business registration website Crearempresa functions but in 2021 is rated last of 76 national business registration sites evaluated by “Global Enterprise Registration” ( www.GER.co ).

Traditionally, the Costa Rican government’s small business promotion efforts have tended to focus on participation by women and underserved communities.  The National Institute for Women (INAMU), National Training Institute (INA), the Ministry of Economy (MEIC), and PROCOMER through its supply chain initiative have all collaborated extensively to promote small and medium enterprise with an emphasis on women’s entrepreneurship. In 2020, INA launched a network of centers to support small and medium-sized enterprises based upon the U.S. Small Business Development Center (SBDC) model.

The Costa Rican government does not promote or incentivize outward investment. Neither does the government discourage or restrict domestic investors from investing abroad.

Côte d’Ivoire

1. Openness To, and Restrictions Upon, Foreign Investment

The government actively encourages FDI and is committed to increasing it.  The preparation of the 2021-2025 PND was informed by a comprehensive review of the previous 2016-2020 PND to identify the main achievements, remaining challenges and additional strategic priorities.  The 2021-2025 PND process was collaborative, including consultations with civil society, private sector, local government, and development finance institutions (DFIs).  The government recognizes it cannot achieve its ambitious PND investment goals without increasing foreign investment and private investment to a target of 72 percent of total investment.  Prime Minister Achi’s March 2022 visit to the U.S. profiled CDI as an attractive trade and investment partner that offers a conducive environment to accommodate foreign companies.  Achi broadcast the government’s objective to use the private sector as a principal element of development, urging U.S. companies to invest in Côte d’Ivoire.  He highlighted CDI’s success in delivering peace and stability through its commitment to political dialogue.  Part of CDI’s vision by 2030 is to process domestically at least 50 percent of its raw export commodities.

Foreign companies are free to invest and list on the Regional Stock Exchange (BVRM – Bourse Régionale des Valeurs Mobilières), which is based in Abidjan and covers the eight countries of the West African Economic and Monetary Union (WAEMU).  WAEMU members are part of the Regional Council for Savings and Investment (CREPMF – Conseil Régional de l’Épargne Publique et des Marchés Financiers), a West African securities regulatory body.  BRVM has only 46 companies, 34 of which are Ivorian.  Looking ahead, the market is slowly going digital, with online trading platforms.  Licensed stock broking companies already execute most investors’ trades through an automated trading system.  Nevertheless, investor and corporate sentiment remain low.  Companies are reluctant to list, and investors do not yet see the market as an alternative way to make profit.  There is a need to expand and deepen markets to support international trade, including forward and futures markets.

In most sectors, there are no laws that limit foreign investment.  There are restrictions, however, on foreign investment in the health sector, law and accounting firms, and travel agencies (see the section below).

The Ivoirian government’s investment promotion agency, the Center for the Promotion of Investment in Côte d’Ivoire (CEPICI), promotes and attracts national and foreign investment.  Its services are available to all investors and are provided through a one-stop shop intended to facilitate business creation, operation, and expansion.  CEPICI ensures that investors receive incentives outlined in the investment code and facilitates access to industrial land.  More information is available at http://www.cepici.gouv.ci/.  In 2019, the government added a Ministry of Investment Promotion and Private Sector Development, charged with investment promotion activities and development of industrial zones, including economic and free zones. The Ministry oversees the CEPICI and the Ivoirian Enterprise Institute (INIE – Institut Ivoirien de l’Entreprise), charged with programs targeting Small and Medium Enterprise (SME) development.  This overlaps with the mandate of the Ministry of SMEs (Ministère de la Promotion des PME, de l’artisanat et de la Transformation du Secteur informel).

Côte d’Ivoire maintains an ongoing dialogue with investors through various business networks and platforms, such as the CEPICI, the Ivoirian Chamber of Commerce (CCI-CI), the association of large enterprises (CGECI), and the bankers’ association.  CGECI regularly proposes reforms to be adopted by the government regarding private sector financing and investment.  CGECI workshops and conferences are venues to discuss issues ranging from tax to access to debt issues.

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 investor participation in state-owned firms that the government is privatizing, although in most cases of privatization the state reserves an equity stake in the new company.

There are no general, economy-wide limits on foreign ownership or control, and few sector-specific restrictions.  There are no laws specifically directing private firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control in those firms, and no such practices have been reported.  Non-citizens and foreign entities can buy stocks listed on the regional stock exchange located in Abidjan.

Banks and insurance companies are subject to licensing requirements, but there are no restrictions designed to limit foreign ownership or to limit establishment of subsidiaries of foreign companies in this sector.  Investments in health, law and accounting, and travel agencies are subject to prior approval and require appropriate licenses and association with an Ivoirian partner.  The Ivoirian government has, on a case-by-case basis, mandated using local providers, hiring local employees, or arranging for eventual transfer to local control.  The government has implemented local content requirement for companies in the oil and gas sectors.  Local content includes an obligation to employ local employees and to work with local SMEs.

The government does not have an official policy to screen investments; its overall economic and industrial strategy does not discriminate against foreign-owned firms.  There are indications in some instances of preferential treatment for firms from countries with longstanding commercial ties to CDI.  In some sectors, such as cocoa and cashew processing, the government gives preferential treatment to Ivoirian companies.  For instance, 20 percent of the national cocoa production is exclusively granted to local cocoa exporting companies.

Côte d’Ivoire has not conducted an investment policy review (IPR) through the OECD.  The WTO last conducted a Trade Policy Review in October 2017, which can be found at https://www.wto.org/english/tratop_e/tpr_e/tp462_e.htm.

UNCTAD published an Investment Policy Review for Côte d’Ivoire in February 2020, which can be found at https://unctad.org/webflyer/investment-policy-review-cote-divoire.

The Government of CDI provides information about sector policies and business opportunities in publicly available reports.  More information can be found at: https://www.cepici.gouv.ci/.  The National Development Plan 2021-2025 outlines the key sectors and priorities of the government regarding investment.

The CEPICI manages CDI’s online information portal containing all documents dedicated to business creation and registration (https://cotedivoire.eregulations.org/).  All the necessary documentation for registration is available online, however actual registration must be done in person. Further information on business registration is also available on CEPICI’s website (http://www.cepici.gouv.ci/).

Businesses can register at the CEPICI’s One-Stop Shop (Guichet Unique) in Abidjan.  The One-Stop Shop allows businesses to register with the commercial registrar (Registre du Commerce et du Crédit Immobilier), the tax authority (Direction Générale d’Impôts) and the social security institute (Caisse Nationale de Prévoyance Sociale).  The One-Stop Shop also publishes the legal notice of incorporation on CEPICI’s website.  All necessary documents for registration are also available on the website.  Registration takes between one and three days, while preparation of necessary documents can take more time.  The business licensing process, controlled by sector-specific governing bodies, is separate from the registration process.

Women have equal access to the registration process.  There have not been any reports of discrimination in that regard.

International financial institutions are recommending that government authorities better and more transparently address concerns from the private sector in the following general areas:

1) enhancing the regulatory framework, reducing bureaucratic red tape, and improving the provision of public sector services, for example by simplifying and harmonizing the process for issuing business licenses and approvals;

2) promoting digitalization, both in the provision of public services and in public finance management;

3)  reducing labor market rigidities by broadening professional training programs;

4)  safeguarding property rights, particularly with respect to ownership and transfer of land;

5)  deepening financial inclusion and facilitating access to financial markets, also via mobile systems and digital platforms; and

6)  reducing uncertainty in the timing of government payments.

Government authorities are stepping up efforts to strengthen macroeconomic statistics. The National Strategy for the development of statistics aims to broaden the competencies of the National Institute of Statistics, reinforce its independence, and create a national fund for the development of statistics.

Côte d’Ivoire does not promote or incentivize outward investment.  However, the government does not restrict domestic investors from investing abroad.

Croatia

1. Openness To, and Restrictions Upon, Foreign Investment

Croatia is generally open to foreign investment and the Croatian government continues to make efforts, through financial incentives, to attract foreign investors.  All investors, both foreign and domestic, are guaranteed equal treatment by law, with a handful of exceptions described below.  However, bureaucratic and political barriers remain.  Investors highlight that an unpredictable regulatory framework, lack of transparency, judicial inefficiencies, lengthy administrative procedures, lack of structural reforms, and unresolved property ownership issues all weigh heavily upon the investment climate.

Croatia is partnered with the World Bank through European Commission Directorate-General for Structural Reform Support on the “Croatia Business Environment Reform” project which intends to help Croatia implement various business reforms. The Ministry of Economy and Sustainable Development Directorate for Internationalization assists investors, including by offering services such as providing information on investment opportunities, offering support through all phases of business development, organizing tours of investment locations and arranging meetings, and promoting Croatia as an investment destination.  For more information, see:  http://investcroatia.gov.hr/ .  The Strategic Investment Act fast-tracks and streamlines bureaucratic processes for large projects valued at $10.7 million or more on the investor’s behalf.  Various business groups, including the American Chamber of Commerce, Foreign Investors’ Council, and the Croatian Employers’ Association, are in dialogue with the government about ways to make doing business easier and to keep investment retention as a priority.

Croatian law allows for all entities, both foreign and domestic, to establish and own businesses and to engage in all forms of remunerative activities.  Article 49 of the Constitution states all entrepreneurs have equal legal status.  However, the Croatian government restricts foreign ownership or control of services for a handful of strategic sectors:  inland waterways transport, maritime transport, rail transport, air to ground handling, freight-forwarding, publishing, ski instruction, and primary mandated healthcare.  Apart from these, the only regulatory requirements to market access involve occupational licensing requirements (architect, auditor, engineer, lawyer, and veterinarian, etc.), about which detailed information can be found at http://psc.hr/en/sectoral-requirements/ .  Business services such as consulting, marketing, creative industries, accounting (bookkeeping), and IT are not licensed. Relevant international comparison of the level of regulatory restrictiveness (including for Croatia and the U.S. which is represented by NY and TX) is available at https://www.oecd.org/economy/reform/indicators-of-product-market-regulation/ . Over 90 percent of the banking sector is foreign owned.

Croatia does not have a foreign investment screening mechanism, but the government designated the Ministry of Economy and Sustainable Development Internationalization Directorate as the “National Contact Point” for reviewing direct investments and responding to requests for information from EU Member States or the European Commission, per European Union Directive 2019/452.

The latest International Monetary Fund Article IV Staff Report from September 2021 includes a broad overview of economic and financial developments and is available at:

https://www.imf.org/en/Publications/CR/Issues/2021/09/10/Republic-of-Croatia-2021-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-465424 

The American Chamber of Commerce in Croatia publishes position papers on various topics related to the economy and investment climate, which can be found at: https://www.amcham.hr/en/position-papers-d207 .

The European Commission’s Country Report Croatia 2020 assesses the country’s economic situation and outlook: https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1584545612721&uri=CELEX%3A52020SC0510 .

B.  Prior to the COVID-19 pandemic, there were no civil society organizations that provided useful reviews of investment policy related concerns.  In March 2020, the Voice of Entrepreneurs business association was formed to advocate for economic measures and reforms to stimulate private sector growth.  The association has not yet published its policy recommendations.  

The Croatian government offers two e-government options for on-line business registration,  www.hitro.hr  and  start.gov.hr , both of which provide 24-hour access.  Start.gov.hr provides complete business registration for a limited liability company (d.o.o.), simple limited company (j.d.o.o.), or general business, without any need to physically enter a public administration office.  The procedure guarantees a short turnaround on requests and provides deadlines by which the company can expect to be registered.  The Start.gov.hr procedure eliminates fees for public notaries, proxies, seals and stamps, and reduces court registration fees by 50 percent.  Hitro.hr also provides on-line services but maintains offices in 60 Croatian cities and towns for those who want to register their business in person.

In 2021, the Global Enterprise Registration website ( www.GER.co ) rated Croatia’s business registration process 7 out of 10, up from 4 out of 10 in 2020.  The government pledged to improve conditions for business registration and continues to identify areas for removing burdensome regulations and processes.  Croatia’s business facilitation mechanism provides for equitable treatment to all interested in registering a business, regardless of gender or ethnicity.

The United Nations Conference on Trade and Development (UNCTAD) provides an outline of investment facilitation proposals at  https://investmentpolicy.unctad.org/country-navigator/53/croatia .

Croatian foreign direct investment totals approximately $85.84 million in the United States, according to Croatian National Bank figures.  The government does not promote or incentivize outward investment.  Croatia has no restrictions on domestic investors who wish to invest abroad.

Cyprus

1. Openness To, and Restrictions Upon, Foreign Investment

The ROC has a favorable attitude towards FDI and welcomes U.S. investors. There is no discrimination against U.S. investment; however, there are some ownership limitations and licensing restrictions set by law on non-EU investment in certain sectors, such as private land ownership, media, and construction (see Limits on Foreign Control, below). The ROC promotes FDI through a dedicated agency, Invest Cyprus, which is tasked with attracting FDI in the key economic sectors of shipping, education, real estate, tourism and hospitality, energy, investment funds, filming, and innovation and startups. Invest Cyprus is the first point of contact for investors, and provides detailed information on the legal, tax, and business regulatory framework. The ROC and Invest Cyprus also promote an ongoing dialogue with investors through a series of promotion seminars each year. The Cyprus Chamber of Commerce and Industry (CCCI) is a robust organization with country-specific bilateral chambers, including the American Chamber (AmCham Cyprus), that is dedicated to promoting FDI and serving the business interests of foreign companies and trade partners operating in Cyprus.

For more information:

Invest Cyprus
9 Makariou III Avenue
Severis Building, 4th Floor
1965 Nicosia, Cyprus
Tel: +357 22 441133
Fax: +357 22 441134
Email: info@investcyprus.org.cy
Website: https://www.investcyprus.org.cy 

Cyprus Embassy Trade Center – New York
13 East 40th Street
New York, NY 10016
Phone: (212) 213-9100Fax: (212) 213-9100
Website: https://www.cyprustradeny.org/ 

AREA ADMINISTERED BY TURKISH CYPRIOTS

Turkish Cypriots welcome FDI and are eager to attract investments, particularly those that will lead to the transfer of advanced technology and technical skills. Priority is also given to investments in export-oriented industries. There are no laws or practices that discriminate against FDI. The “Turkish Cypriot Investment Development Agency (YAGA)” provides investment consultancy services, guidance on the legal framework, sector specific advice, and information about investor incentives.

“Turkish Cypriot Investment Development Agency” (“YAGA”)
Tel: +90 392 – 22 82317
Website: https://investnorthcyprus.gov.ct.tr/ 

REPUBLIC OF CYPRUS

The ROC does not currently have a mandatory foreign investment screening mechanism that grants approval to FDI other than sector-specific licenses granted by relevant ministries. Invest Cyprus does grant approvals for investment under the film production incentive scheme. Invest Cyprus often refers projects for review to other agencies.

The following restrictions apply to investing in the ROC:

  • Non-EU entities (persons and companies) may purchase only two real estate properties for private use (two holiday homes or a holiday home and a shop or office). This restriction does not apply if the investment property is purchased through a domestic Cypriot company or a corporation elsewhere in the EU. U.S. investment in such companies is welcome.
  • Non-EU entities cannot invest in the production, transfer, and provision of electrical energy. The Council of Ministers may refuse granting a license for investment in hydrocarbons prospecting, exploration, and exploitation to a third-country national or company if that third country does not allow similar investment by Cyprus or other EU member states. ROC hydrocarbon exploration is currently led by two U.S. companies.
  • Individual non-EU investors may not own more than five percent of a local television or radio station, and total non-EU ownership of any single local TV or radio station is restricted to a maximum of 25 percent.
  • The right to register as a building contractor in Cyprus is reserved for citizens of EU member states. Non-EU entities are not allowed to own a majority stake in a local construction company. Non-EU physical persons or legal entities may bid on specific construction projects but only after obtaining a special license from the Council of Ministers.
  • Non-EU entities cannot invest directly in private tertiary education institutions but may do so through ownership of Cypriot or EU companies.
  • The provision of healthcare services on the island is subject to certain restrictions, applying equally to all non-residents.
  • The Central Bank of Cyprus’s prior approval is necessary before any individual person or entity, whether Cypriot or foreign, can acquire more than 9.99 percent of a bank incorporated in Cyprus.

AREA ADMINISTERED BY TURKISH CYPRIOTS

According to the “Registrar of Companies Office,” all non-Turkish Cypriot ownership of construction companies is capped at 49 percent. Currently, the travel agency sector is closed to foreign investment. Registered foreign investors may buy property for investment purposes but are limited to one parcel or property. Foreign natural persons also have the option of forming private liability companies, and foreign investors can form mutual partnerships with one or more foreign or domestic investors.

Nothing to report.

REPUBLIC OF CYPRUS

The Ministry of Energy, Commerce and Industry (MECI) provides a “One Stop Shop” business facilitation service; contact details below. The One-Stop-Shop offers assistance with the logistics of registering a business in Cyprus to all investors, regardless of origin and size. Additionally, since September 2020, MECI offers a Fast Track Business Activation mechanism to provide efficient business registration services to eligible foreign investors who want to establish a physical presence on the island. This program has already generated interest from abroad, attracting several firms in the technology, IT, and communications sectors.

One-Stop-Shop & Point of Single Contact
Ministry of Energy, Commerce, and Industry (MECI)
13-15 Andreas Araouzos
1421 Nicosia, Cyprus
Tel. +357 22 409318 or 321
Fax: +357 22 409432
Email 1: onestopshop@meci.gov.cy
Email 2: psccyprus@meci.gov.cy 
Website: www.businessincyprus.gov.cy 

MECI’s Department of the Registrar of Companies and Official Receiver (DRCOR) provides the following services: Registration of domestic and overseas companies, partnerships, and business names; bankruptcies and liquidations; and trademarks, patents, and intellectual property matters.

Domestic and foreign investors may establish any of the following legal entities or businesses in the ROC:

  • Companies (private or public);
  • General or limited partnerships;
  • Business/trade name;
  • European Company (SE); and
  • Branches of overseas companies.

The registration process takes approximately two working days and involves completing an application for approval/change of name, followed by the steps outlined in the following link: http://www.businessincyprus.gov.cy/mcit/psc/psc.nsf/All/A2E29870C32D7F17C2257857002E18C9?OpenDocument. 

At the end of 2021, there were a total of 203,545 companies registered in the ROC, 12,604 of which had been registered in 2021 (for more statistics on company registrations, please see: https://www.companies.gov.cy/en/ ).

In addition to registering a business, foreign investors, like domestic business owners, are required to obtain all permits that may be necessary under Cypriot law. At a minimum, they must obtain residence and employment permits, register for social insurance, and register with the tax authorities for both income tax and Valued Added Tax (VAT). In order to use any building or premises for business, including commerce, industry, or any other income-earning activity, one also needs to obtain a municipal license. Additionally, town planning or building permits are required for building new offices or converting existing buildings. There are many sector-specific procedures. Information on all the above procedures is available online at the link above.

The World Bank’s 2020 Doing Business report ( http://www.doingbusiness.org/rankings)  ranked Cyprus 54th out of 190 countries for ease of doing business. Among the ten sub-categories that make up this index, Cyprus performed best in the areas of protecting minority investors (21/190) and paying taxes (29/190), and worst in the areas of enforcing contracts (142/190) and dealing with construction permits (125/190). Cyprus has recorded small gains in almost all subcategories since the 2019 report, with a substantial improvement in the area of paying taxes, achieving a small overall climb in its ranking since last year. Using another metric, in the Global Competitiveness Index, issued by the World Economic Forum, Cyprus maintained its ranking of 44th out of 141 countries in the 2019 edition. The two areas where Cyprus performed the worst in this report were its small market size and relatively low innovation capability. Since 2020, the World Bank Group has discontinued the Doing Business project and is now formulating a new approach to assessing the business and investment climate in economies worldwide.

The ROC follows the EU definition of micro-, small- and medium-sized enterprises (MSMEs), and foreign-owned MSMEs are free to take advantage of programs in Cyprus designed to help such companies.

Foreign investors can take advantage of the services and expertise of Invest Cyprus, an agency registered under the companies’ law and funded mainly by the state, dedicated to attracting investment.

Invest Cyprus
9A Makarios III Ave
Severis Bldg., 4th Flr.
1065 Nicosia
Tel. +357 22 441133
Fax: +357 22 441134
Email: info@investcyprus.org.cy 
Website: http://www.investcyprus.org.cy/ 

Additionally, the Association of Large Investment Projects, under the Cyprus Chamber of Commerce and Industry, can provide useful information on large ongoing investment projects:

Association of Large Investment Projects

38 Grivas Dhigenis Ave. & 3 Deligiorgis Str.,
P.O.Box 21455
1509 Nicosia
Tel: +357 22 889890
Fax: +357 22 667593
Email: bigprojects@ccci.org.cy 

Lastly, the Cyprus Country Profiler website offers some useful background on the ROC: https://www.cyprusprofile.com/ 

AREA ADMINISTERED BY TURKISH CYPRIOTS

Information available on the “Registrar of Companies’” website is available only in Turkish: http://www.rkmmd.gov.ct.tr/.   An online registration process for domestic or foreign companies does not exist and registration needs to be completed in person.

The “YAGA” website ( https://investnorthcyprus.gov.ct.tr /) provides explanations and guides in English on how to register a company in the area administrated by Turkish Cypriots.

As of March 2021, the “Registrar of Companies Office” statistics indicated there were 23,133 registered companies, 429 foreign companies; and 516 offshore companies.

The area administered by Turkish Cypriots defines MSMEs as entities having fewer than 250 employees. There are several grant programs financed through Turkish aid and EU aid targeting MSMEs.

The Turkish Cypriot Chamber of Commerce (KTTO) publishes an annual Competitiveness Report on the Turkish Cypriot economy, based on the World Economic Forum’s methodology. KTTO’s 2019-2020 report ranked Northern Cyprus 107 among 141 economies, dropping eighteen places from its ranking in 2019. KTTO has not published reports since 2020.

For more information and requirements on establishing a company, obtaining licenses, and doing business visit:

“Turkish Cypriot Investment Development Agency” (“YAGA”)
Tel: +90 392 – 22 82317
Website: https://investnorthcyprus.gov.ct.tr/ 

Turkish Cypriot Chamber of Commerce (KTTO)
https://www.ktto.net/en/ 
Tel: +90 392 – 228 37 60 / 228 36 45
Fax: +90 392 – 227 07 82

REPUBLIC OF CYPRUS

The ROC does not restrict outward investment, other than in compliance with international obligations such as specific UN Security Council Resolutions. In terms of programs to encourage investment, businesses in Cyprus have access to several EU programs promoting entrepreneurship, such as the European Commission’s Next Generation EU economic recovery package, or the Erasmus program for Young Entrepreneurs, in addition to the European Investment Bank’s guarantee facilities for SMEs for projects under USD 4.8 million (EUR 4 million).

AREA ADMINISTERED BY TURKISH CYPRIOTS

Turkish Cypriot “officials” do not incentivize or promote outward investment. The Turkish Cypriot authorities do not restrict domestic investors.

Czechia

1. Openness To, and Restrictions Upon, Foreign Investment 

The Czech government actively seeks to attract foreign investment via policies that make the country a competitive destination for companies to locate, operate, and expand.  The Czech investment incentives legislation (amended Act No. 72/2000 Coll., effective as of September 6, 2019) creates incentive payments for high value-added investments that focus on R&D and create jobs for university graduates.  The law eliminates incentives for investments targeting low-skilled labor and establishes more favorable rules for technological investments in sectors such as aerospace, information and communication technology, life sciences, nanotechnology, and advanced segments of the automotive industry.  In addition, due to COVID-19, the government approved November 30, 2020, an amendment to this statute, which enables producers of personal protective equipment, medical devices, and pharmaceuticals to more easily obtain investment incentives.

CzechInvest, the government investment promotion agency that operates under the Ministry of Industry and Trade (MOIT), negotiates on behalf of the Czech government with foreign investors.  In addition, CzechInvest provides assistance during implementation of investment projects, consulting services for foreign investors entering the Czech market, support for suppliers, and assistance for the development of innovative start-up firms.  There are no laws or practices that discriminate against foreign investors.

The Czech Republic is a recipient of substantial FDI.  Total foreign investment in the Czech Republic (equity capital + reinvested earnings + other capital) equaled USD 192.5 billion at the end of 2020, compared to USD 171.3 billion in 2019.

As a medium-sized, open, export-driven economy, the Czech market is strongly dependent on foreign demand, especially from EU partners.  In 2021, 84 percent of Czech exports went to fellow EU member states, with 32.4 percent to the Czech Republic’s largest trading partner, Germany, according to the Czech Statistical Office.  Since emerging from recession in 2013, the economy had enjoyed some of the highest GDP growth rates of the European Union until the COVID-19 outbreak.  While GDP declined by 5.6 percent in 2020, it rebounded in 2021 and grew by 3.3 percent.  The Ministry of Finance is forecasting 3.1 percent growth for 2022.

The Czech Republic has no plans to adopt the euro as it believes having its own currency and independent monetary policy is helpful for managing economic crises such as the one caused by the COVID-19 pandemic.

The slow pace of legislative and judicial reforms has posed obstacles to investment, competitiveness, and company restructuring.  The Czech government has harmonized its laws with EU legislation and the acquis communautaire.  This effort involved positive reforms of the judicial system, civil administration, financial markets regulation, protection and enforcement of intellectual property rights, and in many other areas important to investors.

While there have been many success stories involving American and other foreign investors, a handful have experienced problems, for example in the media industry.  Both foreign and domestic businesses voice concerns about corruption.

Long-term economic challenges include dealing with an aging population and diversifying the economy away from manufacturing toward a more high-tech, services-based, knowledge economy.

Foreign individuals or entities can operate a business under the same conditions as Czechs.  Foreign entities need to register their permanent branches with the Czech Commercial Register.  Some professionals, such as architects, physicians, lawyers, auditors, and tax advisors, must register for membership in the appropriate professional chamber.  In general, licensing and membership requirements apply equally to foreign and domestic professionals.

In response to the European Commission’s September 2017 investment screening directive, the Czech government adopted foreign investment screening legislation.  The law came into effect on May 1, 2021, and gives the government the ability to review greenfield investments and acquisitions by non-EU foreign investors.  The law allows the Ministry of Industry and Trade (MOIT) to screen FDI in virtually any sector of the Czech economy but specifies four high-risk sectors for which investment screening is mandatory: critical infrastructure, ICT systems used for critical infrastructure, military equipment, and sensitive dual use items.  Outside these critical sectors, non-EU investors are under no obligation to report acquisitions or greenfield investments, but MOIT can retroactively review investments at any point within five years if security concerns arise.  Screening of acquisitions is triggered when a non-EU buyer attempts to make a purchase that would give it at least 10 percent of the voting rights of a Czech company.  However, screening is possible at an even lower threshold in cases where the foreign investor has additional means of exerting potentially malign control over a Czech company, such as through appointment of staff to key positions.  Furthermore, the law gives regulators considerable leeway to designate an investor as “non-EU” if the investor is “indirectly controlled” by non-EU business or individuals.

As of early 2012, U.S. and other non-EU nationals could purchase real estate, including agricultural land, in the Czech Republic without restrictions.  However, following the implementation of the investment screening law as of May 1, 2021, land purchases by non-EU investors may be screened if located near critical infrastructure, such as military installations.  Enterprises are permitted to engage in any legal activity with the previously noted limitations in sensitive sectors.  The right of foreign and domestic private entities to establish and own business enterprises is guaranteed by law.  Laws on auditing, accounting, and bankruptcy are in force, including the use of international accounting standards (IAS).

The OECD last conducted an economic survey of the government in 2020.

Individuals must complete a number of bureaucratic requirements to set up a business or operate as a freelancer or contractor.  MOIT provides an electronic guide for obtaining a business license.  The guide offers step-by-step assistance, including links to related legislation and statistical data, and specifying authorities with whom to work (such as business registration, tax administration, social security, and municipal authorities).  The guide is available at: https://www.mpo.cz/en/business/licensed-trades/guide-to-licensed-trades/.  MOIT also has established regional information points to provide consulting services related to doing business in the Czech Republic and EU.  A list of contact points is available at:  https://www.businessinfo.cz/en/starting-a-business/starting-up-points-of-single-contact-psc/addresses-points-of-single-contact-psc/.

The average time required to start a business is 25 days according to the World Bank’s ‘Doing Business’ Index.  The Czech Republic’s Business Register is publicly accessible and provides details on business entities including legal addresses and major executives.  An application for an entry into the Business Register can be submitted in a hard copy, via a direct entry by a public notary, or electronically, subject to meeting online registration criteria requirements.  The Business Register is publicly available at:  https://or.justice.cz/ias/ui/rejstrik.  The Czech Republic’s Trade Register is an online information system that collects and provides information on entities facilitating small trade and craft-oriented business activities, as specifically determined by related legislation.  It is available online at:  http://www.rzp.cz/eng/index.html.

The Czech government does not incentivize outward investment.  The volume of outward investment is lower than incoming FDI.  According to the latest data from the Czech National Bank, Czech outward investments amounted to USD51.3 billion in 2020, compared to inward investments of USD 195.2 billion.  However, according to the Export Guarantee and Insurance Corporation (EGAP), Czech companies increasingly invest abroad to get closer to their customers, save on transport costs, and shorten delivery times.  As part of EU sanctions, there is a total ban on EU investment in North Korea as of 2017.

Democratic Republic of the Congo

1. Openness To, and Restrictions Upon, Foreign Investment

The ascension of Felix Tshisekedi to the Presidency in January 2019 and his welcoming attitude toward foreign direct investment (FDI), particularly from the United States, have raised hopes that the GDRC can impose and monitor investor-friendly policies. FDI-friendly laws exist, but the judicial system is slow to protect investors’ rights and is susceptible to political pressure and corruption. Investors hope that Tshisekedi can create a more favorable environment by improving the rule of law and tackling corruption. The DRC’s rich endowment of natural resources, large population, and generally open trading system offer significant potential opportunities for U.S. investors. For more than a decade, the DRC has undertaken reforms related to investment in order to make its business environment competitive and attractive including reforms to the investment code, the mining code, the insurance code, the agricultural Act, the Act on the liberalization of electricity, and the telecommunications code. The GDRC has also promoted improvements in the tax, customs, parafiscal, non-tax and foreign exchange regimes, which are applicable to collaboration agreements and cooperation projects, as well as the decree on the strategic partnership on value chains, the Industrial Property Act, the Public-Private Partnership Act, the Competition Act, and the Special Economic Zones Act.

The main regulations governing FDI are found in the Investment Code Act (No. 004/2002 of February 21, 2002). Current regulations reserve the practice of small-scale commerce and retail commerce in DRC to nationals and prohibit majority ownership by foreigners of agricultural enterprises. The ordinance of “August 8, 1990” clearly states that “small business may only be carried out by Congolese”. Foreign investors must limit themselves to import trade and wholesale and semi-wholesale trade. Investors fear that the ban on foreign agricultural ownership will stifle any attempt to revive the agrarian sector.

The National Investment Promotion Agency (ANAPI) is the official investment agency, providing investment facilitation services for initial investments above $200,000. It is mandated to promote the positive image of the DRC and specific investment opportunities; advocate for the improvement of the business climate in the country; and provide administrative support to new foreign investors who decide to establish or expand their economic activities on the national territory. More information is available at https://www.investindrc.cd/ .

The GDRC maintains an ongoing dialogue with investors to hear their concerns. There are several public and private sector forums that address the government on the investment climate in specific sectors. In 2019, the GDRC created the Business Climate Unit (CCA) to monitor and improve the business enabling environment in the DRC, and to interface with the business community. In June 2020, the CCA presented a roadmap for reforms. In December 2021, the CCA developed a digital tool for monitoring and evaluating reforms and missions within the public administration, to allow the highest authorities, including the President of the Republic and the Prime Minister, to follow in real time the progress of the implementation of reforms by the various ministers. The Public-Private mining group Financial and Technical Partners (PTF) represents countries with significant mining investments in the DRC. On March 1, 2022, the GDRC created, by decree, the Agency for the Steering, Coordination and Monitoring of Cooperation Agreements between the DRC and its Private Partners (APCSC). This agency will oversee the implementation of cooperation agreements that the DRC has concluded with private companies, particularly in the areas of basic infrastructure and natural resources. The APCSC serves as an interface between the various parties and entities interested in projects resulting from collaboration or cooperation agreements in basic infrastructure and natural resources, including the GDRC, private companies and/or groups of companies, as well as any joint venture or monitoring structure created for the purpose of exploring, exploiting, or marketing natural resources and/or carrying out infrastructure work. The Federation of Congolese Enterprises (FEC), a private sector organization that partners with the government and workers’ unions, maintains a dialogue on business interests with the government.

The GDRC provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity.

Foreign ownership or control is possible except in certain excepted sectors. The DRC law reserves small-scale commerce and retail trade to Congolese nationals and there is a foreign ownership limit of 49 percent for agricultural concerns, which limits agricultural investment. Many investors note that in practice the GDRC requires foreign investors to hire local agents and participate in joint ventures with the government or local partners. The new telecommunications law enacted in 2022 includes a 25 percent ownership requirement.

Some foreign investors in the mining sector note that the 2018 mining code raised royalty rates from two to ten percent, raising tax rates on “strategic” metals, and imposing a surcharge on the “super profits” of mining companies. The code also removed a stability clause that protected investors from any new taxes or duties for ten years. The Tshisekedi government has indicated that it is prepared to reopen discussions on the mining code.

The GDRC does not maintain an organization to screen inbound investment. The Presidency and the ministries serve this purpose de facto. In May 2021 President Tshisekedi announced his intention to review the content of and compliance with mining contracts signed under former President Kabila, a process that is still ongoing.

In the past five years, has the GDRC not been subject to a third-party investment policy review (IPR) through a multilateral organization such as the Organization for Economic Co-operation and Development (OECD), World Trade Organization (WTO), United Nations Conference on Trade and Development (UNCTAD) or the UN Working Group on Business and Human Rights. Cities with high custom clearance traffic use Sydonia  https://asycuda.org/wp-content/uploads/Etude-de-Cas-SYDONIA-Contr%C3%B4le-de-la-Valeur-RDC.pdf , which is an advanced software system for custom administrations in compliance with ASYCUDA WORLD. (ASYCUDA is a large technical assistance software program recommended by UNCTAD for custom clearance management.)

The international NGO The Sentry published a report in November 2021 on a multi-million-dollar embezzlement and bribery operation using money intended to support infrastructure development. The NGO Global Witness reported in 2019 that a DRC-based bank was involved in laundering money for Congolese officials.

The GDRC operates a “one-stop-shop” for Business Creation (GUCE) that brings together all the government entities involved in the registration of a company in the DRC with an electronic tracking system of the business creation file online. The goal is to permit the quick and simple registration of companies through one office in one location. In October 2020, President Tshisekedi instructed the government to restructure GUCE in order to ease its work with the various state organizations involved in its operation. More information is available at https://guichetunique.cd/ .

In December 2021, the GDRC attempted to make the GUCE more efficient for companies by implementing a system that allows for online business registration. Using the GUCE’s online portal, companies fill out a “single form,” which integrates all of the services involved in the process of creating a company including the Notary’s Office, the Registry of the Commerce and Personal Property Credit Register, the Administration of Tax Authority (DGI), a Center for Ordination of the General Directorate of Administrative, State, Judicial and Participation Revenues (DGRAD), the Administration of the National Economy, the National Fund of Social Security (CNSS), the Administration of the Environment, the National Office of Employment (ONEM), the National Institute of Professional Preparation (INPP), the General Inspection of Work; and a representation of Municipal Entities. Businesses may also need to obtain an operating permit as required by some city councils. The registration process should now take three days, but in practice it can take much longer. Some businesses have reported that the GUCE has significantly shortened and simplified the overall business registration process.

The GDRC does not promote or incentivize outward investment.

There are currently no government restrictions preventing domestic investors from investing abroad, and there is currently no blacklist of countries with which domestic investors are prevented from doing business.

Denmark

1. Openness To, and Restrictions Upon, Foreign Investment

As a small country with an open economy, Denmark is highly dependent on foreign trade and investment. Exports comprise the most significant component (60 percent) of GDP. The Economist Intelligence Unit (EIU) ranks Denmark as the world’s sixth-most attractive business environment and the leading nation in the Nordic region. The EIU characterizes Denmark’s business environment as reflecting excellent infrastructure, a friendly policy towards private enterprise and competition, low bureaucracy, and a well-developed digital sector. Principal concerns include low productivity growth, a high personal tax burden, and potential capacity constraints on the labor market. Overall, however, operating conditions for companies are broadly favorable. Denmark ranks highly in multiple categories, including its political and institutional environment, macroeconomic stability, foreign investment policy, private enterprise policy, financing, and infrastructure.

As of February 2022, the EIU rated Denmark an “AA” country on its Country Risk Service, noting the country is on the “cusp of an upgrade.” Denmark ranked tenth out of 140 on the World Economic Forum’s 2019 Global Competitiveness Report and sixth on the EIU 2021 Democracy Index. Denmark has an AAA rating from Standard & Poor’s, Moody’s, and Fitch Group. “Invest in Denmark,” an agency of the Ministry of Foreign Affairs and part of the Danish Trade Council, provides detailed information to potential investors. Invest in Denmark has prioritized six sectors in its strategy to attract foreign investment: tech, cleantech, life sciences, food, maritime, and design and innovation. The website for the agency is https://investindk.com .

As an EU member state, Denmark is bound by EU rules on the free movement of goods, capital, persons, and certain services. Denmark welcomes foreign investment and does not discriminate between EU and other investors.

Denmark’s central and regional governments actively encourage foreign investment on a national-treatment basis, with relatively few foreign control limits, nor any reported bias against foreign companies from municipal or national authorities when compared to domestic investors. A foreign investment screening mechanism came into force July 1, 2021, to prevent threats to national security and public order from foreign direct investment, but there are otherwise no additional permits required by foreign investors. The mechanism requires mandatory notification for five sectors and allows for voluntary notification for all sectors. The sectors requiring mandatory notification are defense, IT security and processing of classified information, companies producing dual-use items, critical technology, and critical infrastructure. Mandatory notification applies for investments reaching 10 percent ownership or control, and voluntary notification can be made for investments where the company reaches 25 percent ownership or control. A pre-screening process exists to determine if the investment is in the critical technology or critical infrastructure sector. Notification and guidance all take place online, handled by the Danish Business Authority: https://businessindenmark.virk.dk/topics/Economy/Investments/ 

A foreign or domestic private entity may freely establish, own, and dispose of a business enterprise in Denmark. The capital requirement for establishing a corporation (Aktieselskab A/S) or Limited Partnership (Partnerselskab P/S) is $63,000 (DKK 400,000) and for establishing a private limited liability company (Anpartsselskab ApS) $6.300 (DKK 40,000). In 2019, the government lowered the capital requirements to set up a private limited liability company, which brought Denmark more in line with other Scandinavian countries. No restrictions apply regarding the residency of directors and managers.

Since October 2004, any private entity may establish a European public limited company (SE company) in Denmark. The legal framework of an SE company is subject to Danish corporate law, but it is possible to change the nationality of the company without liquidation and re-founding. An SE company must be registered at the Danish Business Authority if its official address is in Denmark. The minimum capital requirement is $137,000 (EUR 120,000).

Danish professional certification and/or local Danish experience are required to provide professional services in Denmark. In some instances, Denmark may accept equivalent professional certification from other EU or Nordic countries on a reciprocal basis. EU-wide residency requirements apply to the provision of legal and accountancy services.

In addition to investment screening cases, ownership restrictions apply to the following sectors:

Oil and Gas: Requires 20 percent Danish government participation on a “non-carried interest” basis.

Defense: The Minister of Justice must approve foreign investment in defense companies doing business in Denmark if such investment exceeds 40 percent of the equity or more than 20 percent of the voting rights, or if the investment gives the foreign interest a controlling share. This approval is generally granted unless there are security or other foreign policy considerations weighing against approval.

Maritime Services: There are foreign (non-EU resident) ownership requirements on Danish-flagged vessels other than those owned by an enterprise incorporated in Denmark. Ships owned by Danish citizens, Danish partnerships, or Danish limited liability companies are eligible for registration in the Danish International Ships Register (DIS). Vessels owned by EU or European Economic Area (EEA) entities with a genuine, demonstrable link to Denmark are also eligible for registration. Foreign companies with a significant Danish interest can register a ship in the DIS.

Civil Aviation: For an airline to be established in Denmark, it must have majority ownership and be effectively controlled by an EU state or a national of an EU state, unless otherwise provided for through an international agreement to which the EU is a signatory.

Financial Services: Non-resident financial institutions may engage in securities trading on the Copenhagen Stock Exchange only through subsidiaries incorporated in Denmark.

Real Estate: Ownership of holiday homes, also known as summer houses, is restricted to Danish citizens. Such homes are generally located along the Danish coastline and may not be used as full-year residences. On a case-by-case basis, the Ministry of Justice may waive the citizenship requirement for those with close familial, linguistic, cultural, or other close connections to Denmark or the specific property. In general, EU and EEA citizens may purchase full-year residential property or real estate that supports self-employment without obtaining prior authorization from the Ministry of Justice. Companies domiciled in an EU or an EEA Member State that have set up or will set up subsidiaries or agencies or will provide services in Denmark may, in general, also purchase real property in Denmark without prior authorization. Non-EU/EEA citizens must obtain authorization from the Ministry of Justice to purchase real estate in Denmark, which is generally granted to those with permanent residence in Denmark or who have lived in Denmark for a consecutive period of five years.

The most recent United Nations Conference on Trade and Development (UNCTAD) review of Denmark occurred in March 2013 and is available here:  unctad.org/en/PublicationsLibrary/webdiaeia2013d2_en.pdf . There is no specific mention of Denmark in the latest WTO Trade Policy Review of the European Union, revised in December 2019.

The EU Commission’s European Semester documents for Denmark are available here:  ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/european-semester/european-semester-your-country/denmark_en   A 2017 Foreign Investment Regulation review by DLA Piper can be found here:  www.dlapiper.com/~/media/files/insights/publications/2017/11/denmark.pdf

Denmark ranked first out of 180 in Transparency International’s 2021 Corruption Perceptions Index. In the IMD 2021 World Competitiveness Ranking, Denmark ranked third out of 64 countries. The World Intellectual Property Organization (WIPO) ranked Denmark ninth out of 132 in its 2021 Global Innovation Index.

The Danish Business Authority (DBA) is responsible for business registrations in Denmark. As a part of the DBA, “Business in Denmark” provides information on relevant Danish rules and online registrations to foreign companies in English. The Danish business registration website, www.virk.dk , is the principal digital tool for licensing and registering companies in Denmark and offers a business registration process that is clear and complete.

Registration of sole proprietorships and partnerships is free of charge. For other types of businesses, online registration costs $106 (DKK 670). Registration by email or mail costs $341 (DKK 2,150).

The process for establishing a new business is distinct from that of registration. The Ministry of Foreign Affairs’ “Invest in Denmark” program provides a step-by-step guide to establishing a business at https://investindk.com/publications/step-by-step-guide-to-do-business-in-denmark , along with other relevant resources at https://investindk.com/our-services/how-to-set-up-a-business-in-denmark . The services are free of charge and available to all investors, regardless of country of origin.

The processing time for establishing a new business varies depending on the chosen business entity. Establishing a Danish private limited liability company (ApS), for example, generally takes four to six weeks for a standard application. Establishing a sole proprietorship (Enkeltmandsvirksomhed) is more straightforward, with processing generally taking about one week.

Those providing temporary services in Denmark must provide their company details to the Registry of Foreign Service Providers (RUT). The website ( www.virk.dk ) provides English guidance on registering a service with RUT. A public digital signature, referred to as a NemID or its replacement MitID, is required for those wishing to register a foreign company in Denmark. A CPR number (a 10-digit personal identification number) and valid identification are needed to obtain a NemID/MitID. Danish citizenship is not a requirement.

Denmark defines small enterprises as those with fewer than 50 employees. Annual revenue or the yearly balance sheet total must be lower than $14.1 million (DKK 89 million) or $7.0 million (DKK 44 million), respectively. Medium-sized enterprises cannot have more than 250 employees. Limits on annual revenue or the yearly balance sheet total are $49.7 million (DKK 313 million) or $24.8 million (DKK 156 million).

Danish companies are not restricted from investing abroad, and Danish outward investment has exceeded inward investments for more than a decade.

Djibouti

1. Openness To, and Restrictions Upon, Foreign Investment

Djibouti’s laws encourage FDI, with the government as a driving force behind Djibouti’s economic growth. Faced with an unemployment rate of over 47%, FDI is expected to generate jobs. There are no laws, practices, or mechanisms that discriminate against foreign investors. Navigating the bureaucracy, however, can be complicated. FDI is encouraged by policy and foreign companies are often able to negotiate favorable tax terms on a case-by-case basis.

The government is gradually opening public sector entities, including state owned utilities, to private investment. In 2021 the government invited proposals for a strategic investor in the state-owned telecommunications monopoly. The energy sector remains open to competition through power purchase agreements; however, the state-owned electric utility retains all rights to the transmission and distribution of electricity. This liberalization of production has resulted in the private development of wind, solar, and waste to energy resources.

Djibouti’s National Investment Promotion Agency (NIPA), created in 2001, promotes private-sector investment, facilitates investment operations, and works to modernize the country’s regulatory framework. NIPA assists foreign and domestic investors by disseminating information and streamlining administrative procedures. Since 2017, NIPA’s one-stop-shop, which houses several agencies under one roof, has simplified business registration. NIPA has identified several priority sectors for investment, including infrastructure and renewable energy.

The Secretariat of State in charge of Investment and Private Sector Development, established in May 2021, is in charge of implementing the business climate policy, investment promotion and private sector development. This agency works in coordination with the Ministry of Economy and Finance. It ensures that the business environment is internationally competitive and conducive to private initiatives. It identifies administrative reforms that remove obstacles to the proper functioning of the private sector.

Foreign and domestic private entities have equal rights in establishing and owning business enterprises and engaging in all forms of remunerative activity. Furthermore, foreign investors are not required by law to have a local partner except in the insurance industry, and then, only if the company is registered as a local company and not as a branch of an existing foreign company. Nevertheless, some foreign companies choose to have a local partner to help them better navigate the local bureaucracy and cultural sensitivities. There is no established screening process for FDI.

The OECD, WTO, and the UNCTAD have not conducted an investment policy review (IPR) for Djibouti in the last five years. The Business and Human Rights Resource Center conducted a review in 2022 of Djibouti’s Doraleh Multipurpose Port (DMP) which focused on the DMP’s financing by China Eximbank.

The government of Djibouti has facilitated the registration of business by reducing the capital needed for investment, simplifying the formalities needed to register and simplifying certain tax procedures. The most important facilitation effort is the one-stop-shop, or Guichet Unique, managed by NIPA. The Guichet Unique (http://www.guichet-unique.dj ) brings together all the agencies with which a company must register.

Typically, a company registers with the following Djiboutian offices: Office of Intellectual Property, Tax office, and the Social Security office. Online registration is not possible; the normal registration process takes 14 days, according to the World Bank. In Djibouti, new businesses must have every document notarized to begin operations.

The government neither promotes nor restricts outward investment.

Dominica

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of Dominica strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on local citizens.

Through the Invest Dominica Authority (IDA), the government instituted several investment incentives for businesses considering locating in Dominica.  Government policies provide liberal tax holidays, duty-free import of equipment and materials, exemption from value added tax on some capital investments, and withholding tax exemptions on dividends, interest payments, and some external payments and income.  The IDA additionally provides support to approved citizenship by investment projects.

The IDA launched a new Investment Promotion Strategy in 2021.  The new strategy is focused on four sectors: agriculture and agri-business, renewable energy, tourism, and knowledge services such as business processing operations.  Other sectors include film, music, and video production, manufacturing, bulk water export and bottled water operations, medical and nursing schools, and English language training services.  The government continuously reviews these sectors. While these sectors are priorities, the government broadly welcomes FDI.

Local laws do not place limits on foreign control in Dominica.  Foreign investment in Dominica is not subject to restrictions, and foreign investors are entitled to receive the same treatment as nationals of Dominica. Foreign investors are entitled to hold up to 100 percent of their investment.  However, there is a requirement for foreign investors seeking to purchase property for residential or commercial purposes to obtain an Alien Landholders License. Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.

The OECS, of which Dominica is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

The IDA is Dominica’s main business facilitation unit.  It facilitates foreign direct investment into priority sectors and advises the government on the formation and implementation of policies and programs to attract investment in Dominica.  The IDA provides business support services and market intelligence to all investors.  It offers an online tool useful for navigating laws, rules, procedures, and registration requirements for foreign investors.  Its website is  http://investdominica.com .

All potential investors applying for government incentives must submit their proposals for review by the IDA to ensure the project is consistent with the national interest and provides economic benefits to the country.

The Companies and Intellectual Property Office (CIPO) maintains an e-filing portal for most of its services, including company registration on its website.  However, this only allows for the preliminary processing of applications prior to the investor physically making a payment at the Supreme Court office.  Investors are advised to seek the advice of a local attorney prior to starting the process.  Further information is available at  http://www.cipo.gov.dm .

Businesses must register with CIPO, the Tax Authority, and the Social Services Institute. The general practice for registration is to retain an attorney who prepares all the relevant incorporation documents.

Local laws do not place any restrictions on domestic investors seeking to do business abroad. Local companies in Dominica are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

Dominica

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of Dominica strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on local citizens.

Through the Invest Dominica Authority (IDA), the government instituted several investment incentives for businesses considering locating in Dominica.  Government policies provide liberal tax holidays, duty-free import of equipment and materials, exemption from value added tax on some capital investments, and withholding tax exemptions on dividends, interest payments, and some external payments and income.  The IDA additionally provides support to approved citizenship by investment projects.

The IDA launched a new Investment Promotion Strategy in 2021.  The new strategy is focused on four sectors: agriculture and agri-business, renewable energy, tourism, and knowledge services such as business processing operations.  Other sectors include film, music, and video production, manufacturing, bulk water export and bottled water operations, medical and nursing schools, and English language training services.  The government continuously reviews these sectors. While these sectors are priorities, the government broadly welcomes FDI.

Local laws do not place limits on foreign control in Dominica.  Foreign investment in Dominica is not subject to restrictions, and foreign investors are entitled to receive the same treatment as nationals of Dominica. Foreign investors are entitled to hold up to 100 percent of their investment.  However, there is a requirement for foreign investors seeking to purchase property for residential or commercial purposes to obtain an Alien Landholders License. Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.

The OECS, of which Dominica is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

The IDA is Dominica’s main business facilitation unit.  It facilitates foreign direct investment into priority sectors and advises the government on the formation and implementation of policies and programs to attract investment in Dominica.  The IDA provides business support services and market intelligence to all investors.  It offers an online tool useful for navigating laws, rules, procedures, and registration requirements for foreign investors.  Its website is  http://investdominica.com .

All potential investors applying for government incentives must submit their proposals for review by the IDA to ensure the project is consistent with the national interest and provides economic benefits to the country.

The Companies and Intellectual Property Office (CIPO) maintains an e-filing portal for most of its services, including company registration on its website.  However, this only allows for the preliminary processing of applications prior to the investor physically making a payment at the Supreme Court office.  Investors are advised to seek the advice of a local attorney prior to starting the process.  Further information is available at  http://www.cipo.gov.dm .

Businesses must register with CIPO, the Tax Authority, and the Social Services Institute. The general practice for registration is to retain an attorney who prepares all the relevant incorporation documents.

Local laws do not place any restrictions on domestic investors seeking to do business abroad. Local companies in Dominica are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

Dominican Republic

1. Openness To, and Restrictions Upon, Foreign Investment

The Dominican Republic presents both opportunities and challenges for foreign investment. The government strongly promotes inward FDI and has prioritized creating a sound enabling environment for foreign investors. While the government has established formal programs to attract FDI, a lack of clear rules and uneven enforcement of existing rules can lead to difficulties. The approval in 2021 of a National Competitiveness Strategy, including the formation of a National Competitiveness Council, seeks to respond to the indicators of the Global Competitiveness Index of the World Economic Forum, and should help address some of these concerns.

The Dominican Republic provides tax incentives for investment in tourism, renewable energy, film production, Haiti-Dominican Republic border development, and the industrial sector. The country is also a signatory of CAFTA-DR, which mandates non-discriminatory treatment, free transferability of funds, protection against expropriation, and procedures for the resolution of investment disputes. However, some foreign investors indicate that the uneven enforcement of regulations and laws, or political interference in legal processes, creates difficulties for investment.

There are two main government agencies responsible for attracting foreign investment, the Export and Investment Center of the Dominican Republic (CEI-RD) and the National Council of Free Trade Zones for Export (CNZFE). CEI-RD promotes foreign investment and aids prospective foreign investors with business registration, matching services, and identification of investment opportunities. It publishes an annual “Investment Guide of the Dominican Republic,” highlighting many of the tools, incentives, and opportunities available for prospective investors. The CEI-RD also oversees “ProDominicana,” a branding and marketing program for the country launched in 2017 that promotes the DR as an investment destination and exporter. CNZFE aids foreign companies looking to establish operations in the country’s 79 free trade zones for export outside Dominican territory.

There are a variety of business associations that promote dialogue between the government and private sector, including the Association of Foreign Investor Businesses (ASIEX).

Foreign Investment Law No. 16-95 states that unlimited foreign investment is permitted in all sectors, with a few exceptions for hazardous materials or materials linked to national security. Private entities, both foreign and domestic, have the right to establish and own business enterprises and engage in all legal remunerative activity. Foreign companies are not restricted in their access to foreign exchange, there are no requirements that foreign equity be reduced over time or that technology be transferred according to defined terms, and the government imposes no conditions on foreign investors concerning location, local ownership, local content, or export requirements. See Section 3 Legal Regime for more information.

The Dominican Republic does not maintain a formalized investment screening and approval mechanism for inbound foreign investment. Details on the established mechanisms for registering a business or investment are elaborated in the Business Facilitations section below.

The Dominican Republic has not been reviewed recently by multilateral organizations regarding investment policy. The most recent reviews occurred in 2015. This included a trade policy review by the World Trade Organization (WTO) and a follow-up review by the United Nations Conference on Trade and Development (UNCTAD) regarding its 2009 investment policy recommendations.

2009 UNCTAD – https://unctad.org/en/pages/PublicationArchive.aspx?publicationid=6343 

2015 WTO – https://www.wto.org/english/tratop_e/tpr_e/s319_e.pdf

2015 UNCTAD – https://unctad.org/en/PublicationsLibrary/diaepcb2016d2_en.pdf

Foreign investment does not require any prior approval in the Dominican Republic, but once made it must be registered with the CEI-RD. Investments in free zones must be registered with the CNZFE, which will notify the CEI-RD. Foreign investment registration is compulsory, but failure to do so is not subject to any sanction.

Law No. 16-95 Foreign Investment, Law No. 98-03 on the Creation of the CEI-RD, and Regulation 214-04 govern foreign investment in the Dominican Republic and require an interested foreign investor to file an application form at the offices of CEI-RD within 180 calendar days from the date on which the foreign investment took place. The required documents include the application for registration, containing information on the invested capital and the area of the investment; proof of entry into the country of the foreign capital or physical or tangible goods; and documents of commercial incorporation or the authorization of operation of a branch office through the setting up of legal domicile in the country.  The reinvestment of profits (in the same or a different firm) must be registered within 90 days. Once the documents have been approved, the CEI-RD issues a certificate of registration within 15 business days subject to the payment of a fee which varies depending on the amount of the investment.

Lack of registration does not affect the validity of the foreign investment; but the fact that it is needed to fulfill various types of procedures, makes registration necessary in practice. For example, the registration certificate has to be presented to repatriate profits or investment in the event of sale or liquidation and to purchase foreign exchange from the authorized agencies for transfers abroad, as well as to process the residency of the investor.  In April 2021, CEI-RD launched an online Registry of Foreign Direct Investment, which aims to streamline and make the registration processes more transparent to investors. For more information on becoming an investor or exporter, visit the CEI-RD ProDominicana website at https://prodominicana.gob.do .

The Dominican Republic has a single-window registration website for registering a limited liability company (SRL by its Spanish acronym) that offers a one-stop shop for registration needs ( https://www.formalizate.gob.do/ ). Foreign companies may use the registration website. However, this electronic method of registration is not widely used in practice and consultation with a local lawyer is recommended for company registrations. According to the “Doing Business” report, starting a SRL in the Dominican Republic is a seven-step process that requires 16.5 days. However, some businesses advise the full incorporation process can take two to three times longer than the advertised process.

In order to set up a business in a free trade zone, a formal request must be made to the CNZFE, the entity responsible for issuing the operating licenses needed to be a free zone company or operator. CNZFE assesses the application and determines its feasibility. For more information on the procedure to apply for an operating license, visit the website of the CNZFE at http://www.cnzfe.gov.do.

There are no legal or government restrictions on Dominican investment abroad, although the government does little to promote it. Outbound foreign investment is significantly lower than inbound investment. The largest recipient of Dominican outward investment is the United States.

Ecuador

1. Openness To, and Restrictions Upon, Foreign Investment

Ecuador is open to FDI in most sectors. The 2008 Constitution established that the state reserves the right to manage strategic sectors through state-owned or -controlled companies. The sectors identified are energy, telecommunications, non-renewable natural resources, transportation, hydrocarbon refining, water, biodiversity, and genetic patrimony (flora, fauna, and ancestral knowledge). Although in recent years Ecuador took steps to attract FDI, its overall investment climate remains challenging as economic, commercial, and investment policies are subject to frequent change. From January to September 2021 (latest information available), FDI flows to Ecuador were USD 493 million, a 50 percent decrease compared to 2020 levels (USD 986 million) and 23 percent lower than 2019 levels (USD 642 million). FDI continues to be very low compared to other countries in the region.

There are no laws or practices that discriminate against foreign investors, but the legal complexity resulting from the inconsistent application and interpretation of existing laws and regulations increases the risks and costs of doing business in Ecuador. Under the prior Correa administration, disputes involving U.S. companies were politicized, especially in sensitive areas such as the energy sector. This resulted in several high-profile international investment dispute cases, with companies awarded damages in international arbitral rulings against Ecuador in the last few years. One case is still pending final arbitral ruling.

[Please use U.S. Department of Commerce key words for industries in this section, list available at https://www.trade.gov/industries-0 ]

Foreign and domestic private entities are allowed to establish and own business enterprises and engage in all forms of remunerative activity, with limitations in strategic sectors as enumerated in the Constitution. Ecuador does not have a single national-level interagency investment screening system for FDI. Each ministry analyzes investments and assesses FDI risks. One hundred precent foreign equity ownership is allowed.

For license and franchise transactions, no limits exist on royalties that may be remitted, although financial outflows are subject to a 4.5 percent capital exit tax. The Lasso administration committed to the gradual phaseout of Ecuador’s capital exit tax (ISD) over the next four years starting in 2022 with a quarterly reduction of 0.25 percent. President Lasso signed September 2 executive decree 182 removing the ISD on the international aviation and maritime cargo sectors. All license and franchise agreements must be registered with the National Service for Intellectual Property Rights (SENADI). In addition to registering with the Superintendence of Companies, Securities, and Insurance, foreign investors must register investments with Ecuador’s Central Bank for statistical purposes.

Ecuador conducted a trade policy review with the World Trade Organization in March 2019; information can be found at https://www.wto.org/english/tratop_e/tpr_e/tp483_e.htm 

In 2020, Ecuador conducted an investment policy review with the United Nations Conference on Trade and Development (UNCTAD), published in 2021. Information can be found at: https://unctad.org/node/34311 . In the past three years, Ecuador has not conducted an investment policy review with the Organization for Economic Cooperation and Development (OECD).

ProEcuador ( https://www.proecuador.gob.ec/ ) is the government entity responsible for promoting economic development through exports, imports, and investment in Ecuador. The institution forms a Vice Ministry within the Ministry of Production, Foreign Trade, Investments and Fisheries (MPCEIP) and has 27 offices in 23 countries, including three in the United States.

A newly created company will at a minimum be required to register with the Superintendence of Companies, Securities, and Insurance ( http://www.supercias.gob.ec/ ), the municipal government, the Internal Revenue Service (SRI), and the Social Security Institute (IESS). The registry with the Superintendence of Companies is a completely online process as of April 2019. The incorporation of companies in Ecuador grew 44 percent in 2021 (15,714 new companies), propelled by the introduction of the simplified joint-stock company (SAS). The SAS came into effect in May 2020 following the enactment of the Organic Law on Entrepreneurship and Innovation.

Ecuador does not restrict domestic investors from investing abroad. ProEcuador is responsible for promoting outward investment from Ecuador. Foreign investments are subject to a 4.5 percent ISD. The 2021 Tax Reform Law enumerates several ISD payment exemptions to productive investment, under certain conditions. In July 2021, the Lasso administration announced a gradual ISD dismantling by sector, quickly followed up with an Executive Decree immediately eliminating ISD on the international aviation and maritime cargo sectors.

In February 2017, voters passed a government-backed referendum prohibiting elected officials and public servants from having financial dealings in tax havens and other suspect jurisdictions. The list includes several U.S. states and territories that do not have state income taxes. The prohibition entered into force in September 2017.

The United States and Ecuador signed the Protocol on Trade Rules and Transparency in December 2020 under the Ecuador-U.S. Trade and Investment Council Agreement (TIC). The Protocol entered into force in August 2021 following National Assembly ratification. The agreement updates the TIC with new annexes in four areas: Trade Facilitation and Customs Administration, Good Regulatory Practices, Anti-Corruption, and SMEs.

Egypt

1. Openness To, and Restrictions Upon, Foreign Investment

Egypt’s completion of the three-year, $12-billion IMF Extended Fund Facility between 2016 and 2019, and its associated reform package, helped stabilize Egypt’s macroeconomy, introduced important subsidy and social spending reforms, and helped restore investor confidence in the Egyptian economy.  The flotation of the Egyptian Pound (EGP) in November 2016 and the restart of Egypt’s interbank foreign exchange (FX) market as part of this program was the first major step in restoring investor confidence that immediately led to increased portfolio investment and should lead to increased FDI over the long term.  Other important reforms have included a new investment law and an industrial licensing law in 2017, a new bankruptcy law in 2018, a new customs law in 2020, and other reforms aimed at reducing regulatory overhang and improving the ease of doing business.

In 2021, Egypt’s government announced plans to launch a second round of economic reforms aimed at increasing the role of the private sector in the economy, addressing long-standing customs and trade policy challenges, and modernizing its industrial base and increasing exports.

As a result of the government’s increased focus on infrastructure development, Egypt’s $259 billion project finance pipeline is the third-largest in the Middle East and the largest in Africa as of March 2022, according to ratings agency Fitch. Recognizing the immense challenges the country faces from the impacts of climate change, government officials announced in 2021 that by 2030 all new public sector investment spending would be green, and accelerated plans to generate 42 percent of its electricity from renewable sources by 2035. Egypt will host the United Nations Conference on Climate Change, COP 27, in November 2022, and the government is developing a package of investment incentives aimed at attracting foreign investment and project finance in areas such as solar and wind power, green hydrogen, water desalination, sustainable transportation, electric vehicles, smart cities and grids, and sustainable construction materials.

With few exceptions, Egypt does not legally discriminate between Egyptian nationals and foreigners in the formation and operation of private companies. The 1997 Investment Incentives Law was designed to encourage domestic and foreign investment in targeted economic sectors and to promote decentralization of industry away from the Nile Valley. The law allows 100 percent foreign ownership of investment projects and guarantees the right to remit income earned in Egypt and to repatriate capital.

The Tenders Law (Law 89 of 1998) requires the government to consider both price and best value in awarding contracts and to issue an explanation for refusal of a bid. However, the law contains preferences for Egyptian domestic contractors, who are accorded priority if their bids do not exceed the lowest foreign bid by more than 15 percent.

The Capital Markets Law (Law 95 of 1992) and its amendments, including the most recent in February 2018, and relevant regulations govern Egypt’s capital markets.  Foreign investors are able to buy shares on the Egyptian Stock Exchange on the same basis as local investors.

The General Authority for Investment and Free Zones (GAFI, http://gafi.gov.eg) is the principal government body that regulates and facilitates foreign investment in Egypt and reports directly to the Prime Minister.

The Investor Service Center (ISC) is an administrative unit within GAFI that provides “one-stop-shop” services, easing the way for global investors looking for opportunities presented by Egypt’s domestic economy and the nation’s competitive advantages as an export hub for Europe, the Middle East, and Africa. This is in addition to promoting Egypt’s investment opportunities in various sectors.

The ISC provides a start-to-end service to the investor, including assistance related to company incorporation, establishment of company branches, approval of minutes of Board of Directors and General Assemblies, increases of capital, changes of activity, liquidation procedures, and other corporate-related matters. The Center also aims to issue licenses, approvals, and permits required for investment activities within 60 days from the date of request. Other services GAFI provides include:

  • Advice and support to help in the evaluation of Egypt as a potential investment location;
  • Identification of suitable locations and site selection options within Egypt;
  • Assistance in identifying suitable Egyptian partners; and
  • Dispute settlement services. ​

The ISC plans to establish branches in each of Egypt’s Governorates by the end of 2021.  Egypt maintains ongoing communication with investors through formal business roundtables, investment promotion events (conferences and seminars), and one-on-one investment meetings.

The Egyptian Companies Law does not set any limitation on the number of foreigners, neither as shareholders nor as managers/board members, except for Limited Liability Companies where the only restriction is that one of the managers must be an Egyptian national. In addition, companies are required to obtain a commercial and tax license, and pass a security clearance process.  Companies are able to operate while undergoing the often lengthy security screening process.  However, if the firm is rejected, it must cease operations and may undergo a lengthy appeals process.  Businesses have cited instances where Egyptian clients were hesitant to conclude long-term business contracts with foreign businesses that have yet to receive a security clearance. They have also expressed concern about seemingly arbitrary refusals, a lack of explanation when a security clearance is not issued, and the lengthy appeals process. Although the Government of Egypt has made progress streamlining the business registration process at GAFI, inconsistent treatment by banks and other government officials has in some cases led to registration delays.

Sector-specific limitations to investment include restrictions on foreign shareholding of companies owning lands in the Sinai Peninsula. Likewise, the Import-Export Law requires companies wishing to register in the Import Registry to be 51 percent owned and managed by Egyptians. Nevertheless, the new Investment Law does allow wholly foreign companies investing in Egypt to import goods and materials. In January 2021 the Egyptian government removed the 20-percent foreign ownership cap for international and private schools in Egypt.

The ownership of land by foreigners is complicated, in that it is governed by three laws: Law 15 of 1963, Law 143 of 1981, and Law 230 of 1996.  Land/Real Estate Law 15 of 1963 explicitly prohibits foreign individual or corporation ownership of agricultural land (defined as traditional agricultural land in the Nile Valley, Delta and Oases). Law 15/1963 stipulates that no foreigners, whether natural or juristic persons, may acquire agricultural land.  Law 143/1981 governs the acquisition and ownership of desert land. Certain limits are placed on the number of feddans (one feddan is approximately equal to one acre) that may be owned by individuals, families, cooperatives, partnerships, and corporations regardless of nationality. Partnerships are permitted to own 10,000 feddans. Joint stock companies are permitted to own 50,000 feddans.

Under Law 230/1986, non-Egyptians are allowed to own real estate (vacant or built) only under the following conditions:

  • Ownership is limited to two real estate properties in Egypt that serve as accommodation for the owner and his family (spouses and minors) in addition to the right to own real estate needed for activities licensed by the Egyptian Government;
  • The area of each real estate property does not exceed 4,000 m²; and
  • The real estate is not considered a historical site.

Exemption from the first and second conditions is subject to the approval of the Prime Minister. Ownership in tourist areas and new communities is subject to conditions established by the Cabinet of Ministers. Non-Egyptians owning vacant real estate in Egypt must build within a period of five years from the date their ownership is registered by a notary public. Non-Egyptians cannot sell their real estate for five years after registration of ownership, unless the Prime Minister consents to an exemption.

In December 2020, the World Bank published a Country Private Sector Diagnostic report for Egypt which analyzed key structural economic reforms that the Egyptian government should adopt in order to encourage private-sector-led economic growth. The report also included recommendations for the agribusiness, manufacturing, information technology, education, and healthcare sectors.

https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publication_site/publications_listing_page/cpsd-egypt 

On July 8, 2020, the Organization for Economic Cooperation and Development (OECD) released an Investment Policy Review for Egypt that highlighted the government’s progress implementing a proactive reform agenda to improve the business climate, attract more foreign and domestic investment, and reap the benefits of openness to FDI and participation in global value chains.

https://www.oecd.org/countries/egypt/egypt-continues-to-strengthen-its-institutional-and-legal-framework-for-investment.htm  

In January 2018 the World Trade Organization (WTO) published a comprehensive review of the Egyptian Government’s trade policies, including details of the Investment Law’s (Law 72 of 2017) main provisions.

https://www.wto.org/english/tratop_e/tpr_e/s367_e.pdf 

The United Nations Conference on Trade Development (UNCTAD) published an Information and Communications Technology (ICT) Policy Review for Egypt in 2017, in which it highlighted the potential for investments in the ICT sector to help drive economic growth and recommended specific reforms aimed at strengthening Egypt’s performance in key ICT policy areas.

https://unctad.org/en/PublicationsLibrary/dtlstict2017d3_en.pdf   

GAFI’s ISC ( https://gafi.gov.eg/English/Howcanwehelp/OneStopShop/Pages/default.aspx ) was launched in February 2018 and provides start-to-end service to the investor, as described above.  The Investment Law (Law 72 of 2017) also introduces “Ratification Offices” to facilitate obtaining necessary approvals, permits, and licenses within 10 days of issuing a Ratification Certificate.

Investors may fulfill the technical requirements of obtaining the required licenses through these Ratification Offices, directly through the concerned authority, or through its representatives at the Investment Window at GAFI.  The Investor Service Center is required to issue licenses within 60 days from submission. Companies can also register online.  GAFI has also launched e-establishment, e-signature, and e-payment services to facilitate establishing companies.

Egypt promotes and incentivizes outward investment. According to the Egyptian government’s FDI Markets database for the period from January 2003 to January 2021, outward investment featured the following:

  • Egyptian companies implemented 278 Egyptian FDI projects. The estimated total value of the projects, which employed about 49,000 workers, was $24.26 billion;
  • The following countries respectively received the largest amount of Egyptian outward investment in terms of total project value: The United Arab Emirates (UAE), Saudi Arabia, Algeria, Kenya, Jordan, Ethiopia, Germany, Libya, Morocco, and Nigeria;
  • The UAE, Saudi Arabia, and Algeria accounted for about 28 percent of the total amount;
  • Elsewedy Electric was the largest Egyptian company investing abroad, implementing 21 projects with a total investment estimated to be $2.1 billion.

Egypt does not restrict domestic investors from investing abroad.

El Salvador

1. Openness To, and Restrictions Upon, Foreign Investment

The GOES recognizes the benefits of attracting FDI. El Salvador does not have laws or practices that discriminate against foreign investors, nor does the GOES screen or prohibit FDI. However, FDI levels are among the lowest in Central America. The Central Bank reported net annual FDI inflows of $408.5 million, or approximately 1.5 percent of GDP, at the end of September 2021.

The Exports and Investment Promotion Agency of El Salvador (PROESA) supports investment in seven main sectors: textiles and apparel; business services; tourism; aeronautics; agro-industry; light manufacturing; and energy. PROESA provides information for potential investors about applicable laws, regulations, procedures, and available incentives for doing business in El Salvador. Websites: https://investelsalvador.com/  and https://proesa.gob.sv/servicios/servicios-al-inversionista/ .

The National Association of Private Enterprise (ANEP), El Salvador’s umbrella business chamber, serves as the primary private sector representative in dialogues with GOES ministries. http://www.anep.org.sv/ .

In 2019, the Bukele administration created the Secretariat of Commerce and Investment, a position within the President’s Office responsible for the formulation of trade and investment policies, as well as overall coordination of the Economic Cabinet. In addition, the Bukele administration created the Presidential Commission for Strategic Projects to lead the GOES’ major infrastructure projects.

Foreign citizens and private companies can freely establish businesses in El Salvador.

No single natural or legal person – whether national or foreign – can own more than 245 hectares (605 acres) of land. The Salvadoran Constitution stipulates there is no restriction on foreign ownership of rural land in El Salvador except in cases where Salvadoran nationals face ownership restrictions in the corresponding country. Rural land to be used for industrial purposes is not subject to this reciprocity requirement.

The Investments Law grants equal treatment to foreign and domestic investors. Apart from limitations imposed on micro businesses, which are defined as having 10 or fewer employees and yearly sales of $175,930 or less, foreign investors may freely establish any type of domestic business. Investors who begin operations with 10 or fewer employees must present plans to increase employment to the Ministry of Economy’s National Investment Office.

The Investment Law provides that extractive resources are the exclusive property of the state. The GOES may grant private concessions for resource extraction, though concessions are infrequently granted.

El Salvador has been a World Trade Organization (WTO) member since 1995. The latest trade policy review performed by the WTO was published in 2016 (document: WT/TPR/S/344/Rev.1).

https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol=%20wt/tpr/s/*)%20and%20((%20@Title=%20el%20salvador%20)%20or%20(@CountryConcerned=%20el%20salvador))&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true# 

The latest investment policy review performed by the United Nations Conference on Trade and Development (UNCTAD) was in 2010. http://unctad.org/en/Docs/diaepcb200920_en.pdf

In 2018, the Salvadoran Foundation for Economic and Social Development (FUSADES) published a position paper on investment policies, expanding on a 2015 study of the role of policies in productive development and investment. The report, written in Spanish, contains an analysis of policies, competitive advantages, constraints to investment attraction, and private sector views of the business climate. The report recommends that the government formulate a long-term development strategy, strengthen the cohesion between investment, trade facilitation and competitiveness policies, and develop an infrastructure policy that includes investment and PPP portfolios, among others. In addition, a September 2021 report on foreign direct investment in El Salvador, also by FUSADES, points out that investment attraction continues to be constrained by the lack of a comprehensive development and competitiveness strategy, poor coordination among government agencies on investment issues, including promotion and aftercare, and institutional capacity limitations. The analysis also notes that stabilizing public finances would contribute to supporting capital flows to El Salvador.

http://fusades.org/publicaciones/Como_reactivar_inversiones_ES.pdf .

http://fusades.org/publicaciones/la-inversion-extranjera-sigue-baja-falta-un-plan-estrategico-publico-y-privado-para-revertirla 

El Salvador has various laws that promote and protect investments, as well as providing benefits to local and foreign investors. These include: the Investments Law, the International Services Law; the Free Trade Zones Law; the Tourism Law, the Renewable Energy Incentives Law; the Law on Public Private Partnerships; the Special Law for Streamlining Procedures for the Promotion of Construction Projects; and the Legal Stability Law for Investments.

While the government encourages Salvadoran investors to invest in El Salvador, it neither promotes nor restricts investment abroad.

Equatorial Guinea

1. Openness To, and Restrictions Upon, Foreign Investment

The government recognizes the critical role foreign direct investment (FDI) in its hydrocarbon sector plays in Equatorial Guinea’s development. However, chronic corruption, patronage, highly centralized decision-making, and a lack of local regulatory capacity create a challenging environment for foreign investors.

Article 27 of the country’s fundamental law states “the State protects, guarantees, and controls the investment of foreign capital that contributes to the development of the country.” In Article 12 of Law No. 7/1992 on the Investment Regime, the government again commits to fair and equitable treatment for all investors. Law No. 7/1992 also creates an Investment Promotion Center (IPC) to advise the government on investment policies, promote investments, and support both domestic and international investors with information and in the resolution of conflicts. These laws also create a National Investment Commission (NIC). Neither the IPC nor the NIC are operational. In 2015, the government directed the Ministry of Commerce and Business Promotion to create an agency to promote, integrate, and coordinate a national strategy to attract FDI. The ministry has yet to establish this agency. Historically, the president has had de facto final approval on large contracts with foreign investors; however, since 2020, the vice president has largely taken over this role. Foreign-owned companies pay higher registration fees than local companies and are often subject to taxes that more informal local businesses avoid.

Equatorial Guinea’s six-year recession has motivated the government to focus on improving economic diversification and attracting new FDI. Led by the Ministry of Finance, Economy, and Planning, the government is promoting its National Economic Diversification Strategy, developed in 2019 to comply with IMF-required reforms to receive a three-year Extended Fund Facility (EFF) arrangement. One of the primary goals of the strategy is to reduce the country’s economic and fiscal dependence on the hydrocarbon sector. The government collaborates with the World Bank, IMF, UN Development Program (UNDP), and private consultants on its economic diversification strategy, including in attracting FDI, but implementation of recommendations remains mixed.

In general, the government focuses its efforts on recruiting investments in large capital projects over small ventures, as large-scale projects are more likely to create new employment opportunities for Equatorial Guinea’s largely unskilled workforce and provide greater fiscal benefits for the government under its underdeveloped and poorly implemented taxation system. The government is increasingly seeking South-South FDI from new partners in countries like Brazil, China, Egypt, India, Turkey, and Venezuela. The government sometimes focuses on recruiting new partners in lieu of maintaining existing partnerships, neglecting improvements to its operating environment, and damaging its prospects for longer term returns from investments.

Foreign investors are allowed to establish and own business enterprises and engage in all forms of remunerative activity in Equatorial Guinea. As part of its economic diversification strategy, in 2018 the government eliminated the requirement to have a domestic joint venture partner for investments in the non-oil sector. Under Equatorial Guinea’s Hydrocarbons Law No. 8/2006, however, the state-owned oil company (GE Petrol) or gas company (Sonagas) must hold a stake of at least 35 percent in foreign-owned hydrocarbon companies and must account for one third of the representatives on their Boards of Directors.

Under Law 4/2009 on the Land Ownership Regime, foreigners cannot own land but can lease property from the government for up to 99 years. To secure a lease, under Decree 140/2013, a foreign national must request approval through the Office of Property Registry, who then requests authorization from the president in the form of a presidential decree. The government does, however, recognize land owned by foreign nationals before the decree entered into force in 2013, if the land was properly registered.

Prior to approving an EFF in 2019, the IMF conducted several rounds of staff-monitored assessments of the governments’ structural, fiscal, and monetary reforms. The results of these assessments, which include investment policy recommendations, can be found on the IMF’s website: https://www.imf.org/en/Countries/GNQ . Beyond these IMF reviews, in the past five years, Equatorial Guinea has not undergone a third-party investment policy review (IPR) through a multilateral organization such as the OECD, WTO, UNCTAD, or UN Working Group on Business and Human Rights.

Civil society organizations in Equatorial Guinea remain weak, hampered by difficulties in registering for legalization through the Ministry of Interior and Local Corporations, and thus are unable to provide oversight of investment policy-related concerns.

In January 2019, the Ministry of Commerce launched its Single Business Window (abbreviated VUE for its Spanish name Ventanilla Unica Empresarial) at its headquarters in Malabo. The VUE reduced the time required to register a business from an average of 33 days to five. In July 2021, the ministry opened a second VUE office in the mainland city of Bata. Registration still must take place in person, however, as there is no online registration page nor a working VUE website. Individuals choosing to register their businesses without utilizing the VUE must complete the following steps through a variety of government agencies:

Process Agency Time Required
Undergo criminal background check Ministry of Justice 1 day
Legalize business’s articles of incorporation Ministry of Justice, Office of the Notary Public 3-14 days
Add name to business registry Ministry of Justice 2-3 days
Open bank account and obtain bank solvency certificate Commercial Bank 1 day
Obtain tax clearance certificate (certificate of good standing) Ministry of Finances 2 days
Add name to business registry Ministry of Commerce 15 days
Complete small and medium enterprise (SME) registration, if applicable Ministry of Commerce 15 days
Register for the Employee Guarantee Fund Ministry of Labor
Obtain tax ID number Ministry of Finances 3 days
Register for social security National Institute of Social Security 1 day

Although Equatoguinean citizens may legally invest outside the country, the government does not actively promote foreign investment. There are no known restrictions on foreign investment, but some individuals and companies have faced delays when transferring money overseas or converting local currency into foreign exchange, which has been exacerbated by new CEMAC rules on foreign currency reserves enacted in 2019. The National Bank of Equatorial Guinea (BANGE) – majority-owned by the government – launched two subsidiary offices in neighboring Cameroon.

Eritrea

1. Openness To, and Restrictions Upon, Foreign Investment

The Eritrean government professes a desire for more and more diversified FDI.  However, strict governmental control of the economy, circulation of currency, access to foreign currency, and the means of production, and the lack of robust business and investment legal code makes private investment difficult, time-consuming, and financially risky.

The official 1994 Investment Proclamation No. 59/1994 states that all sectors (excluding domestic retail, domestic wholesale, import, and commission agency companies without a bilateral agreement of reciprocity) are open to any investors.  In practice, this law has been suspended and the ruling PFDJ determines those sectors in which – and defines the terms under which – private investment is accepted.

The Investment Center, established in 1998, operates directly under the Office of the President; it does not publish any information related to its activities. In the past, the Center conducted public outreach to encourage members of the Eritrean diaspora to invest in Eritrea.  The Center has not conducted a large public event since 2012; senior Center officials have stated that the time for investments is not appropriate because investment developments must follow political developments.

There is no business ombudsman in Eritrea or other mechanisms to prioritize retention or maintain dialogue with existing investors.

In practice, there is no fundamental “right” for either foreign or domestic private entities to establish or run business enterprises free from government interference.  All sectors of the economy are tightly controlled by the GSE, most large enterprises are either entirely or partially owned by the government or the PFDJ, and the government can order a business to close without explanation or legal recourse.

There are both statutory and de facto limits on foreign ownership and control of enterprises.  All foreign-owned mines must give a 10% stake to the Eritrean National Mining Corporation (ENAMCO), and ENAMCO has the option to buy another 30% equity in a project.  Regulations in other fields are not well established.

With some exceptions, such as mining, investment is de facto prohibited in most sectors of the economy.  The government has encouraged investment in the mining sector, and mining-specific regulations were adopted in 2011.  There are few other large foreign investments in the country.  The few foreign enterprises operating in Eritrea do so under non-public agreements negotiated directly between the companies or countries and a small group of officials from the GSE and the PFDJ.

There is no transparent GSE screening mechanism for approving inbound foreign investment.

The GSE has undergone no recent third-party investment policy review. No civil society organizations have provided useful reviews of investment policy-related concerns.

The government has made no known efforts to facilitate business in Eritrea although this may change for Chinese businesses following the November 2021 signing of a Memorandum of Understanding for China’s Belt Road Initiative.  The government does not have a business registration website.  Businesses are required to register with six government offices (the Business License Office, the Ministry of Information, the Inland Revenue Department, the Ministry of Trade and Industry, the Ministry of Labor and Social Welfare, and the local municipality), and the registration process usually takes 84 days, according to the World Bank’s Doing Business report. According to local experts, if an agreement is reached with the government and the PFDJ, this process can be expedited significantly for foreign businesses.

Given the low level of capital accumulation in the economy, Eritrea is not a likely provider of foreign capital.  As part of its efforts to direct capital towards development, the GSE’s laws strictly control capital flows (including payment for the importation of goods), currency exchange, and restricts domestic investors from making large investments abroad.  For example, per person monthly bank withdrawals are limited to 5,000 Nakfa ($333), and Eritreans are generally unable to withdraw dollars.

Estonia

1. Openness To, and Restrictions Upon, Foreign Investment

Estonia is open to FDI and foreign investors are treated on an equal footing with local investors, though the government is developing a screening mechanism to adhere to the EU Foreign Investment Screening Regulation  entered into force on April 10, 2019. This new regulation was launched in October 2020, creating an information-sharing mechanism between Member States and allows Member States and the European Commission to comment on foreign investments foreseen in other Member States.

The Estonian Investment Agency (EIA), a part of Enterprise Estonia, is a government agency promoting foreign investments in Estonia and assisting international companies in finding business opportunities in Estonia. EIA offers comprehensive, one-stop investment consultancy services, free of charge. The agency’s goal is to increase awareness of business opportunities in Estonia and promote the image of Estonia as an attractive country for investments. More info: http://www.investinestonia.com/en/estonian-investment-agency/about-the-agency 

Estonia’s government has not set limitations on foreign ownership. Licenses are required for foreign investors to enter the following sectors: mining, energy, gas and water supply, railroad and transport, waterways, ports, dams and other water-related structures, and telecommunications and communication networks. The Estonian Financial Supervision Authority issues licenses for foreign interests seeking to invest in or establish a bank. Additionally, the Estonian Competition Authority reviews transactions for anti-competition concerns. Government review and licensing have proven to be routine and non-discriminatory.

As a member of the EU, the Government of Estonia (GOE) maintains liberal policies in order to attract investment and export-oriented companies. Creating favorable conditions for FDI and openness to foreign trade has been the foundation of Estonia’s economic strategy. Existing requirements are not intended to restrict foreign ownership but rather to regulate it and establish clear ownership responsibilities.

Since becoming a member of the EU, Estonia is included in World Trade Organization (WTO) Trade Policy Reviews (TPRs) of the EU/EC. The fourteenth review of the trade policies and practices of the European Union took place in February 2020. Full report available here: WTO | Trade policy review -European Union (formerly EC) 2020 .

The World Bank’s Ease of Doing Business report ranks Estonia in 18th place out of 190 countries on the ease of Starting a Business. Economic freedom, ease of doing business, per capita investments, low national debt, euro zone membership, and low corruption scores – all these factors play a role in fostering a good climate for business facilitation.

In Estonia there are two ways to register your business:

  • Electronic registration via the e-Commercial Register’s (takes between 5 minutes and 1 business day).
  • Through a notary (takes 2-3 business days)

More info on registering the business entity and link to the Register: https://www.eesti.ee/en/doing-business/establishing-a-company/comparison-of-each-form-of-business/ 

On July 1, 2014, an amended Taxation Act establishing the employment register entered into force, requiring all natural and legal employers to register the persons employed by them with the Estonian Tax and Customs Board. The company must register itself as a value-added tax payer if the taxable turnover of the company, excluding imports of goods, exceeds EUR 40,000 as calculated from the beginning of the calendar year.

There are certain areas of activity (like construction, electrical works, fire safety, financial services, security services, etc.) in which business operation requires an additional registration in the Register of Economic Activities (MTR), but this can be done after registration of the company in the Commercial Register: https://mtr.mkm.ee/ 

Estonia does not restrict domestic investors from investing abroad nor does it promote outward investment. Estonia companies have invested abroad about USD 12.5 billion, mostly into EU countries. The main sectors for outward investments are services, manufacturing, real estate and financial.

Eswatini

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of the Kingdom of Eswatini (GKoE) regards foreign direct investment (FDI) as one of the five pillars of its Sustainable Development and Inclusive Growth (SDIG) Program, and a means to drive the country’s economic growth, obtain access to foreign markets for its exports, and improve international competitiveness. While the government has strongly encouraged foreign investment over the past 15 years, it only recently adopted a formal strategy for achieving measurable progress. Eswatini does not have a unified policy on investment. Instead, individual ministries have their own investment facilitation policies, which include policies on Small and Medium Enterprises (SME), agriculture, energy, transportation, mining, education, and telecommunications. Calls for more concerted action on these policies have intensified in the last few years as Eswatini has suffered from drought, fiscal challenges, and general economic recession.

The Swati constitution states, generally, that non-citizens and/or companies with a majority of non-citizen shareholders may not own land unless they were vested in their ownership rights before the constitution entered into force in 2006. On the other hand, the constitution’s general prohibition “may not be used to undermine or frustrate an existing or new legitimate business undertaking of which land is a significant factor or base.” Furthermore, non-citizens and non-citizen majority-owned companies may hold long-term (up to 99 years) leases on Title and Swati Nation Land. Besides land ownership laws, there are no laws that discriminate against foreign investors. In 2019, the government listed some of its title deed land to make it available for long-term leasing for commercial purposes.

In practice, most successful foreign investors associate local partners to navigate Eswatini’s complex bureaucracy. Most of the country’s land is Swati Nation Land held by the king “in trust for the Swati Nation” and cannot be purchased by foreign investors. Foreign investors that require significant land for their enterprise must engage the Land Management Board to negotiate long-term leases.

The Eswatini Investment Promotion Authority (EIPA) is the state-owned enterprise (SOE) charged with designing and implementing strategies for attracting desired foreign investors.

Eswatini’s Investment Policy and policies that support the business environment are online at https://investeswatini.org.sz/legal-and-regulatory-framework/  (EIPA is currently functional and helpful, but it is not yet a one-stop-shop for foreign investors). EIPA services include:

  • Attract and promote local and foreign direct investments
  • Identify and disseminate trade and investment opportunities
  • Provide investor facilitation and aftercare services
  • Promote internal and external trade
  • Undertake research and policy analysis
  • Facilitate company registration and business licenses/permits
  • Facilitate work permits and visas for investors
  • Provide a one stop shop information and support facility for businesses
  • Export product development
  • Facilitation of participation in external trade fairs
  • BuyerSeller Missions

The GKoE continues its attempts to improve the ease of doing business in the country through the Investor Roadmap Unit (IRU). The IRU engages with businesses and government to review and report on the progress and implementation of the investor roadmap reforms.

EIPA has an aftercare division for purposes of investment retention that serves as a direct avenue for investors to communicate concerns they may have. Most investors who stay beyond the initial period during which the GKoE offers investment incentives have opted to remain long-term.

Both foreign and domestic private entities have a right to establish businesses and acquire and dispose of interest in business enterprises. Foreign investors own several of Eswatini’s largest private businesses, either fully or with minority participation by Swati institutions.

There are no general limits on foreign ownership and control of companies, which can be 100 percent foreign owned and controlled. The only exceptions on foreign ownership and control are in the mining sector and in relation to land ownership. The Mines and Minerals Act of 2011 requires that the King (in trust for the Swati Nation) be granted a 25-percent equity stake in all mining ventures, with another 25 percent equity stake granted to the GKoE. There are also sector-specific trade exclusions that prohibit foreign control, which include business dealings in firearms, radioactive material, explosives, hazardous waste, and security printing.

Foreign investments are screened only through standard background and credit checks. Under the Money Laundering and Financing of Terrorism (Prevention) Act of 2011, investors must submit certain documents including proof of residence and source of income for deposits. EIPA also conducts general screening of FDI monies through credit bureau checks and Interpol. This screening is not a barrier to investing in Eswatini. There are no discriminatory mechanisms applied against US foreign direct investors.

There have been no investment policy reviews for Eswatini in the last 3 years. Through its membership in the Southern African Customs Union, its ratification of the African Continental Free Trade Agreement and its participation in the work of the WTO, Eswatini continues to pursue the importance of trade in development. In 2015, the WTO performed a Trade Policy Review of the Southern African Customs Union that included Namibia, Botswana, Eswatini, South Africa, and Lesotho. In 2016, the Trade Facilitation agreement was ratified, and Eswatini’s portion of that review is available online: https://www.wto.org/english/news_e/archive_e/country_arc_e.htm?country1=SWZ 

Eswatini does not have a single overarching business facilitation policy. Policies that address business facilitation are spread across the spectrum of relevant ministries. The Investors Road Map Unit (IRMU) is the public entity responsible for the review and monitoring of business environment reforms. EIPA facilitates foreign and domestic investment opportunities and has a fairly modern, up-to-date website: https://investeswatini.org.sz  / , and certain GKoE application forms are available online at the EIPA website. Recent developments in the business facilitation space include the online registration of companies via the link www.online.gov.sz . As of 2020 the final steps (payment of statutory fees and registration fee) are now available offline. According to the Doing Business Report, the process of registering a company in Eswatini takes approximately 10 days. In practice, the process can take much longer for foreign investors.

The main organization representing the private sector is Business Eswatini ( www.business-eswatini.co.sz ), which represents more than 80 percent of large businesses in Eswatini, works on a wide range of issues of interest to the private sector and seeks to build partnerships with the government to promote commercial development. Through Business Eswatini, the private sector is represented in a number of national working committees, including the National Trade Negotiations Team (NTNT).

Ethiopia

1. Openness To, and Restrictions Upon, Foreign Investment

Ethiopia needs significant inflows of FDI to meet its ambitious growth goals. Over the past year, to attract more foreign investment, the government passed a new investment law, acceded to the New York Convention on Arbitration, amended its 60-year-old commercial code, and digitized the commercial registration and business licensing processes. The government has also begun implementing the Public Private Partnership (PPP) Proclamation to allow for private investment in the power generation and road construction sectors.

The Ethiopian Investment Commission (EIC) has the mandate to promote and facilitate foreign investments in Ethiopia. To accomplish this task, the EIC is charged with 1) promoting the country’s investment opportunities to attract and retain investment; 2) issuing investment permits, business licenses, work permits, and construction permits; 3) issuing commercial registration certificates and renewals; 4) negotiating and signing bilateral investment agreements; and 5) registering technology transfer agreements. In addition, the EIC has the mandate to advise the government on policies to improve the investment climate and to hold regular and structured public-private dialogues with investors and their associations. At the local level, regional investment agencies facilitate regional investment.

The American Chamber of Commerce (AmCham) advances U.S. business interests in Ethiopia. AmCham provides a mechanism for coordination among American companies and facilitates regular meetings with government officials to discuss issues that hinder operations in Ethiopia. The Addis Ababa Chamber of Commerce organizes a monthly business forum that enables the business community to discuss issues related to the investment climate with government officials.

Foreign and domestic private entities have the right to establish, acquire, own, and dispose of most forms of business enterprises. The Investment Proclamation and associated regulations outline the areas of investment reserved for government and local investors. There is no private ownership of land in Ethiopia. All land is technically owned by the state but can be leased for up to 99 years. Small-scale rural landholders have indefinite use rights, but cannot lease out holdings for extended periods, except in the Amhara Region. The 2011 Urban Land Lease Proclamation allows the government to determine the value of land in transfers of leasehold rights to curb speculation by investors.

A foreign investor intending to buy an existing private enterprise or shares in an existing enterprise needs to obtain prior approval from the EIC. While foreign investors have complained about inconsistent interpretation of the regulations governing investment registration (particularly relating to accounting for in-kind investments), they generally do not face undue screening of FDI, unfavorable tax treatment, denial of licenses, discriminatory import or export policies, or inequitable tariff and non-tariff barriers.

Over the past three years, the government has not undertaken any third-party investment policy review by a multilateral or non-governmental organization. The government has worked closely with some international stakeholders, such as the International Finance Corporation, in its attempt to modernize and streamline its investment regulations.

The EIC has attempted to establish itself as a “one-stop shop” for foreign investors by acting as a centralized location where investors can obtain the visas, permits, and paperwork they need, thereby reducing the time and cost of investing and acquiring business licenses. The EIC has worked with international consultants to modernize its operations and has adopted a customer management system to build lasting relationships and provide post-investment assistance to investors. Despite progress, the EIC admits that many bureaucratic barriers to investment remain. U.S. investors report that the EIC, as a federal organization, has little influence at regional and local levels.

Currently, more than 95 percent of Ethiopia’s trade passes through the Port of Djibouti, with residual trade passing through the Somaliland Port of Berbera or Port Sudan. Ethiopia concluded an agreement in March of 2018 with the Somaliland Ports Authority and DP World to acquire a 19 percent stake in the joint venture developing the Port of Berbera. The agreement will help Ethiopia secure an additional logistical gateway for its increasing import and export trade.

The GOE is working to improve business facilitation services by making the licensing and registration of businesses easier and faster. In February 2021, the Ministry of Trade and Regional Integration (MOTRI) launched an eTrade platform ( etrade.gov.et ) for business registration licensing to enable individuals to register their companies and acquire business licenses online. The amended commercial registration and licensing law eliminates the requirement to publicize business registrations in local newspapers, allows business registration without a physical address, and reduces some other paperwork burdens associated with business registration. U.S. companies can obtain detailed information for the registration of their business in Ethiopia from an online investment guide to Ethiopia: ( https://www.theiguides.org/public-docs/guides/ethiopia ) and the EIC’s website: ( http://www.investethiopia.gov.et/index.php/investment-process/starting-a-business.html ). MOTRI has target timeframes for the registration of new businesses, but it often fails to meet its deadlines.

There is no officially recorded outward investment by domestic investors from Ethiopia as citizens/local investors are not allowed to hold foreign accounts.

Fiji

1. Openness To, and Restrictions Upon, Foreign Investment

Demonstrating its commitment to improving the business environment in Fiji, the Fiji Parliament passed the Investment Act 2021 which will eventually replace the Foreign Investment Act 1999. The new law aims to improve ease of doing business in Fiji by streamlining the business registration process; attracting foreign and domestic investment; and providing equity for investors with transparent, reliable, efficient, and fair rules and procedures. Previously, all foreign investors were required to register for a Foreign Investment Registration Certificate (FIRC). The new law not only removes the requirement for a FIRC but also strengthens the rights and obligations of the investors. Fiji’s Ministry of Commerce, Trade, Tourism, and Transport (MCTTT) is currently working with the International Finance Corporation (IFC) to draft the regulations of the Act. The new law will come into effect once a notice in the Gazette is issued.

Under the new law, both domestic and foreign investors will undergo the business registration process with the Registrar of Companies and annually report to Investment Fiji. One of the investors’ rights under the law is in reference to national treatment and the most-favored-nation principle whereby foreign investors must be treated no less favorably in like circumstances than domestic investors with respect to the acquisition, expansion, management, conduct, operation, sale, or other disposition of investments in Fiji. Fiji’s Department of Immigration is responsible for managing investor permits for non-citizen investors.

Investment Fiji is responsible for the promotion of foreign investment in the interest of national development. The three main services provided by Investment Fiji include investment promotion, investment facilitation (project management), and trade promotion. In addition to registering and assisting with the implementation of foreign investment projects, Investment Fiji hosts information seminars for visiting foreign business delegations and participates at investment missions overseas. The process of foreign investor registration by Investment Fiji will be phased out when the new law takes effect.

Investment Fiji has recently placed more focus on providing facilitation support for both new and existing foreign and domestic investors. The Fijian government supports and encourages existing businesses to re-invest. Several industry associations have been established which provide a forum for companies to share concerns and ideas in the industry. Examples of these industry associations include the Textile, Clothing, and Footwear (TCF) Council of Fiji, Business Process Outsourcing (BPO) Council of Fiji, and the Fiji Manufacturers Association.

Investors are free to invest in all sectors and regions in Fiji provided it does not contravene the Investment Act 2021 and other laws in place.

Investment in the fisheries sector requires a 30 percent local equity in the project.

Some investment activities are reserved for Fiji nationals or are subject to restrictions. For all other business activities, there is no minimum investment requirement. There are currently 17 reserved activities exclusively for Fiji citizens, mainly in the services sector, and eight restricted activities that fall under the Foreign Investment Act 1999 and Foreign Investment Regulations 2009. These will soon be phased out and will be replaced with a new list of reserved and restricted activities currently being drafted for the Investment Act 2021. The current list of reserved and restricted areas can be found at  https://global-uploads.webflow.com/5fc6b3ad7010ef7a53f68376/60d8f22321e2187f849ac435_Checklist%202020.pdf

Investment Fiji helps vet foreign investment proposals to ensure that the projects are in the interest of national development and to support implementation of projects. The Investment Act 2021 has provisions to restrict investment for the protection of national security interests. Investments in a sector that may have potential effects on critical infrastructure such as energy, transport, communications, data storage, or financial infrastructure; critical technologies; the security of supply of critical inputs; or access to sensitive information or the ability to control sensitive information must have their proposals submitted for Ministerial approval.

The Fiji government’s MCTTT revised the recently passed Investment Act 2021. The International Finance Corporation, a member of the World Bank Group, in collaboration with foreign development partners, provided technical expertise in the review.

The Fiji Civil Society Organization released a 2016-2019 report on Sustainable Development Goals. The report details ways in which civil society and community groups contribute to the achievement of the 17 SDGs in Fiji. This includes Goals 7, 8, 9 & 10 on “affordable and clean energy; and decent work and economic growth” and “industry, innovation, and infrastructure; and reduced inequality.”

Australia is the largest donor for civil society in Fiji and currently supports CSOs through bilateral, regional, and global initiatives.

The Fiji government’s bizFiji website ( www.business-fiji.com ) is an information portal for new and existing businesses, as well as foreign investors. The portal provides information on the business registration process, how to obtain construction permits, and included application forms and links to all the required agencies, including the Registrar of Companies, Fiji Revenue and Customs Services (FRCS), Fiji National Provident Fund, National Occupational Health and Safety Services, and Fiji National University. The government’s reforms to improve the ease and reduce the cost of doing business include the removal of the business license requirement for low-risk businesses, reducing the processing times from five days to 48 hours to issue business licenses, and the removal of several requirements for existing businesses. Since the launch of bizFiji in 2019, the government has worked to develop a single online clearance system to improve registration processes, but inefficiencies remain.

For foreign investors, the bizFiji website is also linked to the Investment Fiji website. The registration form and procedures, and regulations for foreign investment is available at the Investment Fiji issue of the Foreign Investment Registration Certificate (FIRC). Applications for a FIRC and payment of the requisite application fee of $1,336 (FJD$2,725) must be submitted to Investment Fiji. Investors need to meet the requirements listed under the Foreign Investment Act (FIA) and the 2009 Foreign Investment Regulation as well as ensure that the investment activity does not fall under the reserved and restricted activities lists. The registration process for investment applications takes at least five working days and sometimes longer if the paperwork is incomplete. Once the Investment Act 2021 comes into effect, the requirement to register with Investment Fiji will be removed.

Investors are also required to obtain the necessary permits and licenses from other relevant authorities and should be prepared for delays. There are no special services or preferences to facilitate investment and business operations by micro, small, and medium sized enterprises, or by women.

Contact: Ministry of Commerce, Trade, Tourism and Transport, Level 2 and 3, Civic Tower, Victoria Parade, Suva; Telephone: (679) 330 5411; Website: www.mcttt.gov.fj 

The Reserve Bank of Fiji (RBF) tightened exchange controls for any outward investment by individuals, companies, and non-bank financial institutions, including the Fiji National Provident Fund, which require clearance from the RBF.

Finland

France and Monaco

1. Openness To, and Restrictions Upon, Foreign Investment

France welcomes foreign investment. In the current economic climate, the French government sees foreign investment as a means to create additional jobs and stimulate growth. Investment regulations are simple, and a range of financial incentives are available to foreign investors. Surveys of U.S. investors in 2021 showed the greatest optimism about the business operating environment in France since 2008. U.S. companies find France’s good infrastructure, advanced technology, and central location in Europe attractive. France’s membership in the European Union (EU) and the Eurozone facilitates the efficient movement of people, services, capital, and goods. However, notwithstanding recent French efforts at structural reform, including a reduction in corporate and production tax, and advocacy for a global minimum tax within the European Union, perceived disincentives to investing in France include the persistently high tax environment, ongoing labor law rigidity, and a shortage of skilled labor.

France is among the least restrictive countries for foreign investment. With a few exceptions in certain specified sectors, there are no statutory limits on foreign ownership of companies. Foreign entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.

France maintains a national security review mechanism to screen high-risk investments. French law stipulates that control by acquisition of a domiciled company or subsidiary operating in certain sectors deemed crucial to France’s national interests relating to public order, public security and national defense are subject to prior notification, review, and approval by the Economy and Finance Minister. Other sectors requiring approval include energy infrastructure; transportation networks; public water supplies; electronic communication networks; public health protection; and installations vital to national security. In 2018, four additional categories – semiconductors, data storage, artificial intelligence and robotics – were added to the list requiring a national security review. For all listed sectors, France can block foreign takeovers of French companies according to the provisions of the 2014 Montebourg Decree.

On December 31, 2019 the government issued a decree to lower the threshold for vetting of foreign investment from outside Europe from 33 to 25 percent and then lowered it again to 10 percent on July 22, 2020, a temporary provision to prevent predatory investment during the COVID-19 crisis. This lower threshold is set to expire at the end of 2022. The decree also enhanced government-imposed conditions and penalties in cases of non-compliance and introduced a mechanism to coordinate the national security review of foreign direct investments with the European Union (EU Regulation 2019/452). The new European rules entered into force on October 11, 2020. The list of strategic sectors was also expanded to include the following activities listed in the EU Regulation 2019/452: agricultural products, when such products contribute to national food supply security; the editing, printing, or distribution of press publications related to politics or general matters; and R&D activities relating to quantum technologies and energy storage technologies. Separately, France expanded the scope of sensitive sectors on April 30, 2020, to include biotechnology companies.

Procedurally, the Minister of Economy, Finance, and Recovery has 30 business days following the receipt of a request for authorization to either: 1) declare that the investor is not required to obtain such authorization; 2) grant its authorization without conditions; or 3) declare that an additional review is required to determine whether a conditional authorization is sufficient to protect national interests. If an additional review is required, the Minister has an additional 45 business days to either clear the transaction (possibly subject to conditions) or prohibit it. The Minister is further allowed to deny clearance based on the investor’s ties with a foreign government or public authority. The absence of a decision within the applicable timeframe is a de facto rejection of the authorization.

The government also expanded the breadth of information required in the approval request. For example, a foreign investor must now disclose any financial relationship with or significant financial support from a State or public entity; a list of French and foreign competitors of the investor and of the target; or a signed statement that the investor has not, over the past five years, been subject to any sanctions for non-compliance with French FDI regulations.

In 2020, the government blocked at least one transaction—the attempted acquisition of a French firm by a U.S. company in the defense sector. In early 2021, the French government blocked the acquisition of French supermarket chain Carrefour by Canada’s Alimentation Couche-Tard on the basis that it was a threat to France’s food security and national sovereignty.

France has not recently been the subject of international organizations’ investment policy reviews. The OECD Economic Survey for France (November 2021) can be found here:  https://www.oecd.org/economy/france-economic-snapshot/ .

Business France is a government agency established with the purpose of promoting new foreign investment, expansion, technology partnerships, and financial investment. Business France provides services to help investors understand regulatory, tax, and employment policies as well as state and local investment incentives and government support programs. Business France also helps companies find project financing and equity capital. The agency unveiled a website in English to help prospective businesses that are considering investments in the French market ( https://www.businessfrance.fr/en/invest-in-France ). The U.S. Embassy in Paris also collaborated with Business France to create a map of U.S. investment in each region of France ( https://investinfrance.fr/wp-content/uploads/2017/08/Entreprises-americaines.pdf ).

In addition, France’s public investment bank, Bpifrance, assists foreign businesses to find local investors when setting up a subsidiary in France. It also supports foreign startups in France through the government’s French Tech Ticket program, which provides them with funding, a resident’s permit, and incubation facilities. Both business facilitation mechanisms provide for equitable treatment of women and minorities.

President Macron prioritized innovation early in his five-year mandate. In 2017, he launched a €10 billion ($11 billion) fund to back disruptive innovation in energy, the digital sector, and the climate transition by privatizing state-owned enterprises and introduced a four-year tech visa for entrepreneurs to come to France. He also introduced tax reforms that would tax capital gains, interest and dividends at a flat 30 percent, instead of the existing top rate of 45 percent.

In June 2020, the French government introduced a new €1.2 billion ($1.3 billion) plan to support French startups, concentrating on the health, quantum, artificial intelligence, and cybersecurity sectors. The plan included the creation of a €500 million ($550 million) investment fund to help startups overcome the COVID-19 crisis and continue to innovate. It also comprised a “French Tech Sovereignty Fund” launched in December 2020 by France’s public investment bank Bpifrance, with an initial commitment of €150 million ($165 million).

In October 2021, President Macron unveiled a €34 billion ($37.4billion) innovation investment strategy between 2022 and 2027, which mirrors the priorities of the European Commission’s investments in digital innovation and decarbonisation. France will invest by 2030 in breakthrough innovation in a wide variety of areas, including small nuclear fission reactors, green hydrogen production facilities, the production of two million electric and hybrid vehicles every year, research on developing France’s first low-carbon airplane, healthy and sustainable foods, and 20 drugs for cancer and chronic diseases as well as the development of new medical devices. Major industrial groups are encouraged to work with startups, which will also benefit from funding under this new plan. This plan comes on top of the €20 billion ($22 billion) from the 2021 Fourth Future Investment Program. A new Secretary General for Investment was appointed in January 2022 to ensure the coordination of these two innovation programs.

France’s sectors that traditionally attracted the most investment include aeronautics, agro-foods, digital, nuclear, rail, auto, chemicals and materials, forestry, eco-industries, shipbuilding, health, luxury, and extractive industries. However, Business France and Bpifrance are particularly interested in attracting foreign investment in the tech sector. The French government has developed the “French Tech” initiative to promote France as a location for start-ups and high-growth digital companies. French Tech offices have been established in 17 French cities and over 100 cities globally, including New York, San Francisco, Los Angeles, Shanghai, Hong Kong, Vietnam, Moscow, and Berlin. French Tech has special programs to provide support to startups at various stages of their development. The latest effort has been the creation of the French Tech 120 Program, which provides financial and administrative support to some 123 most promising tech companies. In 2019, €5 billion ($5.9 billion) in venture funding was raised by French startups, an increase of nearly threefold since 2015. Venture capital investment in French startups has doubled from €5.1 billion ($5.6 billion) in 2020 to over €10 billion ($11 billion) in 2021.

In March 2021, France launched, with the support of the European Commission and other member states, the Scale-Up Europe initiative bringing together over 300 start-up and scale-up founders, investors, researchers, and corporations, with the goal of creating 10 tech giants each valued at more than €100 billion ($110 billion) by 2030. French authorities supported the Scale-up Europe initiative designed to promote businesses across Europe to expand beyond their local and European markets. As part of that initiative, on February 8, 2022, France inaugurated a new European Investment Fund designed to increase European venture capital funds’ capacity to provide late-stage funding to EU-based start-ups and scale-ups. France and Germany have each committed €1 billion ($1.1 billion), along with €500 million ($565 million) from the European Investment Bank.

The website Guichet Enterprises ( https://www.guichet-entreprises.fr/fr/ ) is designed to be a one-stop website for registering a business. The site, managed by the National Institute of Industrial Property (INPI), is available in both French and English although some fact sheets on regulated industries are only available in French on the website.

French firms invest more in the United States than in any other country and support approximately 765,100 American jobs. Total French investment in the United States reached $314.9 billion in 2020. France was still our tenth largest trading partner with approximately $115.7 billion in bilateral trade in 2021. The business promotion agency Business France also assists French firms with outward investment, which it does not restrict.

Gabon

1. Openness To, and Restrictions Upon, Foreign Investment

Gabon’s 1998 investment code conforms to the Central African Economic and Monetary Community’s (CEMAC) investment regulations and provides the same rights to foreign companies operating in Gabon as to domestic firms.

Gabon’s domestic and foreign investors are protected from expropriation or nationalization without appropriate compensation, as determined by an independent third party. Certain sectors, such as mining, forestry, petroleum, agriculture, and tourism, have specific investment codes, which encourage investment through customs and tax incentives.

Gabon established the Investment Promotion Agency (ANPI-Gabon) with the assistance of the World Bank in 2014. Its mission is to promote investment and exports, support SMEs, manage public-private partnerships (PPPs), and help companies establish themselves. It is designed to act as the gateway for investment into the country and to reduce administrative procedures, costs, and waiting periods.

Gabonese authorities have made efforts to prioritize investment. In 2017, the High Council for Investment was established to promote investment and boost the economy. This body provides a platform for dialogue between the public and private sectors, and its main objectives are to improve the economy and create jobs.

Foreign investors are largely treated in the same manner as their Gabonese counterparts regarding the purchase of real estate, negotiation of licenses, and entering into commercial agreements. There is no general requirement for local participation in investments (see local labor requirements below). Many businesses find it useful to have a local partner who can help navigate the subjective aspects of the business environment.

There are no limits on foreign ownership or control. However, the Government of Gabon automatically owns a 20 percent stake in all petroleum development in the nation, with Gabon Oil able to purchase up to an additional 15 percent. The standard practice is for the Gabonese President to review foreign investment contracts following the completion of ministerial-level negotiations.

The President has taken an active interest in meeting with investors. The lack of a standardized procedure for new entrants to negotiate deals with the government can lead to confusion and time-consuming negotiations. Moreover, the centralization of decision-making by a few senior officials who are exceedingly busy can delay the process. As a result, new entrants often find the process of finalizing deals time-consuming and difficult to navigate.

Gabon has been a World Trade Organization (WTO) member since 1995. In June 2013, Gabon conducted an investment policy review with the WTO. The government has not conducted any investment policy reviews through the Organization for Economic Co-operation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD) since 2017.

The government encourages investments in those economic sectors that contribute the greatest share to Gross National Product (GNP), including oil and gas, mining, and wood harvesting and transformation through customs and tax incentives. For example, oil and mining companies are exempt from customs duties on imported machinery and equipment specific to their industries. The Tourism Investment Code, enacted in 2000, provides tax incentives to foreign tourism investors during the first eight years of operation. The SEZ at Nkok offers tax incentives to industrial investors; the government has mused on the possibility of increasing the number of SEZs in a move to attract further investment.

ANPI-Gabon covers more than 20 public and private agencies, including the Chamber of Commerce, National Social Security Fund (CNSS), and National Health Insurance and Social Security (CNAMGS). It aims to attract domestic and international investors through improved methods of approving and licensing new companies and to support public-private dialogue. It has a single window registration process that allows domestic and foreign investors to register their businesses in 48 hours. There are, however, no special mechanisms for equitable treatment of women and underrepresented minorities in Gabon.

ANPI-Gabon’s website address is: https://www.investingabon.ga/ 

One of ANPI-Gabon’s primary goals is to promote outward investments and exports. The Gabonese government does not restrict domestic investors from investing abroad.

Georgia

1. Openness To, and Restrictions Upon, Foreign Investment

Georgia is open to foreign investment. Legislation establishes favorable conditions for foreign investment, but not preferential treatment for foreign investors. The Law on Promotion and Guarantee of Investment Activity protects foreign investors from subsequent legislation that alters the condition of their investments for a period of ten years. Investment promotion authority is vested in the Investment Division of Enterprise Georgia, a legal entity of public law under the Ministry of Economic and Sustainable Development. The Investment Division’s primary role is to attract, promote, and develop foreign direct investment in Georgia. For this purpose, it acts as the moderator between foreign investors and the Georgian government, ensures access to updated information, provides a means of communication with government bodies, and serves as a “one-stop-shop” to support investors throughout the investment process. ( http://www.enterprisegeorgia.gov.ge/en/about ). Enterprise Georgia also operated the website for foreign investors: www.investingeorgia.org .

Georgia’s Investors Council, an advisory body operating since 2015, aims to promote dialogue among the private business community, international organizations, donors, and the Georgian government for the development of a favorable, non-discriminatory, transparent, and fair business and investment climate in Georgia ( http://ics.ge ). The Business Ombudsman, who is a member of the Investors Council, is another tool for protecting investors’ rights in Georgia ( http://businessombudsman.ge ).

Georgia does not have comprehensive mechanisms in place for screening foreign investment and Georgia does not have FDI thresholds. Governmental reviews of investment projects in Georgia are ad hoc.  The Ministry of Economy and Sustainable Development’s Investment Policy and Support Department is responsible for analyzing proposed foreign investment projects at the request of state agencies.  Georgia’s State Security Service, National Security Council (NSC), Revenue Service, Ministry of Regional Development and Infrastructure, National Bank, Ministry of Finance, Ministry of Justice, Ministry of Internal Affairs, and Ministry of Defense all have potential equities and could play a role in reviewing a foreign transaction or investment proposal for national security concerns in certain circumstances. Georgia’s NSC is currently drafting critical infrastructure protection legislation that is linked to NSC’s investment screening efforts.

Foreign investors have participated in most major privatizations of state-owned property. Transparency of privatization has been an issue at times. No law or regulation authorizes private firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control. Cross-shareholder or stable-shareholder arrangements are not used by private firms in Georgia. Georgian legislation does not protect private firms from takeovers. There are no regulations authorizing private firms to restrict foreign partners’ investment activity or limit foreign partners’ ability to gain control over domestic enterprises.

There are no specific licensing requirements for foreign investment other than those that apply to all companies. The government requires licenses for activities that affect public health, national security, and the financial sector: weapons and explosives production, narcotics, poisonous and pharmaceutical substances, exploration and exploitation of renewable or non-renewable substances, exploitation of natural resource deposits, establishment of casinos and gambling houses and the organization of games and lotteries, banking, insurance, securities trading, wireless communication services, and the establishment of radio and television channels. The law requires the state to retain a controlling interest in air traffic control, shipping traffic control, railroad control systems, defense and weapons industries, and nuclear energy. For investment projects requiring licenses or permits, the relevant government ministries and agencies have the right to review the project for national security concerns.  By law, the government has 30 days to make a decision on licenses, and if the licensing authority does not state a reasonable ground for rejection within that period, the government must approve the license or permit for issuance. In the real estate sector, only Georgian nationals or companies, with some exceptions, may own agricultural land.

Per Georgian law, it is illegal to undertake any type of economic activity in Abkhazia or South Ossetia if such activities require permits, licenses, or registration in accordance with Georgian legislation. Laws also ban mineral exploration, money transfers, and international transit via Abkhazia or South Ossetia. Only the state may issue currency, banknotes, and certificates for goods made from precious metals, import narcotics for medical purposes, and produce control systems for the energy sector.

The Organization for Economic Cooperation and Development (OECD) published an Investment Policy Review in December 2020 ( http://www.oecd.org/investment/oecd-investment-policy-reviews-georgia-0d33d7b7-en.htm ). The most recent WTO Investment Policy Review on Georgia was done in 2016 ( https://www.wto.org/english/tratop_e/tpr_e/tp428_e.htm ), and by UNCTAD in 2014.

Registering a business in Georgia is relatively quick and streamlined. Registration takes one day to complete through Georgia’s single window registration process. The National Agency of Public Registry (NAPR) ( www.napr.gov.ge  – webpage is in Georgian only), located in Public Service Halls (PSH) under the Ministry of Justice of Georgia, carries out company registration. The PSH website (https://www.psh.gov.ge/https://www.psh.gov.ge/main/page/2/85) outlines procedures and requirements for business registration in English. For registration purposes, the law does not require a verification of the amount or existence of charter capital. A company is not required to complete a separate tax registration; the initial registration includes both the revenue service and national business registration. The following information is required to register a business in Georgia: bio data for the founder and principal officers, articles of incorporation, and the company’s area of business activity. Other required documents depend on the type of entity to be established.

To register a business, the potential owner must first pay the registration fee, register the company with the Entrepreneurial Register, and obtain an identification number and certificate of state and tax registration. Registration fees are GEL100 (around $30) for a regular registration and GEL200 (around $60) for an expedited registration, plus a GEL1 bank processing fee. The owner must also open a bank account (free).

Georgia’s business facilitation mechanism provides equitable treatment of women and men. There are a variety of state-run and donor-supported projects that aim to promote women entrepreneurs through specific training or other programs, including access to financing and business training.

The Georgian government does not have any specific policy on promoting or restricting domestic investors from investing abroad and Georgia’s outward investment is insignificant.

According to Georgia’s central bank, the net international investment position of Georgia, which measures the difference between external financial assets and liabilities of a country, totaled negative $26.3 billion as of December 31, 2021.

Germany

1. Openness To, and Restrictions Upon, Foreign Investment

The German government and industry actively encourage foreign investment. U.S. investment continues to account for the largest share of Germany’s FDI. The 1956 U.S.-Federal Republic of Germany Treaty of Friendship, Commerce and Navigation affords U.S. investors national treatment and provides for the free movement of capital between the United States and Germany. As an OECD member, Germany adheres to the OECD National Treatment Instrument and the OECD Codes of Liberalization of Capital Movements and of Invisible Operations.  The Foreign Trade and Payments Act and the Foreign Trade and Payments Ordinance provide the legal basis for the Federal Ministry for Economic Affairs and Climate Action (MEC) to review acquisitions of domestic companies by foreign buyers and to assess whether these transactions pose a risk to the public order or national security (for example, when the investment pertains to critical infrastructure).  For many decades Germany has experienced significant inbound investment, which is widely recognized as a considerable contributor to Germany’s growth and prosperity. The investment-related challenges facing foreign companies are broadly the same as those that face domestic firms, e.g., relatively high tax rates and energy costs, stringent environmental regulations, and labor laws that complicate hiring and dismissals. Germany Trade and Invest (GTAI), the country’s economic development agency, provides extensive information for investors: https://www.gtai.de/gtai-en/invest 

Under German law, a foreign-owned company registered in the Federal Republic of Germany as a GmbH (limited liability company) or an AG (joint stock company) is treated the same as a German-owned company. There are no special nationality requirements for directors or shareholders.

Companies seeking to open a branch office in Germany without establishing a new legal entity, (e.g., for the provision of employee placement services, such as providing temporary office support, domestic help, or executive search services), must register and have at least one representative located in Germany.

While there are no economy-wide limits on foreign ownership or control, Germany maintains an elaborate mechanism to screen foreign investments based on national security grounds. The legislative basis for the mechanism (the Foreign Trade and Payments Act and Foreign Trade and Payments Ordinance) has been amended several times in recent years to tighten parameters of the screening as technological threats evolve, particularly to address growing interest by foreign investors in both Mittelstand (mid-sized) and blue-chip German companies. Germany amended its investment screening mechanism May 1, 2021 and has now fully implemented the EU Screening Directive. With the amendment, firms must notify MEC of foreign investments and MEC can then screen investments in sensitive sectors and technologies if the buyer plans to acquire 10 percent or more of the company’s voting rights and may be required, regardless, for a non-EU company acquiring more than 25 percent of voting rights ( https://www.bmwi.de/Redaktion/EN/Artikel/Foreign-Trade/investment-screening.html ).

In the screening process, MEC considers “stockpile acquisitions” by the same investor in a German company or “atypical control investments” where an investor secures additional influence in company operations via side contractual agreements. MEC can also factor in combined acquisitions by multiple investors if all are controlled by one foreign government. The total time for the screening process, depending on the sensitivities of the investment, may take up 10 to 12 months. BMWK – Investment screening (bmwi.de) 

The World Bank Group’s “Doing Business 2020” Index provides additional information on Germany’s investment climate. [Note: this report is no longer updated]. The American Chamber of Commerce in Germany publishes results of an annual survey of U.S. investors in Germany (“AmCham Germany Transatlantic Business Barometer.” https://www.amcham.de/publications ).

Before engaging in commercial activities, companies and business operators must register in public directories, the two most significant of which are the commercial register (Handelsregister) and the trade office register (Gewerberegister).

Applications for registration at the commercial register ( www.handelsregister.de ) are electronically filed in publicly certified form through a notary.  The commercial register provides information about all relevant relationships between merchants and commercial companies, including names of partners and managing directors, capital stock, liability limitations, and insolvency proceedings.  Registration costs vary depending on the size of the company. According to the World Bank’s Doing Business Report 2020, the median duration to register a business in Germany is eight days, though some firms have experienced longer processing times.

Germany Trade and Invest (GTAI), the country’s economic development agency, can assist in the registration processes ( https://www.gtai.de/gtai-en/invest/investment-guide/establishing-a-company/business-registration-65532 ) and advises investors, including micro-, small-, and medium-sized enterprises (MSMEs), on how to obtain incentives.

In the EU, MSMEs are defined as follows:

  • Micro-enterprises:  fewer than 10 employees and less than €2 million annual turnover or less than €2 million in balance sheet total.
  • Small enterprises:  fewer than 50 employees and less than €10 million annual turnover or less than €10 million in balance sheet total.
  • Medium-sized enterprises:  fewer than 250 employees and less than €50 million annual turnover or less than €43 million in balance sheet total.

U.S.-based exporters seeking to sell in Germany (e.g., via commercial platforms) are required to register with one specific tax authority in Bonn, which can lead to significant delays due to capacity issues.

Germany’s federal government provides guarantees for investments by Germany-based companies in developing and emerging economies and countries in transition in order to insure them against political risks. In order to receive guarantees, the investment must have adequate legal protection in the host country. The Federal Government does not insure against commercial risks. In 2020, the government issued investment guarantees amounting to €900 million for investment projects in 13 countries, with the majority of those in China and India.

Ghana

1. Openness To, and Restrictions Upon, Foreign Investment 

The Government of Ghana has made increasing FDI a priority and acknowledges the importance of having an enabling environment for the private sector to thrive.  Officials are implementing regulatory and other reforms such as automation and digitalization of government processes and enhancing GIPC’s own support services, to improve the ease of doing business and make investing in Ghana more attractive. The 2013 Ghana Investment Promotion Center (GIPC) Act requires the GIPC to register, monitor, and keep records of all business enterprises in Ghana.  Sector-specific laws further regulate investments in minerals and mining, oil and gas, industries within Free Zones, banking, non-bank financial institutions, insurance, fishing, securities, telecommunications, energy, and real estate.  Some sector-specific laws, such as in the oil and gas sector and the power sector, include local content requirements that could discourage international investment.  Foreign investors are required to satisfy the provisions of the GIPC Act as well as the provisions of sector-specific laws.  GIPC leadership has pledged to collaborate more closely with the private sector to address investor concerns, but there have been no significant changes to the laws.  More information on investing in Ghana can be obtained from GIPC’s website, www.gipc.gov.gh.

Most of Ghana’s major sectors are fully open to foreign capital participation. U.S. investors in Ghana are treated the same as other foreign investors.  All foreign investment projects must register with the GIPC.  Foreign investments are subject to the following minimum capital requirements: USD 200,000 for joint ventures with a Ghanaian partner, who should have at least 10 percent of the equity; USD 500,000 for enterprises wholly owned by a non-Ghanaian; and USD 1 million for trading companies (firms that buy or sell imported goods or services) wholly owned by non-Ghanaian entities.  The minimum capital requirement may be met in cash or capital goods relevant to the investment.  Trading companies are also required to employ at least 20 skilled Ghanaian nationals.

Ghana’s investment code excludes foreign investors from participating in eight economic sectors:  petty trading; the operation of taxi and car rental services with fleets of fewer than 25 vehicles; lotteries (excluding soccer pools); the operation of beauty salons and barber shops; printing of recharge scratch cards for subscribers to telecommunications services; production of exercise books and stationery; retail of finished pharmaceutical products; and the production, supply, and retail of drinking water in sealed pouches.  Sectors where foreign investors are allowed limited market access include: telecommunications, banking, fishing, mining, petroleum, and real estate.

Ghana has not conducted an investment policy review (IPR) through the OECD recently. UNCTAD last conducted an IPR in 2003.

The WTO last conducted a Trade Policy Review (TPR) in May 2014.  The next review is scheduled for May 4-6, 2022. The 2014 TPR concluded that the 2013 amendment to the investment law raised the minimum capital that foreigners must invest to levels above those specified in Ghana’s 1994 GATS horizontal commitments and excluded new activities from foreign competition.  However, it was determined that overall, this would have minimal impact on dissuading future foreign investment due to the size of the companies traditionally seeking to do business within the country.  An executive summary of the findings can be found at: https://www.wto.org/english/tratop_e/tpr_e/tp398_e.htm .

Although registering a business is a relatively easy procedure and can be done online through the Registrar General’s Department (RGD) at https://rgd.gov.gh/index.html , businesses have noted that the process involved in establishing a business is lengthy and complex, and requires compliance with regulations and procedures of at least four other government agencies, including GIPC, Ghana Revenue Authority (GRA), Ghana Immigration Service, and the Social Security and National Insurance Trust (SSNIT). In 2019, Ghana passed a new Companies Act, 2019 (Act 992), which among other things, created a new independent office called the Office of the Registrar of Companies, responsible for the registration and regulation of all businesses.  A new office is expected to be in place which would separate the registration process for companies from the Registrar General’s Department; the latter would continue to serve as the government’s registrar for non-business transactions such as marriages.  The new law also simplifies some registration processes by scrapping the issuance of a certificate to commence business and the requirement for a company to state business objectives, which limited the activities in which a company could engage.  The law also expands the role of the company secretary, which now requires educational qualifications with some background in company law practice and administration or having been trained under a company secretary for at least three years.  Foreign investors must obtain a certificate of capital importation, which can take 14 days.  The local authorized bank must confirm the import of capital with the Bank of Ghana, which confirms the transaction to GIPC for investment registration purposes.

Per the GIPC Act, all foreign companies are required to register with GIPC after incorporation with the RGD.  Registration can be completed online at www.gipc.gov.gh.  While the registration process is designed to be completed within five business days, but there are often bureaucratic delays.

The Ghanaian business environment is unique, and guidance can be extremely helpful.  In some cases, a foreign investment may enjoy certain tax benefits under the law or additional incentives if the project is deemed critical to the country’s development.  Most companies or individuals considering investing in Ghana or trading with Ghanaian counterparts find it useful to consult with a local attorney or business facilitation company.  The United States Embassy in Accra maintains a list of local attorneys, which is available through the U.S. Foreign Commercial Service ( https://www.trade.gov/ghana-contact-us ) or U.S. Citizen Services ( https://gh.usembassy.gov/u-s-citizen-services/attorneys/).

Specific information about setting up a business is available at the GIPC website:  https://gipc.gov.gh/4232-2/.   

Ghana Investment Promotion Centre
Post: P. O. Box M193, Accra-Ghana
Note: Omit the (0) after the country code when dialing from abroad.
Telephone: +233 (0) 302 665 125, +233 (0) 302 665 126, +233 (0) 302 665 127, +233 (0) 302 665 128, +233 (0) 302 665 129, +233 (0) 244 318 254/ +233 (0) 244 318 252
Email: info@gipc.gov.gh

Note that mining or oil/gas sector companies are required to obtain licensing/approval from the following relevant bodies:

Petroleum Commission Head Office
Plot No. 4A, George Bush Highway, Accra, Ghana
P.O. Box CT 228 Cantonments, Accra, Ghana
Telephone: +233 (0) 302 953 392 | +233 (0) 302 953 393
Website: http://www.petrocom.gov.gh/ 

Minerals Commission
Minerals House, No. 12 Switchback Road, Cantonments, Accra
P. O. Box M 248
Telephone: +233 (0) 302 772 783 /+233 (0) 302 772 786 /+233 (0) 302 773 053
Website: http://www.mincom.gov.gh/ 

Ghana has no specific outward investment policy.  It has entered into bilateral treaties, however, with a number of countries to promote and protect foreign investment on a reciprocal basis.  Some Ghanaian companies have established operations in other West African countries and there are a number of active Ghanaian investments in the United States in the food processing and personal care sectors.

Greece

1. Openness To, and Restrictions Upon, Foreign Investment

The Greek government continues to take steps to increase foreign investment, implementing economic reforms and taking steps to mitigate the impact of the pandemic.  Greece completed its EU bailout program in 2018, allowing it to borrow once again at market rates, reflected in a rising economic sentiment since 2017.  Heavy bureaucracy and a slow judicial system continue to create challenges for both foreign and domestic investors.

There are no laws or practices known to Post that discriminate against foreign investors.  The country has investment promotion agencies to facilitate foreign investments, with “Enterprise Greece” as the official agency of the Greek state.  Under the supervision of the Ministry of Foreign Affairs, Enterprise Greece is responsible for promoting investment in Greece and exports from Greece, and with making Greece more attractive as an international business partner.  Enterprise Greece provides the full spectrum of services related to international business relationships and domestic business development for the international market, including an Investor Ombudsman program for investment projects exceeding €2 million.  The Ombudsman is available to assist with specific bureaucratic obstacles, delays, disputes, or other difficulties that impede an investment project.  However, Enterprise Greece, even with its ombudsman service, is not very effective at moving investment projects forward.

The General Secretariat for Strategic and Private Investments streamlines the licensing procedure for strategic investments, aiming to make the process easier and more attractive to investors.

Greece has adopted the following EU definitions regarding micro, small, and medium size enterprises:

Micro Enterprises:  Fewer than 10 employees and an annual turnover or balance sheet below €2 million.

Small Enterprises:  Fewer than 50 employees and an annual turnover or balance sheet below €10 million.

Medium-Sized Enterprises:  Fewer than 250 employees and annual turnover below €50 million or balance sheet below €43 million.

Numerous structural reforms, undertaken as part of the country’s 2015-2018 international bailout program as well as a part of the current New Democracy administration’s efforts to lower taxes and reduce bureaucracy, aim to welcome and facilitate foreign investment, and the government has publicly messaged its dedication to attracting foreign investment.The 2019 investment law simplified licensing procedures in order to facilitate investment.  In December 2020, parliament passed a new law allowing non-residents who relocate their jobs to Greece to benefit from half their salary being free of income tax for up to seven years.  The scheme is open to any type of job, any income level and complements other tax incentive schemes put in place, including a non-dom program for wealthy investors and a low flat tax rate for pensioners.  The Trans Adriatic Pipeline (TAP) is another example of the government’s commitment in this area.  In November 2015, the Greek government and TAP investors agreed on measures and began construction on the largest investment project since the start of the financial crisis.  The pipeline began operations in December 2020 and in March 2021, TAP announced that a total of 1 billion cubic meters (bcm) of natural gas from Azerbaijan entered Europe via the Greek interconnection point of Kipoi.  Law 4710/2020 gave a strong push for electro-mobility, with several incentives and subsidies to those interested in acquiring an electric vehicle. The law has paved the way for greater U.S. investment.  For example, Tesla has installed the first pop-up stand along with three electric vehicle (EV) charges at a major Greek shopping mall, while Blink expanded its EV network in Greece.  Additionally, there are directives that have eased the bureaucracy surrounding renewable energy source (RES) projects, including establishing a deadline for the issuance of Environmental Terms Approvals (ETAs) of 120 days and limiting the environmental licensing stages to three stages instead of the previous six or seven stages required for companies to abide by.

In the past decade, the country underwent one of the most significant fiscal consolidations in modern history, with broad and deep cuts to public expenditures and significant increases in labor and social security tax rates, which have offset improved labor market competitiveness achieved through significant wage devaluation.  While there has been notable progress, corruption and burdensome bureaucracy continue to create barriers to market entry for new firms, permitting incumbents to maintain oligopolies in different sectors, and creating scope for arbitrary decisions and rent seeking by public servants.

As a member of the EU and the European Monetary Union (the “Eurozone”), Greece is required to meet EU and eurozone investment regulations.  Foreign and domestic private entities have the legal right to establish and own businesses in Greece; however, the country places restrictions on foreign equity ownership higher than those imposed on average in the other 17 high-income OECD economies, such as equity restrictions on airport operations and limits on foreign ownership in electricity and media.  The government has undertaken EU-mandated reforms in its energy sector, opening much of it to foreign equity ownership.  Restrictions exist on land purchases in border regions and on certain islands because of national security considerations.  Foreign investors can buy or sell shares on the Athens Stock Exchange on the same basis as local investors.  Greece does not maintain an investment screening mechanism.  However, the Greek Government is currently working on the legislation for the development of an FDI screening mechanism. The plan is to finalize the text in mid-2022 and then present it to the European Commission.

The government has not undergone an investment policy review by the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), or United Nations Committee on Trade and Development (UNCTAD) or worked with any other international institution to produce a public report on the general investment climate in the past three years.  However, in July 2020, the OECD published a periodic economic survey describing the state of the economy and addressing foreign direct investment concerns, especially regarding needed reforms in the public sector and judicial system.In particular, the OECD report lauds the Ministry of Digital Governance’s progress in instituting digital and public administration reforms and recommends continued effort in this area.  To date, the OECD has not published an economic survey for 2021, however, the economic forecast summary for Greece was published in December 2021.

Although Greece has many civil society organizations (CSOs), no CSO has raised concerns related to investment policies introduced by the government of Greece.

In 2020, Greece eased processes for starting a business by reducing the time to register a company and removing the requirement to obtain a tax clearance.  Accessing industrial land in Greece is relatively quick, with only three weeks required to lease land from the government.  Private land can be leased within 15 days.  Arbitrating commercial disputes, however, can take almost a year.  Establishing a limited liability company takes approximately four days with three procedures involved, including registering the business, making a company seal, and registering with the Unified Social Security Institution.  Greece’s Ease of Doing Business score in 2020 is 96, for a rank of 11 for starting a business and rank of 79 overall.  Greece is now one of the 37 countries listed on www.businessfacilitation.org.

Greece’s business registration entity GEMI (General Commercial Register) has the basic responsibility for digitizing and automating the registration and monitoring procedures of commercial enterprises. The online business registration process is relatively clear, and although foreign companies can use it, the registration steps are currently available only in Greek.  In general, a company must register with the business chamber, tax registry, social security, and local municipality.  Business creation without a notary can be done for specific cases (small/personal businesses, etc.).  For the establishment of larger companies, a notary is mandatory.

The Greek government does not have any known outward investment incentive programs.  Capital controls were eliminated in September 2019.

Enterprise Greece supports the international expansion of Greek companies.  While no incentives are offered, Enterprise Greece has been supportive of Greek companies attending the U.S. Government’s Annual SelectUSA Investment Summit, which promotes inbound investment to the United States, and similar industry trade events internationally.

Grenada

1. Openness To, and Restrictions Upon, Foreign Investment

Grenada employs a liberal approach to foreign direct investment (FDI) and actively promotes foreign investment into the country.

The government of Grenada identified five priority sectors for investment:

  • Tourism and hospitality services
  • Education and health services
  • Information and communication technology
  • Agribusiness
  • Energy development

The Grenada Investment Development Corporation (GIDC) is the country’s investment promotion agency. It was established in 1985 to stimulate, facilitate, and encourage the creation and development of industry.

The GIDC is a “one-stop shop” offering:

  • Investment and trade information
  • Investment incentives
  • Investment facilitation and aftercare
  • Entrepreneurial/business skills training
  • Small business support services
  • Industrial facilities
  • Policy advice

To promote FDI, the GIDC adopts a targeted approach to promote investment opportunities, provides investor facilitation and entrepreneurial development services, and advocates for a supportive environment for investors to develop and grow businesses, trade, and industries.

Investment retention is a priority in Grenada and is maintained through ongoing dialogue with investors facilitated by the GIDC.

There are no economic and industrial strategies that discriminate against foreign investors. Non-Grenadian investors may be required to obtain an Alien Landholding License and pay a property transfer tax, which levies a 10 percent fee on the purchase of shares in a Grenadian registered company or real estate. In addition, the sale of such shares or real estate to non-nationals will attract a property transfer tax of 15 percent payable by the seller if the seller is a non-Grenadian. Foreign investors employed in Grenada are required to obtain a work permit, renewable annually. U.S. investors must pay a fee of USD $1,111 or XCD $3,000 for work permits. The renewal fee varies based on the investor’s country of citizenship.

There are no limits on foreign ownership or control, except for enterprises deemed prejudicial to national security, the environment, public health, or national culture, or which contravene the laws of Grenada. Grenada has accepted but not yet implemented regional anti-competition obligations. U.S investors are not disadvantaged or singled out by any of the ownership or control mechanisms, sector restrictions, or investment screening mechanisms in Grenada relative to other foreign investors.

Grenada maintains an investment screening and approval mechanism for inbound foreign investment. Inbound investment is screened and approved by the Grenada Investment Development Corporation. GIDC will review the submitted proposal and advise on the requirements and processes for doing business in Grenada. Depending on the type of investment they will work with the respective ministries. Post is unaware of any notable public statements by government officials or private sector representatives about the screening mechanism.

Grenada passed its most recent Investment Promotion Act in 2014. The legislation promotes, encourages, and protects investment in Grenada by providing investors with a stable framework of fundamental and enforceable rights. It seeks to guarantee and ensure security and fairness in strict accordance with the rule of law and best international standards and practices. The 2014 Act is also in compliance with WTO regulations, the Economic Partnership Agreement between the EU and the Caribbean Community (CARICOM), and the Agreement between the Caribbean Forum (CARIFORUM) and the EU.

The incentives regime enacted in 2016 grants incentives to ensure that all new tax exemptions are codified, restricts discretionary exemptions, and requires that the beneficiaries of exemptions file appropriate tax returns and comply with tax requirements. It also sets streamlined, simple, and non-discretionary systems/processes for the granting of incentives. The Customs and Inland Revenue Departments (CIRD) administer exemptions through a clearly defined rule-based system in contrast with past incentive schemes that required each case to be approved at the cabinet level.

Under this regime, the CIRD grants incentives to projects within the priority sectors for investment. These priority sectors are tourism, manufacturing, agriculture and agribusiness, information technology services, telecommunication providers and business process outsourcing operations, education and training, health and wellness, creative industries, energy, and research and development. Other sectors include student accommodation, heavy equipment operators, investment projects above particular investment thresholds, and projects within specific geographical locations.

The incentive regime seeks to provide investment incentives on a performance basis (i.e., the more one invests, the more incentives one can receive). Therefore, based on the level of investment, CIRD grants different levels of incentives in a transparent, predictable, and non-discriminatory manner.

In the past three years, the government was not subject to third-party investment policy reviews through multilateral organizations such as the Organization for Economic Cooperation and Development (OECD), the WTO, and the UN Conference on Trade and Development.

In the past five years, Post is unaware of any civil society organization, including those based in Grenada or in third countries, that provided useful reviews of investment policy-related concerns.

An investor must register a business name and identify whether it is a partnership or limited liability company. A registered business can be wholly owned or a joint venture. The official website of the GIDC includes an investor’s guide that details the procedures for starting and operating a business in Grenada. The guide has a business procedure flow chart and gives step-by-step instructions for various tasks from registering a business and owning properties to obtaining permits and licenses. Detailed information on business registration and timelines can be found at: http://grenadaidc.com/investor-centre/investors-guide/starting-up-a-business/#.WKxXdfnQe70 

The GIDC provides business facilitation mechanisms and ensures the equitable treatment of women and underrepresented minorities in the economy.

The government of Grenada does not promote or incentivize outward investment. The Revised Treaty of Chaguaramas, to which Grenada is a party, includes a chapter on service agreements under the European Partnership Agreement (EPA). Under certain circumstances, provisions in these agreements may offer incentives to the potential investor. Grenada does not restrict domestic investors from investing abroad.

Guatemala

1. Openness To, and Restrictions Upon, Foreign Investment

The Guatemalan government continues to promote investment opportunities and work on reforms to enhance competitiveness and the business environment. As part of the government’s efforts to promote economic recovery during and after the COVID-19 pandemic, the Ministry of Economy (MINECO) began implementing an economic recovery plan in September 2020, which focuses on recovering lost jobs and generating new jobs, attracting new strategic investment, and promoting consumption of Guatemalan goods and services locally and globally. Private consultants contributed to the government’s September 2020 economic recovery plan, which focuses on increasing exports and attracting foreign direct investment. During 2021 and first months of 2022 the Guatemalan congress approved some key economic legislation included in the economic recovery plan to improve the investment climate and foster economic growth, such as a leasing law, amendments to the free trade zone law, a law to simplify administrative procedures and requirements, and an insolvency law.

Guatemala’s investment promotion office operates within MINECO’s National Competitiveness Program (PRONACOM). PRONACOM supports potential foreign investors by offering information, assessment, coordination of country visits, contact referrals, and support with procedures and permits necessary to operate in the country. Services are offered to all investors without discrimination. The World Bank’s Doing Business 2020 report ranked Guatemala 96 out of 190 countries, one position lower than its rank in 2019. (Word Bank discontinued its Doing Business report in September 2021.) The two areas where the country had the highest rankings that year were electricity and access to credit. The areas of the lowest ranking were protecting minority investors, enforcing contracts, and resolving insolvency.

International investors tend to engage with the Guatemalan government via chambers of commerce and industry associations, and/or directly with specific government ministries. PRONACOM began to prioritize investment retention in 2020 and continued this policy throughout 2021.

The Guatemalan Constitution recognizes the right to hold private property and to engage in business activity. Foreign private entities can establish, acquire, and dispose freely of virtually any type of business interest, with the exception of some professional services as noted below. The Foreign Investment Law specifically notes that foreign investors enjoy the same rights of use, benefits, and ownership of property as Guatemalan citizens. Guatemalan law prohibits foreigners, however, from owning land immediately adjacent to rivers, oceans, and international borders.

Guatemalan law does not prohibit the formation of joint ventures or the purchase of local companies by foreign investors. The absence of a developed, liquid, and efficient capital market, in which shares of publicly owned firms are traded, makes equity acquisitions in the open market difficult. Most foreign firms operate through locally incorporated subsidiaries.

The law does not restrict foreign investment in the telecommunications, electrical power generation, airline, or ground-transportation sectors. The Foreign Investment Law removed limitations to foreign ownership in domestic airlines and ground-transport companies in January 2004. The Guatemalan government does not have a screening mechanism for inbound foreign investment.

Some professional services may only be supplied by professionals with locally-recognized academic credentials. Public notaries must be Guatemalan nationals. Foreign enterprises may provide licensed, professional services in Guatemala through a contract or other relationship with a Guatemalan company. As of 2010, Guatemalan law allows foreign insurance companies to open branches in Guatemala, a requirement under CAFTA-DR. This law requires foreign insurance companies to fully capitalize in Guatemala.

Guatemala has been a World Trade Organization (WTO) member since 1995. The Guatemalan government had its last WTO trade policy review (TPR) in November 2016. In 2011, the United Nations Conference on Trade and Development (UNCTAD) conducted an investment policy review (IPR) on Guatemala. The WTO TPR highlighted Guatemala’s efforts to increase trade liberalization and economic reform efforts by eliminating export subsidies for free trade zones, export-focused manufacturing, and assembly operations (maquilas) regimes, as well as amendments to the government procurement law to improve transparency and efficiency. The WTO TPR noted that Guatemala continues to lack a general competition law and a corresponding competition authority. The UNCTAD IPR-recommended strengthening the public sector’s institutional capacity and highlighted that adopting a competition law and policy should be a priority in Guatemala’s development agenda. The government agreed to approve a competition law by November 2016 as part of its commitments under the Association Agreement with the European Union, but the draft law had not been approved as of March 2022. Other important recommendations from the UNCTAD IPR were to further explore alternative dispute resolution mechanisms and the establishment of courts for commercial and land disputes, though the government had not made substantive progress on these recommendations as of March 2022.

The Guatemalan government has a business registration website (https://minegocio.gt/), which facilitates on-line registration procedures for new businesses. Foreign companies that are incorporated locally are able to use the online business registration window, but the system is not yet available to other foreign companies. The commercial code amendments that entered into force in January 2018 reduced the time and costs to register a new business online. As of March 2022, the estimated time to register a new mercantile company online was from four to 36 hours and the estimated time to register a limited liability company was between 11 and 15 days.. The estimated costs to register a new mercantile company and a new limited liability company were $19 and $77, respectively, as of March 2022. The procedures allow mercantile companies to receive their business registration certificates online. Every company must register with the business registry, the tax administration authority, the social security institute, and the labor ministry. Licenses, if required from the Ministry of Environment and Natural Resources, Ministry of Agriculture, Livestock and Food, and/or Ministry of Health and Social Assistance, add considerable additional time.

Guatemala does not incentivize nor restrict outward investment.

Guinea

1. Openness To, and Restrictions Upon, Foreign Investment

Former President Conde’s government had adopted a strong, positive attitude toward foreign direct investment (FDI), an approach that has been echoed by the transition government.  In the face of budget shortfalls and low commodity prices, both former President Conde’s government and the transition government have expressed hope FDI will help diversify the economy, spur GDP growth, and provide reliable employment.  To that end, former President Conde’s government reduced land transfer fees, and improved procedures for import and construction permits.  Guinea does not discriminate against foreign investors, with the exception of a prohibition on foreign media ownership.  One area of concern, mining companies have negotiated different taxation rates despite mining code requirements.  In some instances, short-term tax breaks end up being costly for the investor as they are then expected to “contribute” resources like electrical energy or roadbuilding as an informal quid pro quo for the lighter tax burden.  According to the 2021World Investment Report, FDI in Guinea increased from USD 44 million in 2019 to 325 million in 2020.  In late 2015, the U.S. Embassy facilitated the establishment of an informal international investors group to liaise with the government, although the group has not been very active since.  There is the Chambre des Mines (Chamber of Mines), a government-sanctioned advisory organization that includes Guinea’s major mining firms.  Guinea’s Agency for the Promotion of Private Investment (APIP) provides support in the following areas:

  1. Create and register businesses
  2. Facilitate access to incentives offered under the investment code
  3. Provide information and resources to potential investors
  4. Publish targeted sector studies and statistics
  5. Provide training and technical assistance
  6. Facilitate solutions for investors in Guinea’s interior

On March 13, 2021, a presidential decree changed the structure of APIP into a public agency under the technical supervision of the Ministry of Investments and Public Private Partnerships, and under the financial supervision of the Ministry of Economy and Finance.  Since the September 2021 coup d’etat, APIP falls under the Ministry of Commerce, Industry, and Small and Medium Enterprises.

More information about APIP can be found at: http://apip.gov.gn/

Investors can register under one of four categories of business in Guinea. More information on the four types of business registration is available at http://invest.gov.gn/page/create-your-company.  There are no general limits on foreign ownership or control, and 100 percent ownership by foreign firms is legal in most sectors.  Foreign ownership of print media, radio, and television stations is not permitted.  The 2013 Mining Code gives the government the right to a 15 percent interest in any major mining operation in Guinea (the government decides when an operation has become large enough to qualify).  Mining and media notwithstanding, there are no sector-specific restrictions that discriminate against market access for foreign investment.  Despite this lack of official discrimination, many enterprises have discovered the licensing process to be laden with bureaucratic delays that are usually dealt with by paying consultant fees to help expedite matters.  The U.S. Embassy may be able to advocate on behalf of American companies when it is aware of excessive delays.

According to the Investment Code, the National Investment Commission has a role in reviewing requests for approval of foreign investment and for monitoring companies’ efforts to comply with investment obligations.  The Ministry of Planning and Economic Development hosts the secretariat for this commission, which grants investment approvals.  The government gives approved companies, especially industrial firms, the use of the land necessary for their plant, with the duration and conditions of use set out in the terms of the approval.  The land and associated buildings belong to the State but can also be rented by or transferred to another firm with government approval.

There has been no investment policy review conducted by the UN Conference on Trade and Development or the Organization for Economic Cooperation and Development within the past several years.  The World Trade Organization (WTO) last conducted a review of Guinea in 2018.  The 2018 report can be viewed here: https://www.wto.org/english/tratop_e/tpr_e/tp470_e.htm.

APIP promotes investment, helps register businesses, assists with the expansion of local companies, and works to improve the local business climate.  APIP maintains an online guide for potential investors in Guinea (http://invest.gov.gn).  Business registration can be completed in person at APIP’s office in Conakry or through their online platform:  https://synergui.apipguinee.com/fr/utilisateurs/register/.  The only internationally accredited business facilitation organization that assesses Guinea is the Global Enterprise Registration (GER.co), which gives Guinea’s business creation/investment website a 6/10 rating for 2021.  It takes roughly seventy-two hours to register a business.  APIP’s services are available to both Guinean and foreign investors.  The “One Stop Shop” at APIP’s Conakry office can provide small and medium sized enterprises (SMEs) with requisite registration numbers, including tax administration numbers and social security numbers.  Notaries are required for the creation of any other type of enterprise.

An SME in Guinea is defined as a business with less than 50 employees and revenue less than 500 million Guinean francs (GNF) (around USD 50,000).  SMEs are taxed at a yearly fixed rate of GNF 15 million (USD 1,500).  Administrative modalities are simplified and funneled through the “One Stop Shop”.   In December 2019, the Prime Minister inaugurated the “Maison des PME,” (“The SME House”) a public-private partnership between the Societe Generale bank and APIP to help local SMEs expand and develop.

Guinea does not formally promote outward investment, though the government does not restrict domestic investors from investing abroad.

Guyana

1. Openness To, and Restrictions Upon, Foreign Investment

The GoG recognizes foreign direct investment (FDI) as critical for growing and diversifying the Guyanese economy. Guyanese law does not discriminate against foreign investors. The GoG has prioritized investments in the following sectors: agriculture, agro-processing, light manufacturing, renewable energy, tourism and information and communications technology (ICT). The Guyana Office for Investment (GO-INVEST) is the GoG’s primary vehicle for promoting FDI opportunities and assisting foreign corporations with their business registrations and applying for tax concessions. Companies and investors are encouraged to do their due diligence and have robust business plans completed before approaching GOINVEST. The GoG passed the Local Content Act (LCA) on December 31, 2021, which establishes baseline requirements for foreign and local firms operating in the country’s oil and gas sector to hire Guyanese and source local materials. The legislation lists local quotas for 40 business services and material inputs, which must come from Guyanese businesses. The targets range from near total local sourcing (90 to 100 percent) for services like ground transportation of personnel, local accounting and legal services, and pest control services to lower levels (between 5 to 25 percent) for more technical items like dredging services, engineering and machining, borehole testing, environmental services and studies, and aviation support services.  The GoG plans to expand this initial list of services and materials as local capacity increases, in which case foreign firms may have to enter into partnerships with local firms to comply with the LCA. Some local firms involved in joint ventures or subcontract relationships with foreign companies have expressed concerns about unclear requirements or the suggestion of new or revised tenders by the Local Content Secretariat, which could delay their operations and create conditions for undue influence and rent seeking behavior.

Guyana’s constitution protects the rights of foreigners to own property in Guyana. Foreign and domestic firms possess the right to establish and own business enterprises and engage in all forms of commerce, except for some oil and gas services which are now legally protected under the LCA. Private entities are governed by the 1991 Companies Act (amended in 1995) under which they have the right to establish business enterprises and are free to acquire or dispose of interest in accordance with the law. Some key sectors like oil and gas, aviation, forestry, banking, mining, and tourism are heavily regulated and require special licensing and may have limits on foreign ownership. The process to obtain licenses can be time consuming and may in some instances require ministerial approval.

The LCA significantly increased the ownership criteria for a company operating in, or servicing the oil sector, to be considered Guyanese as: Guyanese nationals having at least 51 percent voting rights, holding at least 75 percent of executive and senior management positions within the company, and at least 90 percent non-managerial staff positions. As of April 2022, these limits on foreign control and ownership only apply to the initial schedule of local companies outlined in the 2021 LCA.

The GoG also prohibits foreign ownership of small-and-medium-scale mining (ASM) concessions. Foreign investors interested in participating in the industry at those levels may establish joint ventures with Guyanese nationals, under which the two parties agree to jointly develop a mining property. However, this type of relationship can carry a high level of risk because arrangements are governed only by private contracts and the sector’s regulatory agency, the Guyana Geology and Mines Commission (GGMC), offers little recourse for ASM disputes. The U.S. Embassy strongly encourages investors to thoroughly conduct their due diligence when exploring business opportunities.

The GoG maintains an investment screening mechanism through GOINVEST. Under this mechanism, investment agreements are prepared by GOINVEST, followed by a review by the Guyana Revenue Authority (GRA), and approval by the Minister of Finance ultimately approves the investment agreement, pending approval by the GRA. Industry specific investments can be subject to approval by the relevant ministries, like the recently established Local Content Secretariat within the Ministry of Natural Resources, which now approves all oil and gas related business operations.

Government policy focuses on attracting inward FDI. The GoG applies national treatment to all economic activities, except for certain oil and gas and mining operations. The World Trade Organization (WTO) published its most recent trade policy review of Guyana on March 2, 2022, in which it encouraged the GoG to invest in infrastructure and human capital development and reduce its dependence on fossil fuels. The most recent report reiterated prior recommendations for the GoG to increase transparency in government procurement and modernize of the government’s treatment of intellectual property rights.

World Trade Organization is available at the following link: https://www.wto.org/english/tratop_e/tpr_e/tp522_crc_e.htm 

President Irfaan Ali’s administration has emphasized its desire to diversify Guyana’s economy and expand business ties with the United States, Europe, the Middle East, and others. The GoG created a Diaspora Affairs Unit within the Ministry of Foreign Affairs and International Cooperation to encourage business ties with the Guyanese diaspora, especially the U.S. based diaspora. All companies operating in Guyana must physically register with the Registrar of Companies, there is no online platform. Registration fees are lower for companies incorporated in Guyana than those incorporated abroad.  Locally incorporated companies are subjected to a flat fee of approximately $300 and a company incorporated abroad is subject to a fee of approximately $400. Depending on the type of business, registration may take three weeks or more. Newly registered businesses are encouraged to immediately apply for a tax identification number (TIN) from the GRA. If a company employs Guyanese workers, the company must demonstrate compliance with the National Insurance Scheme (social security). Businesses in the sectors requiring specific licenses, such as oil and gas, mining, telecommunications, forestry, and banking must obtain operation licenses from the relevant authorities before commencing operations. Guyana has six municipal authorities which also assess municipal taxes: Anna Regina, Corriverton, Georgetown, Linden, New Amsterdam, and Rosehall.

GOINVEST advises the GoG on the formulation and implementation of national investment policies and provides facilitation services to foreign investors, particularly in completing administrative formalities, such as commercial registration and applications for land purchases or leases.  Under the Status of Aliens Act, foreign and domestic investors have the same rights to purchase and lease land. However, the process to access licensing can be complex and many foreign companies have opted to partner with local companies which may assist with acquiring a license. The Investment Act specifies that there should be no discrimination between foreign and domestic private investors, or among foreign investors from different countries. The authorities maintain that foreign investors have equal access to opportunities arising from privatization of state-owned companies.

Resources

Guyana Deeds and Commercial Registry: https://dcra.gov.gy/
GO-INVEST: https://goinvest.gov.gy/
Guyana Revenue Authority: https://www.gra.gov.gy/ 

While the GoG is focused on attracting inward investment into Guyana, there are no restrictions for domestic investors to invest abroad. GOINVEST supports Guyanese investors and exporters looking to operate overseas.  In 2021, Guyana repealed and replaced its existing sovereign wealth fund legislation, the Natural Resource Fund Act. The passage of the revised NRF, along with the appointment of a board of directors, paves the way for the GoG to invest a portion of its oil revenues and royalties in global markets.

Haiti

1. Openness To, and Restrictions Upon, Foreign Investment

Haiti’s legislation encourages foreign direct investment. Import and export policies are non-discriminatory and are not based on nationality. Haitian and foreign investors have the same rights, privileges, and protections under the 1987 investment code. The Haitian government has made some progress in recent years to improve the legal framework, create and strengthen core public institutions, and enhance economic governance. The Haitian Central Bank continues to work with the International Monetary Fund (IMF) and the World Bank to implement measures aimed at creating a stable macroeconomic environment. The IMF concluded its most recent Article IV consultation (2019) with Haiti in January 2020. In April 2020, the IMF loaned Haiti $112 million through its rapid credit facility mechanism to provide liquidity to Haiti for expenditures to address COVID-19. Most recently, in August 2021, Haiti received an allocation of IMF’s Special Drawing Rights (SDR) equivalent to $224 million. While the IMF recommended using these funds to support COVID-19 measures and earthquake relief efforts, the IMF did not stipulate how these fuds were to be used.

While not discriminatory towards international investment specifically, the Haitian government’s economic policies fall short of providing a sound enabling environment for foreign direct investment. Despite the Haitian Central Bank’s periodic interventions in the foreign exchange market, the Haitian gourde continued to depreciate against the U.S. dollar. As of March 2022, the BRH benchmark rate has reached HTG/USD 104.7, having increased by 23.3 percent over the prior 12 months and the U.S. dollar banknotes remain scarce for businesses and regular citizens.

Despite passing anti-money laundering and anti-corruption laws to ensure that Haiti’s legislation corresponds with international standards, the government has not strictly followed the legal framework of these laws and has also failed to incentivize investment in Haiti. In early 2017, the Parliament enacted legislation making electronic signatures and electronic transactions legally binding. Other pieces of legislation that may improve Haiti’s investment climate remain pending, including incorporation procedures, a new mining code, and an insurance code. The Finance Ministry is implementing measures to improve revenue collection and control spending. The Ministry signed an agreement with Haiti’s Central Bank in November 2020 to strengthen fiscal discipline and limit government monetary financing. Despite these measures, monetary financing of the budget deficit over Fiscal Year (FY) 2021 has grown by 15 percent from FY2020 and stood at 15.8 billion gourdes (approximately $145 million) as of March 2022, six months into the fiscal year. The Center for the Facilitation of Investments (CFI), which operates under Haitian Ministry of Commerce oversight, was established to promote domestic and international investment opportunities in Haiti. In concept, the CFI could streamline the investment process by working with other government agencies to simplify procedures related to trade and investment; providing updated economic and commercial information to local and foreign investors; making proposals on investor incentives; and promoting investment in priority sectors. The CFI aims to offer tailored services to large international investors. In practice, the CFI has made limited progress to incentivize job creation and boost national production in agriculture, apparel assembly, and tourism. As examples, prior to the COVID-19 pandemic, Haiti’s Tourism Association reported a 60 percent loss of jobs in the sector in 2019. The apparel sector, the largest provider of jobs in the formal private sector, has reported great difficulties operating due to insecurity and recurring fuel shortages with adverse effect on contracts and employment.

The Haitian government does not impose discriminatory requirements on foreign investors. Haitian laws related to residency status and employment are reciprocal. Foreigners who are legal residents in Haiti and wish to engage in trade have, within the framework of laws and regulations, the same rights granted to Haitian citizens. However, Article 5 of the Decree on the Profession of Merchants reserves the function of manufacturer’s agent for Haitian nationals.

Foreign firms are also encouraged to participate in government-financed development projects. Performance requirements are not imposed on foreign firms as a condition for establishing or expanding an investment, unless indicated in a signed contract.

Foreign investors are permitted to own 100 percent of a company or subsidiary. As a Haitian entity, such companies enjoy all rights and privileges provided under the law. Additionally, foreign investors are permitted to operate businesses without equity-to-debt ratio requirements. Accounting law allows foreigners to capitalize using tangible and intangible assets in lieu of cash investments. Both Haitian and foreign investors enjoy the same rights and privileges. However, foreign investors residing in Haiti must obtain a residence permit and are expected to pay duties and taxes, in accordance with the scales and regulations applicable. Foreign investors are free to own real estate for the needs of their businesses and enjoy the same rights and prerogatives as Haitian investors. The reimbursement of debts contracted abroad for investments made in Haiti are not subject to any constraint or taxation.

Foreign investors are free to enter into joint ventures with Haitian citizens. The distribution of shares is a private matter between the two parties. However, the government regulates the sale and purchase of company shares. Investment in certain sectors, such as health and agriculture, requires special Haitian government authorization. Investment in “sensitive” sectors such as electricity, water, telecommunications, and mining require a Haitian government concession as well as authorization from the appropriate governmental agency. In general, natural resources are the property of the state, and the exploitation of mineral and energy resources requires concessions and permits from the Ministry of Public Works’ Bureau of Mining and Energy. Mining, prospecting, and operating permits may only be granted to companies established and resident in Haiti, and the establishment of new industrial mines cannot take place until an elected parliament passes an updated mining law, along the lines of a draft law initially presented in 2017.

Entrepreneurs are free to dispose of their properties and assets and to organize production and marketing activities in accordance with local laws.

Investors in Haiti can create the following types of businesses: sole proprietorship, limited or general partnership, joint-stock company, public company (corporation), subsidiary of a foreign company, and co-operative society. The most common business structures in Haiti are corporations. A draft law (Société de Droits law), which would facilitate the creation of other types of businesses in Haiti, such as LLCs, remains pending parliamentary approval when parliament is restored.

Haiti’s last investment policy review from the United Nations Conference on Trade and Development occurred in 2012. In general, Haiti’s political instability, weak institutions, and inconsistent economic policies impede the country’s ability to attract and direct foreign direct investment.

The World Trade Organization’s (WTO) 2015 Trade Policy Review stated that Haiti’s Investment Code and Law on Free Trade Zones is fully compliant with the Agreement on Trade-Related Investment Measures. The full report can be viewed at https://www.wto.org/english/tratop_e/tpr_e/tp427_e.htm .

While the Haitian government has made efforts to facilitate the launching and operating of businesses, the average time to start a business in Haiti is 189 days, according to the World Bank’s 2020 Ease of Doing Business Report. At present, it takes between 90 and 120 days to complete registration with the Commercial Registry at the Ministry of Commerce and obtain the authorization of operations (Droit de fonctionnement). The CFI also offers a service providing pre-registered and fully authorized companies in manufacturing, agribusiness, and real estate the opportunity to reduce their registration time. Once the Inter-Ministerial Investment Commission validates these established companies, the shares are transferred to the new owners.

Both foreign and domestic businesses can register at Haiti’s CFI: http://cfihaiti.com . All businesses must register with the Ministry of Commerce, the Haitian tax office, the state-owned Banque Nationale de Crédit, the social security office, and the retirement insurance office.

The Ministry of Commerce and Industry’s internet registry allows investors to search for and verify the existence of a business in Haiti. The registry will eventually provide online registration of companies through an electronic one-stop shop. In October 2020, CFI launched Spotlight, an initiative with the aim of promoting visibility of companies already established in Haiti and registered in the CFI database.

Neither the law nor the Haitian government restricts domestic investors from investing abroad. Still, Haiti’s outward investment is limited to a few enterprises with small investments. These investors are generally businesspersons with dual citizenship and others of Haitian origin who presently reside in the country in which their firms operate. The majority of these firms are service providers and not investment firms. There is no current program or incentive in place to encourage Haitian entrepreneurs to invest abroad.

Honduras

1. Openness To, and Restrictions Upon, Foreign Investment

Honduras is generally open to foreign investment and government leaders consistently assert their desire to attract investment. At the same time, recent government actions have increased uncertainty in the investment climate. The legal framework for investment includes the Honduran constitution, the investment chapter of CAFTA-DR (which takes precedence over most domestic law), and the 2011 Law for the Promotion and Protection of Investments. The Honduran constitution requires all foreign investment to complement, but not substitute for, national investment. Honduras’ legal obligations guarantee national treatment and most favored nation treatment for U.S. investments in most sectors of the Honduran economy and include enhanced benefits in the areas of insurance and arbitration for domestic and foreign investors. CAFTA-DR has equal status with the constitution in most sectors of the Honduran economy. In addition to liberalizing trade in goods and services, CAFTA-DR includes important requirements relating to investment, customs administration and trade facilitation, technical barriers to trade, government procurement, telecommunications, electronic commerce, intellectual property rights, transparency, and labor and environmental protection.

Representatives from the international investment community have voiced concerns that several Castro administration policies have made the investment climate in Honduras less attractive. For example, after the hourly employment law was repealed in April 2022, all Honduran employees must now be salaried, eliminating flexible hiring practices vital for seasonal work. In addition, the threat of expropriation in a May 2022 energy law damaged perceptions of commercial rule of law in Honduras, increasing state control of the sector and leaving many investors wondering which other sectors will be subjected to government coercion and threats. The repeal of the framework establishing the special economic “ZEDE” zones further contributed to uncertainty over the government’s commitment to investment protections required by international treaties. And the Castro administration’s tendency to pass important laws very quickly, with little consultation or consideration of secondary and tertiary effects has created concerns about the stability and predictability of the investment environment.

The National Investment Council, the Ministry of Investment Promotion, and the Ministry of Economic Development all have equities in attracting foreign investment and an ambitious job creation mandate. Critics complain that lack of clarity and overlapping responsibilities among these entities undermine the government’s ability to effectively promote Honduras as a profitable destination for foreign capital.

Honduras’ Investment Law does not limit foreign ownership of businesses, except for those specifically reserved for Honduran investors, including small firms with capital less than $6,300 and the domestic air transportation industry. For all investments, at least 90 percent of companies’ labor forces must be Honduran, and companies must pay at least 85 percent of their payrolls to Hondurans. Majority ownership by Honduran citizens is required for companies in the commercial fishing sector, forestry, local transportation, radio, television, or benefiting from the Agrarian Reform Law. There is no screening or approval process specific to foreign direct investments in Honduras. Foreign investors are subject to the same requirements for environmental and other regulatory approvals as domestic investors.

According to the law, investors can establish, acquire, and dispose of enterprises at market prices under freely negotiated conditions without government intervention, but some foreign business operators report difficulty closing businesses. Private enterprises fairly compete with public enterprises on market access, credit, and other business operations. Foreign investors have the right to own property, subject to certain restrictions established by the Honduran constitution and several laws relating to property rights. Investors may acquire, profit, use, and dispose of property ownership with the exception of land within 40 kilometers of international borders and shorelines. Honduran law does permit, however, foreign individuals to purchase properties close to shorelines in designated “tourism zones.”

In 2020, the UN Working Group on Business and Human Rights conducted a review of Honduras: A/HRC/44/43/Add.2 (un.org) 

The Environmental Justice Atlas details 23 cases of environmental conflicts in Honduras: https://ejatlas.org/country/honduras 

The Business and Human Rights Centre aggregates news articles about responsible business conduct in Honduras: https://www.business-humanrights.org/en/latest-news/?&language=en&countries=HN 

Global Witness details concerns about environmental and human rights practices in Honduras: https://www.globalwitness.org/tagged/honduras/ 

The Honduran government has worked to simplify administrative procedures for establishing a company in recent years, including by offering many processes online. Government of Honduras (GOH) officials are pressing for, and have made good progress in, the digitalization of business, import, permitting and licensing, and taxation processes to increase efficiency and transparency, but procedural red tape to obtain government approval for investment activities remains common, especially at the local level. Honduras’ business registration information portal ( https://honduras.eregulations.org/  ) provides clear step-by-step information on registering a business, including fees, agencies, and required documents.

Honduras does not promote or incentivize outward investment.

Hong Kong

1. Openness To, and Restrictions Upon, Foreign Investment

Hong Kong is the world’s third-largest recipient of foreign direct investment (FDI), according to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2021, with a significant amount bound for mainland China. The HKG’s InvestHK department encourages inward investment, offering free advice and services to support companies from the planning stage through to the launch and expansion of their business. U.S. and other foreign firms can participate in government financed and subsidized research and development programs on a national treatment basis. Hong Kong does not discriminate against foreign investors by prohibiting, limiting, or conditioning foreign investment in a sector of the economy.

Capital gains are not taxed, nor are there withholding taxes on dividends and royalties. Profits can be freely converted and remitted. Foreign-owned and Hong Kong-owned company profits are taxed at the same rate – 16.5 percent. The tax rate on the first USD 255,000 profit for all companies is currently 8.25 percent. No preferential or discriminatory export and import policies affect foreign investors. Domestic industries receive no direct subsidies. Foreign investments face no disincentives, such as quotas, bonds, deposits, or other similar regulations.

According to HKG statistics, 3,940 overseas companies had regional operations registered in Hong Kong as of June 1, 2021. The United States has the largest number with 664. Hong Kong is working to attract more start-ups as it develops its technology sector, and about 28 percent of start-ups in Hong Kong come from overseas. Hong Kong’s Business Facilitation Advisory Committee is a platform for the HKG to consult the private sector on regulatory proposals and implementation of new or proposed regulations. Foreign investors can invest in any business and own up to 100 percent of equity. Like domestic private entities, foreign investors have the right to engage in all forms of remunerative activity.

The HKG owns virtually all land in Hong Kong, which the HKG administers by granting long-term leases without transferring title. Foreign residents claim that a fifteen percent Buyer’s Stamp Duty on all non-permanent-resident and corporate buyers discriminates against them. The main exceptions to the HKG’s open foreign investment policy are:

Broadcasting – Voting control of free-to-air television stations by non-residents is limited to 49 percent. There are also residency requirements for the directors of broadcasting companies.

Legal Services – Foreign-qualified lawyers may only practice the law of their home jurisdiction, provided the firm they are working for is licensed in Hong Kong to work in those jurisdictions. Foreign law firms may become “local” firms after satisfying certain residency and other requirements. Localized firms may thereafter hire local attorneys and must maintain at least a 1:1 ratio of local attorneys to registered-foreign lawyers, without exception. Foreign law firms can also form associations with local law firms.

Hong Kong last conducted the Trade Policy Review in 2018 through the World Trade Organization (WTO). https://www.wto.org/english/tratop_e/tpr_e/g380_e.pdf

The Efficiency Office under the Innovation and Technology Bureau is responsible for business facilitation initiatives aimed at improving the business regulatory environment of Hong Kong. The e-Registry (https://www.eregistry.gov.hk/icris-ext/apps/por01a/index) is a convenient and integrated online platform provided by the Companies Registry and the Inland Revenue Department for applying for company incorporation and business registration. Applicants, for incorporation of local companies or for registration of non-Hong Kong companies, must first register for a free user account, presenting an original identification document or a certified true copy of the identification document. The Companies Registry normally issues the Business Registration Certificate and the Certificate of Incorporation on the same day for applications for company incorporation. For applications for registration of a non-Hong Kong company, it issues the Business Registration Certificate and the Certificate of Registration two weeks after submission.

Hong Kong’s Companies Registry permits public inspection of company information such as the full identification number of company directors and secretaries and their residential addresses. This information is currently available on a paid basis. Starting October 24, 2022, the HKG will restrict public access to this information, citing a need to balance privacy protections and transparency. Those approved by the HKG as “specified persons” will continue to have unrestricted access to the Companies Registries. The ability to apply for status as a “specified person” is largely limited to those working in finance, law, and compliance. Government transparency advocates assert the changes will limit the free flow of information and facilitate fraud, corruption, and other business malfeasance.

As a free market economy, Hong Kong does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad. Mainland China and the British Virgin Islands were the top two destinations for Hong Kong’s outward investments in 2020 (based on most recent data available).

Hungary

1. Openness To, and Restrictions Upon, Foreign Investment

Hungary’s government actively courts FDI; net annual FDI in 2020 amounted to $3.2 billion, and gross FDI totaled $98.1 billion. EU countries account for approximately 89 percent of all FDI in Hungary in terms of direct investors and 62 percent in terms of ultimate controlling parent investor.  In terms of ultimate investor – i.e., country of origin – the United States was the second largest investor after Germany in 2019. In terms of direct investor location, Germany was the largest investor, followed by the Netherlands, Austria, Luxembourg, and then the United States; approximately 450 U.S. companies maintain a presence in Hungary. Most U.S. investment falls within the automotive, software development, and life sciences sectors. According to Hungarian Investment Promotion Agency (HIPA) data, U.S. foreign direct investment produced more jobs in Hungary in 2020 than investment from any other country.

Total cumulative FDI from Asian sources has doubled since 2010, accounting for over five percent of total FDI stock in 2019. According to HIPA, South Korea, Japan, China, India, and other Asian countries accounted for about 40 percent of the value of new foreign investment projects in Hungary in 2020 and in 2021, with $3.1 billion in investments creating 3,500 jobs.

The GOH has implemented tax changes to increase Hungary’s regional competitiveness and attract investment; the government reduced the personal income tax rate to 15 percent in 2016, the corporate income tax rate to 9 percent in 2017, the employer-paid welfare contribution to 13 percent in 2021, and employers’ payroll tax to 13 percent.  Hungary’s Value-Added Tax (VAT), however, is the highest in Europe at 27 percent. As of 2016, the GOH streamlined the National Tax and Customs authority (NAV) procedure to offer fast-track VAT refunds to customers categorized as “low-risk.” In 2020 Hungary committed to join the OECD Global Minimum Tax Agreement with a 10-year transitionary period.

Government policies have resulted in some foreign investors selling their stakes to the government or state-owned enterprises in other sectors, including banking and energy.  Many foreign companies have expressed displeasure with the unpredictability of Hungary’s tax regime, its retroactive nature, slow response times, and the volume of legal and tax changes.  According to the European Commission (EC), a series of progressively tiered taxes implemented in 2014 disproportionately penalized foreign businesses in the telecommunications, tobacco, retail, media, and advertisement industries, while simultaneously favoring Hungarian companies.  Following EC infringement procedures, the GOH phased out most discriminatory tax rates by 2015 and replaced them with flat taxes. Another 2014 law required retail companies with over $53 million in annual sales to close if they report two consecutive years of losses.  Retail businesses claimed the GOH specifically set the threshold to target large foreign retail chains.  The EC likewise determined that the law was discriminatory and launched an infringement procedure in 2016, leading the GOH to repeal the law in November 2018.

In 2017, the GOH passed a regulation that gives the government preemptive rights to purchase real estate in World Heritage areas.  The rule has been used to block the purchase of real estate by foreign investors in the most desirable areas of Budapest. In April 2020 the GOH issued a decree that levied sector-specific taxes on the banking and retail sectors to fund COVID-19 pandemic economic support. This progressive tax on retail grocery outlets is structured such that it applies mainly to large foreign retail firms. In December 2021, the Parliament fast-tracked a legislation to increase the retail tax and compelled retail chains with an annual revenue over $310 million to offer their food items nearing expiry date to a state-owned nonprofit company, introducing another measure which hits only foreign-owned retailers.

The GOH publicly declared its intention to reduce foreign ownership in the banking sector in 2012. Accordingly, various GOH initiatives have reduced foreign ownership from about 70 percent in 2008 to 40.5 percent by the end of 2020. These initiatives included a 2010 bank tax; a 2012 financial transaction tax levied on all cash withdrawals; and regulations enacted between 2012-2015 that obligated banks to retroactively compensate borrowers for interest rate increases on foreign currency-denominated mortgage loans, even though these increases were spelled out in the original contracts with customers and had been permitted by Hungarian law.

While the pharmaceutical industry is competitive and profitable in Hungary, multinational enterprises complain of numerous financial and procedural obstacles, including high taxes on pharmaceutical products and operations, prescription directives that limit a doctor’s choice of drugs, and obscure tender procedures that negatively affect the competitiveness of certain drugs.  Pharmaceutical companies also complain about the lengthy procedure to accept innovative medications in the national reimbursement system, making business planning challenging for them.

The Hungarian Investment Promotion Agency (HIPA), under the authority of the Ministry of Foreign Affairs and Trade, encourages and supports inbound FDI.  HIPA offers company and sector-specific consultancy, recommends locations for investment, acts as a mediator between large international companies and Hungarian firms to facilitate supplier relationships, organizes supplier training, and maintains active contact with trade associations.  Its services are available to all investors. For more information, see:  https://hipa.hu/main.  

Foreign investors generally report a productive dialogue with the government, both individually and through business organizations.  The American Chamber of Commerce (AmCham) enjoys an ongoing high-level dialogue with the GOH and the government has adopted many AmCham policy recommendations in recent years.  In 2017, the government established a Competitiveness Council, now chaired by the Minister of Finance, which includes representatives from multinationals, chambers of commerce, and other stakeholders, to increase Hungary’s competitiveness.  Many U.S. and foreign investors have signed MOUs with the GOH to facilitate one-on-one discussions and resolutions to any pending issues. The GOH has regularly consulted foreign businesses and business associations as it has developed economic support measures during the pandemic. For more information, see: HYPERLINK “https://kormany.hu/kulgazdasagi-es-kulugyminiszterium/strategiai-partnersegi-megallapodasok” HYPERLINK “https://kormany.hu/kulgazdasagi-es-kulugyminiszterium/strategiai-partnersegi-megallapodasok”  https://kormany.hu/kulgazdasagi-es-kulugyminiszterium/strategiai-partnersegi-megallapodasok and  https://www.amcham.hu/.  

The U.S.-Hungary Business Council (USHBC) – a private, non-profit organization established in 2016 – aims to facilitate and maintain dialogue between American corporate executives and top government leaders on the U.S.-Hungary commercial relationship.  Most significant U.S. investors in Hungary have joined USHBC, which hosts roundtables, policy conferences, briefings, and other major events featuring senior U.S. and Hungarian officials, academics, and business leaders. For more information, see:   https://www.us-hungarybusinesscouncil.com/  .

Foreign ownership is permitted except for certain “strategic” sectors including farmland and defense-related industries which require special government permits.  As part of its economic measures during the COVID-19 pandemic, the GOH passed a decree which requires foreign investors to seek approval for foreign investments in Hungary.

Foreign law firms and auditing companies must sign a cooperation agreement with a Hungarian company to provide services on Hungarian legal or auditing issues. According to the Land Law, only private Hungarian citizens or EU citizens resident in Hungary with a minimum of three years of experience working in agriculture or holding a degree in an agricultural discipline can purchase farmland.  Eligible individuals are limited to purchasing 300 hectares (741 acres). All others may only lease farmland. Non-EU citizens and legal entities are not allowed to purchase agricultural land. All farmland purchases must be approved by a local land committee and Hungarian authorities, and local farmers and young farmers must be offered a right of first refusal before a new non-local farmer is allowed to purchase the land.  For legal entities and those who do not fulfill these requirements, the law allows the lease of farmland up to 1200 hectares for a maximum of 20 years. The GOH has invalidated any pre-existing leasing contract provisions that guaranteed the lessee the first option to purchase, provoking criticism from Austrian farmers. Austria has reported the change to the European Commission, which initiated an infringement procedure against Hungary in 2014.  In March 2018, the European Court of Justice ruled that the termination of land use contracts violated EU rules, opening the way for EU citizens who lost their land use rights to sue the GOH for damages.

The GOH passed a national security law on investment screening in 2018 that requires foreign investors seeking to acquire more than a 25-percent stake in a Hungarian company in certain sensitive sectors (defense, intelligence services, certain financial services, electric energy, gas, water utility, and electronic information systems for governments) to seek approval from the Interior Ministry.  The Ministry has up to 60 days to issue an opinion and can only deny the investment if it determines that the investment is designed to conceal an activity other than normal economic activity. In 2020, as part of the measures to mitigate the economic effects of the COVID-19 pandemic, the GOH passed an additional regulation requiring foreign investors to seek approval from the Ministry of Innovation and Technology (MIT) for greenfield or expansion of existing investments. Some observers have suggested this law could be used to disadvantage foreign firms or deny them access to the Hungarian market.

Hungary has not had any third-party or independent civil organization investment policy reviews in the last five years.

In 2006, Hungary joined the EU initiative to create a European network of “point of single contact” through which existing businesses and potential investors can access all information on the business and legal environment, as well as connect to Hungary’s investment promotion agency.  In recent years, the government has strengthened investor relations, signed strategic agreements with key investors, and established a National Competitiveness Council to formulate measures to increase Hungary’s economic competitiveness.

The registration of business enterprises is compulsory in Hungary.  Firms must contract an attorney and register online with the county-level courts of justice operating as courts of registration.  Registry courts must process applications to register limited liability and joint-enterprise companies within 15 workdays, but the process is usually complete within three workdays.  If the Court fails to act within the given timeframe, the new company is automatically registered. If the company chooses to use a template corporate charter, registration can be completed in a one-day fast track procedure.  Registry courts provide company information to the Tax Authority (NAV), eliminating the need for separate registration. The Court maintains a computerized registry and electronic filing system and provides public access to company information.  The minimum capital requirement for a limited-liability company is HUF 3,000,000 ($8,500); for private limited companies HUF 5,000,000 ($14,300), and for public limited companies HUF 20,000,000 ($57,100). Foreign individuals or companies can establish businesses in Hungary without restrictions.

Further information on business registration and the business registry can be obtained at the GOH’s information website for businesses: http://eugo.gov.hu/starting-business-hungary  or at the Ministry of Justice’s Company Information Service   https://ceginformaciosszolgalat.kormany.hu/elektronikus-cegeljaras  , and the Tax Authority  https://en.nav.gov.hu/taxation/registration/specific_rules.html.  

Hungarian business facilitation mechanisms offer no special preference or assistance for them in establishing a company.

Outward investment is mainly in manufacturing, pharmaceuticals, services, finance and insurance, and science and technology.  The stock of total Hungarian investment abroad amounted to $36.8 billion in 2019.  There is no restriction in place for domestic investors to invest abroad. The GOH announced in early 2019 that it would like to increase Hungarian investment abroad and it is considering incentives to promote such investment.

Iceland

1. Openness To, and Restrictions Upon, Foreign Investment

The government of Iceland maintains an open investment climate. The Act on Incentives for Initial Investments, which came into force in 2015, is intended to “promote initial investment in commercial operations, the competitiveness of Iceland and regional development by specifying what incentives are permitted in respect of initial investments in Iceland, and how they should be used.” The Act does not apply to investments in airports, energy production, financial institutions, insurance operations, or securities. For more information, see the English translation of the act: ( https://www.stjornarradid.is/leit/$LisasticSearch/Search/?SearchQuery=Act+on+incentives+for+initial+investments+in+Iceland ).

As part of its investment promotion strategy, the Icelandic government operates a public-private agency called “Invest in Iceland” that facilitates foreign investment by providing information to potential investors and promotes investment incentives. There is a debate, however, within Iceland over balancing energy intensive FDI with the environmental impact associated with certain projects. That said, energy-intensive industries long dominated by aluminum smelting, have expanded to include silicon production plants and data centers. For further resources see: ( http://www.invest.is/doing-business/incentives-and-support ).

Tourism has been a growing force behind Iceland’s economy in the past decade, with opportunities for investors in high-end tourism, including luxury resorts and hotels. The number of tourists in Iceland grew by more than 400 percent between 2010 and 2018, reaching more than 2.3 million in 2018. However, tourism in Iceland contracted in 2019 with visitors falling just below 2 million, which can be largely attributed to the fall of Icelandic budget airline WOW Air. The COVID-19 pandemic has had drastic effects on tourism, as well as on Iceland’s overall economy, which contracted by 7.1 percent in 2020, according to Statistics Iceland. Less than half a million tourists visited Iceland in 2020, with the number of tourists reaching 700,000 in 2021. Stakeholders in the industry have been generally optimistic for 2022, with hotels reporting good booking positions for the spring and summer seasons.

Isavia, a public company that handles the operation and development of Keflavik International Airport has embarked on $1-2 billion capital works project to expand the airport. Projects include extension of buildings, baggage screening and baggage handling systems, self-check in stations, waiting areas and retail/dining areas, check-in areas, bag-drop off areas, security areas, airbridges/gates for remote stands, re-modelling of existing terminal, de-icing platforms, new runway, new taxiway, and a new ATC tower.

The startup and innovation communities in Iceland are flourishing, with IT and biotech startups seeking investors. Foreign investment in the fisheries sector is restricted, as well as in the energy sector (hydropower and geothermal exploitation rights other than for personal use and energy processing and transportation are limited to Icelandic citizens and legal persons, and individuals and legal persons who reside in the European Economic Area). The wind energy sector is growing in Iceland, and the legal framework is still being developed for that sector.

The 1991 Act on “foreign investments for commercial purposes” limits foreign ownership of fishing rights and fish processing companies (only Icelandic citizens or companies that are controlled by Icelandic citizens and have less than 25 percent foreign shareholders can own or control fishing companies); of hydropower and geothermal exploitation rights other than for personal use and energy processing and transportation (only Icelandic citizens and legal persons, and individuals and legal persons who reside in the European Economic Area (EEA) can hold those rights); and of aviation operators (Icelandic ownership of aviation companies needs to be at least 51 percent, and this does not apply to individuals and legal persons that have EEA citizenship). The law further stipulates that foreign states, sub-national governments, or other foreign authorities are prohibited from investing in Iceland for commercial purposes, although the Minister of Culture and Business Affairs may grant exemptions. The responsibility to inform the relevant ministry of both new investments and investments in companies that the party in question has already invested in lies with the investor, or with the Icelandic company that the foreign individual or entity invested in (this does not apply to EEA citizens or residents).

However, the 1991 Act does not stipulate how foreign investment is screened or monitored by relevant authorities, only that the Minister of Culture and Business Affairs handles permits and monitors the execution of this legislation. The Minister can block foreign investments if s/he considers it a “threat to national security or goes against public policy, public safety or public health or if there are serious economic, societal or environmental complications in specific industries or in specific areas, that is likely to persist…” The law further states that the “Minister has the authority to stop foreign investment in systematically important companies if such investment entails systematic risk.” If an investment has already taken place, the Minister of Tourism, Industries, and Innovation has the authority to compel the foreign person or entity in question to sell.

Iceland has been a World Trade Organization (WTO) member since 1995 and a member of GATT since 1968. The WTO conducted its fifth Trade Policy Review of Iceland in 2017 ( https://www.wto.org/english/tratop_e/tpr_e/tp461_e.htm ). The review notes that “with a small population and limited natural resources, apart from energy and fish, trade remains important, but the range of exports is limited to tourism, fish and fish products, and aluminum and products thereof. Therefore, the country remains vulnerable to shocks, including the appreciation of the ISK, overheating of the economy, and Brexit. Furthermore, despite uncertainties relating to Brexit, as growth picks up in the EU, Iceland’s main trading partner, opportunities for trade in goods and services should continue to improve.”

The Organization for Economic Cooperation and Development (OECD) and UN Cooperation for Trade and Development (UNCTAD) have not conducted Investment Policy Reviews for Iceland.

Businesses are registered with Iceland Revenue and Customs (Skatturinn) ( http://www.rsk.is/english/ ). Applications for the registration of businesses can be filled in online, however some forms are in Icelandic only and it is therefore necessary for foreign businesses to contract a local representative to complete the paperwork. The website of the Business Registry in Iceland is ( http://www.rsk.is/fyrirtaekjaskra ) (Icelandic only). More information on establishing a business in Iceland can be found here ( https://www.government.is/topics/business-and-industry/establishing-a-business-in-iceland/ ).

Services offered by Invest in Iceland, a public-private agency that promotes and facilitates foreign investment in Iceland, are free of charge to all potential foreign investors ( http://www.invest.is ). Invest in Iceland can provide information on investment opportunities in Iceland; collect data on the business environment, arrange site visits and plan contacts with local authorities; arrange meetings with local business partner and professional consultants; influence legislation and lobby on behalf of foreign investors ( https://www.invest.is/at-your-service/what-we-do ). Invest in Iceland offers detailed information on how to establish a company on its website ( http://www.invest.is/doing-business/establishing-a-company ). Its sister agencies, Business Iceland (formerly Promote Iceland) ( https://www.businessiceland.is/ ) and Film in Iceland ( http://www.filminiceland.com ), aim to enhance Iceland’s reputation as a tourist destination and as a destination for filming movies and television productions.

The Icelandic Government along with other stakeholders promote exports of Icelandic goods and services through the public-private agency Islandsstofa, also known as Business Iceland ( https://www.businessiceland.is/ ). Business Iceland assists Icelandic businesses in the main industry sectors to export products and services, including fisheries (seafood and technology), agricultural produce (including organic lamb meat), high-tech products and solutions (software, prosthetics, etc.), and services (tourism). Business Iceland has been very active in the United States and Canada in recent years. A trade commissioner represents the Icelandic Ministry of Foreign Affairs in New York, facilitating exports to the United States and promoting business relations between the two countries. Business Iceland also promotes exports to the U.K., Northern and Southern Europe, and more recently to Asia (China and Japan).

Iceland imposed capital controls following the economic collapse in late 2008, which largely prevented Icelandic investors and pensions funds from investing outside of Iceland. The government lifted capital controls on March 14, 2017.

India

1. Openness To, and Restrictions Upon, Foreign Investment

Changes in India’s foreign investment rules are notified in two different ways: (1) Press Notes issued by the Department for Promotion of Industry and Internal Trade (DPIIT) for most sectors, and (2) legislative action for insurance, pension funds, and state-owned enterprises in the coal sector. FDI proposals in sensitive sectors will, however, require the additional approval of the Home Ministry.

The DPIIT, under the Ministry of Commerce and Industry, is the lead investment agency, responsible for the formulation of FDI policy and the facilitation of FDI inflows. It compiles all policies related to India’s FDI regime into a single document that is updated every year. This updated policy compilation can be accessed at: http://dipp.nic.in/foreign-directinvestment/foreigndirectinvestment-policy.  The DPIIT disseminates information about India’s investment climate and, through the Foreign Investment Implementation Authority (FIIA), plays an active role in resolving foreign investors’ project implementation problems. The DPIIT oftentimes consults with lead ministries and stakeholders. However, there have been specific incidences where some relevant stakeholders reported being left out of consultations.

In most sectors, foreign and domestic private entities can establish and own businesses and engage in remunerative activities. However, there are sectors of the economy where the government continues to retain equity limits for foreign capital as well as management and control restrictions. For example, India caps FDI in the Insurance Sector at 74 percent and mandates that insurance companies retain “Indian management and control.” Similarly, India allows up to 100 percent FDI in domestic airlines but has yet to clarify governing substantial ownership and effective control (SOEC) rules. A list of investment caps is accessible in the DPIIT’s consolidated FDI circular at: https://dpiit.gov.in/foreign-direct-investment/foreign-direct-investment-policy .

The Indian Government has continued to liberalize FDI policies across sectors. Notable changes during 2021 included:

Increasing the FDI cap for the insurance sector to 74 percent from 49 percent, albeit while retaining an “Indian management and control” requirement.

Increased the FDI cap for the pensions sector to 74 percent from 49 percent. The rider of “Indian management and control” is applicable in the pension sector.

Eliminated the FDI cap in the telecom sector. 100 percent FDI allowed for insurance intermediaries.

Eliminated the FDI cap for insurance intermediaries and state-run oil companies.

Increased the FDI cap for defense manufacturing units to 74 percent from 49 percent and up to 100 percent if the investment is approved under the Government Route review process.

Since the abolition of the Foreign Investment Promotion Board (FIPB) in 2017, FDI screening has been progressively liberalized and decentralized. All FDI into India must complete either an “Automatic Route” or “Government Route” review process. FDI in most sectors fall under the Automatic Route, which simply requires a foreign investor to notify India’s central bank, the Reserve Bank of India (RBI), and comply with relevant domestic laws and regulations for that sector. In contrast, investments in specified sensitive sectors – such as defense – require review under the Government Route to obtain the prior approval of the ministry with jurisdiction over the relevant sector along with the concurrence of the DPIIT.

In 2020, India issued Press Note 3 requiring all proposed FDI by nonresident entities located in (or having “beneficial owners” in) countries that share a land border with India to obtain prior approval via the Government Route. This screening requirement applies regardless of the size of the proposed investment or relevant sector. The rule primarily impacted the People’s Republic of China, whose companies had more FDI in India, but other neighboring countries affected include Pakistan, Bangladesh, Nepal, Myanmar, and Bhutan.

A. Third-party investment policy reviews

https://www.oecd.org/economy/india-economic-snapshot/ 

https://www.worldbank.org/en/country/india/overview 

https://www.wto.org/english/tratop_e/tpr_e/tp503_e.htm 

B. Civil society organization reviews of investment policy-related concerns

https://www.ncaer.org/publication_details.php?pID=370 

https://www.orfonline.org/research/jailed-for-doing-business/ 

The DPIIT is responsible for formulation and implementation of promotional and developmental measures for growth of the industrial sector. The DPIIT also is responsible for the overall industrial policy and facilitating and increasing FDI flows to the country.

However, Invest India  is the government’s lead investment promotion and facilitation agency and is managed in partnership with the DPIIT, state governments, and business chambers. Invest India works with investors through their investment lifecycle to provide support with market entry strategies, deep dive industry analysis, partner search, and policy advocacy as required. Businesses can register online through the Ministry of Corporate Affairs (MCA) website: http://www.mca.gov.in/ .

To fast-track the regulatory approval process, particularly for major projects, the government created the digital multi-modal Pro-Active Governance and Timely Implementation (PRAGATI) initiative in 2015. The Prime Minister personally monitors the PRAGATI process, to ensure government entities meet project deadlines. As of September 2021, the Prime Minister had chaired 38 PRAGATI meetings with 297 projects, worth around $200 billion, approved and cleared. In 2014, the government also formed an inter-ministerial committee, led by the DPIIT, to track investment proposals requiring inter-ministerial approvals. Business and government sources report this committee meets informally on an ad hoc basis as they receive reports from companies and business chambers seeking assistance with stalled projects.

According to data from the Ministry of Commerce’s India Brand Equity Foundation (IBEF), outbound investment from India has both increased and changed which countries and sectors it targets. During the last ten years, Overseas Investment Destination (OID) shifted away from resource-rich countries, such as Australia, UAE, and Sudan, toward countries providing higher tax benefits, such as Mauritius, Singapore, the British Virgin Islands, and the Netherlands. Indian firms invest overseas primarily through mergers and acquisitions (M&A) to get direct access to newer and more extensive markets and better technologies and increasingly achieve a global reach. According to RBI data, outward investment from India in 2021 totaled around $29 billion compared with around $30 billion the previous year. The RBI’s recorded total of outward investment includes equity capital, loans, and issuance of guarantees.

Indonesia

1. Openness To, and Restrictions Upon, Foreign Investment

Indonesia is an attractive destination for foreign direct investment (FDI) due to its relatively young demographics, strong domestic demand, stable political situation, abundant natural resources, and well-regarded macroeconomic policy. Indonesian government officials often state that they welcome increased FDI, aiming to create jobs, spur economic growth, and court foreign investors, notably focusing on infrastructure development, export-oriented manufacturing, mining refinery industries, and green investment. To further improve the investment climate, the government issued the Omnibus Law on Job Creation (Law No. 1/2020) in October 2020 to amend dozens of prevailing laws deemed to hamper investment. It introduced a risk-based approach for business licensing, simplified environmental requirements and building certificates, tax reforms to ease doing business, more flexible labor regulations, and the establishment of the priority investment list. It also streamlined the business licensing process at the regional level. At the same time, investors cite concerns over restrictive technical regulations, policy inconsistency, bureaucratic inefficiency, lack of infrastructure, sanctity of contract issues, and corruption.

The Ministry of Investment / Investment Coordinating Board (BKPM) serves as an investment promotion agency, a regulatory body, and the agency in charge of approving planned investments in Indonesia. As such, it is the first point of contact for foreign investors, particularly in manufacturing, industrial, and non-financial services sectors. In August 2021, BKPM launched the Risk-Based Online Single Submission (OSS), an integrated online system that streamlines almost all business licensing and permitting processes (except in the oil and gas, and financial sectors).  Under the OSS, businesses deemed lower risk will face fewer administrative requirements to obtain permits and licenses. The GOI abolished building permit requirements and relaxed environmental licenses, which the government deemed were major sources of corruption in the business licensing process. The OSS system intends to streamline permit issuance, but integrating overlapping authorities across ministries into one system, both at the national and subnational level, remains challenging. The Omnibus Law on Job Creation requires local governments to integrate their license systems into the OSS. The law allows the central government to take over local governments’ authority if local governments are not performing. The government has provided investment incentives particularly for “priority” sectors (please see the section on Industrial Policies).

As part of the implementation of the Omnibus Law on Job Creation, the Indonesian government enacted Presidential Regulation No. 10/2021 to introduce a significant liberalization of foreign investment in Indonesia, repealing the 2016 Negative List of Investment (DNI). In contrast to the previous regulation, the new investment list sets a default principle that all business sectors are open for investment unless stipulated otherwise. It details the seven sectors that are closed to investment, explains that public services and defense are reserved for the central government, and outlines four categories of sectors that are open to investment: priority investment sectors that are eligible for incentives; sectors that are reserved for micro, small, and medium enterprises (MSMEs) and cooperatives or open to foreign investors who cooperate with them; sectors that are open with certain requirements (i.e., with caps on foreign ownership or special permit requirements); and sectors that are fully open for foreign investment. Although hundreds of sectors that were previously closed or subject to foreign ownership caps are in theory open to 100 percent foreign investment, in practice technical and sectoral regulations may stipulate different or conflicting requirements that still need to be resolved.

In total, 245 business fields listed in the new Investment Priorities List, or DPI, are eligible for fiscal and non-fiscal incentives, notably pioneer industries, export-oriented manufacturing, capital intensive industries, national infrastructure projects, digital economy, labor-intensive industries, as well as research and development activities. Restrictions on foreign ownership in telecommunications and information technology (e.g., internet providers, fixed telecommunication providers, mobile network providers), construction services, oil and gas support services, electricity, distribution, plantations, and transportation were removed. Healthcare services including hospitals/clinics, wholesale of pharmaceutical raw materials, and finished drug manufacturing are fully open for foreign investment, which was previously capped in certain percentages. The regulation also reduced the number of business fields that are subject to certain requirements to only 46 sectors. Domestic sea transportation and postal services are allowed up to 49 percent of foreign ownership, while press, including magazines and newspapers, and broadcasting sectors are open up to 49 percent and 20 percent, respectively, but only for business expansion or capital increases. Small plantations, industry related to special cultural heritage, and low technology industries or industries with capital less than IDR10 billion (USD 700,000) are reserved for MSMEs and cooperatives. Foreign investors in partnership with MSMEs and cooperatives can invest in certain designated areas. The new investment list shortened the number of restricted sectors from 20 to 7 categories including cannabis, gambling, fishing of endangered species, coral extraction, alcohol, industries using ozone-depleting materials, and chemical weapons. In addition, while education investment is still subject to the Education Law, Government Regulation No. 40/2021 permits education and health investment as business activities in special economic zones.

In 2016, Bank Indonesia (BI) issued Regulation No. 18/2016 on the implementation of payment

transaction processing. The regulation governs all companies providing the following services: principal, issuer, acquirer, clearing, final settlement operator, and operator of funds transfer. The BI Regulation capped foreign ownership of payments companies at 20 percent, though it contained a grandfathering provision. BI’s Regulation No. 19/2017 on the National Payment Gateway (NPG) subsequently imposed a 20 percent foreign equity cap on all companies engaging in domestic debit switching transactions. Firms wishing to continue executing domestic debit transactions are obligated to sign partnership agreements with one of Indonesia’s four NPG switching companies. In December 2020, BI issued umbrella Regulation No. 22/23/2020 on the Payment System, which implements BI’s 2025 Payment System Blueprint and introduces a risk-based categorization and licensing system. The regulation entered into force on July 1, 2021. It allows 85 percent foreign ownership of non-bank payment services providers, although at least 51 percent of shares with voting rights must be owned by Indonesians, and foreign investors may only hold 49 percent of voting shares. The 20 percent foreign equity cap remains in place for payment system infrastructure operators who handle clearing and settlement services, and a grandfathering provision remains in effect for existing licensed payment companies. U.S. payment systems companies have stated that the new regulations could further limit access to Indonesia’s financial services market. Prior regulations required authorization, clearing, and settlement to be processed onshore. The new regulations add initiation of a payment as an onshore processing requirement. The regulations do not specify requirements by product. While the regulations provide for offshore processing if certain requirements are met, it is subject to BI approval.

OJK Regulation No. 12/POJK.03/2021, issued in August 2021, increased the foreign equity cap for commercial banks to 99 percent subject to OJK evaluation and approval, and foreign entities should meet requirements as follows: be committed to support the development of the Indonesian economy; obtain recommendations from the supervisory authority of the country of origin; and have a rating of at least 1 level above the lowest investment rating for bank financial institutions, 2 levels above the lowest investment rating for nonbank financial institutions, and 3 levels above the lowest investment rating for legal entities that are not financial institutions. This new regulation does not repeal the regulations listed in POJK 56 of 2016 article 2 and article 6 paragraph 1, stating that foreign entities may own shares of a bank representing more than 40 percent of the Bank’s capital subject to the approval of the Financial Services Authority (OJK). Foreigners may purchase equity in state-owned firms through initial public offerings and the secondary market. Capital investments in publicly listed companies through the stock exchange are generally not subject to the limitation of foreign ownership as stipulated in Presidential Regulation No. 10/2021.

Government Regulation 14/2018 (Regulation 14) on foreign ownership in insurance companies set the maximum threshold for foreign equity ownership of an Indonesian insurance company to 80 percent but exempted insurance companies with existing foreign ownership levels that exceed 80 percent. Subsequently, the government issued Government Regulation 3/2020 to strengthen the grandfathering provisions of Regulation 14 by allowing foreign investors to inject capital and maintain their existing capital share, repealing the obligation under Regulation 14 for a local shareholder to make a corresponding 20 percent capital injection in the event of a capital increase. In June 2020, OJK issued Regulation 39/2020, which provides for the phased elimination of the domestic cession requirements for purchase of reinsurance from companies domiciled in a country with whom Indonesia has a bilateral agreement. The regulation also phased out the requirement for domestic reinsurance obligations for simple risks by the end of 2020, and for non-simple risks in 2022.

Indonesia’s vast natural resources have attracted significant foreign investment and continue to offer significant prospects. However, some companies report that a variety of government regulations have made doing business in the resources sector increasingly difficult, and Indonesia now ranks 69th of 78 jurisdictions in the Fraser Institute’s 2020 Mining Policy Perception Index. In 2012, Indonesia banned the export of raw minerals, dramatically increased the divestment requirements for foreign mining companies, and required major mining companies to renegotiate their contracts of work with the government. The full export ban did not come into effect until January 2017, when the government also issued new regulations allowing exports of copper concentrate and other specified minerals, while imposing onerous requirements.

Of note for foreign investors, provisions of the regulations require that to export mineral ores, companies with contracts of work must convert to mining business licenses – and be subject to prevailing regulations – and must commit to build smelters within the next five years. Also, foreign-owned mining companies must gradually divest 51 percent of shares to Indonesian interests over ten years, with the price of divested shares determined based on a “fair market value” determination that does not consider existing reserves. In January 2020, the government banned the export of nickel ore for all mining companies, foreign and domestic, in the hopes of encouraging construction of domestic nickel smelters. In March 2021, the Ministry of Energy and Natural Resources issued a Ministerial Decision to allow mining business licenses holders who have not reached smelter development targets to continue exporting raw mineral ores under certain conditions. The 2020 Mining Law returned the authority to issue mining licenses to the central government. Local governments only retain authority to issue small scale mining permits.

In December 2020, the Ministry of Energy and Natural Resources issued Ministerial Decision No. 255.K/30/MEM/2020 that mandates coal mining companies fulfill 25 percent of its production for Domestic Market Obligation (DMO) and set the maximum price of coal for domestic power generation at $70/ton. In January 2022, the government of Indonesia banned exports of coal for all mining companies due to low DMO fulfillment, leading to the risk of power blackouts. The government has lifted the coal export ban and imposed stricter control to allow exports only for coal mining companies that have fulfilled DMO requirements.

The latest World Trade Organization (WTO) Investment Policy Review of Indonesia was conducted in February 2021 and can be found on the WTO website: directdoc.aspx (wto.org) 

The last OECD Investment Policy Review of Indonesia, conducted in 2020, can be found on the OECD website:

https://www.oecd.org/investment/oecd-investment-policy-reviews-indonesia-2020-b56512da-en.htm 

The 2021 UNCTAD Report on ASEAN Investment can be found here: http://investasean.asean.org/files/upload/ASEAN%20Investment%20Report%202020-2021.pdf

Business and Human Rights Resource Center’s Reports:

  • Report on Human Rights Impact Assessment for Japanese Business Investmnt in Indonesia:
  • Investigation Into Deforestation at An Indonesian Company:

Global Witness country-specific reports can be accessed here:

https://www.globalwitness.org/en/campaigns/environmental-activists/indonesia-palm-oil-traders-are-failing-land-and-environmental-defenders/ 

List of conflicts related to environmental and human rights involving companies investing in Indonesia can be seen on Environmental Justice can be accessed here: https: https://ejatlas.org/ 

In order to conduct business in Indonesia, foreign investors must be incorporated as a foreign-owned limited liability company (PMA) through the Ministry of Law and Human Rights. Once incorporated, a PMA must fulfill business licensing requirements through the OSS system. In February 2021, the Indonesian government issued Government Regulation No. 5/2021, introducing a risk-based approach and streamlined business licensing process for almost all sectors. The regulation classifies business activities into categories of low, medium, and high risk, which will further determine business licensing requirements for each investment. Low-risk business activities only require a business identity number (NIB) to start commercial and production activities. An NIB also serves as the import identification number, customs access identifier, halal guarantee statement (for low risk), and environmental management and monitoring capability statement letter (for low risk). Medium-risk sectors must obtain an NIB and a standard certification.

Under the regulation, a standard certificate for medium-low risk is a self-declared statement that certain business standards were fulfilled, while a standard certificate for medium-high risk must be verified by the relevant government agency. High-risk sectors must apply for full business licenses, including an environmental impact assessment (AMDAL). A business license remains valid while the business operates in compliance with Indonesian laws and regulations. A grandfather clause applies to existing businesses that have obtained business licenses. Guidance on the business application process through the Risk-Based OSS can be found at https://oss.go.id/panduan.  The OSS system is an online portal which allows foreign investors to apply for and track the status of licenses and other services online. Foreign investors are generally prohibited from investing in MSMEs in Indonesia, although Presidential Regulation No. 10/2021 opened some opportunities for partnerships in farming, two- and three-wheeled vehicles, automotive spare parts, medical devices, ship repair, health laboratories, and jewelry/precious metals.

According to Presidential Instruction 7/2019, the Ministry of Investment/BKPM is responsible for issuing “investment licenses” (the term used to encompass both NIB and other business licenses) that have been delegated from all relevant ministries and government institutions to foreign entities through the OSS system. BKPM has also been tasked to review policies deemed unfavorable for investors. While the OSS’s goal is to help streamline investment approvals, investments in the mining, oil and gas, and financial sectors still require licenses from related ministries and authorities. Certain tax and land permits, among others, typically must be obtained from local government authorities. Though Indonesian companies are only required to obtain one approval at the local level, businesses report that foreign companies must often seek additional approvals to establish a business. Government Regulation No. 6/2021 requires local governments to integrate their business licenses system into the Risk-Based OSS system and standardize services through a service-level agreement between the central and local governments.

Indonesia’s outward investment is limited, as domestic investors tend to focus on the large domestic market. BKPM is responsible for promoting and facilitating outward investment, to include providing information about investment opportunities in other countries. BKPM also uses its investment and trade promotion centers abroad to match Indonesian companies with potential investment opportunities. The government neither restricts nor provides incentives for outward private sector investment. The Ministry of State-Owned Enterprises (SOEs) encourages Indonesian SOEs through the SOE Go Global Program to increase their investment abroad, aiming to improve Indonesia’s supply chain and establish demand for Indonesian exports in strategic markets. According to the United Nation Conference on Trade and Development (UNCTAD), Indonesia recorded USD 4.5 billion outward direct investments in 2020, increasing 33.3 percent.

Iraq

1. Openness To, and Restrictions Upon, Foreign Investment

The GOI has publicly and repeatedly stated its desire to attract foreign investment as part of national plans to strengthen local industries and promote the “Made in Iraq” brand.  The GOI has yet to follow through on reform process commitments made at the pre-COVID Kuwait International Conference for the Reconstruction of Iraq in February 2018 to reform processes and regulations that hinder investment.  Iraq claims that other countries have not followed through on their financial pledges either.

Iraq administers foreign direct investments (FDI) under its National Investment Law (Investment Law, 2006), amended in December 2015.  The Investment Law outlines improved investment terms for foreign investors, the purchase of land in Iraq for certain projects, and an investment license process.  The purchase of land for commercial or residential development remains extremely difficult.  Since 2015, Iraq has been a party to the International Convention on the Settlement of Investment Disputes between States and Nations of Other States (ICSID).

Foreign investors continue to encounter bureaucratic challenges, corruption, and a weak financial services sector, making it difficult to conclude and implement investment deals.  State-owned banks in Iraq serve predominantly to settle financial payments, with the GOI’s vast public sector payroll dominating the small market for depositors.  Privately-owned banks, until recently, served almost entirely as currency exchange businesses, except for a handful of mostly regionally owned private commercial banks.  Iraq’s more than 60 private commercial banks compete for less than 20 percent of the market; Iraq is a cash-based economy, with many Iraqis distrusting private banks.  Some privately owned banks have commercial lending programs, but Iraq’s lack of a credit monitoring system, insufficient legal guarantees for lenders, and limited correspondent connections to international banks hinder commercial lending.  The financial sector in the IKR suffers from similar issues.

Recently, the GOI has been exploring multi-year financing options to pay for large-scale development projects rather than relying on its previous practice of funding investments entirely from current annual budget outlays.  However, even basic private bank-provided project finance models are virtually non-existent.

According to Iraqi law, a foreign investor is entitled to make investments in Iraq on terms no less favorable than those applicable to an Iraqi investor, and the amount of foreign participation is not limited.  However, Iraq’s Investment Law limits foreign direct and indirect ownership of most natural resources, particularly the extraction and processing of natural resources.  It does allow foreign ownership of land to be used for residential projects and co-ownership of land to be used for industrial projects when an Iraqi partner is participating.

Despite this legal equity between foreign and domestic investment, the GOI reserves the right to screen FDI.  The screening process is vague, although it does not appear to have been used to block foreign investment.  Still, bureaucratic barriers to FDI, such as a requirement to place a significant portion of the capital investment in an Iraqi bank prior to receiving a license, remain significant.

The GOI established the National Investment Commission (NIC) in 2007, along with its provincial counterparts Provincial Investment Commissions (PICs), as provided under Investment Law 13 (2006).  This cabinet-level organization provides policy recommendations to the Prime Minister and support to current and potential investors in Iraq.  The NIC’s “One Stop Shop” https://investpromo.gov.iq/one-stop-shop/ is intended to guide investors through the investment process, though investors have reported challenges using NIC services.

The IKR operates under a different investment law and its supporting regulations implemented in 2006.  Under KRG’s law, foreign investors are entitled to incentives, including full property ownership, capital repatriation, and 10-year tax holidays. The KRG has an Investment Board to assist investors.  An updated investment law, first drafted in 2010, has failed to pass the Iraqi Kurdish Parliament after numerous amendments.  In 2020, the KRG Ministry of Planning (MOP) published a framework for creating public-private partnerships in the region but has not drafted legislation to codify it.  Legislation to amend the investment law to broaden its reach to potential investors remains pending in the Iraqi Kurdistan Parliament (IKP).

Iraqi law stipulates that 50 percent of a project’s workers must be Iraqi nationals to obtain an investment license (National Investment Regulation No. 2, 2009).  Investors must prioritize hiring Iraqi citizens before hiring non-Iraqi workers.  The GOI pressures foreign companies to hire local employees and has encouraged foreign companies to partner with local industries and purchase Iraqi-made products.  The KRG permits full foreign ownership under its 2006 investment law.

The GOI generally favors State Owned Enterprises (SOE) and state-controlled banks in competitions for government tenders and investment.  This preference discriminates against both local and foreign investors.

In the past three years, the GOI did not conduct any investment policy reviews through the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), or the UN Conference on Trade and Development (UNCTAD).  However, the GOI uses UNCTAD’s business registration platform for the Online Single Window program, launched in September 2021.  The Online Single Window, at https://business.mot.gov.iq/, is an important step toward minimizing delays in business registration and reducing corruption, showing Iraq’s willingness to modify its processes to attract international investors.

Foreign investors interested in establishing an office in Iraq or bidding on a public tender are required to register as foreign businesses with the Ministry of Trade’s (MOT) Companies Registration Department.  The procedure costs and time to obtain a business license can be found at https://baghdad.eregulations.org/procedure/108?l=en. Many international companies use a local agent to assist in this process due to its complexity.  The GOI continues working with UNCTAD to streamline the business registration process and make it available online.  Procedures to obtain investment licenses from the NIC can be found at:  https://baghdad.eregulations.org/procedure/60?l=en and https://baghdad.eregulations.org/procedure/51/step/230?l=en&reg=0.

The KRG offers business registration for companies seeking business only in the IKR; however, companies seeking business in both the IKR and greater Iraq must follow both GOI and KRG requirements.  Business registration remains within the jurisdiction of IKR’s Chambers of Commerce. The KRG recently moved the authorities for brand name registration from the Chambers of Commerce to the Ministry of Trade, but this decision has not yet been implemented.  Reforms to reduce bureaucracy and red tape to implement a “single window” for company registration remain unimplemented, though officials have expressed interest in learning from the GOI.

Iraqi laws give the NIC and PICs authority to provide information, sign contracts, and facilitate registration for new foreign and domestic investors.  The NIC offers investor facilitation services on transactions including work permit applications, visa approval letters, customs procedures, and business registration.  Investors can request these services through the NIC website: http://investpromo.gov.iq/.  The NIC does not exclude businesses from taking advantage of its services based on the number of employees or the size of the investment project.  The NIC can also connect investors with the appropriate provincial investment council.

These official investment commissions do struggle to operate amid unclear lines of authority, budget constraints, and the absence of regulations and standard operating procedures. Importantly, the investment commissions lack the authority to resolve investors’ bureaucratic obstacles with other Iraqi ministries.

The Kurdistan Board of Investment (KBOI) manages an investment licensing process in the IKR that can take from three to six months and may involve more than one KRG ministry or entity, depending on the sector of investment.  Due to oversaturated commercial and residential real estate markets, the KBOI has moved away from approving licenses in these sectors but may still grant them on a case-by-case basis.  The KBOI has prioritized industrial tourism such as business conferences, and agricultural projects.  Businesses reported some difficulties establishing local connections, obtaining qualified staff, and meeting import regulations.  Some businesses reported that the KRG did not provide the promised support infrastructure such as water, electricity, or wastewater services, as required under the investment law framework.  Additional information is available at the KBOI’s website:  https://gov.krd/boi-en/.

Iraq does not restrict domestic investors from investing abroad.

Ireland

1. Openness To, and Restrictions Upon, Foreign Investment

The Irish government actively promotes FDI, a strategy that has fueled economic growth since the mid-1990s. The principal goal of Ireland’s investment promotion has been employment creation, especially in technology-intensive and high-skill industries. More recently, the government has focused on Ireland’s international competitiveness by encouraging foreign-owned companies to enhance research and development (R&D) activities and to deliver higher-value goods and services.

U.S. companies are attracted to Ireland as an exporting sales and support platform to the EU market of almost 500 million consumers and other global markets. Ireland is a successful FDI destination for many reasons, including a currently low corporate tax rate of 12.5 percent for all domestic and foreign firms (Ireland is party to the October 2021 OECD deal on a global minimum corporate tax that will set the tax rate to 15 percent); a well-educated, English-speaking workforce; the availability of a multilingual labor force; cooperative labor relations; political stability; and pro-business government policies and regulators. Ireland also benefits from a transparent judicial system; good transportation links; proximity to the United States and Europe, and the drawing power of existing companies operating successfully in Ireland (a so-called “clustering” effect).

The stock of American FDI in Ireland stood at USD 390 billion in 2020, more than the U.S. total for Brazil, Russia, India, China, and South Africa (the so-called BRICS countries) combined. There are approximately 900 U.S. subsidiaries currently in Ireland employing roughly 190,000 people and supporting work for another 152,000. This figure represents a significant proportion of the 2.51 million people employed in Ireland. U.S. firms operate primarily in the following sectors: chemicals, biosciences, pharmaceuticals and medical devices, computer hardware and software, web and digital media; electronics, and financial services.

U.S. investment has been particularly important to the growth and modernization of Irish industry over the past thirty years, providing new technology, export capabilities, management and manufacturing best practices, and employment opportunities. Ireland has more recently become an important R&D center for U.S. firms in Europe, and a magnet for U.S. internet and digital media investment. Industry leaders like Google, Amazon, eBay, PayPal, Meta (Facebook), Twitter, LinkedIn, Electronic Arts and cybersecurity firms like Tenable, Forcepoint, AT&T Cybersecurity, McAfee use Ireland as the hub or important part of their respective European, and sometimes Middle Eastern, African, and/or Indian operations.

Factors that challenge Ireland’s ability to attract investment include relatively high labor and operating costs (such as for energy); sporadic skilled-labor shortages; the fall-out from the COVID-19 pandemic; and sometimes-deficient infrastructure (such as in transportation, energy and broadband quality). Ireland also suffers from housing and high-quality office space shortages; and absolute price levels that are among the highest in Europe. The American Chamber of Commerce in Ireland has called for greater attention to a “skills gap” in the supply of Irish graduates to the high technology sector. It also has asserted that relatively high personal income tax rates can make attracting talent from abroad difficult.

In 2013, Ireland became the first country in the Euro zone to exit a financial bailout program from the EU, European Central Bank, and International Monetary Fund (EU/ECB/IMF, or so-called Troika). Compliance with the terms of the Troika program came at a substantial economic cost with gross domestic product (GDP) stagnation and austerity measures, while dealing with high unemployment (which hit 15 percent). Strong economic progress followed through government-backed initiatives to attract investment and stimulate job creation and employment.

Despite the prolonged difficulties caused by the COVID-19 pandemic, Ireland’s economic performance continued to be the best in the Euro zone in 2021 with an estimated 13.5 percent growth, achieved on the back of strong exports from the food, pharmaceutical and med-tech sectors and other large multinational companies headquartered in Ireland. The domestic economy struggled with temporary business closures due to the restrictions. With Ireland’s official unemployment rate at 5.2 percent in February 2022, employers are expecting a tight labor market over the next year. Ireland’s sovereign debt remains attractive to investors exemplifying international confidence in Ireland’s economic progress.

The UK’s exit from the EU (Brexit) in 2021, leaves Ireland as the only remaining English-speaking country in the bloc. The UK is now a non-EU member which shares a land border with Ireland. The December 2020 Brexit agreement dictates the future trading relationship between the UK and the EU and will likely affect Ireland’s future economic performance. The agreement allows for tariff-free Ireland to Great Britain (England, Scotland, and Wales) trade but comes with increased customs procedures. Existing Ireland – Northern Ireland trade continues unimpeded (aka, the Northern Ireland Protocol). While some disruption has been noticed in the supply chain of retail and agricultural sectors (due to their traditional use of the UK “land-bridge” to move products to and from the EU), Irish companies have generally been able to find alternate routes (i.e., using ferries from Ireland directly to continental Europe), though this has raised costs in some sectors. The EU and UK are in ongoing discussions to ensure the Northern Ireland Protocol remains.

With Brexit, Ireland has lost a close EU ally on policy matters, particularly free trade and business friendly open markets. Ireland continues to be heavily dependent on the UK as an export market and source especially for food products, and the full effect of Brexit may yet hit sectors such as food and agri-business with disruptions to supply chains and increased red-tape. Irish trade with its EU colleagues has already seen a dramatic switch to direct shipping rather than using Great Britain as a land-bridge for trucking products. Some UK-based firms (including U.S. firms) have moved headquarters or opened subsidiary offices in Ireland to facilitate ease of business with other EU countries. The Irish Department of Finance and the Central Bank of Ireland (CBI) estimate Brexit will cut Ireland’s economic growth modestly in the near term, but such models are complicated with the effect of the COVID-19 pandemic and Russia’s invasion of Ukraine.

Six government departments and organizations have responsibility to promote investment into Ireland by foreign companies:

The Industrial Development Authority of Ireland (IDA Ireland) has overall responsibility for promoting and facilitating FDI in Ireland. IDA Ireland is also responsible for attracting foreign financial and insurance firms to Dublin’s International Financial Services Center (IFSC). IDA Ireland maintains seven U.S. offices (in New York, NY; Boston, MA; Chicago, IL; Mountain View, CA; Irvine, CA; Atlanta, GA; and Austin, TX), as well as offices throughout Europe and Asia.

Enterprise Ireland (EI) promotes joint ventures and strategic alliances between indigenous and foreign companies. The agency assists entrepreneurs establish in Ireland and assists foreign firms that wish to establish food and drink manufacturing operations in Ireland. EI has six existing offices in the United States (Austin, TX; Boston, MA; Chicago, IL; New York, NY; San Francisco, CA; and Seattle, WA and has offices in Europe, South America, the Middle East, and Asia.

Shannon Group (formerly the Shannon Free Airport Development Company) promotes FDI in the Shannon Free Zone (SFZ) and owns properties in the Shannon region as potential green-field investment sites. Since 2006, the responsibility for investment by Irish firms in the Shannon region has passed to Enterprise Ireland while IDA Ireland remains responsible for FDI in the region.

Udaras na Gaeltachta (Udaras) has responsibility for economic development in those areas of Ireland where the predominant language is Irish. Udaras works with IDA Ireland to promote overseas investment in these regions.

Department of Foreign Affairs (DFA) has responsibility for economic messaging and supporting the country’s trade promotion agenda as well as diaspora engagement to attract investment.

Department of Enterprise, Trade and Employment (DETE) supports the creation of jobs by promoting the development of a competitive business environment where enterprises can operate with high standards and grow in sustainable markets.

Irish law allows foreign corporations (registered under the Companies Act 2014 or previous legislation and known locally as a public limited company (plc)) to conduct business in Ireland. Any company incorporated abroad that establishes a branch in Ireland must file certain papers with the Companies Registration Office (CRO). A foreign corporation with a branch in Ireland has the same standing in Irish law for purposes of contracts, etc., as a domestic company incorporated in Ireland. Private businesses are not competitively disadvantaged to public enterprises with respect to access to markets, credit, and other business operations.

No barriers exist to participation by foreign entities in the purchase of state-owned Irish companies. Residents of Ireland may, however, be given priority in share allocations over all other investors. There are no recent examples of this, but Irish residents did receive priority in share allocations in the 1998-sale of the state-owned telecommunications company Eircom. The government privatized the national airline Aer Lingus through a stock market flotation in 2005 but chose to retain about a one-quarter stake. At that time, U.S. investors purchased shares in the sale. The International Airlines Group (IAG) purchased the government’s remaining stake in the airline in 2015, and subsequently took an overall controlling interest which it continues to hold.

Citizens of countries other than Ireland and EU member states can acquire land for private residential or industrial purposes. In the past, all non-EU nationals needed written consent from the Department of Agriculture, Food and the Marine before acquiring an interest in land zoned for agricultural use but these limitations no longer exist. There are many equine stud farms and racing facilities owned by foreign nationals. No restrictions exist on the acquisition of urban land.

Ireland does not yet have formal investment screening legislation in place. Draft legislation has been submitted to the Dail (Irish parliament) which is expected to be enacted during 2022. (The bill was partially delayed due to the government’s efforts to respond to the COVID-19 pandemic.) As a member of the EU, Ireland is required to implement any common EU investment screening regulations or directives such as the EU Framework.

There were no third-party investment policy reviews in the past five years.

All firms must register with the Companies Registration Office (CRO) online at www.cro.ie . The CRO, as well as registering companies, can also register a business/trading name, a non-Ireland based foreign company (external company), or a limited partnership. Any firm or company registered under the Companies Act 2014 becomes a body corporate as and from the date mentioned in its certificate of incorporation. The CRO website permits online data submission. Firms must submit a signed paper copy of this online application to the CRO, unless the applicant company has already registered with www.revenue.ie  (the website of Ireland’s tax collecting authority, the Office of the Revenue Commissioners).

The Ireland pages in the following link gives the most up-to-date information:

https://investmentpolicy.unctad.org/country-navigator/102/ireland 

Enterprise Ireland assists Irish firms in developing partnerships with foreign firms mainly to develop and grow indigenous firms.

Israel

1. Openness To, and Restrictions Upon, Foreign Investment

Israel is open to foreign investment and the government actively encourages and supports the inflow of foreign capital.

The Israeli Ministry of Economy and Industry’s ‘Invest in Israel’ office serves as the government’s investment promotion agency facilitating foreign investment. ‘Invest in Israel’ offers a wide range of services including guidance on Israeli laws, regulations, taxes, incentives, and costs, and facilitation of business connections with peer companies and industry leaders for new investors. ‘Invest in Israel’ also organizes familiarization tours for potential investors and employs a team of advisors for each region of the world.

The Israeli legal system protects the rights of both foreign and domestic entities to establish and own business enterprises, as well as the right to engage in remunerative activity. Private enterprises are free to establish, acquire, and dispose of interests in business enterprises. As part of ongoing privatization efforts, the Israeli government encourages foreign investment in privatizing government-owned entities.

Israel’s policies aim to equalize competition between private and public enterprises, although the existence of monopolies and oligopolies in several sectors, including communications infrastructure, food manufacturing and marketing, and some manufacturing segments, stifles competition. In the case of designated monopolies, defined as entities that supply more than 50 percent of the market, the government controls prices.

Israel established a centralized investment screening (approval) mechanism for certain inbound foreign investments in October 2019. Investments in regulated industries (e.g., banking and insurance) require approval by the relevant regulator. Investments in certain sectors may require a government license. Other regulations may apply, usually on a national treatment basis.

The World Trade Organization (WTO) conducted its fifth and latest trade policy review of Israel in July 2018. In the past three years, the Israeli government has not conducted any investment policy reviews through the Organization for Economic Cooperation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD). The OECD concluded an Economic Survey of Israel in 2020, which can be found here: https://www.oecd.org/economy/israel-economic-snapshot/ 

The Israeli government is fairly open and receptive to companies wishing to register businesses in Israel. The business registration process in Israel is relatively clear and straightforward. Four procedures are required to register a standard private limited company and take 12 days to complete, on average, according to the Israeli Ministry of Finance. The foreign investor must obtain company registration documents through a recognized attorney with the Israeli Ministry of Justice and obtain a tax identification number for company taxation and for value added taxes from the Israeli Ministry of Finance. The cost to register a company averages around USD 1,000 depending on attorney and legal fees.

The Israeli Ministry of Economy and Industry’s “Invest in Israel” website provides useful information for companies interested in starting a business or investing in Israel. The website is http://www.investinisrael.gov.il/Pages/default.aspx .

The Israel Export and International Cooperation Institute is an Israeli government agency operating independently, under the Ministry of Economy, that helps facilitate trade and business opportunities between Israeli and foreign companies. More information on their activities is available at https://www.export.gov.il/en .

In general, there are no restrictions on Israeli investors seeking to invest abroad. However, investing abroad may be restricted on national security grounds or in certain countries or sectors where the Israeli government deems such investment is not in the national interest.

Italy

1. Openness To, and Restrictions Upon, Foreign Investment

Italy is an open economy and welcomes foreign direct investment (FDI). As an EU member state, Italy is bound by the EU’s treaties and laws. Under EU treaties with the United States, as well as OECD commitments, Italy is generally obliged to provide national treatment to U.S. investors established in Italy or in another EU member state.

EU and Italian antitrust laws provide Italian authorities with the right to review mergers and acquisitions for market dominance. In addition, the Italian government may block mergers and acquisitions involving foreign firms under its investment screening authority (known as “Golden Power”) if the proposed transactions raise national security concerns. Enacted in 2012 and further implemented through decrees or follow-on legislation in 2015, 2017, 2019, 2020, and 2022, the Golden Power law allows the Government of Italy (GOI) to block foreign acquisition of companies operating in strategic sectors: defense/national security, energy, transportation, telecommunications including 5G and cloud computing, critical infrastructure, sensitive technology, and nuclear and space technology.  Under the April 6, 2020, Liquidity Decree the Prime Minister’s Office issued, the government strengthened Italy’s investment screening authority to cover all sectors outlined in the EU’s March 2019 foreign direct investment screening directive. The decree also extends (and has been renewed until December 31, 2022) Golden Power review to certain transactions by EU-based investors and gives the government new authorities to investigate non-notified transactions. Embedded in a broader government decree issued on March 18, 2022, the latest revision of the Golden Power investment screening authority reflects the government’s effort to adapt to both rapid developments in technology and recent shifts in the geopolitical landscape.  The proposed restructuring of the Golden Power mechanism revolves around three poles: the first enlarges Golden Power’s scope to capture emerging and critical technology, including cloud-based activities of strategic importance to the national defense and security system; the second proposes a requirement that companies submit to the Golden Power committee for approval annual procurement plans; and the third empowers a ten-expert committee to carry out investigations to monitor compliance, and also establishes strict penalties and enforcement mechanisms for non-compliance. The decree is in force for 60 days by which time it will need to be passed by the Italian parliament.

The Italian Trade Agency (ITA) is responsible for foreign investment attraction as well as promoting foreign trade and Italian exports. ITA operates under the coordination of the Italian Ministry of Economic Development and the Ministry of Foreign Affairs. As of April 2022, ITA operates through a network of 79 offices in 65 countries. ITA promotes foreign investment in Italy through Invest in Italy program: http://www.investinitaly.com/en/ . The Foreign Direct Investment Unit is the dedicated unit of ITA for facilitating the establishment and development of foreign companies in Italy. ITA supports foreign investors from location scouting to bureaucratic consulting to aftercare following the establishment of their business (e.g., visas, expansion projects, etc.).

While not directly responsible for investment attraction, SACE, Italy’s export credit agency, has additional responsibility for guaranteeing certain domestic investments. Foreign investors – particularly in energy and infrastructure projects – may see SACE’s project guarantees and insurance as further incentive to invest in Italy.

Additionally, Invitalia is the national agency for inward investment and economic development operating under the Italian Ministry of Economy and Finance. The agency focuses on strategic sectors for development and employment. Invitalia finances projects both large and small, targeting entrepreneurs with concrete development plans, especially in innovative and high-value-added sectors. For more information, see https://www.invitalia.it/eng . The Ministry of Economic Development ( https://www.mise.gov.it/index.php/en/ ) within its Directorate for Incentives to Businesses also has an office with some responsibilities relating to attraction of foreign investment.

Italy’s main business association (Confindustria) also helps companies in Italy: https://www.confindustria.it/en .

Under EU treaties and OECD obligations, Italy is generally obliged to provide national treatment to U.S. investors established in Italy or in another EU member state. EU and Italian antitrust laws provide national authorities with the right to review mergers and acquisitions over a certain financial threshold. The Italian government may block mergers and acquisitions involving foreign firms to protect the national strategic interest or in retaliation if the government of the country where the foreign firm is from applies discriminatory measures against Italian firms. Foreign investors in the defense and aircraft manufacturing sectors are more likely to encounter resistance from the many ministries involved in reviewing foreign acquisitions than are foreign investors in other sectors.

Italy maintains a formal national security screening process for inbound foreign investment in the sectors of defense/national security, transportation, energy, telecommunications, critical infrastructure, sensitive technology, and nuclear and space technology through its “Golden Power” legislation. Italy expanded its Golden Power authority in March 2019 to include the purchase of goods and services related to the planning, realization, maintenance, and management of broadband communications networks using 5G technology. Under the April 6, 2020, Liquidity Decree the Prime Minister’s Office issued, the government strengthened Italy’s investment screening authority to cover all sectors outlined in the EU’s March 2019 foreign direct investment screening directive. The EU regulations cover: (1) critical infrastructure, physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defense, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate; (2) critical technologies and dual use items, including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies, and nanotechnologies and biotechnologies; (3) supply of critical inputs, including food security, energy, and raw materials; (4) access to sensitive information; and (5) freedom of the media. The 2020 decree also extended (and has been renewed until December 31, 2022) Golden Power review to certain transactions by EU-based investors and gives the government new authorities to investigate non-notified transactions. Embedded in a broader government decree issued on March 18, 2022, the latest revision of the Golden Power investment screening authority reflects the government’s effort to adapt to both rapid developments in technology and recent shifts in the geopolitical landscape.  The proposed restructuring of the Golden Power mechanism revolves around three poles: the first enlarges Golden Power’s scope to capture emerging and critical technology, including cloud-based activities of strategic importance to the national defense and security system; the second proposes a requirement that companies submit to the Golden Power committee for approval annual procurement plans; and the third empowers a ten-expert committee to carry out investigations to monitor compliance, and also establishes strict penalties and enforcement mechanisms for non-compliance. The decree is in force for 60 days by which time it will need to be passed by the Italian parliament.

Italy has a business registration website, available in Italian and English, administered through the Union of Italian Chambers of Commerce: http://www.registroimprese.it.  The online business registration process is clear and complete, and available to foreign companies. Before registering a company online, applicants must obtain a certified e-mail address and digital signature, a process that may take up to five days. A notary is required to certify the documentation. The precise steps required for the registration process depend on the type of business being registered. The minimum capital requirement also varies by type of business. Generally, companies must obtain a value-added tax account number (partita IVA) from the Italian Revenue Agency; register with the social security agency (Istituto Nazionale della Previdenza Sociale INPS); verify adequate capital and insurance coverage with the Italian workers’ compensation agency (Istituto Nazionale per L’Assicurazione contro gli Infortuni sul Lavoro – INAIL); and notify the regional office of the Ministry of Labor. According to the World Bank Doing Business Index 2020, Italy’s ranking decreased from 67 to 98 out of 190 countries in terms of the ease of starting a business; it takes seven procedures and 11 days to start a business in Italy. Additional licenses may be required, depending on the type of business to be conducted.

Invitalia and the Italian Trade Agency’s Foreign Direct Investment Unit assist those wanting to set up a new business in Italy. Many Italian localities also have one-stop shops to serve as a single point of contact for, and provide advice to, potential investors on applying for necessary licenses and authorizations at both the local and national level. These services are available to all investors.

Italy neither promotes, restricts, nor incentivizes outward investment, nor restricts domestic investors from investing abroad.

Jamaica

1. Openness To, and Restrictions Upon, Foreign Investment

The Government of Jamaica (GoJ) is open to foreign investment in all sectors of the economy. The GOJ made significant structural changes to its economy, under International Monetary Fund (IMF) guidance during the six-year period to 2019, resulting in an improved investment environment. Since 2013, Jamaica’s Parliament passed numerous pieces of legislation to improve the business environment and support economic growth through a simplified tax system and broadened tax base. The establishment of credit bureaus and a Collateral Registry under the Secured Interest in Personal Property (SIPP) legislation are improving access to credit. Jamaica made starting a business easier by consolidating forms and made electricity less expensive by reducing the cost of external connection works. The GOJ implemented an electronic platform for the payment of taxes and established a 90-day window for development approvals.

The GOJ amended its public procurement regime with effect from April 2019, to include provisions for domestic margins of preference, affording preferential treatment to Jamaican suppliers in public contracts in some circumstances, and setting aside a portion of the government’s procurement budget for local micro, small, and medium enterprises. Notwithstanding, U.S. businesses are encouraged to participate in GOJ open procurements, many of which are published in media and via the government’s electronic procurement website: https://www.gojep.gov.jm/epps/home.do .

Jamaica’s commitment to regulatory reform is an intentional effort to become a more attractive destination for foreign investment. According to the World Bank’s “Doing Business 2020” report, Jamaica ranked 71 out of 190 economies, above average compared to Latin American and Caribbean countries. The country improved or held firm on all metrics assessed in the 2020 report, moving most significantly in the area registering property. The GoJ replaced the Ad Valorem Stamp Duty rate payable on the registration of collateral, such as property used to secure loan instruments, with a flat rate duty. Additionally, the transfer tax, payable on the change of ownership from one person to another, was also reduced during the year from five to two percent. Jamaica is ranked 80 out of 141 countries in the World Economic Forum’s 2019 Global Competitiveness Index. Bureaucracy remains a major impediment, with the country continuing to underperform in the areas of trading across borders, paying taxes, and enforcing contracts.

Jamaica’s trade and investment promotion agency, Jamaica Promotions Corporation (JAMPRO), is the GOJ agency responsible for promoting business opportunities to local and foreign investors. While JAMPRO does not institute general criteria for FDI, the institution targets specific sectors for investment and promotes Jamaican exports (see http://www.jamaicatradeandinvest.org/ ).

JAMPRO and the Jamaica Business Development Corporation assist micro, small, and medium-sized enterprises (MSME) primarily through business facilitation and capacity building. MSMEs tend to consist of less than 10 employees. Such fee-based services would be made available to foreign-owned MSMEs (see https://www.jbdc.net/ ).

All private entities, foreign and domestic, are entitled to establish and own business enterprises, as well as to engage in all forms of remunerative activity subject to, inter alia, labor, registration, and environmental requirements.  Jamaica does not impose limits on foreign ownership or control and local laws do not distinguish between local and foreign investors.  There are no sector-specific restrictions that impede market access.  A 2017 amendment to the Companies Act requires companies to disclose beneficial owners to the Companies Office of Jamaica (ORC).  The law mandates that the company retain records of legal and beneficial owners for seven years.  The GOJ proposed new legislation on the incorporation and operation of International Business Companies (IBC), which is designed to attract and facilitate a wide variety of international business activities to include: (1) holding companies providing asset protection for intellectual property rights, real property, and the shares of other companies; (2) serving as vehicles for licensing and franchising; (3) conducting international trade, and investment activities; (4) acting as special purpose vehicles in international financial transactions; and, (5) serving as the international headquarters for global companies.  

The U.S. government is not aware of any discrimination against foreign investors at the time of initial investment or after the investment is made.  However, under the Companies Act, investors are required to either establish a local company or register a branch office of a foreign-owned enterprise.  Branches of companies incorporated abroad must register with the Registrar of Companies if they intend to operate in Jamaica.  There are no laws or regulations requiring firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control.  Post is not aware of any formal screenings that exist for foreign investments.  Incentives are available to local and foreign investors alike, including various levels of tax relief.

Jamaica concluded a third-party trade policy review through the WTO in September 2017.  The WTO Secretariat’s recommendations are listed here: https://www.wto.org/english/tratop_e/tpr_e/tp459_e.htm 

Jamaica has not undertaken any investment policy reviews within the last three years in conjunction with the Organization for Economic Cooperation and Development (OECD) or United Nations Conference on Trade and Development (UNCTAD).  The GOJ’s previous WTO review took place in 2017 and an OECD review took place in 2004. 

No domestic or foreign civil society organizations have provided useful reviews of investment policy-related concerns within the past five years.

Businesses can easily register using the “Super Form,” a single Business Registration Form for New Companies and Business Names.  The ORC acts as a “one-stop-shop,” effectively reducing the registration time to between one and three days.  Foreign companies can register using these forms, with or without the assistance of an attorney or notary.  The “Super Form” can be accessed under Forms at the ORC’s website (https://www.orcjamaica.com).  All that is needed is a device with access to the internet, an approved reserved name, proof of address (any recent document used to verify your current address such as a utility bill or driver’s license), and a valid ID (Driver’s License, Passport or Voters Id).  The website gives detailed instructions throughout the process.

While the GOJ does not actively promote an outward investment program, it does not restrict domestic investors from investing abroad.

Japan

1. Openness To, and Restrictions Upon, Foreign Investment

Direct inward investment into Japan by foreign investors has been open and free since the Diet amended the Foreign Exchange and Foreign Trade Act (FEFTA) in 1998. In general, the only requirement for foreign investors making investments in Japan is to submit an ex post facto report to the relevant ministries. The Diet further amended FEFTA in 2019, updating Japan’s foreign investment review regime.  The legislation became effective in May 2020 and lowered the ownership threshold for pre-approval notification to the government for foreign investors from ten percent to one percent in industries that could pose risks to Japanese national security. There are waivers for certain categories of investors.

The Japanese government explicitly promotes inward FDI and has established formal programs to attract it. In 2013, the government of Prime Minister Shinzo Abe announced its intention to double Japan’s inward FDI stock to JPY 35 trillion (USD 318 billion) by 2020 and reiterated that commitment in its revised Japan Revitalization Strategy issued in August 2016. At the end of 2020, Japan’s inward FDI stock was JPY 39.7 trillion (USD 386 billion), a 15.6 percent increase over the previous year, achieving the target. The previous administration set a target for inward FDI stocks to double to JPY 80 trillion ($672.3 billion with 1.0 USD = ¥119) by 2030, set out in the Basic Policies released in June 2021 by then-Prime Minister Suga. Achieving this goal would put Japan’s FDI stock as a percentage of GDP at around 20 percent of the OECD average.

From time to time, the government’s “FDI Promotion Council,” composed of government ministers and private sector advisors, releases recommendations on improving Japan’s FDI environment. In a May 2018 report ( http://www.invest-japan.go.jp/documents/pdf/support_program_en.pdf ), the council decided to launch the Support Program for Regional Foreign Direct Investment in Japan, recommending that local governments formulate a plan to attract foreign companies to their regions.

The Ministry of Economy, Trade and Industry (METI) and the Japan External Trade Organization (JETRO) are the lead agencies responsible for assisting foreign firms wishing to invest in Japan. METI and JETRO have together created a “one-stop shop” for foreign investors, providing a single Tokyo location—with language assistance—where those seeking to establish a company in Japan can process the necessary paperwork (details are available at http://www.jetro.go.jp/en/invest/ibsc/ ). Prefectural and city governments also have active programs to attract foreign investors, but they lack many of the financial tools U.S. states and municipalities use to attract investment.

Foreign investors seeking a presence in the Japanese market or seeking to acquire a Japanese firm through corporate takeovers may face additional challenges, however, many of which relate more to prevailing business practices rather than to government regulations, although this varies by sector. Such challenges include an insular and consensual business culture that has traditionally resisted unsolicited mergers and acquisitions (M&A), especially when initiated by non-Japanese entities; a lack of multiple independent directors on many company boards (although board composition is changing); exclusive supplier networks and alliances between business groups that can restrict competition from foreign firms and domestic newcomers; cultural and linguistic challenges; and longstanding labor practices that tend to inhibit labor mobility. Business leaders have communicated to the U.S. Embassy that regulatory and governmental barriers are more likely to exist in mature, heavily regulated sectors than in new industries.

Foreign and domestic private enterprises have the right to establish and own business enterprises and engage in all forms of remunerative activity. Japan has gradually eliminated most formal restrictions governing FDI. One remaining restriction limits foreign ownership in Japan’s former land-line monopoly telephone operator, Nippon Telegraph and Telephone (NTT), to 33 percent. Japan’s Radio Law and separate Broadcasting Law also limit foreign investment in broadcasters to 20 percent, or 33 percent for broadcasters categorized as providers of broadcast infrastructure. Authorities count foreign ownership of Japanese companies invested in terrestrial broadcasters against these limits. The limits do not apply to communication satellite facility owners, program suppliers, or cable television operators.

The Foreign Exchange and Foreign Trade Act, as amended, governs investment in sectors deemed to have national security or economic stability implications. If a foreign investor wants to acquire over one percent of the shares of a listed company in the sectors set out below, it must provide prior notification and obtain approval from the Ministry of Finance and the ministry that regulates the specific industry. Designated sectors include weapons manufacturers, nuclear power, agriculture, aerospace, forestry, petroleum, electric/gas/water utilities, telecommunications, and leather manufacturing. There are waivers for certain categories of investors.

U.S. investors, relative to other foreign investors, are not disadvantaged or singled out by any ownership or control mechanisms, sector restrictions, or investment screening mechanisms.

The World Trade Organization (WTO) conducted its most recent review of Japan’s trade policies in July 2020 (available at directdoc.aspx (wto.org) ).

The OECD released its biennial Japan economic survey results in December 2021 (available at http://www.oecd.org/japan/economic-survey-japan.htm ).

The Japan External Trade Organization is Japan’s investment promotion and facilitation agency. JETRO operates six Invest Japan Business Support Centers (IBSCs) across Japan that provide consultation services on Japanese incorporation types, business registration, human resources, office establishment, and visa/residency issues. Through its website ( https://www.jetro.go.jp/en/invest/setting_up/ ), the organization provides English-language information on Japanese business registration, visas, taxes, recruiting, labor regulations, and trademark/design systems and procedures in Japan. While registration of corporate names and addresses can be completed online, most business registration procedures must be completed in person. In addition, corporate seals and articles of incorporation of newly established companies must be verified by a notary, although there are indications of change underway. Japan established a new Digital Agency in September 2021 to promote the digital provision of government services and digital transformation in the private sector.

According to the 2020 World Bank “Doing Business” Report, it takes eleven days to establish a local limited liability company in Japan. JETRO reports that establishing a branch office of a foreign company requires one month, while setting up a subsidiary company takes two months. Although requirements vary according to the type of incorporation, a typical business must register with the Legal Affairs Bureau (Ministry of Justice), the Labor Standards Inspection Office (Ministry of Health, Labour, and Welfare), the Japan Pension Service, the district Public Employment Security Office, and the district tax bureau. JETRO operates a one-stop business support center in Tokyo so that foreign companies can complete all necessary legal and administrative procedures at one location. In 2017, JETRO launched an online business registration system that allows businesses to register company documents but not immigration documentation.

No laws exist to explicitly prevent discrimination against women and minorities regarding registering and establishing a business. Neither special assistance nor mechanisms exist to aid women or underrepresented minorities.

The Japan Bank for International Cooperation (JBIC) provides a variety of support for outward Japanese foreign direct investment. Most such support comes in the form of “overseas investment loans,” which can be provided to Japanese companies (investors), overseas Japanese affiliates (including joint ventures), and foreign governments in support of projects with Japanese content, typically infrastructure projects. JBIC often supports outward FDI projects to develop or secure overseas resources that are of strategic importance to Japan, for example, construction of liquefied natural gas (LNG) export terminals to facilitate sales to Japan and third countries in Asia. (Note: Days after Russia’s invasion of Ukraine, JBIC announced on March 3, 2022, that it would review the agreement it signed in November 2021 providing for a JPY 220 billion ($1.8 billion) in loans regarding LNG development in Russia.) More information on JBIC is available at https://www.jbic.go.jp/en/index.html .

Nippon Export and Investment Insurance (NEXI) supports outward investment by providing exporters and investors insurance that protects them against risks and uncertainty in foreign countries that is not covered by private-sector insurers. Together, JBIC and NEXI act as Japan’s export credit agency.

Japan also employs specialized agencies and public-private partnerships to target outward investment in specific sectors.  For example, the Fund Corporation for the Overseas Development of Japan’s Information and Communications Technology and Postal Services (JICT) supports overseas investment in global telecommunications, broadcasting, and postal businesses.

Similarly, the Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN) is a government-funded corporation to invest and participate in transport and urban development projects that involve Japanese companies.  The fund specializes in overseas infrastructure investment projects such as high-speed rail, airports, and smart city projects with Japanese companies, banks, governments, and other institutions (e.g., JICA, JBIC, NEXI).

Finally, the Japan Oil, Gas and Metals National Corporation (JOGMEC) is a Japanese government entity administered by the Agency for Natural Resources and Energy under METI.  JOGMEC provides equity capital and liability guarantees to Japanese companies for oil and natural gas exploration and production projects.

Japan places no restrictions on outbound investment, except under certain circumstances (e.g., with countries under international sanctions) that are listed in the appendix of the FEFTA.

Jordan

1. Openness To, and Restrictions Upon, Foreign Investment

Jordan is largely open to foreign investment, and the government is committed to supporting foreign investment. Foreign and local investors are treated equally under the law.

In October 2021, a new, dedicated Ministry of Investment absorbed the responsibilities of the Jordan Investment Commission (JIC) and is now responsible for implementing the 2014 Investment Law and promoting new and existing investment in Jordan. The Ministry is the focal point for investors and can expedite government services and investment incentives. The Ministry supervises and approves investment-related matters within guidelines set by the Investment Council and approved by the government.

The Investment Council, comprised of the Prime Minister, ministers with economic portfolios, and representatives from the private sector, oversees the management and development of national investment policy and propose legislative and economic reforms to facilitate investment.

The Ministry of Investment oversees an “Investment Window” to provide information and technical assistance to investors, with a mandate to simplify registration and licensing procedures for investment projects that benefit from the Investment Law. The Ministry will continue offering the same services that were initiated by The Jordan Investment Commission, including the “Follow-Up and After Care” department established in 2018 and the investor grievance mechanism introduced in 2019 to address investor complaints, with the aim to resolve legal disputes outside of the formal court system.

In 2018, the government issued the “Code of Governance Practices of Policies and Legislative Instruments in Government Departments for the Year 2018.” It aims to increase legislative predictability and stability to ensure the confidence of citizens and the business sector. The government developed and adopted guidelines for a Regulatory Impact Assessment (RIA), to be implemented across all government entities.

Investment and property laws allow U.S. entities to establish businesses in many, but not all, sectors. Foreign companies may open regional and branch offices; branch offices may carry out full business activities; and regional offices may serve as liaisons between head offices and Jordanian or regional clients. The Ministry of Industry, Trade and Supply’s Companies Control Department implements the government’s policy on the establishment of regional and branch offices.

Under the U.S.-Jordan Bilateral Investment Treaty, U.S. investors are granted several exceptions and are accorded the same treatment as Jordanian nationals, allowing U.S. investors to maintain 100 percent ownership in some restricted businesses. In some sectors, including aerospace and defense, travel and tourism, transportation, and media and entertainment, there are limits to U.S. ownership and/or requirements for key positions to be filled by Jordanian nationals, among other restrictions. The most up-to-date listing of limitations on U.S. investments is available in the FTA Annex 3.1 and may be found at http://www.ustr.gov/trade-agreements/free-trade-agreements/jordan-fta/final-text 

Foreign nationals and firms are permitted to own or lease property in Jordan for investment purposes and are allowed one residence for personal use, provided that their home country permits reciprocal property ownership rights for Jordanians. Depending on the size and location of the property, the Land and Survey Department, the Ministry of Finance, and/or the Cabinet may need to approve foreign ownership of land and property, which must then be developed within five years of the date of approval.

In 2020, the government amended its bylaw governing foreign ownership, expanding ownership percentage in some economic activities, while maintaining the following restrictions:

  • Foreigners are prohibited from wholly or partially owning investigation and security services, stone quarrying operations for construction purposes, customs clearance services, and bakeries of all kinds; and are prohibited from trading in weapons and fireworks. The Cabinet, however, may approve foreign ownership of projects in these sectors upon the recommendation of the Investment Council. To qualify for the exemption, projects must be categorized as being highly valuable to the national economy.
  • Investors are limited to 50 percent ownership in certain businesses and services, including retail and wholesale trading, engineering consultancy services, exchange houses apart from banks and financial services companies, maritime, air, and land transportation services, and related services.
  • Foreign firms may not import goods without appointing an agent registered in Jordan; the agent may be a branch office or a wholly owned subsidiary of the foreign firm. The agent’s connection to the foreign company must be direct, without a sub-agent or intermediary.

The bylaw authorizes the Council of Ministers, upon the recommendation of the Prime Minister to grant a higher percentage ownership to non-Jordanian investors in any investment based on a certain criterion.

The Commercial Agents and Intermediaries Law No. 28/2001 governs contractual agreements between foreign firms and commercial agents. Private foreign entities, whether licensed under sole foreign ownership or as a joint venture, compete on an equal basis with local companies.

For national security purposes, foreign investors must undergo security screening through the Ministry of Interior, which can be finalized through the Commission’s “Investment Window” located at the Investment Commission or online https://www.jic.gov.jo/en/home-new/.

Jordan has been a World Trade Organization (WTO) member since 2000. The WTO conducted Jordan’s second Trade Policy Review in November 2015.

In 2012, the United States and Jordan agreed to Statements of Principles for International Investment and for Information and Communication Technology Services, and a Trade and Investment Partnership Bilateral Action Plan, each of which is designed to increase transparency, openness, and governmental and private sector cooperation. All current treaties and agreements in force between the United States and Jordan may be found here: https://www.state.gov/treaties-in-force/

As a follow-up to OECD’s Investment Policy Review of Jordan and Jordan’s adherence to the

OECD Declaration on International Investment and Multinational Enterprises in 2013, the MENA-OECD competitiveness program issued a report in 2018 entitled “Enhancing the legal

framework for sustainable investment: Lessons from Jordan” (http://www.oecd.org/mena/competitiveness/Enhancing-the-Legal-Framework-forSustainable-Investment-Lessons-from-Jorden.pdf).

The Jordan Strategy Forum (JSF), a leading think tank on economic development, regularly publishes an Investor Confidence Index and Investor Confidence Survey (in Arabic) on its website ( http://www.jsf.org ). JSF has published a policy paper on how to increase FDI inflows into Jordan: http://jsf.org/sites/default/files/Opportunities%20to%20Attract%20Foreign%20Direct%20Investment.pdf  .

Businesses in Jordan need to register with the Ministry of Industry, Trade, and Supply, Companies Control Department, or the Chambers of Commerce or Industry depending on the type of business they conduct. Registration is required to open a bank account, obtain a tax identification number and obtain a VAT number. New businesses also need to obtain a vocational license from the municipality, receive a health inspection, and register with the SSC.

In February 2022, the Parliament endorsed a new law for licensing professions within the jurisdiction of the Greater Amman Municipality (GAM) to create a registration fast-track. More than 383 economic activities will be eligible to obtain their licenses within one day, or maximum seven days if the business is considered high-risk. The law also extended the validity of licenses from one to five years.

The Ministry of Investment (which has absorbed the responsibilities of the Jordan Investment Commission) maintains an “Investment Window” which serves as a comprehensive investment center for investors. The Investment Window offers technical advice and complete registration and licensing services for investments inside and outside of development zones. Investors can register their businesses in one day if all documents are provided. Approvals for exemptions granted under the investment law can be approved and obtained in one week.

Jordan has also adopted a single security approval for new investors. The new approval covers registering and licensing the company, obtaining driving licenses for investors, possessing immovable property for the establishment of investment projects in the industrial and developing zones, in addition to granting residence permits to non-Jordanian investors and their family members. The commission has published a number of online guides, including the investor guide ( Investor Guide – Moin ).

In 2018, the Companies Control Department has developed and launched a portal for online registration: http://www.ccd.gov.jo /. Foreign investors can access it to register new companies.

However, e-signatures have not been implemented, so investors must sign documents using notary services in their countries.

In November 2019, under the Jordan Investment Commission (JIC), the government introduced several new online services including the issuance and renewal investor IDs, issuance and renewal of IDs for investors’ family members, registration of institutions in development zones, first-time registration of individual institutions, changing the method of use, registration and renewal of subscriptions to the Amman Chamber of Commerce (ACC), amendments to subscriptions to the ACC, and issuance of environmental permits. The introduction of these electronic services reduced the time needed to grant or renew the investor identification card (required to facilitate various transactions) to one day. ( home new – Moin ). In December 2020, the Greater Amman Municipality (GAM) digitized thirteen of its licensing related services, including vocational licensing and renewal.

In 2018, Jordan launched a National Single Window (NSW) for customs clearance. In 2020, all export and import custom declarations became electronic. In January 2022, the government adopted a simplified import tariff structure and reduced tariff rates. The Ministry of Finance reduced tariff brackets from eleven levels of taxation to four, ranging from zero to 25 percent. The maximum tariff rate (previously 40 percent) was reduced to 25 percent and will be reduced to 15 percent by 2023 ( https://services.customs.gov.jo/JCcits/sections.aspx ).

The Ministry of Digital Economy and Entrepreneurship continues to encourage the use of e-services and expand the number of government transactions that can be completed online. As of March 2021, 413 e-services are available including services provided by the Greater Amman Municipality, Ministry of Investment, Tax Department, Ministry of Trade, and Jordan Customs.

Jordan does not have a mechanism to specifically incentivize outward investment, nor does it restrict it.

Kazakhstan

1. Openness To, and Restrictions Upon, Foreign Investment

Kazakhstan has attracted significant FDI since independence. As of October 1, 2021, FDI totaled $170 billion, primarily in the oil and gas sector. International financial institutions consider Kazakhstan to be a relatively attractive destination for their operations, and some international firms have established regional headquarters in the country.

Kazakhstan adheres to the OECD Declaration on International Investment and Multinational Enterprises, meaning it is committed to certain investment standards.

In April 2019, the Prime Minister created the Coordination Council for Attracting Foreign Investment. The Prime Minister acts as the Chair and Investment Ombudsman. The Investment Committee at the Ministry of Foreign Affairs and its subsidiary, KazakhInvest, handle investment climate policy issues and work with potential and current investors, while the Ministry of National Economy and the Ministry of Trade and Integration work with international organizations like the OECD, WTO, and the UN Conference on Trade and Development (UNCTAD). Each regional government designates a representative to work with investors.

The GOK established the Astana International Financial Center (AIFC), modelled on the Dubai International Financial Center. It offers foreign investors an alternative jurisdiction for operations, with tax holidays, flexible labor rules, a Common Law-based legal system, and flexibility to carry out transactions in any currency.  The GOK recommends that foreign investors use AIFC for contracts with Kazakhstani businesses.

By law, foreign and domestic private firms may establish and own business enterprises. While no sectors are completely closed to foreign investors, restrictions on foreign ownership exist, including a 20 percent ceiling on foreign ownership of media outlets, a 49 percent limit on domestic and international air transportation services, and a 49 percent limit on telecom services.

Kazakhstan formally removed the limits on foreign ownership of telecom companies, except for the country’s main telecom operator, KazakhTeleCom. Still, foreign investors must obtain a government waiver to acquire more than 49 percent of shares in a telecom company. There are no constraints on the participation of foreign capital in the banking and insurance sectors. However, law limits the participation of offshore companies in banks and insurance companies and prohibits foreign ownership of pension funds and agricultural land. Foreign citizens and companies are restricted from participating in private security businesses.

Kazakhstan does not have a screening system in place and does not have legislation specifically focused on the national security implications of FDI akin to the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). Kazakhstan’s central bank (the National Bank of Kazakhstan) collects standard statistics on FDI and other forms of investments, but mostly for macroeconomic purposes.

Foreign companies remain concerned about the risk of preferences for domestic companies and mechanisms for government intervention in foreign companies’ operations, particularly in procurement.  The Front Office for Investors assists with investors’ challenges and brings them to the Prime Minister’s Council.

The OECD Investment Committee presented its second Investment Policy Review in June 2017, available at: https://www.oecd.org/countries/kazakhstan/oecd-investment-policy-reviews-kazakhstan-2017-9789264269606-en.htm 

The OECD review recommended Kazakhstan undertake corporate governance reforms of state-owned enterprises (SOEs), implement a more efficient tax system, further liberalize its trade policy, and introduce responsible business conduct principles and standards.

Kazakhstan has taken steps to simplify procedures for starting and operating businesses. Most procedures can now be done online. For example, online registration of any business is possible through the unified government website https://egov.kz/cms/en/services/business_registration/pass042com_mu .

Non-residents must have a business immigrant visa and submit electronic copies of their IDs, as well as any certification of their companies from their country of origin. Documents must be translated and notarized. Investors may learn more about these services here: https://invest.gov.kz/invest-guide/business-starting/ 

A foreign-owned company registered in Kazakhstan is considered a domestic company for purposes of currency regulation. Residents may open bank accounts in foreign currency in Kazakhstani banks.

In 2021, the GOK introduced a special three percent retail tax for 114 types of small and medium-sized businesses that have been affected the most by the pandemic, available for two years. The GOK also introduced an investment tax credit allowing entrepreneurs to defer taxes for up to three years. In 2020, the government approved new measures aimed to attract FDI. For example, the government introduced a new type of investment agreement (see details in Section 4). In January, Kazakhstan re-instituted visa-free travel for citizens of 54 countries, including the United States, Great Britain, Germany, and Japan.

The AIFC offers legal arrangements not normally available under Kazakhstani law, including trusts. AIFC residents have access to simplified procedures for obtaining investor visas.

Foreign investors often complain about problems with finalizing contracts and licensing. Tax errors still have not been decriminalized. The controversial taxation of dividends of non-residents came into force in January 2021.

The government neither incentivizes nor restricts outward investment.

Kenya

1. Openness To, and Restrictions Upon, Foreign Investment

Kenya has enjoyed a steadily improving environment for FDI.  Foreign investors seeking to establish a presence in Kenya generally receive the same treatment as local investors, and multinational companies make up a large percentage of Kenya’s industrial sector.  The government’s export promotion programs do not distinguish between goods produced by local or foreign-owned firms.  The primary regulations governing FDI are found in the Investment Promotion Act (2004).  Other important documents that provide the legal framework for FDI include the 2010 Constitution of Kenya, the Companies Ordinance, the Private Public Partnership Act (2013), the Foreign Investment Protection Act (1990), and the Companies Act (2015).  GOK membership in the World Bank’s Multilateral Investment Guarantee Agency (MIGA) provides an opportunity to insure FDI against non-commercial risk.  In November 2019, the Kenya Investment Authority (KenInvest), the country’s official investment promotion agency, launched the Kenya Investment Policy (KIP) and the County Investment Handbook (CIH) (http://www.invest.go.ke/publications/) which aim to increase inflow of FDI in the country.  The KIP intends to guide laws being drafted to promote and facilitate investments in Kenya.

KenInvest’s (http://www.invest.go.ke/) mandate is to promote and facilitate investment by helping investors understand and navigate local Kenya’s bureaucracy and regulations.  KenInvest helps investors obtain necessary licenses and developed eRegulations, an online database, to provide businesses with user-friendly access to Kenya’s investment-related regulations and procedures (https://eregulations.invest.go.ke/?l=en).

KenInvest prioritizes investment retention and maintains an ongoing dialogue with investors.  All proposed legislation must pass through a period of public consultation, which includes an opportunity for investors to offer feedback.  Private sector representatives can serve as board members on Kenya’s state-owned enterprises.  Since 2013, the Kenya Private Sector Alliance (KEPSA), the country’s primary alliance of private sector business associations, has had bi-annual round table meetings with President Kenyatta and his cabinet.  President Kenyatta also chairs a cabinet-level committee focused on improving the business environment.  The American Chamber of Commerce has also increasingly engaged the GOK on issues regarding Kenya’s business environment.

The government provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity.  To encourage foreign investment, in 2015, the GOK repealed regulations that imposed a 75 percent foreign ownership limit for firms listed on the Nairobi Securities Exchange, allowing such firms to be 100 percent foreign owned.  However, also in 2015, the government established regulations requiring Kenyan ownership of at least 15 percent of the share capital of derivative exchanges, through which derivatives, such as options and futures, can be traded.

Kenya’s National Information and Communications Technology (ICT) policy guidelines, published in August 2020, adjusted the requirement for Kenyan ownership in foreign ICT companies from 20 to 30 percent, and broadened its applicability within the telecommunications, postal, courier, and broadcasting industries.  Affected companies have 3 years to comply with the new requirement.  The Mining Act (2016) reserves mineral acquisition rights to companies registered and established in Kenya, whether local or foreign owned.  Mineral dealership licenses are only issued to Kenyan citizens or to corporations where at least 60 percent shareholding is held by Kenyan citizens.  The Private Security Regulations Act (2016) restricts foreign participation in the private security sector by requiring at least 25 percent Kenyan ownership of private security firms.  The National Construction Authority Act (2011) and the 2014 National Construction Authority regulations impose local content restrictions on “foreign contractors,” defined as companies incorporated outside Kenya or with more than 50 percent ownership by non-Kenyan citizens.  The definition excludes companies owned by foreigners but incorporated in Kenya.  The act requires foreign contractors enter subcontracts or joint ventures assuring that at least 30 percent of the contract work is done by local firms and locally unavailable skills transferred to a local person.  The Kenya Insurance Act (2010) limits foreign capital investment in insurance companies to two-thirds, with no single person holding more than a 25 percent ownership share.

In 2019, the World Trade Organization conducted a trade policy review for the East Africa Community (EAC), of which Kenya is a member (https://www.wto.org/english/tratop_e/tpr_e/tp484_e.htm).

In 2011, the GOK established KenTrade to address trading partners’ concerns regarding the complexity of trade regulations and procedures.  KenTrade’s mandate is to facilitate cross-border trade and to implement the National Electronic Single Window System.  In 2017, KenTrade launched InfoTrade Kenya (infotrade.gov.ke), which provides a host of investment products and services to prospective investors.  The site documents the process of exporting and importing by product, by steps, by paperwork, and by individuals, including contact information for officials responsible for relevant permits or approvals.

In February 2019, Kenya implemented a new Integrated Customs Management System (iCMS) that includes automated valuation benchmarking, release of green-channel cargo, importer validation and declaration, and linkage with iTax.  The iCMS enables customs officers to efficiently manage revenue and security related risks for imports, exports and goods on transit and transshipment.

The Movable Property Security Rights Bill (2017) enhanced the ability of individuals to secure financing through movable assets, including using intellectual property rights as collateral.  The Nairobi International Financial Centre (NIFC) Act (2017) seeks to provide a legal framework to facilitate and support the development of an efficient and competitive financial services sector in Kenya.  The act created the Nairobi International Financial Centre Authority to establish and maintain an efficient financial services sector to attract and retain FID.  The Kenya Trade Remedies Act (2017) provides the legal and institutional framework for Kenya’s application of trade remedies consistent with World Trade Organization (WTO) law, which requires a domestic institution to receive complaints and undertake investigations in line with WTO Agreements.  To date, however, Kenya has implemented only 7.5 percent of its commitments under the WTO Trade Facilitation Agreement, which it ratified in 2015.  In 2020, Kenya launched the Kenya Trade Remedies Agency to investigate and enforce anti-dumping, countervailing duty, and trade safeguards, to protect domestic industries from unfair trade practices.

The Companies (Amendment) Act (2017) clarified ambiguities in the original act and ensures compliance with global trends and best practices.  The act amended provisions on the extent of directors’ liabilities and disclosures and strengthens investor protections.  The amendment eliminated the requirements for small enterprises to hire secretaries, have lawyers register their firms, and to hold annual general meetings, reducing regulatory compliance and operational costs.

The Business Registration Services (BRS) Act (2015) established the Business Registration Service, a state corporation, to ensure effective administration of laws related to the incorporation, registration, operation, and management, of companies, partnerships, and firms.  The BRS also devolves certain business registration services to county governments, such as registration of business names and promoting local business ideas/legal entities- reducing registration costs.  The Companies Act (2015) covers the registration and management of both public and private corporations.

In 2014, the GOK established a Business Environment Delivery Unit to address investors’ concerns.  The unit focuses on reducing the bureaucratic steps required to establish and do business.  Its website (http://www.businesslicense.or.ke/) offers online business registration and provides detailed information regarding business licenses and permits, including requirements, fees, application forms, and contact details for the respective regulatory agencies.  In 2013, the GOK initiated the Access to Government Procurement Opportunities program, requiring all public procurement entities to set aside a minimum of 30 percent of their annual procurement spending facilitate the participation of youth, women, and persons with disabilities (https://agpo.go.ke/).

Kenya’s iGuide, an investment guide to Kenya (http://www.theiguides.org/public-docs/guides/kenya/about#, developed by UNCTAD and the International Chamber of Commerce, provides investors with up-to-date information on business costs, licensing requirements, opportunities, and conditions in developing countries.  Kenya is a member of UNCTAD’s international network of transparent investment procedures.

The GOK does not promote or incentivize outward investment.  Despite this, Kenya is evolving into an outward investor in tourism, manufacturing, retail, finance, education, and media. Kenya’s outward investment has primarily been in the EAC, due to the preferential access afforded to member countries, and in a select few central African countries.  The EAC allows free movement of capital among its six member states – Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.

Kosovo

1. Openness To, and Restrictions Upon, Foreign Investment

Kosovo welcomes FDI. Kosovo’s laws do not discriminate against foreign investors. The current government (as the government before) – including the Prime Minister’s Office; Ministry of Economy; Ministry of Industry, Entrepreneurship and Trade; and the Ministry of Finance, Labor and Transfers – recognizes the importance of FDI to the expansion of the private sector.

The mission of the Kosovo Investment Enterprise and Support Agency (KIESA) is to promote and support foreign investments. The agency is tasked with offering a menu of services, including assistance and advice on starting a business in Kosovo, assistance with applying for a site in a special economic zone or as a business incubator, facilitation of meetings with different state institutions, and participation in business-to-business meetings and conferences. In practice, however, many foreign and local companies have complained that KIESA has extremely weak capacity to provide the services under its mandate and must be strengthened.

Foreign chambers of commerce – including the American, German, and European – participate in dialogue platforms with the government, although overall communication between the government and the private sector has slightly deteriorated recently.

The laws and regulations on establishing and owning business enterprises and engaging in all forms of remunerative activity apply equally to foreign and domestic private entities. Kosovo legislation does not interfere with the establishment, acquisition, expansion, or sale of interests in enterprises by private entities. Under Kosovo law, foreign firms and local businesses operating in Kosovo are treated equally. Kosovo does not have an investment screening mechanism, though the U.S. government is actively working with Kosovo on the best practices for developing and implementing such a mechanism.

There have been no reports of restrictions from U.S. investors. There are no licensing restrictions particular to foreign investors and no requirement for domestic partners for joint ventures.

Kosovo is not a member of Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), or United Nations Conference on Trade and Development (UNCTAD), so there are no Kosovo-specific investment policy reviews from these organizations. However, Kosovo was profiled as part of the OECD’s report on “Competitiveness in Southeast Europe 2021: A Policy Outlook,” in which Kosovo received an overall score of 2.0 in the area of investment policy and promotion (versus an average of 3.0 across the Western Balkans 6 countries). In February 2017, the Pristina think tank, Group for Legal and Political Studies, published the report, “ How ‘friendly’ is Kosovo for Foreign Direct Investments: A Policy Review of Gaps from a Regional Market Perspective .”

The government has taken steps to remove barriers to facilitate businesses’ operations and improve related government services. With USAID’s assistance, the Government of Kosovo continued a series of business climate reforms that have contributed to Kosovo’s improved ranking in the World Bank Doing Business Index over the years. Per the amended Law on Support to Small and Medium Enterprises, KIESA supports both domestic and foreign-owned micro, small, and medium enterprises (MSMEs), without any specific eligibility criteria. Such services include voucher programs for training and advisory services, investment facilitation, assistance to women and young business owners, and the provision of business space with complete infrastructure at industrial parks, at minimal cost.

The Kosovo Business Registration Agency (KBRA), part of the Ministry of Industry, Entrepreneurship and Trade, registers all new businesses, business closures, and business modifications. The KBRA website is available in English and can be accessed at arbk.rks-gov.net . As of March 2022, some steps in the registration process can be completed online. Successful registrants will receive a business-registration certificate and a VAT number. New businesses must register employees for tax and pension programs with the Tax Administration under the Ministry of Finance, Labor and Transfers. Business registration generally takes one day for an individual business and up to three days for a limited liability company or a joint stock company. A notary is not required when opening a new business unless the business registration also involves a transfer of real property.

Kosovo does not promote, incentivize, or restrict outward investment. There are no restrictions on investments abroad.

Kuwait

Kyrgyz Republic

1. Openness To, and Restrictions Upon, Foreign Investment

The Kyrgyz Republic is actively seeking FDI, and the government publicly recognizes that it is an important component of economic development. While the government has implemented laws to attract foreign investment, a move to nationalize the country’s largest gold mine, the use of criminal investigations in commercial disputes, onerous bureaucracy, and an inability to protect investors’ assets continue to deter foreign investors. In particular, government activities, including demands for renegotiation of operating contracts, invasive and time-consuming audits, levies of large retroactive fines, and disputes over licenses, pose significant impediments to attracting foreign investment. Still, net FDI inflows in 2021 recovered somewhat, increasing 30 percent compared to 2020 levels, but remained 65 percent lower than 2019 levels.

Since 1993, the United States has had a Bilateral Investment Treaty with the Kyrgyz Republic that encourages and offers reciprocal protection of investment. The newly restructured Kyrgyz Agency of Development and Investment (KADI, formerly IPPA), under the Ministry of Economy and Commerce, serves as a vehicle for ongoing dialogue with foreign investors and advocates for investing in the Kyrgyz Republic. The agency participates in the development and implementation of measures to attract and stimulate investment activity.  Its mandate is to coordinate with state bodies, local municipalities, business entities, and non-state actors to promote investment and support investors in the Kyrgyz Republic, including private investment and public-private partnerships, as well as assist local exporters to promote Kyrgyz goods to external markets, and develop Free Economic Zones (FEZ).  The KADI has investor support programs to help guide investors through the registration process and conducts outreach aimed at helping create an environment conducive to foreign investment. The KADI often coordinates with international donor organizations on hosting round- tables discussions, exchanges, and capacity building workshops in the field of economic development.

The Institute of the Business Ombudsman was created in January 2019 as an independent non-state body, funded by external donor sources, to protect the rights, freedoms, and legitimate interests of business entities, both local and foreign. In August 2019, the Supervisory Board of the Institute of the Business Ombudsman appointed former UK Ambassador to the Kyrgyz Republic, Robin Ord-Smith, as Business Ombudsman. The Institute of Business Ombudsman has concluded memorandums of cooperation with leading international business associations, including the American Chamber of Commerce in the Kyrgyz Republic (AmCham), International Business Council (IBC), and the Chamber of Commerce of Industry of the Kyrgyz Republic (CCI).  In 2020, the Business Ombudsman recommended that business reform, protection and support of local entrepreneurs and protecting private property rights are key conditions for attracting direct investment.

The government has established several committees and councils to coordinate cooperation between the business associations and government bodies. Since 2017, the Business and Entrepreneurship Development Council under the Speaker of the Parliament regularly convenes MPs, business community representatives from various sectors of the economy to discuss measures to improve the investment, promotion of entrepreneurship, and legislation to facilitate doing business in the Kyrgyz Republic. The Committee on Development of Industry and Entrepreneurship under the President of the Kyrgyz Republic serves as a platform for entrepreneurs to turn to in case if their grievances are not addressed by the government. The presidential decree to establish the Committee under the National Council on Sustainable Development of the Kyrgyz Republic was signed on December 24, 2019, with the amendment to designate to the Vice-Prime-Minister for economic development, the Business Ombudsman and heads of business associations. The committee includes platforms to raise investment climate and other business concerns to the offices of the President, Parliament, and Prime Minister (Note: the position of Prime Minister was abolished in the 2021 constitution. End Note). The Kyrgyz government also interacts with the business community via a number of local associations that serve as a voice for entrepreneurs and corporations, including AmCham, IBC, and the National Alliance of Business Associations of the Kyrgyz Republic (http://caa.kg/ru/ru-naba/). The Ministry of Economy and Commerce, Parliamentary Business and Entrepreneurship Development Council, and other government bodies often seek the opinion of these associations during the formulation of policy.

While there are still no official limits on foreign control, a large investor in a politically sensitive industry may find that the government imposes investor-specific requirements such as a high percentage of local workforce employment or a minimum number of local seats on a board of directors. Foreigners have the right to establish and own businesses, and there have been no allegations of market access restrictions from U.S. investors since 2016.

By law, the Kyrgyz Republic guarantees equal treatment to investors and places no limit on foreign ownership or control. In the last two years, there were no known cases of sector-specific restrictions, limitations, or requirements applied to foreign ownership and control, but the government has intervened in the ownership of politically sensitive industries like mining. Amendments to the “Law on Mass Media” to limit foreign ownership of television (excluding radio and print media) broadcasters to 35 percententered into force in June 2017.

Post is unaware of any formal investment screening processes in the Kyrgyz Republic.

In 2016, the International Finance Corporation (IFC), a member of the World Bank Group, released a report on the Kyrgyz investment climate in January 2016. The report is available at: https://documents.worldbank.org/en/publication/documents-reports/documentdetail/259411467997285741/investment-climate-in-kyrgyz-republic-views-of-foreign-investors-results-of-the-survey-of-foreign-investors-operating-and-non-operating.

The Investment Policy Review (IPR) of The Kyrgyz Republic for 2016 by the United Nations Conference on Trade and Development (UNCTAD) is available at https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1436.

Starting a business in the Kyrgyz Republic has become easier following the elimination of the minimum capital requirement for business registration, abolition of certain registration fees, and decreases in registration times. The Kyrgyz Republic does not have a business registration website.  Registration of legal entities, branches, or representative offices in the Kyrgyz Republic is based on “registration by notification” and the “one stop-shop” practice.  State registration of a legal entity is completed within three business days from the date of filing the necessary documents for a specified fee.

To stimulate the inflow of direct investment, Parliament passed the law “On Amendments to Certain Legislative Acts of the Kyrgyz Republic on Investment Support” in December 2020. This law provides for the following rules relating to investment issues:

  1. The concept of “investment lots” is introduced, which provides investors with a package of services with the objective of helping the investor start their project;
  1. Local authorities have the authority to execute land transfers;
  1. Reduction of the investment threshold from $50 to $10 million USD for any investor that wants to negotiate an investment agreement directly with the Kyrgyz government;
  2. The Kyrgyz Agency of Development and Investment has the right to issue an application to the Ministry of Foreign Affairs for an investor visa for individuals who have invested more than 10 million soms (c. $95,000); and,
  1. Changes to public-private partnership (PPP) legislation aimed at simplifying procedure and attracting greater investment.

Post is not aware of host government efforts to promote outward investment from the Kyrgyz Republic, nor of any instances in which the government sought to restrict domestic investors from investing abroad.

Laos

1. Openness To, and Restrictions Upon, Foreign Investment

The Lao government officially welcomes both domestic and foreign investment as it seeks to keep growth rates high and graduate from Least Developed Country status by 2026. The pace of foreign investment has increased over the last several years. According to Lao government statistics, mining and hydropower account for 95.7 percent of Foreign Direct Investment (FDI), and agriculture accounted for only 2 percent of FDI in 2019. China, Thailand, France, Vietnam, and Japan are the largest sources of foreign investment, with China accounting for a significant share of all FDI in Laos. The government’s Investment Promotion Department encourages investment through its website www.investlaos.gov.la , and the government is attempting to improve the business environment by facilitating a constructive dialogue annually with the private sector and foreign business chambers through the Lao Business Forum, which is managed by the Lao National Chamber of Commerce and Industry LNCCI).

The 2009 Law on Investment Promotion was amended in November 2016, with 32 new articles introduced and 59 existing articles revised. Notably, the new law, an English version of which can be found at www.investlaos.gov.la , clarifies investment incentives, transfers responsibility for SEZs from the Prime Minister’s office to the Ministry of Planning and Investment (MPI), and removes strict registered capital requirements for opening a business, deferring instead to the relevant ministry. Foreigners may invest in any sector or business except in cases where the government deems the investment to be detrimental to national security, health, or national traditions, or that have a negative impact on the natural environment. In December 2021, Laos amended the value-added tax (VAT) law following Presidential Decree no. 231/P, which reduced the VAT rate from 10 to 7 percent as part of the government’s effort towards economic recovery. Also, the decree aims to provide a mechanism to facilitate investment towards activities that enable production and export. More importantly, the amended law indicates that more activities are exempted from VAT, while other mineral and electricity-related activities are subject to a specific basis for VAT calculation. Nevertheless, even in cases where full foreign ownership is permitted, many foreign companies seek a local partner. Companies involved in large FDI projects, especially in mining and hydropower, often either find it advantageous or are required to give the government partial ownership.

Foreign investors are typically required to go through several procedural steps prior to commencing operations. Many foreign business owners and potential investors claim the process is overly complex and regulations are erratically applied, particularly to foreigner investors. Investors also express confusion about the roles of different ministries, as multiple ministries become involved in the approval process. In the case of general investment licenses (as opposed to concessionary licenses, which are issued by MPI, foreign investors are required to obtain multiple permits, including an annual business registration from the Ministry of Industry and Commerce (MOIC), a tax registration from the Ministry of Finance, a business logo registration from the Ministry of Public Security, permits from each line ministry related to the investment (i.e., MOIC for manufacturing, and Ministry of Energy and Mines for power sector development), appropriate permits from local authorities, and an import-export license, if applicable. Obtaining the necessary permits can be challenging and time consuming, especially in areas outside the capital.

There are several possible vehicles for foreign investment. Foreign partners in a joint venture must contribute at least 30 percent of the company’s registered capital. Wholly foreign-owned companies may be entirely new or a branch of an existing foreign enterprise. Equity in medium and large-sized SOEs can be obtained through a joint venture with the Lao government.

Reliable statistics are difficult to obtain, however the trend of Foreign Direct Investment (FDI) shows an increase in recent years, mainly driven by large infrastructure projects. Total FDI in Laos increased from $5.7 billion in 2016 to $10 billion in 2019.

As discussed above, even though foreigners may invest in most sectors or businesses (subject to previously noted exceptions), many foreign companies seek a local partner to navigate byzantine official and unofficial processes. Companies involved in large FDI projects, especially in mining and hydropower, often either find it advantageous or are required to give the government partial ownership.

The OECD released its most recent investment policy review of Laos on July 11, 2017. More details can be found at http://www.oecd.org/daf/inv/investment-policy/oecd-investment-policy-reviews-lao-pdr-2017-9789264276055-en.htm 

Laos does not have a central business registration website yet, but the Ministry of Industry and Commerce (MOIC) has improved its online enterprise registration site, http://www.erm.gov.la , to accelerate the registration process. Due to the government’s effort in supporting the ease of doing business, investors recently reported needing less than 17 days to attain an Enterprise Registration Certificate for general business activities, compared to 174 days in the past. Nonetheless, the timeline and process for controlled and concession activities (see https://www.laotradeportal.gov.la/kcfinder/upload/files/Legal_1571216364.pdf for a list) can vary considerably, as it requires the engagement of different government agencies to issue an operating license. As a result, many investors and even locals often hire consultancies or law firms to shepherd the labor-intensive registration process.

The Lao government has attempted to streamline business registration using a one-stop shop model. Registration for general business activities can be done at the Department of Enterprise Registration and Management offices, MOIC(see http://www.erm.gov.la  for more details), while the service for activities requiring a government concession is through the Ministry of Planning and Investment (MPI). For investment in special economic zones (SEZ), one-stop registration is run through the MPI or in special one-stop service offices within the SEZs themselves (under the authority of the MPI).

To promote and facilitate domestic and foreign investment, the Prime Minister’s Office issued Order 02 and Order 03 in 2018 and 2019 respectively to reform the ease of doing business and improve services on investment and operational licenses. This includes the improvement of the One Stop Service system and conducting business implementation associated with transparency in a uniform and timely manner. The government also encouraged the participation of both domestic and foreign investors to develop infrastructure and public services delivery projects by issuing a public-private partnership (PPP) decree in 2020 aiming to boost economic growth.

So far, business owners give the one-stop shop concept mixed reviews. Many acknowledge that it is an improvement but describe it as an incomplete reform with several additional steps that must still be taken outside of the single stop. Businesses also complain that there are often different registration requirements at the central and provincial levels.

The Lao government does not actively promote, incentivize, or restrict outward investment.

Latvia

1. Openness To, and Restrictions Upon, Foreign Investment

The Latvian government actively encourages foreign direct investment (FDI) and works with investors to improve the country’s business climate. Latvia has a dedicated investment promotion agency – Latvian Investment and Development Agency – to provide a full scope of investment services to prospective investors: https://www.liaa.gov.lv/en . As of April 2022, the agency has two dedicated representatives based in the United States (San Francisco, CA and Boston, MA). The Latvian government meets annually with the Foreign Investors Council in Latvia (FICIL), which represents large foreign companies and chambers of commerce, to improve the business environment and encourage foreign investment. The Prime Minister chairs the Coordination Council for Large and Strategically Important Investment Projects. In January 2021, FICIL published its Sentiment Index 2020 – a survey of current foreign investors’ assessments about the investment climate in Latvia. It is available at: https://www.ficil.lv/sentiment-index/  .

Latvian legislation, on the basis of national security concerns, requires governmental approval prior to transfers of significant ownership interests in the energy, telecommunications, and media sectors. The government is considering expanding this list of sectors. Detailed information is available here: https://investmentpolicy.unctad.org/country-navigator/118/latvia. 

With these limited exceptions, physical and legal persons who are citizens of Latvia or of other EU countries may freely purchase real property. In general, physical and legal persons who are citizens of non-EU countries (third-country nationals) may also freely purchase developed real property. However, third-country nationals may not directly purchase certain types of agricultural, forest, and undeveloped land. Such persons may acquire ownership interest in such land through a company registered in the Register of Enterprises of the Republic of Latvia, provided that more than 50 percent of the company is owned by: (a) Latvian citizens and/or Latvian governmental entities; and/or (b) physical or legal persons from countries with which Latvia signed and ratified an international agreement on the promotion and protection of investments on or before December 31, 1996; or for agreements concluded after this date, so long as such agreements provide for reciprocal rights to land acquisition. The United States and Latvia have such an agreement (a bilateral investment treaty in force since 1996). In addition, foreign investors can lease land without restriction for up to 99 years. The Law on Land Privatization in Rural Areas allows EU citizens to purchase Latvia’s agricultural land and forests. Other restrictions apply (to both Latvian citizens and foreigners) regarding the acquisition of land in Latvia’s border areas, Baltic Sea and Gulf of Riga dune areas, and other protected areas.

In May 2017, the President of Latvia promulgated amendments to the Law on Land Privatization in Rural Areas to simplify and clarify the process for local farmers to purchase land. The law, however, also prohibits foreigners who do not have a working knowledge of the Latvian language from purchasing agricultural land. On June 11, 2020 the Court of Justice of the EU found that the law violated European law, but the Latvian government has yet to amend the law.

The Latvian constitution guarantees the right to private ownership. Both domestic and foreign private entities have the right to establish and own business enterprises and engage in all forms of commercial activity, except those expressly prohibited by law.

The Organization for Economic Cooperation and Development (OECD) published the latest Latvia Economic Snapshot in March 2022 ( http://www.oecd.org/economy/latvia-economic-snapshot/ ). Although there have been no trade policy reviews specifically involving Latvia, the WTO completed its latest review of the European Union in February 2020. ( https://www.wto.org/english/tratop_e/tpr_e/tp495_e.htm ). Additionally, in October 2017, the World Bank published a review of Latvia’s tax system ( http://documents.worldbank.org/curated/en/587291508511990249/Latvia-tax-review ).

A new business can be registered in Latvia in one day. The Latvian Investment and Development Agency has prepared a guide on starting a business in Latvia: https://www.liaa.gov.lv/en/invest-latvia/business-guide/operating-environment. 

The official website of the Latvian Commercial Register provides detailed information in English on business registration process in Latvia: https://www.ur.gov.lv/en/ .

Latvia has implemented special legislation to encourage startup ventures through favorable tax treatment. For more information, please see here: http://www.liaa.gov.lv/en/invest-latvia/start-up-ecosystem  and here: https://labsoflatvia.com/en/resources .

Using the European Commission definitions of micro, small, and medium enterprises (MSMEs), Latvia has established a special tax regime for microenterprises. This special tax regime is available to foreign nationals. Changes introduced as of January 2022, including an increased microenterprise tax rate, now make the tax regime less attractive for most small companies. For additional details on the microenterprise tax regime, see: https://www.fm.gov.lv/en/micro-enterprise-tax 

Latvia joined other OECD countries in July 2021 i