1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The government of the Republic of Equatorial Guinea is actively soliciting foreign investments. The government announced in August 2018 that 2019 would be the “Year of Energy” with new licensing rounds for hydrocarbons fields and various events to encourage investment. In 2017, the Government started the donor facilitation initiative with the World Bank, as part of a strategy towards membership in the World Trade Organization. The government also passed a law to establish a “one-stop-shop” for investors and simplify the process to register a business, which launched in January 2019. The government of the Republic of Equatorial Guinea equipped facilities for processing applications and has started training staff.
Statutorily, the Minister of Economy, Finances and Planning approves investment permits. A new state entity, Holdings Equatorial Guinea 2020, was created to help guide diversification efforts. This entity was expected to serve as a hub for foreign investors. For now, however, investors still work with the relevant government ministries to negotiate contracts.
The government, including at the highest levels, has regular meetings and conferences with business leaders and investors, though we are unaware of any formal business roundtable. For example, in November 2018 the World Bank and the Singapore Cooperation Programme led a conference in Equatorial Guinea on improving the business climate.
Limits on Foreign Control and Right to Private Ownership and Establishment
The Foreign Investment Law (Decree 72/2018 of April 2018) modified the provisions of decree 127/2004 stipulating that shareholder capital firms and companies operating in the petroleum sector must have Equatoguinean shareholders. The government requires that Equatoguinean partners hold at least 35 percent of share capital of foreign companies or companies created by foreigners in the hydrocarbons sector only. Equatoguinean partners must also account for one third of the representatives on the Board of Directors. Apart from the hydrocarbons sector, investments must not be part of public-private partnerships with a government entity.
Investors work with the relevant government ministries to negotiate contracts. The Minister of Mines and Hydrocarbons generally approves any major deal in the hydrocarbons sector. Decisions regarding larger investment deals may rise to the presidential level. U.S. investors may reach out to the Equatoguinean Embassy in the United States for guidance regarding connection to the appropriate ministry for outreach efforts.
The Hydrocarbons Law and National Content regulation establishes various requirements for international oil and gas companies that wish to operate in Equatorial Guinea. This includes a minority partner stake for either the state oil company (GE Petrol) or the state gas company (Sonagas). In addition, there are national content requirements, several of which were established in 2014 by the Ministry of Mines, Industry, and Energy, which apply to both producers and service companies, including: 70% of staff must be Equatoguineans, the company must procure a significant portion of services (ranging from 50-100% depending on the category) from national company partners, and the company must dedicate a percentage of its revenue to corporate social responsibility projects which the government must approve. (The government restructured the cabinet and there is now a Ministry of Mines and Hydrocarbons and a separate Ministry of Industry and Energy.)
Other Investment Policy Reviews
In the past three years, the government of the Republic of Equatorial Guinea has not conducted an investment policy review through any institutions, such as the Organization for Economic Cooperation and Development, the World Trade Organization, or the United Nations Conference on Trade and Development.
According the World Bank’s Doing Business 2018 report, starting a business in Equatorial Guinea requires 16 procedures and usually takes 33 days, an improvement over 2017. Equatorial Guinea was ranked 184 of 190 in the World Bank’s Doing Business Report 2018 for ease of “starting a business.”
In 2017, the government of the Republic of Equatorial Guinea passed Decree No. 67/2017, published on September 12, 2017 to establish a “one-stop-shop” or a “single window” to simplify the process to register a business and speed the process to seven business days. The “single window” was launched on January 14, 2019, after the Government of the Republic of Equatorial Guinea equipped facilities for processing applications, and trained staff. There is a webpage with information ( ) but businesses cannot register online. Generally, business must register with various agencies at the national level and some local offices. The one-stop-shop does not eliminate steps but it does consolidate visits to five offices into one. The below chart illustrates the steps that an entrepreneur can completed at the one-stop-shop:
|Ministry of Finance||one-stop-shop|
|Ministry of Commerce – General Direction of Commerce||one-stop-shop|
|Ministry of Commerce – Department of Business Promotion||one-stop-shop|
|Ministry of Labor||Ministry of Labor|
|Social Security Administration (INSESO)||Social Security Administration (INSESO)|
|Chamber of Commerce||Chamber of Commerce|
|City Hall||City Hall|
|Sectoral Ministries according to the activity of the company||Sectoral Ministries according to the activity of the company|
The country does not have a business facilitation mechanism for equitable treatment of women and underrepresented minorities in the economy. There are laws that make it illegal to discriminate against women. There is an ongoing effort from the government to include people with disabilities in public administration, including with internship programs and contracts.
Although Equatoguinean citizens may legally invest outside the country, the government of the Republic of Equatorial Guinea does not promote any outward investment that is not government led. Equatoguineans owning businesses abroad are not praised or showcased in the news. There are not any known restrictions on domestic investors who seek to invest abroad. However, some report that certain individuals and companies have faced delays when transferring money overseas or converting local currency into foreign exchange.
2. Bilateral Investment Agreements and Taxation Treaties
Equatorial Guinea and the United States have not signed a Bilateral Investment Agreement, a Free Trade Agreement, nor a Bilateral Taxation Treaty. Equatorial Guinea is not eligible for AGOA this year.
Equatorial Guinea has a bilateral investment agreement with Spain that came into force in 2003. The government signed a cooperation framework agreement with Cape Verde on April 16, 2019, including double taxation avoidance and tax evasion, and reciprocal protection of investments in the two nations.
The country has several bilateral taxation treaties with the following countries:
- China, signed in 2005, entered into force in 2006
- Ethiopia, signed in 2009, not currently in force
- France, signed in 1982, entered into force in 1983
- Morocco, signed in 2005, not currently in force
- Russia, signed in 2011, not currently in force
- South Africa, signed in 2004, not currently in force
- Spain, signed in 2003, entered into force in 2003
- Ukraine, signed in 2005, not currently in force
Equatorial Guinea is also party to various other economic agreements, namely the following:
- Cotonou Agreement EU, entered into force in 2003
- African Union Treaty, entered into force in 1994
- Economic Community of Central African States Treaty, entered into force in 1984
- CEMAC Convention on Liberalization, entered into force in 1972
- CEMAC Investment, entered into force in 1966
- The African Continental Free Trade Agreement signed March 21, 2018, not currently in force
China has granted Equatorial Guinea preferential trade status. The two countries are currently engaged in negotiations for a free trade agreement.