Policies Towards Foreign Direct Investment

The GOC’s policies towards foreign direct investment (FDI) are generally positive.  There are few formal restrictions on foreign trade and investment. 

Chad’s laws and regulations encourage FDI.  The National Investment Charter of 2008, a set of guidelines promulgated by the 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, offers incentives to foreign companies establishing operations in Chad, including up to five years of tax-exempt status.  Under Chadian law, foreign and domestic entities may establish and own business enterprises. The National Investment Charter 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.

Limits on Foreign Control and Right to Private Ownership and Establishment

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.

Other Investment Policy Reviews

The World Trade Organization (WTO) last published a trade policy review for Chad, Cameroon, Republic of Congo, Gabon, and Central African Republic in July 2013. 

Neither the Organization for Economic Cooperation and Development (OECD) nor the United Nations Committee on Trade and Development (UNCTAD) has published any investment policy reviews (IPR) of Chad.

Business Facilitation

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 only legal requirement for investment. ANIE’s website (www.anie-tchad.com  ) provides additional information.  Online business registration is not yet available via the Global Enterprise Registration web site (www.GER.co  ) or the Business Facilitation Program (www.businessfacilitation.org  ). 

In 2018, the World Bank ranked Chad 180 out of 190 countries for ease of starting a business, which included factors beyond the registration, to include permitting, access to resources like space and energy, and access to capital.

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.  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. 

Outward Investment

The GOC does not offer any programs or incentives encouraging outward investment, although there are no restrictions on domestic investors who might have the means and the interest in investing abroad.

The GOC does not restrict domestic investors from investing abroad.

Policies Toward Foreign Direct Investment

The DRC remains a challenging environment in which to conduct business.  At the same time, the GDRC sporadically takes steps to improve economic governance and its business climate, while the DRC’s rich endowment of natural resources, large population and generally open trading system provide significant potential opportunities for U.S. investors.  The GDRC’s investment agency, the National Agency for Investment Promotion (ANAPI), provides investment facilitation services for initial investments over USD 200,000 and is mandated to simplify the investment process, make procedures more transparent, assist new foreign investors and improve the image of the DRC as an investment destination.  Current investment regulations prohibit foreign investors from engaging in informal small retail commerce, referred to locally as petit commerce, and ban foreign majority-ownership of agricultural concerns. Visas for foreign workers are limited to six consecutive months and cost between USD 300 (single entry) and USD 400 (multiple-entry).

Following approval of an initial “temporary” work visa, which, normally, is not difficult to procure, a foreign worker may qualify for a more expensive “establishment visa” with at least a one year validity.  Salaries paid to expatriates are taxed at a higher rate than those of locals to encourage local employment.

Limits on Foreign Control and Right to Private Ownership and Establishment

The DRC Constitution stipulates entitlement to own and establish a business enterprise, and to engage in all forms of remunerative activity, noting minimal restrictions related to small commerce and a prohibition of foreign shareholder ownership of more than 49 percent of an agribusiness.  The government has drafted foreign ownership legislation, but parliamentary debate is still pending. Although it may not be based in law, many investors note that in practice the GDRC requires foreign investors to both hire local agents and participate in a joint venture with the government or local partners.

A new law on subcontracting in the private sector, which was enacted in January 2017, restricts foreign investors’ participation in subcontracting in almost all sectors and is considered discriminatory to the interests of some U.S. companies operating in DRC.  The law restricts subcontracting activity to majority Congolese-owned and capitalized-companies whose head offices are located in the national territory.  The only exception is in the case of unavailability of expertise in a specific subcontracting area. In that case, proof of lack of expertise must be provided to the competent authority to enable a non-Congolese company to be used as a subcontractor, but the activity may not exceed six months.

The law also forbids the subcontracting of more than 40 percent of the overall value of a contract; voids clauses, stipulations and contractual arrangements that violate the provisions of this law; and carries penalties of up to USD 150,000 and the risk of closure of operations for six months if certain provisions are violated.  As of April 2017, the Federations of Enterprises of the Congo (FEC), the American Chamber of Commerce DRC, and other business organizations were lobbying to review and revise the law.  Foreign businesses had a 12-month grace period, which ended in January 2018, to comply with the new law, but as noted below, the law is not yet being enforced.

On April 16^th, 2018, the Congolese government adopted the draft decree on the “creation, organization and functioning of the Authority to Regulate Subcontracting in the Private Sector” (ARSP).  On December 27th, 2018 former President Kabila and Prime Minister Tshibala signed an order to appoint the Authority’s general management and the board of directors, which would implement the law.  The Director General of the ARSP announced in May 2019 that the Authority would begin operations shortly.

On March 9, 2018, the government promulgated a new mining code which increased royalty rates by two to ten percent, raised tax rates on “strategic” metals, and imposed a surcharge on “super profits” of mining companies.  Of particular concern to mining companies, the government unilaterally removed a stability clause contained in the mining code of 2002.  The stability clause protects investors from any new fees or taxes for ten years.  With no coherent and transparent legal and fiscal framework to alleviate investors’ concerns, the stability clause offered a significant inducement to major mining companies.  Removal of the stability clause may deter future investment in the mining sector.  Since August 27^th, 2018, the day of the last meeting between the government and investors, the situation has not progressed.  Also in August, the DRC’s major industrial mining companies, responsible for 80 percent of copper and cobalt production and 90 percent of gold production, formed a new industry body, the Initiative for the Promotion of the Mining Industry (IPM), to engage the GDRC more effectively on the new mining code.  IPM is awaiting appointment of the new government to resume discussions.  The Tshisekedi government has indicated that it is willing to reopen discussions on the new mining code, but given its minority status in the National Assembly, it may not be able to implement changes that require legislative approval.

Other Investment Policy Reviews

The DRC has not undergone an Organization for Economic Cooperation and Development (OECD) or United Nations Conference on Trade and Development (UNCTAD) Investment Policy Review in the last 10 years, but the GDRC has made significant progress to improve its customs clearance procedures. Cities with high custom clearance traffic use Sydonia, which is an advanced software system for custom administrations in compliance with ASYCUDA.  (ASYCUDA is a large technical assistance software program recommended by UNCTAD for custom clearance management.)

Business Facilitation

Since 2013, the GDRC has operated a “one-stop shop” (https://www.guichetunique.cd/) that brings together all the government entities involved in the registration of a company in the DRC.  The registration process now officially takes three days, but in practice it can take much longer.  Yet, some businesses have reported that the Guichet Unique has considerably shortened and simplified the overall process of business registration.

Outward Investment

The GDRC does not prohibit outward investment, nor does it particularly promote it.  There are no current government restrictions preventing domestic investors from investing abroad, and there are no current blacklisted countries with which domestic investors are precluded from doing business.

Policies towards Foreign Direct Investment

The government sees investment beyond the petroleum sector, which accounts for over 90 percent of FDI inflows, as key to stimulating growth and development.  The country has pledged to undertake a variety of legislative, regulatory and institutional reforms to improve the investment climate and attract more FDI with the goal of becoming an emerging market economy by 2025. 

No known laws or practices discriminate against foreign investors, including U.S. investors, by prohibiting, limiting or conditioning foreign investment in a sector of the economy. The U.S. and ROC signed an investment agreement in 1994.

ROC’s Agency for the Promotion of Investments (API), established in 2013, promotes economic diversification by seeking to expand the pool of external investors. It provides limited services, however.  The Ministry of Economy leads government-wide economic diversification efforts.

The government has made no significant efforts to retain foreign investments.  The High Committee for Public-Private Dialogue (“Le Haut Comité du Dialogue Public-Privé”), established in 2012, has not convened since 2014, despite significant lobbying efforts in 2018-19 from ROC’s union of private enterprises to restart a serious public-private dialogue.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity. 

ROC has no known general limits on foreign ownership or control.

Foreign business entities investing in the petroleum sector must pursue a joint venture with the Congolese National Petroleum Company (SNPC).  Informally, ROC enforces a policy that foreign companies must employ a significant number of Congolese workers, including managers, with a focus on employing an increased number of Congolese workers and managers in subsequent years.  There are no other known sector-specific restrictions, limitations, or requirements applied to foreign ownership and control.

ROC does not have an investment screening mechanism for inbound foreign investment.

Other Investment Policy Reviews

The government undergone no third-party investment policy reviews (IPRs) in recent years.

Business Facilitation

The ROC government has a “one-stop shop” for establishing a business called “Agence Congolaise Pour la Création des Entreprises” (ACPCE).  ACPCE has offices in Brazzaville, Pointe-Noire, N’kayi, Ouesso, and Dolisie. In order to establish a business in the ROC, investors must provide ACPCE with two copies of the company by-laws, two copies of capitalization documents (e.g. a bank letter or an affidavit), a copy of the company’s investment strategy, company-approved financial statements (if available), and ownership documents or lease agreements for the company’s offices in the ROC.

The ACPCE has a website: http://www.acpce.cg/  . However, this website serves as an information only website; business registration cannot be undertaken through the website.

Outward Investment

The ROC government does not promote or incentivize outward investment.

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

Policies Towards Foreign Direct Investment

Gabon’s 1998 investment code conforms to Central African Economic and Monetary Community (CEMAC) investment regulations and provides the same rights to foreign companies operating in Gabon as to domestic firms.  Businesses 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 special 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 April 2014.  The ANPI-Gabon’s mission is to promote investments and exports, support small and medium-sized enterprises, manage public-private partnerships, and help companies to get established.  The agency is supposed to act as the gateway for investment into the country and reduce administrative procedures, costs, and waiting periods.

Gabonese authorities have made efforts to prioritize investment.  On March 7, 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.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign ownership or control, except for discrete activities customarily reserved for the state, including military and paramilitary activities.

Foreign investors are largely treated in the same manner as their Gabonese counterparts with regard to 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.

Gabon Oil Company, a state-owned enterprise created in 2011, has an automatic right to purchase up to a 15 percent share in any hydrocarbon contract at market price.

The standard practice is for the Gabonese Presidency to review foreign investment contracts after ministerial-level negotiations are completed.  There are instances where the Presidency gets involved to push negotiations stalled at the ministerial level.  The Presidency takes a very active role 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.

U.S. investors are not disadvantaged by ownership or control mechanisms, sector restrictions, or investment screening mechanisms.  However, French companies continue to dominate major sectors in Gabon. Lack of French language skills can put American or non-Francophone firms at a disadvantage.

Other Investment Policy Reviews

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) in the past three years.

Business Facilitation

The government encourages investments in some of Gabon’s main industries (oil and gas, mining, and timber) through customs and tax incentives.  For example, oil and mining companies are exempt from customs duties on imported working equipment. The Tourism Investment Code, enacted in 2000, provides tax incentives to foreign tourism investors during the first eight years of operation.  A SEZ located at Nkok offers tax incentives to industrial investors.

ANPI-Gabon houses 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).  ANPI-Gabon aims to attract domestic and international investors through improved methods of approving and licensing procedures and support for public-private dialogue. It has a single window registration process that allows domestic and foreign investors to register their business in 48 hours.  There are no special mechanisms for equitable treatment of women and underrepresented minorities in Gabon.

ANPI-Gabon’s website address is:

http://www.anpigabon.ga/index.php/fr/  
https://fr-fr.facebook.com/anpigabon/  

Outward Investment

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.