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Angola

4. Industrial Policies

Investment Incentives

The New Private Investment Law (NPIL) issued in 2018 seeks to incentivize incoming investment. Investment incentives in the NPIL include:

  • Elimination of the minimum investment value and the value required to qualify for incentives in foreign and local investments, previously set at USD 1,000,000 and USD 500,000 respectively. There is no lower limit to invest and qualify for incentives.
  • Elimination of the obligation for foreign investors to establish a partnership with an Angolan entity with at least a 35 percent stake in the capital structure of investments in the electricity and water, tourism, transport and logistics, construction, media, telecommunications and IT sectors. Under the new law, investors will decide on their capital structure and origin.
  • Granting to foreign investors “the right and guarantee to transfer abroad” dividends or distributed profits, the proceeds of the liquidation of their investments, capital gains, the proceeds of indemnities and royalties, or other income from remuneration of indirect investments related to technology transfer after proof of implementation of the project and payment of all tax dues.

Investment incentives are now granted by AIPEX, the State’s investment agency; the president had that responsibility under the 2015 investment law. Companies need to apply for such incentives when submitting an investment application to AIPEX and the relevant ministry. The NPIL restructures the country into three economic development zones (zones A through C) determined by political and socio-economic factors, up from two as per the 2015 investment law. For Zone A, investors have a 3-year moratorium on taxes reduced between 25- 50 percent of the tax levied on the distribution of profits and dividends. For Zone B, it is between three to six years with a 50 to 60 percent tax reduction, and for Zone C between six to eight years with a tax reduction between 60-70 percent of the tax levied on distribution of profits and dividends.

  1. The State guarantees “non-public interference in the management of private companies” and “non-cancellation of licenses without administrative or judicial processes.”
  2. The State provides a new and simplified procedure for the approval of investment projects, along with the adoption of measures aimed at accelerating the contractual process. It also provides special rights projects (undefined), including easier access to visas for investors and priority in the repatriation of dividends, and capital.

Note: Angola is a signatory to the Agreement on Trade-Related Investment Measures (TRIMs) applicable to foreign investment.

Foreign Trade Zones/Free Ports/Trade Facilitation

Angola is a signatory to SADC but not a member of the SADC Free Trade Area. Angola is analyzing and revising its tariff schedule to accommodate beneficial adjustments in regional trade under the SADC Free Trade Area.

Under the NPIL, Angola is divided into three economic zones, zone A through C. Zone A offers a three-year tax exemption for capital tax and a reduction in the tax burden by 25-50 percent; Zone B a three to six-year tax exemption for capital tax with a reduction in the tax burden by 50-60 percent; and, for Zone C, an eight-year tax exemption for capital tax with a with a 60-70 percent reduction in the tax burden.

Porto Caio is under construction in the province of Cabinda. The port is designated as a Free Trade Zone (FTZ) and is slated to provide numerous opportunities for warehousing, distribution, storage, lay down area and development of oil and gas related activity. The Port will also serve as a new major gateway to international markets from the west coast of Angola, and the development will facilitate exports and render them more cost-effective for companies.

Although the government has not yet established regional or international free trade zones, on March 21, 2018 the government signed an agreement to join the AfCFTA. The AfCFTA, by bringing together all 54 members of the African Union will be the largest FTZ in the world since the emergence of the WTO. The agreement’s implementation could create a market of 1.2 billion consumers.

On October 12th, Law no. 35/20 – the Free Trade Zones Law (“FTZL”) – was passed. The FTZL has established benefits to be conceded to investors by the Angolan Government, aiming at attracting foreign investment in Angola thus creating economic growth. All types of investment are permitted in the Free Zones, specifically investment in agriculture, industry (that use Angolan raw materials and are focused on exports) and technology.

All types of investment are permitted in the Free Zones, specifically investment in agriculture, industry (that use Angolan raw materials and are focused on exports) and technology.

Specific aspects pertaining to the access to Free Zones (such as monetary requirements, number of jobs created investments in fixed assets) shall be determined in the investment contract.

Access to the Free Zones is permitted to companies, joint ventures, groups of companies or any other form of companies’ representation, whose scope meets the purpose of the Free Zones.

The investments made in Free Zones must consider environmental protection interests.

Activities to be developed in the Free Zones

In the Free Zones investors are allowed to carry out industrial activities, agriculture, technology activities, as well as commercial and service activities. It is possible to carry out other activities which are not specified by the FTZL, provided that such activities target an international market and relevant authorities authorize the activities.

Investment Operations

Internal, external and mixed (also known as indirect) investments operations are permitted. All investment operations are subject to the private investment regulations in force in Angola.

Use of the Free Zones

The use of the Free Zones is granted for a minimum period of 25 (twenty-five) years which may be extended for equal period of time.

Benefits

According to the FTZL benefits pertaining to Industrial Tax, VAT, Custom Rights, Land, Capital and other benefits may be granted to the investors in the Free Zones. In the Free Zones, tax and customs benefits are applicable and are not limited in time.

Tax benefits may include:

  • Reduction of the taxable basis;
  • Accelerated depreciation and reincorporation;
  • Tax credits;
  • Exemption and reduction of rates and taxes;
  • Contributions and importation rights;
  • Deferral of tax payment;
  • other exceptional measures.

In order to benefit from these measures, investors may not exercise the same economic activity in Angolan territory.

Special Regimes

Free Trade Zones permit special benefits regarding migration, labor, foreign-exchange and financial, to be specifically defined.

Facilities

The relevant authorities must create facilities for the investors to have priority access to services and simplified processes to obtain licenses and authorizations.

Local Content / Employment

In addition to the Local Content regulations currently in force in Angola, the FTZL creates an obligation for investors to give preference in employing Angolan employees. Nevertheless, investors may employ foreign qualified employees provided that the number of Angolan employees is higher.

Capital Repatriation

After the implementation of the foreign investment, and in accordance with the foreign-exchange special regime, foreign investors are granted the right to transfer to foreign territory:

  1. Dividends or profits;
  2. The result of the liquidation of the investment including capital gains;
  3. Any amounts that are due to the investor, as established by acts and contracts;
  4. Compensations attributed due to the extension of the Free Zones for national interest reasons;
  5. Royalties or other incomes related to indirect investments, in connection with the transfer or concession of technology.

Performance and Data Localization Requirements

Angola widely observes a policy to restrict the number of foreign workers and the duration of their employment. The policy aims to promote local workforce recruitment and progression. Decree 6/01, of 2001 establishes that expatriate workers can only be recruited if the Labor Inspectorate gets confirmation from the employer that no Angolan personnel duly qualified to perform the job required is available in the local market. The same decree limits foreign employment to 36 months and temporary employment less than 90 days on the explicit authorization of the Labor Inspectorate. Employers must register an employment contract entered with a foreign national within 30 days at the employment center. The registration includes submission of a copy of the job description approved by the Labor Inspectorate during registration of the employment contract and the payment of a registration fee of 5 percent of the gross salary plus all the benefits.

Companies must deregister employees upon termination of the contract. Deregistration applies to all levels of personnel from administrative staff to boards of directors. Foreign employees require work permits, and no employment is authorized on tourist visas. The visa application procedure, though improved, remains complex, slow and inconsistent. Processes and requirements vary according to the labor market situation at the time of application, the type of work permit being applied for, the nationality of the applicant, the country of application, and personal circumstances of the assignee and any family dependents.

Through the NPIL Angola created the investor visa, granted by the immigration authority to foreign investors, representatives, or attorneys of an investing company, to carry out an approved investment proposal. It allows for multiple entries, and a stay of two years, renewable, for the same period. The NPIL liberalizes foreign investment, limits mandates for local hiring, and primarily calls for strict enforcement on labor sourcing in the petroleum sector. International oil companies are working with the government on a new local-content initiative that will establish more explicit sourcing requirements for the petroleum sector in staffing and material. Specific to the oil sector, because of its significance to the Angolan economy, the Petroleum Activities Law requires Sonangol and its services providers to acquire materials, equipment, machinery, and consumer goods produced in Angola.

Currently, local content regulations offer only guidelines that are loosely enforced, and companies lack clarity on how to satisfy Angolan government’s regulation. While the lack of enforcement may make it easier for foreign companies to comply with local content regulations, the lack of specificity challenges companies in their business planning. For example, it is difficult for companies to compare their competitive position against each other when competing for lucrative concessions and licenses from the government, as local content is sometimes considered during competition for government tenders. Legal guidance to get the guarantees for investors under the NPIL is strongly encouraged.

Regulations around data management including encryption are still at nascent stages. Data storage The Institute for Communications of Angola (INACOM) oversees and regulates data in liaison with the Ministry of Telecommunications.

The President of Angola passed, Decree No. 214/16 on 10 October 2016, establishing the organizational framework of the data protection authority. The Ministry of Telecommunications and Information Technology (‘MTTI’) announced, on 9 October 2019, that the National Database Protection Agency (APD) had become operational.

Benin

4. Industrial Policies

Investment Incentives

Depending on the size of the investment, investors may benefit from reduced tax liability on profits or imported industrial equipment for up to one year from the date of business registration. Investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. The Investment Control Commission monitors companies that receive these incentives to ensure compliance.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Investment Code allows for the creation of SEZs and establishes incentives such as tax reductions for investors. There are currently three SEZs in Benin, but only one, located in southern Benin, is active. SEZ zone investors may benefit from reduced tax liability on profits and exemptions for import and export duties. Investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. Local entities and foreign investors enjoy the same opportunities.

Performance and Data Localization Requirements

There are no government-imposed conditions on permission to invest and there is no “forced localization” policy pertaining to the use of domestic content in goods or technology. There are no requirements in place for foreign IT providers to turn over source code and/or provide access to encryption.

The Benin Post and Communications Regulatory Authority (ARCEP) ensures the confidentiality of the content of all communications by the service provider or operator, whether this is information or other data the service provider obtains in the course of providing the services offered. No information may be disclosed without the written consent of ARCEP or a signed order of the competent judicial authority. Additional information may be found at www.arcep.bj .

Botswana

4. Industrial Policies

Investment Incentives

Botswana has several mechanisms in place to attract FDI. BITC assists local and foreign investors. BITC is responsible for promoting FDI, investor aftercare, and promoting locally manufactured goods in export markets. It assists investors with company registration, land acquisition, factory shells, utility connections, and work and residence permits for essential staff. Investors’ requests for support from BITC and other agencies are evaluated based on the proposed project’s potential to diversify Botswana’s economy, grow priority sectors, and provide employment and training to Botswana citizens. The GoB also makes grants available to investors who partner with citizens and will extend credit to investors presenting proposals that have undergone appropriate due diligence and that have completed a feasibility study. Foreign investors are encouraged to transfer technology to Botswana and skills to Botswana citizens with a view to preparing them for promotion into management positions.

Botswana’s tax rates are relatively low at 22 percent on corporate taxable income and 7.5 percent withholding tax on all dividends distributed. However, withholding tax increased to 10 percent on April 1, 2021. MITI can grant manufacturing companies the reduced level of 15 percent taxable income. Companies can pay the reduced rate of 15 percent of profit with accreditation from the Innovation Hub or the International Financial Services Centre on approved operations.

The Minister of Finance and Economic Development has the authority to issue development approval orders that are used for specific projects, which include providing tax holidays, education, and training grants. The Minister must be satisfied the proposed project will benefit Botswana’s economy. Any firm, local or foreign, may apply for a Development Approval Order through the Permanent Secretary at the finance ministry. Applications are evaluated against the following criteria: job creation for Botswana citizens; the company’s training plans for Botswana citizens; the company’s plans to localize non-citizen positions; Botswana citizen participation in company management; amount of equity held by Botswana citizens in the company; the location of the proposed investment; the project’s effect on the stimulation of other economic activities; and the project’s effect on reducing local consumer prices. MITI also offers rebates on imported materials for manufacturers that produce products for export.

In 2017, Parliament approved and implemented a special incentive package for Selebi-Phikwe geared to promote economic growth and diversification. Some of the incentives include reduced corporate tax of five percent for the first five years and 10 percent thereafter (versus the 22 percent national tax rate), zero customs duty on imported raw materials, rebates for customs duty and value-added tax for any exports outside the SACU, and a minimum of 50 years on land leases (instead of the standard lease of 25 years).

Foreign Trade Zones/Free Ports/Trade Facilitation

The Special Economic Zones Authority (SEZA) was established with the mandate to develop and operate special economic zones around the country. It has earmarked five geographic areas with a total of eight zones, though they are not yet fully operational. In 2015, Parliament approved a Special Economic Zones (SEZ) law to streamline investment in sector-targeted geographic areas including two Gaborone area SEZs (multi-use, diamond processing, and financial services); two Selebi-Phikwe SEZs (mineral processing and horticulture); and additional SEZs in Lobatse (beef, leather, biogas); Palapye (energy); Pandamatenga (agriculture); and Francistown (mining and logistics). The Special Economic Zones Act is available for sale in hard copy at the GoB bookshop. SEZA has prioritized four SEZs—Lobatse (leather park), Gaborone Fairgrounds (Financial Services), Gaborone Sir Seretse Khama Airport (Diamond and Logistics) and Pandamatenga (Agriculture) – and is actively recruiting investors, private developers, and manufacturers. BURS has also introduced an electronic Customs Management System to replace the Automated System for Customs Data and launched the National Single Window, an electronic trade platform that makes trading more secure and efficient.

Performance and Data Localization Requirements

Performance requirements are not imposed as a condition for establishing, maintaining, or expanding an investment in Botswana. Foreign investors are encouraged, but not compelled, to establish joint ventures with citizens or citizen-owned companies.

Foreign investors wishing to invest in Botswana are required to register the company in accordance with the Companies Act and comply with other applicable legislation. Investors are encouraged, but not required, to purchase from local sources. The GoB does not require investors to locate in specific geographical areas, use a specific percentage of local content, permit local equity in projects, manufacture substitutes for imports, meet export requirements or targets, or use national sources of financing for private-sector investments. However, GoB entities, including BITC, use the criteria of diversifying the economy, creating employment, and transferring skills to Botswana citizens in determining whether to assist foreign investors.

As a matter of policy, the GoB encourages foreign firms to hire qualified Botswana nationals rather than expatriates. The granting of work permits for foreign workers may be made contingent upon establishment of demonstrable localization efforts. The government may additionally require evidence that a local is being trained to assume duties currently being fulfilled by a foreign worker, specially focused at the middle-management level. The GoB offers incentives to companies that train local employees, including the deduction of 200 percent of training expenses when an accredited institution conducts the training.

Business leaders cite difficulty securing work permits combined with local skills deficits and constrained labor productivity among the foremost business constraints in Botswana. However, since President Masisi assumed power in April 2018, GoB reports indicate permits for foreign workers have increased with approval rates exceeding 90 percent. Select grants are available to foreign investors who partner with Botswana citizens. The Citizen Entrepreneurial Development Agency has established a venture capital fund to provide equity to citizens and ventures between citizens and foreign investors. Most GoB loans and grants are designed specifically for citizen-owned contracting firms or for small enterprises and are therefore not available to foreign investors.

The GoB, the largest procuring entity in the country, has directed central government, local authorities, and state-owned enterprises to purchase all products and services from locally based manufacturers and service providers if the goods and services are locally available, competitively priced, and meet tender specifications in terms of quality standards as certified or recognized by the Botswana Bureau of Standards. Local preferences arise from numerous sources. n 2015, MITI instituted a preferential procurement program for local companies based on company size – small companies receive a 15 percent preferential price margin on GoB procurement, mid-sized companies receive a 10 percent margin, and large companies a five percent margin. The directive applies to 27 categories of goods and services ranging from textiles to chemicals, and food, in addition to a broad range of consultancy services. In 2014, the GoB and the Chamber of Mines created a committee to oversee the purchasing of mining supplies with a 10 percent preference towards those produced locally. The 2012 Citizen Economic Empowerment Policy also emphasized the preference for local companies and the GoB’s PPADB registers citizen-owned companies for preference purposes. In 2020, the GoB announced new policy that all government contracts less than ~USD 900,000 were reserved for Motswana-owned businesses.

For a foreign firm to qualify with the Department of Industrial Affairs as a local manufacturer or service provider to sell goods or services to the GoB, the firm must be registered with the Registrar of Companies and possess a relevant license or waiver letter. These procedures can be completed online, however, companies may choose to engage the services of a Company Secretary to perform these and other required documentation services. Tenders are generally designed based on the products available in the local market and with locally based companies in mind. In addition, many tenders require local registration as a prerequisite for bids and the GoB frequently breaks up large-scale projects into a series of tenders. These requirements make it difficult to compete for tenders from outside Botswana.

Burundi

4. Industrial Policies

Investment Incentives

The current Investment Code grants various potential fiscal and customs benefits to investors including: three or more years of tax-free operation; exemption of charges on property transfer; exemptions from duties on raw materials, capital goods, and specialized vehicles; tax exemptions for goods used to establish new businesses; exemptions from customs duties if investment goods are made within the EAC or COMESA; a corporate tax rate of 30 percent with a reduction to 28 percent if 50-200 Burundians are employed and to 25 percent if more than 200 are employed; and free transfer of foreign assets and income after payment of taxes due.

The GoB does not issue guarantees, but does co-finance foreign direct investment projects, albeit typically on an in-kind basis, such as by granting land for facilities.

Foreign Trade Zones/Free Ports/Trade Facilitation

Burundi already belongs to the trading blocs of the EAC, the CEPGL (Economic Community of the Great Lakes Countries), COMESA, and the Economic Community of the States of Central Africa (CEEAC). In 2020, GoB adopted new laws to accelerate its integration into other trading blocs such as the African Continental Free Trade Area (AfCFTA), and the Tripartite Free Trade Area (TFTA) between COMESA, EAC and SADC (Southern Africa Development Community). GoB also began harmonizing its policies and legal framework with those of regional entities to advance regional integration, improve its competitiveness, and take better advantage of external economic potentials. However, as the enabling regulations do not yet exist, Burundi does not yet have operational free economic zones.

One of the objectives on Burundi’s agenda is urgent integration into AfCTA, one of the largest free trade areas in the world since the formation of the World Trade Organization with a total of 55 member states. The AfCFTA aims to stimulate intra-African trade (BIAT) and Burundi wants to share in these gains. Burundi and Tanzania are the only countries within the East African Community that have not yet ratified the agreement. The GoB has already set up an ad hoc committee to accelerate the process of integration within AfCTA, and negotiations are underway with a view to ratifying the instruments of this agreement in the very near future. Burundi expects tangible benefits from this large continental market (1.2 billion people with a GDP of over USD 2.5 trillion and a purchasing power of more than USD 4 trillion) due to its strategic location and natural resources.

In addition, the GoB is working to establish its first Special Economic Zone (ZESB) in order to enhance growth and development after the breakdown of cooperation with several European countries. ZESB is still under construction on the Warubondo site (a strategic location of 5.43 square km area located between Burundi and neighboring DRC with easy access to Bujumbura city, Bujumbura International Airport, Bujumbura Port and Lake Tanganyika). ZESB is a result of a business partnership between GoB and private foreign investors and its main objective is to revive the industrial sector and to promote exports. The economic model behind this partnership is that the zone will be a window for foreign investors, but all the products produced within the zone will bear the label “Made in Burundi.”

Performance and Data Localization Requirements

The current government policy for both domestic and foreign companies is mandatory employment of local workers unless it is not possible to find a local candidate with the required skills or expertise. The number of expatriate employees is limited to 20 percent of the total workforce. There is no policy mandating foreign companies to appoint local personnel to senior management or boards of directors.

Burundian visa requirements are not excessively onerous and do not generally inhibit the mobility of foreign investors and their employees. Since 2015, Burundi has removed the possibility for visitors to apply for a visa upon arrival at the airport unless authorized by the PAFE (immigration authority). Travelers to Burundi must apply for visas in one of the Burundian missions abroad. A foreigner holding a residency visa is permitted to work in Burundi. A two-year residence visa (renewable) costs USD500 and it can only be issued after making a refundable deposit of USD1,500 in a local bank (BANCOBU). There are no government/authority-imposed conditions to invest except for a minimum investment requirement of USD50,000 applicable to foreign investors only.

The 2000 Arusha Agreements for peace and reconciliation for Burundi and the Constitution recommend ethnic and gender quotas for new hires (60 percent from the Hutu ethnic group, 40 percent from the Tutsi ethnic group and 30 percent women) in state and security institutions. However, neither the Constitution nor the Arusha Agreements mention ethnic or gender quotas for the private sector. In 2017, a law was passed obliging International Non-Governmental Organizations (INGOs) to recruit local staff while respecting the ethnic and gender quotas that apply to state institutions. Between December 2018 and April 2019, several INGOs decided to close their doors rather than submit to the requirements, arguing that the practices based on ethnicity were against their principles and values and the only recruitment criteria should be competency-based.

There are no requirements that investors purchase from local sources. However, the mining law requires a commitment from the investor to recruit staff or subcontractors of Burundian nationality as a precondition for granting a mining license, with mandatory quotas currently in place. The GoB imposes no performance requirements on investors as a condition for establishing, maintaining, or expanding their investments or for access to tax and investment incentives.

There are no laws requiring foreign IT providers to turn over source code and/or provide access to encryption except for a law requiring that companies share user information with law enforcement authorities during terrorism investigations; this law applies equally to Burundian and foreign companies. There are no laws that prevent companies from transmitting data outside the country.

Cambodia

4. Industrial Policies 

Investment Incentives

Cambodia’s Law on Investment and Amended Law on Investment offers varying types of investment incentives for projects that meet specified criteria. Investors seeking an incentive – for examples, incentives as part of a QIP – must submit an application to the CDC. Investors who wish to apply are required to pay an application fee of KHR 7 million (approximately USD1,750), which covers securing necessary approvals, authorizations, licenses, or registrations from all relevant ministries and entities, including stamp duties. The CDC is required to seek approval from the Council of Ministers for investment proposals that involve capital of USD50 million or more, politically sensitive issues, the exploration and exploitation of mineral or natural resources, or infrastructure concessions. The CDC is also required to seek approval for investment proposals that will have a negative impact on the environment or the government’s long-term strategy.

QIPs are entitled to receive different incentives such as corporate tax holidays; special depreciation allowances; and import tax exemptions on production equipment, construction materials, and production inputs used to produce exports. Investment projects located in designated special promotion zones or export-processing zones are also entitled to the same incentives. Industry-specific investment incentives, such as three-year profit tax exemptions, may be available in the agriculture and agro-industry sectors. More information about the criteria and investment areas eligible for incentives can be found at the following link .

Foreign Trade Zones/Free Ports/Trade Facilitation

To facilitate the country’s development, the Cambodian government has shown great interest in increasing exports via geographically defined special economic zones (SEZs).  Cambodia is currently drafting a law on Special Economic Zones, which is now undergoing technical review within the CDC. There are currently 23 special SEZs, which are located in Phnom Penh, Koh Kong, Kandal, Kampot, Sihanoukville, and the borders of Thailand and Vietnam. The main investment sectors in these zones include garments, shoes, bicycles, food processing, auto parts, motorcycle assembly, and electrical equipment manufacturing.

Cameroon

4. Industrial Policies

Investment Incentives

Cameroon’s investment incentives remain in place. The 2013 investment law lists several types of investment incentives for investors and specifies the conditions that they must meet in order to benefit from those incentives. This law specifies incentives available to Cameroonian or foreign legal entities, whether established in Cameroon, conducting business therein, or holding shares in Cameroonian companies, with a view to encouraging private investment and boosting national production. For example, during the establishment phase (which cannot exceed five years), the new code provides for exemptions from VAT and duties on key services/assets (including an exemption from stamp duty on the lease of immovable property). During the operation phase (which cannot exceed 10 years), further exemptions from, or reductions of, other taxes (including corporate tax), duties (such as stamp duty on loans), and other fees are granted. Overall, the law seeks to facilitate, promote, and attract productive investment to develop activities geared towards strong, sustainable, and shared economic growth as well as job creation. In a context where businesses must navigate between national and regional incentives, U.S. companies and investors must seek local and regional expertise if they plan to operate in the CEMAC region.

Common incentives are granted to investors during the establishment and operation phases.  During the operation phase, which may not exceed 10 years, the investor may enjoy exemptions from or reductions of payment of several taxes, duties, and other fees including corporate tax, tax on profit and stamp duty on loans. In addition, any investor may benefit from a tax credit provided he or she meets one of the following criteria: (1) employs at least five graduates each year, (2) combats pollution, and (3) develops public interest activities in rural areas.

The investor shall enjoy the following benefits during establishment phase, which may not exceed five years, with effect from the date of issuance of the approval:

  • Exemption from stamp duty on establishment or capital increase;
  • Exemption from stamp duty if immovable property used exclusively for professional purposes and that is part of an integral part of the investment program;
  • Exemption from transfer taxes on the acquisition of immovable property, land, and buildings essential for the implementation of the investment program;
  • Exemption from stamp duty on contracts for the supply of equipment and construction of buildings and installations that are essential for the implementation of their investment program;
  • Full deduction of technical assistance fees in proportion to the amount of the investment made, calculated on the basis of the total amount of the investment;
  • Exemption from VAT on the provision of services related to the execution of the project and obtained from abroad;
  • Exemption from stamp duty on concession contracts;
  • Exemption from business license tax;
  • Exemption from taxes and duties on all equipment and materials related to the investment program;
  • Exemption from VAT on the importation of equipment and materials;
  • Immediate removal of equipment and material related investment program during clearance operations;
  • The right to open in Cameroon and abroad local and foreign currency accounts and to carry out transactions on such accounts;
  • The right to freely use and or keep abroad funds acquired or borrowed abroad, and to freely use the funds;
  • The right to freely keep abroad dividends and proceeds of any kind from capital invested, as well as proceeds from the liquidation or sale of their assets;
  • The right to directly pay abroad non-resident suppliers of goods and services essential for conduct of business; and,
  • Free transfer of dividends and proceeds from the sale of shares in case of disinvestment.

With respect to foreign staff employed by the investor and resident in the Republic of Cameroon, they shall enjoy free conversion and free transfer to their country of origin of all or part of amounts due them, subject to prior payment of various taxes and social security contributions to which they are liable in compliance with the regulations in force. Finally, the government shall institute facilities necessary for the establishment of a specific visa and a reception counter at all airports throughout the national territory for investors, subject to their presentation of a formal invitation from the body in charge of investment promotion of small and medium-sized enterprises. There are additional incentives in priority economic sectors. In addition to the above-mentioned incentives, specific incentives may be provided to enterprises, which carry out investments that contribute to the attainment of the following priority objectives:

  • Development of agriculture, fisheries, livestock, and plant, animal or fishery product packaging activities;
  • Development of tourism and leisure facilities, social economy, and handicrafts;
  • Development of housing, including social housing;
  • Promotion of agroindustry, manufacturing industries, industry, construction materials, iron and steel industry, construction, maritime and navigation activities;
  • Development of energy and water supply; encouragement of regional development and decentralization;
  • The fight against pollution and environmental protection;
  • Promotion and transfer of innovative technologies and research and development;
  • Promotion of exports; and,
  • Promotion of employment and vocational training.

Foreign Trade Zones/Free Ports/Trade Facilitation

In Cameroon, Foreign Trade Zones (FTZ) are demarcated and fenced geographic areas, with controlled access, where some standard trade barriers, tariffs, quotas, or other bureaucratic requirements are lifted or lowered to attract investments. Cameroon passed a special law instituting FTZs in 1990. Applications for an authorization to establish an industrial free zone are submitted to the National Office for Industrial Free Zones.  The authorization to establish an Industrial Free Zone is granted by the Minister in Charge of Industrial Development.  Some of the benefits of the FTZ are built into commercial, fiscal, custom, and labor codes.  The status of FTZs has not changed since the last reporting period.

Performance and Data Localization Requirements

The government of Cameroon does not mandate local employment except as an incentive to entice foreign investment. It encourages investors to create jobs and employ local labor. There are no compulsory or legal requirements on senior management and boards of directors either, although local managers can facilitate the understanding of the domestic business environment. Prospective investors and their employees can travel to Cameroon on standard intentional visas. The fees may vary per country of application. Once they settle in Cameroon, they can apply for long-term residence permits. The government of Cameroon applies the visa reciprocity rules to a limited extent, but companies have in the past complained about the difficulty of obtaining work permits or the fact that work visas expire after six months and frequently are single entry. Longer term work permits are now said to be available, but they have not been issued to Post’s interlocutors unless included as residency work permits, a different category with more complicated application procedures. The government does not impose rules on the recruitment of senior management nor excessively onerous visa, residence, work permit, or similar requirements inhibiting mobility of foreign investors and their employees.

The government does not impose conditions on permission to invest in Cameroon. It gives incentives to investors to transform local raw materials, goods, and services in their production or their projects. There is no “forced localization” policy. Enforcement procedures for performance requirements are not yet standardized, but the government generally develops terms of reference on a case-by-case basis for contract performance. The government has not stated intentions to maintain, increase, or decrease performance requirements.

Investment incentives, described above, are available to both domestic and foreign investors.  Foreign information technology providers are not required to turn over source code and/or provide access to encryption, but they can be required to provide them in cases of cybercrime under the national cybercrime law. Post is unaware of any measures designed to prevent or impede companies from freely transmitting customer or other business-related data outside of Cameroon.

Chad

4. Industrial Policies

Investment Incentives

The Chadian tax code (CGI, Code General des Impôts) offers incentives to new business start-ups, new activities, or substantial extensions of existing activities. Eligible economic activities are limited to the industrial, mining, agricultural, forestry, and real estate sectors, and may not compete with existing enterprises already operating in a satisfactory manner (Articles 16 and 118 of the National Investment Charter).

To spur investment into target sectors, the GOC authorized tax credits, discounts, and exemptions for investments in the agriculture, animal husbandry, solar and wind energy, information technology, oil, and plastics sectors in the 2021 Finance Law.

Foreign investors may ask the GOC for other incentives through investment-specific negotiations. Large companies usually sign separate agreements with the government, which contain negotiated incentives and obligations. The possibility of special tax exemptions exists for some public procurement contracts, and a preferential tax regime applies to contractors and sub-contractors for major oil projects. The government occasionally offers lower license fees in addition to ad hoc tax exemptions. Incentives tend to increase with the size of a given investment, its potential for job creation, and the location of the investment, with rural development being a GOC priority. Investors may address inquiries about possible incentives directly to the Ministry of Industrial and Commercial Development & Private Sector Promotion.

The GOC does not issue guarantees but jointly finances some foreign direct investments, with mixed results.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are currently no foreign trade zones in Chad. The Chadian Agency for Investment and Exportation (ANIE) is examining the possibility of creating a duty-free zone.

Performance and Data Localization Requirements

Chad does not follow forced localization, the policy in which foreign investors must use domestic content in goods or technology.

Foreign companies are legally required to employ Chadian nationals for 98 percent of their staff. Firms can formally apply for permission from the Labor Promotion Office (ONAPE) to employ more than two percent expatriates if they can demonstrate that skilled local workers are not available. Most foreign firms operating in Chad have obtained these permissions. Foreign workers require work permits in Chad, renewable annually. Companies must present personnel files of local candidates not hired to the GOC for comparison against the profiles of foreign workers. Multinational companies and international non-governmental organizations routinely protest these measures.

There are no requirements for foreign IT providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software or turn over keys for encryption). There are no rules on maintaining a certain amount of data storage within Chad.

Investment Climate Statements
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