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Executive Summary

The Democratic Republic of the Congo (DRC) is the second largest country in Africa and potentially one of the richest in the world in terms of natural resources. With 80 million hectares (197 million acres) of arable land and 1,100 minerals and precious metals, the DRC has the resources to achieve prosperity for its people, and serve as a catalyst for African economic growth. Despite its potential, however, the DRC is still striving to provide adequate social security, infrastructure and health care to its estimated 81 million inhabitants, some 75 percent of whom live on less than two dollars a day.

The DRC’s political and security situation remains fragile, and the economy experienced several shocks in 2016 which are expected to limit growth in 2017. The downturn in prices of DRC’s main commodity exports resulted in a trade balance shift from a $521 million surplus for the first half of 2015, to a $351 million deficit for the corresponding period in 2016. Moreover, the commodity price collapse cut government revenues, forcing a sizeable and growing deficit. Preliminary Government of DRC (GDRC) figures peg the 2016 growth rate at 2.4 percent, compared with 6.9 percent in 2015 and 9.5 percent in 2014. Although commodity prices rebounded slightly in early 2017, the benefits of this uptick are not expected to be felt until 2018. The GDRC is taking steps to mitigate the impact of low commodity prices on the broader economy through a push for diversification, targeting key sectors including agriculture, manufacturing, telecommunications, and energy.

The nation’s economy is highly dollarized, which has implications for monetary policy execution, financial development and systemic stability. Approximately 90 percent of bank deposits and loans are denominated in US dollars and the prices of many goods, services and financial activities are indexed to the dollar. This high dollarization weakens monetary policy execution and increases the systemic exposure to liquidity shocks since the minimum regulatory requirements of banks are defined in local currency.

Although the economy is dollarized, the domestic currency, the Congolese Franc (CDF), which had remained relatively stable for several years, depreciated significantly in 2016, falling nearly 40 percent against the dollar. Similarly, inflation, which was stable at roughly 1 percent from 2013 through 2015, reached double digits in 2016.

Although the GDRC has demonstrated a growing commitment to foster sound economic governance and to attract foreign direct investment (FDI), progress remains slow. The GDRC set up a “Competitiveness and Private Sector Development Project” which has reduced business start-up time by half and the number of all types of taxes by three-quarters since 2014. The GDRC adopted an investment code in 2002 aimed at increasing and promoting foreign investment in the country by granting tax breaks or tax holidays for investors, though many investors and businesses still complain that tax burdens remain heavy, and the system remains overly complex, duplicative, and opaque. Government agencies at all levels also exert significant administrative pressure on businesses with audits and inspections that often result in questionable legal fines.

Although the DRC has been a member of the Organization for the Harmonization of Business Laws in Africa (OHADA) since 2014, and GDRC investment reforms and investor protections make Public-Private Partnerships (PPPs) more secure and attractive for outside investors than they were previously, the GDRC has yet to implement several key OHADA goals. Reform of a non-transparent and often corrupt legal system is also a prerequisite for investors to benefit more fully from the DRC’s OHADA membership.

Rehabilitation of basic infrastructure remains a priority for the GDRC, and will be necessary for the country to realize its potential. Only one third of the 1,530 km (950 miles) of road in the east is in good condition, and although the Congo River has the potential to generate up to 100,000 megawatts of power, today less than 10 percent of DRC inhabitants have access to electricity. The country’s two largest dams, Inga I and II, generate less than half of their 2,500 megawatt capacity due to poor upkeep. The GDRC is seeking foreign investment partnerships on several hydropower projects, including a massive 40,000 MW Inga III project, as well as the construction of new transmission lines and geothermal power stations. Although the mining and extractive industries contribute more than 95 percent of export revenues, the country still has untapped potential. In February 2017, a revised hydrocarbon code was published in hopes of making the sector more structured and attractive for investors.

Overall, businesses in the DRC face numerous challenges, including fragility of functional infrastructure, endemic corruption at virtually all levels of government, predatory tax agencies, limited access to capital, a shortage of skilled labor, difficulties enforcing contracts, political uncertainty, a weak judicial system, ongoing armed conflict in eastern DRC, and the emergence of sporadic violence in other parts of the country. The Embassy strongly urges all prospective investors to visit to read the latest country-specific information and travel warnings before traveling to the DRC.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2016 156 of 175
World Bank’s Doing Business Report “Ease of Doing Business” 2017 184 of 190
Global Innovation Index 2016 N/A of 128
U.S. FDI in partner country ($M USD, stock positions) 2015 N/A
World Bank GNI per capita 2015 $410

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Toward Foreign Direct Investment

The DRC remains a challenging environment in which to conduct business. At the same time, the GDRC is pushing to improve economic governance and its business climate, and 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 $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 $300 (single-entry) and $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 (as described in Section 1.1) and a prohibition of foreign shareholder ownership of more than 49 percent of an agri-business. The government has drafted foreign ownership legislation, which Parliament is expected to debate soon. 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 by U.S. companies operating in DRC as discriminatory to their interests. The law restricts subcontracting activity to companies with Congolese capital 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 and any other company under Congolese or foreign law may 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 $150,000 and the risk of closure of operations for six months if certain provisions are violated. Currently foreign businesses have a 12 month grace period, through January 2018, to comply with the new law. As of April 2017, the Federation of Enterprises of the Congo (FEC), American Chamber of Commerce DRC, and other business organizations were lobbying to review and revise the law.

Other Investment Policy Reviews

The DRC has not undergone an OECD or UNCTAD Investment Policy Review in the last 10 years, though, in collaboration with the World Bank and the European Union, in 2010, the GDRC published a Diagnostic Study on Commercial Integration, a trade survey that identifies commercial hurdles and provides recommendations. The report highlighted four key points:

  • The GDRC’s customs procedures are outdated and fail to comply with international standards as recommended by the World Customs Organization (WCO) in the Revised Kyoto Agenda;
  • Trade information and management systems are inadequately computerized; where they are computerized, computerization is often ignored in favor of manual records;
  • Exporters face indiscriminate fees imposed by government agencies along with informal facilitation costs for record handling;
  • Onerous regulations and administrative hurdles lead to average administrative wait times of four to five days at port, costing on average more than $1,020.

Business Facilitation

Since 2013, the GDRC has operated a “one-stop shop” ( that brings together all the government entities involved in the registration of a company in the DRC. In essence, all administrative formalities related to registration of a new company have been brought together. The registration process officially takes three days, but practically it can take much more. However, businesses have reported that the Guichet Unique has considerably shortened and simplified the process of overall business registration. On the other hand, the new subcontracting law (discussed in Section 1.2) imposes local content/sourcing requirements on foreign investors and appears to have a discriminatory effect on U.S. businesses.

Outward Investment

The GDRC does not prohibit outward investment, but 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.

2. Bilateral Investment Agreements and Taxation Treaties

The U.S.-DRC Bilateral Investment Treaty (BIT) was signed in 1984 and entered into force in 1989. The BIT guarantees reciprocal rights and privileges to each country’s investors and provides that, should a claim arise under the treaty, it can be submitted to a dispute resolution mechanism through international arbitration.

Germany, France, Belgium, Italy, South Korea, and China have also signed bilateral investment treaties with the DRC. South Africa and Kenya are negotiating bilateral investment treaties with the DRC. Lebanon, Ivory Coast, and Burkina Faso have negotiated, but not yet signed, bilateral investment treaties with the DRC.

In October 2016, the DRC and Rwanda signed an agreement on a simplified trade regime covering only small commerce between the countries.

There is no bilateral taxation treaty between the United States and the DRC.

In August 2015, Zambia and the DRC signed a bilateral taxation treaty that abolished customs taxes across their common border.

3. Legal Regime

Transparency of the Regulatory System

The DRC does not yet have a complete legal and regulatory framework for the orderly conduct of business and the protection of investments. The GDRC authority on business standards, the Congolese Office of Control (OCC), oversees foreign businesses engaged in the DRC.

There are no formal or informal provisions systematically employed by the GDRC to impede foreign investment, but nor are there provisions that are universally employed to aid foreign investment. Problems encountered within the GDRC tend largely to be administrative and/or bureaucratic in nature, as reforms and improved laws and regulations are often poorly or unevenly applied. Proposed laws and regulations are rarely published in draft format for public discussion and comment; discussion is typically limited to the governmental entity that proposes the draft law and Parliament prior to enactment.

By implementing the OHADA, the GDRC strengthened its legal framework in the areas of contract, company, and bankruptcy law and set up an accounting system better aligned to international standards. For this purpose, a Coordination Committee was established internally in the DRC to monitor OHADA implementation.

The Extractive Industries Transparency Initiative (EITI), a multi-stakeholder initiative to increase transparency in transactions between governments and companies in the extractive industries, declared in 2014 that DRC’s payment and receipt procedures conform to EITI requirements. In 2016, EITI awarded the DRC the first Initiative Award for Transparency in Extractive Industries.

International Regulatory Considerations

The DRC is a member of several regional economic blocks, such as the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of Central African States (ECCAS).

According to the Congolese National Standardization Committee, the DRC has adopted 370 harmonized COMESA standards, almost achieving the objective set by the country in 2008.

In order to formalize the DRC’s integration into the COMESA Free Trade Area and in order to comply with its commitments within COMESA, the DRC President promulgated in December 2015, after its adoption by both chambers of Parliament, an Act establishing a new tariff of import duties and taxes pursuant to the COMESA Treaty. The Act establishes a zero rate for goods originating in COMESA member countries following a three-year tariff dismantling of 40 percent, 30 percent and 30 percent respectively for the first, second and third years. However, the DRC is not on track to meet this goal.

The DRC is a World Trade Organization (WTO) member and, as such, maintains measures consistent with Trade Related Investment Measures (TRIM) requirements. In October 2016, the WTO noted that there had been positive developments on various fronts in the DRC, including streamlining the country’s tax system, introduction of a VAT, and enactment of a new customs act, a new excise act, and a new procurement code. The WTO also noted that the business environment has improved as a result of the progressive establishment of single windows for conducting international trade ( ) and setting up enterprises ( ). The WTO further commended the adoption of new sectoral policies that have opened several economic sectors, including insurance services and hydrocarbon trade, to competition. In 2015, the DRC also adopted a new law aimed at aligning its national tariff with the common external tariff of COMESA. The GRDC has proposed a new Strategic National Development Plan which sets the goal of modernizing and industrializing the country by 2035.

Legal System and Judicial Independence

The DRC is a civil law country, and the main provisions of its private law can be traced to the Napoleonic Civil Code. The general characteristics of the Congolese legal system are similar to those of the Belgian legal system, as the DRC largely received its law from its Belgian colonialists. Customary or tribal law is another aspect of DRC’s legal system. Various local customary laws regulate both personal status laws and property rights, especially the inheritance and land tenure systems in traditional communities throughout the country. The Congolese legal system is divided into three branches: public law, private law and economic law. Public law regulates legal relationships involving the state or state authority; private law regulates relationships between private persons; and economic law regulates interactions in areas such as labor, trade, mining and investment.

Since 2008, the DRC has established ten commercial courts located in DRC’s main business cities, including Kinshasa, Lubumbashi, Matadi, Kisangani, and Mbuji-Mayi. These courts are led by professional judges specializing in commercial matters and exist in parallel to an otherwise inadequate judicial system. With European Union support, buildings are under construction and/or rehabilitation to establish additional commercial courts.

The current judicial process is not procedurally reliable: at times it is respected, at times it is not. The national court system provides a mechanism for appealing, and the OHADA provides regulations and a legal framework to appeal verdicts. Legal documents in the DRC can be found at: .

Laws and Regulations on Foreign Direct Investment

Most FDI is governed by the 2002 Investment Code. Mining, hydrocarbons, finance, and other sectors are also governed by sector-specific investment laws. The GDRC deregulated the electricity and insurance sectors in 2015 and in 2016 Parliament passed a bill to reform the hydrocarbon sector and the labor law was revised. The 2002 mining code has been under review since 2012, with a draft bill in place since 2014. There continues to be legislation pending in Parliament to address consumer protection, e-commerce, liberalization of prices, competition regulation, account auditing, agriculture regulation, trade courts, entrepreneurship, and free trade areas. Passage of these bills should improve the DRC’s investment environment, though there was little progress in 2016.

ANAPI is the DRC agency whose mandate is to simplify the investment process, make procedures more transparent, assist new foreign investors, and improve the image of the country as an investment destination ( There is also a Steering Committee for the Improvement of the Business and Investment Climate (CPCAI), which has the overall goal of improving the DRC’s ranking in the World Bank’s “Doing Business” indicators by reducing administrative delays, red tape, and the overall cost of establishing a business. Since its inception, CPCAI has eliminated 46 of 117 taxes applied to cross-border trade. The GDRC also instituted a “Guichet Unique,” in 2013, which is a one-stop shop to simplify business creation, cutting processing time from five months to three days, and reducing incorporation fees from $3,000 to $120. ( ). A “one stop shop” also exists for import-export business, covering, among other things, the collection of taxes and transshipment operations. ( ).

The GDRC’s efforts to improve its investment framework have had some impact: the World Bank’s 2015 Doing Business Report cited the DRC among the world’s top ten most improved countries. The DRC gained three spots in the overall ease of doing business ranking in 2016, but still ranked near the bottom (184 out of 189). Despite the progress, and the fact that the OHADA’s jurisdiction also offers a mechanism for transparency in financial and accounting systems, there has not been an obvious impact and firms continue to complain about widespread corruption and difficulties in doing business.

Competition and Anti-Trust Laws

There is no existing national agency that reviews transactions for competition or antitrust related concerns; however, as a member COMESA, the DRC falls under the Competition regime adopted by COMESA which is made up of the COMESA Competition Regulations and the COMESA Competition Rules. Under the COMESA Treaty, the Regulations are binding on all member states. Since the DRC does not have a dedicated domestic competition law regime, the regional competition law regime is effectively the only competition law available.

Expropriation and Compensation

Technically, the GDRC may only proceed with an expropriation when it benefits the public interest, and the person or entity subject to an expropriation should receive fair compensation. The U.S. Embassy is unaware of any new expropriation activities by the GDRC against U.S. citizens in 2016 or 2017, thus far, but there are a number of existing (some long standing) claims of expropriation made against the GDRC, including by Americans. Some claims have been taken to arbitration, though many arbitral judgments against the GDRC are not paid in a timely manner, if at all.

Dispute Settlement

ICSID Convention and New York Convention

The DRC is a member of the International Center for Settlement of Investment Disputes (ICSID) Convention and has been a Contracting State to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) since February 2015. Although the DRC has not made any notifications or reservations in accordance with the New York Convention, the internal legislation facilitating the DRC’s accession to the New York Convention contains reservations regarding reciprocity (the DRC will only enforce awards made in the territory of other Contracting States); commerciality (only awards on matters which are considered commercial under DRC law will be recognized and enforced under the New York Convention); non-retroactivity (the New York Convention will only apply to awards made after February 3, 2015); and finally, that the New York Convention will not apply to disputes related to immovable property (i.e. real estate, industrial plants, etc) or to rights related to immovable property.

In the case of an investment dispute, the U.S.-DRC BIT provides for reconciliation or national or international arbitration. In the case of a dispute between a U.S. investor and the GDRC, the U.S. investor is subject to the Congolese civil code and legal system. If the parties cannot reach agreement, under the terms of the U.S.-DRC BIT, the dispute is taken to ICSID or the Paris-based International Chamber of Commerce (ICC). Commercial parties may also seek redress under the Organization for the Harmonization of African Business Law (OHADA).

The DRC’s accession to the New York Convention is important to international investors seeking to develop activities in the DRC because it facilitates the enforcement of international arbitral awards. However, the reservation related to immovable property effectively excludes disputes relating to mining rights which, under Congolese law, are considered immovable property.

Although there are instances of ongoing corruption at almost every level of the DRC judicial system, several disputes between foreign investors and State Owned Enterprises (SOE) have been resolved in favor of the foreign investor.

International Commercial Arbitration and Foreign Courts

As a signatory to the OHADA, the DRC also adopted the OHADA Uniform Act on Arbitration (the UAA). The UAA sets out the basic rules applicable to any arbitration where the seat of arbitration is located in an OHADA member state. Because DRC is a member of the New York Convention, the requirements set out under Article 5 of the New York Convention for the recognition and enforcement of foreign awards will apply where the seat of any arbitration is outside an OHADA member state, or where the parties chose arbitral rules outside the UAA.

OHADA‘s UAA offers an alternative dispute resolution mechanism for settling disputes between two parties. The two main consequences of the DRC’s accession to OHADA in September 2012, with respect to dispute resolution are:

The mandatory application of the UAA, which sets out arbitration procedures applicable to any arbitration arising in a Member State of OHADA where the place of arbitration is situated in a Member State.

Disputes must be submitted to the Common Court of the Justice and Arbitration (CCJA) (based in Abidjan, Cote d’Ivoire) in accordance with the provisions of the OHADA Treaty and the OHADA Arbitration Rules.

The UAA, while not directly based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law, is similar in that it provides for the recognition and enforcement of arbitration agreements and arbitral awards and supersedes the national laws on arbitration to the extent that any conflict arises. Arbitral awards with a connection to an OHADA member state are given final and binding status in all OHADA member states, on a par with a judgment of a national court. Support is provided by the CCJA which can rule on the application and interpretation of the UAA. Arbitral awards rendered in any OHADA Member State are enforceable in any other OHADA member state, subject to obtaining an exequatur (a legal document issued by a sovereign authority allowing a right to be enforced in the authority’s domain of competence) of the competent court of the State in which the award is to be made. Exequaturs shall, in principle, be granted unless the award clearly affects public order in that State. Decisions granting or refusing the granting of an exequatur may be appealed to the CCJA.

Bankruptcy Regulations

The OHADA Uniform Act on Insolvency Proceedings provides a comprehensive framework not only for companies encountering financial difficulties and seeking relief from the pressing demands of creditors, but also for creditors to file their claims. The GDRC judiciary system has agreed to enforce the OHADA Insolvency Act.

4. Industrial Policies

Investment Incentives

Investment incentives for companies entering the DRC are generally negotiated during a streamlined period of approximately 30 days. Negotiated incentives can range from tax breaks to duty exemptions, and are dependent upon the location and type of enterprise, the number of jobs created, the degree of training and promotion of local staff, and the export-producing potential of the operation. Investors who wish to take advantage of customs and tax incentives in the extant 2002 Investment Code must apply to the National Agency for Investment Promotion (ANAPI), which, in turn, submits applications to the Ministries of Finance and Planning for final approval.

Foreign Trade Zones/Free Ports/Trade Facilitation

The DRC does not have designated free trade areas or free port zones; however legislation is pending to create such zones. The DRC is a member of SADC and the Common Market of Eastern and Southern Africa (COMESA), but has not yet joined either the COMESA or the SADC Free Trade Areas. In 2015, the GDRC confirmed its commitment to work to enter the tripartite COMESA-SADC-EAC (Eastern African Community) Free Trade Area and the African Free Trade Area, however, currently the implementation process is on hold and there is no indication of when it will resume.

Performance and Data Localization Requirements

Although there are no specific performance requirements for foreign investors, invariably, they must negotiate many of the conditions of their investments with ANAPI. Performance requirements agreed upon with ANAPI typically include a timeframe for the investment, use of OHADA accounting procedures and periodic authorized GDRC audits, protection of the environment, periodic progress reports to ANAPI, and the maintenance of international and local norms for the provision of goods and services. The investor must also agree that all imported equipment and capital will remain in country for at least five years.

The Ministry of Labor controls expatriate residence and work permits. For U.S. companies, the BIT assures the right to hire staff of their choice to fill some management positions, but companies agree to pay a special tax on expatriate salaries. Visa, residence or work permit requirements are not discriminatory or excessively onerous, and are not designed to prevent or discourage foreigners from investing in the DRC, though corruption and bureaucratic hurdles can create serious delays in obtaining the necessary permits and visas.

A new law on subcontracting was enacted in January 2017, which requires foreign companies to use local subcontractors for subsidiary services (see section 2).

The DRC does not have specific legislation on data storage. However, it recognizes the need for appropriate regulation. As there is no obligatory legislation, in practice, few companies report on data storage.

5. Protection of Property Rights

Real Property

The DRC’s Constitution (Chapter 2, Articles 34-40) protects private ownership without discrimination between foreign and domestic investors. Despite this, the GDRC has acknowledged the lack of enforcement in the protection of property rights and relevant draft bills have been pending before Parliament since 2015, however there is little progress, if any, and the draft bills are not included on the agenda of the current (March 2017) parliamentary session. Congolese law related to real property rights enumerates provisions for mortgages and liens, and real property (buildings and land) is protected and registered through the Ministry of Land’s Office of the Mortgage Registrar, however land registration can be risky, as records are often incomplete and legal disputes over land deals are common. Additionally, there is no specific regulation of real property lease or acquisition. Ownership interest in personal property (e.g. equipment, vehicles, etc.) is protected and registered through the Ministry of the Interior’s Office of the Notary.

Intellectual Property Rights

In principle, intellectual property rights (IPR) are legally protected in the DRC, but enforcement of IPR regulations is virtually non-existent. Prior to independence in 1960, IPR was regulated by multiple Belgian instruments. In 1963, the DRC became a party to the Berne Convention of 1886 for the Protection of Literary and Artistic Works, and in 1975 it joined the 1883 Paris Convention for the Protection of Industrial Property. The DRC introduced Law No. 82-001 on Industrial Property in 1982, and Law No. 86-022 on the Protection of Copyright and Neighboring Rights in 1986. Both instruments remain in force, but legislative action in the area of IPR and enforcement of the existing laws has been virtually non-existent since their passage.

The country is also a signatory to a number of relevant agreements with international organizations such as the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO), and is thus ostensibly subject to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), an international legal agreement between all the member nations of the WTO which sets down minimum standards for the regulation by national governments of many forms of IPR. Specifically, TRIPS requires WTO members to provide copyright rights, covering content producers including performers, producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents; new plant varieties; trademarks; trade dress; and undisclosed or confidential information. TRIPS also specifies enforcement procedures, remedies, and dispute resolution procedures. As a least-developed country member, DRC was given a longer transition period, through 2006, to comply with TRIPS, but to this day it continues to be out of compliance with its international IPR obligations.

The pertinent conventions provide maximum protection of 20 years for patents, and 20 years, renewable, for trademarks, starting from the date of registration. If not used within three years, a trademark can be cancelled. By contrast, the current Congolese laws provide only 15 years of protection on a number of patents, and do not include all the means mentioned in TRIPS for enforcement of IPR rights. In July 2011, the Ministry of Culture and Art established the Société des Droits d’Auteur et des Droits Voisins (SOCODA) to address IPR issues faced by authors, and presented a law to the government that seeks to rectify shortcomings of the existing 1982 IPR law, however, the reform law is still pending Parliamentary approval and it is unclear when that will be forthcoming.

6. Financial Sector

Capital Market and Portfolio Investment

The DRC’s capital markets remain underdeveloped and consist mainly of the issuance of treasury bonds. There are no stock exchanges operating in the country, but a small number of private equity firms are actively investing in the mining industry. The institutional investor base is poorly developed, with only an insurance company and a state pension fund as participants. The Central Bank of Congo (BCC), developed a market for short-term bonds, but most of these bonds are bought and held by local Congolese banks. In the absence of a domestic debt market, the fixed-rate market is limited to government-issued treasury bonds with maturities of up to 28 days traded through commercial banks.

Access to the primary market is limited to commercial banks holding securities accounts at the BCC and all investors, including institutional and individual investors, must submit bids through banks. Commercial banks, which dominate the investor base, may trade in treasury bills in the secondary market, but in order to do so bids and prices for which they agree to trade must be transparent and publicized. There is no market for derivatives in the country.

The DRC suffers from weak and fragile financial infrastructure. National payment systems are not governed by central legislation, although the DRC’s National Payments and Settlement Committee is in the process of proposing legal reform through a draft bill that was proposed in 2016, has been adopted by the DRC Senate, but, as of the date of this report, remains pending before the National Assembly for a second reading. The DRC has a credit bureau supervised by the BCC, but it is generally considered inefficient and obsolete, with relatively few clients. It serves mainly institutional clients that are eligible for large loans.

Borrowing options for small and medium enterprises (SME) are limited. Maturities for loans are usually limited to 3-6 months, and interest rates typically hover around 16-18 percent. The weakness of the legal system, the often cumbersome business climate and the difficulty in obtaining inter-bank financing discourages banks from providing long term loans. There are limited possibilities to finance major projects in the domestic currency, the Congolese franc (CDF). Local banks’ have limited holdings in CDF. Prior to 2016, the average was roughly $12 million per bank, though the economic downturn prompted the Central Bank to mandate an increase in CDF holdings to $30 million per bank by October 2017. Foreign currency deposits account for almost 90 percent of bank holdings.

Portfolio investment has not yet developed in the DRC. Cross-shareholding and stable shareholding arrangements are also not common. There are occasional complaints about unfair privileges extended to certain investors in profitable sectors such as mining and telecommunications.

Money and Banking System

The Congolese financial system is growing but remains fragile and operates primarily through the BCC. The financial sector is comprised of 18 licensed banks, a national insurance company (SONAS) and the National Social Security Institute (INSS), one development bank, SOFIDE (Societe Financiere de Development), 120 micro finance institutions and cooperatives, 78 money transfer institutions which are concentrated in Kinshasa and the former Katanga provinces, three electronic money institutions and more than 16 foreign exchanges offices.

Aggregate holdings of banks, estimated at $5.1 billion, account for about 95 percent of the overall holdings of the financial system. Bank deposits account for the majority of total deposits, around 90 percent of the deposits in the financial system, with the balance held by microfinance institutions. Among the largest banks, four are local and another is controlled by a foreign entity. The five largest banks hold almost 65 percent of bank deposits and more than 60 percent of total bank assets.

Bank financing is dominated by the collection of deposits, nearly 90 percent of which are denominated in U.S. dollars and deposited into demand accounts. Bank operations are highly dollarized and their financing is highly dependent on demand deposits. While nearly 95 percent of loans are in dollars, clients are mainly companies that deposit working capital and then take loans primarily for daily operations and import/export activities. The national and local DRC governments have significant balances in some banks (deposits in dollars used for investments) and they also borrow funds from a few banks to finance administrative expenses. Statistics on non-performing loans do not seem reliable. According to the BCC’s regulatory framework many banks only report the balance due rather than the total amount of the non-performing loan.

Transactions involving correspondence with associated foreign banks represent a significant part of the activities of DRC banks. Correspondent accounts represent more than 30 percent of bank assets and more than 95 percent of interbank market activity. They allow banks to settle transactions denominated in dollars, reflecting efforts to limit risks. The profitability and profits of the banks are fragile and have deteriorated over the last year, reflecting high operating costs and deteriorating exchange rates. Fees charged by banks are a major source of their revenues.

In 2016, deposits in DRC banks reached $3.6 billion, up slightly from 2015, with overall holdings at in the banking systems reported to be approximately $5 billion. The DRC’s special advisor on corruption, money laundering and governance estimates that approximately $10 billion of savings exist in the informal sector outside of banks, though in what form these savings exist is not documented. Most deposits in the formal system are U.S. dollar-denominated. A slight increase in bank penetration occurred after 2011 as the GDRC switched public employee payments from cash to bank transfers. Bank penetration is roughly 6 percent, which places the country among the most under-banked nations in the world. According to the BCC strategic plan, the aim is to reach more than 20 million bank accounts by 2030. Banks are increasingly offering savings accounts that pay approximately 3 percent interest, but few Congolese hold savings in banks. Of an estimated 65 percent of the population that saves, only 4.7 percent do so through a bank, according to the Banking Association of Congo (ACB). Most individual account holders withdraw their balance in full shortly after their salary is deposited.

The overall credit volume is estimated at roughly more than $2.2 billion. Credit volume has risen rapidly, but remains scarce, short-term, and highly concentrated. From 2012 to 2016, credit reached only 13 percent of GDP. Domestic credit granted by banks from 2015 to 2016 increased from $2.2 billion to $2.3 billion, and those granted by microfinance institutions for the same period increased from $162 million to $190 million. The largest depositors in the banking system are private enterprises and households with 46 and 43 percent of deposits, respectively. Public enterprises, central administration and local administration deposits are estimated at seven percent, four percent and one percent respectively.

Foreign Exchange and Remittances

Foreign Exchange

As part of broad economic reforms begun in 2001, the DRC adopted a free-floating exchange rate policy and lifted various restrictions on business transactions, including in the mining sector. The international transfer of funds takes place freely when sent through local commercial banks. On average, bank declaration requirements and payments for international transfers take less than one week to complete.

The BCC is responsible for regulating foreign exchange and trade. The only currency restriction imposed on travelers is a $10,000 limit on the amount an individual can carry when entering or leaving the DRC. The GDRC requires that the BCC license exporters and importers. The DRC’s informal foreign exchange market is large and unregulated and has tended to offer exchange rates not widely dissimilar from the official rate. In practice, the nation’s economy remains highly dollarized.

On September 25, 2014, new foreign exchange regulations were put into place by the BCC. Among other things, these regulations declared the Congolese franc (CDF) as the main currency in all transactions within the DRC. Payment of fees related to education, medical care, water and electricity consumption, residential rents, and federal taxes were mandated to be paid in CDF. In the last several years, this requirement has been relaxed and where the parties involved and the appropriate monetary officials agree, exceptions may, and routinely are, made. Any payments exceeding $10,000 must be executed within the banking system, unless there is no presence of banking entities. The largest, albeit rare, banknote in circulation is the CDF 20,000 note (approximately $14.70). Far more common are the CDF 500 and CDF 1,000 notes worth approximately $0.36 and $ 0.73, respectively. U.S. banknotes printed after 2008 are readily accepted in virtually all transactions, with the exception of one-dollar bills. Banks provide accounts denominated in either currency. In September 2013, the GDRC embarked on a process of “de-dollarizing” the economy by requiring that tax records be kept in CDF and tax payments from mining companies be paid in CDF. In March 2016, however, as a result of a dollar shortage the GDRC began requiring mining and oil companies to pay their customs fees and taxes in U.S. dollars.

The CDF depreciated by nearly 40 percent against the U.S. dollar in 2016 and the annualized inflation rate, which was stable at around 1 percent from 2013 through 2015 then increased rapidly to 11 percent The economic forecast calls for continuing inflation and currency depreciation. With March 2017 foreign exchange reserves at $730 million, or 3.3 weeks of import cover (half the level of a year ago) Central Bank officials can no longer support the CDF, which has depreciated over 9 percent this year.

Remittance Policies

Although there is no legal restriction on converting or transferring funds related to investment, new exchange regulations will increase the time for in-country foreigners to repatriate export and re-export income from 30 to 60 days. The BCC is the legal authority controlling and providing the legal framework on foreign exchange in the DRC. Foreign investors may remit through parallel markets when they are legally established and recognized by the BCC.

Sovereign Wealth Funds

The DRC does not have a Sovereign Wealth Fund.

7. State-Owned Enterprises

Generally speaking, the DRC state owned enterprises (SOEs) are a burden on the nation’s economy. SOEs stifle competition and are unable to provide reliable electricity, transportation, and other important services over which they have monopolies. SOEs and other Congolese parastatal organizations are in a poor financial and operational state due primarily to indebtedness, mismanagement of resources and employees, and bad service delivery.

Reporting on the assets of SOEs and other parastatal enterprises is limited, making valuation difficult. According to State law N° 08/007 of July 7, 2008 (related to business transformation), any firm of which the state owns 50 percent plus one share is considered to be an SOE. DRC law does not grant SOEs advantage over private companies in bidding for government contracts, however, in practice, SOEs are favored over private companies, often using questionable practices and arguably unsupportable legal actions. The list of SOEs can be found at: .

SOE accounts are generally not audited. While the Supreme Audit Institution (Cour des Comptes) is authorized to audit SOEs and to publish findings, a lack of resources devoted to the organization has resulted in no complete SOE audits. In addition, the Conseil Superieur du Portefeuille – an oversight body under the Ministry of Portfolio – is mandated with assessing SOE financial performance in terms of growth, profitability, and solvency. Their reports are for internal use and are not publicly available.

There is no official provision requiring preferential access to land and raw materials for SOEs; in a situation where both an SOE and private enterprise show interest to the same land or material, preferential access shall be granted to the first applicant.

The DRC is not a party to the WTO’s procurement agreement (GPA) and does not adhere to the OECD guidelines on Corporate Governance for SOEs.

Privatization Program

The DRC has no official privatization program, though, with support of the World Bank, the GDRC established a Steering Committee in 2010 for the Reform of Public Enterprises (COPIREP), which attempts to address the performance of SOEs. To date, only a handful of SOEs have undergone reform, with mixed results.

8. Responsible Business Conduct

The GDRC supports responsible business conduct (RBC) by encouraging the development and adherence to a code of ethics, and respect for the environment in which companies in the DRC operate. Specific steps taken to encourage RBC include a 2012 roundtable between the GDRC, economic operators and the Fond Social de la Republique Democratique du Congo (FSRDC) in order to evaluate the implementation of socially responsible and environmentally sustainable investments in the DRC.

The GDRC has made clear its expectations that all the companies operating on its soil should be committed to transparency. In addition, the GDRC, in conjunction with the Federations of Enterprises of the Congo (FEC), and civil society organizations interested in the mining sector, have recently launched the Guide on Corporate Social Responsibility (CSR Guide) for the mining sector in Katanga. The project was financed by GiZ, the German development agency, and offers directives and guidance that propose a voluntary approach to be followed in order to achieve two objectives: (i) better enforcement of mining sector laws, and; (ii) identification of international standard practices for companies operating in DRC.

The DRC Labor Code includes provisions intended to protect employees, and there are legal provisions that require businesses to protect the environment or face prosecution, however, these are inconsistently enforced and not well understood. The DRC does not possess a legal framework to protect the rights of consumers and there are no existing domestic laws intended to protect individuals from adverse business practices in general. Most legal issues of this nature are resolved, if at all, on a case by case basis.

Although it is not a member of the Organization for Economic Cooperation and Development (OECD), the DRC has also adopted the OECD due diligence guidelines on responsible mineral supply chains, as defined by the United Nations Group of Experts, as well as various resolutions of the UN Security Council related to business and human rights in the Congolese mining sector. In addition, the mandate of the UN Group of Experts on transparency in the mining industry was renewed and supported by the DRC authorities in June 2016. The GDRC participates actively in the application of the regulations of the EITI in the extractive sector, and in 2016, EITI awarded the DRC the first Initiative Award for Transparency in Extractive Industries. More recently, however, some analysts consider the GDRC’s commitment to the EITI to be waning. Each year the EITI DRC publishes a report on companies in the extractive industries. ( )

There are also existing internal measures in place in the DRC requiring supply chain due diligence for companies that source minerals in DRC. The mining code provides domestic transparency measures requiring the disclosure of payments made to governments, though they appear to be infrequently enforced. In addition, Promines, a technical parastatal body financed by the GDRC and the World Bank, aims to improve the transparency of the artisanal mining sector. Amnesty International and Pact Inc. have also published reports related to RBC in the DRC mining sector.

9. Corruption

The GDRC’s constitution includes laws intended to fight corruption and bribery by all citizens, including public officials; however enforcement of these laws is rare, and when applied, politically motivated. The GDRC also encourages private companies to establish an internal code of conduct and prohibit bribery, and they have historically been more likely to develop and implement anti-corruption controls than their SOE and parastatal counterparts. The DRC hosted the Southern African Commission against Corruption (SAFAC) in November 2015 to discuss strategies to combat corruption.

In 2015, the DRC President authorized the creation of an anti-corruption office to fight corruption in the management of public affairs and appointed a “corruption czar” to decrease governmental malfeasance. The new office is reportedly under-financed and, although it has allegedly prepared reports on several politicians who have been accused of corruption and embezzlement of public funds, the reports have not been published, leading many to believe that the office is politicized. The ineffectiveness of the new office and “czar” was underscored by the DRC’s ranking of 156 out of 177 countries on the 2016 Corruption Perception Index published by Transparency International. The DRC’s score of 21 percent, which was nine places lower than its 2015 ranking, highlighted the lack of progress by the GDRC in fighting corruption, and underlined the endemic and deep roots of corruption in the DRC government, and other aspects of daily life.

While several NGOs contribute to the fight against corruption, their reports on the matter are frequently ignored by the government, particularly when government officials are implicated. American firms see corruption as one of the main hurdles to investment in the DRC.

The DRC is a signatory to the UN Anticorruption Convention, but not to the OECD Convention on Combating Bribery. In September 2007, the DRC ratified a protocol agreement with SADC on Fighting Corruption. In 2015, the government drafted a bill to fight corruption that was scheduled to be discussed in Parliament in 2016, however that did not happen and it is not mentioned in the 2017 parliamentary agenda.

The Agency in charge of fighting corruption in the DRC is:

Cellule Technique de Lutte contre l’Impunite
Nkulu Mbayo Marie-Claude, Coordinator
Tel: 00243815189341

Palais de Justice, Place de l’Indépendance
Kinshasa/Gombe, DRC
Special Advisor for Good Governance
Luzolo Bambi Lessa

10. Political and Security Environment

For more than two decades, the DRC has been subject to marauding armed groups, bouts of civil unrest, and ethnic and political violence. Violence in the eastern part of the country in particular has resulted in the deaths of hundreds of thousands of people, large scale rape and mass displacements. The ongoing armed conflicts in the DRC have their origins in several socio-political and economic events, including the massive refugee crisis and spillover from the 1994 Rwandan genocide, tribalism, the illicit trade of minerals, and the failure of the country’s leadership to prepare and proceed with elections in 2016 as required by the Congolese Constitution. At least 70 armed groups are still believed to be operating in the eastern region. These groups range from small criminal enterprises to well organized, armed, and trained military organizations striving to overthrow local and provincial governments.

The lax security environment outside of larger cities in the eastern DRC like Goma and Bukavu has spawned a kidnapping for ransom industry as well as the full spectrum of banditry. U.S. citizens and interests are not being specifically targeted but can easily become targets of opportunity by being in the wrong place at the wrong time.

According to reports by the United Nations and various in-country NGOs, some elements of the DRC’s national armed forces also participate in illegal activities. Militant forces originating in neighboring countries, including Rwanda and Uganda, continue to perpetuate violence in the DRC, often supporting their activities from the proceeds of the illegal exploitation of natural resources. The UN estimates that there are at least 2.2 million internally displaced persons in the DRC and approximately 460,000 refugees from other nations. The United Nations has one of the largest peacekeeping operations in the world in the DRC. Known by its French acronym, MONUSCO, it has roughly 16,000 peacekeepers deployed throughout the country, a majority of them in the east.

In addition to the violence perpetrated by armed groups, the political environment remains tense and unstable. President Joseph Kabila, in office since 2001, refuses to relinquish power even though his second legally mandated term expired in December 2016. At the end of March, the Catholic Church suspended talks it was mediating between the government and the opposition, citing the refusal of both sides to make the compromises needed to implement a power-sharing accord that would lead to elections in December 2017. The international community, including the USG, continues to press both sides to resume meaningful negotiations.

The ongoing political instability, coupled with a deepening economic crisis, is fueling civil unrest and political violence in various parts of the country, such as in the Kasai provinces in south central Congo, as well as in the capital of Kinshasa. On September 19, 2016, and again on December 19, 2016, clashes between government forces and opposition supporters in Kinshasa resulted in approximately 100 deaths, the looting of a number of businesses, the destruction of opposition party headquarters, and the effective shut down of the capital city for several days. The unstable political and security situation continues to negatively impact the economy, making the DRC a difficult environment for foreign investors despite the tremendous natural resources the country has to offer.

The Armed Conflict Location and Event Dataset tracks political violence in developing countries, including the DRC, . In addition, the Department of State continues to warn travelers to avoid all non-essential travel to the DRC.

11. Labor Policies and Practices

The DRC is a difficult labor market, with chronically high unemployment, particularly among youth, that also features a labor force frequently lacking in marketable skills. Jobs requiring technical or vocational training are frequently filled by expatriates.

There is no official or formal policy to mandate the make-up of senior management or boards of directors. However, the labor law stipulates that for businesses with over 100 employees, 10 percent of all employees should be local. Further, if the managing director is a foreigner, his deputy or secretary general is generally expected to be a Congolese citizen. These provisions can be waived depending on the sector of activity and available expertise. There are no onerous conditionality, visa, residence or work permit requirements inhibiting mobility of foreign investors and their employees, though during 2016 there were some reports of American companies having difficulties securing DRC entry visas.

While the agricultural sector is expanding, it continues to face challenges related to poor infrastructure; its contribution to employment is largely informal. The DRC faces a deficit in skilled labor across all sectors. There are few formal vocational training programs, though Article 8 of the labor law stipulates that all employers should provide training to their employees. To address the high unemployment rate, the GDRC enacted a preferential policy, giving Congolese preference in hiring over expatriates. Laws prevent firms from firing workers under most conditions without compensation. These restrictions, however, have deterred hiring and encouraged the use of temporary contracts in lieu of permanent hiring. In 2016, a new labor law was enacted that authorizes foreigners, under certain condition, to be appointed to the management of a trade union, and allows women to work the night shift. Despite these changes, the DRC labor code still requires substantial revision, including facilitating foreign employment and providing more protection for employees, foreign and domestic.

Congolese law imposes certain restrictions on the principle of free and voluntary collective bargaining in the public sector. The law bans collective bargaining in certain sectors, including by civil servants and public employees, and the law does not provide adequate protection against anti-union discrimination. While the right to strike is recognized, there are provisions which undermine this right, including requiring unions to obtain permission and adhere to lengthy compulsory arbitration and appeal procedures prior to initiating a strike. In 2016, employees of the GDRC authority on business standards, the Congolese Office of Control (OCC), went on strike in response to four months of unpaid salaries. The three-week long strike, which ended in November 2016, impacted the import-export sector by delaying the customs clearance process for goods entering the country. Despite GDRC ratification of the International Labor Organization’s (ILO) eight core conventions, some Congolese laws continue to be inconsistent with the ILO Convention on Forced Labor. There are significant gaps both in law and practice regarding compliance with ILO conventions.

The law prohibits discrimination in employment and occupation based on race, gender, language, or social status. The law does not specifically protect against discrimination based on religion, age, political opinion, national origin, disability, pregnancy, sexual orientation, gender identity, or HIV-positive status. Additionally, no law specifically prohibits discrimination in employment of career public service members. The government does not effectively enforce relevant employment laws.

The government sets regional minimum wages for all workers in private enterprise, with the highest pay scales applied to the cities of Kinshasa and Lubumbashi. The law defines different standard workweeks, ranging from 45 to 72 hours, for various jobs and prescribes rest periods and premium pay for overtime. The law establishes no monitoring or enforcement mechanism, and employers in both the formal and informal sectors often do not respect these provisions. The law does not prohibit compulsory overtime.

The labor code specifies health and safety standards. The Ministry of Labor employs 200 labor inspectors, which is not sufficient to enforce consistent compliance with labor regulations. The government does not effectively enforce such standards in the informal sector, and enforcement is uneven in the formal sector.

The DRC Penal Code does not establish appropriate criminal penalties regarding the imposition of forced labor. In practice, forced labor persists and remains a serious concern. According to a 2105 UNICEF study, nearly a third of Congolese employed in the informal mining sector (40,000 of 150,000) were children. According to the DRC’s Ministry of Labor, children continue to be engaged in the mining of gold, cassiterite (tin ore), and wolframite (tungsten ore). Children are also increasingly recruited by political parties for violent electioneering activities. In order to combat this problem, President Kabila signed and promulgated a law on July 15, 2016 fixing the legal working age at 18. Penalties for violations for the worst forms of child labor, which are one to three years of imprisonment and fines as high as 200,000 Congolese francs ($170) have proven to be insufficient to deter violations. While DRC’s criminal courts continued to hear child labor complaints, neither the courts, nor other government agencies, effectively enforced these laws.

12. OPIC and Other Investment Insurance Programs

The U.S. Overseas Private Investment Corporation (OPIC), which provides political risk insurance and project financing to U.S. investors and non-governmental organizations, has granted political risk insurance for projects in the DRC in the past and is open to working on future projects in the DRC.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data

Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) N/A N/A 2015 $35,238
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in Partner Country
($M USD, stock positions)
Host Country’s FDI in the United States
($M USD, stock positions)
Total Inbound Stock of FDI as % Host GDP N/A N/A N/A N/A N/A

Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available.

14. Contact for More Information

Points of contact for inquiries from the public:

Mustansir Barma
Deputy Economic Counselor

Deborah Edney
Commercial Officer

Elisée Kaozi
Commercial Assistant

Econ Section’s email address:

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