Investing in Africa

About Investing in Africa

Investing in Africa provides information on investment procedures, incentives, and opportunities in sub-Saharan African states. It collects information from a wide range of mainly Internet based sources, and organises it in a standardised format which is convenient for printing.

In the last decade, many countries have changed their investment procedures in order to attract more private sector and foreign involvement in the economy. As a result, this study may be more relevant than older studies, as it was prepared between March and July 2001. Since the report may itself become out-of-date within a couple of years, I have also included references to the sources I used, and other reliable information available on the Internet. Investors may look at them in the future for more recent data. For a few of the countries the information dates back to the 1990s, and procedures have since been altered. You are advised to investigate the national website for further information (please see the "other studies" section below).

Sources

For member countries of the Common Market of Eastern and Southern Africa (COMESA), the large majority of factual information came from its website, http://www.comesa.int, itself referenced from a United Nations administered website (for the International Trade Centre, http://www.intracen.org/iatp/links.htm). The sub-Saharan member states are Angola, Burundi, Comoros, the Democratic Republic of the Congo, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe. The COMESA site takes some of its information from external sources, and I attempted to corroborate them where I could. Nevertheless, it is possible that some errors have slipped through, and the information in this website should not be used exclusively to form business decisions - preferably the embassies of the countries involved should be contacted.

The information for Tanzania comes from the UN administered site Trade Point Tanzania at http://www.tptanzania.co.tz, and the linked site for the Tanzania Investment Centre, http://www.cats-net.com/tic/index.htm.

The statistics for Mozambique were taken from the Mozambican trade and export websites http://www.ipexport.org, http://www.mozambique.mz, http://www.mozbusiness.gov.mz, http://www.tropical.co.mz/~parafric/, and http://www.ine.gov.mz. They are all linked to one another, and the original link to the ipexport site was made from the United Nations administered site http://www.intracen.org/iatp/links.htm.

I found data on Somalia from various United Nations websites, namely the World Development Indicators database, http://devdata.worldbank.org/data-query/, and the World Banks "Somalia at a glance", http://www.worldbank.org/data/countrydata/aag/som_aag.pdf. I used a variety of sources for background information, including the World Bank site http://www.worldbank.org/afr/so2.htm, the Arab Net site http://www.arab.net/somalia/somalia_contents.html, and the Mbendi site http://www.mbendi.co.za/land/af/so/p0005.htm.

The Lesotho information came from the Lesotho Government site http://www.lesotho.gov.ls, and the linked source for the Lesotho National Development Corporation http://www.lndc.org.ls. Unfortunately, I have not been able to confirm that these two sites are authentic, by a link from the United Nations site or another similarly well known. However, I attempted to verify the content against information of Ernst and Young, and Werksmans Attorneys, available on the Mbendi website http://www.mbendi.co.za/land/af/le/p0005.htm. Where there is overlap, mainly on the investment incentives section, the three sources agree. I also used the World Bank review of Lesotho http://www.worldbank.org/afr/ls.htm, and the linked review from the Southern African Development Community, http://www.sadc-online.com/countrys/lesotho/, for background.

For the background to Botswana report, I used information from the World Bank review at http://www.worldbank.org/afr/bw.htm, and the linked review from the Southern African Development Community at http://www.sadc-online.com/countrys/botswana/. The information on incentives, taxation, and so on came from the Botswana Government site www.gov.bw. I could not confirm the authenticity of this site by a link from a well known site like the United Nations, so I reconciled the data in it to information produced by Ernst and Young, and Werksmans Attorneys, available on the Mbendi website http://www.mbendi.co.za/land/af/bo/p0005.htm. The data agree, despite some difference in the subjects covered. The site contains some recent, unverified, information on incentives and business forms not included here.

Most of the South African information came from the site Trade and Investment South Africa at http://www.isa.org.za. This site is linked from the World Bank administered site IPAnet, http://www.ipanet.net/ilink. Additional background information came from the World Bank site itself at http://www.worldbank.org/afr/za.htm, and from the Southern African Development Community review at http://www.sadc-online.com/countrys/safrica/. The latter was used mainly for description of the physical environment.

The data for Congo came from the Investir en Zone Franc site http://www.izf.net/izf/Guide/Congo/Default.htm, and the linked site Agence pour la Creation d'Enterprises http://www.apce.com/monde/congo.html. Investir en Zone Franc is linked from the West African Development Bank at http://www.boad.org/liens/institues.htm, itself mentioned on the United Nations / International Trade Centre address, http://www.intracen.org/iatp/links.htm. Additional background information came from the World Bank report at http://www.worldbank.org/afr/cg.htm.

The information for Equatorial Guinea is also from the Investir en Zone Franc site http://www.izf.net/izf/Guide/GuineEquatoriale/Default.htm, with background from the World Bank report at http://www.worldbank.org/afr/gq.htm.

Information for Gabon was from the Investir en Zone Franc site http://www.izf.net/izf/Guide/Gabon/Default.htm, and Agence pour la Creation d'Enterprises http://www.apce.com/monde/gabon.html. The World Bank site http://www.worldbank.org/afr/ga.htm provided further background. The information for Cameroon came from the same sources: Investir en Zone Franc at http://www.izf.net/izf/Guide/Cameroun/Default.htm, Agence pour la Creation d'Enterprises http://www.apce.com/monde/cameroun.html, and the World Bank http://www.worldbank.org/afr/cm.htm. The Central African Republic, Chad, Niger, Burkina Faso, Mali, Senegal, Benin, Guinea Bissau, Togo, and Ivory Coast data came from the World Bank site http://www.worldbank.org/afr and from Investir en Zone Franc http://www.izf.net. For Niger and Togo, the Agence pour la Creation d'Enterprises site for Benin http://www.apce.com/monde/benin.html was also used, for information on the business forms in use in member states of OHADA, the Organisation for Business Law Harmonisation in Africa.

The data for Nigeria came from the Nigerian Federal Government site http://www.nigeria-government.com. I was unable to verify its authenticity by a link from a multinational institution like the United Nations. However, it is listed as the official site on the African section of the British Broadcasting Corporation website http://news.bbc.co.uk/hi/english/world/africa/country_profiles/newsid_1064000/1064557.stm. The World Bank site http://www.worldbank.org/afr provided additional background statistics.

Ghana information was from the Ghana Ministry of Trade and Industry website at http://www.ghanaclassifieds.com/moti/index.html, linked from the Ghana Export Promotion website http://www.exportghana.org, which is itself linked from the United Nations International Trade Centre site. More background information came from the World Bank site for Africa.

Information for Liberia came from the World Bank African site, and from the website for the Economic Community of West African States (ECOWAS) at http://www.ecowas.int. The address for ECOWAS listed on the Intracen site, http://www.cedeao.org/, does not seem to work (CEDEAO is the French acronym of ECOWAS). The same site address also appears on using one of the major search engines to find "ECOWAS", with the advice underneath saying that it has moved to www.ecowas.int, which does work.

For Sierra Leone, I used the Sierra Leonean Government site at http://www.sierra-leone.gov.sl/index.htm, which is linked from the ECOWAS pages. I also used information from the Sierra Leone Chamber of Commerce, Industry, and Agriculture at http://www.cocsl.bizhosting.com, which is linked from the Government site.

The information for Guinea was from the Guinean Government site http://www.guinee.gov.gn. I was not able to find a link to it from a multinational institution like the World Bank or ECOWAS, although the site is mentioned on the African section of the British Broadcasting Corporation World Service website. Background information came from the World Bank site for Africa.

The Gambia data was taken from the Gambian Government website at http://www.gambia.com/invest/invest.html and http://www.gambia.com/gambia.html, linked from the ECOWAS website, as well as the British Broadcasting Service. The links are to http://www.gambia.com, but at the time of writing (July 2001), this page appears to have been attacked by hackers. The subpages are still working, however. They were found using a major Internet search engine. I am not sure of their current accuracy.

The Mauritania data came from the Mauritanian Government website at http://www.mauritania.mr, and the investment section of the linked site for the Ministry of Economic Affairs and Development at http://www.economie.gov.mr. I could not find the former address on a multinational organisation site like the United Nations, but it is mentioned on the African Section of the British Broadcasting Corporation World Service website.

The Sao Tome and Principe data came from the World Bank website for Africa.

The Cape Verde information came from the Cape Verde Centre of Promotion of Tourism, Investment, and Exports at http://www.promex.org (in Portuguese). This is linked from the Government site at http://www.governo.cv/links.html, via the national privatisation site at http://www.cvprivatization.org/links/index.htm, the Bank of Cape Verde http://www.bcv.cv/links/entrada_nacionais.htm, and the Ministry of Finance site http://www.gov.cv/minfin. I could not find the Government site linked from a multinational organisation site, but there is a link on the British Broadcasting Corporation World Service website. Additional information came from the World Bank site for Africa.

For the statistics at the head of each country account, I used the World Development Report 1999/2000, published by the World Bank, and available on http://www.worldbank.org/wdr/2000/.

The data was extracted over period March-July 2001.

For the commentaries and organisation of the data, the work is entirely my own.

Other studies

Mbendi http://www.mbendi.co.za/land/af/p0005.htm is a South African business information website is particularly detailed on investment procedure and practise in the Southern part of the continent.

The United States Government site http://www.usatrade.gov/website/CCG.nsf covers similar material to this study, and also has some practical information, for example about business travel.

Transparency International http://www.transparency.org looks at economic corruption, mainly by surveying senior business people in the countries concerned. I was not able to find a link for the Internet address from the United Nations or similar multinational website.

The British Broadcasting Corporation World Service website http://www.bbc.co.uk/worldservice/africa/index.shtml contains many links to national Government websites, via its "country profiles".

Investing in Africa can be e-mailed by clicking here.


The countries

Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Central African Republic
Chad
Comoros
Congo
Democratic Republic of the Congo
Djibouti
Equatorial Guinea
Eritrea
Ethiopia
Gabon
Gambia
Ghana
Guinea Bissau
Guinea
Ivory Coast
Kenya
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritania
Mauritius
Mozambique
Namibia
Niger
Nigeria
Rwanda
Sao Tome and Principe
Senegal
Seychelles
Sierra Leone
Somalia
South Africa
Sudan
Swaziland
Tanzania
Togo
Uganda
Zambia
Zimbabwe




Angola

Background

1998 Population (M): 12
1998 GNP (USD B): 4.1

1997/98 Annual GNP growth rate: 7.9
1998 GNP per capita (USD): 340
1990-98 % annual growth GDP: -0.4
1990-98 % inflation: 921.1

1998 Labour force (M): 6
1998 Female % of labour force: 46
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1997 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 5

1990-98 % annual growth of gross domestic investment: 12.6
1997 Private investment as % of gross domestic fixed investment: 88
1997 Foreign direct investment (USD M): 350
1998 Merchandise exports (USD M): 4222
1997 Present value of external debt as % of GDP: 206

1998 Value added as % of GDP Agriculture: 14
1998 Value added as % of GDP Industry: 54
1998 Value added as % of GDP Services: 32

It is a measure of the resilience of the Angolan economy that the country, after 25 years of civil war, still maintains a degree of normal trade and activity. Indeed, the considerable natural resources, whether in the form of oil, minerals, or agricultural land, may have perversely have sustained a civil war which has prevented Angola becoming one of the richest states south of the Sahara, as both the Government and the UNITA rebels have been accused of using those resources to fund their armies.

In talking about the economy, the oil industry is one of the first topics to arise, as it generates 40% of GDP, and 90% of exports, mostly to the United States. The oil sector grew throughout the 1980s, unlike other industries, and exploration of more sites continues to this day, beyond those already known in the main part of Angola and the Cabinda enclave. Foreign investors have been present in the oil industry for decades, and currently they control the industry in partnership with a parastatal oil firm. There have also been plans discussed for exploring the natural gas and hydroelectric power potential. Angola is responsible for coordinating the energy policy of the Southern Africa Development Coordination Conference (SADCC).

Nominally Marxist, the government held a barrage of controls on the economy in its early period, but adopted a pragmatic policy which eased foreign involvement in industry throughout the 1980s, and by the late 1990s had eased price controls, removed its own monopoly on mineral rights, and encouraged foreign investors to enter into various sectors, either by outright purchase of assets or in partnership with Angolans. Privatisation has progressed steadily for the last decade, with foreign investors buying large coffee plantations, and Angolan investors taking over smaller ones. The government has targeted disposal of non-strategic, non-monopoly parastatals, sometimes following division into smaller units, and restructuring or liquidation of those assets which remain in its hands. Monopolies will be subject to a maximum of 49% private ownership. Foreign investment legislation is under review, and the World Bank is helping in the review of some of its banking legislation. Other efforts are being made in the tax collection system, import and export procedures, and rescheduling of the substantial foreign debt.

With two thirds of the population living in rural area, the agricultural sector is crucial; for the economy, and the land is reported to be one of the richest potentials in Africa, allowing for tropical and subtropical crop growth. Before the outbreak of the civil war, the country was self sufficient in food, and was the worlds 4th largest coffee producer, with potential for production of sugar, coffee, sisal, and other crops. Only 3% of arable land is presently cultivated, giving rise to a demand for food aid for up to 1/5 of the population, depending on the state of the civil war - production expands and contracts quickly. The United Nations has provided some relief, as well as directly promoting agricultural development. The European Union has been active too, sending seeds, machinery and human resources.

The government has made efforts to improve supplies and services to the agricultural sector, but any attempts must confront the problem of a badly damaged transportation system. With roads, rail, and ports affected by the war, the UN has approved a number of loans to repair the infrastructure, starting with handful of key roads. The government is also attempting to modernise its telecommunications sector, with capital drawn from a number of sources.

Prior to the conflict, the manufacturing industry was quite active, with 4,000 enterprises. There have been recent efforts to restore some of the past capacity, with a number of projects proposed. Recent projects have been in pharmaceuticals, steel, television assembly, and brewing. The steel works may utilise Angolas iron ore reserves. The country has a number of other mineral deposits, notably diamonds, which made it historically one of the worlds largest producers of the gems, although (official) production has dropped substantially with the outbreak of fighting.

As for future prospects, the USA has imposed sanctions on arms provision to the UNITA rebel movement, which may help hasten the end of the war, although there have been other false starts in this respect. The damaged infrastructure could then be repaired, and normal development process set in action. Peace would also allow the development of the tourist industry, inevitably limited by the conflict. There is also the prospect of peace in the Democratic Republic of Congo, where Angolan troops have been active, although they may withdraw unilaterally in any case.

Regulations governing foreign investment

The following are classified as foreign investments:
1) transfer of funds from abroad
2) payment of cash assets into foreign currency bank accounts set up in Angola by non-residents
3) import of equipment, accessories, and materials
4) incorporating credits and other cash assets in Angola, which could be transferred abroad in terms of the foreign exchange legislation.
5) incorporation of technologies

Investments less than $250,000 are not considered foreign investment operations, but are subject to foreign exchange and commercial legislation.

Foreign exchange operations are subject to the supervision of the Angolan National Bank. After-tax profits and dividends may be remitted abroad, except in the case where they are so large that they may aggravate balance of payments difficulties, when the Minister of Economy and Finance may regulate them.

Legal forms

Branch

Branches have no legal entity. Obligations entered into by branch therefore apply to the foreign company, and there is unlimited liability on the parent company.
All mandatory regulations (e.g. labour and tax laws) apply to branch activities, and foreign investment regulations are valid.

Subsidiary

A subsidiary has its own legal entity, independently of the shareholder(s). It may take any of the normal forms for business in Angola.

Limited liability partnership (Sociedade por quotas - Lda)

These forms offer the owners limited liability. They have to be formed by notarial deed, and subsequently registered in the Commercial Registry. They are subject to a minimum capital requirement of Kwanza 50,000, although this number is not used for foreign investors. Instead, and approximate amount of $3,000 is used.

Share companies (Sociedades Anonimas - SARL)

The information I have about share companies is that they are similar to Limited liability partnerships.

Procedures for investment

For investments between $250,000 and $5,000,000

To establish a new company, the first stage is to get documentary confirmation from a competent agent that the proposed name for the company is original.

The investment proposal is then submitted by filling out the relevant form available at the Foreign Investment Office. It must be accompanied, all in duplicate, by the following documents:

the confirmation of the names originality,
a certified copy of the legal documents stating the usual residence of the proposer (for people), or the documents registering the incorporation of the proposer (for companies and legal entities),
draft incorporation papers,
draft contract of association.

If the investment is by purchasing part of an existing enterprise, then the investor should instead include a certified copy of incorporation papers and commercial registration for the company to be purchased.

If the investment involves new capital transfers into an existing company, then a certified copy of the proposed transfer should be included, authorised by the party sending the funds.

Where national investors also participate, the proposer of the investment should also include certified copies of the legal documents stating the identity and usual residence of the national partner (for people), or the documents registering the incorporation of the partner (for companies and legal entities).

Proposals must then be submitted to the Foreign Investment Office, which immediately issues a signed and dated receipt, or a notification that the proposal is insufficient or deficient. This notification should arrive within five days, and must state in writing the grounds for the rejection.

If the proposal is not rejected then the Foreign Investment Office issues within 60 days a declaration of acceptance. The proposer may then progress with the proposal.

For investments between $5,000,000 and $50,000,000

All the procedures for investments below $5,000,000 must be followed, plus a study of the investments technical, economic, and financial feasibility. All documents must be sent in triplicate. Rejection or approval time is 120 days.

For investments above $50,000,000 or affecting areas reserved by the government, or of special interest to the national economy

All the procedures for investments below $50,000,000 must be followed. The Foreign Investment Office responds within 30 days with its evaluation, and then forwards the proposal to appropriate authorities who will rejection it, or initiate negotiations between the investor and a committee representing the State.

Labour considerations

All foreign workers must obtain visas, and if they are employed by a local company they should also obtain work permits. Work permits are allocated with consideration of the type and remuneration of the work, and the availability of workers and accommodation. Foreign employees are treated as Angolan nationals in calculating income tax, and in particular are subject to social security payments. This contribution may be waived if they can show that they are covered by an overseas scheme.

Taxes

Companies are liable to Industrial Tax (Income Tax) on all profits derived from Angolan activities. This includes the permanent Angolan establishments of foreign companies and those companies providing a service in the country for more than 90 days in the year, if made in the presence of hired personnel. The basic rate is 40%, up to Kwanza Reajustados 400M, then 50% on income in excess of this. There is a special regimes for contracting, subcontracting, and rendering of services, which operates on a contract-by-contract basis, but it does not apply to companies with a permanent establishment in the country. Companies may carry forward losses for 3 years. They may not carry back.

Dividends are subject to a capital income tax of 10%. Companies generally pay tax on the gross amount of dividends received, although it is exempt if the company paying the dividend is subject to Industrial Tax, and the recipient has held at least 25% of the companys shares for two years or since the recipients incorporation.

Personal income tax varies progressively from 0% to 15%. There is an additional 2% charge for employees, and 5% for employers, as a social security contribution.

Customs duties and Consumption Tax are levied on imports. The latter is payable at rates from 5% to 50%. Imports to oil companies are usually exempt from both, although Training Levy is payable by companies collaborating on a permanent basis with oil companies operating in Angola. It is calculated as a percentage of gross income.

Investment incentives

The Minister of Finance may grant exemption or reduction of tax liability to companies. This is done on a case-by-case basis for companies investing in fundamental areas of the economy. New enterprises may also qualify for a tax exemption for 3 to 5 years, or for Capital Income Tax to be waived.

The Foreign Investment Law permits exemptions from customs duties, again subject to Ministerial approval.

Contact addresses

I could not find information on this subject.





Benin

Background

1998 Population (M): 6
1998 GNP (USD B): 2.3

1997/98 % annual GNP growth rate: 4.5
1998 GNP per capita (USD): 380
1990-98 % annual growth of GDP: 4.6
1990-98 % inflation: 10.1

1998 Labour force (M): 3
1998 Female % of labour force: 48
1997 Adult illiteracy rate as % of people 15 and above (male): 52
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 6

1990-98 % annual growth of gross domestic investment: 4.6
1997 Private investment as % of gross domestic fixed investment: 59.5
1998 Merchandise exports (USD M): 195
1997 Foreign direct investment (USD M): 3
1997 Present value of external debt as % of GDP: 46

1998 Value added as % of GDP Agriculture: 39
1998 Value added as % of GDP Industry: 14
1998 Value added as % of GDP Services: 47

Benin has a large agricultural sector, with 70% of the population living in rural areas, many in subsistence production. The countrys income per person is low, despite steady growth of GDP over the last decade: 4.4% per year in 1990-4, then 5% per year since 1995. The expansion was associated with market liberalisation during the period, with World Bank and other foreign institutions encouraging the process, and providing financial support. Production of cotton in particular has increased, and it has become the main cash crop accounting for almost half of exports in 1999. A cotton fibre production industry has expanded along with the crop. The country still has to import significant amounts of food, however.

The services sector also accounts for a large proportion of GDP, with goods passing through to the landlocked Niger to the North, and to a lesser extent, the sizable market of Nigeria. As within agriculture, liberalising measures have been taken, and the World Bank is pressing for further opening of the economy, and anti-corruption measures. In view of the administration associated with large amounts of transit goods, this may encourage much more trade, if the domestic, Nigerien, and Nigerian demand exists for the increased supply. As may be expected, transport is a large subsector, at 6% of GDP, with road and rail both able to take goods from the main port of Cotonou to the north of the country and on to Niger. The connections to the East and West are more limited, which has hindered trade with Togo in particular, although the road network is being improved. There are 300,000 square metres of storage facilities at Cotonou, and other warehouse facilities. Competition has been introduced into the port management, and there are an abundance of funds for further development, arising from short and medium term deposits made by traders.

It is industry that remains the smallest sector, at 14% of GDP in 1998, and manufacturing was just 8%, the same as in 1980, with capital goods accounting for 32% of all imports. Chemicals, cement, fabric, palm oil, beers, carbonated drinks, and cigarettes are all produced in small volumes. Recent extensive privatisation of parastatals may help development, as may quite high primary school enrolment, to reduce the 61% illiteracy rate among adults older than 15. Energy shortages formed a restraint on industry in the first half of 1998. Domestic petroleum extraction has been falling sharply due to wells drying up, and Benin has to import a large amount of its fuel, and Benin is attempting to address its difficulties by investments in its own generation facilities. At the moment, hydropower is the principal source of electricity, although much of the population relies on wood based energy.

Benin is a member of the West African Economic and Monetary Union, and uses the CFA Franc. The Francs devaluation in 1994 preceded a jump in inflation, but since then inflation has been controlled, along with other macroeconomic indicators like fiscal deficit, and public sector debt owed to non-Beninese.

Regulations governing foreign investment

Foreign investors are entitled to the same treatment as national investors.

There are no restrictions on capital transfer.

There is commercial and management freedom.

Investors are protected against expropriation or nationalisation of their property. It may not be taken away unless it is in the public interest, and fair compensation is paid.

Legal forms

Société à Responsabilité Limitée (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

To set up a company

The first stage is to prepare the Statutes by private signature or notarial act. The expected address of the companys office should be included, and the members and shareholders of the company must sign them.

The Statutes should then be taken to the Centre of Enterprise Formalities (CFE) at Cotonou, which is part of the Benin Chamber of Commerce and Industry. This is a one-stop-shop, and all further formalities may be completed there. It is estimated to take about eight days to form a company.

Labour considerations

All employers and employees must be registered at the Social Security by completing the relevant forms when employees are hired.

Expatriates and their families may enter, leave, and move about in Benin as they wish.

Taxes

Tax on industrial and commercial profits is 38%. Single Professional Tax is similar to this, but is levied on companies with turnover below a fixed threshold. One source reports its value at 26%, another at 13%.

Businesses must pay various taxes in respect of their employees. The rate varies from 2% to 6%. There are also Social Security contributions varying from 16.4% to 19.4%.

Dividend income is taxed at 18%.

Value Added Tax is 18%.

There are no customs duties between the states of the West African Economic and Monetary Union: Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, and Togo. The countries share common taxes on imports from outside the Union, forming a set of customs charges. These are:

- customs duties,
- the statistical charge,
- the community levy (PCS),
- the conditional import tax (TCI), and
- the reducing protection tax (TDP).

The last two are temporary taxes which are intended to be reduced or removed over time.

Customs duties vary by the type of good:

- medicines, condoms, health education materials, books, and magazines are exempt from duty,
- raw materials, equipment goods, and specific production inputs are subject to a 5% charge on import cost (I am not sure whether this is a Free on Board value, or another classification),
- intermediate inputs and products are subject to duty at 10%, and
- consumer goods and all other products pay 20%.

Statistical charge is 1% on import cost.

Community Levy is 0.5%.

TCI is designed to slow the effect of international price fluctuations on West African Economic and Monetary Union production of important goods like rice and sugar. As a result, it depends on market conditions, and is set at a Union level.

TDP is levied on industries that the Union wants to protect, for example, cigarette production. It is levied at two rates, depending on the industry, 10% or 20%. In the first case, the protection reduces by 2.5% per year, while in the second it falls at 5% per year.

The Union may decide on other measures for protection.

There is a double taxation agreement with France.

Investment incentives

There are four incentive regimes in the Investment Code, depending on the size of the company:

- the Special Regime, for very small enterprises and those working in health, education, or public works,
- Regime A, for small and medium sized enterprises,
- Regime B, for large businesses, and
- Regime C, or "fiscal stabilisation", for very large companies.

The Special Regime, for very small enterprises and those working in health, education, or public works

To qualify for the Special Regime, the enterprise must either be working in the health, education, or public works sectors with investment of at least 20 million CFA Francs, or otherwise invest between 5 million and 20 million CFA Francs.

It must also meet the following conditions:
- it must be registered in the Register of Commerce,
- it must meet national accounting standards, and
- it must provide the following information:
-- a description of the manufacturing or transformation process used,
-- a list of materials and equipment required to set up the business,
-- the nature, amount, and origin of the raw materials required, and
-- the number of permanent jobs created.

While the company is being set up, it is entitled to a 75% reduction in the purchase taxes on materials, tools, and machines required for production. There is also a 75% reduction on taxes on spare parts required for imported equipment, subject to the value of the parts being less than 15% of the Cost, Insurance, and Freight value of the equipment. The statistical tax and the transport tax ("taxe de viorie") are not included in the exemption.

Further tax exemptions may be granted during the period of operation.

Regime A, for small and medium sized enterprises

Regime A has the following entry conditions:

- the enterprise must be registered in the Register of Commerce, or conform to the regulation governing the setting up of cooperatives, as relevant,
- it must meet national accounting standards,
- it must have an investment program of between 20 million CFA Francs and 500 million CFA Francs, and
- at least five permanent Beninese jobs must be created.

While the company is being set up, the benefits are:

- A 75% reduction in the purchase taxes on materials, tools, and machines required for production, as stated in the investment programme. The statistical tax is not included in the exemption. - A 75% reduction in the taxes on spare parts required for imported equipment, subject to the value of the parts being less than 15% of the Cost, Insurance, and Freight value of the equipment. The statistical tax is not included in the exemption.

While the company is operating, the incentives are:

- exemption from tax on industrial and commercial profits, and
- exemption from sales taxes on goods manufactured, prepared, or exported by the enterprise.

The durations of the exemptions are:

- five years in Cotonou and a 25 km area around it,
- seven years in the urban areas of Porto Novo, Parakou, Abomey, and Bohicon, and
- nine years elsewhere.

Regime B, for large businesses

The following requirements are made for Regime B:

- the enterprise must be registered in the Register of Commerce,
- it must meet national accounting standards,
- it must have an investment program of between 500 million CFA Francs and 3,000 million CFA Francs, and
- at least twenty permanent Beninese jobs must be created.

At present, the benefits and their duration are identical to those under Regime A. The agreed programme for exemptions may differ.

Regime C, or "fiscal stabilisation", for very large companies

To qualify for Regime C, the conditions are:

- the enterprise must be registered in the Register of Commerce,
- it must meet national accounting standards,
- it must have an investment program of at least 3,000 million CFA Francs, and
- at least twenty permanent Beninese jobs must be created.

All the advantages of regime B are granted. An additional incentive is flexibility in the method of calculation of the tax on industrial and commercial profits - I do not know how this would affect the exemption.

Contact addresses

Chambre de Commerce et d’Industrie du Bénin (CCIB)
Avenue du Général de Gaulle
BP 31 Cotonou
Tel: (229) 31.20.81 or (229) 31.22.93 or (229) 31.32.99
Fax: (229) 31.32.99

Chambre d’agriculture du Bénin
(Benin Chamber of Agriculture)
BP 04-0759 Cotonou
Tel: (229) 31.45.66

Centre Béninois du Commerce Extérieur
(Beninese Centre of Foreign Trade)
BP 1254 Place du Souvenir
Cotonou
Tel: (229) 30.13.20 or (229) 30.13.97
Fax: (229) 30.04.36

Direction des Douanes et Droits Indirects (DDDI)
(Department of Customs and Indirect Taxes)
BP 400 Cotonou
Tel: (229) 31.50.54 or (229) 31.50.55 or (229) 31.56.54

Cellule des Opérations de Dénationalisation
(Office of Denationalisation Operations - it gives information on privatisation offers.)
BP 140 Cotonou
Tel. (229) 31.59.18
Fax (229) 31.23.15
Website: http://planben.intnet.bj

Port Autonome de Cotonou (PAC)
(Autonomous Port of Cotonou)
BP 927 Cotonou
Tel.(229) 31.52.80 or (229) 31.28.90
Fax (229) 31.28.91

Centre de Perfectionnement et d’Assistance en Gestion
(Centre of Management Training and Assistance)
BP 1468 Cotonou
Tel: (229) 31.42.80

Fonds de Solidarité Nationale pour l’Emploi (FSNE)
(National Solidarity Funds for Employment - it helps with employment creation.)
Tel: (229) 31.31.12 or (229) 31.26.18

Organisation Nationale des Employeurs du Bénin (ONEB)
BP 41 Cotonou
Tel: (229) 33.13.00 or (229) 33.16.61
Fax: (229) 31.59.50

Projet d’Assistance aux Entreprises (PAE)
(Assistance Project to Enterprises - it assists newly established enterprises.)
BP 8140 Cotonou
Tel: (229) 31.33.58

Projet d’Appui aux PME (PAPME)
(Support Project for Small and Medium Sized Enterprises)
BP 08-1155 Cotonou
Tel: (229) 30.28.08
Fax: (229) 30.28.09

Centre de Promotion pour l’Emploi, la Petite et moyenne Entreprise (CEPEPE)
(Centre of Promotion for Employment and Small and Medium Sized Companies)
BP 2093 Cotonou Tel: (229) 31.44.47 or (229) 31.22.61
Fax: (229) 31.59.50

Projet d’appui au Développement de Micro-Entreprises (PADME)
(Support Project for Development of Micro-Enterprises)
BP 08-07112 Cotonou
Tel: (229) 31.05.45
Fax (229) 31.06.85





Botswana

Background

1998 Population (M): 2
1998 GNP (USD B): 5.6

1997/98 % annual GNP growth rate: 5.5
1998 GNP per capita (USD): 3,600
1990-98 % annual growth of GDP: 4.8
1990-98 % inflation: 10.3

1998 Labour force (M): 1
1998 Female % of labour force: 46
1997 Adult illiteracy rate as % of people 15 and above (male): 28
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 56

1990-98 % annual growth of gross domestic investment: 2.0
1997 Private investment as % of gross domestic fixed investment: 44.6
1998 Merchandise exports (USD M): 2,261
1997 Foreign direct investment (USD M): 100
1997 Present value of external debt as % of GDP: 9

1998 Value added as % of GDP Agriculture: 4
1998 Value added as % of GDP Industry: 46
1998 Value added as % of GDP Services: 51

Botswana is a lower middle income country whose economy has grown at 7.3% per year over the period 1970-1995. Its economic success is due in part to good fortune, as it has considerable mineral wealth, in the form of diamonds, copper, and nickel. It is the worlds largest producer of the precious stone, which accounts for the majority of its exports. Botswanas environmental circumstances do not seem favourable, with most of the country desert or prone to drought, and large-scale food imports necessary despite a quarter of the population working in agriculture. The economy in general and the mining sector in particular was undeveloped when the colonial period ended in 1966. But mineral discoveries have allowed rapid growth, together with an independent economic and foreign policy which has kept the country free of war, and with a limited debt burden.

The mining sector has grown so large that other sectors, notably manufacturing industry, are small by comparison. Their proportions of GDP in 1998 were 35% and 4.8%, respectively. This has lead to calls for increased diversification in the economy, and recent years have seen a growth in finance and other services, supported by a rising level of literacy. Illiteracy remains to a moderate degree, however, and the high level of HIV may well damage education efforts. Primary school enrolment is nearly universal.

Manufacturing growth is constrained by the limited size of the domestic market, and the ready availability of South African exports. Capital goods are among the largest classes of imports. Attempting to promote expansion whilst avoiding protectionist measures may be one of the major challenges to the economy. An example of the importance of sales to Botswanas large neighbour is in tourism, where South Africans form the largest proportion of visitors in an increasingly important sector.

The infrastructure is quite well developed and may support further business development, with a moderate density of telephone lines, and both a railway and road network. Botswana imports the majority of its electricity, with a large amount being used in mineral extraction.

Regulations governing foreign investment

I could not find information on this subject.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

Expatriate workers may be employed when skills are not available locally. In granting expatriate work permits, consideration is given to whether locals will be trained to replace the non-Botswana citizen.

The length of the period of work is specified. For five day working week, the length of the day is limited at 9 hours, with at least one hour of rest during that time. The maximum overtime is 14 hours a week, charged at 1.5 times the basic rate for normal days of work, or 2 times for rest days and public holidays.

Employees are entitled to 15 working days of paid leave every year. There are also entitlements to sick leave and maternity leave.

Statutory minimum hourly rates of pay are:

- night-watchmen, Pula 1.50,
- employees (including casual and part time workers) in wholesale trade, Pula 1.65
- employees (including casual and part time workers) in retail trade, Pula 1.55, and
- employees (including casual and part time workers) in other industries, Pula 1.75.

An employer or employee may terminate the contract of employment by giving notice. The minimum notice period is the same as the period over which wages are paid. Alternatively, immediate notice may be given if the wages are paid straight away which would be paid over the notice period. An additional severance payment is due to employees who have worked continuously for at least 60 months.

Workers Compensation Insurance is mandatory.

Taxes

Company tax is payable at 25%. Allowances may be made for expenditures on capital, plant and machinery, buildings, and training.

Dividends are liable to a 15% withholding tax. Interest is also subject to a 15% charge on payments to non-residents, but is subject to income tax for residents. Other charges like royalties are generally subject to a 15% charge when made to non-residents.

For construction contracts worth more than 5,000 Botswana Pula, there is a 25% withholding tax on payments to non-residents.

Personal income tax for residents varies progressively between 0% and 25%. For non-residents, the rate is between 0% and 30%.

Capital Gains Tax is progressive from 0% to 30%. Capital gains on shares listed on the Botswana Stock Exchange are exempt, as are those on one principal private property.

There are common customs tariffs in force within the Common Custom Area comprising of Botswana, South Africa, Namibia, Lesotho, and Swaziland. These include Ad Valorem Customs Duty, Excise Duty, and Surcharges.

Sales tax is 10% on most consumer goods. Different rates apply to alcoholic drinks.

Double taxation agreements exist with South Africa, the United Kingdom, and Sweden.

Investment incentives

The Financial Assistance Policy

The Financial Assistance Policy helps enterprises which produce or process goods for import substitution or export. It covers activities including:

- manufacturing,
- tourism,
- agriculture, except cattle rearing,
- small and medium sized mining, and
- activities providing a marketing, collection, or repair facility for the other activities.

Large-scale mining, cattle rearing, and brewing and distilling are not eligible.

Projects with fixed capital investment of less than Pula 75,000 may qualify for grants. Only Botswana citizens are eligible, and the amount is determined by considering the location of the project, whether it is owned by women, and how many jobs will be created.

Projects with amounts of fixed capital investment above Pula 75,000 could receive a range of grants. For capital between Pula 75,000 and Pula 2 million, the scheme is administered by the Department of Industrial Affairs in the Ministry of Commerce and Industry. When the capital is above Pula 2 million, the responsibility is with the Ministry of Finance and Development Planning.

These tax-free, non-refundable grants to larger companies are awarded to expanding and new businesses with a minimum economic rate of return of 6%. Preference is given to those projects that create employment. There are three types of grant:

- the Capital Grant,
- the Unskilled Labour Grant, and
- the Training Grant.

Capital Grant

The Capital Grant provides funds for the purchase of fixed assets, depending on the number of jobs created. Pula 1,000 is awarded per job created in projects which are at least partially foreign owned, and Pula 1,500 per job for projects owned entirely by Botswana citizens.

Unskilled Labour Grant

This grant reimburses the wages of Botswana citizens earning close to the statutory minimum. 80% of the wages are reimbursed in the first two years, 60% in year 3, 40% in year 4, and 20% in year 5. The reimbursements are made at 3 monthly intervals.

Training Grant

The Training Grant meets 50% of the off-the-job training costs for Botswana citizens for the first five years of the project. Tuition, board and lodging, travel, materials, and wages are included.

Contact addresses

Department of Customs and Excise
Private Bag 0041
Gabarone
Tel: (+267) 312455
Fax: (+267) 312455

Botswana Development Corporation
Private Bag 160
Gaborone
Botswana
Tel: (267) 35 1811/7
Fax: (267) 37 3539

Ministry of Commerce and Industry
P/Bag 004
Gaborone
Tel. 267-3601200
Telex. 267-2674
Fax. 267-3715349

Ministry of Finance and Development Planning
P/Bag 008
Gaborone
Tel. 267-350100

Ministry of Labour and Home Affairs
P/Bag 002
Gaborone
Tel. 267-3601000
Telex. 267-2994 BD
Fax. 267-313584





Burkina Faso

Background

1998 Population (M): 11
1998 GNP (USD B): 2.6

1997/98 % annual GNP growth rate: 6.3
1998 GNP per capita (USD): 240
1990-98 % annual growth of GDP: 3.5
1990-98 % inflation: 6.6

1998 Labour force (M): 5
1998 Female % of labour force: 47
1997 Adult illiteracy rate as % of people 15 and above (male): 70
1994 % share of income or consumption (highest 10% of population / lowest 10%): 18.0
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: 4.1
1997 Private investment as % of gross domestic fixed investment: 52.4
1998 Merchandise exports (USD M): 327
1997 Foreign direct investment (USD M): 0
1997 Present value of external debt as % of GDP: 30

1998 Value added as % of GDP Agriculture: 32
1998 Value added as % of GDP Industry: 28
1998 Value added as % of GDP Services: 40

The environment is perhaps the most important influence at present on the Burkinabe economy. Located in the Sahel, it has low levels of rainfall, and undergoes strong fluctuations in its weather. These make its export earnings volatile from cash crops which include cotton, green beans, and groundnuts. The inhospitable climate makes livestock rearing comparatively attractive, and meat accounts for 17% of export earnings in 1999, second to cotton at 53%.

Burkina Faso has been through a period of economic structural adjustment since 1991, including trade liberalisation, very widespread privatisation of State owned shareholdings, and fiscal and budgetary reform. It has seen its GDP grow at a rate of 3.5% over the years 1990 - 1998. The IMF and World Bank have supported the scheme, and foreign funds finance much Government expenditure.

A number of multinational companies have invested in the industrial sector, notably Holderbank of Switzerland (cement and other building materials), Interstart of Canada (manganese mining), and Boliden of Sweden (zinc mining). There is scope for further development, perhaps on an import substitution basis, as there has been a persistent current account deficit, and manufactures and capital goods accounted for half of all imports in 1999. Manufacturing production is concentrated among a few companies, with ten companies accounting for 80% of total subsector turnover. It is also concentrated geographically around the railway from the capital Ouagadougou to Abidjan, the largest city of the Ivory Coast, providing an important access route to the sea. The road network is an increasingly viable alternative to the railway, as investments have been made recently in its infrastructure and management.

A restraint to development is the low level of human capital. There is an 80% adult illiteracy rate, and this seems likely to persist for some time in view of the 40% primary school enrolment. There is reportedly a shortage of workforce and managerial skills.

Unlike its neighbours to the North and South, Burkina Faso is not an oil producer, and its chief domestic energy source is wood. Deforestation is a national problem, worsening the quality of the soil available for agriculture. The Government is attempting to promote gas usage and electricity production in its place, which may also provide a basis for extending modernisation into other sectors. Links have been set up for electricity exchange with the surrounding countries.

The political situation has been stable for the last decade, during which time the country has undergone a transition to democracy.

Regulations governing foreign investment

Foreign investors may use their assets and organise their enterprise as they wish. Commercial freedom is guaranteed by law.

There are no restrictions on hiring, employment conditions, or redundancies.

There is free choice of suppliers and services.

There is free access to raw materials (presumably, this means there are no Government restrictions on purchases by non-nationals). They may be moved freely within Burkina Faso, along with expendable materials, finished and semi-finished products, and spare parts.

Legal forms

The major forms in Burkina Faso are:

- Société à Responsabilite Limitee (SARL),
- Société Anonyme (SA),
- Société en Nom Collectif (SNC),
- Société en Commandite Simple (SCS),
- Groupement d’Interêt Economique (GIE), and
- individuals.

Some sources differ in the characteristics they report for these forms. For the Sociétés and the Groupement, I use the forms as they apply to member states of the Organisation for Business Law Harmonisation in Africa (OHADA). It is reported that the individual form is no longer valid under OHADA regulations, although it may persist in businesses established before the OHADA treaties are ratified. Under this form, the individual has unlimited liability, and is subject to income tax on profits at a rate which varies according to the type of business, and the size of turnover.

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

Setting up a company

The sequence to follow in setting up a company is:

- organising a constitutive assembly,
- transferring the necessary capital,
- employing a notary to prepare a declaration of the capital subscribed, and the financial condition of the members,
- preparation of the Statutes of the company by a solicitor,
- obtaining approval for the Statutes from the Department of Internal Trade and Competition,
- registering the Statutes and the minutes of the constitutive assembly at the Department of Company Property,
- registration at the fiscal division of the Department of Taxation,
- registration in the Register of Commerce at the Office of the Clerk of the Primary Court,
- inclusion in the journal of legal announcements,
- registering in the register of companies at the Department of Company Property,
- confirmation of the nature of the business at the Chamber of Commerce, Industry, and Crafts,
- getting a retailers card from the Department of Internal Trade and Competition,
- declaration at the Department of Work and Social Law,
- declaration at the ONPE (I do not know what this is), and
- registration of the employer and employees at the Department of National Social Security Fund Collection.

Documents and fees must be provided at some of these stages. These are detailed below.

Obtaining approval for the Statutes from the Department of Internal Trade and Competition

Together with the draft Statutes, the request must be stamped to the value of 200 CFA Francs.

Registering the Statutes and the minutes of the constitutive assembly at the Department of Company Property

This stage should be performed within a month of forming the company. At least five copies should be provided of the Statutes and the minutes of the constitutive assembly. There are several fees:

- 3% of all the start-up capital apart from property,
- 6% of the value of all property,
- a 4,000 CFA Francs fixed charge, and
- 400 CFA Francs per page of document deposited.

Registration at the fiscal division of the Department of Taxation

There is a form to complete.

Registration in the Register of Commerce at the Office of the Clerk of the Primary Court

There is a form to complete, and the following documents must be brought too:

- a copy of the Statutes registered at the Department of Company Property,
- a copy of the registered minutes of the constitutive assembly, and
- a declaration of company existence.

A fee of 30,000 CFA Francs is charged.

Inclusion in the journal of legal announcements

A charge of 40,000 CFA Francs is levied.

Registering in the register of companies at the Department of Company Property

The enterprise should be recorded within forty-five days of the constitutive assembly. The documents required are:

- a copy of the registered Statutes,
- a copy of the registered minutes of the constitutive assembly,
- a declaration of company existence, and
- a copy of the journal (of legal announcements, I think).

Companies with capital above 3,200,000 CFA Francs must make a down payment on income tax on dividends.

Confirmation of the nature of the business at the Chamber of Commerce, Industry, and Crafts

The investor must bring a copy of the receipt from registration in the Register of Commerce. There is a fee of 200 CFA Francs.

Getting a retailers card from the Department of Internal Trade and Competition

A form must be completed. Other requirements are:

- a photocopy of the financial statements,
- two fiscal stamps of 200 CFA Francs,
- a copy of the Statutes, and
- a form for a professional card (perhaps this is available from the Department).

The charge is 900 CFA Francs - I am not sure whether this includes the cost of stamps.

Declaration at the Department of Work and Social Law

Some forms must be completed, and there is a fee of 500 CFA Francs.

Declaration at the ONPE

There are some forms to complete, and a copy of the declaration at the Department of Work and Social Law must be provided.

Registration of the employer and employees at the Department of National Social Security Fund Collection

This step must be taken within eight days of hiring the first employee. A number of forms must be completed. Other documents required are:

- a copy of the declaration at the Department of Work and Social Law,
- a copy of the declaration at ONPE,
- birth certificates for the personnel, and
- the Register of Commerce number.

The Burkina Faso Chamber of Commerce, Industry, and Crafts estimates the total time required for all of the stages to be no more than 3-4 weeks.

Labour considerations

There is a minimum salary which varies by type of employment. It applies to all industries not otherwise regulated by collective agreements, or given special dispensation.

Overtime rates for work beyond forty hours per week are set by legislation. They are stated as percentage increases above the standard rate, excluding relocation expenses. In detail, they are:

- 15% increase for hours between the 41st and 48th hour on weekdays and Saturdays,
- 35% increase for hours beyond the 48th hour from Monday to Saturday,
- 50% increase for time worked during the night from Monday to Saturday,
- 60% increase for time worked on Sundays and public holidays, and
- 120% increase for time worked on nights of Sundays and public holidays.

The rates apply even when the employment contract specifies the job in terms of specific tasks rather than hours worked. As with the minimum salary, certain industries may be exempted from the overtime rates.

There are sixteen public holidays every year.

Domestic employees are subject to separate regulations.

Taxes

Companies are subject to tax on industrial and commercial profits. The rate varies from 10% to 40%.

Dividends and other income from shares are subject to 6% charge on gross income, deducted at source.

Companies are subject to apprenticeship tax on their gross salary bill. The rate is 4% on salaries paid to nationals, and 8% on those paid to foreign workers.

Personal income tax is progressive from 2% to 30%.

Value Added Tax is 18%.

There are various registration fees which are detailed above.

There are no customs duties between the states of the West African Economic and Monetary Union: Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, and Togo. The countries share common taxes on imports from outside the Union, forming a set of customs charges. These are:

- customs duties,
- the statistical charge,
- the community levy (PCS),
- the conditional import tax (TCI), and
- the reducing protection tax (TDP).

The last two are temporary taxes which are intended to be reduced or removed over time.

Customs duties vary by the type of good:

- medicines, condoms, health education materials, books, and magazines are exempt from duty,
- raw materials, equipment goods, and specific production inputs are subject to a 5% charge on import cost (I am not sure whether this is a Free on Board value, or another classification),
- intermediate inputs and products are subject to duty at 10%, and
- consumer goods and all other products pay 20%.

Statistical charge is 1% on import cost.

Community Levy is 0.5%.

TCI is designed to slow the effect of international price fluctuations on West African Economic and Monetary Union production of important goods like rice and sugar. As a result, it depends on market conditions, and is set at a Union level.

TDP is levied on industries that the Union wants to protect, for example, cigarette production. It is levied at two rates, depending on the industry, 10% or 20%. In the first case, the protection reduces by 2.5% per year, while in the second it falls at 5% per year.

The Union may decide on other measures for protection.

There is a double taxation agreement with France.

Investment incentives

The Investment Code defines six incentive regimes, as well as benefits for using local raw materials and investing outside of urban areas. The regimes are:

- regime A, for small investments in enterprises producing, transforming, or storing goods,
- regime B, for medium sized investments in enterprises producing, transforming, or storing goods,
- regime C, for large investments in enterprises producing, transforming, or storing goods,
- regime D, for medium sized investments in enterprises providing services,
- regime E, for large investments in enterprises providing services, and
- the regime for exporting enterprises.

All applications for the regimes must be made at the Ministry of Industry. A National Committee of Investments is responsible for assessing it.

If the application is successful, an approval decree will be sent with the following details:

- the type of regime and the incentives granted,
- the particular conditions relevant to the project,
- the list of the business activities for which the incentives are awarded,
- the list of the requirements on the enterprise, and
- the sanctions which would occur if the company defaults on its obligations.

The successful applicant must use the best possible factors of production. It must also use goods produced by local companies when these are available at the same price and quantity as imports. It should provide information to the authorities when requested, and conform to environmental, security, accounting, and other laws and standards.

The delay between granting incentives and setting up the business must be no more than three years. Beyond this, the incentives are lost, although a one year further extension may be given to an entrepreneur who shows that the project has been started by the end of the three years.

Regime A, for small investments in enterprises producing, transforming, or storing goods

This incentive scheme applies to businesses which invest less than 20 million CFA Francs, and create at least three permanent jobs.

While the company is being set up, the following incentives apply:

- exemption from customs duties and taxes,
- exemption from taxes on equipment purchases, including the first lot of spare parts, and
- total exemption from tax on locally produced equipment.

When the enterprise starts operating, the benefits are:

- exemption from the tax on industrial and commercial profits for five years,
- exemption from the minimum tax payable of industrial and commercial professions for five years,
- exemption from business rates for two years, and
- 50% reduction of business rates during the three years after the exemption ends.

The exemptions do not include taxes on services rendered, fuel, office equipment and air conditioning equipment, and hardware.

Regime B, for medium sized investments in enterprises producing, transforming, or storing goods

To qualify for regime B, an enterprise must invest at least 20 million CFA Francs, and create at least seven permanent jobs.

While the company is being set up, the following incentives apply:

- exemption from customs duties and taxes,
- exemption from taxes on equipment purchases, including the first lot of spare parts, and
- total exemption from tax on locally produced equipment.

When the enterprise starts operating, the benefits are:

- exemption from the tax on industrial and commercial profits for five years,
- exemption from the minimum tax payable of industrial and commercial professions for five years,
- exemption from income tax on dividends for five years,
- exemption from Employers' and Apprenticeship Tax for five years,
- exemption from tax on Mainmorte Goods for five years (this is tax on property revenues from groups of persons which are defined independently of the particular people who make it up), and
- 50% reduction of all the mentioned taxes for a further three years after the exemption ends.

The exemptions do not include taxes on services rendered, fuel, office equipment and air conditioning equipment, and hardware.

Regime C, for large investments in enterprises producing, transforming, or storing goods

To qualify for regime C, the investment must be above 500 CFA Francs, and at least fifty permanent jobs must be created.

While the company is being set up, the following incentives apply:

- exemption from customs duties and taxes,
- exemption from taxes on equipment purchases, including the first lot of spare parts, and
- total exemption from tax on locally produced equipment.

When the enterprise starts operating, the benefits are:

- exemption from the tax on industrial and commercial profits for six years,
- exemption from the minimum tax payable of industrial and commercial professions for six years,
- exemption from income tax on dividends for six years,
- exemption from Employers' and Apprenticeship Tax for six years,
- exemption from tax on Mainmorte Goods for six years, and
- 50% reduction of all the mentioned taxes for a further three years after the exemption ends.

The fiscal regime is guaranteed not to change during the period of approval.

The exemptions do not include taxes on services rendered, fuel, office equipment and air conditioning equipment, and hardware.

Regime D, for medium sized investments in enterprises providing services

An enterprise must invest 10 million CFA Francs or more, and create seven or more permanent jobs, to qualify for this regime.

While the company is being set up, the following incentives apply:

- exemption from customs duties and taxes,
- exemption from taxes on equipment purchases, including the first lot of spare parts, and
- total exemption from tax on locally produced equipment.

When the enterprise starts operating, the benefits are:

- exemption from the tax on industrial and commercial profits for five years,
- exemption from the minimum tax payable of industrial and commercial professions for five years,
- exemption from income tax on dividends for five years,
- exemption from Employers' and Apprenticeship Tax for five years, and
- exemption from tax on Mainmorte Goods for five years.

The exemptions do not include taxes on services rendered, fuel, office equipment and air conditioning equipment, and hardware.

Regime E, for large investments in enterprises providing services

The requirements for regime E are the investment of at least 500 CFA Francs, and the creation of thirty or more permanent jobs.

While the company is being set up, the following incentives apply:

- exemption from customs duties and taxes,
- exemption from taxes on equipment purchases, including the first lot of spare parts, and
- total exemption from tax on locally produced equipment.

When the enterprise starts operating, the benefits are:

- exemption from the tax on industrial and commercial profits for six years,
- exemption from the minimum tax payable of industrial and commercial professions for six years,
- exemption from income tax on dividends for six years,
- exemption from Employers' and Apprenticeship Tax for six years, and
- exemption from tax on Mainmorte Goods for six years.

The exemptions do not include taxes on services rendered, fuel, office equipment and air conditioning equipment, and hardware.

The regime for exporting enterprises

This regime is for new businesses which operate only in export markets.

While the company is being set up, the following incentives apply:

- exemption from customs duties and taxes on equipment, raw materials, and spare parts, except for taxes on services rendered, and
- total exemption from tax on locally produced equipment.

When the enterprise starts operating, the benefits are:

- exemption from all taxes, duties, and charges linked to exporting and production for export that the enterprise is liable for, lasting seven accounting years, and
- 50% reduction from all these taxes, duties, and charges permanently after the first seven years.

Incentives for investing outside of urban areas

New investments at least 50 kilometres from certain urban centres are entitled to an extra two years of benefits from regimes A, B, C, D, or E, if they qualify for these. The urban areas are specified by decree - the Ministry of Industry should be able to list them.

Incentives for using local raw materials

These incentives are awarded to enterprises which are expanding its operations and for which 50% or more of the value or quantity of its raw materials are from Burkina Faso. The benefits are:

- permanent exemption from customs taxes and levies, and
- permanent exemption from taxes on production equipment and spare parts accompanying them.

Contact addresses

La Chambre de Commerce, d'Industrie et d'Artisanat du Burkina
(Burkina Faso Chamber of Commerce, Industry, and Crafts)
180/220, rue 3-119
B.P. 502 Ouagadougou
Tel: (226) 30.61.14 or (226) 30.61.15
Fax: 30.61.16
Telex: 5268 BF
E-mail: ccia-bf@cenatrin.bf

Bobo-Dioulasso Office
BP 148
Tel: 98.20.77
Fax: 98.20.74
Telex: 8234

Ouahigouya Office
BP 334
Tel: 55.07.83
Fax: 55.07.84

Koupèla Office
Tel: 70.02.19

Ministère de l’Industrie du Commerce et des Mines
(Ministry of Industry, Commerce, and Mines)
B.P.514 Ouagadougou
Tel: (226) 36.13.66
Fax: (226) 36.61.16

Bobo-Dioulasso Office
Tel: (226) 97.20.24

Direction Générale de la Promotion Economique
(Department of Economic Promotion - it promotes investment)
B.P. 258 Ouagadougou
Tel: (226) 30.73.07 or (226) 30.73.42
Fax: (226) 31.14.69

Office National du Commerce Extérieur (ONAC)
(National Office of Overseas Trade)
01 B.P. 389 Ouagadougou
Tel: (226) 30.62..23 or (226) 31.13.00
Fax: 31.14.69

Conseil National du Patronat Burkinabé (CNPB)
(National Council of Burkinabe Employers)
B.P. 660 Ouagadougou
Tel: (226) 33.29.24
Fax: (226) 30.25.21

Bureau d’Appui aux Micro-entreprises (BAME)
(Office of Support for Micro-enterprises - it helps to create them)
B.P. 148 Bobo-Dioulasso
Tel: (226) 97.16.28
Fax: (226) 91.01.66

Association Femmes Solidarité (AFS)
(Association of Women's Solidarity - it supports women looking for guarantee funds and advice)
B.P.1749 Ouagadougou
Tel: 30.01.50

Projet d’Appui à la Création de Petites et Moyennes Entreprises (PAPME)
(Project of Support for the Creation of Small and Medium-sized Enterprises)
B.P.1777 Ouagadougou
Tel: (226) 97.29.41





Burundi

Background

1998 Population (M): 7
1998 GNP (USD B): 0.9

1997/98 Annual GNP growth rate: 4.6
1998 GNP per capita (USD): 140
1990-98 % annual growth GDP: -3.2
1990-98 % inflation: 12.2

1998 Labour force (M): 4
1998 Female % of labour force: 49
1997 Adult illiteracy rate as % of people 15 and above (male): 46
1997 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: -16.1
1997 Private investment as % of gross domestic fixed investment: 30.9
1997 Foreign direct investment (USD M): 1
1998 Merchandise exports (USD M): 86
1997 Present value of external debt as % of GDP: 58

1998 Value added as % of GDP Agriculture: 49
1998 Value added as % of GDP Industry: 19
1998 Value added as % of GDP Services: 32

The Burundi economy is heavily dependent on the agricultural sector, which accounts for half of GDP, with 90% of the population living by subsistence farming. Even within agriculture, activity is quite concentrated; 80% of foreign exchange earnings arise from coffee exports, making the country vulnerable to price fluctuations in international markets.

There is an emerging mining industry, which could take advantage of the countrys mineral wealth. Nickel deposits in particular show promise for future extraction. The Burundi Mining Company, a public private partnership, possesses the rights to most of the countrys gold deposits. There are no known oil, gas, or coal deposits, which gives oil importation national significance, accounting for a quarter of all imports. They are supervised by the Ministry of Industry and Trade, which controls the petroleum sector generally.

Bringing oil into the country itself causes difficulties, as sections of the road network are in disrepair. To help preserve them, the World Bank has recommended that tanker trucks transporting fuel limit their load to 30,000 litres, a reduction from the 60,000 litres previously allowed. This has caused a shortage of fuel in the country. Burundi has no rail network, and the other main distribution system consists of barges for transportation across Lake Tanganyika.

Electricity is mostly thermally generated, and concentrated in the region around the capital, Bujumbura, with a little hydroelectric power generated in rural areas. Burundi cooperates with Rwanda and Congo in electricity provision.

Ethnic violence has been a problem in Burundi for several decades, and continues to this day. Since 1993, deaths have reached 100,000 and a million people have been displaced. The economic effects have been substantial too, with a 25% contraction in GDP in the second half of the decade. Combatants recently came close to the Bujumbura, and ongoing tensions in the Democratic Republic of Congo provide a constant destabilising force. Civil war has historically meant that sanctions were applied by Uganda and Tanzania, its two large neighbours to the North and East.

Violence has also hindered the economic reform program launched in 1991. The program had World Bank support, attempting to diversify agricultural earnings, modernise the state sector, and attract foreign investment. The reforms have extended to privatisation of parastatals, with the national telecommunications operator reportedly soon to be sold. This may bring private funds to develop the sparse telephone network, where the French company Alcatel has already invested this year. More spectacularly, a foreign investor has recently established the first casino in Bujumbura, with a local partner. The World Bank and other donors have provided a number of large development loans recently.

Internet information on investing in Burundi is hard to find, so the sections on investment procedures are not included here.

Regulations governing foreign investment

I could not find information on this subject.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

I could not find information on this subject.

Investment incentives

I could not find information on this subject.

Contact addresses

Ministère des Finances
BP 1830, Bujumbura
Tél: 257 223988; Téléx: 5135; Fax: 257 223827
Ministre: M. Salvator Toyi

Banque de la République du Burundi (BRB)
BP 705, Bujumbura
Tél: 257 225142; Télex: 5071/5072 ; Fax: 257 223128; Addresse télégraphique: burundibanque
Gouverneur: M. Mathias Sinamenye

Chambre de commerce et D'Industrie du Burundi
Avenue du 18 Septembre
B.P. 313 Bujumbura
Tel: (257) 222280
Tlx: 5145 CCI BDI





Cameroon

Background

1998 Population (M): 14
1998 GNP (USD B): 8.7

1997/98 % annual GNP growth rate: 6.7
1998 GNP per capita (USD): 610
1990-98 % annual growth of GDP: 0.6
1990-98 % inflation: 6.1

1998 Labour force (M): 6
1998 Female % of labour force: 38
1997 Adult illiteracy rate as % of people 15 and above (male): 21
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 5

1990-98 % annual growth of gross domestic investment: -1.6
1997 Private investment as % of gross domestic fixed investment: 93.7
1998 Merchandise exports (USD M): 1,860
1997 Foreign direct investment (USD M): 45
1997 Present value of external debt as % of GDP: 93

1998 Value added as % of GDP Agriculture: 42
1998 Value added as % of GDP Industry: 22
1998 Value added as % of GDP Services: 36

The Cameroon economy has recently been growing at just under 5% per year, a little above the average GDP growth rate of 4% since 1970. It has low inflation at 0.8% in 1999/2000, and is registering improvements in certain export sectors. The countrys economic history has been more volatile than may appear at first glance, with very rapid expansions and contractions of the economy over the last twenty-five years.

The oil industry is an important sector, particularly for export performance, as it generates about 40% of foreign exchange in the form of crude petroleum and the products of a small refining industry. Several multinational oil companies are active in the country, including Esso, Petronas, and Chevron. Nevertheless the sector accounts for only 6% of the entire GDP of the country, and has been declining in recent years. The domestic market has also been affected by competition from Nigerian imports.

60% of the labour force works in agriculture, where 40% of GDP arises. The principal cash crops are cocoa, coffee, tobacco, cotton, bananas, palm oil, and natural rubber. They are vulnerable to both unfavourable weather conditions, and fluctuations in world prices. Manufacturing is of moderate size, producing aluminium, transport equipment, electrical equipment, beer, and cigarettes. 6% of exports are in the form of aluminium. Major parts of the service sector are transport and communication, which between them equal a third of the proportion of GDP due to services.

Cameroon uses the CFA Franc, and its fluctuations in value affect the competitiveness of Cameroons exports. The recent period of growth followed the devaluation of 1994. The country is also a member of the Central African Economic and Monetary Community, and it has 50% of the total GDP of the trading bloc. While some trade does occur with the other members - for example, oil is sold to Chad and Equatorial Guinea - most is with partners beyond the region, with France accounting for 27%, and Germany, Nigeria, and Belgium next, all below 10%. Timber sales, a major source of overseas revenue, were adversely affected by the Asian crisis.

An IMF sponsored economic reform package is being applied, aiming at improving governance and market performance. Previous efforts at increasing growth have relied on reductions in basic health and education spending. Private funds are currently increasing in telecommunications provision.

There is local Internet connection

Regulations governing foreign investment

Equal treatment of Cameroon citizens and foreign investors is guaranteed in the Investment Code.

There is protection against expropriation or nationalisation. If these are undertaken in the public interest, adequate compensation must be determined by an independent third party.

There is freedom when hiring workers, subject to the relevant labour law.

There are no restrictions on repatriation of dividends, interest, or other charges on capital.

Capital transfer and foreign exchange access is subject to the regulation of the CFA Franc Zone and the Bank of Central African States.

Legal forms

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

To set up a new business

Any new company must be licensed with the tax authorities. They must submit a stamped, handwritten application for a license, explaining the objectives of the company, and the annual turnover, or its estimate. The investors should also send two photos of themselves. I am not sure who this has to be submitted to, but the regional tax centre should be able to help.

The company must then be included in the commercial register of the local Office of the Clerk of the Court. A photocopy of the license (from the tax authorities, I think) must be brought. Nationals must also bring a photocopy of their national identity card, although I am not sure what is required for non-citizens. There is a charge of 18,000 CFA Francs.

The investor should notify the CNPS (the National Social Security Fund) of the investment.

A Taxpayer's Card must be obtained, by submitting the following documents:

- the relevant form from divisional centre of taxes,
- a certified copy of the investor's national identity card, for people,
- a certificate from the commercial register, for business entities,
- a certificate of registration with the SCIFE (I do not know what this is), and
- a money order for 1,500 CFA Francs payable to the director of taxes (directeur des impôts).

Next, the company must apply for a professional retailer’s card. I do not have any details, although the Chamber of Commerce should be able to assist here.

The final step for registration is to file the following documents with the Chamber of Commerce:

- the original license and a photocopy,
- the original document from the register of commerce, and a photocopy,
- the original SCIFE, and a photocopy,
- stamp fees of 500 CFA Francs, and
- registration fees of 5,000 CFA Francs.

The total cost for all of the above stages was estimated in 1998 at 225,000 CFA Francs.

An extra stage is to notify the Foreign Exchange Office, so that money may be repatriated.

Exporters must follow additional procedures depending on the type of product exported, although they are only time-consuming in the case of animal products. For coffee or cocoa exporters, the following documents are required, and it seems that they must be sent the to the Government Ministry concerned:

- an application stamped to the value of 500 CFA Francs,
- a certified copy of the receipt of registration in the Commercial Register,
- a certified copy of the taxpayer's card,
- a certified copy of the taxpayer's license,
- a legal declaration of good faith, and
- information on current investments.

Manufacturers who want to export must obtain a certificate of origin from the Chamber of Commerce.

Labour considerations

Employment relations are governed by the Work Code of 1992.

In all non-agricultural enterprises, the length of the working week is restricted to 40 hours, while the maximum time that can by worked in a month is 174 hours.

Children and women may not work between 6 p.m. and 6 a.m.

Temporary contracts may not last longer than two years, and may only be renewed once with the same company. At the end of the contract, any extension on the same terms becomes a permanent contract.

A national minimum salary applies, though I do not have its current rate. Holiday periods are specified by law.

Taxes

Company tax on profits is 38.5% (another source reports 38%, with a minimum payment of 1% of turnover).

Companies must pay towards to the National Fund for Social Security. The rate is calculated as a proportion of the salary bill, and varies according to the regime the enterprise is put in: the general regime, the agricultural regime, the educational regime, or the household regime. In the general regime, the employer must pay 4.2% of salary to the Fund.

Employers are liable for an additional levy for protection against accidents at work.

There is a tax from income from transferable assets. In the case of equities, shareholdings, and similar assets, the rate is 16.5%.

Value Added Tax is 18.7%.

There is a charge payable on non-essential consumer goods. It is presently 25%.

Customs duties are the same throughout the CEMAC zone. There is a common exterior tariff of:

- 5% on products considered necessities,
- 10% on primary materials and equipment,
- 20% on intermediate and various other goods, and
- 30% on consumer goods.

Goods made and sold in CEMAC countries are liable a General Preferential Tariff of 20%, which I presume replaces the charge on consumer goods.

Additional taxes on services total to 2.48% of the Cost, Insurance, and Freight charge.

There is a double taxation agreement with France.

Investment incentives

There is a range of fiscal and monetary supports available for investors in Cameroon. The classifications include:

- the base fiscal regime,
- the regime for small and medium sized businesses,
- the regime for strategic enterprises,
- the regime for reinvestment,
- the Industrial Free Zone,
- Aid and Guarantee Funds for Small and Medium Sized Enterprises (FOGAPE), and
- the National Investment Company (SNI).

All applications for entry into a regime can be made through the one stop shop, the Unit for Investment Code Management.

The base fiscal regime

To qualify for the base regime, an enterprise must meet one of three criteria:

- it must create permanent local employment, of a least one job per 10 million CFA Francs investment, or
- it must export at least 25% of its pre-tax turnover, or
- at least 25% of its inputs, excluding energy resources, must be locally produced.

For the first three years, the benefits are:

- exemption from registration charges, except those arising from constituting the company,
- exemption from transfer charges, and
- 50% reduction in company tax.

For the next five years, the non-renewable benefits are:

- 50% reduction in company tax, tax on industrial and commercial profits, and tax from income from transferable assets,
- possibility of carrying forward for up to five years losses resulting from depreciations in the first three years,
- reduction in taxable income by 0.5% of the Free on Board value of manufactures (this may not be carried forward), and
- exemption from taxes on insurance contracts.

The regime for small and medium sized enterprises

The qualifying criteria here are:

- creating permanent local employment, of a least one job per 5 million CFA Francs investment, and
- investing at least 1,500 million CFA Francs, and
- having a Cameroonian shareholding of at least 35%.

For the first three years, the benefits are the same as for the base regime. For the next seven years, the company has the same incentives as for the base regime in years 4 to 8. It also has its taxable income reduced by 25% of the salary bill paid to Cameroon citizens in the accounting period.

The regime for strategic enterprises

To be classified as a strategic enterprise, a business must:

- be declared strategic in the plan of the Director of Industrialisation, and
- create permanent local employment, of a least one job per 20 million CFA Francs investment, and
- export at least 50% of its pre-tax turnover, or
- use at least 50% local inputs, excluding energy resources.

The advantages are the same as for small and medium sized enterprises, except that the second period of incentives lasts for twelve years, not seven.

The regime for reinvestment

The requirements for the reinvestment regime are:

- predicted production increases by at least 20% compared with the value at application, or
- a proposed level of service better than the current one.

The corresponding benefits last for three years, and are:

- reduction of company tax, or personal income tax, by 50% of accepted reinvestments,
- exemption from registration charges when increasing capital, and
- exemption from registration charges on leases for real estate when it is used solely for professional purposes linked to the investment.

The Industrial Free Zone

The Zone provides incentives to exporting companies, who must meet the following criteria:

- the company must produce goods aimed solely at the export market, and
- the goods must meet environmental and security standards.

Companies benefit from the following incentives:

- exemption from all taxes for the first ten years,
- a 15% tax on profits from the eleventh year on,
- permanent exemption from all customs duties,
- exemption from licensing or other limitation on imports and exports,
- freedom from price and profit margin controls,
- ability to open foreign currency accounts,
- freedom from foreign exchange controls and restrictions on profit repatriation, subject to 25% of profits being reinvested in Cameroon,
- freedom from having to set wages by salary scales,
- free negotiation for work contracts,
- automatic right to employ expatriate workers up to 75% of total salary (I am not sure whether this is by number of workers, or total wage bill), and
- ability to use a private electricity and telecommunications network within the Zone.

To qualify, investors must apply to the National Office of Industrial Free Zones (ONZFI). The Office attempts to issue permits within thirty days of application.

Aid and Guarantee Funds for Small and Medium Sized Enterprises (FOGAPE)

FOGAPE attempts to support small and medium sized enterprises financially and technically, up to a limit of 80% of their needs. It can help them in a number of ways:

- by guaranteeing their financial commitments to financial institutions,
- by taking a share of their capital,
- by loans, including those which get some managerial control, and
- by helping in project studies, consultancy, management, and training.

The Fund has not been very active recently, and is being restructured.

The National Investment Company (SNI)

As with the FOGAPE, small and medium sized enterprises can benefit from funds from the SNI, which may take up to a 33% share in their capital, or make medium to long term loans for equipment or leasing.

Contact addresses

Société Nationale d’Investissement (SNI) (National Investment Company)
B.P.423-Yaoundé
Tel: (237) 22.44.22 or 23.10.59
Fax: 22.39.64

Cellule de Gestion du Code des Investissements (Unit for Investment Code Management)
B.P.2031-Douala
Tel: (237) 42.20.85
Fax: (237) 43.30.07

Office National des Zones Franches Industrielles (ONZFI) (National Office of Industrial Free Zones)
B.P. 925 Douala
Tel: (237) 43.33.43 or 44.45.50
Fax: (237) 43.33.17

Cameroon Chamber of Commerce Industry and Mines
Rue de Chambre de Commerce, B.P. 4011
Douala, Cameroon
Tel: (237) 42.68.55 or 42.22.14 or 42.98.81 or 42.67.87
Fax: (237) 42.55.96
Yaoundé Office:
Tel: (237) 22.47.76
Fax: (237) 22.01.55

Chambre d’Agriculture, d’Elevage et des Forêts (Chamber of Agriculture, Livestock, and Forests)
B.P.287-Yaoundé
Tel. (237) 22.28.44 or 22.38.85
Fax 22.01.55
Douala Office:
Tel: (237) 42.52.80

GUCE, Guichet Unique des opérations du Commerce Extérieur, (One-stop-shop for external trade operations)
BP 12769 - Douala
Email: guce-gie@camnet.cm
Tel: (237) 43.60.88 or 41.02.44 or 41.02.44
Fax: (237) 43.60.78

Poste d’Expansion Economique Régional de Yaoundé (Office for Regional Economic Expansion of Yaoundé)
Nouvelle route de Bastos - B.P.1026 Yaoundé
Tel: (237) 20.25.65 or 21.07.20
Fax: 21.34.64

Syndicat des Industriels du Cameroun (Syndustricam) (Union of Industrial Companies of Cameroon)
Yaoundé Office:
Tel. (237) 20.24.68
Fax (237) 21.52.86
Douala Office:
Tel: (237) 42.30.58
Fax: (237) 42.56.16

Syndicat des Commerçants Importateurs-Exportateurs (Union of importing and exporting retailers)
Douala Office:
Tel: (237) 42.60.04

Groupement Interpatronnal du Cameroun (Organisation of Cameroonian employers)
Douala Office
Tel: (237) 42.14.89
Centre CAMPUS Cameroun (business support organisation)
B.P. 15.363 Douala - Tel.(237) 43.36.57
Email : ccam@camnet.cm

Ministère de l’Economie et des Finances (MINEFI) (Ministry of the Economy and Finance)
B.P.1070 Yaoundé
Tel: (237) 22.00.31 or 22.17.00
Fax: (237) 22.49.53

Direction des Douanes (Department of Customs)
B.P.4020-Douala
Tel: (237) 42.01.33

Ministère du Développement Industriel et Commercial (Ministry for Industrial and Commercial Development)
Tel: (237) 22.44.52 or 22.50.85 or 23.33.88
Fax: (237) 22.27.04

Direction de l’Industrie (Department of Industry)
Tel: (237) 23.26.37

Ministère de l’Agriculture (Ministry of Agriculture)
B.P.1060-Yaoundé
Tel: (237) 22.51.66 or 22.05.53 or 22.19.25





Cape Verde

Background

1998 Population (M): 0.4
1998 GNP (USD B): 0.4

1997/98 % annual GNP growth rate: 4.5
1998 GNP per capita (USD): 1,060
1989-99 % annual growth of GDP: 5.4
1993-99 % inflation: 5.1

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 26%
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1989-99 % annual growth of gross domestic investment: 9.5
1997 Private investment as % of gross domestic fixed investment: N/A
1999 Private consumption as % of total consumption: 83%
1998 Merchandise exports (USD M): N/A
1998 Foreign direct investment (USD M): 14
1997 Present value of external debt as % of GDP: 36.1

1998 Value added as % of GDP Agriculture: 12.0
1998 Value added as % of GDP Industry: 16.4
1998 Value added as % of GDP Services: 71.6

After trebling in size in the 1980s, the Cape Verdean economy grew by a further 80% in the 1990s, with an annual growth of 5.4% from 1989 to 1999. The increase was particularly marked in the services sector, at over 6% each year, followed by industry (4.4% each year), and agriculture (3.7%). In 1999, almost three quarters of GDP arose from services. A 9.5% annual growth in gross domestic investment over the last decade has encouraged the growth of various light manufacturing industries, like clothing, footwear, and electronic components. Portugal and Italy have been large sources of foreign investment, but a wide range of investors have shown interest in the country, from the Canary Islands (tourism) to Hong Kong (textile manufacture). 1999 economic growth was 9.9%.

The country has been reported to be undergoing economic reforms. State owned companies have been privatised, and various incentives have been set to attract investment. The economy has a large private sector, accounting for 83% of total consumption. Foreign donors and lenders have been active in Cape Verde.

The tourist industry is quite diverse, including hotels, restaurants, travel agents, car hire companies, and souvenir shops. It contributed 4% to total GDP in 1999, and may still have potential for further expansion, as suggested by the US$243 million invested in the sector over 1994-1999. Many tourists come from Italy and Portugal.

There are now several dozen factories in Cape Verde, mostly privately owned. Manufacturing accounted for 8.5% of GDP in 1999, and a little under half of the 144 investment projects approved over 1994-1999 were in industry. It generated many of the jobs created over the period, helping to lower the year 2000 unemployment rate of 19.9%. The telecommunication sector has also seen investments, including internet connection to the islands.

Financial institutions have been part of a privatisation drive, and foreign investors play a role in the sector, with a Portuguese group being the major shareholder in the largest bank. Interest rates are moderate, with rates at the time of writing of 7.7% per year over a one year term, rising to 13.6% per year over five years. Current inflation is low, although there is a large current account deficit (19% of GDP in 1999), which may suggest high consumer spending and possible future tension.

Many of the Cape Verdean exports are agricultural, like bananas and fish, and many are in processed form. Nevertheless, despite increasing production, the country is not self-sufficient, and has to import foodstuffs.

26% of the adult population was illiterate in 1996, but this figure will be lowered by the primary education provided to all children.

Cape Verde is a member of the Economic Community of West African States, ECOWAS.

Regulations governing foreign investment

Foreign investors must be approved by the Vice Prime Minister, as outlined in the "procedures for investment" section.

There are no restrictions on repatriating dividends.

Investors may have foreign currency accounts.

Private property is protected (I think this means against nationalisation and expropriation).

Legal forms

The main business forms in Cape Verde are:

- Sociedade em nome colectivo,
- Sociedade por quota,
- Sociedade anónima,
- Sociedade em comandita, and
- Sociedade cooperativa.

Sociedade em nome colectivo

A sociedade em nome colectivo has the following characteristics:

- members share the liabilities of the company in specified proportions,
- there is no restriction on the liability of individual members, and
- liability ends when the member leaves the company.

The company should specify the value of the goods and services which each member contributes, for the purposes of dividing profits and capital.

Sociedade por quota

In this form, the members are collectively responsible for the liabilities of the company. The share for each member is specified in the company constitution. The minimum capital allowed is 200,000 Cape Verdean Escudos.

Sociedades anónimas

The sociedade anonima form has the following characteristics:

- there must be at least two members, except in certain cases mentioned in law,
- the responsibility of each member for the companys liability is equal to the value of their shares in the company,
- the minimum issued equity capital must be at least 2,500,000 Cape Verdean Escudos,
- all equities have the same nominal value,
- the equities must have a nominal value of at least 1,000 Cape Verdean Escudos, unless the statutes specifies that the equities do not have a nominal value,
- certain information must be fixed about the company (at constitution, I guess):
-- the number of equities,
-- their nominal value, or the statement that that they do not have one,
-- the conditions of transfer of equities,
-- whether the equities belong to the bearer, or whether they are owned by a named person,
-- the categories, number, or rights of each type of equity that may be created,
-- the rules for possible conversion of equities,
-- the amount of capital received, and the time span for receiving subscribed capital, and
-- the authorisation, if given, for the issue of loans.

Sociedades em comandita

Member of the sociedades em comandita form may be one of two types:

- comanditários (they are liable for the debts of the company only to the limit of their share in the company), and
- comanditados (they share the liabilities of the company in specified proportions with other members, and have unlimited responsibility for them),

The sociedade em comandita form also has two sub-types:

- simple (I think that this means that transfer of ownership is restricted), and
- por acções (with equities - the form must have at least two members).

Sociedades cooperativas

The characteristics of this form are as follows:

- the number of members may vary,
- the amount of capital is variable,
- there is freedom of membership and leaving,
- the minimum number of members is six, except for companies engaged in the marketing of goods when the minimum is twenty,
- there is no maximum limit on the number of members, unless required by law,
- each member has one vote,
- the initial issued capital must be at least 200,000 Cape Verdean Escudos,
- at least a third of the issued share capital must be received from the subscriber,
- certain information must be fixed about the company (at constitution, I guess):
-- the company name,
-- the addresses of the head office, the other offices and establishments, and the representatives,
-- the objective,
-- the term of the company, if appropriate,
-- the initial issued share capital,
-- the share capital received,
-- any increases in the minimum subscribed capital,
-- the identity of the parties involved,
-- the constitution, power, and functioning of the company, and
-- the rules of economic and financial management.

Procedures for investment

Setting up a company

There are a number of stages for setting up a company in Cape Verde:

- A certificate must be obtained confirming that there is not already a company with the proposed name. It is available from the office of registration (in Portuguese, "conservatória").
- A public notary must give an official authentication of the constituting document of the company, for example the statutes or memorandum of association.
- At least 10% of the authorised or legal issued capital must be transferred to a bank account for that purpose. A bank statement or receipt must be obtained.
- The constituting documents or statutes should be published in the Official Bulletin of the Cape Verde Government ("Boletim Oficial do Governo de Cabo Verde").
- The investor should register with the Ministry of Finance.
- The investor should register with the Department of Commerce.
- The investor should then obtain their registration certificate from the office of registration.

Foreign investment

Foreign investors must be approved by the Vice Prime Minister. They can request approval by writing to the Centre of Promotion of Tourism, Investment, and Exports (PROMEX), with the following documents:

- three copies of a completed application form,
- a summary description of the company,
- identification of the investor (I think that this would be an identity card or similar),
- the curriculum vitae of the investor, and
- the bank references of the investor.

The decision of the Vice Prime Minister should be returned within thirty days of the request. The investor may be asked for extra information. If the investment application is accepted, then an External Investor's Certificate will be issued. The investment operation must be started within the time scale agreed, or the Certificate expires.

Before the start of business, the enterprise must be inspected by the authorities. Inspection will occur within thirty days of the request for inspection being issued. I am not sure whether the Government or the investor would make the request.

Certain other foreign investment activities must be registered with a bank. Unfortunately, I do not know what these are.

Labour considerations

There are no restrictions on hiring foreign workers.

Taxes

Company income tax is levied on enterprises registered in Cape Verde, or earning income there.

Personal income tax is levied on people living in Cape Verde, or receiving income there.

Income tax rate is charged at rates of 20% and 35%.

Interest on term deposits is taxed at 20%.

Dividends and other shares in company profits are taxed at 15%. I think that profits paid to foreigners are taxed at 20%.

There is a tax (Imposto Único sobre o Património) of 2% levied on publicly traded shares, and the value of buildings. I guess that this is levied on sales of the assets.

Stamp duty charged on sales of goods and services is 0.7%.

Investment incentives

Enterprises which work in the maritime transport industry are exempt from profit tax. The exemption lasts for five years after the start of the activity.

Companies in the tourist sector are exempt from consumption tax, fees, and general emoluments on imports used in the business.

Companies and private medical clinics are exempt from customs duties and consumption tax on imports of new and modern equipment (I do not know what the precise definition would be).

Car hire companies are exempt from customs duties and consumption tax on the import of light passenger cars, if they are used exclusively in the business.

Other incentives offered include:

- support for training workers,
- provision of industrial properties, and
- administrative facilities.

Contact addresses

Centro de Promoção do Turismo, do Investimento e das Exportações (PROMEX),
(Centre of Promotion of Tourism, Investment, and Exports),
Avenida OUA,
P.O. Box 89/C,
Achada de Santo António - Praia,
Cabo Verde
Tel: (238) 62.26.21 or (238) 62.26.89
Fax: (238) 62.27.37
E-mail: promex@mail.cvtelecom.cv





Central African Republic

Background

1998 Population (M): 3
1998 GNP (USD B): 1.0

1997/98 % annual GNP growth rate: 4.5
1998 GNP per capita (USD): 300
1990-98 % annual growth of GDP: 1.5
1990-98 % inflation: 5.4

1998 Labour force (M): N/A
1998 Population aged 15-64 (M): 2
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 44
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: -5.4
1997 Private investment as % of gross domestic fixed investment: 42.2
c. 1998 Merchandise exports (USD M): 174
1997 Foreign direct investment (USD M): 6
1997 Present value of external debt as % of GDP: 53

1998 Value added as % of GDP Agriculture: 55
1998 Value added as % of GDP Industry: 18
1998 Value added as % of GDP Services: 27

The CAR relies heavily on its natural resources to generate wealth. Agriculture accounts for half of gross domestic product, while the large majority of exports are in the form of minerals or cash crops, mainly diamonds, cotton, timber, and coffee. There are reported to be substantial opportunities for expanding mining and crop production, and recent years have seen funds increasing for these purposes. The agricultural sector has not yet seen large-scale expansion into agro-industries, with the manufacturing sector restricted to only 9% of GDP in 1998. At present, much of the population works at subsistence level, and substantial amounts of food have to be imported, despite a favourable environment for production. Improvements in the world prices for CAR exports were partially responsible for the 3.5% real increase in GDP in 2000, above the 1995-2000 trend of 3.0% real growth per year.

In the last decade, the Government has followed a plan for increasing liberalisation and efficiency in the economy, in association with the IMF and foreign donors, who have helped financially and technically. The plan involves limiting public expenditure, reforming Government tax collection and debt payment, and privatisation in the formerly extensive parastatal sector, including in electricity, telecommunications, and banking. By conventional measures, the economy is becoming healthier, with inflation, government finances, and trade balances measuring recent improvements, while external debt is moderate by continental standards. Poverty and a very high adult illiteracy rate of 44% for males and 70% for women are longer term challenges. Civil and military unrest in 1996/7 gave added impetus for a change in economic performance, and improved growth may have contributed to the more stable situation since then.

The CAR uses the CFA Franc, and it is pegged to the Euro via the French Franc. Devaluations against the French currency have been very infrequent, with the last in 1994 boosting short term export competitiveness, although eroding purchasing power over the main import, capital goods. A member of the Central African Economic and Monetary Community, and with 5% of its combined GDP in 1998, the bloc nevertheless accounts for a limited amount of Central African trade. In 1998, only Cameroon was a major regional partner, at 12% of total trade, behind Franc (with 30%), and Ivory Coast (21%), and ahead of Belgium with 4%. Unlike its neighbours to the West, the CAR is not a petroleum producer, and its trade balance has been adversely affected by increases in oil prices. Economic growth was restricted as a result in 2000, with an acute shortage of fuel. Distribution and marketing has recently been passed from Government control to the multinationals Elf, Total, and Shell, as part of the privatisation campaign.

The transport infrastructure is reported to be poor, with very few roads covered in bitumen, although there are ongoing investments to improve the situation. River transport is the other possibility for transporting goods. An additional problem has been the wars in Congo, and the DRC, which has restricted sea access for this landlocked country. Over 50% of the GDP due to the service sector comes from transport, commerce or telecommunications.

Regulations governing foreign investment

The Investment Code guarantees equal treatment of foreign investors with Central African citizens. There are no controls on capital transfer, subject to the rules of the CFA Franc Zone and the Bank of Central African States. No restrictions apply on the establishment and management of companies.

Legal forms

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

To set up a company

There are number of stages to setting up a company in the CAR:

1. Registration with the Department of Tax and Property,
2. Registration with the Office of the Clerk of the Commercial Court,
3. Registration at the Chamber of Commerce,
4. Opening a bank account,
5. Registration at the Office of Licenses,
6. Registration with the Central African Office of Social Security,
7. Registration with the Ministry of Commerce, Industry, Mining, and Crafts, and
8. Registration with other relevant Ministries.

1. Registration with the Department of Tax and Property

The Enterprises Statutes must be drafted by a notary or other authorised person, and delivered to the Department. Five copies, including the original, must be provided. There are stamp and registration costs to pay.

2. Registration with the Office of the Clerk of the Commercial Court

The stamped Statutes must then be presented at the Office of the Clerk of the Commercial Court. The investor must complete a registration form for the Register of Commerce and Credit, together with three copies of it. This form varies according to whether the enterprise being set up is a sole trader or company. The Court keeps one copy of the Statutes, and one form. A tax is payable to the Office of Tax at this point.

3. Registration at the Chamber of Commerce

A company must send the following documents to the Centre of Business Procedures (CFE):

- the declaration to the Register of Commerce and Credit,
- a copy of the registered Statutes, and
- a copy of the minutes of the Constitutive Assembly.

A sole trader must submit the following information:

- the declaration to the Register of Commerce and Credit, and
- a confidential form containing information on the enterprise.

Registration charges are payable by both companies and individuals. Investors will receive a document recognising the enterprise after completing these steps.

4. Opening a bank account

A bank account must be opened with one of the commercial banks in the capital Bangui, BICA, UBAC, or BPMC (the first two have had solvency problems recently). Their addresses may be found in the contact addresses section. The following documents must be provided when opening the account:

- A declaration of the legality and correctness of the transfer. It should be made by a notary or the directors of the company. If a notary is used, then their Visa should be provided for verification purposes.
- The Statutes of the Company, or license for an individual company.
- Power of attorney or proxy.
- The minutes of the General Assembly of the investing shareholders giving the authorised signatures.

5. Registration at the Office of Licenses

A declaration must be made on the form PL - 40. After a payment, a registration number "NUMICA" is issued, which is used in subsequent administration.

6. Registration with the Central African Office of Social Security

The Central African Agency of Professional Training and Employment must be notified of the names of all salaried employees. A request for registration must be sent to the Central African Office of Social Security, together with the salaries paid by the employer.

7. Registration with the Ministry of Commerce, Industry, Mining, and Crafts

To register with the Ministry of Commerce, the following documents must be sent:

- a copy of the registered Statutes, for companies,
- a copy of the registration in the Register of Commerce and Credit,
- the letter of recognition from the Chamber of Commerce,
- the license from the Office of Licenses,
- confirmation of registration with the Office of Social Security,
- confirmation of the opening of a bank account,
- the NUMICA number,
- the retailer's card (I am not sure where to get this),
- one fiscal stamp, whose value is determined by turnover or the category of the license,
- residence permits for foreign workers,
- information on the form, objectives and methods of financing the new enterprise,
- a statistical form for retailers, available from the Minister of Commerce,
- any police records incurred more recently than three months previously (for the Chief Executive Officer or managers, I think), and
- two photographs of the Chief Executive Officer or managers.

8. Registration with other relevant Ministries

Ministerial approval must be sought for companies in medical or pharmaceutical practise, hunting, the livestock or bush meat business, or gold and diamond activity.

Labour considerations

I could not find information on this subject.

Taxes

Company Tax is 40% on companies with their own capital. A special rate is payable by those in agriculture of 25.5%. The minimum tax payable is 0.5% to 1.5% of turnover.

A separate regime applies to sole traders, who are subject to progressive income tax from 10% to 55%.

Dividends from companies are taxed at 20%, which is retained at source. For sole traders, they are taxed at 30%, also retained at source.

Value Added Tax is 18%.

Customs duties are the same throughout the CEMAC zone. There is a common exterior tariff of:

- 5% on products considered necessities,
- 10% on primary materials and equipment,
- 20% on intermediate and various other goods, and
- 30% on consumer goods.

Goods made and sold in CEMAC countries are liable for a General Preferential Tariff of 20%, which I presume replaces the charge on consumer goods.

There is a double taxation agreement with France.

Investment incentives

There are seven investment regimes, which may be classified as:

- Regime A, for small and medium sized enterprises,
- Regime B, for large investments,
- Regime C, for exporting enterprises,
- Regime D, for enterprises refitting or expanding exiting operations,
- Regime E, for agricultural, farming, and agro-alimentary industries,
- Regime F, for research and development activities, and
- Regime G, for very large investments.

The exemption periods mentioned may be lengthened for investments outside of the capital Bangui. Up to 100 km away from Bangui, one extra year is granted; for distances of between 100 km and 300 km, two extra years are given; while investments at 300 km or more from Bangui get three more years.

Regime A, for small and medium sized enterprises

To qualify for this regime, the enterprises turnover must be below 500 million CFA Francs, with investments below 100 million CFA Francs. The majority of the capital must be held by Central Africans, and at least half of the directors must be nationals. The incentives are:

- exemption from Company Tax in respect of the manufacture and sale of local products (I am not sure what the definition of local product is) for three years,
- exemption from income tax on industrial and commercial profits and BNC (I do not know what this is) for three years,
- the above taxes apply at 50% in the fourth year, then at 75% in the fifth year, and then 100% in the sixth year onwards,
- exemption from the contribution to social development for three years,
- and it applies at 25% in the fourth year, 50% in the fifth, 75% in the sixth, and 100% in the seventh onwards.

Regime B, for large investments

Companies investing at least 100 million CFA Francs are entitled to the same incentives as Regime A.

Regime C, for exporting enterprises

Enterprises that principally produce goods for export qualify for:

- exemption from Company Tax in respect of the manufacture and sale of local products (I am not sure what the definition of local product is) for four years,
- exemption from income tax on industrial and commercial profits and BNC (I do not know what this is) for four years,
- the above taxes apply at 50% in the fifth year, then at 75% in the sixth year, and then 100% in the seventh year onwards,
- exemption from the contribution to social development for four years,
- and it applies at 50% in the fifth, 75% in the sixth, and 100% in the seventh onwards,
- business rates of 20% in year 1, 40% in year 2, 60% in year 3, 80% in year 4, and 100% in year 5 onwards.

Regime D, for enterprises refitting or expanding existing operations

Enterprises refitting or expanding their operations, or which have been taken over by Central African nationals, are entitled to:

- exemption from Company Tax in respect of the manufacture and sale of local products (I am not sure what the definition of local product is) for two years,
- the above taxes apply at 50% in the third year, then at 75% in the fourth year, and then 100% in the fifth year onwards,
- exemption from the contribution to social development for two years,
- and it applies at 50% in the third, 75% in the fourth, and 100% in the fifth onwards,
- business rates of 50% in year 1, 75% in year 2, and 100% in year 3 onwards.

Regime E, for agricultural, farming, and agro-alimentary enterprises

Enterprises in the agricultural, farming, or agro-alimentary industries gain the following benefits:

- exemption from Company Tax for five years,
- and it applies at 25% in year 6, 50% in year 7, 75% in year 8, and 100% in year 9 onwards,
- exemption from the contribution to social development for five years,
- and it applies at 25% in the sixth, 50% in the seventh, 75% in the eighth, and 100% in the ninth onwards,
- business rates of 20% in year 1, 40% in year 2, 60% in year 3, 80% in year 4, and 100% in year 5 onwards.

Regime F, for research and development activities

Enterprises specialising in research and development activities qualify for the same incentives as in regime E.

Regime G, for very large investments

Companies investing over 5,000 million CFA Francs have the incentives shown below:

- exemption from Company Tax for five years,
- and it applies at 25% in year 6, 50% in year 7, 75% in year 8, and 100% in year 9 onwards,
- exemption from the contribution to social development for five years,
- and it applies at 25% in the sixth, 50% in the fifth, 75% in the sixth, and 100% in the seventh onwards,
- business rates of 25% in year 1, 50% in year 2, 75% in year 3, and 100% in year 4 onwards.

Contact addresses

Ministère de l'Énergie et des Mines,
BP 26, Bangui, RCA

Banque Internationale pour le Centrafrique - BICA
B.P 910, Place de la République, Bangui, RCA
Tel: (236) 61.00.42 or 61.17.68
Fax: (236) 61.61.36

Banque Populaire Maroco Centrafricaine - BPMC
B.P. 844, Bangui, RCA
Tel: (236) 61.31.90 or 61.12.90
Fax: (236) 61.62.30

Union Bancaire en Afrique Centrale - UBAC
B.P. 59 & 839, Rue de Brazza, Bangui, RCA
Tel: (236) 61.29.90
Fax: (236) 61.34.54





Chad

Background

1998 Population (M): 7
1998 GNP (USD B): 1.7

1997/98 % annual GNP growth rate: 4.4 (Source: World Bank Report)
1998 GNP per capita (USD): 230
1990-98 % annual growth of GDP: 4.6
1990-98 % inflation: 7.3

1998 Labour force (M): 7.4
1998 Female % of labour force: 45
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
c. 1996 Adult illiteracy rate as % of people 15 and above: 52 (male and female combined) (Source: World Bank Report)
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 1

1990-98 % annual growth of gross domestic investment: 18.6
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): 202
1997 Foreign direct investment (USD M): 15
1997 Present value of external debt as % of GDP: 35

1998 Value added as % of GDP Agriculture: 39
1998 Value added as % of GDP Industry: 15
1998 Value added as % of GDP Services: 46

The GDP growth that Chad saw in 2000 was due in part to improvements in agricultural production. The value of the cotton, meat, and cash crops which account for 39% of GDP and over 60% of exports are dependent on environmental conditions, as well as external factors, like world prices and currency movements. Land use is increasing, although the large majority of Chadians who subsist on the land may soon have to find work in the services sector, or in manufacturing, which at present is 12% of GDP. Much of it depends on agricultural inputs, like cotton fibre production, sugar refining, and cigarette, beer, and soap production. 14% of exports are manufactures, although Chad relies heavily on foreign capital goods.

Commerce is the largest contributor to the service sector, with 48% of the sectors GDP in 1998. Public administration contributed a further 24%.

Oil has recently been discovered in the South of the country, and the multinationals ExxonMobil, Shell, and ElfTotalFina have the rights to extract it, with anticipated investment of 3,000 million US dollars for an extraction facility in Chad and for a pipeline to the Cameroonian port of Kribi. Adjusting to the cash inflow will be one of many challenges the economy will have to handle in the future. The discovery may help to reduce the amount of fuel and energy Chad has to import - in 1999, they accounted for 8% of imports, and there were shortages, and problems with the rising world price of petroleum. Chad may have to expand its downstream industry to take advantage of its own wealth.

The country has made efforts to promote a stable, liberal economy in the ten years, and they have been accompanied by GDP growth and constrained inflation. One observer has said that the growth was not more marked due to a lack of capacity in the economy, while the low literacy and poor health conditions in the country may hinder development too. The World Bank is attempting to address these factors as part of wider economic assistance. 60% of the Governments development budget is from foreign aid.

As part of the scheme to liberalise the economy, a wide privatisation plan is being implemented, including State assets in banking, water and electricity provision, agribusiness, pharmaceuticals, and hotels. Future holdings to be sold will be in construction, mining, and road transport, amongst other sectors. Additional funds in transport would be a welcome addition to recent public spending for this landlocked nation, where the nearest port is over 1,000 km distant. Depending on the source of privatisation revenue, the banking system may receive more deposits, building on its currently low base.

Mirroring the economic changes, the political situation has improved over the last decade, and the country now seems to have become a stable democracy, although elections have been subject to disputes about their fairness.

Chad uses the CFA Franc as its currency, and is a member of the Central African Economic and Monetary Community, with 9% of its combined GDP in 1998. Most of Chads trade is done outside of the bloc, France alone accounting for 45%, also in 1998. However, strong regional competition can arise in certain subsectors. For example, 2000 saw heated markets for beer, soap, and paint.

Regulations governing foreign investment

Foreign investors are legally entitled to the same treatment as nationals.

Free transfer of capital is allowed, subject to the rules of the CFA Franc Zone and the Bank of Central African States.

The investment regime is guaranteed against future changes in regulations.

The Government gives certain additional guarantees to businesses it considers to be priority enterprises.

Legal forms

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

Setting up a new business

There are twelve stages to follow in setting up a business in Chad:

1. Getting the authorisation of the Minister of Commerce and Industry to practise a trade.

The following documents must be provided:

- the proposer's police record in their country of origin,
- the proposer's medical certificate,
- for non-Chadians, their resident's permit,
- the expected list of personnel,
- the expected list of materials, and
- an exhaustive list of expected business activities in Chad.

2. Depositing and registering the Statutes at the registration, estates, and stamping service.

This stage is done at the Ministry of Finance and Information Technology. There is a fee of 3% of the enterprises capital, plus 1000 CFA Francs per page of the Statutes.

3. Opening a bank account.

4. Registering in the register of commerce and credit.

The registration must be made at the N’Djaména Court of High Authority (Tribunal de Grande Instance de N’Djaména). The information to be supplied is:

- a copy of the Statutes,
- a copy of the authorisation from the Department of Commerce, and
- a deed of registration from a notary.

A fee must be paid, which varies according to the size of the capital.

5. Making a legal declaration of the existence of the company.

6. Declaration to the Department of Taxes.

The Statutes, register of commerce, and Department of Commerce authorisation must be deposited at the Department.

7. Registration in the register of employers at National Office for the Promotion of Employment.

The following documents must be provided:

- the register of commerce,
- the authorisation from the Department of Commerce,
- the companys license (I think that this is issued when registering in the register of commerce and credit),
- the tax files (I think this is issued when making the declaration to the Department of Taxes),
- the companys Statutes,
- the list of workers' names, and
- a registration request.

A registration fee is payable.

8. Registration with the National Social Security Fund for both employer and employees.

The same documents must be provided for the Fund as for the National Office for the Promotion of Employment.

9. Recording in the statistical code.

10. Preparation of the company accounts.

11. For the spouse of a civil servant, the civil service department concerned must be notified.

12. Preparation of the Foreign Resident's Card and Resident's Permit, from the National Department of Security.

Labour considerations

Salaries earned by expatriates may be repatriated freely.

Temporary contracts have a term of at most two years, with one renewal possible. If the work continues after the end of the contract, then it becomes permanent.

Employees are entitled to one month of holidays annually. I am not sure whether these are on full pay.

The minimum salary is 25,480 CFA Francs, I think on a monthly basis.

The maximum length of the working week is 39 hours.

Overtime is payable at the basic rate plus 10% for the first eight hours, and 25% beyond this. It is also payable at 25% extra for work during weekly rest days and public holidays. 50% extra is due for overtime worked at night, except during the nights of weekly rest days and public holidays, when the supplement is 100%.

Taxes

Company Tax is 45%, subject to a minimum payment of 1.5% of turnover.

Personal income tax is progressive from 20% to 65%.

Dividends and interest are both taxed at source, at 20%.

Employers are subject to social charges of 2% of gross salary, and employees to 12.5%.

Investment incentives

The current investment code dates from 1987, and provides four specialised incentive schemes:

- Regime A, for small and medium sized enterprises whose issued share capital is mainly owned by Chadians,
- Regime B, for enterprises only operating in Chad,
- Regime C, for businesses who trade in at least two states in the Central African Economic and Monetary Community (CEMAC), and
- Regime D, for large investments.

Aside for the requirements specific to each regime, all qualifying investments must be in one of the following subsectors:

- industrial transformation of primary materials,
- research,
- mining or petroleum extraction,
- energy production,
- manufacture and assembly of consumer goods,
- tourism,
- construction and civil engineering, and
- maintenance of industrial equipment.

Regime A, for small and medium sized enterprises whose issued share capital is mainly owned by Chadians

To qualify for this regime when a business is being created, the investment made must be between 15 million and 500 million CFA Francs.

Qualification may be extended beyond the initial period if the following conditions are met:

- investments plus gross fixed assets must have a value below 1,000 million CFA Francs,
- the cost of creating employment must be reduced (I am not sure what this means),
- professional training must be provided, and
- in using inputs, priority must be given to products from Chad or other CEMAC states.

The incentives apply for up to ten years, or fifteen years in the case of enterprises in regions not presently industrially developed. The incentives are:

- exemption or reduction of start-up costs,
- exemption for Company Tax, including the minimum payment,
- exemption from personal income tax,
- exemption from business rates,
- exemption from tax on rental values,
- deduction of 50% of profits retained in Chad or of certain reinvestments, for the purposes of calculating Company Tax (I am not sure why this is necessary in view of the exemption from this tax, but perhaps it applies to carrying over of losses),
- carrying over of normal depreciation during the period of exemption for up to three years after its end,
- temporary exemption for land tax, and
- priority in awards of public contracts.

Regime B, for enterprises only operating in Chad

For entry into this regime, investments must be made during its period in force of between 500 million CFA Francs and 2,500 million CFA Francs.

Lasting for up to ten years, the benefits are:

- exemption from Company Tax, including the minimum payment, for five years,
- exemption from personal income tax for five years,
- for new plants, exemption from business rates for five years,
- for new plants, exemption from TVLP for five years (I think this may be the tax on rental values),
- deduction of 50% of profits retained in Chad or of certain reinvestments, for the purposes of calculating Company Tax, for up to ten years (I am not sure why this is necessary in view of the exemption from this tax, but perhaps it applies to carrying over of losses),
- carrying over of normal depreciation for up to three years after the Company Tax exemption period ends, and
- exemption for land tax for five to ten years.

Regime C, for businesses who trade in at least two states in the Central African Economic and Monetary Community (CEMAC)

This regime only requires that the investment be made in one of the eligible subsectors. The incentives are the same as for Regime B, except that the deduction of 50% of retained profits when calculating Company Tax may last for up to fifteen years in the case of enterprises in regions not presently industrially developed.

Regime D, for large investments

Regime D applies to investments above 2,500 million CFA Francs. A Document of Establishment is put in place which guarantees, for up to twenty years, stability of taxes, fees, and other charges.

Contact addresses

Chambre de Commerce, d’Industrie, de l’Agriculture, des Mines et de l’Artisanat (Chamber of Commerce, Industry, Agriculture, Mines, and Trades)
12, rue du Colonel Moll
B.P.458, N’Djamena
Tel: (235) 52.52.64
Fax: (235) 52.14.52

Secrétariat général du Gouvernement (General Secretariat of the Government)
BP 59, N'Djamena
Tel: (235) 52.52.82
Fax: (235) 52.43.56

Ministère des Travaux Publics et des Transports (Ministry of Public Works and Transport)
N'Djamena
Tel: (235) 52.37.65

Ministère des Mines, Energie et Pétrole (Ministry of Mines, Energy, and Petroleum)
N'Djamena
Tel: (235) 52.61.57

Direction des Ressources en Eau et de la Météorologie (DREM) (Department of Water Resources and Meteorology)
BP 429, N'Djamena
Tel: (235) 52.30.81
Fax: (235) 52.30.43
Email: sacdrem@intnet.td

Office national de la main d'oeuvre (National Office of the Workforce)
N'Djamena
Tel: (235) 51.20.42

Conseil National du Patronat Tchadien (CNPT) (National Council of Chadian Employers)
17, Avenue Charles de Gaulle
N’Djamena
Tel: (235) 52.25.71
Fax: (235) 51.60.65

Syndicat National des Commerçants du Tchad (National Union of Chadian Retailers)
Syndicat Professionnel
B.P.1045, N’Djamena
Tel: (235) 52.52.64

Société de Développement du Lac Tchad (SODELAC) (Society for the Development of Lake Chad)
B.P.782, N’Djamena
Tel: (235) 51.35.03 or (235) 51.32.38
Fax: (235) 51.32.38

Société d’Exploitation et de Commercialisation des Ressources Minérales (SECOM) (Society of Exploitation and Commercialisation of Mineral Resources)
B.P.1273, N’Djamena
Tel: (235) 51.46.84
Fax: (235) 51.80.93

Centre d’Étude et de Formation pour le Développement (CEFOD) (Centre of Development Studies and Training)
BP 907, N’Djamena
Tel: (235) 51.54.32
Fax: (235) 51.91.50

Centre National d’Appui à la Recherche (CNAR) (National Centre of Research Support)
Centre de recherche
B.P.1228, N’Djamena
Tel: (235) 51.24.35
Fax: (235) 51.58.84

Poste d’Expansion Economique à Yaoundé (Cameroon based organisation, but able to provide information on Chads economic and financial situation)
Tel: (237) 20.25.65
Fax: (237) 21.34.64

Organisation Africaine de la Propriété Intellectuelle (OAPI) (African Organisation for Intellectual Property)
Division de la Propriété Industrielle et de la Technologie
BP 424, N’Djamena
Tel: (235) 52.27.33
Website: http://www.oapi.wipo.net





Comoros

Background

1998 Population (M): 0.5
1998 GNP (USD B): 0.2

1997/98 % annual GNP growth rate: 1
1998 GNP per capita (USD): 370
1990-98 % annual growth GDP: N/A
1990-98 % inflation: N/A

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 45 (Male and female)
1997 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1997 Foreign direct investment (USD M): N/A
1998 Merchandise exports (USD M): N/A
1997 Present value of external debt as % of GDP: N/A

1998 Value added as % of GDP Agriculture: N/A
1998 Value added as % of GDP Industry: N/A
1998 Value added as % of GDP Services: N/A

The Comoros economy is founded on agriculture, which accounts for 40% of GDP. The country is the worlds largest producer of ylang ylang - an oil used in the perfume industry - and the second largest producer of vanilla. World demand and prices of these exports have declined sharply in the last decade, and with them foreign exchange receipts. France is the major trading partner and foreign donor. Government expenditure is heavily dependent on foreign aid.

The geography of the islands is an important asset, with the tourist industry attracting 20,000 visitors a year. There has been recent investment from South Africa, which may help to expand the sector, although it may be hampered by political instability. There are active independence movements on some of the islands, and a coup attempt was made in March 2000.

There is some population pressure, which along with concentration of land ownership has meant that the three-quarters of Comorians who live by subsistence farming do not grow enough food to support themselves. 50% of the annual budget is spent on food, substantially accounting for the large trade deficit. It is also widened by petroleum imports, necessary because there is no indigenous upstream oil industry. Electricity is provided by a parastatal. Despite a sparse telecommunications network, there is a local Internet service provider.

Recent years have seen poor economic growth, with income per head declining. Only a tenth of the population works in the formal sector.

Internet information on investing in Comoros is hard to find, so the sections on investment procedures are not included here.

Regulations governing foreign investment

I could not find information on this subject.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

I could not find information on this subject.

Investment incentives

I could not find information on this subject.

Contact addresses

Comoros Chambers of Commerce & Industry
Union des Chambre de commerce, D'Industrie et D'Agriculture
B.P. 763
Moroni
Tel: (269) 731026
Fax: (269) 731983
Tlg: CHAMCOMER MORONI





Congo

Background

1998 Population (M): 3
1998 GNP (USD B): 1.9

1997/98 % annual GNP growth rate: 11.9
1998 GNP per capita (USD): 690
1990-98 % annual growth of GDP: 1.0
1990-98 % inflation: 7.1

1998 Labour force (M): 1
1998 Female % of labour force: 43
1997 Adult illiteracy rate as % of people 15 and above (male): 15
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 8

1990-98 % annual growth of gross domestic investment: 4.1
1997 Private investment as % of gross domestic fixed investment: 66.5
1998 Merchandise exports (USD M): 1,600
1997 Foreign direct investment (USD M): 9
1997 Present value of external debt as % of GDP: 247

1998 Value added as % of GDP Agriculture: 12
1998 Value added as % of GDP Industry: 50
1998 Value added as % of GDP Services: 39

Crude oil extraction is central to the Congolese economy, accounting for 40% of GDP and 85% of exports at the end of the 1990s, and for the predominance of the industrial sector. Discoveries and further exploration of existing fields are ongoing, and the rapid growth in production has been largely responsible for overall economic expansion. A number of multinational companies have been active offshore, including TotalFinaElf, Agip, and Esso. There are plans for reducing State involvement in oil production, as part of a wider privatisation programme.

The non-oil sub-sector, notably manufacturing, is of limited size, and capital goods, and fuel and energy are major imports, possibly including Congos own petroleum in refined form, as the downstream oil industry is very small. Goods which are manufactured or processed include beer, paint, soap, milk, and boilers. The sector has not grown much in recent years, and it has been hampered by a domestic energy supply reportedly of intermittent quality, despite Congos natural endowments.

Congo has comparatively high literacy rates, and a large urban population, about 60% of the nation. Whilst these factors may help promote industrialisation, the on-off civil war since 1993 remains a hindrance to development. The war has also aggravated a debt burden that is among the largest in the world. The World Bank is not currently lending to the country, although the donor and lending community has prepared a number of requirements for further funding, including reduction in social tension, promoting free markets, and improving public sector efficiency. Rebuilding the infrastructure following a decade of war is also a priority, with the road and rail network suffering from underinvestment. There is also an inland waterway network.

The public sector was historically the main element in the formal economy, and its productivity has been criticised, notably on state-run plantations. If private expansion is allowed, further logging of forest resources may be expected, with timber already one of the larger non-petroleum export commodities. The agricultural sector has declined in importance, although recent renovation and development funding has been made, for example in eucalyptus production. Receipts are subject to price fluctuations on international markets.

Congo is a member of the Central African Economic and Monetary Community, and a number of treaties have been put in place for fiscal and tariff harmonisation. Currently, Congo trades all over the world - in 1998, France accounted for 24% of foreign trade, the USA 10%, Belgium 9%, and China 7%.

Regulations governing foreign investment

Under the Investment Code of 1992, foreign investors may participate in any agricultural, mining, industrial, commercial, or services activity.

In June 2000, the Government and businesses prepared a national investment charter which was due to be presented to Parliament for approval. It protects foreign investments, allows free repatriation of profits, and gives them freedom in hiring workers. It will replace earlier codes.

In 1999, the Central African Economic and Monetary Community CEMAC asked its member states, including Congo, to put place a common Investment Charter, although I am not sure whether Congo has put it into force domestically yet. The Charter gives investors protection, and establishes procedures for arbitration of disputes. Other articles require:

- uniform and equitable application of economic law including between nationals and overseas investors,
- quality of information provision,
- limits on delays in responding to business requests,
- protection of intellectual property rights,
- promotion of competition, and
- compliance with Article VIII of the IMF Statutes guaranteeing free movement of capital.

Legal forms

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

Setting up a company

It has been claimed that it is possible to establish a company in Congo in less than one hour with minimal complication. For a company, there is a single form that must be completed, while a sole trader must only declare their activity. The corresponding legal papers should also be attached and taken to the Centre Congolais des Formalites d’Entreprises (CCFE). A fee has to be paid.

The remaining documents which have to be brought depend on the nationality of the investor, and whether the investor is acting on their own, or on behalf of a company.

Nationals operating on their own

These should also bring their identity card or other paper serving the same purpose, together with two copies certified by the CCFE, under the control of the Ministry of Commerce. Three identity photographs should also be brought along.

Nationals acting on behalf of a company

All the papers for a national sole trader are required, as well as four copies of the notarial statutes, mentioning the representative of the company. In the absence of these, the notes of the General Assembly authorising the purchase should be included.

Non-nationals from CEMAC states acting on their own

The investor must bring documents proving that they are allowed to stay in Congo, as well as two copies certified by the CCFE. Three identity photographs, a receipt notifying the opening of a bank account in Congo, and the commitment to effect the necessary financial transactions must accompany the documents.

Other non-nationals

Other non-nationals must set up as a company. They must present:

- documents proving that the non-nationals are allowed to stay in Congo, as well as two copies certified by the CCFE,
- three identity photographs,
- four copies of the notarial statutes, mentioning the representative of the company. In the absence of these, the notes of the General Assembly authorising the purchase should be included,
- a receipt notifying the opening of a bank account in Congo, and the commitment to effect the necessary financial transactions, and
- a legal document which is described as a commercial lease contract entailing eventually a suspensive clause concerning the administrative regularisation of the company, together with a copy certified by the CCFE.

Labour considerations

Labour relations are regulated by the Law of March 1975, and its subsequent modifications. It covers a range of different subjects, including the end of contracts, workplace hygiene, and temporary employment.

The basic length of the working week is set at 40 hours. The minimum salary payable is 40,370 CFA Francs, which may change with the cost of living, although I do not know whether the indexing is automatically linked to inflation.

There are a number of employee related taxes. These are dealt with in the section on taxes.

Authorisation cards are required for traders, exporters, and importers.

Taxes

Corporate income tax is 45% (another source reports 49%, and a special rate of 36.4% on agricultural and property companies). Dividends are taxed at 20%.

A turnover tax, TCA, is charged at 17%.

Personal income tax is progressive from 1% to 50%.

Value added tax is levied at 18% (another source reports 18.6%). There is reduced rate of 8%.

Customs duties are the same throughout the CEMAC zone. There is a common exterior tariff of:

- 5% on products considered necessities,
- 10% on primary materials and equipment,
- 20% on intermediate and various other goods, and
- 30% on consumer goods.

Goods made and sold in CEMAC countries are liable a General Preferential Tariff of 20%, which I presume replaces the charge on consumer goods.

There is a Social Security Charge on salaries of 20.78%. 17.88% is payable by the employer, with 2.9% contributed by employees. Additional taxes are family benefits of 10.03% and work accident fees of 2.25%, both payable by the employer. Old age pension of 6% of gross real salary is paid partially by the employer (3.6%), and in part by the employee (2.4%).

A double taxation agreement is in force with France.

Investment incentives

There are a variety of tax breaks for investors in Congo. Those listed below cover:

- the General Regime (Regime G),
- the small and medium sized enterprise regime,
- investments in economically less developed zones,
- development of existing businesses,
- reinvestment of profits,
- exports,
- technological innovation, and
- the guarantee and support fund.

To qualify for the two regimes, and the benefits for investments in economically less developed zones, the project must qualify under the Investment Code, which requires an application to the Minister of Economy and Planning. I am not sure whether this is necessary for the other incentives.

Any company may be able to benefit from incentives, except those in trading and brokering, weapons importation and manufacture, and the importation and treatment of toxic waste. The criteria for qualifying for the investment code and so incentives are:

- to create at least 25% of the internal value added (I am not clear what this means),
- to create permanent employ for Congolese nationals of at least 280 days every year, and either
- to use local materials for at least 30% of the primary materials necessary to produce a finished or semi-finished product, or
- to provide at least 25% of the finance before tax directly from the companys own funds.

The General Regime (Regime G)

The General Regime is available to all companies satisfying the criteria above. The incentives are:

(during the installation phase)
- reduced tax of 5% (another source reports 15%) on importing equipment, tools, technology, and vehicles needed in production and exporting, except office equipment, renovation equipment, and spare parts,
- exemption from the turnover tax TCA on equipment,
- exemption from all indirect taxes on production of equipment or industrial inputs,

(during a seven year period of operation)
- graduated reduction of taxes on profits,
- reduction of the special tax on businesses (I am unsure of what this tax is),
- exemption from charges on property, factories, and mining,
- exemption from TCA,
- reduction of 15% on charges and taxes on imports, and
- 15% reduction on one-off and indirect taxes on primary materials used.

(while the Company remains approved for the investment code)
- 50% reduction in registration and transfer fees during extension or modernisation, or increase in capital.

Small and medium sized enterprise regime

For a company to benefit from this regime, it must be registered in the register of trade, have a bank account, conform to Congolese accounting rules, and employ between 5 and 99 people. The advantages are:

- all those of the General Regime,
- exemption from all registration and transfer fees during extension and modernisation, or increase in capital while the Company remains eligible for the regime,
- exemption from taxes on funds contracted for investment programmes in small and medium sized enterprises if they have Congolese participation.

Investments in Economically Less Developed Zones (ZEMODs)

Incentives apply to investments in the regions 50km around the railway CFCO-COMILOG, and the regions of Likouala and Sangha. The benefits are:

- exemption from TCA on services and works, transfer fees, and registration fees.
- 50% reduction in business taxes for seven years,
- exemption from energy taxes for seven years, and
- allowance of a percentage of transport costs against taxable income for seven years.

Development of existing businesses

Companies investing at least 10% of current fixed assets are eligible for:

- reduced tax of 15% on importing equipment, tools, technology, and vehicles needed in production and exporting, except office equipment, renovation equipment, and spare parts, and
- exemption from the turnover tax TCA and TIT (I am unsure of what this last tax is) on equipment.

Reinvestment of profits

Tax liability on profits is reduced if profits are reinvested within 725 days of receipt.

Exports

Any company transforming their finished or semi-finished products are exempt from all export taxes and fees.

Technological innovation

A third of research costs is tax deductible.

Guarantee and Support Fund

This State owned fund supports small and medium sized enterprises (SMEs) which qualify for the Investment Code. It works in several ways, including:

- participating in credit guarantees to banks lending to SMEs,
- assisting in decisions relating to bank credit provision, and
- helping to find national and international financing.

Contact addresses

Chambre de Commerce d’Agriculture et d’Industrie du Congo (Chamber of Agricultural and Industrial Commerce of Congo)
B.P.92 Brazzaville -Tel.(242) 83.10. 89/83.30.52

Centre de Formalites des Entreprises (CFE) (Centre of Business Procedures)
B.P. 2103 Brazzaville -Tel. (242) 83.54.76 Fax (242) 83.54.02

Centre d’Information et de Documentation sur la Petite Entreprise (Centre of Information and Documentation on Small Business)
B.P. 2103 Brazzaville -Tel. (242) 83.54.76 Fax (242)

Poste d’Expansion Economique (Office of Economic Expansion)
B.P.2012 - Brazzaville - Tel. (242) 83.05.64/83.33.23 -Fax (242) 83.59.85

Office National de l’Emploi et de la Main d’oeuvre (National Office for Employment and the Workforce)
Tel.(242) 83.14.73/83.38.67

Office National Congolais du Tourisme (Congolese National Office of Tourism)
B.P. 456 Brazzaville - Tel. (242) 83.09.53

Centre Congolais du Commerce Exterieur (Congolese Centre of Foreign Trade)
B.P.127 Brazzaville -Tel. (242) 82.29.66/83.29.67

Direction de la Reglementation Economique (Department of Economic Regulation)
Immeuble du Ministère du Plan
B.P. 64 Brazzaville Tel. (242)83.43.24/83.47.74

UNICONGO (Union of Congolese Employers)
B.P. 42 Brazzaville - Tel. (242) 83.05.51 - Fax (242) 83.68.16
Pointe Noire B.P. 1713 - Tel. (242) 94.08.61 - Fax (242) 94.07.23

Direction Generale des Impôts (Department of Taxes)
Tel. (242) 83.31.61

Direction Generale des Douanes (Department of Customs)
Tel. (242) 83.40.96

Direction Generale de l’Industrie (Department of Industry)
B.P. 211 Brazzaville - Tel. (242) 83.25.92/83.15.02

Direction Generale des Mines (Department of Mines)
B.P.2124 Brazzaville -Tel. (242) 83.17.87





The Democratic Republic of Congo

Background

1998 Population (M): 48
1998 GNP (USD B): 5.3

1997/98 % annual GNP growth rate: 4
1998 GNP per capita (USD): 110
1990-98 % annual growth GDP: -5.1
1990-98 % inflation: 1423.1

1998 Labour force (M): 20
1998 Female % of labour force: 43
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1997 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 1

1990-98 % annual growth of gross domestic investment: -3.5
1997 Private investment as % of gross domestic fixed investment: 64.4
1997 Foreign direct investment (USD M): 1
1998 Merchandise exports (USD M): 530
1997 Present value of external debt as % of GDP: 215

1998 Value added as % of GDP Agriculture: 58
1998 Value added as % of GDP Industry: 17
1998 Value added as % of GDP Services: 25

With a population of 48 million people, and a surface area the size of Western Europe, the DRC has a proportionately large number of natural resources. Agriculture, where most people work, produces a variety of crops for domestic consumption and export; among the latter are coffee, palm oil, sugar, and tea. There is also an embarrassment of mineral wealth, the major source of export earnings and public revenue. It includes copper, diamonds, cobalt, manganese, zinc, uranium, tin, and gold. The country is the worlds second largest producer of industrial diamonds. There is a large potential for hydro-power, and exports from offshore oil production are also growing.

Among the largest industries are cement, engineering and agro-industries. Any manufacturing enterprise must manage the underinvestment in infrastructure. An inadequate transport system, for example, contributes to the countrys need to import food, despite the size of the agricultural workforce. It may, however, have protected forests from extensive commercial logging, at least to date, and so the resulting environmental problems have been avoided. The main export routes run to the South.

The telecommunications network connects urban areas, and has been subject to criticism. The National Telecommunication Office is seeking external partners to improve the services quality. There are several private telecom operators, with branches spread throughout the DRC. Charges are levied in US dollars. Internet connection has recently been made, and telex facilities are available.

Past decades have seen rising national debt and hyperinflation, and reports of fantastic official corruption. Coupled with a low level of GDP per capita, unevenly distributed, these factors have encouraged the growth of a large informal sector. Indeed, the country is at present in civil war, and half the country is under the control of rebel forces, making normal economic activity inevitably difficult. All the neighbouring countries involved in the "civil" war - Angola, Namibia, and Zimbabwe on the side of the government, and Rwanda and Uganda on the side of the rebels - have been accused of exploiting the DRCs mineral assets for their own benefit. The rise to power of a new president, following the assassination of his predecessor in January 2001, seems to have provided the stalled peace process with genuine impetus, although many problems still remain.

Regulations governing foreign investment

All foreign trade and exchange is subject Banque National du Congo regulation, with some responsibility delegated to banks. Imports must be paid for on their arrival or shipment. Most require only a declaration at authorised banks, in the form of a Document Préalable à l'Importation, or DPI. However, arms, narcotics, materials contrary to public morals, and certain alcoholic beverages are prohibited or require special authorisation. Special licences are also needed for petroleum products, and certain foodstuffs, like rice and sugar.

Within 15 days of arrival in the country, the imports must be declared to be for local consumption, transit, or warehousing.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

Most imports are subject to a turnover tax at rates varying from 0% to 20%.

Investment incentives

Investors may apply for exemption from Income Tax and Customs Duties under the Investment Code.

There is a Free Trade Zone at the Zone Franche d'Inga (COFI).

Samples of negligible value may be imported duty free, as may valuable samples under bond.

Contact addresses

DR Congo Chambers of Commerce & Industry
Association Nationale des Entreprises du Zaire
B.P. 7247 10, Av. des Aviateurs
Kinshasa
Tel: (24312) 22286/24623/24815/22565
Tlx: 21071 ANEZA ZR.

Board of External Trade (BET):
Contact through:
Monsieur le Directeur général
Ministère du commerce extérieur
B.P. 3095 Kinshasa/Gombe
(Tlx 42789);
Tel 33149/33150





Djibouti

Background

1998 Population (M): 0.7
1998 GNP (USD B): Estimated to be between 0.5 and 2.1

1997/98 % annual GNP growth rate: N/A
1998 GNP per capita (USD): Estimated to be between $761 and $3,030.
1990-98 % annual growth GDP: N/A
1990-98 % inflation: N/A

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1997 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1997 Foreign direct investment (USD M): N/A
1998 Merchandise exports (USD M): N/A
1997 Present value of external debt as % of GDP: N/A

1982 Value added as % of GDP Agriculture: 6%
1982 Value added as % of GDP Industry: 31%
1982 Value added as % of GDP Services: 63%

Free trade is as central to the Djibouti economy as agriculture is to some other COMESA states. It has to be; there are few natural resources in the country, a desert hinterland surrounding the capital, the port of Djibouti, where two thirds of the population lives. The economy is very open, with minimal capital controls, and the port serves as a regional free trade zone. The service sector accounted for 63% of GDP in 1982, with industry making up most of the rest.

Although the US oil company Chevron has performed a small amount of exploration, there is no established upstream oil industry. Nevertheless, downstream business is significant to the countrys industry, because the port supplies the surrounding region with petroleum products. It also provides refuelling services to ships. Distribution and marketing is controlled by the oil giants Mobil, Total, and Shell, with little government regulation. Domestic electricity generation and supply is managed by parastatals, and entirely thermally generated (in 1993).

Djiboutis geographic position means that it has access to the major undersea fibre optic cable from South East Asia to the Mediterranean and Western Europe. It may therefore be able to provide international connections to its neighbours too, perhaps using the private funds brought into the industry by the Governments plans to dispose of a stake in the national, state-run telecommunications operator. The preparatory step to privatisation was taken in 1998, with the splitting of the Office des Postes et Telecommunications into a postal service operator, a regulator, and the telecom service operator.

The port of Djibouti management has been privatised, and there are plans to double its handling capacity. The port has considerable strategic advantages: it is one of only three active ports in the Horn of Africa, it is near the busiest shipping lanes in the world, it is close to Arabian oilfields, and it is currently Ethiopias principal trade route as a result of the closure of the Eritrea passage, following the war between those two states. The last advantage may change over time, of course, due to improving relations between the former combatants, or due to Ethiopian diversification of trade routes. There certainly seems to be a future of trade along the route - the railway linking Port Djibouti and Addis Ababa is going to be improved, as part of a $40 million project with European Union funding. This may increase its current usage, which at present is less than 50% of capacity.

The road network equally needs investment. There are at present only 75km of tarmac roads, with total highways of 2,890km. The World Bank believes that distributing petroleum products by rail or pipeline, rather than road, would significantly reduce costs.

There is some domestic political unrest, and there seems to have been a coup attempt in late 2000.

Internet information on investing in Djibouti is hard to find, so the sections on investment procedures are thin.

Regulations governing foreign investment

There are few capital controls. The Djiboutian Franc is freely convertible.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

I could not find information on this subject.

Investment incentives

I could not find information on this subject.

Contact addresses

I could not find information on this subject.





Equatorial Guinea

Background

1998 Population (M): 0.4
1998 GNP (USD B): 0.6

1997/98 % annual GNP growth rate: 36.0
1998 GNP per capita (USD): 1,500
1990-98 % annual growth of GDP: N/A
1990-98 % inflation: N/A
1995-98 % inflation: 7.3 (Source: Bank of Central African States, quoted on Investir en Zone Franc)

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 20 (male and female combined)
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): N/A
1997 Present value of external debt as % of GDP: N/A

1998 Value added as % of GDP Agriculture: 19 (Source: Bank of Central African States, quoted on Investir en Zone Franc)
1998 Value added as % of GDP Industry: 75 (Source: Bank of Central African States, quoted on Investir en Zone Franc)
1998 Value added as % of GDP Services: 6 (Source: Bank of Central African States, quoted on Investir en Zone Franc)

The Equatorial Guinean economy is heavily dependent on revenues from its substantial petroleum reserves. The oil industry accounts for 60% of GDP and 90% of exports in 1998, and its contribution continues to increase. A number of multinationals have been attracted to the country, among them Mobil and Elf-Aquitaine. The current oil wealth dates back only to the middle of the 1990s, when significant oil reserves came on stream. Their discovery marked a revolution on an economy that until then had been low-income and agriculturally based. Oil production was largely responsible for GDP growth exceeding 30% per year over the period 1995-1999.

Petroleum income has allowed expenditure to improve the highway, air, and water transport infrastructure. Improvements may encourage the logging industry, which is otherwise restricted by forest protection laws, and the requirement that 60% of logs are processed locally. Until recently, there have only been a few Guinean sawmills and varnishing plants, although investments are ongoing. The recovery of Asian economies, Guineas largest export market for timber, has provided another stimulus, following loss of business in the 1998 crash. Currency fluctuations have resulted in periodic changes in export volumes, in timber and other commodities. If the CFA Franc strengthens as a result of Western African oil discoveries, then non-petroleum industries may find that exporting becomes more difficult.

Agricultures importance has declined in recent years. Cocoa and coffee, for example, were historically significant exports, but current coffee production is very small, and cocoa makes a limited contribution to national wealth, although it continues to employ large numbers of people. Domestically produced foodstuffs are said to be insufficient for the domestic population, in part due to problems with the distribution network.

The service sector is small, in part due to the very recent arrival of large amounts of capital. It may be expected to grow as the wealth is dispersed and people have greater income to spend. In this context, the transparency of public fund management has been criticised as a leading cause of continued income inequality.

Equatorial Guinea is a member of the Central African States Customs Union, and uses the CFA Franc as its currency.

Regulations governing foreign investment

Foreign firms are legally guaranteed equal treatment with local firms.

There is free movement of capital.

There is freedom of establishment and management (I think this means that business decisions are not interfered with).

Legal forms

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

To register under the Investment Code, a Spanish language dossier on the project must be sent to the Ministry of Economy and Finance. Registration earns certain fiscal advantages, although one source recommends that individual negotiation is followed with the authorities in order to obtain more favourable terms. This requires the advice of specialists in the field.

Labour considerations

I could not find information on this subject.

Taxes

Income tax on capital is 25%. There seems to be a minimum charge of 1% of turnover.

There is a turnover tax levied at 5% or 12%.

Individual income tax is progressive from 0% to 20%. There is a tax per head which varies from 500 CFA Francs to 2000 CFA Francs.

Other charges include sales tax and customs duties.

Investment incentives

Enterprises creating employment for Guinean nationals

50% of the resulting salary bill may be deducted from taxable profits.

Enterprises training Guinean nationals

200% of the training costs may be deducted from taxable profits, except salaries.

Enterprises exporting non-traditional products

Tax credits are granted up to 15% of the value of the exports.

Enterprises helping development in less developed zones

The business is exempt from tax except income tax, sales tax, customs duties, and charges on foreign operations. Infrastructure costs may be fully amortised.

Enterprises with Guinean capital participation

If over 50% of the issued capital is owned by Guinean citizens, the taxable base is reduced, as well as the minimum amount of tax due. The business does not have to get import or export licenses, nor pay ad-hoc taxes which are not specified in law.

Contact addresses

I could not find information on this subject.





Eritrea

Background

1998 Population (M): 4
1998 GNP (USD B): 0.8

1997/98 % annual GNP growth rate: -4
1998 GNP per capita (USD): 200
1990-98 % annual growth of GDP: 5.2
1990-98 % inflation: 10.1

1998 Labour force (M): 2
1998 Female % of labour force: 47
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1997 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 6

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: 53.8
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): 0
1997 Present value of external debt as % of GDP: 4

1998 Value added as % of GDP Agriculture: 9
1998 Value added as % of GDP Industry: 30
1998 Value added as % of GDP Services: 61

In the period since Eritrea gained independence in 1993, the Government has actively attempted to construct an economic policy which would promote private investment, and reduce the role of the State which from 1974 to 1989 had been extensive. The Government has established an Investment Code, and set up a Business Licensing Office for efficient issuing and renewal of licenses. Plans have been formulated to loosen central control over parastatals, and ultimately to privatise them. State-owned factories have seen their special status removed, so that they have the same treatment as private firms. There has been a rapid response to the changes, with the number of private enterprises doubling in a few years from its 1991 mark of 684, the year of the collapse of the socialist military regime.

The new policy in fact marks a return to the pre-1974 situation, which may indicate the shape of things to come. There were 165 manufacturing plants in 1970, with assets of Birr 300M (at 1996 exchange rates, about $50M). After independence, the number had fallen to 39, with operating problems due to lack of raw materials, machinery, and skilled workforce. In 1974 there was also a well-developed system of road and rail, dating back to the Italian occupation. The government is looking for foreign aid and private investment to rebuild the infrastructure. As another possible indication of the future, most of the pre-1974 private sector was under foreign ownership.

Until recently, the port of Assab was Ethiopias main outlet for imports and exports. However, the outbreak of the Ethio-Eritrean war closed that route, and despite the recent ceasefire, may stay shut for some time. If relations are normalised in the future, then Massawa may also serve as a similar trading centre for North Ethiopia, as well as for Eritrea itself, although the port was heavily damaged by the civil war from 1975 to 1991. Resumption of the former trading relationship may also boost the economy more generally, which had been damaged by the war with one of Eritreas major trading partners.

Although when unified with Ethiopia, the Eritrean region had produced up to 40% of total Ethiopian manufacturing output, 80% of the population lives in the countryside. Sorghum, cotton, teff (a crop found mainly in the Horn of Africa), and citrus fruits are grown, but agricultural productivity is low, and historically food imports were necessary. Drought and war has meant that 85% of the population rely on food aid. Deforestation, with consequent soil erosion, has also contributed to the problem.

Electricity is thermally generated, and available only in major towns. Capacity is limited at present, but is being upgraded. Oil exploration is ongoing, and shows some promise, with investments by Agip, Anadarko, and Shell, amongst others. There are also other mineral deposits, like gold, copper, and zinc, although their precise size is unknown.

Tourism may also prove to be a growth sector, but needs investment. The instability of relations with Ethiopia may also hamper development.

A low domestic saving ratio together with demand for short-term deposit accounts has resulted in banks lacking funds to support large-scale investment projects. As a result, worker remittances and direct investment from overseas are important in industrial development.

Regulations governing foreign investment

There are no exchange controls on the repatriation of either dividends or capital.

Official policy is to treat foreign investors on an equal basis with locals in securing access to land, utilities, and other production inputs. There is protection against nationalisation or confiscation.

Regulations governing foreign investment

I could not find information on this subject.

Legal forms

I could not find information on this subject.

Procedures for investment

A central licensing system has been introduced, the Business Licensing Office (BLO). A single business license is required, covering all activities entailed in the enterprise. It seems to be the case that the BLO also arranges clearance from government departments, making it a true one-stop-shop.

Labour considerations

The current labour law regulates:
-minimum working conditions,
-employee and worker associations,
-procedures for collective bargaining and resolution of disputes,
-powers and duties of the state in resolution.

There is no statutory minimum wage.

Work permits for foreign workers are granted when there is no local expertise available.

Taxes

Duty on imports of capital and intermediate goods, spare parts, and raw materials is 2%. There is an additional sales tax of 3% on imports of raw and part-finished materials.

All imports for re-export are duty-free. Exports are exempted from sales and export taxes.

Investment incentives

The State will enter into joint ventures with the private sector, and will take up to 20% of the equity capital in strategic oil and gas projects.

Contact addresses

I could not find information on this subject.





Ethiopia

Background

1998 Population (M): 61
1998 GNP (USD B): 6.1

1997/98 % annual GNP growth rate: -0.8
1998 GNP per capita (USD): 100
1990-98 % annual growth of GDP: 4.9
1990-98 % inflation: 7.9

1998 Labour force (M): 26
1998 Female % of labour force: 41
1997 Adult illiteracy rate as % of people 15 and above (male): 59
1995 % share of income or consumption (highest 10% of population / lowest 10%): 11.2
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: 15.4
1997 Private investment as % of gross domestic fixed investment: 56.6
1998 Merchandise exports (USD M): 551
1997 Foreign direct investment (USD M): 5
1997 Present value of external debt as % of GDP: 131

2001 Value added as % of GDP Agriculture: 50% (source: direct link from the COMESA website)
2001 Value added as % of GDP Industry (manufacturing): 15% (source: direct link from the COMESA website)
2001 Value added as % of GDP Services (balancing item): 35%

Agriculture is the predominant element in the Ethiopian economy, accounting for 50% of GDP and the employment of 85% of the workforce of approximately 24 million. 85% of exports arise in this sector, coffee alone generating 60% of foreign exchange earnings. The land has scope for further development, with one report suggesting a substantial increase in utilisation may be possible, although the marginal productivity of the extra land may decline, and land degradation and desertification are imminent threats. The livestock wealth of the country is said to be substantial, albeit with a small contribution to the formally accounted national economy. Food production was subject to collectivisation efforts in the 1980s, but only increased rapidly after the liberalisation of the market at the end of the decade. Nevertheless, 2 million people still required food aid in 1999. Price controls and state controlled farms have been abandoned in favour of a free market.

The present Government has ruled since 1991, after seventeen years of a military socialist regime. The economic reforms launched since their accession have included decreasing the role of central control over parastatals, authorisation of private sector involvement in sections of the economy previously reserved for parastatals, tax cuts, and promotion of foreign and domestic investment including the establishment of a one-stop-shop for potential investors. Despite some dissent, the Government has recently won internal support for its present policies. Growth of GDP in the period 1990-1998, at 4.9%, has resumed its rate prior to 1974 (4% between 1965 to 1974), after dipping during the civil war period 1974-1991 to 1.5%. The recent war with Eritrea seems likely to have caused damage to the economy, although a short-term boost may have occurred, stimulated by government war spending.

In contrast to subsistence agriculture, the industrial sector is small, at 11% of GDP, and only 3% of total employment. It depends heavily on imports of semi-processed goods, raw materials, spare parts, and fuel, and is limited by low educational levels and literacy. There is also a weak transfer of resources between the modern sector and the agricultural sector, both in technology and in the availability of waged labour. Only 20% of the highway network is paved, and large sections of the country are inaccessible to modern transport. In particular, they are difficult to reach by road, which handles over 90% of freight and passenger transport.

Presently constrained by capital shortage, there is considerable potential for mining, including for gold, platinum, marble, and oil. The downstream oil industry is significant, with 45% of export revenues being used to buy petroleum. There are a variety of other coal, gas, and renewable sources. Electricity is provided by a State-run company.

The telecommunications industry has been part of the recent economic reforms, but despite liberalisation, there have reportedly been no new operators to date (at March 2001), with the market still controlled by a parastatal. Available connections are insufficient to meet demand, and are concentrated in urban areas. A number of public-private partnerships are being considered, including for rural connection and Internet provision.

Regulations governing foreign investment

The Government alone may invest in defence, large scale electrical production and supply, large scale air transport services, rail transport, and telecommunications and postal services excepting courier services.

Only Ethiopian nationals may hold investments in banking and insurance, small-scale electrical production and supply, and small scale air transport.

Where the investment exceeds $20 million, then foreign investors may hold a share of up to 73% in the following industries: engineering and metallurgical industries, pharmaceuticals, basic chemical and petrochemicals, and fertilizers.

All other sectors are open for foreign investment. Where a local partnership is set up, the equity share of the domestic partner must be at least 27%.

There are minimum capital requirements for foreign investment, of $500,000 for a single investment project, or $300,000 when in partnership with a local investor, or $100,000 for a new project financed from an existing project.

Foreign investors require a permit from the Investment Authority. The Authority must also approve beforehand the purchase of existing enterprises.

Investments have legal protection against confiscation and nationalisation, except when in the public interest, and then fully compensated at market value.

The National Bank of Ethiopia controls all foreign exchange operations, and transactions must be executed by authorised dealers. There are no restrictions on remittance of profits, dividends, principal, interest, and proceeds from the sale or liquidation of companies. The latter is exempt from Capital Gains Tax. Balances in non-resident foreign currency accounts may be transferred abroad. Borrowing abroad requires approval.

Permits for exports and their payment must be obtained from the Exchange Controller at the National Bank. Imports are also subject to licensing.

Legal forms

A number of forms are available for investment: sole proprietorship; business organisations incorporated in Ethiopia or abroad; public enterprises; partnerships; and cooperative societies.

Procedures for investment

An application for an investment permit must be made to the Investment Authority, in a form containing the following information:

-project profile,
-list of the equipment intended to be exempted from import duties and taxes,
-for a business, the memorandum and articles of association,
-in the case of expansion or upgrading, a brief description of the plans and their implementation,
-where expatriates will be employed, a statement on the time schedule for their replacement by Ethiopians, and the training program to assist the replacement,
-other relevant information.

If the application is complete, and the investment complies with the law, including environmental regulations, then the permit will be issued within 10 days.

Labour considerations

An investor may employ expatriate managers and experts if equally qualified Ethiopians are not available.

There is a minimum wage in force for unskilled labour of Birr 120 per month ($20 per month at 1996 exchange rates).

A new labour law is in force, regulating the start and end of labour contracts.

Taxes

Corporations pay income tax at 35%. Dividends are subject to a withholding tax of 10%.

Personal income tax varies progressively from 0% to 40%.

Sales tax has rates of 4% (on selected agricultural and essential goods) and 12%. Exports are not subject to tax except on coffee.

Customs duty, payable on imports, varies from 0% to 50%.

Excise tax is payable on selected items, and varies from 0% to 200%.

Investment incentives

Certain types of investment activities are encouraged, known as "pioneer" or "promoted" activities. Pioneer activities include those related to irrigated agriculture, some sections of rain-fed agriculture, and high-tech or capital good manufacture. Promoted activities include other rain-fed agriculture, livestock farming, and consumer good manufacture. A full list may be found at http://www.telecom.net.et/investment.htm.

If an foreign investor puts $500,000 or more of capital into the enterprise, or $300,000 in the case of joint venture with a local partner, then the investor is exempt from income tax for the following periods, dependent on the region of investment.

If the investment is within a 15 km wide corridor running from Addis Ababa to Nazareth, inclusive, along the main highway, then the period of exemption is 3 years for pioneer activities, and 1 year for promoted activities.

If the investment is in relatively underdeveloped regions such as Gambella, Beneshangul, and other regions determined by the investment board, the exemption is for 4 years for pioneer activities, and 3 years for promoted activities.

For all other regions, the periods are 4 years for pioneer activities, and 2 years for promoted activities.

Exemptions are also available following the expansion or upgrading of existing enterprises. The period is 2 years for pioneer activities, and 1 year for promoted activities.

A pioneer investor incurring losses whilst exempted are able to carry forward those losses for the following periods: 3 years (for investments along the Addis Ababa - Nazareth highway); 5 years (relatively undeveloped regions); 5 years (other regions). In the case of promoted activities, the periods are 3 years, 4 years, and 3 years, respectively.

Investors in pioneer and promoted goods are exempt from customs duty on machinery and equipment necessary for the establishment of a new enterprise or upgrading of an existing one.

Capital goods may be imported duty free. There are miscellaneous other items which also qualify, including investments in:

-agriculture,
-manufacturing,
-construction,
-tourism,
-education,
-health services,
-transport and storage,
-engineering and technical consultancy,
-waste disposal,
-electrical energy generation,
-petroleum refining.

Research and development expenses are deductible from taxable income.

Contact addresses

Ethiopian Investment Authority
Public Enterprise Supervising Authority
Tel. 251-1-51-00-33
Fax 251-1-51-43-96
Telex 251-1-21-57-2
P. O. Box 2313
Addis Ababa, Ethiopia

Customs and Excise
Contact: General Manager
Ethiopian Customs Authority
P.O. Box 3248
ADDIS ABABA
(Tlx 21117);
Tel 513100;
Fax 518355





Gabon

Background

1998 Population (M): 1.2
1998 GNP (USD B): 4.6

1997/98 % annual GNP growth rate: 5.7
1998 GNP per capita (USD): 3,950
1990-98 % annual growth of GDP: N/A
1995-98 % annual growth of GDP: 4.3% (source: Investir en Zone Franc)
1990-98 % inflation: N/A
1995-98 % inflation: 4.4% (source: Investir en Zone Franc)

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 37%
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): N/A
1997 Present value of external debt as % of GDP: N/A
1997 Undiscounted value of external debt as % of GDP: 56.7

1998 Value added as % of GDP Agriculture: 9 (source: Investir en Zone Franc)
1998 Value added as % of GDP Industry: 48 (source: Investir en Zone Franc)
1998 Value added as % of GDP Services: 43 (source: Investir en Zone Franc)

Gabon is an upper middle income economy. The extraction and trade of natural resources is the guiding force behind the Gabonese economy, particularly the petroleum sector which accounts for over 40% of GDP (1998), three quarters of exports (1998), and most economic growth in recent years. Extensive forests provided the timber for another 14% of exports, and manganese was a further 7%. As a result, volatility of commodity prices and exchange rates can result in substantial changes in national accounts, and challenges with financing of public projects, as happened after the loss of East Asian markets in 1998 when they suffered a slump. Other agricultural products include rubber, palm oil, sugar, coffee, and cocoa.

Parastatal involvement in the economy was formerly widespread, but is being reduced by a privatisation programme including telecommunications, airlines, railways, and agribusinesses. The timber subsector is also being targeted for a greater role of private capital, which may help to increase the amount of wood processing done before export. At present, over 90% of wood is not processed before it leaves the country. Petroleum refining may have similar growth prospects, and the whole manufacturing sector has room for expansion, in view of its current small size - only 7% of the economy in 1998 - and ready labour availability. Present manufactures include textiles, chemicals, flour, cigarettes, and beer.

The 1997 unemployment rate was 21%, with the figure among the young even higher, and rapid population growth may increase this figure still further. 37% of the population are illiterate, and the unemployed may generally be unskilled workers, as elsewhere. With three-quarters of the population living in towns and cities, and as Gabon is not self sufficient in food, the creation of new jobs is a critical issue for the country. Some work may be found in infrastructure projects, like the ongoing road improvement programme. Transport, communications, and public administration together were over 40% of the service sector in 1998.

Gabon is a member of CEMAC (the West African Economic and Monetary Community), and is the second largest economy is the sub-region, after Cameroon. It use the CFA Franc as its currency, and has France as its largest trading partner by far (40% of total trade), followed by the USA, the Netherlands, and Cameroon, each at about 6%.

Regulations governing foreign investment

The Gabonese Investment Code of 1998 guarantees equal treatment of foreign and domestic investors. It also establishes freedom of profit repatriation and business establishment and management. Capital transfer and foreign exchange access is subject to the regulation of the CFA Franc Zone and the Bank of Central African States.

Legal forms

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Branch

The Minister of Commerce may grant permission for a branch to be established for up to two years, if a contract for business in Gabon is provided. After two years, a company must be set up under local law.

Procedures for investment

There is a one-stop-shop which investors may approach with proposed investments. It sends the details to the relevant authorities and their responses to the investors. This process is claimed to take no more than three days, at the end of which the investor is either rejected, or issued with registration numbers.

For certain sectors, including mining and timber, approval must be additionally granted by the relevant Government ministry. There is a delay of no more than thirty days. The same is true of certain professions, where the delay is fifteen days.

Labour considerations

The Labour Code is reported to be quite wide in its application, covering permanent and temporary contracts, and specifying minimum wages and dismissal procedures.

Foreign workers who are employed in Gabon for more than three months must obtain entry authorisation from CEDOC (the Department responsible for Documents), and work authorisation from the Ministry of Labour. The latter requires a commitment from the employer to repatriate the worker and his family.

Taxes

I do not have information on the rates of company tax, nor personal income tax, nor Value Added Tax.

Newly registering companies are subject to a number of taxes in relation to their issued capital. They are also liable to a 5% charge when they use reserves, provisions, profits, or mergers to increase that capital. Other increases are subject to a 1% tax.

Companies must pay a basic charge of 20.1% on their salary bill. There are several additional charges, like a professional training tax of 0.6%.

Insurance tax is levied at rates between 5% and 30%, according to the risk.

Rent tax is 15% on gross income from buildings built by the lessor. It is one of several taxes on property.

Subcontractors in the petroleum industry may be exempted from company tax, personal income tax, and taxes based on their wage bill. Instead, they may be charged only based on their net turnover. They also exempted from Value Added Tax on their business with oil companies. This exemption also applies to suppliers to oil companies.

Foreign workers are subject to Gabonese tax if they spend more than 183 days per year in the country, or are paid by a Gabonese employer or a permanent foreign establishment.

Customs duties are the same throughout the CEMAC zone. There is a common exterior tariff of:

- 5% on products considered necessities,
- 10% on primary materials and equipment,
- 20% on intermediate and various other goods, and
- 30% on consumer goods.

Investment incentives

FODEX (Funds for the Expansion and Development of Small and Medium Sized Gabonese Enterprises)

FODEX is a public body that supports small and medium sized business in the following ways:

- it will grant investment funds of up to 70% of the project cost,
- it will grant loans,
- it will guarantee loans of up to 50% of the capital value, and
- it will pay half of the costs of feasibility studies and of business consultants’ costs in the first three years of operation.

To qualify for FODEX support, a company must be in one of the following sectors:

- manufacturing,
- mineral, oil, or gas extraction,
- timber,
- fishing,
- agriculture, and
- services or trading.

It must also meet the following conditions:

- it must be a private enterprise registered under Gabonese law,
- Gabonese nationals or companies must hold at least 51% of the capital,
- it must have a turnover of no more than 1,000 million CFA Francs, and
- its investment scheme must be no greater than 150 million CFA Francs.

Fonds d'Aide et de Guarantie aux PME (Funds for Aid and Guarantee to Small and Medium Sized Enterprises)

Like FODEX, these are public funds for small and medium sized businesses. The benefits include:

- loans up to 15 million CFA Francs at relatively low interest rates,
- payment of the difference in interest rates between a commercial loan to the enterprise and the rate payable on its own funds,
- participation in the capital of the enterprise, subject to the company buying it back within five years, and
- guaranteeing commercial loans up to 80% of the value of the principal and interest.

The following conditions must be met to access the Funds:

- the company must be small or medium sized,
- the project must be sufficiently profitable to ensure the debt can be repaid and the enterprise can grow, and
- the promoter must be of good character.

During the period the benefits are granted:

- the benefits must be used only for the intended purposes,
- any goods given to the funds in guarantee must not be used for the same purpose elsewhere,
- a bank account must be opened in the enterprises name, and
- regular bookkeeping must be performed.

Contact addresses

Chambre de Commerce, d’Agriculture, d’Industrie et des Mines du Gabon (Gabonese Chamber of Commerce, Agriculture, Industry, and Mines)
B.P. 2234 Libreville
Tel. (241) 72.20.64
Fax (241) 72.14.20

Ministère du Commerce, de l’Industrie, des PME, PMI et de l’Artisanat (Ministry of Commerce, Small and medium sized companies and industries, and Crafts)
B.P.3096 Libreville
Tel. (241) 74.54.25
Direction Generale du Commerce: Tel. (241) 74.59.25
Direction Generale de l’Industrie: Tel. (241) 76.34.21

Ministère des Finances, de l’Economie (Ministry of Finance and the Economy)
B.P. 165 Libreville
Direction Generale du Budget: Tel. (241) 76.37.63

AGROGABON (Society for agricultural development in Gabon)
Libreville
Tel. (241) 76.40.82
Fax (241) 76.44.72

PROMOGABON (Organisation for training and support in enterprise creation)
B.P. 2111 Libreville
Tel. (241) 74.89.57/58
Fax (241) 74.89.59

Direction Generale du Travail de la Main d’Oeuvre et de l’Emploi (Government department of labour, the workforce, and employment)
Tel. (241) 76.38.43

Poste d’Expansion Economique Regional de Libreville (Libreville office of regional economic expansion)
B.P. 936 Libreville
Tel. (241) 74.32.73/76.04.78
Fax (241) 74.70.34

FODEX - Fonds d’Expansion et de Developpement de la Petite et Moyenne Entreprise Gabonaise (Funds for the Expansion and Development of Small and Medium Sized Gabonese Enterprises)
B.P.3896
Tel. (241) 77.50.34/77.50.33
Fax (241) 77.50.34





Gambia

Background

1998 Population (M): 1.2
1998 GNP (USD B): 0.4

1997/98 % annual GNP growth rate: 5.0
1998 GNP per capita (USD): 340
1989-99 % annual growth of GDP: 2.8
1990-98 % inflation: N/A
1993-99 % inflation: c. 3.5%

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1997 Adult illiteracy rate as % of people 15 and above (male and female combined): 67
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1989-99 % annual growth of gross domestic investment: 4.4
1997 Private investment as % of gross domestic fixed investment: N/A
1999 Private consumption as a % of total consumption: 86
1998 Total exports (USD M): 130
1997 Foreign direct investment (USD M): N/A
1999 Present value of external debt as % of GDP: 55.7

1998 Value added as % of GDP Agriculture: 33.2
1998 Value added as % of GDP Industry: 12.7
1998 Value added as % of GDP Services: 54.1

A small and open economy, the Gambia has specialised in developing its services sector, particularly tourism and trade. Over half of GDP arises from these industries, and half of GDP is exported. The economy has seen reasonable success, with a GDP growth of 3.5% over the period 1993 to 1999, about the same as the last twenty years. It grew by 5.6% in 1999, and other macroeconomic statistics seem to be under control: low inflation, a moderate budget deficit, and a declining current account deficit. International lenders and donors have been active in the country, including support for structural adjustment goals in economic and social infrastructure.

A tenth of GDP arose from tourism in 1990, and it generated jobs and foreign exchange too. The industry is advertising in Europe, the Middle East, and the United States in order to increase the visitors from the 110,000 people in that year. It is also looking for new investments. The stable democracy since independence was briefly interrupted by a military regime in the mid 1990s, and this may have reduced some of the Gambias appeal as a destination, at least in the short run.

The Gambia has well developed port facilities at its capital city, Banjul. There are warehousing facilities, a one-stop-shop for trade documentation, and a computerised processing system. It also claims to have fast customs clearance. There is an export processing zone by the port, which offers incentives to investors.

About three quarters of the population live in rural areas. Varying weather can make their income uncertain, and the main cash crop, groundnuts, has suffered in the last few years. Horticulture production has been increasing, taking advantage of the export and trading facilities in the country. Investors have shown interest in undeveloped agribusiness sector, and this may be a point of growth for industry as a whole.

In 1999, industry accounted for 13% of GDP, with manufacturing just 5% of GDP and concentrated in small and medium sized enterprises. Foreign direct investment has been modest, and the Government is trying to attract more. The Gambias natural resources are not widely exploited, despite deposits of industrial minerals, like kaolin and titanium sands, and salt. The high level of illiteracy (67% of the adult population in 1997) may be a problem for industrial development, but should be partially addressed by the 77% enrolment in primary education.

Regulations governing foreign investment

There are no restrictions on repatriating profits or capital.

Investors are protected under the Gambian constitution against expropriation or nationalisation.

A foreign investor may establish a company in any form they like.

For investors in the Export Processing Zone, there are no capital controls.

Legal forms

The legal forms in Gambia are:

- public limited companies limited by shares,
- private limited companies limited by shares,
- companies limited by guarantee, so the members must contribute to the assets of the company up to an agreed limit if it is wound-up, and
- unlimited companies, where there are no limits to the members' liabilities.

Private limited companies

Private limited companies have the following characteristics:

- they are limited by shares,
- the maximum number of members is 50,
- they may not invite the public to subscribe to their shares or debentures,
- transfer of their shares is restricted, and
- they must have at least one director.

They also have common characteristics with other company forms, as described below.

Public limited companies

The public limited company form is:

- limited by shares, and
- must have at least two directors.

They also have the common features of company forms given below.

Common features of all company forms

Companies must meet the following requirements:

- They must prepare articles of association and a memorandum of association in a prescribed format, and file them with Registrar of Companies.
- Every company must have registered office in the Gambia.
- Registered companies must have a certificate of incorporation from the Registrar General clearly displayed in their principal place of business. A certified copy of it may be used as well.
- The names and nationalities of all directors must appear on all relevant documents.
- They must have a secretary. The secretary does not have to be an employee of the company. However, they may not also be the sole director of the company, or any other company.
- The company must keep statutory records including registers of:
-- members,
-- directors and the secretary,
-- mortgages and debentures,
-- directors' holdings, and
-- minutes of directors' and members' meetings.
- Companies must have a common seal.
- Companies must keep ensure its accounts give a true and fair view of its state of affairs.
- If the accounts are kept in the Gambia, then accounts must be sent to the Registrar General at least every six months.
- Every company must have an auditor, unless they are exempted. The auditor must be either a member of a United Kingdom accounting body recognised by the Ministry of Finance and Economic Affairs, or otherwise approved by the Minister. They must not be an employee or officer of the company.
- A general meeting must be held at least once each calendar year, and the directors must present a profit and loss account, a balance sheet, a directors' report, and an auditors report. The first meeting must be held within eighteen months of incorporation, and subsequently no later than fifteen months after the previous meeting.

There is no minimum or maximum share capital required for companies.

Procedures for investment

Any Gambian business must register under the Business Registration Act of 1973. This involves submitting the companys articles of association and memorandum of association to the Registrar of Companies. A certificate of incorporation is then issued by the Registrar General, and is valid for a period of twelve months before it has to be renewed. A fee is charged on registration.

Labour considerations

Minimum wages for skilled labour are approximately 12.5 Gambian Dalasis (each day, I think. This is about US$0.79 in July 2001. The exchange rate was taken from an internet currency converter, www.oanda.com). For unskilled labour, the rate is around 9 Gambian Dalasis (about US$0.57 in July 2001).

Taxes

Company tax is charged at 35% of net profits.

Sales tax is levied on some imports.

Investment incentives

Gambias incentives programme was recently extensively reviewed, but I do not have the general results.

However I do have information for the Export Processing Zone at the Banjul Freeport. Investors there are exempted from all tax and customs duties.

Contact addresses

The Managing Director
Gambia Ports Authority
P.O. Box 617
Banjul
The Gambia
Tel: (220) 22.72.66 or (220) 22.35.72 or (220) 22.99.40
Fax: (220) 22.72.68
Telex: 2235 Gamports GV





Ghana

Background

1998 Population (M): 18
1998 GNP (USD B): 7.2

1997/98 % annual GNP growth rate: 4.6
1998 GNP per capita (USD): 390
1990-98 % annual growth of GDP: 4.2
1990-98 % inflation: 28.6

1998 Labour force (M): 9
1998 Female % of labour force: 51
1997 Adult illiteracy rate as % of people 15 and above (male): 23
1994 % share of income or consumption (highest 10% of population / lowest 10%): 7.3
1997 Telephone main lines per 1000 people: 6

1990-98 % annual growth of gross domestic investment: 2.8
1997 Private investment as % of gross domestic fixed investment: 46.4
1998 Merchandise exports (USD M): 1,550
1997 Foreign direct investment (USD M): 130
1997 Present value of external debt as % of GDP: 57

1998 Value added as % of GDP Agriculture: 37
1998 Value added as % of GDP Industry: 25
1998 Value added as % of GDP Services: 38

The growth in exports as a proportion of GDP - from 11.2% in 1979 to 33.5% in 1999 - describes well Ghanas economic direction for the last two decades. The country has become increasing open to trade, and has specialised in cocoa, gold, and timber production. It has liberalised its economy, reformed its agricultural production, particularly cocoa, and the Government has privatised parastatals across many sectors. The country has a stock exchange, and an investment promotion centre, and its political situation is quite stable, with a change of president after electoral defeat in 1999. The country has had some World Bank, IMF, and bilateral donor support. Despite the free market emphasis, income distribution in Ghana is among the most equal in Africa.

The response to the changes has been in some ways typical of behaviour after structural adjustment. The economy has grown quite well (4.2% each year over 1990-1998) before recently slowing, partially in response to a declining world prices for cocoa and gold, which seems likely to be a persistent challenge given Ghanas specialisation in these commodities. Cocoa in particular saw a sharp price fall, by 50% between 1999 and 2000. There may be some future attempt at forming a cartel with the other major growers in the region, like Ivory Coast, possibly through the Economic Community of West African States, of which Ghana is a member.

Meanwhile, the manufacturing sector contracted as a proportion of GDP over the last decade (from 10.0% in 1989 to 8.9% in 1999), perhaps reacting to the large scale privatisation programme which may have been associated with closure or restructuring of some companies. However, domestic investment in the whole economy has grown over the period, and certain industries have seen increases themselves. Industry excluding manufacturing expanded considerably (from 16.7% in 1989 to 25.3% in 1999). A comparatively wide range of products are produced, if in small scale, with many based on agricultural inputs. Others are textiles, processed wood products, electronics, and plastics. The large agricultural sector may provide a source of labour for future industrial growth, as may any workers retrenched during restructuring or sale of parastatals. With industrial capacity usage reported at 45%, it seems that these sources of cost inflation are likely to be limited in the immediate future.

However, the tripling of oil prices had an effect of Ghana, for whom fuel and energy accounted for 15% of all imports in 1989, the last year I have figures. The current account deficit reached 11% of GDP in 1999, but inflation was controlled by stringent fiscal and monetary measures, so that it was constrained under 20% by June 2000. Its rate throughout the period 1990-1998 was 28.6% per year, declining steadily from a 1995 peak of 60%.

Regulations governing foreign investment

Both foreign and domestic companies are regulated by the 1963 Companies Code.

Non-Ghanaian companies may register a place of business in a number of forms:

- a branch,
- an office or other fixed address,
- management, or
- transferred shares.

Enterprises wholly or partly foreign owned must register for the minimum foreign capital requirement. It is US$10,000 in cash or kind for joint ventures with Ghanaians (I am not sure whether this is the total capital or the non-Ghanaian part), and $50,000 for wholly foreign owned businesses.

Foreign companies registered in Ghana may invite the general public to subscribe to their shares.

There are no restrictions on remitting profits, dividends, or other capital earnings. The foreign exchange system is said to be liberalised, with free transfer of currency.

There is legal protection against expropriation of property.

Legal forms

The business forms in Ghana are:

- limited companies,
- unlimited company,
- joint ventures (partnership),
- business names (sole trader), and
- branches of non-Ghanaian companies.

Apart from branches, non-Ghanaian companies may also register a place of business in the form of an office or other fixed address, management, or transferred shares.

Procedures for investment

Setting up a company

A company which wants to register must complete an application form, available from the Registrar of Companies. It can be sent directly to the Registrar, or through an agent or solicitor. A registration fee is charged of 0.2% of stated capital. Registration should take no more than five days, if the documents sent are in good order.

Companies looking to set up businesses in the mining sector must be approved or licensed by the Minerals Commission, while those looking to work in the petroleum industry must be approved or licensed by the Ghana National Petroleum Corporation. There are no approvals required for other sectors.

Foreign companies

Within one month of establishment, a foreign company must submit the following documents to the Registrar of Companies:

- a certified copy of the company statutes, memorandum, or other instrument establishing the company, and
- two copies of a statement containing the following information:
-- the name of the company,
-- the nature of the business,
-- number of authorised and issued shares,
-- the amount paid and outstanding (for those shares, I think),
-- the address of the registered or principal place of business in the host country,
-- the address of the principal place of business in Ghana,
-- the occupation of the local manager in Ghana,
-- the name and address of a person authorised to act as company secretary and legal representative, and
-- information on charges on the company property, with their copies. If no charges are made, then this should be stated too.

Enterprises wholly or partly foreign owned must register for the minimum foreign capital requirement, which is US$10,000 in cash or kind for joint ventures with Ghanaians (I am not sure whether this is the total capital or the non-Ghanaian part), and $50,000 for wholly foreign owned businesses. They have to complete an application form from the Ghana Investment Promotion Centre, providing bank transfer information in the case of cash imports and customs entry forms in the case of capital goods. The Centre must issue registrations within five days if the application has been made correctly.

Labour considerations

Registered companies with paid up capital of between US$10,000 and US$100,000 are allowed to employ one expatriate. Those with paid up capital of between US$100,000 and US$500,000 may employ two. I do not know what the quota is above $500,000.

There are no restrictions on issuing work and residence permits to expatriates investing or working in the free zones.

For workers in the free zones, there is a minimum wage in force, which in January 2001 was about US$1 per day.

Taxes

I could not find any information on this subject.

Investment incentives

General incentives

Enterprises in agriculture and real estate are exempted from all tax for five years.

Losses may be carried forward for five years in any sector, and in agriculture and real estate, the period applies after the end of the five year exemption.

Corporate income tax is 8% on income from non-traditional exports (I am not sure what these are). The rate for income from licensed hotels is 25%.

Plant, equipment, and machinery are exempted from import duties and taxes. Applications must be made to the Ghana Investment Promotion Centre. Basic office equipment and related supplies for the hotel industry and restaurants are exempted from import duties.

Capital allowance on buildings is 20%. On machinery and equipment, the rate is 50%, except in financial services, mining and petroleum extraction.

Free Zones

Free Zone status may be awarded to companies exporting at least 70% of their goods, who may be based anywhere in the country. Applications must be made to the Ghana Free Zones Board, using the form which can be found at http://www.ghanaclassifieds.com/gfzb/info.html.

The incentives are:

- exemption from all direct and indirect duties on imports used in production,
- no import licensing requirements,
- exemption from all direct and indirect duties on exports,
- exemption from income tax on profits for ten years,
- income tax rate of no more than 8% after ten years,
- exemption from withholding taxes on dividends from free zone investments, and
- double taxation relief.

Contact addresses

Registrar General's Department,
PO Box 118,
Accra,
Ghana
Tel: (233) 21.66.64.69 or (233) 21.66.46.91

The Secretariat
Ghana Free Zones Board
(Ministry of Trade and Industry Annex)
PO Box M 47,
Accra,
Ghana
Tel: (233) 21.78.05.32 or (233) 21.78.05.33 or (233) 21.78.05.34 or (233) 21.78.05.35
Fax: (233) 21.78.05.36
Email: gfzb@ighmail.com
Internet: www.ghanaclassifieds.com/gfzb/index.html





Guinea Bissau

Background

1998 Population (M): 1.2
1998 GNP (USD B): 0.2

1997/98 % annual GNP growth rate: -28.9
1999/2000 % annual GDP growth rate: 8.2
1998 GNP per capita (USD): 160
1990-99 % annual growth of GDP: 0.5
1990-98 % inflation: N/A
1998-99 % inflation: 5.3%

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1997 Adult illiteracy rate as % of people 15 and above (male and female combined): 66
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: -12.9
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1998 Foreign direct investment (USD M): 1
1999 Present value of external debt as % of GDP: N/A
1999 Present value of total debt as % of GDP: 187%

1998 Value added as % of GDP Agriculture: 63.6
1998 Value added as % of GDP Industry: 12.3
1998 Value added as % of GDP Services: 24.2

Natural resources are central to Guinea Bissaus economy at the moment. Groundnut sales accounted for three quarters of its export earnings in 1999, and a moderate proportion of its entire gross domestic product. Cotton production is being encouraged for cash crop diversification, and output may increase in future from its current low level. Licenses are granted to foreign companies to fish the waters around the Guinean coast, giving rise to a large percentage of Government income. 80% of the population work in agriculture.

None of the known resources are sufficient to expand the economy very rapidly. The countrys minerals are phosphate and bauxite, not diamonds and oil, and it has been reported that they would not be profitable to extract. The movement towards an industrial and service based economy is still at an early stage, with manufacturing accounting for only 8.6% of GDP in 1999. Guinea Bissaus similarly endowed neighbour, Senegal, may prove to be a model for the future in this respect. The comparative slowness of development has been attributed to the poor state of education and health services at the end of the colonial rule, and industrial policies pursued by the former post-independence Government. Illiteracy among people aged 15 or over was 66% in 1997, while primary school enrolment was 62% in 1999. Very high national debt (187% of GDP in 1999) is a constraint on changing these rates.

The economy has been developing quite well over the last decade, with a number of macroeconomic indicators, like economic growth and inflation, measuring improvements for most of the period. Severe political disputes in 1998 resulted in a fall in real GDP of 28%, cancelling out some of the earlier gains. The growth of GDP over the decade in the absence of the decline would have been 4.0% per year, instead of the actual 0.5% per year. The economy seems to be recovering quite quickly, with a 6.9% increase in GDP in 1999, and 8.2% in 2000. Tension continues despite democratic elections in 1999, and World Bank and IMF funding to promote stability. It delays the development of tourism, which at present is a very small subsector, needing infrastructure and personnel investment to develop further.

Guinea-Bissau is a member of the West African Economic and Monetary Union. It uses the CFA Franc.

Regulations governing foreign investment

Foreign investors are guaranteed equal treatment with national investors. In particular, they may invest freely in any type of business.

There are no restrictions on capital transfer.

There is freedom of management.

Legal forms

Société à Responsabilité Limitée (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

Company tax varies from 35% to 50%.

Tax on dividends is 30%.

I do not have information on personal income tax rates.

Other taxes include complementary tax on both companies and persons, consumption tax, stamp duty, vehicle tax, and transaction tax.

There are no customs duties between the states of the West African Economic and Monetary Union: Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, and Togo. The countries share common taxes on imports from outside the Union, forming a set of customs charges. These are:

- customs duties,
- the statistical charge,
- the community levy (PCS),
- the conditional import tax (TCI), and
- the reducing protection tax (TDP).

The last two are temporary taxes which are intended to be reduced or removed over time.

Customs duties vary by the type of good:

- medicines, condoms, health education materials, books, and magazines are exempt from duty,
- raw materials, equipment goods, and specific production inputs are subject to a 5% charge on import cost (I am not sure whether this is a Free on Board value, or another classification),
- intermediate inputs and products are subject to duty at 10%, and
- consumer goods and all other products pay 20%.

Statistical charge is 1% on import cost.

Community Levy is 0.5%.

TCI is designed to slow the effect of international price fluctuations on West African Economic and Monetary Union production of important goods like rice and sugar. As a result, it depends on market conditions, and is set at a Union level.

TDP is levied on industries that the Union wants to protect, for example, cigarette production. It is levied at two rates, depending on the industry, 10% or 20%. In the first case, the protection reduces by 2.5% per year, while in the second it falls at 5% per year.

The Union may decide on other measures for protection.

Investment incentives

The Investment Code of 1991, and its 1996 revision, is managed by the Office of Investment Support, the GAI. It includes six incentives regimes:

- the common regime,
- the export regime,
- the import regime,
- the professional training regime,
- the regime of reforestation, and
- the regime of decentralisation.

I do not know the conditions for entry into the regimes, only the benefits.

The common regime

The incentives for the Common Regime are:

- exemption or reduction of industrial tax,
- exemption or reduction of capital tax,
- exemption or reduction of complementary tax, and
- exemption from customs duties on the import of equipment necessary for the investment.

The export regime

In the export regime, companies are entitled to make a 10% reduction in their annual export earnings for the purposes of calculating tax liability. This applies for six years.

The import regime

This regime applies to companies that manufacture goods which replace imports, and help to establish self-sufficiency in food resources. The same advantages apply as for the export regime.

The professional training regime

Twice the value of training courses is tax-deductible (from income tax, I think).

The regime of reforestation

If 10 hectares of national varieties of trees are planted as part of the project, twice the value of expenses incurred are tax deductible. This applies over a three year period.

The regime of decentralisation

If the investment project is outside of the region of Bissau, then the following incentives apply:

- 50% of transport costs (from Bissau, I would guess) are tax deductible, up to a limit of 5 million Guinean Pesos, and
- expenses incurred in infrastructure creation are fully tax deductible.

Contact addresses

I could not find information on this subject.





Guinea

Background

1998 Population (M): 7
1998 GNP (USD B): 3.8

1997/98 % annual GNP growth rate: 4.3
1998 GNP per capita (USD): 540
1990-98 % annual growth of GDP: 5.0
1990-98 % inflation: 5.9

1998 Labour force (M): 3
1998 Female % of labour force: 47
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
c. 1996 Gross primary enrolment as % of school age population: 54
1994 % share of income or consumption (highest 10% of population / lowest 10%): 12.3
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: 5.7
1997 Private investment as % of gross domestic fixed investment: 68.5
1998 Merchandise exports (USD M): 730
1997 Foreign direct investment (USD M): 1
1997 Present value of external debt as % of GDP: 65

1998 Value added as % of GDP Agriculture: 22
1998 Value added as % of GDP Industry: 35
1998 Value added as % of GDP Services: 42

A country which has 6% inflation for a decade, an active privatisation programme, restrained government spending, and a national commitment to liberalisation since 1984 should see growth lead by private entrepreneurs. Guinea has, with an average 4% increase in GDP each year over the period 1984-1996, and the private sector accounting for 91% of final consumption in 1997, and 70% of gross capital formation. Agro-industries have seen particular expansion, and Coca Cola and Nestlé among others have invested in the country. Other multinational companies present in Guinea include UBS Warburg, BNP Paribas, Royal Dutch Shell, British American Tobacco, Holderbank, Rio Tinto and many mining companies. Telekom Malaysia is a major shareholder in an expanding telecommunications and internet industry.

Much of the economy is built on mineral resources. Guinea has about 25% of the worlds known bauxite reserves, and this ore, together with aluminium, gold, and diamonds, accounts for three quarters of exports. Falls in world demand for bauxite and aluminium slowed economic growth slightly in 1999 and 2000, and the Government is reported to be promoting alternative mining resources. The economy as a whole is rather undiversified - manufacturing, for example, was only 4.0% of GDP in 1999. Agricultural production is being expanded, with coffee, rubber trees, fruit, and cotton crops under development. As food accounted for 9% of imports in 1999, and 80% of the population work on the land, there seems to be room for productivity improvements in this sector. Some commentators believe that general economic growth could increase further if such measures are put in place.

Guinea is quite an open economy, exporting a fifth of GDP in 1999. Its main trading partners are in North America and Western Europe, notably France. A member of the Economic Community of West African States, ECOWAS, Guineas leading regional partners are the richest, Ivory Coast and Senegal, which suggests that as economic growth occurs in the area, Guinean markets could expand and transportation costs fall.

There have been internal political tensions in the past which have had short-term destabilising effects on the economy. The country has quite evenly distributed wealth compared with other states in the region, although inequality exists in education, with only 54% gross primary enrolment. Wars in neighbouring states have sometimes overflowed into Guinean territory, and there are large numbers of refugees in the country.

Regulations governing foreign investment

All investors are guaranteed equal treatment, regardless of nationality.

Investors may invest in any commercial or industrial activity.

There are no restrictions on repatriation of capital, dividends, interest, or other revenues from the investment.

Investments are protected against expropriation except when it is in the public interest. In this case, compensation must be paid.

Legal forms

Guinean legal forms for companies are:

- société anonyme (SA),
- société à responsabilité limitée (SARL),
- société à participation,
- société de fait,
- regroupement momentané d'entreprise,
- société à objet particulier
- société cooperative, and
- société à nom collectif.

Foreign companies may also set up a branch operation.

For the two common forms société anonyme and société à responsabilité limitée, the company details are as follows.

Société anonyme (SA)

Société anonyme companies must meet several conditions:

- they must have at least one member,
- they must have called-up share capital of at least 10 million Guinean Francs,
- they must have individual share value of at least 10,000 Guinean Francs,
- the share capital must be fully subscribed, and
- when the company is set up, at least a quarter of the share capital must be paid for.

Société à responsabilité limitée (SARL)

The conditions for a société à responsabilité limitée are:

- they must have between one and fifty members inclusive,
- they must have called-up share capital of at least 5 million Guinean Francs,
- they must have individual share value of at least 10,000 Guinean Francs,
- the share capital must be fully subscribed, and
- when the company is set up, the share capital must be fully paid for.

Procedures for investment

Setting up an enterprise

An investor may set up an enterprise by submitting certain documents to the one-stop-shop, the Private Investment Promotion Office (Office de Promotion des Investissements Privés). The Office may also be able to provide information and other assistance.

The documents required are:

- a copy of the company statutes, if a company form is being established,
- a copy of the identity card of either the proprietor, manager, or representative,
- two of their photographs,
- their certificate of residence, and
- the entry visas for foreign nationals (I think this is needed for all employees).

A registration fee is charged, depending on the business form. It is 100,000 Guinean Francs for companies, and 50,000 Guinean Francs for sole traders. There are no charges for a société cooperative.

Labour considerations

I could not find any information on this subject.

Taxes

I do not have full details on when the following taxes apply, so they may not all be charged in a particular situation.

Business taxes

Income tax on industrial and commercial profits is 30%.

Company tax is 35%.

Companies must make an annual minimum tax payment of 3% of the previous years turnover, subject to a minimum of 2 million Guinean Francs, and a maximum of 20 million Guinean Francs. I think this is a minimum of all tax payments in total.

Tax on financial activities is charged at 13%, except for credit arrangements lasting over a year, when the rate is 5%.

Fees on company shares vary between 0.5% and 2% of company capital. I think this may be levied when registering the company.

Among other registration and stamp fees, a charge is made of 0.5% to 10% of asset value.

Companies must make a monthly base payment of 6% of gross salaries.

Apprenticeship tax is 3%. I think that this is levied on gross salaries too.

Professional business rates vary between 10% and 15%, according to the value of the properties owned.

Professional tax is 5% of the previous years turnover.

Tax on vehicles varies between 10,000 Guinean Francs and 450,000 Guinean Francs, according to the type and usage of the vehicle.

Buildings worth less than a threshold of 200,000 Guinean Francs are subject to a charge of 10% on their value. The same is true of factories, no matter what their value. Other buildings are charged at 20%. (I am not clear whether the threshold is 100,000 Guinean Francs or 200,000 Guinean Francs).

Habitation tax is also charged on buildings. The rate is 10% of the property value, with a reduction of 15,000 Guinean Francs for owner-occupiers and 10,000 Guinean Francs for tenants.

Real estate charges on non-developed sites are 1% of their value.

Export and import taxes

A basic charge on imports is made of 3%.

An import charge is 8% on all imported goods except rice, flour, cereals, and edible oils.

Customs duty on imports is 7%.

Another tax is levied on imports called the "centime additionnel", which is 0.25% of the Cost Assurance Freight value of the imported good.

Charges for customs clearance is 2% of the Free on Board value of the exported good.

A charge is made on exports of 2% of their Free on Board value, except on precious metals and stones, when the rate is 3%. Agricultural exports are exempted.

An export charge is levied on coffee of 13,000 Guinean Francs per tonne.

Other taxes

Value added tax is 18%. Exemptions are made to several types of product:

- exports,
- international transport,
- pharmaceuticals,
- fertilizers,
- phytosanitary products,
- education supplies, and
- certain foodstuffs (namely, rice, flour, wheat, bread, and edible oils).

Surtax on consumption of luxury articles varies by the good consumed. It is:

- 20% to 30% for motor vehicles,
- 400 Guinean Francs per 33 centilitre can or bottle of beer (reports of the rate varies),
- 3,000 Guinean Francs per litre of liqueurs, and
- 100,000 Guinean Francs per carton of 10,000 cigarettes.

Tax on petroleum products varies by the type of product. It is:

- 335 Guinean Francs per litre for petrol,
- 325 Guinean Francs per litre for diesel, and
- 100 Guinean Francs per litre for lubricants.

Investment incentives

There are several incentive schemes in Guinea, for different types of enterprises:

- small and medium sized businesses,
- exporting enterprises,
- enterprises developing Guineas natural resources, and
- businesses in less developed regions.

The schemes are applicable to businesses in these sectors:

- industrial development,
- investment banking or provision of credit outside of Conakry,
- agriculture,
- livestock rearing and fishing,
- fertilizer manufacture,
- health and education,
- tourism, and
- development of social housing.

Any newly formed business which is legally constituted and registered in the Register of Commerce may apply for admission to one of the schemes. Extension of existing enterprises may also qualify for one of the schemes if it fulfils the following criteria:

- the new investment is either at least 25% of the initial investment or more than 500 million Guinean Francs,
- it creates at least twenty five jobs, and
- it is accounted separately.

The one-stop-shop, the Private Investment Promotion Office (Office de Promotion des Investissements Privés), should be able to help with the precise information required in the application, and where to submit it. The National Investment Commission must notify the investor of acceptance or rejection within four months. If it does not do this, then the investor may appeal to the Ministry of Planning and International Cooperation.

Common benefits

The following benefits are common to all of the incentive schemes:

- exemption from all taxes and charges on imports of equipment and tools used in establishing the investment,
- a single import duty on imports of raw materials used directly in the manufacturing process,
- reduction of tax on industrial and commercial profits, by 50% in the first fiscal year, and 25% in the second,
- exemption from apprenticeship tax for five years, and 50% reduction for three years subsequently, and
- exemption from the base tax on salaries for five years, and 50% reduction for three years subsequently.

Small and medium sized businesses

To qualify for these incentives, a company must:

- have a share value between 15 million Guinean Francs and 500 million Guinean Francs, and
- create at least five jobs.

In addition to the common incentives, the tax on industrial and commercial profits is reduced to 20% of its usual level for five years, if this rate is less than two thirds of the normal rate applied to the company.

Enterprises are also exempted from the minimum tax payment for three years.

Exporting enterprises

Incentives for exporting enterprise are awarded to those companies which export at least 22% of their turnover value.

In addition to the common incentives, there is a partial exemption from the tax on industrial and commercial profits. The percentage exempted is equal to exported turnover as a share of total turnover, up to a maximum of 60%.

Enterprises developing Guineas natural resources

These incentives are awarded to companies that:

- use more than 50% Guinean intermediate inputs by cost, and
- use less than 50% imported raw materials by cost.

All of the common incentives apply. The tax on industrial and commercial profits is reduced (in absolute amount, I think) by 20% of the value of Guinean intermediate inputs.

Businesses in less developed regions

Regions are classified into four zones. Zone 1 is Conakry, but I do not know the definitions of the other three zones. I believe that enterprises in any part of the country away from Conakry qualify for benefits.

Under the scheme, all the common incentives are awarded, as well as an exemption from tax on industrial and commercial profits for five to eight years. The turnover tax is also reduced for five years, by 20% to 60%, depending on region.

Contact addresses

Office de Promotion des Investissements Privés Guichet Unique (OPIP),
Le Directeur Général,
B.P. 2014,
Conakry,
République de Guinée,
Tel: (224) 41 49 85





Ivory Coast

Background

1998 Population (M): 14
1998 GNP (USD B): 10.1

1997/98 % annual GNP growth rate: 5.7
1998 GNP per capita (USD): 700
1990-98 % annual growth of GDP: 3.5%
1990-98 % inflation: 8.7

1998 Labour force (M): 6
1998 Female % of labour force: 33
1997 Adult illiteracy rate as % of people 15 and above (male): 49
1994 % share of income or consumption (highest 10% of population / lowest 10%): 10.2
1997 Telephone main lines per 1000 people: 9

1990-98 % annual growth of gross domestic investment: 18.0
1997 Private investment as % of gross domestic fixed investment: 70.2
1998 Merchandise exports (USD M): 4,183
1997 Foreign direct investment (USD M): 327
1997 Present value of external debt as % of GDP: 141

1998 Value added as % of GDP Agriculture: 25
1998 Value added as % of GDP Industry: 23
1998 Value added as % of GDP Services: 52

The current structure of the Ivorian economy reflects the long term national commitment to international trade, particularly with France, and to capitalist growth with substantial state intervention. The largest economy in the West African Economic and Monetary Union, Ivory Coast has specialised in agricultural production, and exports over a third of world cocoa supply. The manufacturing sector produces a fifth of the countrys GDP, and a large service sector has emerged. Gross domestic investment over the period 1990-1998 was 18.0% per year, among the highest in the world, while income inequality is moderate. The recent growth has been offset to some extent by uncharacteristic political instability since 1999, problems with repaying the large national debt, and suspension of World Bank loans.

The Government has been attempting to attract further private funds into the economy over the last decade. Am investment promotion centre was set up in 1993 to encourage and help investors. The privatization plan launched in 1990 aims to sell three quarters of parastatal enterprises, and it is said to have expanded the capitalization of the Stock Exchange, which serves as a regional exchange for the whole West African Economic and Monetary Community. The Government is also reducing its role in the agricultural sector, with, for example, the coffee industry now entirely in private ownership. Various other measures have been taken which may increase growth. A large scale program of infrastructure works was started in 1996, under private management. It includes energy and transport projects, and may be constrained by the availability of Government funds presently. New regulation has been introduced into the insurance sector, while the banking sector has been restructured to improve solvency and liquidity.

Apart from cocoa beans, which accounted for 30% of exports in 1999, the other major cash crop is coffee, with smaller contributions from palm oil, rubber, and cotton. Recent declines in the world commodity prices, notably of cocoa, contributed to an economic slowdown in the country. As the leading producer of cocoa, Ivory Coast attempted to reduce supplies in order to raise the price. Some protection against primary commodity price falls is offered by the quite large volume of manufactured exports, equaling 31% of all earnings in 1999, and by the limited crude oil exports, although these are much less than the fuel and energy imports. The country has a growing information technology market, despite 58% adult illiteracy in 1997. This rate may be reduced in the long run by increases in primary school enrolment, at present 72% of the age group population.

Regulations governing foreign investment

There are no restrictions on capital transfer, subject to the rules of the CFA Franc Zone.

The following telecommunications operations are restricted to the Ivorian State, or the enterprises to which it awards concessions:

- the establishment of open public telecommunications networks, except for radioelectric networks,
- providing telecommunications services between fixed points, and
- providing telecommunications services.

Legal forms

One source reports that the following forms apply for all countries that have ratified the treaty of the Organisation for Business Law Harmonisation in Africa (OHADA), including Ivory Coast:

- Société à Responsabilite Limitee (SARL),
- Société Anonyme (SA),
- Société en Nom Collectif (SNC),
- Société en Commandite Simple (SCS), and
- Groupement d'Interêt Economique (GIE).

Another source lists slightly different details for the SARL and SA forms, and also mentions branches of overseas companies.

Société à Responsabilité Limitée (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

Setting up a company
There are eleven stages to setting up a company:

1. Registration of the company statutes,
2. Depositing the statutes at the Office of the Clerk of the Tribunal,
3. Publication of the notice of creation,
4. Certification of the notice,
5. Registration in the register of commerce,
6. Declaration of existence with the tax authorities,
7. Attestation of payment of business rates and the tax on salaries and revenues,
8. Registration at the Department of Foreign Trade,
9. Registration at the National Social Security Fund,
10. Declaration of the personnel, and
11. Authorisation for capital transfer.

1. Registration of the company statutes

Companies must register at the Department of Registration and Stamping, providing seven signed and initialed copies of the company statutes, and seven copies of the minutes of the constitutive assembly, if relevant. Four copies of the registered statutes will be issued.

There are a couple of fees to be paid. A 500 CFA Franc stamp must be put on each page of each copy of the statutes. On the other side, the investor should write "face annulée", meaning "blank side". A registration charge must also be paid, equal 0.6% of the companys capital when it is less than or equal to 5,000 million CFA Francs, and 0.2% when it is above this amount. I am not sure whether the 0.2% is levied on the excess, or the whole of the capital. The registration charge is doubled if registration does not take place within a month of the setting-up date in the statutes.

2. Depositing the statutes at the Office of the Clerk of the Tribunal

The company must leave two registered copies of the statutes at the Office of the Clerk of the Tribunal, in the region the company is based. A receipt and certificate of deposit will be issued. There is a 3,000 CFA Franc fee.

3. Publication of the notice of creation

Two copies of the typed résumé of the statutes must be sent to the daily newspaper, Fraternité-Matin, for publication. It should be done within one month of the constitutive act of the company being drawn up. The résumé should mention:

- the company form,
- its name,
- the address of its head office,
- its objectives,
- the names, addresses, and status of the administrators or managers,
- the issued capital, the number of shares and a summary of their type,
- the date the company started and the date it will close, if relevant,
- the name of the Office of the Clerk of the Court where the statutes were deposited,
- the date they were registered,
- their registration number.

After paying the fee of 8,760 CFA Francs per line (of text in the Fraternité-Matin), the information of the new company will appear in the newspaper.

4. Certification of the notice

Three copies of the Fraternité-Matin newspaper containing the companys information must be sent to the local town hall. Certified copies of the newspaper will be returned. The charge is 1,500 CFA Francs.

5. Registration in the register of commerce

Investors must register at the Office of the Clerk of the Tribunal in Abidjan. The documents required are five registration forms, available from the one-stop-shop (CEPICI), and one certified copy of the newspaper announcing the company start-up. The investor will receive two forms carrying the date and number of registration in the register of commerce. 500 CFA Francs is payable when the documents are submitted, and 5,650 CFA Francs on registration.

6. Declaration of existence with the tax authorities

The investor must provide the Department of Taxation with a form of declaration of existence.

7. Attestation of payment of business rates and the tax on salaries and revenues

This stage is done at the tax centre for the companys region. A modification declaration form and the registration form from the register of commerce must be brought. After business rates and the tax on salaries and revenues are paid, an attestation will be given.

8. Registration at the Department of Foreign Trade

All companies that import or export must register. There is no cost. The information required is:

- an information form on traders available from the Department of Trade Promotion or the one-stop-shop,
- a registration certificate from the register of commerce,
- a certificate of declaration of existence with the tax authorities, and
- attestation of payment of business rates and the tax on salaries and revenues.

The fiscal code and import code will be issued.

9. Registration at the National Social Security Fund

The investor may register at any of the offices of the Fund, by submitting an employer's registration form (available from the Fund), and the certificate of registration in the register of commerce. There is no charge.

10. Declaration of the personnel

All personnel must be declared, also at the National Social Security Fund, except for diplomats and international civil servants. For each of the employees, a photograph and their identity card must be provided. A social insurance card will be issued for them, with an employee number. There is no charge.

11. Authorisation for capital transfer

The investor must apply to the overseas finance authority, FINEX. The relevant forms are as available from banks or FINEX. There is no cost.

Labour considerations

Contracts between employees and employers are freely negotiated. They may also be ended by negotiation.

Before any industrial action takes place, a warning must be given to the employer at least six days in advance.

A minimum wage is in force.

The basic length of the working week is forty hours.

Special regulations apply to night work.

There are also special regulations for female and child labour.

Enterprises with more than ten employees must have an elected workers delegate and deputy. If the business employs more than ten people, internal rules and regulations must be established, while with more than fifty employees, it must have a committee for hygiene, safety, and working conditions.

Taxes

Tax on profits earned in the industrial, commercial, and agricultural sectors is 35% for companies and 25% for sole traders.

Companies not in one of these sectors must pay non-commercial tax on their profits at 25%.

Companies must pay a proportion of their salary bill in taxation. For salaries paid to local workers, the proportion is 2.8%, while for non-nationals, it is 12%.

Companies must pay at least 0.5% of their annual turnover in tax, in one form or another, if they are in the industrial, commercial, and agricultural sectors. Outside of these sectors, the rate is 3%.

There are special regimes for companies in the following sectors:

- mining,
- providing services to petroleum companies,
- construction of public housing, and
- relaunching businesses in difficulty.

Dividends are taxed at 10% to 12%.

Personal income tax varies from 0% to 60%.

Value Added Tax is charged at two rates, 11% and 20%.

Business rates are also charged. They are made up of a fixed amount and a variable amount.

Tax is charged on developed properties.

A double taxation agreement exists with France.

Investment incentives

The Investment Code of 1995 established two incentive regimes:

- the declaration regime, for newly created enterprises, and
- the agreement regime, for companies investing over 500 million CFA Francs.

The mining, telecommunications, and petroleum sectors have their own Codes. The Mining Code is discussed below.

The declaration regime

The declaration regime applies to all newly established companies, apart from those in the sectors of transport, trading, construction and civil engineering, and finance. The application procedures are minimal, with only an investment declaration required, attested by the Centre of Investment Promotion (CEPICI). Applications are said to be processed within 48 hours.

The incentives are:

- exemption from taxes on industrial and commercial tax, or the non-commercial tax, as appropriate,
- exemption from business rates, and
- exemption from license requirements.

The duration of the incentives varies by region. For investments in the Abidjan region, the period is five years, while it is eight years in other regions. In the second to last year of exemption, the reduction is 50% of taxes, while in the last year, it is 25%.

The agreement regime

This regime is restricted to companies investing over 500 million CFA Francs. Both new and existing companies are eligible, in all sectors except construction, civil engineering, and finance. The company must employ and train Ivorian nationals, although I do not know how extensively. Applications must be accompanied by a dossier describing all relevant information about the project. There is a response time of no more than 45 days. I am not sure where the information must be submitted.

Whilst the investment is being set up, the benefits are:

- a reduced customs and import duty of 5% on equipment and materials, and on the first set of spare parts, for investments within an upper and lower threshold,
- exemption from customs and import duty on equipment and materials, and on the first set of spare parts, for investments above the upper threshold, and
- exemption from Value Added Tax on equipment and materials whether imported or made locally, as well as on spare parts and company vehicles, for investments above the lower threshold.

The following articles are not exempted:

- construction materials,
- vehicles for tourism, and
- equities.

During the period of operation, for investments above the lower threshold, the advantages are:

- exemption from taxes on industrial and commercial profits, and
- exemption from business rates and licence requirements.

For investments above the upper threshold, the company is also exempted from tax on developed properties.

In the second to last year of exemption, the reduction is 50% of taxes, while in the last year, it is 25%.

The Mining Code


Mining companies have their own incentives:

- reduction by 50% of the registration fees for increasing capital, and
- exemption from all import taxes and duties on equipment, machines, and materials used in prospecting for which no Ivorian equivalent in price and quality is available. Components are also exempted up to a value of 30% of the total Cost-Insurance-Freight value of imported machines and equipment. The following items are not included:

-- vehicles transporting people and goods apart from extracted minerals,
-- decorative furniture,
-- and other equipment not accepted by the commission issuing the investment incentives.

For new investments, the exemption lasts for four years after the right to mine is given. In the case of extensions of existing businesses, the period is two years, unless the Minister responsible for mining decides to extend it.

Contact addresses

Centre de Promotion des Investissements en Côte d'Ivoire (CEPICI)
(Centre for Investment Promotion)
5ème étage immeuble C.C.I.A
B.P. V 152
Abidjan
Tel: (225) 20.21.40.70
Fax: (225) 20.21.40.71 or (225) 22.22.35
Internet: http://www.cepici.go.ci
Email : info@cepici.go.ci

Direction de l'Enregistrement et du Timbre
(Department of Registration and Stamping)
Cité Administrative
Tour E
3ème étage
Porte 47
Tel: (225) 20.22.52.29

Fraternité-Matin
Direction Commerciale
Service publicité
Bd du Général de Gaulle
01 BP 1807
Abidjan 01
Tel: (225) 20.37.04.66 or (225) 20.37.06.67

Direction Générale des Impôts (DGI)
(Department of Taxation)
Direction des Rôles et de l'Informatique
Cité administrative
Tour E
7è étage
Tel: (225) 22.27.13
Fax: (225) 22.87.86

FINEX
Cité financière
10è étage

Direction Générale des Impôts (DGI)
(Department of Taxation)
B.P. V 103
Abidjan
Tel: (225) 22.27.13
Fax: (225) 22.87.86

Direction Générale des Douanes (DGD)
(Department of Customs)
B.P. V 25
Abidjan
Tel: (225) 21.25.93
Fax: (225) 22.05.68

Chambre de Commerce et d'Industrie
(Chamber of Commerce and Industry)
01 B.P. 1399
Abidjan 01
Tel: (225) 33.16.00
Fax: (225) 32.39.42

Conseil National du Patronat Ivoirien (CNPI)
(National Council of Ivorian Employers)
01 B.P. 8666
Abidjan 01
Tel: (225) 22.50.08
Fax: (225) 22.50.09

Chambre d'Agriculture
(Chamber of Agriculture)
01.B.P. 1291
Abidjan
Tel: (225) 32.92.13
Fax: (225) 32.92.20

Syndicat des Commerçants Importateurs/Exportateurs (SCIMPEX)
(Union of Importing / Exporting Tradesmen)
01.B.P. 3792
Abidjan 01
Tel: (225) 32.54.27
Fax: (225) 32.56.52





Kenya

Background

1998 Population (M): 29
1998 GNP (USD B): 9.7

1997/98 % annual GNP growth rate: 1.5
1998 GNP per capita (USD): 330
1990-98 % annual growth of GDP: 2.2
1990-98 % inflation: 15

1998 Labour force (M): 15
1998 Female % of labour force: 46
1997 Adult illiteracy rate as % of people 15 and above (male): 13
1994 % share of income or consumption (highest 10% of population / lowest 10%): 19.38
1997 Telephone main lines per 1000 people: 8

1990-98 % annual growth of gross domestic investment: 4.3
1997 Private investment as % of gross domestic fixed investment: 61.8
1998 Merchandise exports (USD M): 2053
1997 Foreign direct investment (USD M): 20
1997 Present value of external debt as % of GDP: 49

1998 Value added as % of GDP Agriculture: 29
1998 Value added as % of GDP Industry: 16
1998 Value added as % of GDP Services: 55

75%-80% of the Kenyan population is employed in agriculture, and Kenya is one of the world's largest tea exporters. Tea accounts for 25% of exports, while a further 18% comes from coffee. The horticultural industry is a fast growing source of foreign exchange, and 29% of the GDP arises from the agricultural sector. Despite these statistics suggesting that the economy is predominantly geared to crop production, Kenya has a diversified economy compared to some of its neighbours. Services add 55% of value to GDP, with the remaining 16% from industry, including consumer goods and agricultural processing, with an increasing export market.

The upstream oil industry is important in the economy, accounting for 11% of exports. The Mombasa oil refinery, a significant part of that trade, is being upgraded by its shareholders, so further expansion of business may be expected. Other chemical-related industries include soap, lubricants, battery production, and plastics. Electricity is provided by a parastatal.

Telephony is becoming more sophisticated, with moderate local call charges, although international calls are expensive. Nairobi has a number of Internet providers with good availability of connections.

Kenya is one of the leading regional tourist destinations, which is a significant source of foreign revenue. A new cargo centre is being built at the international airport in Nairobi.

Although economic policy since independence has tended to promote the private sector, steps have recently been taken to further reduce the Governments role in the economy. Privatisation, fiscal and monetary restraint, and civil service reform are all progressing. Corruption and inefficiency particularly in parastatals have been criticised, and international donors have applied financial and other pressure to compel the Government to remedy the situation. A high population growth rate and declining amounts of available high yield agricultural land, combined with slowing economic growth has caused declining living standards for much of the nation in the last few years. Urban unemployment rates of 35% together with high educational achievements provide a pool of trainable labour, although the impact of AIDS/HIV may be offsetting some of Kenyas earlier investments in education.

Regulations governing foreign investment

Note: in this section and the sections which follow, I use the Investment Promotion Centre information, on www.ipckenya.org. The IPC website is only indirectly connected to the COMESA site, via a website which is mentioned on COMESAs Kenya section (www.kenyaweb.com).

The foreign exchange market is liberalised, with no restriction on remittance of dividends, interest, principal, nor capital receipts from sales of investments. Foreign exchange may be purchased from commercial banks for these purposes. Remittances of large amounts of foreign currency require notification to be made.

Foreign investments are allowed in most industries.

Agricultural land may only be owned by Kenyan nationals.

Legal forms

The principal types of business enterprises in Kenya are:

-Registered Companies (Private and Public)
-Branch offices of companies registered outside Kenya
-Partnerships
-Sole Proprietorships
-Co-operatives

Registered Companies and branch offices have limited liability, and most large companies take this form. They are regulated by the Companies Act.

Procedures for investment

Formation of a company

Firstly, the company name should be registered with the Registrar of Companies. Then the Memorandum and Articles of Association should be filed, again with the Registrar. If they are in order, a Certificate of Incorporation will be issued.

To obtain licenses and permits from Government ministries, the Investment Promotion Centre serves as a one-stop-shop. The form available at http://www.ipckenya.org/busoper.htm should be sent to the Centre, together with the certificate of incorporation or registration, and joint venture, royalty and management agreements (where applicable).

Foreign companies establishing a branch

Within 30 days of opening a branch, a foreign company should submit to the Registrar of Companies the following information:

-A certified copy of the Charter, Statutes or Memorandum and Articles of the Company, or other instruments defining the constitution of the company;
-A list of the directors and secretary of the company, giving full names, nationality and other directorships of companies in Kenya;
-A statement of all existing charges entered into by the company affecting properties in Kenya;
-Names and postal addresses of one or more persons resident in Kenya authorised to accept, on behalf of the company, service of notices required to be served on the company;
-Full address of the registered or principal office of the company in its home country; and,
-Full address of place of business in Kenya.

Labour considerations

Expatriate staff are allowed in senior management positions, or where equally skilled locals are not available. The Investment Promotion Centre can help in obtaining work permits.

Trade union membership is voluntary. An Industrial Court exists for dealing with disputes.

Taxes

Corporation tax is 30% on resident companies, and 37.5% on non-residents. Dividends paid to individuals are subject to withholding tax at 5%, while those paid to companies and financial institutions are not taxed.

Personal income tax is progressive from 10% to 30%, and is levied on earnings arising in Kenya, subject to certain residency requirements.

VAT is charged at three rates: 0% (goods in health care, education, and agriculture), 5% (machinery and equipment, and restaurant services), and 18% (other goods and services). There is a minimum turnover for companies to be liable of 2 million Kenyan shillings.

Excise duties are payable at a variety of rates.

There are double taxation agreements with Canada, Denmark, Malawi, Norway, Sweden, the United Kingdom, and Zambia.

There are a variety of other taxes, like Stamp Duty, and contributions to the National Social Security Fund.

Investment incentives

Private investments in excess of $5 million over a two year period, and which are judged to generate economic benefits for the economy, can offset import duties on capital goods against income liability.

Investment allowance is 60% for businesses in the manufacturing and hotel sectors.

There are a number of incentives aimed at promoting exports.

Duty may be exempted on imports used in producing manufactures for export, or raw materials or duty free items for sale domestically. Applications must be made to the Export Promotion Programme Office in the Ministry of Finance and Planning.

A "manufacturing under bond" scheme is run jointly by the Investment Promotion Centre and the Ministry of Finance and Planning. It is aimed to promote export oriented manufacturing, and applied to companies operating in or around Nairobi, Mombasa, Kisumu, Eldoret, Nakuru, Nyeri and Thika. The following incentives are available:

-Exemption from duty and VAT on imported plant, machinery and equipment, residual oil, raw materials and other imported inputs; and,
-100 per cent investment allowance on plant, machinery, equipment and buildings.

The Export Processing Zones Programme establishes regions where companies can take advantage of simplified licensing arrangements, and a number of fiscal benefits:

-10-year tax holiday and a flat 25 per cent tax for the next 10 years,
-Exemption from all withholding taxes on dividends and other payments to non-residents during the first 10 years,
-Exemption from import duties on machinery, raw materials and intermediate inputs,
-No restrictions on management or technical arrangements,
-Exemption from Stamp Duty,
-Exemption from VAT.

Contact addresses

Investment Promotion Centre
P. O. BOX 55704
NAIROBI.
FAX: 254-2-33663

Ministry of Finance
POB 30007, Treasury Building, Harambee Avenue, Nairobi
Tel: 254-2 338111; Telex: 22921

Central Bank of Kenya (Banki Kuu ya Kenya)
POB 60000, Haile Selassie Avenue, Nairobi
Tel: 254-2 330500/226431; Telex: 22324 KENYABANK; Fax: 254-2 340192

Kenya Export Promotion Council:
P.O. Box 40247
Nairobi
Tel:+2542 228534
Fax: 2542218013

Kenya National Chambers of Commerce and Industry
Ufanisi House
Selassie Avenue
P.O. Box 47024
Nairobi
Tel: (2542) 220866/7
Fax: (2542) 340664

Kenya Association of Manufacturers
P.O. Box 30225
Nairobi, KENYA
Tel: 254-02-746005/7, 746021/2
Fax: 254-02-746028/30





Lesotho

Background

1998 Population (M): 2
1998 GNP (USD B): 1.2

1997/98 % annual GNP growth rate: -3.1%
1998 GNP per capita (USD): 570
1990-98 % annual growth of GDP: 7.2
1990-98 % inflation: 7.7

1998 Labour force (M): 1
1998 Female % of labour force: 37
1997 Adult illiteracy rate as % of people 15 and above (male): 29
1986-7 % share of income or consumption (highest 10% of population / lowest 10%): 48.2
1997 Telephone main lines per 1000 people: 10

1990-98 % annual growth of gross domestic investment: 11.1
1997 Private investment as % of gross domestic fixed investment: 81.8
1998 Merchandise exports (USD M): 980
1997 Foreign direct investment (USD M): 29
1997 Present value of external debt as % of GDP: 35

1998 Value added as % of GDP Agriculture: 11
1998 Value added as % of GDP Industry: 42
1998 Value added as % of GDP Services: 47

Lesotho is a small country surrounded by South Africa, which exerts considerable influence over the economy. Historically, many citizens travelled to South African mines, and this source continues to contribute about 30% to GDP, and up to half of rural household income. Recent years have seen a reduction in such opportunities, and despite the presence of some diamond deposits in the country, most returnees may have to find work in the large informal and agricultural sector. Presently, a third of the workforce have no formal employment or are underemployed.

Lesotho is a member of the Southern African Development Community and in currency union with South Africa along with Swaziland and Namibia. The resulting area of low transaction costs is important for a country whose growth depends closely on trade with its larger neighbour. In recent years, this has taken the form of sales of Lesothos considerable water resources. South Africa also supplies the countrys electricity, and its entrepreneurs own the rail network. The railway is small however, with highways far more extensive, the majority being unpaved.

The high GDP growth rate in the last decade has been assisted by a rapid increase in the manufacturing sector, from a low starting point. Industries include clothing and textiles, food processing, and construction. Many of these are export generating. Further industrial expansion may be possible in view of the large proportion of manufactures presently imported, although the domestic market may not be large enough to justify the production of some goods if aimed only at the Lesotho consumer.

85% of the population are rural, but the mountainous environment, periodic droughts, and population pressure contributes to the need for substantial food imports, mostly corn. The environment may prove to be an asset through tourism, however, which may have potential for growth, in view of its financial significance in the larger region.

The Government has stated its aim of privatising parastatals, and private investment is encouraged by a one-stop-shop, the Lesotho National Development Corporation. The World Bank is active in an advisory and financing role.

There has been some political tension in the last two decades, and the distribution of income is very unequal.

Regulations governing foreign investment

There are no capital controls between Lesotho, South Africa, Swaziland, and Namibia. They have a common external control regime.

Profits may be repatriated freely.

Legal forms

I could not find information on this subject.

Procedures for investment

The Lesotho National Development Corporation (LNDC) is a one-stop-shop who may assist in the administrative procedures for proposed investments, as well as with loans and other financing. A project proposal should be submitted with the following information:

- a brief description of the project,
- details and history of the investing firm,
- audited profit and loss accounts and balance sheets for the last three years,
- details of directors,
- details of management,
- anticipated employment,
- the marketing plan,
- financing,
- projected profitability,
- the site,
- the utility requirements, and
- equipment and raw materials to be used.

A full list of information required is given on the LNDC website.

Labour considerations

Basic minimum wages are set by the Statutory Wages Advisory Board, which contains representatives of employers, employees, and the Government.

Employees may not be dismissed unless there is a reason for the termination deemed valid, and they may have the opportunity to defend themselves unless the employer cannot be reasonably expected to allow this.

Any dismissed employee, except those guilty of misconduct, is entitled to two weeks severance pay per complete year of continuous service.

The normal working week is limited at 45 hours, but may be extended by up to a further 11 hours when the continuous nature of the work makes it necessary. In this case overtime must be paid at 1.25 times the basic rate, or greater.

No employee must work for more than five hours continuously without a break of one hour. There must be a weekly break of at least 24 hours.

Holiday allowance must be at least twelve days per year. There are the same number of public holidays, and full pay must be given on both.

Sick leave and maternity leave entitlements are in force. Companies must provide adequate transportation to work where appropriate.

In the event of an industrial dispute, defined consultation procedures should proceed industrial action.

Taxes

The maximum tax rate on profits of manufacturing companies is 15%. Their shareholders are not liable to withholding tax on received dividends.

Personal income tax is progressive from 0% to 35%.

Sales tax also applies.

There are double taxation agreements with South Africa, the UK, Germany, and Mauritius.

Investment incentives

Manufacturers may qualify for a number of incentives, including:

- long term loans,
- export finance facility,
- exemption from sales tax on capital machinery and equipment, and
- unimpeded access to foreign exchange.

The Lesotho National Development Corporation (LNDC) provides loans for terms up to ten years, with flexible repayment. The scheme details must be submitted, and the project must be viable in the long term.

The corporation only takes a portion of the equity of the company when the project is in the national interest but no private investor will take part, or the promoter feels that LNDC participation is essential.

It may also provide training grants and subsidised industrial property.

Contact addresses

Lesotho National Development Corporation
Postal address:
P/Bag A96
Maseru 100
Location:
Development House
Block A
Kingsway Street
Maseru
Telephone: +266 312012
Telefax: +266 310038
Email: lndc@ilesotho.com
Web site: www.lndc.org.ls

Association of Lesotho Employers
P O Box 1509
Maseru 100
Tel: +266 315736

Department of Labour
Private Bag A116
Maseru 100
Tel: +266 322564/5

Department of Customs
P O Box 891
Maseru
Tel: +266 313796





Liberia

Background

1998 Population (M): 3
1998 GNP (USD B): 0.4 (World Bank estimate)

1997/98 % annual GNP growth rate: 60% (Author's estimate based on World Bank data)
1998 GNP per capita (USD): $150 (World Bank estimate)
1990-98 % annual growth of GDP: N/A
1990-98 % inflation: N/A

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1997 Adult illiteracy rate as % of people 15 and above (male and female combined): 52
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): N/A
1997 Present value of external debt as % of GDP: N/A
1997 Value of external debt as % of GDP: 520

1998 Value added as % of GDP Agriculture: N/A
1998 Value added as % of GDP Industry: N/A
1998 Value added as % of GDP Services: N/A
1979 Value added as % of GDP Agriculture: 34.3
1979 Value added as % of GDP Industry: 30.0
1979 Value added as % of GDP Services: 35.7

The Liberian economy is based on agricultural and mineral resources, notably iron ore, rubber, and timber. It grew strongly throughout the 1960s and 1970s, before declining in the 1980s. Between 1990 and 1997, Liberia was engaged in a civil war which caused substantial economic disruption, and whose effects are still being felt today, despite a recent recovery. The World Bank does not seem to have very many reliable current macroeconomic statistics about the country, so some of my observations relate to its state before the war.

The majority of the population work in the agricultural sector, generating over a third of GDP in 1979. Prior to the outbreak of the war, major cash crops were rubber and timber, with rubber generating over US$100 million annually in exports. This amount declined sharply during the war years, and indeed the total of all officially recorded export earnings in 1996 was only US$20M. Since 1997, crop production has increased rapidly.

The industrial sector accounted for another third of 1979 GDP. A central part of the sector is mineral extraction. Liberia has large iron ore deposits, and in the 1970s it was among the worlds largest exporters of the metal. Although some of these have been exhausted, there seems to be room to expand production again, perhaps by attracting foreign companies back to the country. Many left during the first part of the 1990s. Manufacturing is a small part of the economy, having contracted substantially during the 1980s. The remaining part may be more efficient than in 1979, although this would of course depend on the way in which the contraction occurred.

In the service sector, Liberia generates revenues by allowing shipping travel under the Liberian flag, while efforts have been made to promote tourism. With over 40% of the population living in towns and cities, services may grow in the future. International and regional trade may also increase again. Liberia is a member of the Economic Community of West African States, ECOWAS, although it is not yet well integrated into its programmes, like free movement of persons and goods, and harmonisation of economic policies.

The end of the civil war in 1997 and the democratic elections which followed had the immediate effect of doubling real GDP in the year, and increasing it significantly in the following year. The Government has taken steps to stabilize the economy and bring it to a peacetime state, with spending, inflation, and the exchange rate restrained. It may attempt to improve relations with international lenders, which in the case of the World Bank will probably mean paying some of its debt arrears. Some problems relating to the war remain: some rebels are still active, if at a lower level than previously; there are a large number of refugees; and former fighters must be reintegrated into civilian society. There are also disputes along the borders with Sierra Leone and Guinea. Once these difficulties are solved, the country can attempt to improve living standards and raise literacy beyond its current adult rate of 53%.

Internet information on investing in Liberia is hard to find, so I have left blank the sections below. However, if you are interested, there is a much more complete review provided by the United States Department of Commerce at

http://www.usatrade.gov/website/CCG.nsf/ShowCCG?OpenForm&Country=LIBERIA

I have not reviewed the accuracy of this source.

Regulations governing foreign investment

I could not find information on this subject.
Legal forms

I could not find information on this subject.
Procedures for investment

I could not find information on this subject.
Labour considerations

I could not find information on this subject.
Taxes

I could not find information on this subject.
Investment incentives

I could not find information on this subject.
Contact addresses

I could not find information on this subject.





Madagascar

Background

1998 Population (M): 15
1998 GNP (USD B): 3.8

1997/98 % annual GNP growth rate: 4.8
1998 GNP per capita (USD): 260
1990-98 % annual growth of GDP: 1.3
1990-98 % inflation: 22.1

1998 Labour force (M): 7
1998 Female % of labour force: 45
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1993 % share of income or consumption (highest 10% of population / lowest 10%): 19.32
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: 0.4
1997 Private investment as % of gross domestic fixed investment: 46.9
1998 Merchandise exports (USD M): 215
1997 Foreign direct investment (USD M): 14
1997 Present value of external debt as % of GDP: 85

1998 Value added as % of GDP Agriculture: 31
1998 Value added as % of GDP Industry: 14
1998 Value added as % of GDP Services: 56

Madagascars economy is based on subsistence agriculture, where the majority of the Malagasy people work. Coffee accounts for a little under half of exports, with vanilla and cloves bringing the figure to three-quarters. The declining world prices for the leading export commodities contributed to a disappointing economic growth in the 1980s and early 1990s. A growing industrial sector, 14% of GDP, imports substantial amounts of capital goods and part finished manufactures, and sub-sectors directly linked to indigenous resources are predominant, like food processing and mining. The unusual natural environment gives tourism the possibility of strong growth.

IMF sponsored structural adjustment programs have been negotiated since 1988, and the economy has moved away from the formerly extensive Government activity in the economy. Parastatals are being privatised, or the private sector involved, in the air transport, petroleum, telecommunications, and banking industries. A Free Trade Zone was established in 1991 and has attracted hundreds of companies, particularly in textiles, lured by a plentiful and low cost labour force. The Zone has been the main entrance point for foreign investors, with French and Mauritian the largest. Other footloose industries may also find a base on Madagascar in the future, possibly relocating from elsewhere in the Indian Ocean rim.

The communications and telecommunications networks are not well developed, and hamper business. The port system of this island nation is in a notable state of disrepair. Lately, funds and assistance for infrastructure development have arrived by way of privatisation, or from foreign donors. There are a number of Internet service providers.

Regulations governing foreign investment

Exchange control is administered by the External Finance Office of the General Directorate of the Treasury, with some delegation to authorised intermediaries. In practise, a shortage of domestic credit and de facto limitations on the interbank market restrict foreign exchange availability.

Foreign currency may be imported freely, subject to a written declaration to customs. Profits may be remitted without restriction, while exporters must repatriate their foreign currency earnings within 90 days of acquisition.

Legal forms

Joint ventures or licensing

One investment advisor (the US embassy in 1996) recommends these forms, because establishing a new business or getting clearance for land purchase is said to remain difficult for foreigners.

The same adviser recommends that licensing arrangements are negotiated carefully, as the Malagasy Commercial Code (again in 1996) was outdated.

Procedures for investment

There is a one-stop-shop to assist foreign investment. It does not authorise investments itself, but directs the proposal towards Government ministries, and attempts to clarify standards of approval and reasons for rejection. The following aspects of proposals are considered:

- type of investment,
- contribution to the sector of investment,
- technological level, and
- impact on labour.

The one-stop-shop aims for a 45-60 day processing time.

Prior to importing, an importer must send an Import Statistics Sheet and a pro forma invoice to their primary commercial bank, and a copy to the Ministry of Commerce.

Exports are not regulated, except for trade in endangered species, and precious and semi-precious stones.

Labour considerations

Residence visas and work permits are required.

There are simplified visa procedures for Free Trade Zone investors.

Potential foreign investors may have to show as part of the project approval process that:

- the project generates employment,
- maximises the use of local inputs, or
- trains Malasy workers for eventual managerial or technical roles.

Taxes

The 1996 financial law specified four types of import duty:

- import tax, valued on CIF, and varying from 0% to 30%,
- customs fees, from 0% to 30%,
- value added tax, 20%, and
- consumption tax, 120%.

Export duties are also levied.

Investment incentives

Free Trade Zone / Free Ports

Investments benefit from incentives if they qualify for the Free Trade Zone, which is a legal status rather than a location. Entrance is awarded to companies which are export oriented manufacturers, or develop, manage, or provide services to Free Trade Zone companies. The following benefits are given:

- tax holidays of varying terms,
- exemption from customs duties, import taxes, value added taxes, and export duties, and
- personal taxes are reduced.

Contact addresses

Ministère de la Promotion du Commerce et du Ravitaillement (Ministry for the Promotion of Commerce and Supplies)
P.O. BOX 245
Antananarivo 101
Tel: (261 2) 272 92
Fax: (261 2) 312 80

Ministère de la Promotion de l'Industrie et de l'Artisanat (Ministry for the Promotion of Industry and Crafts)
P.O. BOX: 527
Antananarivo 101
Tel: (261 2) 255 15
Fax: (261 2) 277 90

Guichet Unique (One-Stop-Shop)
Ministere de l'Economie et du Plan
P.O. Box 674
Antananarivo 101 - Madagascar
Tel: (261 2) 202 84
Fax: (261 2) 285 08

Chambre de Commerce, d'Industrie et d'Agriculture d'Antananarivo (Antananarivo Chamber of Commerce, Industry, and Agriculture)
P.O. BOX 166
Antananarivo 101
Tel: (261 2) 202 11
Fax: (261 2) 202 13

FIVMPAMA (Association of Malagasy Businessmen)
12, rue Rainizanabololona - Antanimena
Antananarivo 101
Tel: (261 2) 347 54
Fax: (261 2) 320 56

GEM (Groupement des Entreprises de Madagascar, the Malagasy Association of Businesses)
P.O. Box 1695
Antananarivo 101 - Madagascar
Tel: (261 2) 238 41

SIM (Syndicat des Industries de Madagascar, Association of Malagasy Industries)
c/o PAPMAD
P.O. Box 1756
Antananarivo - Madagascar
Tel: (261 2) 206 35
Fax: (261 2) 243 94

Export Promotion Department
Ministry of Trade Promotion Craft
Antananarivo
Tlx: 22378
Fax: 221309





Malawi

Background

1998 Population (M): 11
1998 GNP (USD B): 2.1

1997/98 % annual GNP growth rate: 1.8
1998 GNP per capita (USD): 200
1990-98 % annual growth of GDP: 3.9
1990-98 % inflation: 32.8

1998 Labour force (M): 5
1998 Female % of labour force: 49
1997 Adult illiteracy rate as % of people 15 and above (male): 27
1997 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 4

1990-98 % annual growth of gross domestic investment: -8
1997 Private investment as % of gross domestic fixed investment: 27.7
1998 Merchandise exports (USD M): 530
1997 Foreign direct investment (USD M): 2
1997 Present value of external debt as % of GDP: 45

1998 Value added as % of GDP Agriculture: 39
1998 Value added as % of GDP Industry: 19
1998 Value added as % of GDP Services: 41

Malawis growth in production in the early 1990s marks a return to the industrialisation led growth of the immediate post independence period, and the stagnation which followed the earlier period has a parallel in the current slowdown. The last decade saw a number of measures aimed at promoting the growth of the private sector, including setting up export processing zones, privatisation, and establishing a Stock Exchange, making Malawi probably the poorest country in the world to have one. There were also several unusual events which may have provided boosts to the economy, notably the end of the civil war in Mozambique, allowing refugees to leave and permitting Malawi to use Mozambiquan ports which are probably Malawis cheapest access to the sea, and the opening of markets in surrounding countries, with new export opportunities. As in other states undergoing structural adjustment, foreign and multilateral donors provide a significant amount of the Government budget. Perhaps not unrelated to the more liberalised economy is the high rate of HIV/AIDS, which is likely to adversely affect the countrys skills base.

Agriculture is the foundation of the economy, accounting for 39% of GDP in 1998 and employing most of the workforce, with tobacco, tea, and sugar among the leading exports. Droughts and floods are periodic problems. Much of the industrial sector is based on agro-processing, with some diversification coming from a small textiles industry, although many manufactured goods are imported. The manufacturing sector has nevertheless increased quite rapidly from its original, restricted size.

Mining rights belong to the Government, and licenses are granted for prospecting and extraction. The sector is small at present, and mainly centred on industrial minerals, including coal and limestone. Precious and semi-precious stones are extracted with licenses required for trade.

Hydropower generates almost all of Malawis electricity, which is provided by a parastatal. Most of the power used in commerce is produced by burning petroleum products, and it is heavily dependent on imports, as the country has no upstream industry.

Opinions on the quality of the telecommunications network are divided, but here as elsewhere, liberalisation has been proceeding. Long term Government plans have been stated to be increased quality and coverage of the system, modernisation of facilities, and private sector participation, with the establishment of an independent regulatory authority an intermediate step. Local Internet providers exist.

Malawi has entered into agreements with several of its neighbours to promote trade and development, including COMESA membership, and the establishment of the Mtwara development corridor in 1999.

Regulations governing foreign investment

The Reserve Bank of Malawi is responsible for exchange control, with delegation to authorised dealers.

Inward capital investment is unrestricted, although if it is to be recognised as foreign investment, it must be registered with the Reserve Bank. Registering with the Bank also allows free capital repatriation. Remittance of dividends in the form of foreign currency requires Bank approval.

The Malawi Stock Exchange permits foreign investment, although the total amount a single overseas investor may hold in a company is 5% of issued share capital, and the maximum total non-local ownership is 49%.

Legal forms

Public and private companies

Companies may be limited by shares or guarantee, or their owners may have unlimited liability.

At least two people are required to form a company.

The Board must have at least three local investors, unless the company is exempted.

There must be a Memorandum and Articles of Association.

It must submit an annual return to the Registrar of Companies.

Private companies

Private companies are the most common form of business. They are subject to all the regulations described above, plus a few others.

The Memorandum or Articles of Association must restrict the right to transfer shares, if the company has any. It may not invite the public to acquire shares or debentures in it.

The total number of members must be no greater than 50.

Branch

A branch of a foreign company must register as an external company if it has a place of business or owns immovable property in Malawi. It must have at least one Malawian resident director, and has to submit annual returns and a financial statement to the Registrar of Companies.

Procedures for investment

For a new company

The first step is to send the proposed name to the Registrar of Companies.

If the name is cleared, the Memorandum and Articles of Association should be submitted to the Registrar. They should be signed and dated before a witness. A signed statement of consent by the directors and secretary should be included.

If the documents are acceptable, a Certificate of Incorporation is issued. A fee is charged.

For registration of foreign companies

A foreign company must register with the Registrar within 28 days of setting up a place of business. The following documents should be sent:

- Memorandum and Articles of Association, or any other documents defining the company,
- A statement in standard form giving the name, nature of business, address in and outside Malawi, and the names and addresses of documentary agents, local directors, and other relevant information.

If the documents are in order, the company is entered in the Register of External Companies.

Labour considerations

Permits are required to live or work in Malawi.

Investors with investments below $100,000 may be granted a Temporary Employment Permit for up to 6 years. It allows employment of foreign personnel when suitable local employees are not available.

Investing above $100,000 automatically entitles two senior employees to work in Malawi.

Taxes

(These taxes are under review, and the following rates may have changed.)

Income arising from a Malawi source is taxable. Foreign residents are liable if they conduct business in Malawi through a permanent establishment.

The standard rate of corporation tax is 38%, with branches taxed at 43%. (One source reports 35% and 40%, and different rates for some of the following figures).

Personal income tax varies progressively from 0% to 38%. The rate for partnership also ranges from 0% to 38%.

There are various income tax rates for other legal forms.

A 10% withholding tax applies to interest, royalties, rent, fees, and commission in excess of K100. For other payments, a 5% tax applies.

A 15% withholding tax applies to the income of non-residents.

A number of other taxes are in force too, including stamp duty, import duty, and rates.

There are double taxation agreements with Denmark, France, Kenya, the Netherlands, Norway, South Africa, Sweden, Switzerland, and the UK.

Investment incentives

Any investments may be awarded the incentives listed:

- 40% investment allowance on qualifying expenditure on new building and machinery,
- additional allowance of 15% for investments in designated areas of Malawi,
- 20% allowance on qualifying expenditure on used building and machinery,
- manufacturing companies may deduct all operating expenses up to 18 months prior to the start of the operation,
- full deduction in respect of carried forward losses,
- and other tax breaks.

Export Processing Zones

Investments in Export Processing Zones may benefit from the following incentives:

- corporate tax of 15% (0% according to one source),
- no withholding tax on dividends,
- no duty on capital equipment and raw materials,
- no excise tax on purchase of raw materials and packaging materials made in Malawi,
- no value added tax,
- transport tax allowance on international transport costs of 25%.

Exporters outside Export Processing Zones may benefit from other incentives:

- export tax allowance of 12% of export revenues for non-traditional exports, that is other than tea, coffee, tobacco, and sugar,
- transport tax allowance of 25% of international transport costs,
- no duties on imports of capital equipment used mainly in manufacture of exports,
- no value added tax,
- no excise taxes on purchases of raw materials and packaging materials made in Malawi,
- refund of all duties on imports used in the production of exports,
- no duties on capital items and raw materials.

Contact addresses

Malawi Export Promotion Council (MEPC)
Delamere House, Victoria Avenue
P.O. Box 1299
Blantyre
Tel: (265) 620499
Tlx: 44589 EXPORT MI

Malawi Chamber of Commerce and Industry
P.O. Box 258
Blantyre
Tel: (265) 671988
Fax: (265) 671147
Tlx: 43992

Customs and Excise
Contact: Controller of Customs & Excise
Department of Customs & Excise
P/Bag 20
BLANTYRE
(Tlx 44804 CUSTEX);
Tel (265) 620288





Mali

Background

1998 Population (M): 11
1998 GNP (USD B): 2.6

1997/98 % annual GNP growth rate: 5.3
1998 GNP per capita (USD): 250
1990-98 % annual growth of GDP: 3.7
1990-98 % inflation: 9.2

1998 Labour force (M): 5
1998 Female % of labour force: 46
1997 Adult illiteracy rate as % of people 15 and above (male): 57
1994 % share of income or consumption (highest 10% of population / lowest 10%): 22.4
1997 Telephone main lines per 1000 people: 2

1990-98 % annual growth of gross domestic investment: 1.5
1997 Private investment as % of gross domestic fixed investment: 60.8
1998 Merchandise exports (USD M): 518
1997 Foreign direct investment (USD M): 15
1997 Present value of external debt as % of GDP: 73

1998 Value added as % of GDP Agriculture: 45
1998 Value added as % of GDP Industry: 21
1998 Value added as % of GDP Services: 34

Malis economic growth has increased in the last decade, from 3% in 1992-4 to 4.6% in 1995-9, due in part to improvements in agricultural performance. Agriculture, where the majority of the population work and almost half of GDP is generated, has seen the production of paddy rice and cotton increase sharply. Mali is now the largest producer of the fibre in sub-Saharan Africa, and in 1999 it accounted for 43% of export earnings. Other crops like fruit and vegetables are now being promoted, and these may help in reducing dependence on food imports. The growth has occurred against adverse environmental conditions, with declining soil fertility and desertification becoming a threat for the 40% of the country not already covered by desert.

The economic structural adjustment programme started in 1992 has probably been important in the rural expansion, with liberalising measures taken as part of wider scheme to reduce the States role, and encourage entrepreneurial activity. Price controls have been lifted, and a privatisation scheme is bringing capital into the telecommunications industry - formerly a state monopoly -and the transport infrastructure. Inflation has been low for several years, and the fiscal deficit constrained, although the country has a persistent visible trade deficit. The World Bank is actively encouraging the process, using debt relief as an incentive. The next part of the programme will aim to sustain growth and reduce poverty in the country. To meet the latter goal, the level of illiteracy will probably have to be lowered from its current level of 68%, which is restricting the opportunities for growth of skilled employment.

Mining is a central industrial subsector. The principal mineral is gold, accounting for 41% of export earnings in 1999, although phosphates are also extracted, and there are diamonds and copper deposits. They may be mined as part of current plans to diversify within the sector. The manufacturing sector is small, at 6% of GDP in 1998. However, businesses using agricultural inputs are reported to be expanding, for example those in the production of vegetable oil and textiles.

The country has to import its petroleum, making it vulnerable to fluctuations in the world price. The majority of its domestic energy comes from wood sources, which may worsen the problem of deforestation and so soil erosion. The Senegal River is reported to have hydropower potential, and this may be used more extensively in the future.

Malis land transport network consists of roads, rail, and rivers. Because it is landlocked, the issue of access to the sea is very important, and the Government is building new roads that will extend the available routes into neighbouring states. A railway already runs from Kouliko, in the heart of Mali, to Dakar in Senegal, while river transport is used for lightweight goods, particularly along the Niger River. Roads are also being built to the less densely populated regions in the west and north of the country, which may help to promote the expanding tourist industry.

Mali is a member of the West African Economic and Monetary Union, and has the CFA Franc as its currency. The devaluation of the CFA Franc in 1994 was said to have boosted exports.

Regulations governing foreign investment

Foreign investors are guaranteed the same benefits as Malian investors.

There is freedom of capital and revenue transfer for all investments financed by foreign currency, provided the transfer is made in the same currency. This includes dividends, interest, capital released at wind-up, and salaries.

Procedures exist for arbitration in the event of dispute between the investor and authorities, at the International Centre for Resolution of Disagreements relative to Investments between States and Foreign Nationals, set up under World Bank guidance.

Mali has signed the treaty of the Multilateral Investment Guarantee Agency.

Legal forms

The legal forms in Mali are defined by Organisation for Business Law Harmonisation in Africa (OHADA) regulation, and are shared with other member states who have ratified the relevant treaties.

A foreign company investing in Mali may set up a representative office, or create a locally registered subsidiary, which is the most common approach.

The forms are:

- Société à Responsabilité Limitée (SARL)
- Société Anonyme (SA),
- Société en Nom Collectif (SNC),
- Société en Commandite Simple (SCS), and
- Groupement d’Interêt Economique (GIE).

Société à Responsabilité Limitée (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

Setting up a new business

There are two one-stop-shops for setting up a business in Mali. The first, "le Guichet Unique", issues permits to enterprises not only concerned with trading, but also production of goods. The second, "Le Centre des Formalités des Entreprises" (CFE) authorises enterprises which are concerned solely with trading. The Centre tries to process applications within 48 hours, and then forward them to the Ministries and other authorities involved. Authorisation should be granted within fifteen working days of the application.

Labour considerations

Workplace relations are governed by the Labour Code of 1992.

The only restriction on hiring Malian or expatriate workers is that visas are requested from the Inspectorate of Labour.

Temporary contracts may only be renewed twice.

An employer may make an employee redundant if circumstances make it unavoidable. They must inform the Inspectorate of Labour, who will issue a purely consultative opinion within fifteen days.

The Social Security Code applies to all employers and workers in Mali except civil servants and members of the armed forces. It makes the following requirements on employers:

- All enterprises must provide a medical and health service to their employees.
- All employees must undergo a medical examination before hiring, or at the latest by the end of the employee's trial period.
- The regime for prevention and compensation for accidents at work, and for workers' illnesses, must be granted to all salaried employees (I am not sure of its content).
- All accidents or worker's illnesses must be reported within 48 hours (I do not know where).
- The National Social Security Institute (INPS) must be notified of the hiring or redundancy of any workers.
- Contributions must be made to the INPS for protection against accidents at work, the amount varying by profession.
- Both employer and employee must make contributions to a pension fund (I do not know if this is State administered).

Taxes

The Société à Responsabilité Limitée and Société Anonyme (SA) pay company tax at 35% of tax. There is a minimum payment of 0.75% of turnover.

Taxes on dividends are 18% if they are distributed, 10% if they are retained, and 9% is they are put in current account.

Business rates are calculated in two parts: a fixed amount, and a percentage of property value. The percentage is reported at 10% or 15%, depending on the source.

Personal income tax (tax on benefits and salaries, ITS) is progressive from 0% to 40%.

There is a basic employer’s contribution of 7.5% (levied on the total salary bill, I think).

Contributions must be made to the National Social Security Institute (INPS) for protection against accidents at work. The amount varies by profession.

There is a single Value Added Tax rate of 18%.

Tax on financial activities is 15% - I am not sure on what it is charged.

There is also a land tax, and a charge for the National Housing Fund.

Fees are charged on setting up a company or transferring its ownership.

There are no customs duties between the states of the West African Economic and Monetary Union: Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, and Togo. The countries share common taxes on imports from outside the Union, forming a set of customs charges. These are:

- customs duties,
- the statistical charge,
- the community levy (PCS),
- the conditional import tax (TCI), and
- the reducing protection tax (TDP).

The last two are temporary taxes which are intended to be reduced or removed over time.

Customs duties vary by the type of good:

- medicines, condoms, health education materials, books, and magazines are exempt from duty,
- raw materials, equipment goods, and specific production inputs are subject to a 5% charge on import cost (I am not sure whether this is a Free on Board value, or another classification),
- intermediate inputs and products are subject to duty at 10%, and
- consumer goods and all other products pay 20%.

Statistical charge is 1% on import cost.

Community Levy is 0.5%.

TCI is designed to slow the effect of international price fluctuations on West African Economic and Monetary Union production of important goods like rice and sugar. As a result, it depends on market conditions, and is set at a Union level.

TDP is levied on industries that the Union wants to protect, for example, cigarette production. It is levied at two rates, depending on the industry, 10% or 20%. In the first case, the protection reduces by 2.5% per year, while in the second it falls at 5% per year.

The Union may decide on other measures for protection.

There is a double taxation agreement with France.

Investment incentives

The current Investment Code dates from Laws of 1991 and 1995. It applies to all enterprises, except those solely concerned with trading, and those searching for, or extracting, oil or gas.

All projects granted incentives must be realised within five years, although the period may be extended by another year if the project has been started after five years.

Applications must be made to the Guichet Unique one-stop-shop. Approval is granted within thirty days of application, and is only refused if the project does not meet legal and regulatory conditions. The documents required are:

- a stamped request addressed to the Minister of Industry,
- a copy of authorisation for professional activity, if necessary,
- a feasibility study in five copies, with detailed information on the following subjects:
-- résumé,
-- incentives requested,
-- context and history of the project,
-- capacity of the market and the enterprise,
-- materials used,
-- location,
-- technical information on the project,
-- enterprise organisation,
-- fees incurred in organising the enterprise,
-- workforce,
-- timetable for implementation, and
-- financial and economic assessment.

There are three incentive regimes available:

- regime A, for small and medium sized enterprises,
- regime B, for large businesses, and
- the free zone regime, for exporting companies.

The conditions and benefits are detailed below. There is a general condition for all regimes that the value added by the enterprise must be at least 35% of the product value.

Regime A, for small and medium sized enterprises

Regime A applies to investments below 100 million CFA Francs. The incentives are:

- exemption from tax on industrial and commercial profits for five years,
- exemption from business rates for five years,
- exemption from tax on land incomes for five years,
- exemption from tax on mainmorte goods for five years (this is tax on property revenues from groups of persons which are defined independently of the particular people who make it up),
- the right to pay registration charges over three years instead of at company creation, and
- exemption from charges when increasing company capital.

Regime B, for large businesses

This regime is for investments above 100 million CFA Francs.

- exemption from tax on industrial and commercial profits for eight years,
- exemption from business rates for eight years,
- exemption from tax on land incomes for five years,
- exemption from tax on mainmorte goods for five years,
- the right to pay registration charges over three years instead of at company creation, and
- exemption from charges when increasing company capital.

The free zone regime, for exporting companies

Companies that primarily export may benefit from this regime, with a limit of 20% of their products being sold in the Malian market.

Free zone companies are exempted from all taxes linked to their export operation. They must pay taxes on any products sold in the domestic market.

Contact addresses

Centre des Formalités des Entreprises (CFE)
(Centre of Business Formalities)
B.P.46 Bamako
Tel: (223) 22.50.14

Chambre de Commerce et d'Industrie du Mali (CCIM)
(Mali Chamber of Commerce and Industry)
Place de la Liberté,
B.P.46 Bamako
Tel: (223) 22.50.36 or (223) 22.57.62 or (223) 22.96.45
Fax: (223) 23.22.15 or (223) 22.21.20

Centre National de Promotion des Investissements (CNPI)
Tel: (223) 22.22.79 or (223) 22.52.12
Fax: (223) 22.80.85
Email: cnpi@spider-toolnet.org

Chambre d’Agriculture du Mali (CAM)
(Mali Chamber of Agriculture)
B.P. 49 Bamako
Tel: (223) 22.87.27

Institut National de Prévoyance Sociale (INPS)
(National Institute of Social Security)
Square Patrice Lumumba
B.P.53 Bamako
Tel: (223) 21.25.54 or (223) 21.77.42
Fax: (223) 22.60.30

Ministère des Finances
(Ministry of Finance)
B.P.234 234 Bamako
Tel: (223) 22.58.58

Ministère des Travaux Publics et des Transports
(Ministry of Public Works and Transport)
B.P.78 Bamako
Tel: (223) 22.39.37 or (223) 22.33.80

Ministère de l’Emploi, de la Fonction Publique et du Travail
(Ministry of Employment, the Civil Service, and Labour)
B.P.80 Bamako
Tel: (223) 22.34.31

Ministère de l’Industrie du Commerce et de l’Artisanat
(Ministry of Industry, Commerce, and Crafts)
B.P.1759 Bamako
Tel: (223) 22.92.08 or (223) 22.80.58

Direction Nationale des Douanes
(National Department of Customs)
B.P.128 Bamako
Tel: (223) 22.53.94
Fax: (223) 22.51.61

Fédération Nationale des Employeurs du Mali
B.P.2445 Bamako
Tel: (223) 22.63.11

Agence de Promotion des Entreprises Privées (APEP)
(Agency for Promotion of Private Companies - it presents project studies to banks that may provide finance)
Avenue Moussa Travélé Imm.Sogefih
B.P.912 Bamako
Tel: (223) 23.10.72
Fax: (223) 23.10.73





Mauritania

Background

1998 Population (M): 3
1998 GNP (USD B): 1.0

1997/98 % annual GNP growth rate: 5.2
1998 GNP per capita (USD): 410
1990-98 % annual growth of GDP: 4.2
1990-98 % inflation: 5.9

1998 Labour force (M): 1
1998 Female % of labour force: 44
1997 Adult illiteracy rate as % of people 15 and above (male): 51
1995 % share of income or consumption (highest 10% of population / lowest 10%): 13.0
1997 Telephone main lines per 1000 people: 5

1990-98 % annual growth of gross domestic investment: 4.0
1997 Private investment as % of gross domestic fixed investment: 78.3
1998 Merchandise exports (USD M): 448
1997 Foreign direct investment (USD M): 3
1997 Present value of external debt as % of GDP: 169

1998 Value added as % of GDP Agriculture: 24
1998 Value added as % of GDP Industry: 30
1998 Value added as % of GDP Services: 45

The Mauritanian economy has been going though slow, steady, and fundamental changes over the last decade. Physical capital has been improved by a 6.2% average annual growth in annual gross domestic investment, while 20% of Government expenditure over the years 1992 to 1997 was spent on education. Much of the population has moved from the rural areas to the cities of this desert nation, and there is a readily available workforce, with 26% of the active population in 1988 unemployed. With a reasonable growth rate and controlled inflation, the country has been able to diversify its markets and products from a restricted base, without excessive economic or political disruption. One source says that the Government has been liberalising the economy for almost twenty years.

Well over a third of Mauritanian goods and services are exported, and the country has moved from quite large current account deficits in the early 1990s to a surplus in 1999. Almost the only exports are iron and fish, which can make foreign exchange earnings volatile. Although Mauritania is not a member of ECOWAS, the Economic Community of West African States, the trading bloc has become an increasingly significant partner. The volume of exports to it rose from 5% of total exports in 1990 to 14% in 1996, before declining to 10% in 1997, with imports at a much lower level, although also growing. An industrialising and more prosperous ECOWAS may provide further opportunities for trade. From 1990-4, the only years I have figures, half of Mauritanias trade was with the European Union. As the country is fairly near to the southern tip of the EU and seems to show many of the conditions necessary for an expansion of light industry, it may be among the first sub-Saharan states to produce textiles and other manufactures in large quantities for European markets. The production is already occurring in North African nations. In 1999, manufacturing accounted for 10% of GDP, with industry at 29%. Capital goods were 20% of all imports, and vehicles another 11%.

The production of iron and fish was almost static throughout the decade, while electricity output doubled and fresh water production increased by 40%. The two last subsectors could help to support industries which are, at present, constrained by shortage of inputs.

About two thirds of the population work in the rural sector, but limitations on land for rain-fed horticulture and an adverse climate mean that a large amount of food has to be imported. The rural population may find employment in the service sector, almost half of GDP in 1998. The formal service sector has run a large trade deficit for many years, and domestic production may be able to replace imports in the future. The high adult illiteracy rate of 58% in 2000 may slow down the development, although a national commitment to education, and an 86% primary enrolment, should bring the rate down.

Regulations governing foreign investment

Foreign investors are guaranteed equal treatment with Mauritanians.

Any investor may set up business in:

- agriculture and rural activities,
- growing, processing, and packaging commercial crops,
- promoting livestock health,
- storage or processing food and agricultural products,
- forestry regenerating existing forests,
- fishing involving processing or conservation of fish stocks,
- constructing, fitting out, or repairing ships,
- production or transformation of manufactured goods,
- prospecting, extraction, or processing of minerals,
- producing, transporting, or distributing energy,
- producing, treating, or bottling of water,
- telecommunications,
- helping to build affordable, social housing,
- tourism,
- service industries supporting industry, agriculture, fishing, or livestock rearing,
- finance, accepting deposits from the general public,
- exporting Mauritanian manufactures,
- laboratories connected with agriculture, livestock rearing, fisheries, or industry, and research centres,
- companies operating in industrial zones,
- public works, and
- the health sector.

Companies may import any goods that they wish, and may export products freely.

They may choose freely:

- their production policy,
- their trade policy,
- their prices,
- their customers and suppliers, and
- when to hire or dismiss employees.

The Mauritanian Central Bank guarantees to provide foreign currency to buy raw materials or equipment necessary for the company, and to repay loans from foreign lenders for Mauritanian investments.

There are no restrictions on repatriating dividends, or capital when selling or winding-up the company. The proceeds from a sale are exempt from all taxes or duties.

Expatriate salaries may be repatriated freely.

Investors are protected against expropriation or nationalisation. If these do occur, then compensation will be paid, determined by international law.

Legal forms

Legal forms in Mauritania include the Société à Responsibilité Limitée, or SARL (a limited liability company with shares) and the Société Anonyme, or SA (another limited liability company with shares, often larger than the SARL).

Procedures for investment

Registration in the investment code

There is a one-stop-shop in the Ministry of Planning which accepts and processes applications for registration. After receiving an application, the one-stop-shop sends a receipt immediately. The notification of the decision about acceptance in the Code will be made within forty five days.

The decision is taken by representatives of Government Ministries concerned. The installation phase of the proposed project should be completed within three years of the date of registration, or it stops being valid.

The documents which should be included in the application are:

- A request addressed to the Minister of Planning, care of the One-stop-shop Director, stating that the promoter will respect all the obligations in the investment code.
- A form describing the principal characteristics of the project. The form is available from the Secretariat of the one-stop-shop. The details required are:
-- the target market,
-- a summary description of the production process,
-- the production plan,
-- the financial set-up,
-- the programme of investment,
-- the type and number of jobs created, and
-- the location.
- a detailed list of the equipment proposed for total or partial exemption from import taxes and duties,
- the company statutes,
- the minutes of the constitutive General Assembly,
- a list of the members of the company, and the size of their ownership,
- if the investment is to extend an existing business, the balance sheets and accounts for the last three financial periods.

Investors should also include requests for entry into any of the special incentive schemes.

Labour considerations

I could not find information on this subject.

Taxes

Taxes include:

- tax on industrial and commercial profits,
- tax on financial profits,
- tax on non-commercial profits,
- apprenticeship tax,
- property taxes,
- tax on petroleum products,
- value added tax,
- import tax, and
- export tax.

I do not know their rates.

Investment incentives

Two incentive regimes are available:

- the priority enterprise regime, and
- the regime of establishment conventions.

There are a number of general conditions for entry:

- The investment must be registered under the investment code, as described in the "procedures for investment" section above.
- It must create, extend, develop, or restructure a business activity. In the case of extension, the investment must be at least 40% of the value of the company shares, and new jobs must be created, numbering at least 30% of the existing workforce.
- The investment must be in one of the following sectors:
-- the promotion of small and medium sized enterprises,
-- the development of exports of Mauritanian manufactures,
-- the development of domestic resources,
-- the setting up of businesses in the interior of the country, and
-- promotion of foreign investment.
- The investor must give priority to using Mauritanian raw materials, equipment, and services when they are of equal price and quality as foreign alternatives.
- The investor must employ and train Mauritanian managers and workers (I do not know how general this is).

The particular conditions for the incentive schemes are as follows.

The priority enterprise regime

To qualify for the priority enterprise regime, at least one of the following conditions must be met:

- the programme of investment must be less than or equal to 1.5 million Mauritanian ouguiya per job created, or equal to or greater than 50 million ouguiya per job created, before recoverable turnover tax,
- the enterprise must be based outside of the Nouakchott and Nouadhibou regions, and at least 90% of the personnel must work outside of these regions, and
- it must export products manufactured in Mauritania.

There are general benefits, and benefits which are awarded according to which of the conditions were met.

The general benefits are:

1) Partial exemption from tax on industrial and commercial profits for the first six years of operation, with the following conditions:

- Up to 40% of the gross profits may be exempted from tax.
- The exempted part of the profits must be reinvested within three years in the enterprise or another enterprise also in one of the incentive regimes.
- These exempted profits must be included each year in a special reserve in the companys balance sheet. The reserve must be called an "investment reserve" ("réserve d'investissement").
- The balance sheet must be certified by an accounting expert registered in Mauritania, and sent to the Department of Tax within four months of the end of the financial year.

2) The remainder of the tax on industrial and commercial profits is subject to a reduced rate for the first six years of operation:

- in the first year, the reduction is 50% for companies in the Nouakchott and Nouadhibou regions, and 90% elsewhere,
- in the second year, the reduction is 50% for companies in the Nouakchott and Nouadhibou regions, and 80% elsewhere,
- in the third year, the reduction is 50% for companies in the Nouakchott and Nouadhibou regions, and 70% elsewhere,
- in the fourth year, the reduction is 40% for companies in the Nouakchott and Nouadhibou regions, and 60% elsewhere,
- in the fifth year, the reduction is 30% for companies in the Nouakchott and Nouadhibou regions, and 50% elsewhere, and
- in the sixth year, the reduction is 20% for companies in the Nouakchott and Nouadhibou regions, and 40% elsewhere.

3) Service tax is reduced by 50% on the cost of lending from Mauritanian institutions to finance investment programmes.

4) If the enterprise faces unfair competition or dumping by a foreign company importing goods, then it may ask for a degressive surtax to be put on the import, levied as a tariff. The enterprise must supply twenty copies of a study of price comparisons in the market.

5) Charges arising when buying intellectual property rights may be written off over one tax year.

6) Research and development expenses may also be written off over one tax year.

7) Companies may ask the Government to make land and buildings available for its use.

The specific advantages are as follows.

1) For businesses involved with a programme of investment less than or equal to 1.5 million Mauritanian ouguiya per job created, or equal to or greater than 50 million ouguiya per job created, before recoverable turnover tax.

- The customs duty, the fiscal duty, and the turnover tax on imported raw materials, equipment and spare parts are reduced. The total tax from all three charges is lowered to 5% of the Cost, Insurance, and Freight value of the goods. The reduction applies during the period of installation of the investment, or three years, whichever is less.

2) For businesses based outside of the Nouakchott and Nouadhibou regions, and with at least 90% of the personnel working outside of these regions.

- Businesses are exempted from duties on setting up a company, or increasing its capital.
- The interest rate on short and medium term loans from Mauritanian financial institutions is at a favourable level. I am not sure how this works. The rate applies to loans for financing investment and subsequent operations.
- Enterprises may set up in the regional industrial estates.
- If businesses set up outside of these estates, then land may be provided free or at preferential rates.

3) For businesses exporting products manufactured in Mauritania.

- The interest rate on short and medium term loans from Mauritanian financial institutions is at a favourable level. I am not sure how this works. The rate applies to loans for financing Mauritanian exports.
- The Service Tax (taxe de prestation de service, TPS) is reduced by 50% on these loans.
- Up to 25% of the turnover earned by exports may be paid into a foreign currency account, subject to the regulations of the Central Bank of Mauritania.
- The tax on industrial and commercial profits will be reduced by the same proportion as export turnover is a share of total turnover. The maximum reduction is 85%.
- Certain duties and taxes paid on imports can be reclaimed when the final product is exported. This applies to all charges on imports used as inputs in the manufacturing process.
- Enterprises are exempted from all duties and taxes on exports.

The regime of establishment conventions

To qualify for this regime, both of the following conditions must be met:

- the investment must be at least 500 million ouguiya over a four year period,
- at least 200 permanent jobs must be created over the first two years of operation, and
- the investment should give particular importance to the economic and social development of the country, notably in the sectors mentioned in the section above, "regulations governing foreign investment".

The investment programme must begin within two years of the award of the regime, or it is cancelled.

The benefits are:

- all the general benefits of the priority enterprise regime,
- the specific advantages of the priority enterprise regime, if the enterprise qualifies for them,
- the taxes on the company will not change for ten years from the start of the regime, and the tax basis will be frozen,
- taxes acting retrospectively may not be put on the company unless it wants to have them applied, and
- the enterprise is exempted from the following taxes for the first six years of operation:
-- business rates,
-- dividend tax, and
-- real estate tax.

Contact addresses

Secrétariat de la Direction de la Promotion de l'Investissement Privé,
(Secretariat of the Department of Private Investment Promotion),
Ministère des Affaires Economiques et du Développement,
B.P. 238,
Nouakchott





Mauritius

Background

1998 Population (M): 1.1
1998 GNP (USD B): 4.3

1997/98 % annual GNP growth rate: 4.5
1998 GNP per capita (USD): 3,700
1990-98 % annual growth of GDP: N/A
1990-98 % inflation: N/A
1995 % inflation: 6% (source: COMESA website)

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 17 (male and female combined)
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): N/A
1997 Present value of external debt as % of GDP: N/A
1996 Total external debt as % of GDP: 30.4% (source: COMESA website)

1998 Value added as % of GDP Agriculture: N/A
1998 Value added as % of GDP Industry: N/A
1998 Value added as % of GDP Services: N/A

Mauritius has trodden the familiar economic development path of moving from a predominantly agricultural society, which put it among the ten largest sugar exporters in the world, to a economy in which light manufacturing, particularly textiles, has become the largest source of foreign revenue. One example of the success of the changes is that this small island state recently became the third largest exporter of woollen knits. The country is now looking to move towards more high-tech industries, including telecommunications, computer software, and financial services. The already strong tourism sector is another possibility for expansion.

Economic growth was very rapid in the 1980s, and has remained at a healthy, although slower, rate to the present day. The centre for the expansion has been Export Processing Zones, where over 500 companies are now based, and where production is increasing at 5% per year. Living standards have risen correspondingly, and rising wages have meant that some of the cost advantages of the island have weakened. Industry is attempting to diversify into higher quality goods and modernise production, while labour intensive businesses such as sugar processing are switching to more mechanised production techniques. The sharp fall in unemployment in the 1980s, resulting in close to full employment for male job seekers in the 1990s, has been offset to some extent by the entry of women into formal sector employment.

Foreign direct investment has undergone changes in its quality and quantity over the last decade. After sharp declines in the early years, recent investments have been in the service sector. The Government has adopted policies that encouraged the development of private enterprises, and has been quite agile in promoting new economic avenues. It has recently substantially reduced corporation tax from 35% to 25%, and lowered interest rates, together with fiscal benefits for high-tech companies and small and medium sized companies. The State is an active participant in utilities provision, although some privatisation is underway.

The evolution to manufacturing economy has meant that the preferential access to overseas markets historically enjoyed by enterprises may be eroded, notably to the European Union and the United States. Companies in those trading blocs may become competitors as Mauritian companies enter into higher value added industries.

The success of the development program has put pressure on the countrys infrastructure. There is only one airport, and no rail network, contributing to road congestion. The Government is committed to transport improvements, as well opening the telecommunications sector to competition by 2004. It is at present controlled by the State. International connections have been described as reliable, and the Internet is available locally. The changes may help to promote telecommunications equipment manufacturing.

There is a small Stock Exchange, which permits foreign investment. It is including systems for electronic trading.

Regulations governing foreign investment

There are no foreign exchange controls, and in particular no restrictions on profit repatriation.

100% foreign ownership of a company is allowed, although local participation is encouraged. Stock Exchange trading is also unrestricted, unless the objective is legal or management control. However, foreign investors are limited to 15% holdings in sugar companies. Companies in Export Service Zones must be at least 70% local owned.

Non-Mauritians may not acquire property. However, approved locally incorporated investors may do so.

Foreign companies may not sell directly to the local market, although franchising is possible, and exceptions may be made where new technology or skills are transferred.

Legal forms

The principal forms are limited companies, associations, and branches of foreign companies.

The preferred form for foreign companies is reported to be the limited company, followed by branches.

Procedures for investment

Applications for approval of investment by foreign citizens must contain:

- a letter of comfort from a listed bank or from a recognised legal firm in their country of origin.
- the applicant's place and date of birth,
- their nationality
- their permanent residential address, and
- their business / professional experience.

It seems that the submission must be made to the Prime Minister's Office. Within three months of investment and the issue of a temporary investment authorisation, documentary evidence must be provided of the transfer of funds from abroad and the purchase of shares in the local company.

There is a one-stop-shop which helps in obtaining permits, and provides information in submitting applications, and on incentives.

Labour considerations

In 1996, about 1 in every 60 workers was a foreign national.

There are about 12,000 new entrants to the job market every year, mainly high school graduates.

There is a Government administered Permanent Arbitration Tribunal and National Remuneration Board for resolving industrial disputes. Trade unions cover less than 25% of the workforce, and very rarely engage in strike action.

Employers must pay a training levy of 1% on total basic salary to the Industrial and Vocational Training Board, a parastatal involved in manpower training. Employers are refunded up to 75% of the amount spent on training, subject to completion of certain procedures beforehand.

Taxes

Corporation tax is 25% generally, and 15% for registered restaurants, tour operators, professional diving centres, Internet service providers, Network service providers, information technology training schools, and other information technology providers.

Individuals are taxed progressively at a rate varying from 5% to 30%.

Other forms of taxation include sales tax, registration duty, land transfer tax, land development tax, national pension fund tax, capital gains tax, and training levy.

There are a number of double taxation treaties in force with France, U.K., Germany, India, Sweden, Zimbabwe, Malaysia, Swaziland, Italy, China, Pakistan, Madagascar, Luxembourg, Botswana, and South Africa. A number of others are pending (in 1996).

Investment incentives

Start-up companies in information technology, telecommunications, and multimedia

Start-up companies in information technology, telecommunications, and multimedia can deduct their funding contribution from taxable income. It may be carried over for three years.

All income in the form of shares held for at least three years is exempt from income tax.

Small and medium sized enterprises

Small and medium sized enterprises benefit from a number of incentives:

- concessionary loans up to 90% of investment costs,
- concessionary loans for modernisation, and
- financial support for market research and overseas trade fair attendance.

The Government is planning to establish estates where small and medium sized enterprises can share facilities and so reduce overheads.

The Freeport

The Freeport was set up in 1992, with 12,500 square metres of warehousing facilities at the port, and 2,500 square metres at the airport (in 1996), with the aim of promoting warehousing, distribution, and marketing. Plans are in place to expand capacity significantly in the near future. No restrictions apply on foreign ownership.

Incentives include:

- exemption from company tax,
- preferential rates for warehousing and storage,
- reduced port charges, and
- exemption from import duty and sales tax on finished goods, machinery, equipment, and materials.

Export Processing Zone

The Zone is a legal status rather than a particular region, although many are based in Government industrial estates. It aims to promote manufacturing exports, and in its 30 year history has moved from an emphasis on textiles to more technologically advanced goods.

The following benefits apply in the Zone:

- exemption from corporation tax,
- exemption from tax on dividends for the first 20 years, and
- exemption from import duties and sales tax on machinery, equipment, and spare parts.

Offshore companies

Offshore companies incorporated in Mauritius may qualify for a number of incentives:

- exemption from corporation tax, although companies may opt to pay up to a rate of 35%,
- exemption from withholding tax on dividends paid from income from offshore activity, and
- various other exemptions.
Other schemes

There are several other incentive schemes, for example to firms in industries of strategic importance.

Contact addresses

I could not find information on this subject.





Mozambique

Background

1998 Population (M): 17
1998 GNP (USD B): 3.6

1997/98 % annual GNP growth rate: 11.3
1998 GNP per capita (USD): 210
1990-98 % annual growth of GDP: 5.7
1990-98 % inflation: 41.3

1998 Labour force (M): 9
1998 Female % of labour force: 48
1997 Adult illiteracy rate as % of people 15 and above (male): 43
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 4

1990-98 % annual growth of gross domestic investment: 8.9
1997 Private investment as % of gross domestic fixed investment: 43.7
1998 Merchandise exports (USD M): 200
1997 Foreign direct investment (USD M): 35
1997 Present value of external debt as % of GDP: 135

1998 Value added as % of GDP Agriculture: 34
1998 Value added as % of GDP Industry: 18
1998 Value added as % of GDP Services: 48

The Mozambican economy has been going through a strong transition for the last fifteen years. Although the majority of the population still work in agriculture, many at a subsistence level, industry has been growing quite quickly, with manufacturing in particular benefitting from a number of large investments, like a US$1.3 billion aluminium refinery whose construction started in 1998. South African funds have been integral in this and other projects - to 1998 about 70% of all investment came the large neighbour to the South. It is also the largest source of imports, although only the second largest recipient of Mozambican exports as Spain receives slightly more, at around 21% at the end of the last decade.

Despite the growth in industry, agricultural and fishing exports predominate, principally prawns, lobsters, cotton, cashew nuts, and precious woods. They increased sharply over the period 1994-1997, by 19% per year. Despite these figures, the country has to purchase large amounts of food imports, perhaps because large parts of the country are prone to drought, flood, and typhoon. The extended coastline and abundant natural reserves may nevertheless prove to be advantage to the tourism industry, and since the end of the 1980s civil war, the ports present a natural alternative to South African ports for countries to the West. The road network is being substantially rebuilt, and rail connections exist as well.

The Government has encouraged foreign investment and promoted private enterprise since the 1980s, and more recently a large number of parastatals have been restructured or privatised. By 1998, 840 companies had been privatised, with a target of 1,248. 90% had been acquired by Mozambican individuals or businesses, but the larger ones have had a more substantial foreign involvement. A range of incentives are in place, covering all sizes of company, and promoting the development of exports. Some incentives are aimed at promoting growth in less developed regions, with much of the investment to 1997 concentrated in the area around the capital Maputo. These attempts at development, and the successful integration of former civil war adversaries in peacetime politics, may have encouraged foreign donors and multilateral lenders in their financial support for the Government. Some of the countrys substantial debt burden has been recently reduced.

Industrial growth over the period 1993-1998 averaged 8%. Agricultural inputs were central, with the leading manufactures being various types of flour, beer, poultry, and cotton. Cement also appeared among the main goods produced, supplying the large construction sector.

There are reported to be industrial minerals, marble, and precious stones in Mozambican land, but the extraction sector is not well developed. There has been recent investment in the countrys natural gas deposits, which may help to improve the countrys trade balance in energy. At present, fuel and electricity imports account for about a tenth of total imports. Hydropower may also be a potentially substantial source of power, although it currently seems only to account for a modest proportion of energy generation.

The country is a member of a number of trading blocs, notably the Southern African Development Community.

There is full local Internet connection.

Regulations governing foreign investment

Investors may import equity capital and arrange loans freely.

There are no restrictions on remittance of dividends, interest, or other charges, nor on capital repatriation.

Land is state property and may not be brought nor mortgaged. However, a concession or lease may be granted to use the land for up to 50 years, with rights to buy and sell property on the land. The Investment Promotion Centre assists investors to get the concession.

Legal forms

The most common business forms are the Private Limited Liability Company (LDA) and Public Limited Company (SARL).

Procedures for investment

Setting up a new business

Firstly, authorisation must be obtained from the Investment Promotion Centre, the CPI, by submitting the following documents:

- a CPI application form,
- for each individual investor, a copy of their identification card or passport,
- for each corporate investor, a copy of their certificate of registration,
- a list of certain equipment to be imported, and
- it seems that the location of the company must also be specified.

Then the proposed name must be approved by the Commercial Registration Office.

Once approval has been granted, a bank account should be opened in the companys name, with at least 50% of the share capital being deposited for a Private Limited Liability Company, and at least 10% for a Public Limited Company.

The Articles of Association or statute of the company should be prepared. If the shareholders are companies, their own documents of incorporation and registration should also be gathered, along with the minutes of the general meeting where it was decided to participate in the new company. If the shareholders are individuals, then identity documents should be collected. I am not sure to whom these documents should be submitted.

The enterprise must then be incorporated at the public notary, then registered at the Commercial Registration Office. The Articles of Association must then be published in the official government gazette.

The company should register at the tax office local to its registered office, or where it does its main business.

Any business licenses required for the companys activities can be obtained from the respective Government Ministries.

Foreign direct investment

When the investment is made in freely convertible currency, the following documents should be sent to the Bank of Mozambique:

- a photocopy of the authorisation, and
- an extract of the deposit of the capital from the Commercial Bank.

When the investment is in the form of equipment and other materials, the documents submitted should be:

- a photocopy of the bulletin of import registration,
- a list of equipment exempted from customs duties in triplicate,
- invoices, and
- a certificate of inspection of the embarkation of equipment.

Labour considerations

The Government sets a national minimum wage, which varies by profession. In April 1999, the rate for commercial industrial workers was US$35, while for workers in the agro-industry the rate was US$30.

Foreign investors require entry visas.

Taxes

Corporation tax is 35% on all profits except those arising from agricultural activities, when the rate is 10%. Losses may be carried forward for up to three years. Allowable depreciation rates are between 2% and 33%.

A sole proprietor is liable to a levy called supplementary tax which is progressive between 8% and 40%.

Personal income tax increase progressively from 0% to 20%.

Social security tax is 7% of employees’ wages. 4% is met by the employer, and 3% by the employee.

Value Added Tax is levied on imports, goods, and services, and is payable at 17%.

Import duties are levied on CIF value, and vary according to the type of good:

- raw materials are charged at 2.5%,
- fuel and equipment at 5%,
- intermediate goods at 7.5%, and
- consumer goods at 35%.

Products classified as essential goods are exempt from import duties. A handling fee of 1% is charged on all goods.

Other taxes include withholding tax on interest and dividends (at 18%, it seems), property transfer tax, and specific consumption tax.

There are double taxation agreements in force with Portugal and Mauritius.

Investment incentives

New enterprises or rehabilitated formerly shut down enterprises

Tax reductions are granted depending on the location of the business.

If the company is in Niassa, Cabo Delgado or Tete provinces, Corporate Tax and Supplementary Tax are reduced by 80% for the period of investment recovery or ten years, and then by 50% for a further period of six years.

If the location is Sofala, Manica, Zambezia or Nampula provinces, the taxes are reduced by 65% for the period of investment recovery or ten years, and then by 40% for an additional period of three years. If the company is in a provincial capital, these rates do not apply. Instead, Corporate Tax and Supplementary Tax are reduced by 50% for the period of investment recovery or ten years.

For businesses in other provinces, the reduction is 65% for the period of investment recovery or ten years, and a 25% reduction for the next three years. In provincial capital, the taxes are reduced by 50% for the period of investment recovery or ten years.

Investors in Industrial Free Zones

There are two Industrial Free Zone statuses which may be awarded to investors.

Businesses may be classified as an Industrial Free Zone Enterprise by meeting the criteria of creating jobs for Mozambicans, and exporting at least 85% of their product. The benefits are:

- exemption from income tax on manufacturing and other Industrial Free Zone activities, and
- exemption from customs duties, Value Added Tax, and Specific Consumption tax on imports of goods used in the production process.

The status of Industrial Free Zone Developer is awarded to companies which establish and manage installations to assist exporting from the Free Zone. The incentives granted are:

- income from the sale and rental of Industrial Free Zone installations and from the supply of services by Industrial Free Zone Developers is liable to a 1% fee on gross receipts from the seventh year after the granting of the status, and
- exemption from customs duties, Value Added Tax, and Specific Consumption tax on imports of goods for the establishment and operation of the Industrial Free Zone.

Zambezi River Valley

Investors in this region are entitled to a variety of benefits, if the investment is made in one of several sectors, namely:

agriculture,
forestry (logging),
hydroponics,
wildlife management,
water supply,
electricity generation, transmission, and distribution,
telecommunications,
civil construction and public works,
manufacturing and industry, and
banking and insurance.

The fiscal advantages are:

- exemption from customs duties on certain goods for new enterprises, or for expansion of existing enterprises,
- exemption from Industrial Contribution for five tax years after the start of operations,
- 80% reduction in tax from the sixth year onwards,
- exemption from withholding tax on interest and dividends,
- exemption from withholding tax on payments to non-resident sub-contractors, and
- exemption from real property transfer tax.

Enterprises in agricultural, livestock, forestry and hydroponics gain a further exemption from Industrial Contribution until 2025.

Other benefits

Investments in existing, operational enterprises are deductible from income tax for five fiscal years.

Companies investing in public infrastructure and utilities or schools are entitled to 120% capital allowance. 100% capital allowance is made on purchase of artworks and donations to Mozambican cultural activities.

Training costs may be deducted up to 5% of taxable income.

Investments of over US$500 million may qualify for additional benefits.

Contact addresses

CPI (Investment Promotion Centre),
Rua da Imprensa nº 332,
R/C
Maputo
Mozambique
Tel: 258-1-422525 or 258-1-422530
Fax: 258-1-422604.

Technical Unit for Enterprise Restructuring (UTRE)
Rua da Imprensa 256
Predio 33 Andares, 7º, Suites 704-708
C.P. 4350
Maputo
Tel: 426514 or 426515 or 426516
Fax: 421541;
Email: juma@utre.uem.mz

Mozambique Export Promotion Institute-IPEX
1008, 25th September Av., 3th Floor
P.O. Box 4487
Maputo
Tel.: 258-01-307257/8
Fax: 258-01-307256
e-mail: ipex@teledata.mz
www.ipexport.org

TMIC - Trade and Market Information Centre
1008, 25th September Av., 4th Floor
P.O. Box 4487
Maputo
Tel.: 258-01-424242
Fax: 258-01-429964
e-mail: tmica@zebra.uem.mz

Mozambique Chamber of Commerce,
Tel: 492210 or 491970 or 492687,
Fax: 492211;

AIMO (Industrial Association of Mozambique),
CP 700,
Tel: 424659,

ACTIVA (Association of Mozambican Women Entrepreneurs and Executives),
c/o AIMO.

AEPRIMO (Private Entrepreneurs Association)
CP 1212.
Tel: 424002,
Fax: 424006.

CDC (Commonwealth Development Corporation)
Predio 33 floors,
6th floor,
CP 1657,
Maputo.
Tel: 258-1-421325 or 258-1-420256
Fax: 422150.





Namibia

Background

1998 Population (M): 2
1998 GNP (USD B): 3.2

1997/98 % annual GNP growth rate: 1.2
1998 GNP per capita (USD): 1,940
1990-98 % annual growth of GDP: 3.5
1990-98 % inflation: 9.5

1998 Labour force (M): 1
1998 Female % of labour force: 41
1997 Adult illiteracy rate as % of people 15 and above (male): 19
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 58

1990-98 % annual growth of gross domestic investment: 4.1
1997 Private investment as % of gross domestic fixed investment: 62.2
1998 Merchandise exports (USD M): 1,400
1997 Foreign direct investment (USD M): 137
1997 Present value of external debt as % of GDP: N/A

1998 Value added as % of GDP Agriculture: 10
1998 Value added as % of GDP Industry: 34
1998 Value added as % of GDP Services: 56

Namibia is a land of many economic contrasts. It has one of the highest GDP per capita in sub-Saharan Africa, but 70% of the population are poor farmers. There is a well-developed industrial sector, yet one largely concentrated on extracting the countrys considerable mineral wealth. Active in regional trade groupings, and in monetary union with South Africa, it is fighting in the civil war in the Democratic Republic of Congo.

The main exports of Namibia include diamonds, copper, gold, and uranium, being one of the worlds largest exporters of the radioactive element. The title to minerals rests with the Government, who grant licenses for prospecting and extraction. The desert and harsh landscape over much of the country means that livestock rearing is the main method of farming, and a large amount of food has to be imported. The unusual environment and comfortable living circumstances in the wealthier parts of the country may help to promote the growing tourism industry.

Namibia is well-endowed with energy resources. There are oil and gas reserves. The upstream oil industry generates important amounts of foreign exchange, while domestic electricity is generated by hydropower and coal burning. Electricity trading occurs with South Africa, depending on the supply and demand at any point in time. The state of the downstream oil industry, and the chemical industry more generally, is subject to conflicting reports. There are a number of international oil companies operating in the distribution and marketing industry.

The local industry in manufactures is quite limited, with the majority being imported. There is an expanding export processing zone at Walvis Bay, which may help to encourage manufacturing exports. The telecommunications network is reported to be relatively well developed, and there are cellular operations and several Internet service providers. The Government is looking to privatise the parastatal airline Air Namibia.

There is a small Stock Exchange which utilises computerised trading, and exploits linkages with other Stock Exchanges, both regional and further afield.

Regulations governing foreign investment

Namibia is part of the South African Rand monetary area, so there are common external exchange control regulations. No controls apply within the area.
Legal forms

Private company

Private companies are the most common business form. They are governed by the Companies Act. The regulations which apply are quite loose:

- their name must end in "(Proprietary) Limited",
- there is no minimum capital requirement,
- they may have only one member,
- they may have only one director, who does not have to be resident in Namibia,
- they must be audited, but need not submit the financial statements to the authorities.

Public company

Public companies are also subject to Companies Act rules. Their name must end in "Limited", and there is no minimum capital requirement.

Subsidiary of a foreign company

The subsidiary is considered as a separate company in Namibia, and consequently the liability of the parent is limited to registered Namibian share capital or guarantees of the subsidiary. An annual audit is required, and financial statements must be sent to the Registrar of Companies.

Procedures for investment

The procedure for establishing a new company varies according to the nature of business.

There is an Investment Centre to assist foreign investors. Foreign companies establishing a branch must submit to the Registrar of Companies a certified copy of its own Memorandum and Articles of Association, or other document constituting it, together with a sworn English translation if appropriate.

Labour considerations

There is high unemployment among unskilled labour, and a shortage in the skilled market, which has lead to foreign workers being brought in.

Work and residence permits must be obtained before entering the country.

The Labour Act applies to all private sector employees, and stipulates basic conditions of employment, as well as prohibiting discrimination and permitting affirmative action.

Taxes

Taxation only applies to income earned in Namibia.

The general rate for corporation tax is 35%. However, gold mining, and oil and gas extraction are subject to special regimes. Diamond mining is taxed at 55%.

No tax applies to dividends received by a company or resident. Non-residents are taxed at 10.5%. There is no withholding tax on interest.

Personal income tax varies progressively from 0% to 35%.

Sales tax varies from 8% to 23% depending on the product, and applies to both goods and services.

Other taxes include transfer duty and stamp duty.

There are double taxation agreements in place with South Africa, the UK, Germany, and Sweden. Several others are pending.

Investment incentives

A number of general incentives apply, for example

- a straight line depreciation over three years may be applied to fixed moveable assets, and
- an allowance of 20% of cost may be made on buildings for the first year of usage, then 4% per year for the next 20 years.

Manufacturers promoting Namibian economic development may apply for registered manufacturer status from the Ministers of Finance, and Trade and Industry. Registration confers the following benefits:

- The right to make an 8% allowance on buildings for the 20 years after the first, instead of the usual 4%.
- The ability to reduce tax liable income by 50% for the five years, then 45% in the sixth year, the 40% for the next eight years. Losses may not be generated in this way.
- Deductions from 25% to 75% of marketing expenditure may be claimed in respect of exported goods.
- An allowance of 25% of remuneration, pension, benefit or approved training contributions may be made for employees directly engaged in manufacturing operations.
- Taxable income arising from manufacturing exports may be reduced by 80%, excluding fish and meat products. Again, assessed losses are not permitted.

Contact addresses

Ministry of Finance
P/Bag 13295, Windhoek
Telephone: 2099111 Telefax: 227702

Bank of Namibia
POB 2882, Goring Street No. 10, Windhoek
Telephone: 226401 Telex: 908-710 Telefax: 229874

Namibia Chamber of Commerce and Industry
Kenya House
P.O. Box 21852
Windhoek
Tel: (061) 228809 [W] 223989 [H]
Fax: (061) 228009

Customs and Excise
Contact: Director of Customs & Excise Ministry of Finance
P/Bag 13295
WINDHOEK
(Fax 239278)





Niger

Background

1998 Population (M): 10
1998 GNP (USD B): 1.9

1997/98 % annual GNP growth rate: 4.3
1998 GNP per capita (USD): 190
1990-98 % annual growth of GDP: 1.9
1990-98 % inflation: 6.8

1998 Labour force (M): 5
1998 Female % of labour force: 44
1997 Adult illiteracy rate as % of people 15 and above (male): 78
1995 % share of income or consumption (highest 10% of population / lowest 10%): 44.3
1997 Telephone main lines per 1000 people: 2

1990-98 % annual growth of gross domestic investment: 4.4
1997 Private investment as % of gross domestic fixed investment: 45.3
1998 Merchandise exports (USD M): 268
1997 Foreign direct investment (USD M): 2
1997 Present value of external debt as % of GDP: 56

1998 Value added as % of GDP Agriculture: 41
1998 Value added as % of GDP Industry: 17
1998 Value added as % of GDP Services: 42

The Nigerien economy has in the past been fairly comprehensively divided into two sectors: rural subsistence and uranium mining. The population is concentrated on an arable strip in the South of the Niger, away from the semi-desert covering much of the country. 90% of the workforce earns its living from agriculture, with the majority of value added arising from rain fed production, and the remainder from livestock rearing. Nevertheless, food has to be imported, because of periodic droughts and declining income per head from agricultural production. Those income increases that have been recorded have arisen from increasing the land under production, rather than by improvements in crop yields.

The other predominant sector is mining of uranium, accounting for 41% of total exports in 1999. Its expansion since the 1970s has led the growth of the industrial sector to 18% of the economy, although this figure has stabilised over the last decade.

The economy seems to have reached a point where diversification into new sectors is becoming increasingly important, and this has been recognised by the Nigerien Government. Labour intensive employment programmes have been put in place in rural areas, and the low manufacturing base - in 1999, 6% of GDP - may be boosted by an extensive privatisation plan, including disposal of state assets in the telecommunications, water, electricity, banking, and pharmaceuticals industry. Efforts are also being made to move towards a modern skills based economy by reducing the 85% illiteracy rate, although primary school enrolment is presently perhaps the lowest in the world, and income distribution is very unequal, so the transition may be a long one. The Government is said to be reducing its direct role in the economy more generally, whilst improving its institutions. The long term effect on employment and economic growth remains to be seen. Growth in the economy has improved recently, with GDP per head increasing at 4.3% per year since 1994.

Niger is a member of the West African Economic and Monetary Union. A non-producer of petroleum, it has attempted to purchase more oil from its fellow members rather than from Nigeria, which formerly was its only supplier. The Government has also tried to promote its domestic agricultural products as substitutes for imports, and this attempt may be extended to the manufacturing sector, particularly the capital goods that account for 19% of imports. The country uses the CFA Franc, and its devaluation in 1994 helped export competitiveness.

The political situation in the last two years has been comparatively stable after political instability throughout the 1990s, and peace agreements have been reached with military and civilian opposition groups.

Regulations governing foreign investment

For a company to be considered Nigerien, it must meet the following criteria:

- at least 15% of the issued capital must be held by Nigerien citizens or Nigerien legal entities, and
- the chief executive officer, or the person occupying the equivalent position, the managers, and the directors must be Nigerien.

The following activities are restricted to Nigeriens:

- selling arms and munitions,
- running a business concerned with immigration and emigration,
- running a private security firm,
- providing loans and capital, and
- organising pilgrimages.

The law guarantees equal treatment of foreign and domestic investors.

There is freedom of management and capital transfer.

Investors are protected against nationalisation and expropriation, except when it is in the public interest. In this case, compensation must be paid.

Legal forms

One source reports that the two authorised company forms are the Société Anonyme and the Société à Résponsibilité Limité. However, elsewhere the forms are said to be determined by multinational treaties signed by members of the Organisation for Business Law Harmonisation in Africa, including Niger. These treaties also include the forms of the Société en Nom Collectif and the Société en Commandite Simple.

Société à Responsabilite Limitee (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

There are three stages for registering a company in Niger:

1. registration at the Register of Licenses,
2. inclusion in the Register of Commerce, and
3. inclusion in the Register of Employers at the National Social Security Fund.

Foreign investors must obtain an additional authorisation to set up a company.

1. Registration at the Register of Licenses

A request for registration must be made to the Director of Taxes (Directeur des Diverses Contributions), together with a form declaring the enterprises existence. A certificate of registration will be delivered, along with notification of the type of license.

2. Inclusion in the Register of Commerce

This step is done at the Office of the Clerk of the Court of First Jurisdiction. The following documents are required:

- certificate of nationality,
- the investors police record for at least the last three months,
- the certificate of registration at the Register of Licenses, and
- authorisation to trade for non-Nigeriens.

If the investors are companies, they must also submit:

- the Statutes of the company and the legal materials setting it up, and the property registration number, and
- confirmation of fees paid.

For importing and exporting, the following documents are required:

- confirmation of payment of subscription fees to the Chamber of Commerce,
- confirmation of payment of subscription fees to the Council of Public Transport Users, and
- a confirmation from the préfet (the Government representative in the region). I am not sure of the content of the confirmation.

3. Inclusion in the Register of Employers at the National Social Security Fund

Employers must register with the National Social Security Fund, to receive their employer's number.

To obtain the authorisation to trade for foreigners, a request must be made to the Minister of Trade and Industry, or the regional prefect in certain cases. The documents required are:

- a certificate of nationality,
- the investors police record for at least the last three months,
- the certificate of registration at the Register of Licenses,
- a copy of the Statutes or anticipated Statutes for companies, and
- a description of the financial, human, and physical resources which will be used.

In view of the delays between application and authorisation, a provisional authorisation may be issued for a period of three months, and it may be renewed once.

If the authorisation to trade is issued to a person, then it stops being valid when that person loses their majority shareholding in the company concerned.

Authorisations are valid for periods of five tax years for trading activities, and ten tax years for industrial activities. They are renewable.

In the three months following the issue, a list of employees must be sent to the Minister of Employment, then the Minister of Trade and Industry. Their responsibilities and nationalities should also be stated, along with the training program for Nigerien citizens.

A registration fee is payable.

Labour considerations

One source reports freedom of entry, movement, and exit for investors.

There is a national program for Nigerien involvement in employment.

Taxes

The tax on industrial and commercial profits (BIC) is 45%, subject to a minimum of 1% of turnover.

Business tax is made up to two components: a fixed charge and a proportional rate of 12.5% of the value of the property used for business.

Social security charges are levied on employers at 15.4% of salary, and on employees at 1.6%. It is payable monthly for companies employing more than twenty people, and quarterly for companies employing less than twenty. I am not sure what frequency applies for companies employing exactly twenty. An additional apprenticeship tax is 2% of net annual remuneration. I think it is charged to companies rather than individuals.

Personal income tax is progressive from 2% to 60%.

Income tax applies to rents.

Value Added Tax on imports is 17%.

There are no customs duties between the states of the West African Economic and Monetary Union: Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, and Togo. The countries share common taxes on imports from outside the Union, forming a set of customs charges. These are:

- customs duties,
- the statistical charge,
- the community levy (PCS),
- the conditional import tax (TCI), and
- the reducing protection tax (TDP).

The last two are temporary taxes which are intended to be reduced or removed over time.

Customs duties vary by the type of good:

- medicines, condoms, health education materials, books, and magazines are exempt from duty,
- raw materials, equipment goods, and specific production inputs are subject to a 5% charge on import cost (I am not sure whether this is a Free on Board value, or another classification),
- intermediate inputs and products are subject to duty at 10%, and
- consumer goods and all other products pay 20%.

Statistical charge is 1% on import cost.

Community Levy is 0.5%.

TCI is designed to slow the effect of international price fluctuations on West African Economic and Monetary Union production of important goods like rice and sugar. As a result, it depends on market conditions, and is set at a Union level.

TDP is levied on industries that the Union wants to protect, for example, cigarette production. It is levied at two rates, depending on the industry, 10% or 20%. In the first case, the protection reduces by 2.5% per year, while in the second it falls at 5% per year.

The Union may decide on other measures for protection.

Investment incentives

Investment incentives are regulated by the Investment Act of 1997. There are three regimes in place:

- The Promotional Regime, or Regime A, for investments in certain industries,
- The Priority Regime, or Regime B, for larger investments in those industries, and
- The Conventional Regime, for very large investments.

The Promotional Regime

To qualify for the Regime, the following conditions must be met:

- the investment must be in an eligible sector, namely manufacturing, industrial agriculture, production for export, mining, energy, property, or maintenance of other companies,
- the investment must create a new enterprise, restructure an existing enterprise, or increase the value of capital, and
- the enterprise must be listed in the Register of Commerce, at the Register of Licenses, and at the National Social Security Fund.

The incentives are:

- exemption from all taxes apart from the statistical charge on raw materials, tools, and production equipment during the period of installation,
- exemption from tax on industrial and commercial profits during the period of operation for up to ten years, including the period of installation,
- exemption from business rates for ten years,
- exemption from rates for ten years, and
- exemption from the minimum tax contribution for six years, with subsequent increases in the rate.

The Priority Regime

For the priority regime, the conditions that have to be met are:

- the investment must be in an eligible sector, namely manufacturing, industrial agriculture, production for export, mining, energy, property, or maintenance of other companies,
- the investment must create a new enterprise, restructure an existing enterprise, or increase the value of capital,
- the enterprise must be listed in the Register of Commerce, at the Register of Licenses, and at the National Social Security Fund, and
- the investment must be between 50 and 100 million CFA Francs and create at least five jobs for Nigeriens (for the small enterprise incentives), or
- the investment must be between 100 and 250 million CFA Francs, and create at least five jobs for Nigeriens (for the medium sized enterprise incentives), or
- the investment must be above 1,000 million CFA Francs (for the large enterprise incentives).

The benefits are:

- exemption from taxes and charges on setting up a business,
- exemption from tax on industrial and commercial profits,
- exemption from business rates,
- exemption from rates,
- exemption from the minimum tax contribution, and
- exemption from tax on property values.

The exemption is total for seven years for small enterprises, followed by three more years of partial exemption. For medium sized enterprises, the periods are nine years and three years, and for large enterprises, twelve years and fifteen years.

The Conventional Regime

This regime is granted after negotiation between the parties involved - I think this means the Government and the enterprise. It has the following requirements:

- the enterprise must be registered in the Register of Commerce,
- the investment must be greater than 2,000 million CFA Francs, and
- at least four hundred Nigerien jobs must be created.

The benefits are those of the Priority Regime, as well as a 50% reduction on taxes on all energy sources.

Regional incentives

The exemptions mentioned in the Promotional, Priority, and Conventional Regimes may be extended by a further three years in the case of investments in the Agadès, Diffa, Tahoua, or Zinder regions.

General comments on the Regimes

When there are local equivalents to imported materials or equipment, there are no reductions in import duties.

There is a one-stop-shop for investors at the Chamber of Commerce which may help with applications for investment incentives.

Contact addresses

CPI - Centre de Promotion des Investissements (Investment Promotion Centre, part of the Ministry of Trade and Industry)
Tel: (227) 73 68 36
Fax: (227) 73 67 72

Chambre de Commerce, d'Agriculture, d'Industrie et d'Artisanat (Chamber of Commerce, Agriculture, Industry, and Crafts)
BP 209 Niamey,
Tel: (227) 73 51 55

Ministère du Travail (Ministry of Employment)
Tel: (227) 73 50 50 (Department of Employment)
Tel: (227) 73 35 53 (Inspector of Employment and the Workforce)

Bureau du greffier en chef du tribunal de première instance (Office of the Clerk of the Court of First Jurisdiction)
Tel: (227) 72 22 75

Caisse de Sécurité Sociale (Social Security Fund)
BP 255, Niamey
Tel: (227) 75 35 17

Centre Nigérien du Commerce Extérieur (Nigerien Centre of Foreign Trade)
BP 209, Niamey
Tel: (227) 73 22 88

Conseil Nigérien des Utilisateurs des Transports Publics (Nigerien Council of Users of Public Transport)
BP 11048, Niamey
Tel: (227) 73 51 85

Direction générale des Impôts (Department of Taxation)
Tel: (227) 72 23 66

Contributions diverses (Taxation, "diverse contributions")
Tel: (227) 72 23 67

Domaines et enregistrements (Taxation, property and registrations)
Tel: (227) 72 21 16

Douanes (Taxation, customs)
Tel: (227) 72 31 33





Nigeria

Background

1998 Population (M): 121
1998 GNP (USD B): 36.4

1997/98 % annual GNP growth rate: 1.1
1998 GNP per capita (USD): 300
1990-98 % annual growth of GDP: 2.6
1990-98 % inflation: 38.6

1998 Labour force (M): 49
1998 Female % of labour force: 36
1997 Adult illiteracy rate as % of people 15 and above (male): 31
1994 % share of income or consumption (highest 10% of population / lowest 10%): 24.2
1997 Telephone main lines per 1000 people: 4

1990-98 % annual growth of gross domestic investment: 8.0
1997 Private investment as % of gross domestic fixed investment: 44
1998 Merchandise exports (USD M): 10,360
1997 Foreign direct investment (USD M): 1,539
1997 Present value of external debt as % of GDP: 72

1998 Value added as % of GDP Agriculture: 32
1998 Value added as % of GDP Industry: 41
1998 Value added as % of GDP Services: 27

There were about 121 million Nigerians in 1998, representing almost half of West Africas population. It is a regional economic giant too, particularly within the Economic Community of West African States. ECOWAS, whose role as a trading bloc may expand in future. The country has many natural and mineral resources, but it is petroleum extraction which is at the centre of the economy. It accounted for 40% of GDP in 1999, and 85% of export earnings. Many international oil companies are active in the country as partners of the parastatal Nigerian National Petroleum Corporation, and Shell, ExxonMobil, Chevron, Texaco, and TotalFinaElf have been present for forty years or more.

Nigerias growth has modest in the last decade. Corruption has been very widely criticised, and the Government has recently passed anti-corruption legislation as part of a wider economic reform program aiming to promote growth, which has seen privatization in the telecommunications industry, for example. Inflation has been lowered to around 10% for the last few years, from 40% in the early 1990s. Reducing dependence on petroleum production may become an important objective in the future, with the petrochemical sector being developed. It now produces polypropylene, linear alkyl-benzene, and carbon black, with olefin production planned. Only 5% of GDP arose from manufacturing in 1998, after a decade in which its production grew at 2.3% each year, compared with 2.7% each year for the whole economy. The subsector accounted for less than 0.1% of recorded exports in 1999, although some informal cross border trade may have occurred to increase this percentage.

The country had an illiteracy rate of 37% in 1999, which is moderate by regional standards, and primary school enrolment is nearly comprehensive. GDP per head is low. Nigerias people are as diverse as its population size suggests, with ethnic and regional divides, as well as religious splits between a Muslim north and a Christian south. These divisions, together with the poverty of the country, have perhaps been among the causes of the periodic military coups since independence. The last period of military rule ended in 1999, with the current comparatively stable democracy taking over. Part of the potential tension is taken by the federal system of government, although some remains, and the country has avoided war for many years.

Regulations governing foreign investment

All petroleum, gas, and mineral rights belong to the Nigerian Government. It enters into partnerships with foreign firms for prospecting and extraction. Investors may enter freely into the downstream industry.

In the Calabar Export Processing Zone or Oil and Gas Export Free Zone, there are no limits on the maximum share an overseas investor may take in a company, and there are no restrictions on remitting capital or profits.

Legal forms

I could not find information on this subject.

Procedures for investment

Investors in the oil industry

Any company wishing to operate in the oil industry must submit the following documents:

- an application form and form F2a, stating the types of services involved (both are available from the Department of Petroleum Resources),
- evidence of expertise in the specialized activities involved, including a list of previous jobs if possible,
- a list of the equipment available, as well as their type and technical specifications,
- an accident status report for the last year, and
- the current tax clearance certificate (for a limited liability company), or
- the tax clearance certificate of one of the directors (for a sole trader or partnership).

A fee of 25,000 (Nigerian Naira, I think) is charged.

Companies which provide any of the following services will have their facilities inspected and expertise verified:

- calibration,
- pressure testing,
- marine survey, and
- cargo superintendence.

Additionally, companies operating in calibration will have their measures verified.

Investors in the Calabar Export Processing Zone

The Zone serves as a one-stop-shop which simplifies application procedures, as well as providing various incentives, detailed below.

Labour considerations

I could not find information on this subject.

Taxes

Company tax is 30%.

Petroleum and gas taxes are said to be adjusted to ensure that the profit margins do not fall below their past level. The current tax rate on profits of petroleum operating companies is 85%.

Investment incentives

Investments in solid minerals

Investors in solid minerals may benefit from the following incentives:

- a three to five year tax exemption,
- the ability to defer royalty payments, depending on the nature of the project and investment (I think these would be payable to the Nigerian state), and
- financial support for expenditure on exploration and surveys.

The Calabar Export Processing Zone

Companies producing the following products may qualify for the Zone:

- wood products,
- petroleum,
- rubber and plastics,
- textile products,
- garments,
- confectionery and food processing,
- cosmetics and chemical products,
- educational materials,
- sports equipment,
- printing,
- metal products,
- machinery,
- communications equipment,
- office equipment,
- electrical and electronic products,
- medical and optical instruments and appliances, and
- pharmaceutical products.

Companies producing other goods may also be considered.

The benefits are:

- no duty on imports of raw materials,
- no license requirements for imports or exports, and
- general tax holidays.

Oil and Gas Export Free Zone

For companies exporting oil and gas, the following benefits are awarded in the Free Zone:

- exemption from all taxes and duties,
- no foreign exchange regulations,
- no restriction on capital repatriation,
- no restriction on profit and dividend repatriation,
- no import or export licenses are required,
- rent free land when the company facilities are being built, and
- the ability to employ foreign managers and qualified personnel without restriction.

Companies may sell up to 25% of their products in Nigeria, if they have a valid permit and pay the corresponding duty.

Incentives to gas production

Petroleum profit tax is reduced to 30% from 85%.

Capital allowance (on all equipment, I think) is 20% in the first four years, and 19% in the fifth year.

Royalties (payable to the Government, I think) are charged at 7% (of profits, I would guess) for on-shore operations, and 5% for off-shore operations.

An investment tax credit of 5% is given.

Incentives to gas production and distribution

Profit tax is reduced to 30% from 85%.

Capital allowance (on all equipment, I think) is 20% in the first four years, and 19% in the fifth year.

Tax holidays may also be awarded.

Other incentives for companies marketing or distributing gas

Further incentives may be awarded to companies involved in the marketing or distribution of gas.

Contact addresses

I could not find information on this subject.





Rwanda

Background

1998 Population (M): 8
1998 GNP (USD B): 1.9

1997/98 % annual GNP growth rate: 9.9
1998 GNP per capita (USD): 230
1990-98 % annual growth of GDP: -3.3
1990-98 % inflation: 18.4

1998 Labour force (M): 4
1998 Female % of labour force: 49
1997 Adult illiteracy rate as % of people 15 and above (male): 29
1994 % share of income or consumption (highest 10% of population / lowest 10%): 5.76
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: -3.9
1997 Private investment as % of gross domestic fixed investment: 18
1998 Merchandise exports (USD M): 88
1997 Foreign direct investment (USD M): 1
1997 Present value of external debt as % of GDP: 33

1998 Value added as % of GDP Agriculture: 34
1998 Value added as % of GDP Industry: 23
1998 Value added as % of GDP Services: 43

The Rwandese economy is based on agriculture, where the majority of the population work. Crops and minerals account for most of the export earnings, with coffee alone making 60% of total revenue. Drought is a risk in parts of the country, and there is some land pressure, which has been stated as a contributory factor to the civil war and genocide of 1994. The reconstruction of the economy after the war has proceeded quite quickly, particularly in the early years, and from 1996 was accompanied by an IMF monitored adjustment plan. Liberalisation of the economy has seen a number of immediate effects, like privatisation of parastatals, and restrained monetary policy. But many of the challenges facing the country are of a longer term nature, like the training of a qualified administrative class, already in shortage before the 1994 decimation, and like the rehabilitation and resettlement of the displaced and bereaved. Growth has recently slowed, blamed by one source on possibly transient factors like drought, high fuel and transport costs, and mixed results in privatisation.

Many of Rwandas manufactures are imported, and industrial sector growth was comparatively sluggish in the mid 1990s, unlike much of the rest of the economy. The mining industry has potential for gold, tin, wolframite, amongst other minerals, but is not well developed. The telephone system attempts to provide full connections to business and Government, but not the general public. There is a local Internet service.

Although all petroleum products have to be imported from Kenya and Tanzania, there is methane gas along the borders with Tanzania and the DRC. Reduction in regional tension may permit more extensive exploitation. Hydropower is another significant source of energy, and the opening of the Makungura Dam project has meant that energy imports could be reduced. Electricity supply and production was provided by a parastatal, although there was a timetable for its privatisation by 2000, so its status may have changed. The Government regulates diesel and petrol prices.

Rwanda seems to have reduced the risk of further ethnic clashes within its own borders by imprisoning or expelling many of the earlier perpetrators, although their presence in the Democratic Republic of Congo, ethnic divisions in Burundi, and political polarisation of several of Rwandas neighbours acts to destabilise the region. Rwanda appears to be disengaging from the DRC war, which may free funds for reconstruction and development, at the risk of allowing re-entry of the militias. United Nations troops are being deployed to the DRC.

Some of the following information seems to be out-of-date already at the time of writing (July 2001). Updated information is available at the Rwanda Government site http://www.rwanda1.com/economy., which is linked from the British Broadcasting Corporation World Service website.

Regulations governing foreign investment

Foreign investment requires approval by the Bank of Rwanda.

The Bank also has responsibility for exchange control, and the following operations have to be approved:

- remittances of dividends,
- repatriation of capital,
- repatriation of royalties and payments from service agreements,
- expatriate allowances,
- imports and exports when foreign currency transactions are required.

Generally, import and export insurance has to be purchased in Rwanda, with the Bank able to grant exemptions.

Legal forms

(The following notes were valid in March 1994, and capital requirements and so on may have changed since then).

Public company (Société Anonyme)

A public company must have at least seven members, and a minimum capital of 100 million Rwandese Francs for companies constituted without public subscriptions, and 200 million Rwandese Francs for those with public subscriptions. Its shares may be offered to the public.

Private company (Société à Responsibilité Limité)

Private companies have a minimum capital of 500,000 Rwandese Francs. They are not allowed to make public subscriptions, and so cannot offer shares to the public.

Collective name (Société en Nom Collective)

A Collective Name may be established by two or more people. It does not have to be registered in the Commercial Register.

Partnerships

Partnerships may have limited liability (the form is Société en Commandite Simple), or unlimited liability (Société en Commandite Par Action).

Procedures for investment

All the above forms apart from the collective name have to be registered with the Commercial Registry, by submitting statutes which are published in the official journal three months prior to the date of registration in the Commercial Register. The contents for statutes depend on the company form.

Public companies must include the following information:

- information on the promoters including their interest in the new company,
- company name,
- objective,
- subscribed capital,
- callable capital,
- number, nominal value, and proportional value of each share,
- method of sharing dividends,
- information on the bodies administrating the company,
- regulations of the General Assembly, and
- duration of the company.

Statutes of private companies have to show:

- information on the promoters,
- the name of the company,
- objectives,
- the amount of capital, and
- the number and nominal value of shares.

Partnerships must submit:

- the amount and value of contributions by all partners, and
- the method of division of benefits.

There is cost for publication in the journal and register, and a charge on the deposit of the statutes of 5,000 Rwandese Francs.

Foreign companies establishing places of business in Rwanda must deposit its own statutes.

Labour considerations

The Labour Code regulates employment matters. The contract of employment is left for agreement between the employer and employed, subject to the following rules:

- people under 18 may not be employed,
- the minister responsible for labour affairs may set minimum wages, and
- the statutory working period is 45 hours per week.

There are provisions for collective agreements on salaries, method of their payment, conditions of work, and related issues.

Expatriate employment requires approval by the Director General of Labour.

Taxes

Note: Rwanda changed its taxation system in the late 1990s, and the following rates, which applied at March 1994, may have changed.

The general rate of corporation tax is 20%. Generally expenses are deductible.

Tax on dividends and interest varies from 0% to 80%.

Personal income tax also varies from 0% to 80%.

Rent tax is payable annually on profits from rent on buildings and land.

Business license tax is due annually, and levied on people undertaking lucrative activities.

Import and export duties also apply.

Investment incentives

Applications for incentives must be made to the Minister for Finance, and should contain:

- legal status of the applicant,
- activities envisaged including suppliers of inputs,
- investment programme including sources of funds,
- the incentive regime applied for, and
- balance sheets for the last three years.

The Investment Code has four incentives regimes: the general regime, the regime for small and medium enterprises, the regime of "decentralised" industries, and the regime of "convention" enterprises.

The General Regime

The regime is open to enterprises which:

- employ or train Rwandese nationals,
- follow national and international standards,
- have financial plans conforming to the national plan, and
- carry out research and development activities to maintain the competitiveness of their products.

The benefits are:

- Exemption from duties on importation of machinery and equipment for production, spare parts, raw materials, and other products necessary for production. A payment of 10% of customs value must be made instead.
- Exemption from export duties.
- Exemption from corporation tax for 5 years.
- Exemption from property tax for 5 years.

The Small and Medium Sized Enterprise Regime

Businesses with commercial society or co-operative society status, and with an investment programme of no more than 75 million Rwandese Francs, may qualify.

The benefits are:

- all those of the general regime,
- plus in the 6th year, taxes are payable at 25% of the normal rate, then at 50% in the 7th year, and 75% in the 8th year, and
- license fees are exempted during the period.

The Decentralised Regime

The decentralised regime applies to businesses outside of Kigali and the surrounding areas.

The incentives are:

- all those of the general regime,
- the possibility of subsidised bank loans, and
- priority in establishment of public markets and services.

The Convention Regime

This regime is open to industries which:

- invest in projects of importance to the national economy,
- have an investment programme to last at least 10 years, and
- invest at least 500 million Rwandese Francs.

The benefits are:

- all those for the general regime,
- plus it seems those for the decentralised regimes, and
- the duration of exemptions lasts 10 years, not 5 years.

Contact addresses

Ministry of Finance (Ministère des Finances)
BP 158, Kigali
Tél: 250- 75410; Télex: 502; Fax: 250-74538

National Bank of Rwanda (Banque Nationale du Rwanda)
BP 531, Avenue Paul VI, Kigali
Tél: 250-72947/77937; Télex: 508; Fax: 250-72551

The Secretary General of Foreign Trade (Monsieur le Secrétaire Général du Commerce extérieur)
Ministère du Commerce, de I'Industrie et de I'artisanat
B.P. 73 Kigali

The Rwanda Chamber of Commerce and Industry (Chambre de Commerce et d'Industrie de Rwanda (CCIR))
Service de Documentation
Avenue de la Justice
B.P. 319 Kigali
Tel: (250) 2319/4319
Tlx: 22662 CCIR RW

Customs and Excise
Contact: Monsieur le Directeur des Douanes
Ministère des Finances
B.P. 718 Kigali
(Tlx: 2502)





Sao Tome and Principe

Background

1998 Population (M): 0.1
1998 GNP (USD B): 0.0
1998 GNP (USD M): 40

1997/98 % annual GNP growth rate: 2.5
1998 GNP per capita (USD): 280
1989-99 % annual growth of GDP: 1.7
1993-99 % inflation: 51

1998 Labour force (M):N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 80
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1989-99 % annual growth of gross domestic investment: -0.5
1997 Private investment as % of gross domestic fixed investment: N/A
1999 Private consumption as % of total consumption: 72
1998 Merchandise exports (USD M): N/A
1999 Foreign direct investment (USD M): 3
1997 Present value of external debt as % of GDP: N/A
1997 Present value of total debt as % of GDP: 353

1998 Value added as % of GDP Agriculture: 21.3
1998 Value added as % of GDP Industry: 16.7
1998 Value added as % of GDP Services: 62.0

Sao Tome and Principe is a small economy which depends on a single crop, cocoa, for the majority of its foreign exchange earnings. It differs from many small economies in that its exports are limited as a proportion of total GDP, only 10%. Nevertheless, it is quite reliant on the international community for a number of reasons: many of its potential high income industries, like tourism, would be sold to foreign markets; it imports a significant volume of goods; and it has a very high debt.

Cocoa is by far the countrys major export, accounting for 89% of all exports in 1998 and 1999. This fact gives the crop more importance than its moderate direct contribution to GDP would suggest. Partly it is because the economy is very vulnerable to demand and price changes, partly because a considerable amount of food has to be imported, and partly because it is the base on which much other activity depends, particularly the 62% of GDP generated from the service sector.

The islands are visually attractive, and the tourist industry is developing slowly. Funds from it may, in the long term, be able to support the development of an international services industry, which is the course followed by many other small island states. For the moment, the high illiteracy rate would probably prevent the creation of a large financial or similar sector, although this being corrected by a gross primary enrolment of 70% of the school age population.

There are some prospects of oil production, which could transform the economy. At present, the country has to import a large amount of fuel and energy, and industry was only 17% of GDP in 1999, with the manufacturing sector 4.5%.

One source says that the Government has been liberalising the economy for over a decade, and private consumption accounted for 72% of total consumption in 1999. The Government is currently discussing structural reform and funding with the IMF and World Bank. An extremely high long and short term debt burden, and consumption sustained by borrowing give the multinational institutions strong influence over economic policy.

Internet information on Sao Tome and Principe is hard to find, and I have not completed the sections below. The United Nations address http://www.uns.st/uns/links.html contains many links to country information, and may be able to help further. The site is itself linked from the United Nations Development Programme at http://www.undp.org.

Regulations governing foreign investment

I could not find information on this subject.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

I could not find information on this subject.

Investment incentives

I could not find information on this subject.

Contact addresses

I could not find information on this subject.





Senegal

Background

1998 Population (M): 9
1998 GNP (USD B): 4.8

1997/98 % annual GNP growth rate: 6.0
1998 GNP per capita (USD): 530
1990-98 % annual growth of GDP: 3.0
1990-98 % inflation: 6.1

1998 Labour force (M): 4
1998 Female % of labour force: 43
1997 Adult illiteracy rate as % of people 15 and above (male): 55
1994 % share of income or consumption (highest 10% of population / lowest 10%): 42.3
1997 Telephone main lines per 1000 people: 13

1990-98 % annual growth of gross domestic investment: 2.2
1997 Private investment as % of gross domestic fixed investment: 70.1
1998 Merchandise exports (USD M): 924
1997 Foreign direct investment (USD M): 30
1997 Present value of external debt as % of GDP: 56

1998 Value added as % of GDP Agriculture: 17
1998 Value added as % of GDP Industry: 23
1998 Value added as % of GDP Services: 59

As the crow flies, Senegal is much closer to Paris than to Cape Town, and Senegal uses to advantage its easy access to major European markets together with convenience of Senegalese sea ports. Fishing is a significant industry, and marine salt extraction is practised industrially too. A developing tourist industry provides a major source of foreign exchange, while the countries water resources encourage agricultural development. Oil is known to be located offshore, although one source says that it can not be extracted profitably at the moment.

Aside from its geographic position, Senegal is also somewhat separate from many African states in the nature of its economy. It has a small agricultural sector, at only 17% of GDP in 1998, and imports a large amount of food. Industry was 23% of GDP, 15% of it from a manufacturing subsector which includes heavy and light production, for example of construction materials, refined oil refining, and electricity. Manufacturing has been growing steadily as a proportion of national output for decades, and in 1999 accounted for 29% of all exports. Without the natural resources of some its neighbours, its principal mineral is phosphate, which has promoted the development of a chemicals industry. Considerable funds for it have come from entrepreneurs in India, and that market receives much of its output. If investment is found for extracting Senegals iron deposits, then it is possible that a steel industry will appear in a similar manner.

The capital and port of Dakar is the centre of manufacturing industry; it is also where the large service sector is concentrated. Many companies have set up offices there, with information technology companies being among the most recent to arrive, including ATI, Unisys, and Bull. Incentive schemes and support for new businesses have been reviewed in the last few years, including changes to the one-stop-shop system, so other enterprises may be attracted by the new regime. Dakar is said to suffer from electricity shortages, although the situation may improve with the development of hydroelectric power on the River Senegal, in association with Mauritania and Mali.

The government has undertaken various structural reforms of the economy, and many conventional macroeconomic indicators like inflation and the current account deficit have been controlled. Economic growth over the last decade has been moderate (3.0% annual GDP growth 1990-8), and rose to above 5% in 1998 and 1999. Poverty and the 64% illiteracy rate are outstanding problems.

The Central Government is stable and democratic, although there is an armed independence movement in the South of the country, and fighting has resulted in refugee and landmine problems. The Government is trying to deal with them at the moment as part of an economic and social development plan.

Senegal is a member of the West African Economic and Monetary Union, and its currency is the CFA Franc.

Regulations governing foreign investment

Foreign companies are guaranteed equal treatment with local investors.

There is freedom of capital transfer and management.

There are no restrictions on entry or exit to Senegal, length of stay, or movements while there.

There are arbitration procedures for ruling on investment disputes.

Legal forms

Some of the details about the forms differ between sources. For example, some report differing minimum capital requirements. However, the overall structures remain the same.

Société à Responsabilité Limitée (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

The one-stop-shop at Dakar can handle all the formalities relating to setting up a business, including requesting permits from the appropriate Ministries. The shop is itself part of the Ministry of Economy, Finance, and Planning. A registration fee is payable.

Labour considerations

There are no restrictions on hiring Senegalese workers, but the Ministry of Labour must be informed.

Expatriates may be hired only after approval by the Ministry of Labour. The Ministry must also stamp their contract of employment.

All employers must have an employers' register, an employers' book, and a pay book (I am not sure what these are).

Employers must register with the following bodies:

- the Senegal Institute of Retirement Security (IPRES),
- the Social Security Fund (CSS), and
- the Institute of Medical Security.

The minimum wage (SMIG) is 201.60 CFA Francs per hour. Collective agreements are in force in some professions.

The maximum length of the working week is 40 hours. For work beyond this, the basic rate is increased by a fixed percentage:

- 15% between the 41st and the 48th hour,
- 40% beyond the 48th hour, and
- 60% for hours worked at night.

Certain activities may be excluded from these increases. They include agriculture, trade, the hotel business, chauffeuring, watchman, and domestic helpers.

An employee is entitled to one and a half days of paid leave per month of service. There are thirteen public holidays.

Taxes

Company Tax is 35%, and is charged on profits. It is subject to a minimum payment of 500,000 CFA Francs or 1,000,000 CFA Francs - I do not know which applies to a particular company. Losses may be carried over for three years, and deferred depreciation may be carried over indefinitely. 50% of retained profits may be deducted from taxable income, up to a limit of 50% of existing profits.

Companies must pay the Basic Employers' Contribution. It is charged on the salary bill at 3% for Senegalese employees, and 6% for foreign employees.

Employers are also liable for various Social Security charges which sum to between 17.2% and 21.2% of the salary bill, depending on the type of work, and subject to an annual limit of 2,880,000 CFA Francs. I am not sure whether the Basic Employers Contribution is included in these percentages. Employees must pay 6.8% of their salary.

I do not know the rates for personal income tax.

Value Added Tax is levied on many goods and services. It is charged at two rates, 10% and 20%. The rate is 10% on imports. Port services like boat repair are excluded, while the financial sector has its own specific tax. There is also a version for the informal sector, although I do not know how this works.

Fees are charged on registering a company, and transferring ownership.

Other business taxes include a tax on company turnover, and taxes levied locally.

There are no customs duties between the states of the West African Economic and Monetary Union: Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, and Togo. The countries share common taxes on imports from outside the Union, forming a set of customs charges. These are:

- customs duties,
- the statistical charge,
- the community levy (PCS),
- the conditional import tax (TCI), and
- the reducing protection tax (TDP).

The last two are temporary taxes which are intended to be reduced or removed over time.

Customs duties vary by the type of good:

- medicines, condoms, health education materials, books, and magazines are exempt from duty,
- raw materials, equipment goods, and specific production inputs are subject to a 5% charge on import cost (I am not sure whether this is a Free on Board value, or another classification),
- intermediate inputs and products are subject to duty at 10%, and
- consumer goods and all other products pay 20%.

Statistical charge is 1% on import cost.

Community Levy is 0.5%.

TCI is designed to slow the effect of international price fluctuations on West African Economic and Monetary Union production of important goods like rice and sugar. As a result, it depends on market conditions, and is set at a Union level.

TDP is levied on industries that the Union wants to protect, for example, cigarette production. It is levied at two rates, depending on the industry, 10% or 20%. In the first case, the protection reduces by 2.5% per year, while in the second it falls at 5% per year.

The Union may decide on other measures for protection.

There is a double taxation treaty with France.

Investment incentives

The Investment Code dates from the law of 1987 and its amendment in 1989. It applies to almost all industry sections, although not trade. There are five incentive regimes:

- the common regime,
- the regime of small and medium sized enterprises,
- the regime of local resource development,
- the regime of technological innovation, and
- the regime of decentralised enterprises.

Applications for regimes may be made through the one-stop-shop in Dakar.

The incentives consist of various tax exemptions. Their duration is the same for all regimes, and varies by the region where the business is located:

- in Dakar and the surrounding area, the exemption is for five years,
- in the rest of the Dakar region and the Thiès region, it is for seven years,
- in Dioubel, Louga, and Kaolack, it last ten years, and
- in Fatick, Kolda, Saint Louis, Zinguinchor et Tambacounda, it lasts twelve years.

In the final three years of its duration, the exemption is only partial: 25% of taxes are due in the third to last year, 50% in the second to last, and 75% in the last year.

The common regime

This set of incentives is awarded to any company which is covered by the Investment Code, whether or not it qualifies for the other regimes. The benefits are:

- while the business is being set up, exemption from fees and taxes on imports of raw materials not available in Senegal, and
- while the company is operating, exemption from tax on turnover invoiced by local suppliers.

The regime of small and medium sized enterprises

To qualify for this regime, the following conditions must be met:

- the investment must be between 5 million and 200 million CFA Francs,
- at least three permanent Senegalese jobs must be created, and
- accounting must be to Senegalese standards.

The benefits are:

- all those of the common regime,
- while the business is being set up, exemption from setting up fees,
- while the business is being set up, exemption from capital increase fees,
- while the business is operating, exemption from the minimum Company Tax payment,
- while the business is operating, exemption from social charges, and
- while the business is operating, exemption from business rates, if the business is operating outside of Dakar and its surrounding area.

The regime of local resource development

A company in this regime must meet the condition that 65% of the total cost of intermediate goods used are Senegalese. The advantages are:

- all those of the common regime,
- exemption from the minimum Company Tax payment, and
- exemption from business rates, if the business is operating in a region of low development (I think that this means outside of Dakar and its surrounding area).

The regime of technological innovation

The requirements for this regime are that the enterprise invests a certain percentage of its turnover in research, in partnership with a Senegalese body (I am not sure if partnership is necessary when the enterprise is entirely Senegalese owned).

The company is then exempted from all social charges on Senegalese employees' salaries.

The regime of decentralised enterprises

For the regime of decentralised enterprises, at least 90% of the workforce must be based outside of Dakar and the surrounding area.

Employers are exempted from the Basic Employers' Contribution on the salaries of Senegalese employees.

Other schemes

Apart from the regimes, there are also Free Exporting Enterprises (EFE). To qualify, 80% of the products of a business must be exported. It may then benefit from a Company Tax rate of 15% on profits.

Contact addresses

Chambre de Commerce, d’Industrie et de l’Agriculture (CCIA)
(Chamber of Commerce, Industry, and Crafts)
1,place de l’Indépendance
B.P. 118 Dakar
Tel: (221) 23.71.89
Fax: (221) 23.93.63

Guichet Unique - Ministère de l’Economie et des Finances et du Plan
(One-Stop-Shop at the Ministry of Economy, Finance, and Planning)
B.P.4017 Dakar
Tel: (221) 23.67.27

Centre International du Commerce Extérieur (CICES)
(International Centre of Foreign Trade)
B.P. 8166 Dakar
Tel: (221) 20.17.50
Fax: (221) 35.07.12

Conseil National du Patronat (CNP)
(National Council of Employers)
7, rue Jean Mermoz
Dakar
Tel: (221) 21.58.03





Seychelles

Background

1998 Population (M): 0.1
1998 GNP (USD B): 0.5

1997/98 % annual GNP growth rate: -1.3
1998 GNP per capita (USD): 6,450
1990-98 % annual growth of GDP: N/A
1990-98 % inflation: N/A
1997 % inflation: -0.6% (source: COMESA website)

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): N/A
1997 Present value of external debt as % of GDP: N/A

1998 Value added as % of GDP Agriculture: N/A
1998 Value added as % of GDP Industry: N/A
1998 Value added as % of GDP Services: N/A

The Seychelles geographical isolation from the rest of the COMESA economies may seem to be paralleled in the economic sphere, as the country has a GDP per head of around $7,000, ten times or more larger than the poorer States. But other factors suggest that the difference is in quantity rather than quality - 20% of the GDP is from tourism, accounting for the majority of foreign exchange earnings, and the major exports are natural resources, like fish and cinnamon bark, with manufactures and machinery significant import goods. The small size of the population does mean that any investments tend to have a large effect on wealth per head, and concentration on niche sectors is possible.

Agriculture is not well developed meaning that much food has be imported. Other service industries have been added to the countrys traditional tourism bussiness, notably offshore financial services and investment, which was encouraged by legislation enacted in 1994 regulating banking, insurance, and securities. The laws have taken several successful foreign regimes as models. A one-stop-shop assists in the sectors development.

The Investment Promotion Act of 1994 has provided an array of incentives to encourage inward investment, and a number of major multinational companies have invested in the manufacturing sector, including Guinness, Cable and Wireless, and Heinz. The export of the resulting goods is becoming more important, with Europe and the USA being among the target markets. A freeport has recently been established, which may help to take advantage of the islands position in major shipping lanes.

The country has seen economic growth since independence, despite political instability. The decade-long calm may help to promote economic development further. The Government is privatising some industries, and generally reducing national debt.

The country has no upstream oil industry, although offshore prospecting is continuing. Electricity is provided by a parastatal.

The telecommunications sector is reported to be of good quality. There is a local Internet service provider.

Regulations governing foreign investment

Exchanges of foreign currency must be made through authorised dealers. The Central Bank has responsibility for allocation, which is made on a "first-come first-served" queue system.

One source reports that at March 2001, shortage of foreign currency has resulted in suspensions of the right to dividend remittance, and the transfer of proceeds from sales of assets.

Legal forms

International Business Company (IBC)

An IBC must have at least one director and one shareholder, but is otherwise quite free from regulation. There is no minimum capital requirement, no taxes have to be paid, and no accounts have to be submitted. Confidentiality is guaranteed by law.

International trust

International trusts cannot own land nor may their settlors be resident in Seychelles, nor trust beneficiaries.

Trusts may own and trade shares and Government securities, and have no restriction on capital accumulation. Confidentiality is guaranteed, except in the case of criminal investigation.

Offshore bank

An offshore bank must be a company limited by shares, or an unlimited company incorporated and registered under the local Companies Act. They must have a minimum paid-up capital of $1 million, or equivalent in a freely convertible company.

They are not subject to exchange control, and do not have to pay corporation tax, withholding tax, tax on dividends and interest, wealth tax, capital gains tax, customs duty, or stamp duty. They may however, choose to pay corporation tax at an agreed rate.

Confidentiality is guaranteed, except in the case of criminal investigation.

Offshore insurance company

An offshore insurance company must be a company limited by shares, or an unlimited company incorporated and registered under the local Companies Act. The following minimum paid-up capital requirements apply:

- US$125,000 (companies engaged in general or life business),
- US$1 million (companies engaged in reinsurance business solely), and
- US$70,000 (captive insurance companies).

Solvency margins, and reporting and recording obligations are also in place.

Offshore insurance companies are not subject to exchange control, and do not have to pay corporation tax, withholding tax, tax on dividends and interest, wealth tax, capital gains tax, customs duty, or transfer tax on assets and securities. They may however, choose to pay corporation tax at an agreed rate.

Guarantees are available against future taxes for 20 years after registration.

Procedures for investment

International Business Company (IBC)

Applications for registration must be made to an approved agent of SIBA, the Seychelles International Business Agency.

The first stage is to get name approval. SIBA is automated, so approval should be automatic.

Then the Memorandum and Articles of Association must be presented to SIBA, and clearance is claimed to take only 2 hours. License fees are as follows:

- US$100 if authorised share capital is less than US$5,000,
- US$300 if authorised share capital is at least US$5,000, but less than $50,000, and
- US$1,000 if authorised share capital is at least $50,000.

International trust

Registration must be made through a licensed trustee. There is a one-off registration fee of US$100.

Offshore bank

Application should be made to the Offshore Banking Department of the Central Bank, either directly or through a firm of Chartered Accountants or Attorney-at-Law.

The main information for inclusion is:

- a list of shareholders and directors, and their details,
- a business plan,
- draft articles of incorporation, and
- draft of any Administered Bank Agreement.

The application processing fee is US$2,000, and an annual fee of US$15,000 is charged.

Offshore insurance company

Applications should be made to the Insurance Authority at the Ministry of Finance and Communications, either directly or through a firm of Chartered Accountants or Attorney-at-Law.

The main information to be submitted includes:

- a list of shareholders and directors, and their details,
- the intended classes of business,
- a business plan,
- the applicants Memorandum and Articles of Association, and resolution of the board of directors, and
- the applicants certificate of incorporation.

An application fee of US$500 is charged, together with annual fee of:

- US$1,500 (life or general business),
- US$3,000 (both life and general business), and
- US$1,000 (captive companies).

Labour considerations

Companies qualified under the Investment Promotion Act automatically have a right to employ a quarter of its workforce from overseas, if they pay 500 Seychelles Roupees per employee per month. They may also employ an additional 25% at 1,500 Seychelles Roupees per employee per month.

Taxes

The following taxes apply to companies registered under the Investment Promotion Act, and so may considered as part of the incentive scheme.

The business tax rate is 15% with further tax credits available, resulting in an effective rate of 9%.

There is no sales tax.

There are no import duties on capital equipment and intermediate inputs.

A depreciation rate of 150% of original capital cost applies to certain categories of investment.

In some cases, businesses may have a tax holiday.

Any changes in tax subsequent to the issue of a Certificate of Approval cannot be to the detriment of the company.

Double taxation agreements are under consideration.

Investment incentives

Seychelles International Trade Zone (Freeport and Export Processing Zone)

The Zone allows licensing of both freeport and manufacturing operations.

Benefits include:

- exemption from all taxes,
- ability to have an entirely foreign workforce,
- license fees fixed for life, and
- eligibility to sell in the domestic sector.

There is a one-stop-shop for redistribution, manufacturing, light assembly, or export services.

Contact addresses

I could not find information on this subject.





Sierra Leone

Background

1998 Population (M): 5
1998 GNP (USD B): 0.7

1997/98 % annual GNP growth rate: -0.7
1998 GNP per capita (USD): 140
1990-98 % annual growth of GDP: -4.7
1990-98 % inflation: 32.5

1998 Labour force (M): 2
1998 Female % of labour force: 37
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1989 % share of income or consumption (highest 10% of population / lowest 10%): 87.2
1997 Telephone main lines per 1000 people: 4

1990-98 % annual growth of gross domestic investment: -13.3
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): 17
1997 Foreign direct investment (USD M): 4
1997 Present value of external debt as % of GDP: 89

1998 Value added as % of GDP Agriculture: 44
1998 Value added as % of GDP Industry: 24
1998 Value added as % of GDP Services: 32

Sierra Leone is well endowed with natural resources, both in agriculture and in mining. It has a generous range of investment incentives, has quite freely available information on investing in the country, and it has attracted foreign businesses for forty years, with current interest in agribusiness, manufacturing, and real estate. It also has seen two decades of economic stagnation, due in large part to political instability and civil war. The gap between the potential in the country and the current situation is very marked at the moment, although indications are that the economy has begun to grow rapidly since the end of 1999, after sharp contractions during the conflict from 1990 to 1995.

Agriculture is central to the Sierra Leonean economy, with about two thirds of the population working in the sector, many at a subsistence level. It accounts for the largest part of GDP, and generates export earnings through cash crops like cocoa, coffee, and kernels. The small manufacturing sector, only 4.2% of GDP, relies on many of its inputs, for example in the production of flour, salt, cigarettes, soap, furniture, and cocoa butter. Manufacturing is generally limited to processing raw materials, light production, and transforming semi-finished imports. Many enterprises are said to have spare capacity.

The majority of export earnings do not arise from cash crops, however, but from industrial and precious minerals, particularly rutile (titanium dioxide) with 44% of all earnings in 1989, and also diamonds, and bauxite. Exports have declined sharply over the last decade, from US$142 million in 1989 to US$65 million in 1999. Partially this was due to the conflict, and partially due to a decline in the world price for diamonds and gold. The effects have been felt throughout the economy, with restrictions on purchases of machines and other imported materials.

The tourism sector is another possible source of foreign exchange, and may grow quickly. Although it was inevitably damaged in the last few years, 100,000 visitors came in 1990, mainly from France. The country has a deepwater harbour at Freetown, and an inland waterway network.

The security of the region around the capital Freetown has now been consolidated, some major rebel leaders have been detained, and foreign donors and international lending agencies are funding reconstruction projects in transportation, energy, and urban development, among other schemes. The economy is also being reformed, continuing a process started in the 1980s. Inflation had been reduced to 3.5% by September 2000, well below the 1990-1998 average rate of 32.5%. Parastatal enterprises are reducing their workforce, although the Government role in the economy is mainly restricted to public utilities, so the macroeconomic effect may be limited. Perhaps a larger problem to the economy is to narrow social divides caused by the civil war, and to reduce the very large income inequalities. In 1989, the last year World Bank publishes figures for Sierra Leone, it had the most unequal distribution of income in the world among countries recording these statistics. There are also very many refugees, and regions away from Freetown are not fully under Government control.

Sierra Leone is a member of the Economic Community of West African States, ECOWAS.

Regulations governing foreign investment

Restrictions on repatriation of capital, profits, dividends, or expatriate earnings apply only from the view of exchange control.

Foreign investors may set up foreign currency accounts.

Legal forms

Sierra Leonean legal forms include:

- Limited Liability Companies,
- partnerships, and
- sole traders.

Procedures for investment

Setting up or expanding a company

If an investor wants to set up or expand an industrial enterprise, an application must be made to the Secretary of State for Trade, Industry, and State Enterprises. It must contain a completed application form (available from the Department of Trade, Industry and State Enterprises), and a feasibility study including the following information:

- the current and future markets for the products,
- the technical and technological aspects, including
-- the location,
-- plant and machinery details,
-- raw materials used, and
-- other inputs used,
- the experience and qualifications of the management,
- local employment generated,
- the value added in the process,
- the financial rate of return,
- the economic benefits for the country, and
- the foreign exchange earned by the project.

Labour considerations

There are no restrictions on repatriating expatriate earnings.

There are six public holidays every year.

Taxes

Taxes on companies include:

- income tax,
- surtax,
- Payroll Tax, and
- customs duty.

I do not have information on their rates.

Investment incentives

General incentives

The following incentives may be awarded by the Department of Trade, Industry and State Enterprises at the same time as permission to invest is granted:

- preferential treatment in granting and processing import licenses,
- partial or total exemption from customs duty on capital equipment if alternative, more labour intensive production techniques are not available,
- partial or total exemption from customs duty on raw materials if they are not locally available,
- partial or total exemption from customs duty on intermediate goods if these do not decrease the proportion of value added domestically,
- a 25% capital allowance on machinery and equipment used in an industrial plant, and 10% every year during the benefit period,
- a 16% investment allowance, which is not deductible when calculating the residue of expenditure for the balancing charge,
- exemption from surtax for up to five years, subject to a maximum of 150% of the original capital investment, and
- exemption from income tax for up to five years, subject to a maximum of 150% of the original capital investment.

Incentives for export promotion

Under the export promotion scheme, the Bank of Sierra Leone guarantees to pay commercial banks money loaned to exporters to purchase inputs used in producing export goods, if the exporter defaults on the interest or capital payments. The guarantee is restricted to an agreed limit, or two thirds of the money owed, whichever is less.

Companies registered with the Sierra Leone Export Development and Investment Corporation may qualify for tariff exemptions.

Incentives to train Sierra Leoneans

Expenses incurred in training Sierra Leoneans are deductible from income tax.

Foreign instructors training Leonean nationals may be exempted from Payroll Tax.

Incentives for regional development

Industrial establishments outside of the Freetown region may qualify for a number of incentives, including:

- preferential allocation of loans from the National Development Bank,
- allocation of rental land and factory premises, and
- advisory services.

Incentives to Sierra Leonean entrepreneurs

Sierra Leonean entrepreneurs are entitled to the following benefits:

- preferential approval of projects,
- exemption from Payroll Tax on foreign employees, including expatriates, and
- loans from the National Development Bank up to 75% of the cost of the project, subject to normal approval procedures.

Incentives to research and development

Expenses incurred in research and development are deductible from income tax. This is true whether they are incurred directly by an enterprise or on its behalf by a recognised institution.

Incentives to tourism

These incentives may be awarded to an enterprise using foreign investment to construct or extend any hotel or other tourist facility approved by the National Tourism Development Board. They are:

- exemption from duty on importation of building materials, machinery, or equipment used in the investment, if they are not readily available in Sierra Leone, and
- exemption from Payroll Tax on expatriate staff if suitably qualified Sierra Leoneans are not readily available.

Other incentives

Incentives may also be awarded to companies operating in the following sectors:

- industries using raw materials and meeting local demand,
- industries using and producing building materials, and
- import substituting industries which save or earn foreign exchange, and domestically produce value added equal to at least 30% of the value of the finished product.

Contact addresses

I do not have information on this subject.





Somalia

Background

1998 Population (M): 9.1
1998 GNP (USD B): Estimated to be below 6.9

1997/98 % annual GNP growth rate: N/A
1998 GNP per capita (USD): Estimated to be below $760
1990-98 % annual growth of GDP: N/A
1990-98 % inflation: N/A

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): N/A
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): 0 (net)
1997 Present value of external debt as % of GDP: N/A
1997 Present value of external debt as % of GDP: Estimated to be at least 34%

1998 Value added as % of GDP Agriculture: N/A
1998 Value added as % of GDP Industry: N/A
1998 Value added as % of GDP Services: N/A

1989 Value added as % of GDP Agriculture: 63.6
1989 Value added as % of GDP Manufacturing: 4.5
1989 Value added as % of GDP Services and other Industrial: 31.9

The agricultural sector is central to the Somali economy, with livestock rearing predominating in the North of the country, while crops like sugar cane, corn, and bananas are produced in the South. The major exports show a similar bias: livestock, bananas, meat, and wood, with periodic reduction in meat exports due to foreign restrictions following disease outbreaks, like Rift Valley fever. Flooding and drought are persistent problems, and there have been severe food shortages in recent years, foodstuffs being a major import. About 70% of Somalis are nomadic.

The country has been engaged in civil war since 1991, and there has been no internationally recognised government. The economy has suffered extensive damage, and some of the conventional aids to investment are not readily available, like information on investment procedures and statistical services. Steps are being made to establish a government, but the country remains divided, with two northern regions declaring autonomy, along former colonial boundaries. These zones have been relatively peaceful, and have seen more international assistance than the inaccessible warring regions.

The industrial sector is of limited size, in 1987 employing only 9% of the population. A large proportion of output depends on agricultural inputs, for example in textiles and food processing. A cement factory was recently opened, with capacity of 200,000 metric tons. Many manufactures are imported.

The mineral wealth of the country has not been fully determined, but includes uranium, gypsum, marble, and industrial metals. They have not yet been commercially exploited. There are also oil and natural gas deposits, although at present petroleum is one of the countrys largest imports. Most energy is generated by thermal sources.

The war has substantially affected Somalias infrastructure. There is no railway, so the underdevelopment of the road network is a serious constraint on land travel, although Mogadishu is said to be well connected, with improving facilities as a port. The telecommunications sector has also been damaged, although there is local Internet connection. The education system has been subject to severe pressure too.

There is considerable cross border migration between Somalia and her neighbours, due in part to the nomadic lifestyle, food shortages, and war in the region. The recent fighting in the country has encouraged a diaspora beyond the continent, and expatriates may eventually provide a source of funds for development. Tensions exist with the surrounding states. There is considerable potential for growth in tourism when peace returns.

The country started to liberalise in the early 1980s under IMF guidance, although the programme was not fully implemented. The World Bank is not currently active in the country. Inflation has been aggravated by forged banknotes entering the economy from a variety of sources.

Internet information on investing in Somalia is hard to find, so the sections on investment procedures are not included here.

Regulations governing foreign investment

I could not find information on this subject.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

I could not find information on this subject.

Investment incentives

I could not find information on this subject.

Contact addresses

I could not find information on this subject.





South Africa

Background

1998 Population (M): 41
1998 GNP (USD B): 119.0

1997/98 % annual GNP growth rate: 0.6
1998 GNP per capita (USD): 2,880
1990-98 % annual growth of GDP: 1.6
1990-98 % inflation: 9.8

1998 Labour force (M): 16
1998 Female % of labour force: 38
1997 Adult illiteracy rate as % of people 15 and above (male): 15
1994 % share of income or consumption (highest 10% of population / lowest 10%): 41.7
1997 Telephone main lines per 1000 people: 107

1990-98 % annual growth of gross domestic investment: 3.4
1997 Private investment as % of gross domestic fixed investment: 72.9
1998 Merchandise exports (USD M): 26,322
1997 Foreign direct investment (USD M): 1,725
1997 Present value of external debt as % of GDP: 19

1998 Value added as % of GDP Agriculture: 4
1998 Value added as % of GDP Industry: 38
1998 Value added as % of GDP Services: 57

South Africa is the largest economy in the Southern African region, both in terms of the volume of production and power of consumption. It consequently exerts a substantial influence on its neighbours, through trade, through monetary union with Lesotho, Namibia, and Swaziland, and by its high quality transport facilities and sea access. Nevertheless, its largest trading partners are outside of the region, in Europe, Asia, and North America, countries with sufficient income to buy the gold, diamonds, and other minerals on which South African industry is founded.

Apart from the mineral resources, the country also exports foodstuffs, chemicals, and manufactures. It also supplies electricity to a number of its neighbours, and investment throughout the African continent. The domestic agricultural sector is very small in terms of its contribution to GDP, although a significant minority of the population work there. Drought is a periodic difficulty. Non-mining industry is quite well developed, but the country runs a substantial trade deficit in a number of sub-sectors like electronic goods, and there may be scope for import substitution, and for exporting to other African countries. South Africa is a member of a number of trading blocs in the continent, giving it more favourable access to local markets than overseas competitors.

The financial services sector is sophisticated, and there is a well-developed Stock Exchange which utilises modern technology and linkages with other exchanges to improve its liquidity. Services as a whole are the largest sector of the economy.

The transport infrastructure is of a quite high standard, with electrified railways, a large paved highway system, and ports that serve both South Africa and its northern neighbours. The telephone network uses a variety of modern technologies, and is reported to be of good quality. A number of utility parastatals are due to be privatised in the near future.

There are substantial income and educational inequalities in the country, which have persisted for many years. The Government is undertaking programs to improve the living conditions and opportunities in the less developed areas, although at the same time attempting to keep borrowing and inflation under control, and to promote investment. Increased educational access, reducing illiteracy, and controlling the growth of HIV/AIDS are among the most pressing medium term issues for the economy. There is a large pool of unemployed and underemployed labour in the country.

Regulations governing foreign investment

Foreign exchange control is administered by the South African Reserve Bank, with delegation to commercial banks acting as authorised dealers. The regime is liberalised, although there are a number of reporting requirements.

There are no restrictions on foreign firms investing in share capital, beyond documentation. Dividends and capital gains may be repatriated freely. Royalties, license fees, and patent fees repatriation must be approved by the Reserve Bank, except in the case of manufacturing royalties, when the Department of Trade and Industry must issue the approval.

Foreign resident loans to South African residents and their repayment require approval by the Reserve Bank. South African companies that are 75% or more foreign owned may only borrow a certain amount from South African lenders, defined by a formula

effective capital x ( 100% x ( 1 + % South African interest / % Non-resident interest ) ).

Effective capital is the total of all assets due to shareholders, like share capital and non-distributed profits.

Legal forms

Public company

Public companies, along with private companies, are the most common business forms used by foreign investors. Public companies have the following characteristics:

- they must have a registered office in South Africa,
- they may offer their shares for sale to the public,
- there is no restriction on transfer of their shares,
- there is no limitation on the number of shareholders,
- they must be incorporated and registered with the Registrar of Companies
- they must file a copy of their annual financial statements with the Registrar, and
- they must be audited by a registered accountant and auditor,

Private company

This form meets a number of requirements:

- they must have a registered office in South Africa,
- they may not offer their shares for sale to the public,
- the transfer of their shares is restricted,
- there may be no more than fifty members,
- they must be incorporated and registered with the Registrar of Companies,
- they must be audited by a registered accountant and auditor, and
- their name must end in the words (Proprietary) Limited, or with the abbreviations (Pty) and Ltd.

Local branch of a foreign company

The form does not require registration of a separate locally incorporated company. It may be used in any sector except for banking and insurance. These requirements must be met:

- a registered office must be set up in South Africa,
- a South African resident must act as its legal representative,
- a local auditor must be appointed,
- unless exempted, audited financial statements of the branch must be submitted with the Registrar of Companies,
- as well as a certified copy of the most recent financial statements of the foreign company in the country of incorporation,
- there are no local equity requirements, except in some major banking institutions, when non-resident control is restricted,
- although borrowing and the ratio of debt to equity are limited when foreign ownership exceeds 75%, as outlined in the section above on "Regulations governing foreign investment".

Close company

This form is common among smaller businesses. It has the following characteristics:

- its members must be individuals, not companies or trusts,
- there may be no more than ten members,
- the members have limited liability, which may be lost if the rules governing close corporations are broken,
- there are no directors, and
- they do not have to be audited, but
- they must have an accounting officer who must report that the annual financial statements agree with the accounting records.

Partnerships and sole traders

These forms are subject to less regulation than companies, which may be summarised as:

- partners and traders do not have unlimited liability,
- except in a partnership known as en commandite, when some partners may choose not to disclose their names, and retain limited liability,
- they have no more than twenty members,
- except in the case of certain professional partnerships, and
- they do not have to register,
- nor to submit statutory reports beyond adequate financial statements for tax purposes.

Joint ventures

This form exists when two companies have a contractual relationship which is not a partnership.

Procedures for investment

Registering a private or public company

The first stage is to register the proposed name by submitting to the Registrar of Companies a form CM5 in duplicate and stamped with 50 Rand in revenue stamps. The form, like all the others required for registration, may be purchased for a stationer dealing in statutory forms. Three or four alternative names should also be provided in case the first choice is rejected on any of a number of grounds, like it already being in use. Once accepted, the name is reserved for two months, during which time the documents of incorporation should be submitted. Extension by one month may be given if a CM6 form is submitted with 20 Rand of revenue stamps.

The following documents should be delivered by hand:

- a copy of the approved form CM5,
- CM22 (notice of postal address and registered office address), in duplicate,
- the Memorandum and Articles of Association, in duplicate (one copy bound in book form and certified by a notary - standard forms exist, and submitting these speeds up processing),
- CM2 (first page of the Memorandum of Association), stamped with a minimum registration fee of 350 Rand, plus R5 per R1 000 of share capital or part thereof and/or R5 per R1 000 no-par-value shares,
- CM1 (certificate of incorporation),
- CM46 (certificate to commence business), stamped with R60,
- CM44c (signature page for subscribers),
- CM44c,
- CM46 stamped with R60,
- CM47 for each director,
- CM29 (return of Register of Directors),
- CM31 (auditors consent), in duplicate,
- CM27 (notice of Company Secretary), if a public company, and
- power of attorney (if attorney is used or if more than one subscriber exists).

If there are no errors or omissions, the normal processing time is three to five business days.

The total cost of all forms is about R100. Legal fees start at R4,500, and depend on the complexity of the application.

Registering a close corporation

The first stage is to propose the name to the Registrar of Close Corporations. After acceptance, the following documents should be delivered by hand or mail to the Registrar:

- the founding statement application,
- approved form CK7 (I think that this is the name acceptance),
- an original letter of consent from the ACC official (I am not sure what ACC stands for, but the Registrar should be able to advise), and
- form CK1 in duplicate.

Neither auditors nor lawyers are required in the registration process.

Processing time is two to three business days.

Registering partnerships and sole traders

These forms do not have to be registered.

Registering a branch of a foreign company

To be recognised as a branch, a foreign company must register as an external company with the Registrar of Companies within 21 days of establishing an operation within South Africa.

The documents which should be submitted include:

- an application form,
- a certified copy of the Memorandum and Articles of Association of the foreign company, with translation into an official language of the Republic if appropriate,
- the address of the companys registered office,
- the consent, name, and address of a local auditor,
- details of the local manager and secretary,
- the consent and details of directors,
- the name and address of the person authorised to accept service on behalf of the company,
- audited financial statements of the South African branch prepared by a local auditor, and
- a certified copy of the foreign companies most recent financial statements,

The last two requirements may be waived in some circumstances.

A local auditor and legal representative should be appointed. Legal costs may be similar to incorporation of a separate company.

Labour considerations

The Basic Conditions of Employment Act regulates the standards of employment. The articles covered include:

Length of working time

The working week is limited at 45 hours, with daily limits of 9 hours a day for employees working five days or less in a week, and 8 hours for those working more.

Overtime is subject to agreement between the employer and employee, and must be paid at one and a half times the basic rate, or in the form of an extended paid holiday.

Sunday working is also paid at one and half times the basic rate, if the employee normally works on Sundays, or two times if they don't. The minimum payment for working on Sunday is the normal daily rate, no matter how little time is worked. Again, paid time-off may be agreed instead of payment.

Working on public holidays requires mutual agreement.

Annual leave

An employee is entitled to 21 days consecutive days in each year of employment.

Sick leave

Paid sick leave is set over three year period, and is payable for the same length of time as is normally worked over a six week scale. For example, it is payable for thirty days over the three year cycle if the length of the working week is five days.

Maternity Leave

Employees have the right to maternity leave for four consecutive months.

Family Responsibility Leave

There is an entitlement of three days of paid Family Responsibility Leave every year. It may be taken when:

- a child is born to an employee,
- one of the employee's children is sick, or
- one of the employee's immediate family dies.

Child Labour

It is illegal to employ children under the age of 15, while those between 15 and 18 may only be employed when the work is appropriate and not harmful to their well-being and development.

The Labour Relations Act regulates relations between employers and employees. It promotes the establishment of forums for collective agreements between the workforce and management, and sets up bodies for resolving labour disputes, including issues relating to retrenchment. In the case of severance pay, one weeks salary must be paid for each year of completed service.

The Employment Equity Act prohibits discrimination on grounds including race, gender, and disability. Larger employers must develop employment equity or affirmative action plans, and report to the Department of Labour.

The national investment promotion agency recommends consultation with industry unions during the setting-up of a company. Unions have the right to be consulted when the company is in operation, on matters of workplace restructuring, mergers and acquisitions affecting labour, and proposed retrenchments.

Taxes

Corporate income tax is 35%.

An additional Secondary Tax on Companies of 12.5% on companies and close corporations applies to the amount of dividends declared less dividend income. This additional charge does not apply to companies managed outside of South Africa, and trading through a branch or agency.

Dividends received are exempt from income tax.

Personal income tax varies progressively from 0% to 45%.

Value Added Tax is 14% on most goods and services, with exemptions on financial services, exports, the sale of a business as a going concern, and certain other sales. Companies with annual turnovers above R150,000 must register for the tax, while registration is optional for those with turnovers below the sum.

A number of other taxes apply to companies. Regional establishment levy varies between 0.1% and 0.15% of turnover. Payroll levy is between 0.25% and 0.35% of payroll. Skills development levy is 0.5% of payroll in the companys first year, and 1% in subsequent years, with rebates granted to companies with training plans considered sensible.

There is no Capital Gains Tax.

Investment incentives

The Industrial Development Corporation

The Industrial Development Corporation helps to finance enterprises in a variety of circumstances:

- to give general loans to manufacturers,
- to fund new or expanding businesses,
- to promote employment,
- to assist in importing and exporting,
- to promote the tourist industry, and
- to promote rural development.

General loans

Loans are provided to help promote viable secondary manufacturing. The loans are usually medium to long-term, and may be fixed or variable rates. The fixed rate is currently 17%. The variable rate is 4.5% below Prime rate for loans to emerging entrepreneurs, or when a job is created for every R100,000 borrowed. The variable rate for other businesses is 2% below Prime rate.

Venture Capital Scheme

The Scheme provides a flexible package to assist in development of products with good growth potential.

Economic Empowerment Scheme

Larger than normal funding is available to help industrialists from previously disadvantaged communities.

Export of Capital Goods and Services Scheme

Loans at attractive interest rates are available for exporters of such products, over terms of two to ten years.

Import Financing

Equally, industrialists importing capital goods and services have access to credit and guarantee facilities.

Tourism Schemes

Subsidised loans are provided for improvement or extension of accommodation facilities. A special scheme applies to businesses operating in game parks and conservation areas.

Orchards Scheme

Low interest loans are available to orchard establishments creating employment in rural areas.

Contact addresses

Office of the Registrar of Companies and Close Corporations
Department of Trade and Industry
PO Box 429
Pretoria 0001
Telephone: (012) 310 9791
Facsimile: (012) 328 3051

South African Revenue Service (Customs and Excise)
Private Bag X47
Pretoria 0001T
Telephone: (012) 422 4000
Facsimile: (012) 422 6991

South African Revenue Service (General taxation)
Department of Finance
Private Bag X923
Pretoria 0001
Telephone: (012) 422 4000

Directorate Import and Export Control
Department of Trade and Industry
Private Bag X192
Pretoria 0001
Telephone: (012) 310 9791
Facsimile: (012) 322 7408

Department of Home Affairs
Private Bag X114
Pretoria 0001
Telephone: (012) 314 8911
Facsimile: (012) 326 4571
Contact: Chief Directorate: Migration

Directorate Import and Export Control
Department of Trade and Industry
Private Bag X192
Pretoria 0001
Telephone: (012) 310 9791
Facsimile: (012) 322 7408

Office of the Registrar Patents, Trademarks, Designs and Copyright
Department of Trade and Industry
Private Bag X400
Pretoria 0001
Telephone: (012) 310 8701
Facsimile: (012) 323 4257

Ministry of Labour
Private Bag X499
Pretoria 0001
Telephone: (012) 309 4000
Facsimile: (012) 309 4446
Contact: Zintle Filtane

Directorate: Mining Rights
Department of Minerals and Energy
Private Bag X59
Pretoria 0001
Telephone: (012) 317 9029
Facsimile: (012) 322 8955

Property Council of South Africa
Managed by Avian Management Services (Pty) Ltd
P O Box 78544
Sandton, 2146
Telephone: (011) 883 0679
Facsimile: (011) 883 0684
E-mail: ceo@procsanet.org.za

Department of Public Works
Private Bag X65
Pretoria 0001
Telephone: (012) 205 2015
Facsimile: (012) 325 8098
Contact: Directorate Property Control

The Registrar of Deeds
Private Bag X 41
Johannesburg 2000
Telephone: (011) 378 2111
Facsimile: (011) 378 2100

Congress of South African Trade Unions (COSATU)
Telephone: (011) 339 4911
Facsimile: (011) 339 5080





Sudan

Background

1998 Population (M): 28.3
1998 GNP (USD B): 8.2

1997/98 % annual GNP growth rate: 5
1998 GNP per capita (USD): 290
1990-98 % annual growth of GDP: N/A
1990-98 % inflation: N/A

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 47 (male and female combined)
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): N/A
1997 Present value of external debt as % of GDP: N/A

1998 Value added as % of GDP Agriculture: N/A
1998 Value added as % of GDP Industry: N/A
1998 Value added as % of GDP Services: N/A

Much of the Sudanese economy is based on agriculture. Most of the population works on the land, and cotton, livestock and meat, gum arabic, and sesame are significant exports. Drought is a problem in some regions of the country, and a civil war which has lasted decades has resulted in others becoming inaccessible. The country has to import large amounts of food.

The discovery of large oil and gas deposits in the last thirty years has the potential to revitalise the economy. Future strikes in the South of the country may be difficult to exploit, as Sudanese rebel groups are concentrated in the region, and they have stated their intention to target oil facilities. Development has been further hindered by international condemnation of the Government role in the civil war, with the United States applying sanctions in 1997. The participation of Western multinationals in the industry has been subject to criticism both in Sudan and beyond its borders. Most commercial energy is generated from petroleum, and a proportion of the national electricity generation is thermal, the remainder being hydropower.

The distribution system for oil is said to be in need of improvement. It consists of pipelines, notably from the refinery at Port Sudan to Khartoum, an extensive railway, a road system, and river transport. The telecommunications network may also require further investment, although ongoing military spending may limit available public cash. Private sector involvement in the last few years, with 80% of the national telecommunications operator Sudatel being sold by the Government, may bring new funds into the sector. Although Sudatel has a monopoly on infrastructure developments until 2009, there is some competition among wireless companies, which may form the basis for a future open market. There is full Internet connection via the USA and the UK.

A stock exchange opened in 1994 based on Sharia Law. It is an innovation in financial terms, although some of its features - like the presence of primary and secondary markets - are familiar in conventional exchanges.

There are known gold deposits in Sudan, as well as iron ore and base metals. The mining industry is not well developed, although new investments are being made.

Regulations governing foreign investment

The Bank of Sudan administers exchange control, with commercial banks and authorised dealers able to sell foreign exchange to finance imports, though one source reports that informal rationing exists. Importers and exporters must register with the Ministry of Trade.

Some imports are prohibited for religious, health, and national security reasons. All trade with Israel is banned.

Full remittance of dividends, interest, fees, and other business charges is possible through commercial banks, although this may require Ministerial approval.

Legal forms

I could not find information on this subject.

Procedures for investment

I could not find information on this subject.

Labour considerations

I could not find information on this subject.

Taxes

Business profit tax is payable on the net profit derived from lucrative activities, whether by individuals or companies. The corporate rates are:

- 40% on private and public companies,
- 35% on agricultural companies, and
- 45% on banks and insurance companies

For individuals, the rates vary from 0% to 40%.

Personal income tax varies from 0% to 30%.

Capital gains tax is due on net profits from the sale of land (5%), real estate (5%), and cars (2.5%).

There are a number of other taxes, including sales tax, stamp duty, expatriates tax, and agricultural tax.

Imports may be subject to a range of duties, including:

- value added tax,
- consumption tax,
- defence tax,
- quay dues, and
- stamp duty.

Investment incentives

Incentives may be awarded to investments satisfying any of the following objectives:

- investing in less developed areas,
- helping achieve food, housing, clothing, or medicinal security,
- assisting in the development of exports,
- supporting "justice in the distribution of wealth and incomes", and creating new work opportunities,
- helping to provide local alternatives to basic imports,
- using local raw materials,
- working in mining, and
- reinvesting profits (of mining activities, I think).

The granting of incentives is at the discretion of the relevant Government Minister.

Incentives include:

- exemption from business profits tax for up to five years, with losses carried over to the end of the period, and the option of extension by Ministers.
- exemption of up to 70% of import taxes,
- subsidised land, and payment for it by instalments,
- exemption from any other taxes and fees levied during a period of up to five years, and
- no restriction over profit and capital repatriation.

There are free trade zones at Port Sudan, Melut, and Junaynah.

Contact addresses

Financial and Monetary Authorities
Ministry of Finance and Economic Planning
POB 700, Khartoum
Telephone: 77003-77255 Telex: 22324-612
Minister: Mr. Abdul-Rahim Mahmood Hamdi

Bank of Sudan
POB 313, Gamaa Avenue, Khartoum
Telephone: 78064 Telex: 22352
Governor: Mr. El Cheikh Sid Ahmed el-Cheikh

Ministry of Commerce, Corporation and Supply
Trade Information Centre
Gamal Street
P.O. Box 194
Khartoum
Tel: (24911) 72540
Fax: (24911) 72540
Tlx: 22329 MCCS SD

General Manager
Sudan Chamber of Commerce
P.O. Box 81
Khartoum
(Tel 00249-11-772346/776518)

Customs and Excise
Contact: Director
Customs & Excise Department
Sudan Customs & Excise Headquarters
P.O. Box 323
Khartoum
(Tlx 22181)





Swaziland

Background

1998 Population (M): 1
1998 GNP (USD B): 1.4

1997/98 % annual GNP growth rate: 1.8
1998 GNP per capita (USD): 1,400
1990-98 % annual growth of GDP: N/A
1990-98 % inflation: N/A
1995 inflation: 14.7% (source: COMESA website)

1998 Labour force (M): N/A
1998 Female % of labour force: N/A
1997 Adult illiteracy rate as % of people 15 and above (male): 23 (male and female combined)
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: N/A

1990-98 % annual growth of gross domestic investment: N/A
1997 Private investment as % of gross domestic fixed investment: N/A
1998 Merchandise exports (USD M): N/A
1997 Foreign direct investment (USD M): N/A
1997 Present value of external debt as % of GDP: N/A
1996 Total debt as % of GDP: 24.4% (source: COMESA website)

1998 Value added as % of GDP Agriculture: N/A
1998 Value added as % of GDP Industry: N/A
1998 Value added as % of GDP Services: N/A

The Swaziland economy is closely linked with its much larger neighbour, South Africa. Their two currencies have the same value, South Africa is Swaziland trading partner with 60% of exports and 85% of imports, and there is no customs or excise duty between the two. Swazi workers have historically travelled to jobs in South African mines, although the workforce is now being reduced, and the smaller state will probably have to generate increased work itself. Formal sector employment has grown over the period 1991-98 by 0.5% every year, substantially below the population growth at 2.7%, and so probably below the increase in available manpower. Much of the deficit has been absorbed into the informal sector, where employment increased at 2.5% per year, according to Central Bank estimates. Job turnover is large.

The Swaziland Investment Promotion Agency attempts to promote investment, and ease the procedures for approval. Growth in wealth per head has slowed from its high point through the 1980s, with foreign direct investment in manufacturing showing a noticeable fall. Much of the manufacturing industry is based on the agricultural sector where the majority of the population works - the countrys main exports include soft drink concentrates, sugar, wood pulp, and cotton yarn.

There is an attempt to develop Swazilands tourist sector, which could become a significant industry, especially in view of its success in South Africa. Political instability may limit its development, having already cost the country GSP trading preferences from the United States.

A number of plans have been advanced to improve Swazilands infrastructure. Export and import costs may fall with the proposed rehabilitation of roads and of the rail route to Mozambique, while the civil service has been subject to efficiency reviews. The telephone network is said to be limited but improving, and there are a number of Internet service providers. Electricity is provided by a parastatal.

Swaziland has a small stock exchange.

Regulations governing foreign investment

Most business activities are open to foreign investors.

Swaziland is a member of the Rand monetary area, and external capital controls apply outside the members: South Africa, Swaziland, Namibia, and Lesotho. There is no capital control within the area.

Dividends and interest may be repatriated freely, after tax. However, certain fees are restricted.

Legal forms

Private company

Private companies have the following characteristics:

- they have names ending in "(Proprietary) Limited",
- they are limited by share capital,
- they have no more than fifty members,
- they restrict the right to transfer shares,
- they may not invite the public to acquire shares or debentures in the company, and
- they must be registered.

Public company

Public companies have names ending in "Limited", and have no restriction on share transfer. They must:

- be limited by share capital,
- have at least seven members, and
- be registered.

Foreign company

Foreign companies must register with the Registrar of Companies, and are regulated by the Companies Act. They can operate through a subsidiary or a branch. In the latter case, they must be registered as an external company.

Partnership

Partnerships are restricted to twenty persons or legal entities, except for some recognised professionals.

Other forms include sole traders, and trading trusts.

Procedures for investment

Registration of companies

The first stage is to get approval of the proposed name from the Registrar of Companies. Names should not be already in use, nor cause annoyance, nor use words like "imperial", "crown", and so on.

Then the Memorandum of Association should be submitted to the Registrar, with

- the name of the company,
- the address of the registered office,
- the objectives,
- statement of whether the liability is limited, and
- the amount of the share capital.

For a limited company, the Articles of Association should also be included. Sending them is optional for a company with unlimited liability.

For foreign company, documents showing the overseas incorporation are also required.

Sole traders and partnerships must also register.

A license fee is payable, of:

- Emalangeni 20 if the share capital is no more than E10,000,
- E40 if the share capital is above E10,000 but no more than E30,000,
- E100 if the share capital is above E30,000 but no more than E50,000, and
- E200 if the share capital is above E50,000.

Labour considerations

Work permits are generally awarded if expatriates have skills not locally available.

The Employment Act (1980) regulates the contract of employment.

The Wages Act (1964) regulates the wages and conditions of employment. The Minister of Labour sets minimum wages and standards for certain industries, such as the motor industry, transportation, mining, retail, hotel and catering, and agriculture.

The Industrial Relations Act (1980) concerns collective negotiation of terms of employment as well as establishment of a Labour Court. The Court assists in the settlement of trade or other contract disputes.

Employees may form labour organisations. Recognition is gained by registration with the Commissioner of Labour.

Taxes

Corporation tax is 37.5% (one source reports 30%). Mining companies are taxable at rates of 27% then 37% above taxable income of E20,000. Some expenditures are tax deductible.

Dividend tax is 15% generally. Companies incorporated in Botswana, Lesotho, or South Africa pay 12.5%. Non-residents pay withholding tax at the same rates.

Tax on interest is 10%.

Personal income tax is progressive from 0% to 39%.

Sales duty is 15%, and 20% on liquor and cigarettes.

Other taxes include stamp duty, sugar export tax, mineral rights tax, and casino tax.

There are double taxation agreements with South Africa and the UK.

Investment incentives

There are a number of incentive schemes.

Swaziland Industrial Development Company Limited

Direct joint participation in the project may occur through the Swaziland Industrial Development Company Limited (SIDC), a limited company which provides finance to the private sector, and takes part in projects judged to be viable and well managed. Priority is given to schemes which:

- provide permanent employment,
- generate foreign exchange,
- utilise local resources,
- encourage linkage with existing industries,
- upgrade human resource skills,
- transfer appropriate technology, and
- promote local entrepreneurship.

The SIDC in principle only finances new projects, and does not refinance. The involvement is restricted to:

- 50% of the projects financial requirements,
- 35% of the companys equity,
- loans for fixed assets with terms up to 10 years, and
- financial services.

Export Credit Guarantee Scheme

The scheme provides credit to small and medium sized exporters, and is funded in part by the Government, and in part by banks and investment income.

Other incentives

Special tax allowances may be given to large scale investors, those training Swazi citizens, and those classified as "development" enterprises.

New manufacturing enterprises may be given a five year tax exemption, subject to the cumulative taxable income in the period less remuneration paid to Swazi citizens being below 150% of the value of the fixed assets.

Industrial machinery qualifies for a 50% write-off in the year the asset is brought into use. Industrial plants and hotels also have an initial 50% allowance, and then 4% annual allowance.

Contact addresses

Ministry of Finance
POB 443, Mbabane
Telephone: 42141 Telex: 2109

Central Bank of Swaziland
POB 546, Mbabane
Telephone: 43221 Telex: 2029-2108 Telefax: 45417-42636

The Swaziland Investment Development Corporation
P.O. Box 866
Mbabane
Telephone: (00268) 43391/43
Fax: 45619

Ministry of Commerce, Industry & Tourism Trade Promotion Unit
P.O. Box 451
Mbabane
Tel: (0268) 43201/41808/9
Tlx: 2232 WD
Fax: (0268) 43833

Swaziland Industrial Development Co. Ltd
Operations Department
Corner Tin & Walker Street
P.O. Box 866
Mbabane
Tel: (268) 43391-3; 44010-2
Tlx: 2052 WD
Fax: (268) 45619





Tanzania

Background

1998 Population (M): 32
1998 GNP (USD B): 6.7 (mainland Tanzania only)

1997/98 % annual GNP growth rate: 3.2
1998 GNP per capita (USD): 210
1990-98 % annual growth of GDP: 2.9
1990-98 % inflation: 24.3

1998 Labour force (M): 16
1998 Female % of labour force: 50
1997 Adult illiteracy rate as % of people 15 and above (male): 18
1994 % share of income or consumption (highest 10% of population / lowest 10%): 10.75
1997 Telephone main lines per 1000 people: 3

1990-98 % annual growth of gross domestic investment: -2.3
1997 Private investment as % of gross domestic fixed investment: 83.8
1998 Merchandise exports (USD M): 674
1997 Foreign direct investment (USD M): 158
1997 Present value of external debt as % of GDP: 77

1998 Value added as % of GDP Agriculture: 46
1998 Value added as % of GDP Industry: 14
1998 Value added as % of GDP Services: 40

Natural resources form the basis of the Tanzanian economy. Half of GDP comes directly from agriculture, and a substantial part of the industrial sector relies on its inputs for producing textiles, processed tea and coffee, twine and ropes, paper and chemicals. Cash crops, including coffee, cotton, and sisal, generate the majority of export earnings. Fish and livestock rearing are another important sub-sector to the economy, generating a tenth of GDP. Fish provides an important source of food for the population, 85% of who work the land, mainly in subsistence farming.

The country set about liberalising the economy in the 1980s, following two decades of large-scale public control of the economy. Price controls have been lifted, and privatisation has been ongoing, with 191 companies out of a targeted 401 parastatals sold by 1999. A one-stop-shop for foreign investments has been created, and foreign exchange controls lifted. The country has a comparatively high level of literacy, a moderately sized urban population, and a very low level of income per head, which should encourage inwards investment. Recent investors have included R.J. Reynolds, Tadema, Asea Brown Boveri, Holderbank, and Scancem. The country also has been mostly free from large-scale domestic or international conflict for much of the last 40 years, with a war twenty years ago against Uganda being an exception. Perhaps as a result, the economy has grown steadily if slowly, despite volatility in the world prices of some of its export commodities.

Manufacturing production grew at 1.0% per year in the first half of the last decade, but in the later years it accelerated to 5.3% annual growth. It remains a modest proportion of GDP, with plenty of scope for import substitution of machinery, textiles, and fertilisers. There have been some constraints on development due to capital shortages, but despite this the mining sector has been buoyant, where extraction of gold, precious stones, and industrial minerals has increased sharply, particularly for exports.

The forest resource that covers half the country accounts for 10% of foreign exports, and most of the fuel used by the rural population. Tanzanias visually attractive environment means that tourism has potential for continuing its recent rapid expansion. It currently accounts for about 16% of GDP.

The transport infrastructure has been developed in the last few year, with the support of multilateral and bilateral institutions. The road system in particular is said to have improved substantially, although certain parts of the country are not yet fully served. Other forms of surface transport are rail and waterway. Despite recent increases in the number of lines available, the telecommunications network does not reach most of the population, although this may change with the licensing of several cellular operators. There are many Internet service providers, and recent technological innovations, for example relating to international bandwidth, could promote further electronic communication. Power supply is reported to be getting better, helping industrial growth.

The financial infrastructure has also been reformed, and a small Stock Exchange established, which may be able to take part in larger regional linkages. Tanzania is a member of a number of regional trading blocs, notably the East African Community and the Southern African Development Community.

Regulations governing foreign investment

There are no restrictions on remittance of profits, interest, principal, and other charges, if they are made through an authorised bank. This benefit may only apply to companies registered through the Tanzania Investment Centre. Equally, there are no restraints on technology transfers, although they must be recorded with the Investment Centre when they are made.

Foreign investors may borrow from Tanzanian financial institutions up to limits set by the Bank of Tanzania.

Legal forms

Legal forms include sole proprietors, partnerships, joint ventures, incorporated companies and registered branches of overseas companies. They must all register with the Tanzanian authorities. Private companies must have at least two shareholders.

Procedures for investment

The Tanzania Investment Centre acts as a one-stop-shop for local investors investing over US$100,000 and foreign investors bringing at least US$300,000. It helps with applications for new business permits, and other administrative procedures, as well as providing information on new opportunities and incentives.

To register a business proposal, a foreign investor should submit the following documents to the Centre:

- an application form in triplicate,
- a project study and business plan in triplicate,
- a copy of the investors certificate of incorporation, and
- the foreign investors profile and reference from its host countrys chamber of commerce.

The TIC may then assist in the remaining procedures. Foreign investors will have to provide the company charter, Memorandum of Association, and Articles of Association.

A fee of 240,000 Tanzanian Shillings is payable for a certificate of incorporation.

For investors building their own factory, an inspector will visit the complete site. There is an additional small charge.

Labour considerations

Expatriate employment

Businesses granted a Certificate of Incentives automatically are allowed to employ five expatriates during the start-up period. The Executive Director of the Investment Centre may permit additional foreign experts to work in the enterprise.

There are no restrictions on employing expatriate experts in the Mining or Petroleum sectors, if a justification for their employment is made.

Minimum wage

The minimum for the private sector is 30,000 Tanzanian Shillings per month for those aged 18 and above, and 14,000 Tanzanian Shillings per month for 15-17 year olds.

Length of the working week

The standard working week is 45 hours. Overtime pay is 1.5 times the employee’s standard pay.

Work Restrictions

The minimum working age is 15 years. 14 year olds may be employed with parental consent.

Annual Leave and public holidays

Employees are entitled to 28 annual leave days (including weekends). At the end of every second year a leave allowance is paid.

There are also 14 public holidays in Tanzania.

Sick Leave

Employees are entitled to three months continuous sick leave at full pay. For the subsequent three months half the employee’s usual wages must be paid.

Maternity Leave

Expectant female employees have the right to a paid maternity leave of 84 days.

Dismissal Procedures

A series of warnings must be given to an employee before they are dismissed.

Retrenchment

Any plans for retrenchment must be discussed with the Industrial Court.

Severance Pay

Severance allowance is determined as

(annual wages) x (0.0005) x (number f years of service).

I am not sure of the basis on which the annual wages are calculated.

Taxes

Corporate income tax is 35% on resident and non-resident companies.

Personal income tax is progressive from 0% to 35%.

Dividends are subject to 15% withholding tax on residents and non-residents. Interest payments are subject to 15% withholding tax for residents, while the rate for non-residents is 20%. The tax also applies to a number of other payments, like royalties and rent.

Other taxes include value added tax, payroll levy, training levy, contribution to the national provident fund, development levy, and housing levy. A payment of 1.2% of FOB value of exports must be made to companies specialising in pre-shipment inspections.

There are double taxation agreements in force with India, Zambia, the United Kingdom, Italy, Sweden, Norway, Finland, Denmark, and Canada. More are being negotiated.

Investment incentives

Businesses approved by the Tanzania Investment Centre, or granted a Certificate of Incentives

Corporate tax is reduced to 30%. Losses may be carried over indefinitely.

The withholding tax on dividends is 10%. No tax applies to interest payments.

Capital goods are free of Sales Tax. There are reduced import tariffs of 0% or 5%.

I am not sure whether these exemptions have carried over to exemption from value added tax, as the latter was due to replace sales tax and import duties in 1998.

100% allowances are available on industrial building, plant, and machinery, and agricultural expenditure. Accelerated depreciation applies on capital goods.

Exporters

Exporters approved the Tanzania Investment Authority are entitled to all of the above benefits, and if they are in an Export Processing Area, they are additionally exempted from corporation tax.

Exports from Tanzania are exempt from value added tax, which is reclaimable after the goods have been exported.

Manufacturers

Manufacturing firms can apply for a Registered Dealer Certificate, entitling them to an exemption on sales tax and avoidance of double taxation. I am not sure whether the sales tax exemption has carried over to value added tax.

Duty Drawback

Duties and sales taxes paid on imported raw materials used for export production may be reclaimed on submitting proof of export.

Exemptions from corporate income tax

Exemptions from corporate income tax can be requested from the Commissioner of Income Tax.

Contact addresses

Tanzania Investment Centre
P.O Box 938
Dar es Salaam
Tanzania
Tel: +255 51 116328-32, 113365
Fax: +255 51 118253

Board of External Trade
Saba Saba Grounds
P O Box 5402
Dar es Salaam
Tanzania
Tel: 851706
Fax: 851700
E-Mail: betis@intafrica.com
Web: www.bet.co.tz

Chief Executive Officer
Capital Market & Securities Authority
P. O. Box 75713
Dar es Salaam
Tel: 255 51 113903
Fax: 255 51 113846
E-mail: cap-markets@cats-net.com
Web Site: http://www.darstock.com

Registrar of Companies
Co-operative Building
10th Floor
Lumumba Street
P. O. Box 9393
Dar es Salaam
Telephone: 255 51 180385/180113/180371/188344

Commissioner
Income Tax Department
Tanzania Revenue Authority
East African Community Building
P. O. Box 9131
Dar es Salaam
Tel: 255-51 29533 or 38811

Customs Department
Tanzania Revenue Authority
Sokoine Drive

East African Community Building
P. O. Box 9053
Dar es Salaam
Tel: 255-51 111615/38067
Fax: 255-51 116640
Contact Person: Commissioner for Customs & Excise Department

Tanzania Harbours Authority (THA)
P. O. Box 9184
Dar es Salaam
Tel: 255-51 112872
Fax: 255-51 113938
Contact Person: Director General

Tanzania Central Freight Bureau (TCFB)
P. O. Box 3098
Dar es Salaam
Tel: 255-51 114174/115579/35081
Fax: 255-51 114174
Contact Person: Director General

National Shipping Agencies Company (NASACO)
P. O. Box 9082
Dar es Salaam
Tel: 255-51 112069
Contact Person: Managing Director

Department of Immigration Services
Ministry of Home Affairs
P. O. Box 512
Dar es Salaam
Tel: 255-51-23936
Fax: 255-51-844246
Contact: Director of Immigration Services

Labour Commission
Bibi Titi Mohammed Road
P. O. Box 9014, Dar es Salaam
Tel: 255-51-110463
Contact: and Department

Labour Division Headquarter
Ministry of Labour and Youth Development
Askari Circle
P. O. Box 9014
Dar es Salaam
Tel: 255-51-110218/110219
Fax: 255-51-112054
Contact Person: Commissioner for Labour

Tanzania Chamber of Commerce Industry & Agriculture (TCCIA)
1st Floor Salamander Coffee
Restaurant Building Samora Avenue
P. O. Box 9713 Dar es Salaam
Tel: 255-51 37370 - 2
Telex: 41424 MKONSULT
Contact Person: President (TCCIA)

Confederation of Tanzania Industries (CTI)
10th Floor NIC Building,
P. O. Box 71783 Dar es Salaam
Tel: 255-51 114954
Fax: 255-51 23802
Telex: 41587
Contact Person: Chairman (CTI)

Tanzania Chamber of Mines
P. O. Box 13369 Dar es Salaam
Tel: 255-812 780-933 Chairman
Tel/Fax: 255-51 700244/700242

Dar es Salaam Chamber of Commerce
P. O. Box 41 Dar es Salaam
Tel: 255-51 21893/23759

Dar es Salaam Merchants Chamber of Commerce
P. O. Box 12
Dar es Salaam
Tel: 255-51 22293





Togo

Background

1998 Population (M): 4
1998 GNP (USD B): 1.5

1997/98 % annual GNP growth rate: -1.0
1998 GNP per capita (USD): 330
1990-98 % annual growth of GDP: 2.3
1990-98 % inflation: 8.8

1998 Labour force (M): 2
1998 Female % of labour force: 40
1997 Adult illiteracy rate as % of people 15 and above (male): 31
1994 % share of income or consumption (highest 10% of population / lowest 10%): N/A
1997 Telephone main lines per 1000 people: 6

1990-98 % annual growth of gross domestic investment: 12.6
1997 Private investment as % of gross domestic fixed investment: 85
1998 Merchandise exports (USD M): 237
1997 Foreign direct investment (USD M): 0
1997 Present value of external debt as % of GDP: 59

1998 Value added as % of GDP Agriculture: 42
1998 Value added as % of GDP Industry: 21
1998 Value added as % of GDP Services: 37

While agriculture is the main sector in Togos economy, there is also quite a wide range of other activities, like mining, manufacturing, transport services, and banking. These provide some protection against world agricultural price fluctuations and recessions in any one industry, and may allow some flexibility in its development path, at least in the context of an ongoing economic adjustment programme. The Government has set up an export free zone to promote foreign trade, and has engaged in widespread privatisation, broken up monopolies, and liberalised certain sections of commerce. The countrys GDP growth rate was modest at 2.3% over the 1990-8 period, but it would have been higher if political disturbances in 1992-3 had not reduced GDP by 22%. If they had not occurred, growth would have been 5.2% per year, among the highest on the continent. The economic and political situation has deteriorated since 1998, commencing with a four month energy shortage.

Three quarters of the population work in the agricultural sector, mainly at subsistence level. Small producers are responsible for growing much of the cotton which is the largest agricultural crop and accounted for 22% of exports in 1999. They are reported to use quite sophisticated growing techniques, and seed production is increasing rapidly, and being liberalised. The climate allows for many crop types, with coffee and cocoa also generating significant foreign exchange earnings, although the country still has to import large amounts of food, some 38% of all imports in 1999. Since 1996, efforts have been made to improve the structures and technological organisations in place, including promotion of peasant organisations, measures to encourage plant health, and establishment of price floors.

The only large-scale mineral extraction is open-cast mining of phosphates, in either high quality form or as phosphate carbonate. The largest industrial subsector at 5-10% of GDP in 2000, and accounting for 21% of exports in 1999, it is run by a parastatal company which is being privatised, possibly bringing funds to expand the limited local capacity for processing. Studies are being made into the feasibility of producing phosphoric acid and fertilisers. The Government is reported to be attempting to diversify the range of minerals extracted, and a new Mining Code was introduced in 1995 with incentives for companies engaged in the industry. The expansion may help to expand demand for the output of the manufacturing sector, in 1998 only 9% of GDP, although 21% of exports.

The port at Lomé provides an opening to the sea for Togo itself, and the landlocked states of Burkina Faso, Mali, and Niger to the North. 20% of the trade passing through it goes on to other countries in the region. Investments have been made in its infrastructure, and there are many storage and transport facilities.

Possibly a result of the trade through Lomé, the banking sector has large amounts of funds on deposit, despite a low level of domestic savings. Combined with recent reforms - reinforcing solvency, reducing the level of bad debt, and reducing expenses - the industry may become a competitor in the regional finance market. Very substantial shifts to a modern service sector would be hindered by the 44% adult illiteracy rate, although the high level of primary school enrolment should correct this in time.

Regulations governing foreign investment

Foreign investors are guaranteed equal treatment with local investors.

There is freedom of capital transfer, and commercial management.

There are no restrictions on investors entering or leaving Togo. They may stay for as long as they like, and move about freely.

Investors are guaranteed against nationalisation and expropriation. If these do occur (I think this would take place if it was in the public interest), compensation must be paid.

Legal forms

Société à Responsabilité Limitée (SARL)

The SARL form has the following characteristics:

- the capital is divided into shares,
- limited liability for members up to their specified share,
- members may be people or legal forms,
- there may be just one member (or more),
- there may be just one manager,
- capital must be at least 1 million CFA Francs, and
- the nominal values of each share must be equal, and at least 5,000 CFA Francs.

Société Anonyme (SA)

The characteristics of a Société Anonyme are:

- its capital is divided into equity shares,
- limited liability for members up to their equity holding,
- there may be just one member, or more,
- capital is at least 10 million CFA Francs,
- the nominal value of each equity share must be at least 10,000 CFA Francs,
- the capital must be fully subscribed before the statutes are signed, or a constituting general assembly is held.

Société en Nom Collectif (SNC)

All the members of this form must be retailers, who have joint and several liability. The capital must be divided into parts each of the same nominal value (I am not sure whether this implies that profits and ownership must be shared equally between members). There may be just one manager, or more.

Société en Commandite Simple (SCS)

In an SCS there are two types of members. The first, called associes commandites, are jointly and severally liable for the common debts of the company, while the second type, called "associes commanditaires" or "associes en commandite" are liable only for their specified share. There must be at least one of each type of member.

Groupement d’Interêt Economique (GIE)

A Groupement exists to facilitate or develop the economic activity of its members over a determined period. It may have no capital, and does not specify the means of sharing benefits.

Procedures for investment

Foreign investors in certain industries (detailed in the incentives section below) are encouraged to invest in the Industrial Free Zone, which is a status rather than particular region. To set up an enterprise in the Zone, the investor must complete and return a request form available from the Administration Company of Free Zones (SAZOF). SAZOF operates a one-stop-shop, and helps with the remaining administration and obtaining permits.

Labour considerations

I could not find information on this subject.

Taxes

Company tax varies from 37% to 40%. The minimum payment is 1% of turnover.

Professional tax is also charged as a percentage of turnover, varying between 0.2% and 2%.

Tax is charged on salaries at 7%.

Social charges are paid by companies and workers (on gross salary, I think). The company contribution is 38% for local workers and between 52% and 55% for expatriates. The employees must pay 18.1%.

Companies must also pay an additional tax on salaries of 7%.

Personal income tax has a maximum rate of 55%.

Value Added Tax is charged at rates between 7% and 18%.

There is a double taxation agreement with France.

Investment incentives

To qualify for incentives, companies must operate in one of the following sectors:

- agriculture,
- manufacturing,
- research,
- mining,
- programmes of social housing,
- tourism,
- social and cultural activities,
- applied research in laboratories,
- storage of food products, and
- storage of raw agricultural products.

There are a number of incentive schemes in Togo:

- help in setting up,
- support when operating,
- support for employment creation,
- assistance for decentralisation,
- support for small and medium sized enterprises of Togolese origin,
- development of existing enterprises, and
- Industrial Free Zone incentives,

Several of these classify enterprises according to the region in which they are based. The regions are:

- zone 1: Lomé district and the Golf prefecture,
- zone 2: the coastal region, except Zone 1, and the plateau region,
- zone 3: the central region, the Kart region, and the savannah region.

Help in setting up

Any company converting local materials or operating in Zone 1 or 2 is entitled to the following benefits:

- exemption from start-up taxes, and
- exemption from Value Added Tax on imported materials used in the agreed activity.

Support when operating

Any enterprise is entitled to exemption from the minimum tax payment, lasting for three years. This is extended to five years for small and medium sized businesses, and seven years for enterprises converting local raw materials.

Support for employment creation

All salaries paid to Togolese nationals are only subject to 2% tax on salaries, instead of the usual 7%. The exemption lasts for five years for enterprises in zone 1, seven years in zone 2, and twelve years in zone 3.

It is reported that aid is available for job creation equal to 50% of the annual salary bill paid to permanent Togolese employees.

Assistance for decentralisation

To qualify for decentralisation assistance, the company must have at least 90% of its workforce in the required region. One source reports this region to be zones 1 and 2. The duration of the incentives is five years for enterprises in zone 1, seven years in zone 2, and twelve years in zone 3.

The benefits are:

- exemption from taxes on turnover,
- exemption from taxes on services and work relating to investment,
- exemption from fiscal charge and Value Added Tax on fuels used at fixed sites,

Support for national small and medium sized enterprises

I am not sure what precise definition of small and medium sized enterprises is used, except that the business must take the form of a commercial company. During the period of installation and periods of increases to capital, there are reduced registration fees.

Development of existing enterprises

An enterprise developing its existing business may qualify for:

- exemption from company tax,
- exemption from the minimum tax payment,
- exemption from taxes and charges on fuels, and
- (for companies in zones 1 and 2) reduction on tax on salaries.

Industrial Free Zone incentives

To qualify for Industrial Free Zone status, a company must meet the following conditions:

- it must export its products,
- it must give priority to Togolese nationals when appointing permanent employees, and
- it must be in at least one of the following sectors: -- labour intensive work,
-- high technology businesses,
-- businesses based on using local raw materials,
-- exporting firms doing internationally subcontracted work,
-- enterprises producing inputs for any of the sectors mentioned, or
-- companies performing services for other companies in the Industrial Free Zone, or internationally.

The incentives are:

- exemption from all taxes on imported goods or made in the Industrial Free Zone,
- exemption from all taxes and fees related to importation of raw materials, and materials and equipment for plants,
- 50% reduction in import taxes and fees on commercial vehicles,
- exemption from company tax for the first ten years of operation, and a reduced rate of 15% subsequently (the source I used is not clear about this tax exemption, however),
- exemption from tax on dividends for non-Togolese shareholders, for the first ten years,
- permanent reduction in the tax on salaries to 2%,
- preferential rates on public utilities: electricity, water, telephone, and port services, and
- ability to hold bank accounts in foreign currencies.

Contact addresses

Société d'administration des zones franches (SAZOF)
(Administration Company of Free Zones)
BP 2748
Lomé
Tel. (228) 26 13 74 or (228) 27 13 74
Fax (228) 26 52 31or (228) 21 52 31

Chambre de Commerce, d'Agriculture, et d'Industrie du Togo (CCAIT)
(Togo Chamber of Commerce, Agriculture and Industry)
BP 360
Lomé
Tel. (228) 21 20 65 or (228) 21 70 65
Fax (228) 21 47 30
Email : info@republicoftogo.com

Ministère de l'Industrie et du Commerce
(Ministry of Industry and Commerce)
Lomé
Tel: (228) 21 05 52
Fax: (228) 21 05 72

Ministère de l'Economie et des Finances
Lomé
Tel: (228) 21 35 54
Fax: (228) 21 09 05

Ministère de l'Equipement, des Mines, des Transports, des Postes et Telécommunications
Lomé
Tel: (228) 21 25 28
Fax: (228) 21 68 12

Ministère du Plan et du Développement
(Ministry of Planning and Development)
Lomé
Tel: (228) 21 37 51
Fax: (228) 21 37 53

Douanes Togolaises
(Togolese Customs and Excise)
Lomé
Tel: (228) 21 26 57 or (228) 27 24 34

Bureau des Privatisations
(Privatisations Office)
BP 2748
Lomé
Tel: (228) 21 07 44
Fax: (228) 21 43 05

Conseil National du Patronat du Togo (CNP)
(National Council of Togolese Employers)
BP 12429
Lomé
Tel: (228) 21 08 30 or (228) 21 20 65





Uganda

Background

1998 Population (M): 21
1998 GNP (USD B): 6.7

1997/98 % annual GNP growth rate: 5.9
1998 GNP per capita (USD): 320
1990-98 % annual growth of GDP: 7.4
1990-98 % inflation: 15.3

1998 Labour force (M): 10
1998 Female % of labour force: 48
1997 Adult illiteracy rate as % of people 15 and above (male): 25
1992-3 % share of income or consumption (highest 10% of population / lowest 10%): 12
1997 Telephone main lines per 1000 people: 2

1990-98 % annual growth of gross domestic investment: 10
1997 Private investment as % of gross domestic fixed investment: 63.6
1998 Merchandise exports (USD M): 557
1997 Foreign direct investment (USD M): 180
1997 Present value of external debt as % of GDP: 31

1998 Value added as % of GDP Agriculture: 43
1998 Value added as % of GDP Industry: 18
1998 Value added as % of GDP Services: 43

The Uganda Government in the late 1980s decided to liberalise an economy just leaving a state of civil conflict. The shift from direct intervention to business facilitation has been successful, with rapid growth in income per head, particularly industry and services. Since 1991, over $2 million in inwards investment has been attracted to the country, including Coca-Cola, Pepsi-Cola, South African Breweries, Shell, British American Tobacco, and Unilever. Inflation has been limited, and the HIV/AIDS rate has fallen sharply. The large number of orphans from the earlier wave presents an ongoing challenge.

Although agriculture is still the largest sector of the economy, it fell from 54% of GDP in 1989 to 43% of GDP in 1998. There is potential for a wide range of produce, although coffee accounts for almost all exports. The country is prone to droughts, and one in 1999 hampered development. The rest of the economy was sufficiently robust for projected GDP growth in 2000 to equal 6%, the average of the previous decade.

The country has substantial mineral deposits, including copper, cobalt, and gold. Mining revenues grew by 48% between 1995 and 1997. There is no upstream oil industry, and much domestic electricity supply is generated by hydropower. Despite 18% of electricity capacity being exported to Kenya, Rwanda, and Tanzania, domestic demand often exceeds supply at present. The current plans to privatise the parastatal distributor may result in increased capacity, or in any case introduce market clearing prices. The generator will remain in public hands.

The financial services sector is developing quickly, although many of the newly formed banks are in the capital Kampala, which is reported to result in insufficient coverage in other regions. There are also not many development or merchant banks, which may mean a capital shortage in the buoyant small enterprise sector. A stock exchange was opened in 1998, but has very low capitalisation at present.

The telecommunications sector has two operators, one State owned and the other private, although the parastatal may be privatised in the near future. The current network only provides 65,000 lines. There are a number of cellular operators, and Internet service providers.

Ugandan may be disengaging from the current conflict in the Democratic Republic of Congo, although the regional situation remains uncertain. Reduction in direct involvement may help provide funds for development, and also ensure the continued goodwill of the donor community.

There are road, rail and air connections to Uganda, although their standard varies, and further investment may be made in the infrastructure.

Regulations governing foreign investment

Investments are regulated by the Investment Code (1991). However, privileges and rights from previous regimes continue to apply to holders of earlier licenses.

A foreign investor is considered to be someone who is not a Ugandan citizen, and who owns at least half of a Ugandan business entity. Applications for foreign investment should be submitted to the Uganda Investment Authority so profits, dividends, interest, and other charges may be repatriated. The application must include information on the size and source of funds.

The foreign exchange market has been liberalised for some time, and there are no restrictions on capital repatriation.

Legal forms

Private Limited Liability Company

Private Limited Liability Companies are the most common form of business in Uganda. They are governed by the Companies Act (1964), and are subject to a number of rules:

- their name must end in "Limited",
- they must have at least two members, who do not have to be Ugandan,
- there is no minimum capital requirement,
- they have to be audited, but
- they do not have to submit annual financial statements.

Public Limited Liability Company

These forms are also governed by the Companies Act. They must have names ending in "Limited", and are not subject to minimum capital requirements.

Branch of a foreign company

Branches must register with the Registrar of Companies, and send a certified copy of the parents Memorandum and Articles of Association, with an English translation if necessary, together with certain other information. Accounts must be prepared and audited each year, and a copy of the financial statements submitted to the Registrar of Companies.

Other business forms are sole proprietorships, partnerships, and trusts.

Procedures for investment

The Ugandan Investment Authority (UIA) is the one-stop-shop for foreign investment.

The initial stage for getting approval for a business plan seems to be to complete a form from the UIA (UIA FORM 1), which allows registration for facilities under the Code, and enable follow-up assistance. The information required is about the nature of the business, and the facilities and types of incentives wanted.

Further information on the Memorandum and Articles of Association or company by-laws may be needed, as well as on the environmental effects and promoters' backgrounds.

Labour considerations

The UIA can provide immigration permits. Visas, visitor's passes, dependant's passes, and special passes may be granted after filing a formal application. Dependants are attached to the holder of a work permit. For entry permits and work permits, the applicant should include:

- two recent passport size photographs,
- photocopies of the applicants passport,
- a completed entry permit application form, and
- photocopies of academic qualifications, résumé, and the letter of appointment.

Uganda presently produces about 10,000 graduates every year, and many more thousands from technical skills.

Taxes

Taxes apply only to income derived in Uganda. When a resident company derives profits partly in Uganda and partly overseas, all profits is considered to have arisen in Uganda.

Income tax on companies is payable every six months, and is 30% for resident companies and branches of foreign companies. The rate is 35% for non-residents.

Personal income tax is progressive from 0% to 30%.

Dividend, interest, and other fees payable to non-residents are subject to a 15% withholding tax.

For residents, the rate is 20%, with a credit being granted in calculating their gross taxable income.

Some goods and services are liable for value added tax at 17%.

Other taxes include capital gains tax, and customs and excise duty.

Double taxation agreements are in force with the UK, South Africa, Kenya, and Tanzania, with others in negotiation.

Investment incentives

Applications for incentives should be made to the UIA with documents including, as appropriate:

- the Certificate of Incorporation,
- the Articles and Memorandum of Association,
- audited accounts for at least the last two accounting years, with income tax clearance certificates and trading licenses,

and other relevant information on the project.

The UIA staff will then make a site visit.

A local investor with US$50,000 or more in fixed qualifying assets is exempted for three to five years from corporation tax, taxes on dividends, and withholding tax.

The corresponding figure is US$300,000 for foreign investors. It must be invested in a sector classified as "priority" in the Investment Code. Additional investments above $300,000 may be exempted for up to six years.

Exporters may be granted drawbacks of duties and sales tax payable on imported inputs for producing export goods.

There are also various tax-deductible expenses and depreciation allowances, with preference given to large scale investments, medium-long term investments, and investments in less developed areas.

Contact addresses

Ministry of Finance and Economic Planning
POB 8147, Kampala
Tel: 256-41234700/232672/726000; Telex: 61170; Fax: 256-41 234194/232015

Bank of Uganda
POB 7120, Plot 37-43 Kampala Road, Kampala
Tel: 256-41 258441-9/258061/253281-4; Telex: 61244/61059/61131; Fax: 256-41 230828/244549 Cable address: UGABANK

Uganda National Chamber of Commerce and Industry
Plot 17/19, Jinja Road
P.O. Box 3809
Kampala
Tel: (25641) 258792
Tlx: 61403 MINCO UG
Web Site: Uganda National Chamber of Commerce and Industry

Uganda Export Promotion Council (UEPC)
Plot 17/19, Jinja Road
P.O. Box 5045
Kampala
Tel: (2564) 259779
Tlx: 62033 UG
Email: upec@starcom.co.ug





Zambia

Background

1998 Population (M): 10
1998 GNP (USD B): 3.2

1997/98 % annual GNP growth rate: -1.8
1998 GNP per capita (USD): 330
1990-98 % annual growth of GDP: 1
1990-98 % inflation: 63.5

1998 Labour force (M): 4
1998 Female % of labour force: 45
1997 Adult illiteracy rate as % of people 15 and above (male): 17
1996 % share of income or consumption (highest 10% of population / lowest 10%): 24.5
1997 Telephone main lines per 1000 people: 9

1990-98 % annual growth of gross domestic investment: 12.1
1997 Private investment as % of gross domestic fixed investment: 60.1
1998 Merchandise exports (USD M): 901
1997 Foreign direct investment (USD M): 70
1997 Present value of external debt as % of GDP: 136

1998 Value added as % of GDP Agriculture: 16
1998 Value added as % of GDP Industry: 30
1998 Value added as % of GDP Services: 55

Zambia has seen quite thorough liberalisation of its economy. Parastatals have been marked for privatisation, prices have been deregulated, state subsidies limited, interest rates and exchange rates are market determined, and there is very limited exchange control. Some Western governments have shown approval for the policies adopted, by cancelling outstanding debt, although the economic reforms have been said to have had modest success to date. This is due in part to declining prices for the copper which accounts for much of Zambias export earnings. Other factors may have been drought and reduction in foreign aid, or a long period of transition from a controlled economy to a predominantly free market.

The mining sector is a mainstay of the economy. Apart from copper, other minerals produced include zinc, cobalt, lead, and precious metals and gemstones. The country supplies 20% of the worlds rough emeralds. Zambia hopes to exploit its natural environment further through the tourist industry, and many tour operators have opened recently. Local and overseas investment has occurred in the agricultural sector, often looking towards an export market. Exports include wheat, cotton, and coffee, and horticulture has increased significantly in the last few years.

The manufacturing sector is developing, with edible oils, sugar, cigarettes, textiles, and chemicals the main products. Machinery and transportation goods tend to be imported. Large-scale projects are often the result of participation between foreign investors and the State in the form of the Industrial Development Corporation of Zambia. There is also a rural handicraft industry, although rapid expansion may be limited by the presence of only a single development bank in the country. Other banks tend to have their own specialisation away from micro-credit. There is a small stock market that may be expected to grow with large scale privatisation.

There is no upstream oil industry, although the refinery at Ndola produces sufficient petroleum products to satisfy most domestic demand, and to support exports. The country also exports electrical power to some of its neighbours. Coverage in Zambia itself is limited to 10% of the population. Considerable forest resources may provide energy for a proportion of the remainder.

The telecommunications sector has been liberalised since 1994, and regulated by the Zambia Communications Authority.

Many of Zambias neighbours have internal tensions. Zambia itself has some constitutional disputes, although these are on a much lower level.

Regulations governing foreign investment

There are exchange controls only on a few foreign currency activities, and no restrictions on repatriation of dividends, interest , and other charges.

Some financial institutions will not provide loans to non-Zambians, unless there is Zambian participation.

Anyone entering Zambia with more than $5,000 or equivalent must complete a form for statistical purposes.

Legal forms

Private company

Private companies are the most common business form in Zambia.

They are governed by the Companies Act, and must fulfil the following rules:

- their name must end in "Limited",
- they must have a minimum capital of K500,000
- they must have fifty shareholders or less,
- they may have shares with limited or unlimited liability, or
- they may be limited by guarantee,
- they may not offer shares or debentures to the general public, and
- they must be audited, but
- they do not have to lodge their annual financial statements with the Registrar of Companies.

Public Company

This form is also governed by the Companies Act, and their name should end in "Public Limited". It has shares with limited liability, and must have capital of at least K500,000.

Branch of a foreign company

A foreign company must register if it establishes a place of business or owns immovable property in Zambia, by lodging a certified copy of its Articles of Association or other defining document with the Registrar of Companies. A sworn English translation should also be included as appropriate. It must be audited annually, and should send its annual financial statistics to the Registrar.

Branches are regulated by the Companies Act, and its legal liability extends to the assets of the parent as well.

Other forms

Other forms include individuals, partnerships, and trusts.

Procedures for investment

Incorporation procedure

The first step is to get clearance of the companys name from the Registrar of Companies. It should not be too similar to an existing name, nor imply Presidential patronage without consent, nor be otherwise undesirable in the Registrar's opinion.

Then, the promoters should send an application for incorporation to the Registrar together with:

- the proposed Articles of Association,
- statutory declaration of compliance with the Investment Act, made by a legal practitioner or a company director or secretary,
- signed consent from each person named as secretary or director, and
- declaration of guarantee made by each member, if the company is to be limited by guarantee.

Registration of a foreign company

Within 28 days of establishing a place of business in Zambia, a foreign investor should complete an application form for registration under the Investment Act. Along with the form, the investor should send:

- a certified copy of its Memorandum and Articles of Association or other defining document,
- signed consent from each local director and company secretary, and
- information on any charge or property acquired in the fourteen days before the application was lodged.

Labour considerations

An investor who invests at least $250,000 or equivalent and employs at least ten people automatically qualifies for a self employment permit or residence permit.

Taxes

Tax is payable on income arising within Zambia.

Companies are taxed at 35% on their taxable profit.

Personal income tax varies progressively from 0% to 30%.

A partnership is not liable to tax, but individual partners are taxed on their income.

Withholding tax of 15% is due on dividends, interest, and rent.

Value added tax is 17.5% on certain goods.

Import duties vary from 0% to 25%, with further reductions for imports from COMESA member states.

Export tax of 5% is applied only to minerals and gemstones.

Councils charge a 1% personal levy on the gross salaries of employees, after an allowance.

Rates are 1.015%.

Investment incentives

No distinction is made between local and foreign investors when allocating incentives.

Applications for an Investment Certificate and incentives should be made to the Director General of the Investment Centre. It should include:

- the applicant's identity,
- the proposed business activity,
- the financial aspects of the proposed projects,
- the qualifications and experience of the applicant and employees,
- information on technology transfer agreements, and
- incentives applied for by applicants.

Applications are accepted or refused within six weeks.

General Incentives

General incentives apply to any investor investing in an enterprise covered by the Investment Act. They include:

- income tax of 15% on farming activities,
- income tax of 15% accruing on non-traditional products,
- tax of 14.3% the normal tax rate on rural enterprises,
- a depreciation rate of 5% per annum and initial allowance of 10% in the year of first use for buildings used for manufacturing, mining or hotels,
- a depreciation rate of 50% per annum (in two years) for implements, machinery and plant used exclusively for farming, manufacturing or tourism, and
- a farm improvement allowance of 20% on capital expenditure used on farm improvements for the first five years,
- losses incurred except in mining activities are deductible, as well as training and research expenses,
- dividends declared from farming are tax deductible,
- investors may set up bonded factories, and
- rural small scale enterprises are tax exempt for three years, and urban small scale enterprises for five years. Customs duty and sales tax on equipment is exempt.

Special Incentives

Special incentives are available to:

- exporters of non-traditional products which result in net foreign exchange earnings,
- producers of products used locally in agriculture,
- enterprises in tourism which result in net foreign exchange earnings of 25% of their gross annual earnings,
- import substitution enterprises, and
- enterprises located in rural areas.

Investors may also be assisted in matters including:

- identifying suitable land for investment,
- applying to relevant authorities for land rights,
- obtaining electric power, and
- transport and communications facilities.

Contact addresses

The Registrar of Companies,
Ministry of Commerce, Trade, and Industry,
P.O. Box 31968,
Lusaka

Ministry of Commerce
Trade and Industry
Cairo Road
P.O. Box 31968
Lusaka
Tel: 228301-9
Tlx: 45630
Fax: 226673

Export Board of Zambia
3rd Floor Lotti House
P.O. Box 30064
Lusaka
Tel: 228106/7
Tlx: 40309
Fax: 222509

Investment Centre
Ndeke House
P.O. Box 34580
Lusaka
Tel: 252130, 252133, 252152
Tlx: 40596
Fax: 252150

Zambia Privatisation Agency
P.O. Box 30189
Lusaka
Tel: 223859
Tlx: 406641
Fax: 225270

Lusaka Stock Exchange
P.O. Box 34523
Lusaka
Tel: 228537
Fax: 225969/228608

Ministry of Finance Headquarters
P.O. Box RW 50062
Lusaka
Tel: 250544

Zambia Revenue Authority
Profund House
P.O. Box 35710
Lusaka
Tel: 223754/229214-8

National Commission for Development Planning (NCDP)
P.O. Box 50268
Lusaka
Tel: 227649

Zambia Bureau of Standards
P.O. Box 50259
Lusaka
Tel: 227171

Zambia Association of Chambers of Commerce and Industry (ZACCI)
P.O. Box 30844
Lusaka
Tel: 252369
Fax: 252483
Tlx: ZA 40124

Common Market for Eastern and Southern Africa (COMESA)
P.O. Box 30051
Lusaka
Tel: 229725
Fax: 224961
Tlx: 40456

SGS Lusaka Liaison Office
Cairo Road
P.O. Box 33673
Lusaka
Tel: 225323/225137
Tlx: 45300
Fax: 227394/227176

Zambia International Trade Fair (ZITF)
P.O. Box 71058
Ndola
Tel: 655514-6
Fax: 655704
Tlx: 34260

Zambia Agricultural & Commercial Show Society
P.O. Box 30333
Lusaka

Zambia Confederation of Industries and Chamber of Commerce Showgrounds, Great East Road
P.O. Box 30844
Lusaka
Tel: (2601) 252369
Fax: (2601) 252483
Tlx: ZA 40124
E-mail: zacci@zamnet.zm

Zambia Association of Manufacturers
C/o Mr Mark O'Donnell
E-mail: odonnell@zamnet.zm





Zimbabwe

Background

1998 Population (M): 12
1998 GNP (USD B): 7.1

1997/98 % annual GNP growth rate: -0.4
1998 GNP per capita (USD): 610
1990-98 % annual growth of GDP: 3.6
1990-98 % inflation: 22.4

1998 Labour force (M): 5
1998 Female % of labour force: 44
1997 Adult illiteracy rate as % of people 15 and above (male): 6
1990 % share of income or consumption (highest 10% of population / lowest 10%): 26.1
1997 Telephone main lines per 1000 people: 17

1990-98 % annual growth of gross domestic investment: 4.5
1997 Private investment as % of gross domestic fixed investment: 88.7
1998 Merchandise exports (USD M): 2,508
1997 Foreign direct investment (USD M): 70
1997 Present value of external debt as % of GDP: 52

1998 Value added as % of GDP Agriculture: 18
1998 Value added as % of GDP Industry: 24
1998 Value added as % of GDP Services: 58

Zimbabwe is one of the larger sub-Saharan economies, and in some ways has been among the more successful, at least until recently. It has a large, long-established private sector, and moderately sized manufacturing and mining industries that have historically accounted for over half of exports, in the form of textiles, gold, ferrochrome, and other manufactures. But it is agriculture which is the heart of the economy, where about half of the countrys industries get their raw materials, and on which more than 40% of company performances on the stock exchange depend. The main crops are tobacco, cotton, and sugarcane, with horticulture becoming increasingly important. The country can be prone to drought, and many people have to rely on food aid.

Industrial development in the last decade has been guided by a structural adjustment program which was accepted by the Zimbabwean Government at the end of the 1980s, in order to attract investment and loans to the country. The strategy involved removing economic controls and opening the domestic market to foreign trade after two decades of protectionism. It was subject to early criticism from the trade union movement over the effect on employment and living standards, and later by initially enthusiastic businesses who saw their previously protected domestic market now open to international competition. The adjustment period may not last much longer, and in future large-scale investment may follow. Foreign exchange is reported to remain in short supply in the country at the moment, despite high interest rates. Rising unemployment has encouraged the development of a substantial informal sector, and the third of the population who live in cities and towns provide a ready source of labour.

Much farmland is controlled by a small percentage of Zimbabweans, and in 2000 and 2001 a number of farms were forcibly occupied by landless people, often with violence or threats. The Government and State security have sometimes been involved directly, although at other times individuals or groups have acted by themselves, and the Government may not be in full control of events. Income in Zimbabwe has one of the most uneven distributions in the world. Recent compromises offered by the Commercial Farmers Union may help to calm the situation.

Zimbabwe has attracted large numbers of tourists, although some may be alarmed by recent political disturbances, which could last into next years presidential elections. The sector may be capable of long-term growth.

The indigenous chemicals industry is developing from a low base. There have been efforts made to promote its development, with a range of domestically produced products now available, and cement is produced in quite large quantities. The country has to import large amounts of petroleum products.

The road network, where most freight is transported, is reported to be of good quality. Goods may be sent by ports in Mozambique and South Africa. The telecommunications infrastructure is said to be inefficient, although competition may improve services. Internet connections are widespread.

Substantial investment has been made in education, and there are high levels of literacy. Nevertheless, there is a shortage of some labour skills, as many educated Zimbabweans leave the country for better pay and conditions in neighbouring states, and there is high unskilled unemployment. Further skills loss is likely to occur as a result of the 25% HIV/AIDS rate. The epidemic tends to be concentrated in urban regions where many of the professional classes live and work, and has been exacerbated by high rates of unemployment, and declining availability of low cost medical care.

A program of privatisation is in place, which may help to deflect criticism of transparency and corruption in government and parastatals. The scheme is to be administered by an independent body. Some international companies have complained that foreign investment has been subject to attempts to dictate local partnerships, and tendering of government contracts has equally been criticised, which has sometimes lead to retenderings.

Zimbabwe is the member of a number of trading blocs, and these may become increasingly important with the new, more export oriented trading regulations in force. Zimbabwean disengagement from the war in the Democratic Republic of Congo may be possible in near future, although the situation remains volatile. There is some co-operation between the Zimbabwe stock exchange and others in the region, which may help to expand its currently limited size.

Regulations governing foreign investment

Direct investment must first be authorised by the Zimbabwe Investment Centre. The proportion of foreign ownership allowed varies by industry, and joint ventures with local partners is encouraged.

Exchange control is administered by the Reserve Bank of Zimbabwe, with delegation to authorised dealers.

Remitting dividends, interest, and other commercial charges requires approval from the Reserve Bank if the amounts are above a certain value. Below this value, clearance may be granted by the Commercial Bank. Dividends are reported to be able to be fully remitted in the case new investments.

Foreign loans by companies must be approved by the Central Bank if they are above 5 million Zimbabwe dollars. Otherwise, the Commercial Bank may authorise the transfer.

One source reports that capital remittance must take place over twenty years, accompanied by investment in government securities.

Import restrictions apply to only a few items.

Legal forms

Private company

Private companies must fulfil the following rules:

- Their name must end in "(Private) Limited".
- The minimum number of members is two, and the maximum is fifty.
- The Memorandum and Articles of Association must restrict the right to transfer shares.
- A private company cannot invite the public to subscribe to shares or debentures.
- The company may be limited by shares or guarantee, or have unlimited liability.
- If the company is limited by shares, it must have at least two.
- If the company is limited by guarantee, it must not exist to make profit.

Public company

Public companies must satisfy the following rules:

- Their name must end in "Limited".
- The minimum number of members is two.
- The company may be limited by shares or guarantee, or have unlimited liability.
- If the company is limited by shares, it must have at least two.
- If the company is limited by guarantee, it must not exist to make profit.

Branch of a foreign company

It is reported that it is usually easier to establish a subsidiary than a branch.

Generally, a representative office is not considered a place of business, and is not subject to Company Law nor Tax Law. Income is considered to accrue to the non-Zimbabwean source of funds.

Other forms

Other forms include private business corporations, partnerships, trusts, and sole traders.

Procedures for investment

The procedures described were in force at March 1994, and may have changed since then.

Registration of a new business

Firstly, the companys proposed name should be cleared with the Registrar of Companies.

After clearance, the following documents should be sent to the Registrar:

- the Memorandum of Association in English, submitted in duplicate or with printed notarial copy,
- the address of the registered office, and
- the list of directors.

The Articles of Association may also optionally be sent. If they are, they should be submitted in duplicate.

A fee of Z$100 is charged for registration of companies with share capital up to Z$20,000. Above Z$20,000, a sum of 50 cents is payable per Z$100 of extra share capital, or part of it.

Registration of a foreign company

A foreign company must submit to the Minister of Justice, Legal and Parliamentary Affairs the following documents:

- a certified copy of the companys charter or Memorandum and Articles of Association,
- a list of resident directors, or those who will be resident in Zimbabwe, and
- the names of holding companies, if the company is a subsidiary.

The Minister must then issue a certificate authorising establishment of a place of business in Zimbabwe, unless they believe it would not be in the public interest.

After receiving the certificate, the company should then submit the same documents as for registration of a new business, together with its Zimbabwean address, and the name and address of the local administrator for the business.

Labour considerations

Employment of expatriates is allowed if certain conditions are met.

Visas are required for entrance to Zimbabwe, except for nationals of Commonwealth and West European countries, Japan, Switzerland, and the United States.

Taxes

The following tax rates are reported slightly differently from source to source.

Corporation tax is 35%.

Dividends paid to another Zimbabwean company are not taxed. Those paid to non-residents are subject to withholding tax at 15% from stock exchange listed companies, and 20% from other companies.

I do not have information on personal income tax rates.

Capital gains tax is 20%. The rate is 10% on listed securities. There is an annual inflation allowance of 15% on cost for each tax year since acquisition.

Other taxes include sales tax, stamp duty, and estates duty.

There are double taxation agreements with South Africa, the UK, Germany, France, the Netherlands, Sweden, Canada, Mauritius, Malaysia, Poland, and Bulgaria. Others are awaiting ratification.

Investment incentives

New investment projects, export oriented projects, and those in particular regions may be eligible for financial assistance and tax incentives. The Zimbabwean Investment Centre may provide information on incentive schemes.

Tax incentives are claimed when annual tax returns are filed. They include:

- wear and tear allowances,
- mining allowances, and
- training allowances.

Industrial, agricultural, hotel, and mining activities may qualify for depreciation allowances on buildings, implements, machinery, and utensils.

In 1994, there was an Export Processing Zone which granted exemptions from import duties. I am not sure of its current status.

Contact addresses

Ministry of Finance, Economic Planning and Development
Private Bag 7705, Causeway, Munhumutapa Building, Samora Machel Ave., Harare
Telephone: 794571-722101, Telex: 22141 Telefax: 706293

Reserve Bank of Zimbabwe
POB 1283, 76 Samora Machel Avenue, Harare
Tel: 263-4 790731/ 796251; Telex: 26033/26075; Fax: 263-4 708976
Governor: Dr L L Tsumba

ZIMTRADE (Zimbabwean Import / Export Board)
Kurima House
89 Barker Avenue
P.O. Box 2738
Harare
Tel: (263-4) 731020/706772
Fax: (263-4) 706930
E-mail: zimtrade@iafrica.harare.com

Zimbabwe National Chamber of Commerce
Equity House,
Rezende Street
P.O. Box 1934
Harare
Tel: (263-4) 754419
Fax: (263-4) 753450

Confederation of Zimbabwe Industries
P.O. Box 3794
Harare
Tel: (263-4) 739833
Tlx: 22073 ZW

Customs and Excise
Contact: Director of Customs & Excise
Department of Customs & Excise
P/Bag 7715
Causeway,
Harare

The Commissioner of Taxes,
Anlaby House,
Baker Avenue,
P.O. Box 8126,
Causeway,
Harare

Chief Immigration Officer,
Private Bag 7717,
Causeway,
Harare