2023 Investment Climate Statements: Burundi

Policies Towards Foreign Direct Investment

The Government of Burundi (GoB) is generally supportive of FDI and seeks investments to promote economic growth. The GoB revised the country’s investment code in June 2021 (last updated in 2008) and issued the first national industrialization policy and its accompanying implementation strategy. These regulations offer the same advantages to both Burundian and foreign investors. The regulations also raised the minimum investment amounts to be eligible for certain benefits in the investment code from $50,000 to $500,000 for all investors, with the stated purpose of attracting only quality investments that will create decent jobs. Industry experts believe the new investment regulations will boost development of the industrial sector, which so far contributes only about 17 percent of GDP. An overview of the legal framework for foreign investment can be found at: http://www.eatradehub.org/burundi_investment_policy_assessment_2018_presentation 

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

Limits on Foreign Control and Right to Private Ownership and Establishment

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

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

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

Other Investment Policy Reviews

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

Business Facilitation

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

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

The ADB indicates that from July-December 2022, more than 2,511 companies were registered and created, giving rise to an estimated 156,800 jobs. The agency also issued 45 grants that are expected to use a capital of over 400 billion BIF (approximately USD 200 million) and projected to create 3,902 jobs. Although the construction, infrastructure projects, transportation and tourism sectors are attracting foreign investment, ADB notes that the energy and mining sectors attract the most interest from investors.

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

Outward Investment

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

Transparency of the Regulatory System

Although parts of the government are working to create more transparent policies for fostering competition, Burundi lacks much of the necessary regulatory framework. Many policies for foreign investment are not transparent, and laws or regulations on the books are often ineffective or unenforced. Burundi’s regulatory and accounting systems are generally transparent and consistent with international norms on paper, but a lack of capacity or training for staff and political constraints sometimes limit the regularity and transparency of their implementation.

Rule-making and regulatory authority is exercised exclusively at the national level. Relevant ministries and the Council of Ministers exercise regulatory and rule-making authority, based on laws passed by the Senate and National Assembly. In practice, government officials sometimes exercise influence over the application and interpretation of rules and regulations outside of formal structures. The government sometimes discusses proposed legislation and rule-making with private sector interlocutors and civil society but does not have a formal public comment process. There are no informal regulatory processes managed by non-governmental organizations (NGOs) or private sector associations.

Draft bills or regulations are not subject to a public consultation process. There are no conferences that involve citizens in a consultative process to give them an opportunity to make comments or contributions, especially at the time of project development, and, even if this were the case, the public does not have access to the detailed information needed to participate in this process.

Burundi does not have a centralized online location where key regulatory actions are published; however, regulatory actions are sometimes posted on the websites of GoB institutions (typically that of the Office of the President or respective ministries).

Burundi has sectoral regulatory agencies covering taxes and revenues, mining and energy, water, and agriculture. Regulatory actions are reviewable by courts. There have been no recent reforms to the regulatory enforcement system.

The government generally issues terms of reference and recruits private consultants who prepare a study on the draft legislation for review and comment by the private sector. The government analyzes these comments and takes them into consideration when drafting new regulations. New regulations can be issued by a presidential decree or Parliament can make them into a law. This mechanism applies to laws and regulations on investment.

Information on public finances and debt obligations (including explicit and contingent liabilities) is published in the Burundi Central Bank’s Reports and on its website: https://www.brb.bi/ . However, some publications on the website are not up to date.

International Regulatory Considerations

Burundi is a member of the East African Community (EAC), a regional economic bloc composed of seven member states: the republics of Burundi, Kenya, Rwanda, South Sudan, Tanzania, Uganda and the recently admitted Democratic Republic of the Congo. The EAC integration process is anchored on four pillars: a customs union, a common market, a monetary union, and political federation. Each member state must harmonize its national regulatory system with that of the EAC.

Burundian law and regulations reference several standards, including the East African Standards, Codex Alimentarius Standards, the International Organization for Standardization (ISO), and Burundi’s own standards. ISO remains the main standard of reference.

The country joined the WTO on July 23, 1995. According to the Ministry of Trade, Transport, Industry and Tourism, Burundi has not notified the WTO Committee on Technical Barriers to Trade of all its draft technical regulations.

Legal System and Judicial Independence

The country’s legal system is civil (Roman), based on German and French civil codes. For local civil matters, customary law also applies. Burundi’s legal system contains standard provisions guaranteeing the right to private property and the enforcement of contracts. The country has a written commercial law and a commercial court. The investment code offers plaintiffs recourse in the national court system and to international arbitration.

The judicial system is not effectively independent of the executive branch. A lack of capacity hinders judicial effectiveness, and judicial procedures are not rigorously observed.

Laws and Regulations on Foreign Direct Investment

In June 2021, the GoB adopted a revised investment code and the first national industrialization policy and its accompanying implementation strategy. Along with the new investment code, the Burundi Development Agency (ADB) officially replaced the Investment Promotion Agency (API) (See Policies Towards Foreign Direct Investment above).

Competition and Antitrust Laws

There is no agency in charge of reviewing transactions for competition-related concerns.

Expropriation and Compensation

Burundian law allows the GoB to expropriate property for exceptional and state-approved reasons, but the GoB is then committed to provide compensation based on the fair market value prior to expropriation.

There are no recent cases involving expropriation of foreign investments nor do any foreign firms have active pending complaints regarding compensation in Burundian courts.

Dispute Settlement

ICSID Convention and New York Convention

Burundi is a full member of the ICSID Convention since 1969 and became the 150th country to sign the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention). Burundi’s commercial law allows enforcement of judgments in foreign courts by local courts.

Investor-State Dispute Settlement

Burundi is a signatory of the International Centre for Settlement of Investment Disputes (ICSID) and Multilateral Investment Guarantee Agency (MIGA) in which international arbitration of investment disputes is recognized. Burundi does not have a bilateral investment treaty with the United States.

There have been limited instances of foreign investors seeking restitution from the GoB over allegations of breach of contract and corruption.

In cases involving international parties, the GoB accepts international arbitration and recognizes and enforces foreign arbitral awards. There is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

In rare cases involving international elements, the GoB accepts international arbitration and recognizes and enforces foreign arbitral awards. In investment disputes between private parties, international arbitration is accepted as a means of settlement provided one of the parties is a non-national. In 2007, the GoB created a Center for Arbitration and Mediation (CEBAC) to handle such disputes, but it is not very active.

There is no operational commercial arbitration body in the country besides CEBAC. Foreign arbitral awards are recognized, but local courts are not legally equipped to enforce them. No Burundian private entity has been involved in a foreign arbitration. In the past, one registered case involved the GoB and a private gold refining company. The GoB lost the case and enforced the ICSID’s against the GoB.

Bankruptcy Regulations

Burundi has two laws governing or pertaining to bankruptcy: Law N°1/07 of March 15, 2006, on bankruptcy and Law N°1/08 of March 15, 2006, on legal settlement of insolvent companies. Under Burundian law, creditors have the right to file for liquidation and the right to request personal or financial information about the debtors from the legal bankruptcy agent. The bankruptcy framework does not require that creditors approve the selection of the bankruptcy agent and does not provide creditors the right to object to decisions accepting or rejecting creditors’ claims.

Investment Incentives

The updated investment code grants potential fiscal and customs benefits for up to five years, or up to ten years for certain sectors as determined by presidential decree and based on the country’s development needs. Benefits include exemption from transfer duties for the acquisition of land or buildings, exemption from Value Added Tax (VAT) and customs duties on the importation of construction materials and production inputs, and reduced tax rates on profits ranging from 5 to 25 percent for the first five years, after which the corporate tax rate is set at 30 percent.

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 belongs to the trading blocs of the EAC, the Economic Community of the Great Lakes Countries (CEPGL), the Common Market for Eastern and Southern Africa (COMESA), and the Economic Community of the States of Central Africa (CEEAC). During the reporting period, Burundi ratified the African Continental Free Trade Area (AfCFTA) agreement, accepting all conditions of the agreement. The GoB has set up an ad hoc committee to continue working on AfCFTA integration and Burundi hopes to benefit from AfCFTA’s market due to its strategic location and natural resources.

The government indicates it aims to accelerate integration into other trading blocs, such as the Tripartite Free Trade Area (TFTA) between COMESA, EAC and Southern Africa Development Community (SADC). The 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.

The GoB is working to establish its first Special Economic Zone (ZESB) in order to enhance growth and development. ZESB is still under construction on the Warubondo site (a strategic location of 5.43 square kilometers 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 the 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. During the reporting period, Burundi reauthorized visitors to apply for a visa upon arrival at the airport. A foreigner holding a residency visa is permitted to work in Burundi. A two-year residence visa (renewable) costs $500 and it can only be issued after making a refundable deposit of $1,500 in a local bank (BANCOBU).

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.

There are no requirements that investors purchase from local sources. However, the mining code currently requires a commitment from investors to recruit staff or subcontractors of Burundian nationality as a precondition for granting a mining license, with mandatory quotas currently in place (although the mining code is under revision as of March 2022). 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.

Real Property

Secured interests in both real and movable property are nominally recognized under Burundian law. The Burundi land code, adopted in 2011, recognizes the right to property and protection for Burundians and for foreigners. Foreigners enjoy the same rights and protection as nationals, subject to the principle of reciprocity. The state can give property to foreigners for industrial, commercial, and cultural use, and can rent them out, but full ownership is reserved for Burundians.

Land titling in Burundi has historically been a lengthy, opaque, and centralized process. The Land Titles Service registers real estate and security instruments, such as mortgages. Property titles are accepted as a guarantee by commercial banks, but documents for properties located outside the capital city of Bujumbura are less readily accepted because of conflicts and crime related to land disputes in rural areas (more than 80 percent of criminal court cases are related to conflicts over land).

The legal system and the investment code do not differentiate between local and foreign investors regarding land acquisition or lease. However, the possibility for land acquisition is based on reciprocity between Burundi and the investor’s home country.

When a property has been legally purchased, it cannot be legally confiscated by the state except when it is the subject of an expropriation procedure in accordance with legal and regulatory procedures.

Intellectual Property Rights

Burundi is not listed in the United States Trade Representative (USTR) Special 301 Report or the Notorious Market List.

Burundi has adopted the 1995 World Trade Organization (WTO) Agreement on Trade-Related Aspects of International Property Rights (TRIPS), which introduced global minimum standards for the protection and enforcement of virtually all intellectual property rights (IPR). The legal system and the investment code aim to protect and facilitate the acquisition and disposition of all property rights, including IPR. The law also guarantees protection for patents, copyrights, and trademarks. However, there is no record of enforcement action on IPR infringement violations. No IPR-related law has been enacted during the past year and no bills are pending.

Agents of Burundian institutions in charge of the fight against piracy and counterfeiting (Burundian Revenue Office, Ministries of Trade and Public Health) have already benefited from various sources of support in terms of capacity building on industrial property rights and the fight against piracy and counterfeiting on the part of multilateral partners, but these institutions lack modern tools for detecting counterfeits. Although these institutions have already committed themselves to carry out reforms in this sector (a multisectoral committee responsible for promoting procedures to combat counterfeiting and piracy and monitoring has been set up), they still need to set up a database of recognized trademarks, in which all the information on trademarks registered at customs is compiled and to require this procedure for all companies or representatives of multinationals to be effective.For now, the Burundi Bureau of Standardization (BBN) is the state authority responsible for monitoring the quality of consumer products on the market; however, this Bureau lacks the necessary expertise and resources to be effective.  Counterfeiters who are apprehended are fined and their products are seized. There are no statistics available on seizures of counterfeit goods. For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

Although there are no regulatory restrictions on foreign portfolio investment, Burundi does not have capital markets that would enable it. Capital allocation within Burundi is entirely dependent on commercial banks.

The country does not have its own stock market. There is no regulatory system to encourage and facilitate portfolio investment. Existing policies do not actively facilitate nor impede the free flow of financial resources into product and factor markets.

There is no regulation restricting international transactions. In practice, however, the government restricts payments and transfers for international transactions due to a shortage of foreign currency, which impedes doing business in a number of ways.

In theory, foreign investors have access to all existing credit instruments and on market terms. In practice, available credit is extremely limited.

Money and Banking System

The financial sector includes 15 credit institutions, 40 microfinance institutions, 16 insurance companies, three social security institutions and three payment institutions. All these institutions aim at reducing unemployment by creating job opportunities, particularly small and medium-scale entrepreneurship. The banking market is dominated by the three largest and systemically important banks: Credit Bank of Bujumbura (BCB), Burundi Commercial Bank (BANCOBU), and Interbank Burundi (IBB).

Burundi’s population has very limited access to banking services, according to the most recent national survey on financial inclusion conducted by the central bank. In this 2016 survey, the Bank of the Republic of Burundi (BRB) found a penetration level of approximately 22 percent, although the government opened two banks, one for youth entrepreneurs and one for women, over the last 1.5 years in an effort to address this challenge.

The government is a minority shareholder in six banks, including the country’s three largest banks and is the main shareholders in the two new banks BIJE (Banque d’Investissement des Jeunes/Youth Investment Bank) and BIDF (Banque d’Investissement et de Développement pour les Femmes/Investment and Development Bank for Women). Several local commercial banks have branches in urban centers and micro-finance institutions mostly serve rural areas. Foreign banks can establish operations in the country.  Foreign banks operating in the country include ECOBANK (Pan African Bank-West Africa), CRDB (Tanzanian Bank), DTB and KCB (both Kenyan Banks).  The central bank directs banking regulatory policy, including prudential measures for the banking system.  Foreigners and locals are subject to the same conditions when opening a bank account; the only requirement is the presentation of identification.

Foreign Exchange and Remittances

Foreign Exchange

According to the GoB, funds associated with an investment can be converted into a freely usable currency at a legal market rate, pending their availability. In practice, foreign investors routinely encounter difficulties in converting funds associated with investments into foreign currency due to de facto capital controls implemented by the BRB in 2019 and lack of foreign currency reserves. Due to the shortage of foreign currency, the central bank prioritizes companies in specific strategic industries for access to foreign exchange accommodation.

The government has imposed capital controls to prevent abrupt exchange rate movements; there is a significant gap between the official rate and a floating parallel unofficial market rate, which ranged from 50-70 percent during the rating period. The BRB publishes the daily exchange rate on its website each morning.

Remittance Policies

The government has not passed any new laws regarding a change to investment remittances policies. The average delay for remitting investment returns (once all taxes have been paid) is three months due to general inefficiency in the banking sector and the rarity of such transactions in an environment with very little foreign direct investment.

Sovereign Wealth Funds

Burundi does not have a sovereign wealth fund.

Privatization Program

In 2002, Burundi entered an active phase of political stabilization, national reconciliation, and economic reform. In 2004, it received an emergency post-conflict program from the IMF and the World Bank, paving the way for the development of the Strategic Framework for Growth and Poverty Alleviation (PRSP). After the 2005 elections, the GoB made the decision to open several state-owned enterprises in different sectors of the economy to private investment, including foreign investment. The Burundian government, considering coffee a strategic sector of its economy, decided to opt for the privatization of the coffee sector first in an effort to modernize it. However, following the crisis of 2015, the GoB decided to suspend the privatization program. At that time, it had not yet privatized other sectors such as tea or sugar. In late 2019, the GoB regained control of the coffee sector, citing as its rationale perceived mismanagement on the part of the privatized companies during the 2015-2019. It is unclear if or when the privatization program will continue.

Climate Issues

Burundi first made commitments to contribute to the fight against climate change through its original Nationally Determined Contribution (NDC) in 2015 during the twenty-first Conference of the Parties (COP 21) of the United Nations Framework Convention on Climate Change (UNFCCC) held in Paris in 2015 and Burundi ratified the agreement in 2018.  During the reporting period, Burundi submitted an updated 2020 NDC to the UNFCCC’s Secretariat in November 2021 at the Climate Change Conference of the Parties (COP26) as well as an initial National Adaptation Plan (NAP).

The interim NDC evaluation report of March 2021 noted some achievements in the forestry sector, although there were few results on energy sector commitments.  The report found the GoB lacked adequate funding and technical capacity for implementation.  Burundi contributes less than 0.1 percent of global greenhouse gas emissions but remains vulnerable to global climate impacts.

Burundi’s NAP on climate change calls for a range of responses.  In agriculture, Burundi is planning to increase irrigation and diversify climate-resilient, high-yield food crop varieties.  For ecosystems and landscapes, efforts will focus on reforestation of degraded lands and floodplain protection.  Water priorities include expanding integrated watershed management and rainwater harvesting.  Health efforts highlight the collection of environmental health data and the development of a health sector NAP.  Energy efforts will center on hydroelectric and solar power, increasing biogas, and improved cooking stoves.  Burundi’s infrastructure plans hope to improve waterways and structures around the Lake Tanganyika port area and rehabilitate existing road networks.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

Name: Roger Ndikumana
Title: Commissaire Général
Organization: Anti-Corruption Brigade
Address:  PO Box 890 Bujumbura
Telephone Number:  (+257) 22 25 62 37
Email Address:  brigadeanticorruption@yahoo.fr

Contact at a “watchdog” organization:

Name: Gabriel Rufyiri
Title: President
Organization:  OLUCOME
Address: 47, Chaussée Prince Louis Rwagasore, n°47, 1st Floor
Telephone Number: (+257) 79 30 82 97
Email Address: rufyiriga@gmail.com / olucome2003@gmail.com