Breakdown of relevant regulations for investors in Cote d'Ivoire

The 2012 Investment Law comprises two types of investment regime: the investment declaration regime and the investment licensing regime. The two systems operate as follows:

• The investment declaration regime applies to companies that make investments that create activity, in any sector, except for construction of non-industrial infrastructure, commerce, and banking and financial services.

• The investment licensing regime concern operations that create activity (implementation of a new project), as well as projects which develop an activity (implementation of an extension, diversification, integration or modernisation project) the amount of which is a minimum of CFA200m (€300,000) or CFA70m (€105,000) for small and medium-sized enterprises (SMEs). Companies from all sectors are eligible, except for those operating in the construction of non-industrial infrastructure, commerce, and banking and financial services. However, since November 2015, the development of activities of large commercial centres, such as shopping centres, is also eligible for these fiscal advantages, on the condition that the minimum amount invested is CFA10bn (€15m).

Supermarkets, hypermarkets and other commercial centres under construction before the measure in question enters into force, will also be included, which is in accordance with Ordinance No. 2015-714 of November 4, 2015.

Declaration & Licensing Investment

The procedure for the declaration of investment involves compiling a dossier of specific documents. In addition to the formatted documents and forms provided by the Investment Promotion Agency of Côte d’Ivoire (CEPICI), the dossier for the request of declaration must include administrative evidence and documents regarding the proposed activity, related in particular to the National Social Security Fund (Caisse National de Prévoyance Sociale, CNPS), the fiscal administration and the foreign trade service. The evidence and documents essentially include:

• Copies of the trade register of the declaration made to the Industrial Promotion Services West Africa-CNPS and the declaration of fiscal existence;

• An import-export code if required by said activity;

• An administrative authorisation to exercise or exploit said regulated activities; and

• SME must provide all information related to their status as SMEs.

Depositing The Dossier

Companies are requested to deposit four copies of the dossier for the declaration of investment with the CEPICI. Furthermore, a certificate of deposit of the request for declaration of investment is required. The CEPICI must deliver a certificate of deposit within two days of the receipt of the request. The certificate of deposit, signed by the director-general of the CEPICI, provides full rights to the registrant to access advantages linked to the declaration regime.

A copy of the certificate of deposit and the dossier for request of the herein declaration is transmitted, for recording purposes, by the CEPICI to the Directorate General of Taxes and competent authorities of the ministry in the relevant industry, and other technically concerned ministries.

In case of rejection or inadmissibility of the dossier, the director-general of the CEPICI will address a letter to the company, which will be notified within two working days. The letter will include the reasoning for the rejection or inadmissibility.

Licensing Of Investment

It is necessary to compile a file for licensing of investment. In addition to the documents and forms provided by the CEPICI, as well as the administrative evidence and documents required for the dossier for the request of declaration, the licensing dossier must also include the following elements:

• An exhaustive inventory of materials, equipment and spare parts that are able to be imported under the relevant advantages, depending on a model provided by the CEPICI;

• A commitment to keep a separate accounting system in case of the development of further activities; and

• A commitment to provide the CEPICI with financial statements and analytical accounts in relation with the investment(s) that has benefitted from incentives in line with the Investment Code. As with the request for declaration of investment, SMEs are required to also provide all information related to their status as SMEs.

Depositing The Licensing Dossier

Companies must send the CEPICI 10 copies of their licensing application, which must contain all documents and forms herein mentioned. The CEPICI will have a deadline of two working days, starting from the date of the deposit, to deliver a confirmation of receipt for the licensing dossier.

The examination of the dossier is performed by the CEPICI’s single window. The accreditation of the application is provided within a delay of 19 working days from the date of delivery of the confirmation of receipt for the licensing dossier. Therefore, the CEPICI has a timeline of 21 working days, starting from the day of the deposit, to examine a dossier for the licensing of investment.

In the event of non-compliance with this timeline, the operator may reach out to the prime minister, who will have five days to take the necessary measures. A licensing committee presided over by the director-general of the CEPICI, or his representative(s), has been instituted at the heart of the CEPICI in order to adjudicate over licensing of investment applications and is backed by the single window.

Decisions & Rejections

In the event of a favourable decision from the licensing committee, the president of the Management Council, or his interim – in cases involving an impediment – will sign the licensing decision for the investor on the basis of the deliberation of the herein mentioned committee. This licensing decision gives the beneficiary the right to benefit from the fiscal and Customs incentives mentioned under the relevant licensing regime, as well as the specified advantages regarding SMEs. Lastly, an order from the Ministry of Economy and Finance is granted for the execution of the investment licensing decision.

In the event of an unfavourable decision, the director-general of the CEPICI will address a note including the reasons for such decision to the company concerned, within a delay of two working days, following the date of deliberation.

Advantages

The incentives provided under the Investment Law vary depending on the location of the investment in question. The distributions of zones, applicable to both regimes are as follows:

• Zone A: District of Abidjan;

• Zone B: Agglomerations having a population density equal to or more than 60,000 people; and

• Zone C: Agglomerations having a population density below 60,000 people, as well as special economic zones, which are determined by a decree depending on regional programmes. Moreover, the duration of these advantages also depends on the investment zones:

• Zone A: five years;

• Zone B: eight years; and

• Zone C: 15 years. Lastly, specific incentives are planned for SMEs. Advantages related to the investment declaration regime include the following: (I) Zone A:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits; and

• Exemption on payment of tax on licences and permits. (II) Zone B:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from payment of tax on licences and permits; and

• 80% reduction of the employers’ contribution, excluding the tax on learning and the tax on continued professional training. (III) Zone C:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from payment of tax on licences and permits; and

• 90% reduction of the employers’ contribution; however, this excludes the tax on learning and the tax on continued professional training;

• Exemption from the tax on land heritage; and

• Exemption from registration rights in case of an increase in capital. Note that the exemptions from income tax and tax on licences and permits have been lowered to 50% and 25%, respectively, two years and one year, respectively, before the end of the incentive. The declaration regime provides no exemption for materials and equipment with regard to value-added tax (VAT) or Customs duties.

Investment Incentives

There are a number of incentives provided during the investment phase. The following measures are granted to authorised firms as part of their investment programmes related to the implementation or development of their activities, no matter the investment zone.

• 50% reduction of Custom duties related to materials and equipment, as well as the first set of spare parts, for investments of less than CFA1bn (€1.5m) and CFA200m (€300,00) for SMEs, with the exemption of community levies;

• 40% reduction of Custom duties related to materials and equipment, as well as the first set of spare parts, for investments equal to CFA1bn (€1.5m) or more, with the exemption of community levies; and

• Complete exemption from VAT, which is only applicable to materials and equipment, as well as the first set of spare parts sourced locally or imported.

The herein mentioned set of spare parts must represent a maximum of 10% of the acquisition costs of equipment assets.

Creation Of Activities & Incentives

The distinction for authorised firms is that advantages vary depending on investment thresholds. For investments of less than CFA1bn (€1.5m), or CFA200m (€300,000) for SMEs, the following rules apply: (I) Zone A:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from payment of tax on licences and permits; and

• 50% reduction for the employers’ contribution, but excluding the tax on learning and the tax on continued professional training. (II) Zone B:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from payment of tax on licences and permits; and

• 75% reduction of the employers’ contribution, but excluding the tax on learning and the tax on continued professional training. (III) Zone C:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from taxes on property income for housing put at the disposal of personnel;

• Exemption from the tax on land heritage;

• Exemption from payment of tax on licences and permits; and

• 90% reduction of the employers’ contribution, excluding the tax on learning and the tax on continued professional training.

Larger Investments

There are separate incentive available for larger investments of CFA1bn (€1.5m) or more, or more than CFA200m (€300,000) for SME. They are as follows: (I) Zone A:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from payment of the tax on licences and permits; and

• 50% reduction of the employers’ contribution, excluding the tax on learning and the tax on continued professional training. (II) Zone B:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from payment of taxes on licences and permits; and

• 75% reduction of the employers’ contribution, excluding the tax on learning and the tax on continued professional training for companies creating at least 550 new jobs. (III) Zone C:

• Exemption from income tax, under industrial and commercial profits, non-commercial profits or agriculture profits;

• Exemption from taxes on licences and permits;

• 90% reduction of the employers’ contribution, excluding the tax on learning and continued professional training; and

• Exemption from taxes on property income for housing put at the disposal of personnel. Note that the exemption of income tax, under industrial and commercial profits, non-commercial profits or agriculture profits, and from the payment of the tax on licences and permits, has been reduced to 50% and 25%, respectively, during the last two years.

SME

Incentives for under the declaration or licensing regimes for SMEs maintaining the investment of CFA70m-200m (€105,000-1.5m) include:

• Exemption from registration rights for all rights requiring registration;

• State provisioning of land to enact investment projects; and

• Purchasing of electricity and water, and the use of new technologies at preferential rates, under the condition to invest in a raw material processing unit. In addition, SMEs benefit from longer durations for their investments, of five to seven years for Zone A, and eight to 11 years in Zone B. Generally, an SME is considered a firm with a permanent staff of less than 200 employees and annual turnover, before taxes, of CFA1bn (€1.5m) or less.

Transfer Of Incentives

The incentives granted by the Investment Law to SMEs at the time of purchase of materials, tools or equipment, either imported or locally sourced, are transferred to the financial lessor. Exemptions related to VAT are specifically targeted during the investment phase or development of activities.

Investor Obligations

The new code contains fiscal, social and environmental obligations for investors. These obligations take into consideration the social and environmental norms included in the state’s policies regarding employment, the fight against corruption and money laundering. They aim to improve the investment framework and are applied no matter the investment regime. These obligations do not present any particularity different from those found elsewhere in the world. Economic obligations: The investor must give preference to the use of local suppliers and subcontractors with whom he has mutually beneficial relations. He must also contribute to the development of the know-how of the local partner, notably thought education and technology transfer. Respect the norms: An investor must respect the national technical, social, health and environmental norms, or under default of local standards must adhere to international standards, most notably those included within ISO 26 000.

They must also provide associates with secure and hygienic conditions compliant with local legislation and engage in social responsibility initiatives through projects that profit local communities in its area of operations. Recruitment: An investor must hire predominantly local workers and contribute to their development through continued basic skills training. Environmental: Investors are obligated to comply with national legislation on environmental matters. Corruption & money laundering: Investors must abstain from all acts of corruption and infraction before or after establishment of operations. Acts of corruption with regards to investment are punishable in conformity with the law, and may lead to the forfeiture of any incentives provided.

Implementation & Delays

Investors who are benefitting from the declaration or licensing of investment regimes have two years to implement their respective investment. In the event of a delay during the start of an investment, the promoter may lose their incentives.

However, investors who can prove that they have implemented a minimum of 66% of their investment during the delay may be granted a one-year, non-renewable extension, which starts from the expiration date of the delay. The accorded extension must be issued by the director-general of the CEPICI.

 

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The Report: Côte d'Ivoire 2017

Tax chapter from The Report: Côte d'Ivoire 2017