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1.Africa Investment Guide 2017_2

Africa Investment Guide 2017

Contents

Angola

Côte d’Ivoire

Egypt

Ethiopia

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Acknowledgments

Introduction

Despite ongoing concerns related to inclusion and sustainability, Africa’s long- term growth remains strong as the continent continues to benefit from a demographic dividend, better governance and increased industrialization.

InWest Africa, indicators show that the Nigerian economy has begun a slow recovery following its first economic contraction in over 20 years. After December’s election, Ghana looks set to return to being a bright spot in the region.The new government’s economic strategy appears to have won investor confidence as the country recently accessed USD 2.2 billion on the international bond markets and the cedi has started to strengthen. Côte d’Ivoire is emerging as one of the continent’s economic giants, with growth expected to be the highest in Africa this year. Kenya remains East Africa’s largest economy, however a combination of upcoming elections and severe drought makes for an uncertain 2017. Tanzania and Ethiopia continue to show significant growth spurred by large infrastructure spending. Despite these opportunities, the prospect of navigating often opaque and challenging legal landscapes can deter much needed foreign investment. Challenges related to new tax and

regulatory regimes, difficulties in expropriating profits, uncertainty about employment and local content legislation or lack of clarity in real estate laws all represent significant business risks to foreign investors. This guide aims to provide legal and commercial professionals a high-level overview of key legal issues in 10 key African economies. If you have any questions or would like to speak to a member of the Clyde & Co Africa team, please do not hesitate to contact us.

Dawda Jawara III Legal Director [email protected]

Africa Investment Guide | 1

Angola Angola covers an area of approximately 1,200,000 square kilometres and has a population of over 24 million people. Bordered by Namibia, the Democratic Republic of Congo and Zambia, the Angolan territory includes the northern enclave of Cabinda, bordered by the Republic of Congo. Angola is divided into 18 provinces and 163 municipalities. The capital is Luanda, which is the largest and most heavily populated city. The official language is Portuguese. The national currency is the Kwanza ( AOA ). The legal system in Angola is a civil law system, derived from the Portuguese legal structure. The judicial system consists of municipal and provincial courts, as well as a Supreme Court.

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Investment Outlook Following more than a decade of strong economic growth, the sharp fall in oil prices has resulted in Angola adopting restrictive measures since 2015, in particular regarding public expenses and monetary policy. Angola’s strong reliance on oil has signaled the necessity to diversify the economy and to focus more intensively on sectors such as agriculture, fisheries, livestock and industry. In this context, in 2015, Angola approved a new legal framework for private investment, with the aim of attracting and mobilising human, financial, material, economic and technological resources into the country. The aim of the new law is attracting foreign investment, given its importance for the economic development of Angola. The new law has attracted several international banks and financial institutions to Angola which has strengthened the banking system. The drop in oil prices has led to weakening the Kwanza which has resulted in a foreign exchange crisis in Angola. The Angola government and central bank are pursuing monetary policies to alleviate the situation but it remains a major concern for investments. Forms of Corporate Structure To invest in Angola, foreign private investors must carry out their activities through a corporate structure. This can vary depending on the complexity and dimension of the project to be implemented. The Angolan Company Law establishes five types of corporations in Angola, including: • Partnerships; • Private Limited Companies; • Public Limited Companies; • Limited Partnership Companies; and • Public Partnership Companies. In 2015, a new Simplification Law that streamlines the procedure for setting up companies was approved. However, the full implementation of this law is still dependent on the approval and publication of additional regulations.

Amongst other measures, the Simplification Law eliminates the requirements for public deeds regarding the vast majority of business acts, such as for setting up a company, amending articles of association or increasing share capital, as well as for mergers, divisions or dissolutions of companies. In all these situations, the Simplification Law only requires a private document to be issued according to an official model still to be approved, with recognised signatures of the subscribers. Currently, the entire process for setting up companies in Angola can be carried out at a single entity, the Guiché Único da Empresa , a one-stop-shop public service that aims to facilitate the setting up of companies in the country. Incorporation Procedure 1 Item Estimated Time Estimated Cost 1 Certificate of admissibility of the company’s name 2 weeks AOA 16,500.00 2 Registration of the new 1 day N/A

company within the Tax Administration and Social Security

3 Deposit of the legally required initial share capital

1 day

N/A (administrative fees to be

charged by commercial banks)

4 Execution of the notary deed to incorporate the company

1 week

To be assessed on a case by case basis

(approval of the articles of association of the new company)

5 Registration of the company at the Commercial Registry office

3 weeks

AOA 10,000.00 – AOA 40,000.00 (depending on the company type)

6 Publication in the official gazette (Diário da República)

Up to 45 days

AOA 1,000.00

7 Obtaining environmental,

To be assessed on a case by case basis

industrial, import and export or other necessary licences to the company from the Ministry of Commerce (Ministério do Comércio) (if applicable)

1 Cost and timeframe are based may vary depending on the specifics of each incorporation and may not be relevant for highly regulated sectors.

If the company should be incorporated within the scope of an investment project, previous steps have to be taken, as follows:

The NPIL is not applicable to investments made in the oil and gas sector, mining sector and financial institutions, which are regulated by specific legislation. Additionally, it should be noted that the registration of branches or representative offices is no longer deemed as foreign investment under the NPIL. The NPIL is not applicable to investments made by private companies of which the Angolan Government or Angolan Companies hold 50% or more of the share capital. The NPIL requires that, in some sectors, foreign private investment must be undertaken in partnership with Angolan citizens, Government owned companies or Angolan private companies. These sectors are the following: • Construction; • Electricity and water; • Hotel and tourism; • Media; • Telecommunications and information technology; and • Transportation and logistics. Tax benefits and incentives under the NPIL can be granted to foreign investment in an amount equal to or greater than USD 1,000,000 and to domestic investment in an amount equal to or greater than USD 500,000. Angolan companies which invest a minimum of USD 500,000 will benefit from a special scheme of tax deductions, accelerated depreciation and reincorporation. The NPIL also establishes objective criteria for the granting of extraordinary incentives that are applicable to investments in a total amount equal to or greater than USD 50,000,000 and that generate between 200-300 job positions for Angolan citizens, depending on the region. This new law also establishes that the profits arising from an investment may be repatriated immediately upon the conclusion of the project. This is a considerable step forward in Angolan business practices as the old law only allowed profits to be repatriated 3 years after the conclusion of a project. If the amount of dividends or profits distributed to the shareholders of a company incorporated under an investment project exceed the participation of the shareholders in the company’s own funds, such shareholders are under obligation to pay a surcharge of capital application tax at the following rate:

Estimated Time

Item

Estimated Cost

1 Obtaining the investment approval (CRIP) from the relevant ministerial UTAIP

It depends on the negotiations with the relevant ministerial UTAIP To be assessed on a case by case basis

N/A

To be assessed on a case by case basis

2 Obtaining a commercial operations license (locally known as Alvará ) from the Ministry of Commerce (Ministério do Comércio)

3 Obtaining a currency

1 month

N/A (administrative fees to be

import license from the Angolan Central Bank (Banco Nacional de Angola) (BNA).

charged by commercial banks)

Further licenses and authorisations may be required depending on the activity of the new company. The licences and additional information would need to be sought from the relevant administrative authority. The World Bank report “Doing Business 2016: Measuring Regulatory Quality and Efficiency”, has highlighted important developments in Angola’s business environment. Angola has moved up 33 places in the table ranking the ease of setting up of businesses. Additionally, the cost to set up a business in Angola is lower than in other sub-Saharan African countries, reflecting the focus of the country in stimulating economic growth. Investment Promotion and Incentives The Angola’s New Private Investment Law (the NPIL ) entered into force in 2015 and establishes the principles of private investment in Angola. Furthermore, it provides a scheme of tax benefits and incentives and aims to make private investment in Angola more attractive. The NPIL applies to all foreign investment where the minimum domestic investment amount required is set at AOA 50,000,000 (approximately USD 302,000).

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Salaries comprise the basic salary and all additional supplements paid directly or indirectly to the employee, in cash or in kind. In particular, the following payments are not considered as salary in Angola: – – reimbursement of expenses incurred by the employee and related to the professional activity (e.g. per diem and travel allowances); – – voluntary bonuses not related to work carried out or granted as a bonus for good service; and – – child benefit and social security allowances, when paid by the employer. The national minimum wage adheres to the following amounts for three different economic activities:

Profits exceeding participation in the company’s own funds

Surchage rate

20%

15%

20% to 50%

30%

50% and more 50% This additional tax is not applicable if the dividends or profits are reinvested in Angola. The NPIL, complemented by the Regulation on Procedures for Private Investment under the NPIL, has also adopted a more simplified procedure for the approval of private investment projects. The Agency for Promotion of Investment and Exports fromAngola ( APIEX ) is in charge of the promotion of private investment in and outside of Angola. Pursuant to the new NPIL, the approval of investment projects and tax benefits is now conducted by the ministry responsible for the sector in which the investments will be made or, should the investment be greater than the kwanza equivalent of USD 10,000,000, by the President of the Republic. This resulted in the elimination of the previously existing overlap of legal regimes applicable to private investment and a reduction of the bureaucracy in the context of the attribution of tax benefits and incentives. Immigration, Employment and Local Content The employment regime was significantly modified in 2015, with the publication of a new General Employment Law. The aim of this law was to stimulate the economy and increase employment rates in the country. The new General Employment Law came into force in 2015, with the aim of contributing to the increase and stability of employment, as well as stimulating the economy. The application of the new General Employment Law is further extended to apprentices and trainees, to national workers carrying out their activities for a national employer in a foreign country and to foreign resident workers hired in Angola by national employers. Employment contracts in Angola may be entered into for a fixed-term or for an indeterminate period. Fixed term contracts may be renewed up to a maximum of five years. For micro, small and medium sized enterprises, the maximum limit is ten years. The normal working period in Angola is 44 hours per week and 8 hours per day, unless otherwise stated in special legal regimes.

USD Amount (approximately)

Sector

Rate

Commerce and extraction industry Transport, services and manufacturing industry

AOA 22,504.50

USD 135

AOA 18,754

USD 110

Agriculture

AOA 15,003

USD 90

National or foreign employers in Angola may only have non-resident foreign workers if they can prove that the workforce of the company, if over five employees, has a workforce of 70% national personnel. This percentage must be respected even if the foreign workers are not being paid. Nevertheless, a new regulation (Presidential Decree 43/17, approved on the 6th of March 2017) was recently approved on non-resident foreign workers, which introduced some relevant changes to the regime applicable to these employees. The highlights of this new regulation may be summed up as follows: – – It is nowmandatory to pay the foreign non-resident employees in Kwanza; – – Benefits and allowances paid to foreign non-resident employees (whether in cash or in kind) cannot exceed 50% of the base salary; – – The Angolan Central Bank ( BNA ) is expected to pass a regulation in order to regulate the amount of transfers made by a foreign non-resident employees to any bank account abroad ; – – The non-resident foreign employee shall be qualified under the same occupational criteria applicable as for the national employees;

– – Companies are also obliged to ensure that housing conditions are as specified in the relevant employment agreement and also provide the plane ticket for the early return in case of dismissal of foreign employee; – – Employment agreements entered into with foreign non- resident employees may only last for up to 36 months. The new regulation no longer provides for the possibility of rehiring foreign non-resident employees beyond that maximum limit; – – Only 30% of the workforce of a company in Angola could be composed of foreign non-resident employees. The new regulations does not foresee circumstances where companies could exceed this maximum quota. The employment contract for a non-resident foreign worker must be registered at the employment centre and cancelled when terminated. The maximum duration of employment contracts for non-resident foreign workers is 3 years. After this time has elapsed, the worker must return to his country of origin. Under the Angolan General Employment Law, employment contracts may be terminated for the following reasons: a. Objective causes, including, among others, death of the employee, partial or total permanent incapacity of the employee preventing him/her fromworking professionally for a period of over 12 months, retirement of the employee, bankruptcy or insolvency of the employer, unforeseeable circumstances or force majeure; b. Mutual agreement, to be presented in writing and signed by both parties; or c. Unilateral decision of either party. Unilateral termination by the employer is only valid when a serious infringement has been committed by the employee, subject to a disciplinary procedure or objective reasons of an economic, technological or structural nature, renders the employment contract impossible to maintain. On the other hand, the employee may terminate the employment agreement at will, without having to have a fair cause of dismissal. However, the existence of such fair cause is relevant to determine when the termination becomes effective – should it be based on a fair cause, the termination becomes effective immediately; otherwise, the employee must respect a 30 day prior notice. Termination of employment contracts may be judicially challenged by employees, in particular based on the absence of grounds for the dismissal, discriminatory

reasons or the infringement of procedural formalities. In the event the courts find the dismissal to be unfounded or illegal, the employer shall immediately reinstate the dismissed employee to his/her former position or compensate the employee according to the legal terms. Real Estate In accordance with the provisions of the Angolan Constitution, the Land Law (Law no 9/04, of 9 January) determines that all land is originally owned by the State and that only land that integrates the private domain of the State may be subject to transfer or encumbrance. As a general principle, the right of ownership over the land may only be transferred by the State to private parties on restricted terms. Given this, a common situation to get around this issue is the transfer of land rights in a different manner, generally surface rights. Rural land cannot be transferred to individuals or corporate entities, whereas urban land can only be transferred to Angolan individuals. Such restrictions do not apply to the transfer of other land rights. The General Regulation on Land Concession (Decree no 58/07, of 13 July) and the regime applicable to the sale of the State housing (Law no 12/01, of 14 September) further regulate the terms and conditions of real estate transactions in Angola. Banking, Finance and Exchange Control The Exchange Law (Law no 5/97, of 27 June), sets out the regime applicable to foreign exchange operations and foreign exchange trade, defining the National Bank of Angola (the BNA ) as the competent authority. As a general principle, the Exchange Law provides that all foreign exchange operations must be transacted by a duly authorised financial institution. For the purposes of the Exchange Law, Angolan residents include, in particular, individuals with normal residence in Angola, legal entities with head office in Angola and branches, agencies and other forms of representation in Angola of foreign corporates. On the contrary, individuals with normal residence outside Angola, legal entities with head office outside Angola, individuals who are out of the country for more than one year and branches, agencies and other forms of representation abroad of Angolan corporates, are considered to be non-resident in Angola. The Exchange Law permits non-residents to open bank accounts in national or foreign currency, although under specific terms determined by the BNA.

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Further BNA regulations stipulate the procedures to transfer abroad any profits or dividends of foreign investors in Angola. In particular BNA’s Notice no. 13/14, of 24 December, determines that all transfers of profits or dividends must have the prior authorisation of the BNA whenever the annual amount to be transferred is over AOA 500,000,000. Taxation Angola has carried out extensive reform of its taxation system since 2015, with the aim of raising tax revenues and making tax collection more effective. The main taxes applicable in Angola are the following: Direct taxation: • Personal Income Tax • Corporate Income Tax • Capital Gains Tax Other taxes: • Consumption Tax • Custom Duties • Property Tax (Urban Property Tax) • Real Estate Transfer Tax • Inheritance and Donation Tax • Stamp duty Under the NPIL, the Angolan Government may grant tax benefits to private investors.

The general tax rates for the main taxes applicable in Angola are as follows:

Tax

Tax Rate

Capital Gains Tax

between 5% and 15%

Corporate Income Tax

30% (6,5% of withholding tax on most services rendered in or to Angola)

Personal Income Tax (employees) between 7% and 17% Personal Income Tax (self- employees) between 6,5% and 10,5% ConsumptionTax between 2% and 30% (most services are taxed at 5%) Social security 11% Personal Income Tax Personal Income Tax ( PIT ) is charged on income earned by employees and self-employees. For employees, PIT is levied on salaries and other income paid by the employer to the employee, exception made to some allowances, which are wholly or partially excluded from taxation. The applicable tax rates are progressive and vary between 7% and 17%, depending on the monthly income. PIT for employees is withheld by the employer as the salary is paid, being payable even if the salary is not effectively paid to the employee. For self-employees, PIT is levied on the price of services and withheld by the acquirer, except if the acquirer does not have organized accounts. The withholding tax rate is either 6,5% or 10,5% depending on the service provided. Corporate Income Tax Companies with registered office, effective management or a permanent establishment in Angola (Angolan-based companies) are due to pay Corporate Income Tax ( CIT ) for all net income earned in each financial year, regardless of its

source (universal taxation). On the other hand, companies without registered office, effective management or a permanent establishment in Angola but rendering services to Angola (foreign companies) are only subject to CIT regarding such services. For Angolan-based companies the applicable tax rate is 30% on the annual net income. Provision of most services is also subject to withholding tax at a tax rate of 6,5% to be settled as the invoice is paid. Sale of goods is also subject to provisory taxation, which is levied on the first semester sales, being taxed at a tax rate of 2%. Both withholding tax and provisory taxation on sales are deductible to the final annual tax. Most services rendered by foreign companies to Angola are subject to withholding tax of 6,5%. Sales made by foreign companies to Angola are not subject to taxation under CIT. Capital Gains Tax Capital Gains Tax ( CGT ) is levied on capital gains earned in Angola, either by tax residents and non-tax residents. Capital gains include earnings with interest, dividends, premiums, royalties, gambling prizes, among others. The tax rates vary between 5% and 15% of the income earned, depending on the type of capital gains. Consumption Tax In the absence of Value Added Tax ( VAT ), Consumption Tax ( CT ) is levied on the provision of the services expressly subject to it, being subject to a tax rate of either 5% or 10% (only applicable to hotel business and similar – includes the restaurant business). CT is also due for production and import of goods, with the applicable tax rates varying between 2% and 30%. Property Tax Owning urban real estate in Angola property is subject to Property Tax.

Urban real estate subject to lease agreements is subject to a tax rate of 15% on the amount of rent to be paid by the tenant to the landlord. For rents paid by companies or individuals with organized accounts, tenants should withhold the tax due. This withholding obligation does exist for the remaining individuals, being the landlord due to burden all tax obligations. Urban real estate not covered by any lease agreement is also subject to Property Tax, which is levied on the patrimonial value of the real estate. A tax rate of 0,5% is applicable to the patrimonial value exceeding AOA 5.000.000,00. Dispute Resolution Court Litigation The Angolan judicial system comprises municipal and provincial courts and a Supreme Court which deals with appeals from the lower courts. The Constitutional Court was established in 2008, and the constitutional matters over which this Court has jurisdiction are set out in the 1992 Constitutional Law. Arbitration On 6 March 2017, Angola became a party to the New York Convention 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), which means that foreign arbitration awards are nowmore easily enforceable in this jurisdiction. In addition, the Voluntary Arbitration Law has been in force in Angola since 2003 (Law 16/03, approved on 25th of July), providing for domestic arbitration in the country supervised by an arbitral institution and, under specific circumstances, international arbitration. Under the new investment regime, the NPIL allows parties to an investment agreement to agree that any dispute regarding interpretation and enforcement may be settled by means of arbitration.

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Côte d’Ivoire Côte d’Ivoire has a reputation for friendliness towards private investment, despite having experienced a coup d’état in 1999, faced civil war from 2002 to 2003 and undergone a political crisis after the presidential elections of 2011. With reconstruction currently underway, the country offers many business opportunities for private investors. Côte d’Ivoire’s economy is primarily based on agriculture. It is the world’s largest producer and exporter of cocoa beans. It also produces coffee, palm oil and bananas in significant quantities. The country has recently become a producer of oil and mineral resources. The currency used in Côte d’Ivoire is the franc of the African Financial Community (the CFA ), which is fixed to the Euro and guaranteed by the French Treasury.

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Investment Outlook After a number of years of political instability, Côte d’Ivoire has seen strong growth (estimated at 9% for the past three years) and is determined to develop its business climate to make it more attractive to foreign direct investment. The incumbent president, Alassane Ouattara, has already spent billions of dollars on improving infrastructure in the country to promote and encourage development. The Ministry for Infrastructure is heading the ‘route networks project’, which has already built over 200 miles of new roads in the country. As Côte d’Ivoire’s economy is primarily based upon agriculture, specifically cocoa, it has weathered the overall downturn in demand from China as well as the recent fall in oil prices which has struck many African nations hard. In addition to this, the pegging of the CFA to the Euro has meant that Côte d’Ivoire has avoided currency depreciations that have blighted other well- performing countries in Africa, with inflation currently at around 1%. Following political and economic stability, the African Development Bank has returned to Côte d’Ivoire to re-establish its headquarters in Abidjan, the capital. The prospects for Côte d’Ivoire look good, with a clear path to development and to attain ‘Emerging Nation’ status by 2020. Forms of Corporate Structure The types of entities used for business purposes in Côte d’Ivoire are a branch of a company, a Liaison Office, a general partnership, a limited partnership, a limited liability company, a limited company and a simplified joint-stock company. However, a limited liability company and a limited company are the most used forms of business by investors. • A Branch of a Company (Succursale) A branch is useful to explore the market and render services locally and has some management autonomy. To establish a branch of a company in Côte d’Ivoire, the foreign investor should provide the articles of incorporation of the parent company translated into French (if necessary). Within two years of its establishment, a branch must be transformed into a registered company, unless it is expressly exempted by a decree issued by the Minister of Commerce.

• A Liaison Office or Bureau de Liaison A liaison office is similar to a branch in that can also be used to explore market but cannot render services locally. It also does not have management autonomy. To establish a Liaison Office, the articles of incorporation of the parent company translated into French (if necessary) are required. A Liaison Office does not need to be transformed into a registered company within two years of its establishment unless converted to a Branch. • A General Partnership (Société en Nom Collectif) (SNC) An SNC is registered at the corporate registry upon presentation of its articles of association. The incorporation process is completed by the publication of a notice of incorporation in a legal gazette. No minimum capital is required for an SNC. • A Limited Partnership (Société à Comandite Simple) (SCS) An SCS is registered at the corporate registry upon presentation of its articles of association, proof of the subscription and payment for its shares, and the administrative documents relating to the general partners and limited partners. The incorporation process is completed by publication of a notice of incorporation in a legal gazette. No minimum capital is required to form an SCS. • A Limited Liability Company (Société à Responsabilité Limitée) (SARL) The formalities for the creation of the limited liability company have been greatly simplified since April 2014 in order to attract investors. A SARL is registered at the corporate registry upon presentation of its articles of association, proof of the subscription and payment for its shares, and the administrative documents relating to the members. The incorporation process is completed by publication of a notice of incorporation in a legal gazette. No minimum capital is required to form a SARL. In accordance with OHADA community requirements, however, a minimum share capital of 5,000 FCFA (7,60 euros) remains in place;

The SARL is managed by one or more managers and does not require a board of directors and it is now not necessary to go to a notary’s office to prepare the deed of incorporation. Businesses may now set up by way of private deed. In order to support entrepreneurs this process, the Government will make available to entrepreneurs, standard articles of incorporation under private seal. Except for these particularities, the rules applicable to the SARL are similar to those applicable to the limited company. • A Limited Company (Société Anonyme) (SA) Two forms: An SA is the most commonly used vehicle for large investments and may be fully-owned by foreign nationals. It requires a minimum capital of F.CFA 10 million. An SA may be administered by a managing director if it has one to three shareholders. If the company has more than three shareholders, it must have between three and twelve directors, who are assisted by a general manager. An SA is registered at the corporate registry upon presentation of its articles of association, proof of the subscription and payment for its shares, and the administrative documents relating to its shareholders and directors. The incorporation process is completed by publication of a notice of incorporation in a legal gazette. • A Private Limited Company Ivorian law recognises the principle of transferability of the shares of a private limited company, which may be effected by simple delivery or by endorsement. A share purchase agreement is essential for the closing of this type of transaction, and the prior approval of the existing shareholders is a common requirement. The shares of companies that are not publicly traded are generally certified. Consequently, the transfer of shares will vary depending on whether the shares to be transferred are bearer or registered shares. - Private Limited Company - Public Limited Company

• A Public Limited Company The acquisition of the shares of a company that are publicly traded is organized under the authority of the Regional Stock Exchange (Bourse Régionale des Valeurs Mobilières, BRVM). Completed transactions are cleared and settled according to the general regulation and procedures of the Central Securities Depositary (Dépositaire Central, DC) and/or the Clearing House (Banque de Règlement, BR). • A Simplified Joint-stock Company ( Société par Action Simplifiée) (SAS) The SAS offers a lot more flexibility to shareholders and executives than an SA, and subject to mandatory rules, the articles of association can freely provide the organization, management and operation of the company: the SAS can be incorporated without minimum share capital and can have as many shareholders as legal persons and also natural persons. • An Economic Interest Grouping or Groupement d’Interet economique (GIE) An economic interest group has legal personality. It may be incorporated without share capital and allows its members (minimum of two) to put in place all the means necessary to facilitate or develop their economic activities for a specified period. Its activity shall mainly be connected with the economic activity of its members and cannot be of an auxiliary nature in relation thereto. • A Joint-venture or Société en Participation A joint-venture is not registered and the partners freely agree on the object, duration, conditions of functioning, rights of partners and termination, under the condition that there being no derogation from the common mandatory rules applicable to companies, with the exception of those relating to corporate personality. Incorporation Procedure 1 Côte d’Ivoire launched a One Stop Centre for business registration ( CEPICI ), which allows entrepreneurs to register with the commercial registrar (Registre du Commerce et du Crédit Inmobilier) , the tax authority (Direction Générale d’Impots) and the social security institute (Caisse Nationale de Prévoyance Sociale) .

Africa Investment Guide | 13

The one-stop-shop also publishes the legal notice of incorporation on their website (http://www.cepici.gouv.ci/) CEPICI has considerably reduced the incorporation timeframes by half and the procedure is currently as follows:

• Purchase of electricity, water and provision of new technologies at discounted rates, subject to an investment in a unit of processing of rawmaterials Free Zones There is only one Free Zone in Côte d’Ivoire, which is located in Grand-Bassam, a suburb of Abidjan. The Free zone is limited to Biotechnology, InformationTechnology and Communication companies. In order for a company to be admitted to the Free Zone, it must obtain a license issued by the Village of InformationTechnology and Biotechnology (VITIB SA). VITIB SA is the Ivorian Company in charge of the Management, Promotion and Exploitation of the Free Zone. Investment Guarantee and Protection The Investment Code provides some guarantees and protections to foreign investors. Under this code, a foreign investor is guaranteed that it will receive a treatment identical to the one granted to natural or legal persons of Ivorian nationality. In accordance with international agreements and treaties it has signed, Côte d’Ivoire protects intellectual property, including patents, trademarks and trade names. Private ownership of any property, movable or immovable, tangible or intangible, is protected in all its aspects. Freedom of access to raw materials, semi-finished or produced in the country, is guaranteed to all investors. If necessary, the state shall take the necessary measures to ensure the effective exercise of freedom of access to raw materials. Côte d’Ivoire guarantees any investor the freedom to appoint members of the board, the CEO or the manager. No investor may be deprived of property investments except for a public purpose and under the condition of a just and prior compensation. The country has put in place support mechanisms to assist companies who suffer damage by popular movements. The government of Côte d’Ivoire facilitates the access of investors to industrial land, agricultural land and tourist areas as appropriate. It takes the necessary security measures to protect businesses located in designated areas without this constituting an obligation of result for the investors.

Approximate Cost (USD)

Item

Time

205

2 days

1 A notary draft the statutes and certifies the paid-in capital 2 Open a bank account and deposit the minimum capital requirement at the bank 3 Register at the one-stop shop (CEPICI) and publish the legal notice

1 day

No charge

3 days

4 Obtain a company seal

1 day

The CEPICI One-Stop Shop has improved its business incorporation performance from 48 hours to 24 hours in compliance with an Interministerial Order No. 186 / MIM / MJDHLP / MPMB / MCAPPM / of 07 May 2014 amending interministerial decree N ° 104 / MEMEASPF / MJDHLP / MPMEF / MCAPPME of 25 March 2013 fixing the deadlines, procedures and costs of creating and modifying companies in the one-stop shop Formalities Department Of CEPICI, Articles 2, 4, 5 and 6. Investment Promotion and Incentives In order to promote the development of small businesses, Côte d’Ivoire has offered some non-tax incentives for these businesses. Under the investment code a small business is a business that employs less than 200 permanent employees and generates a revenue of less than F.CFA 1 billion (USD equivalent USD 1.7m). The incentives for small business include: • Exemption from registration of all acts subject to registration • Provision by the state of plots of land necessary for the construction of investment projects; and

80% of the new “Plan National de Development (2016- 2020) is supposed to be developed under PPP agreements. The government issued a new decree on December 19th 2016, with the aim of governing the country’s PPP framework. Many practitioners consider this a step in the right direction however practical obstacles remain such as limited monitoring capacity within the PPP unit. This decree has a clear objective, to frame the legal framework of the creation of a PPP which was non- existent before. However, experts and legal practitioners explain that the implementation of this decree collides with a lot of practical obstacles and that the reform of the decree should be a priority. Immigration, Employment and Local Content Ivorian authorities are flexible in granting work permits to foreign nationals. An application for the permit must be made to the Ministry of Employment, enclosing the employment contract of the foreign national. The issue of a work permit is subject to the payment of fees equivalent to the gross monthly salary of the foreign employee. There is no limitation on the number of work permits a company may obtain. Ivorian labour laws require that an employer attempts to offer a vacant job to a local worker prior to offering the position to a foreign worker. If after two months the employer cannot find a qualified national, they can then employ a foreign worker. The foreign employee must be registered with the Agency of Youth Employment (Agence d’Emploi des Jeunes), the National Social Security Fund and given an employment contract. Foreign workers must also obtain a work permit. A work visa is valid for three months and may be extended if needed for a longer period, up to a maximum of 24 months. An employee who will not be required to work for longer than 3 months is not required to obtain a visa. Employees in Côte d’Ivoire can be terminated for a number of reasons, however laws governing termination of employees mean there are strict procedures to follow which should be adhered to in order to avoid any claims by the employee.

Investment Protection Agreements Côte d’Ivoire has signed investment protection agreements with a certain number of countries such as China, Germany, the United Kingdom and the United States. Economic and Trade Agreements Côte d’Ivoire entered in multiple trade agreements with different countries. A list of these agreements is found below: • As a member of the Economic Community of West African States ( ECOWAS ), Côte d’Ivoire is under an economic and free trade agreement with all the countries members of the Community, which include Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. • The European Union has signed an interim economic partnership agreement with Côte d’Ivoire in December 2007. This agreement covers duty and quota-free EU market access for Ivory Coast products. • Sweden and Côte d’Ivoire have entered into a trade agreement in August 1965. Under this agreement, products from both countries benefit from trade preferences. • Brazil and Côte d’Ivoire have also entered into a trade agreement on 14 September 1979. Under the treaty both parties agree to facilitate the free movement of persons and goods. • Since 2012, Côte d’Ivoire became eligible for the African Growth and Opportunity Act ( AGOA ). This is a piece of legislation adopted to improve economic relations between the United States and African countries. Under this piece of legislation, eligible countries benefit from trade preferences for quota and duty-free entry into the United States for certain goods. Public-Private Ventures (Partenariat Public-Privé) (PPP) PPP contracts may be concluded in all economic, social and cultural areas, as well in non-profit sectors. A PPP contract may be formed through several types of procedure. PPP contracts are written according to specific regulations. A reform of the PPP legal framework is ongoing (planned to be adopted before June 2016). Nearly

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Real Estate Ex-patriates are afforded the same rights over land as native Ivoirians, as both can own freehold as well as leasehold in Côte d’Ivoire. Leasehold is subject to a maximum limit of 99 years for both Ivorians and ex-patriates. A land registry (Conservation de la propriété foncière et des hypothèques) exists in Côte d’Ivoire to record rights over land and provides comfort for potential investors. Both ownership of real estate as well as any rental income is subject to tax, set at 4% of the annual rental value for owner- occupied properties and 15% of the annual rental income for leasehold properties. Tax Taxes are levied at both the national and local levels of government. The primary taxes imposed on companies are corporate income tax, withholding tax, value-added tax ( VAT ) and excise tax. Excise and Customs Tax The Common External Tariff ( CEF ) duty is applicable in Côte d’Ivoire. This tariff is regulated by the Economic Community of West Africa States Union ( ECOWAS-CEDEAO in French). CEF is made up of the following permanent duties. As a member state of the West African Economic and Monetary Union ( WAEMU ), Côte d’Ivoire applies the customs rates specified in the community regulations. Customs duties are levied on the customs value of most imported goods at rates of 0%, 5%, 10% and 20%, depending on their classification. Taxable Income and Rates Côte d’Ivoire operates a territorial tax system under which tax is imposed only on profits derived by an enterprise that operates in the country. A company is considered to be resident in Côte d’Ivoire if it is registered, managed and controlled there. The tax rate is 20% for individuals and 25%for companies and companies must pay a minimum tax of 0.5% (reduced for financial institutions) of the previous year’s turnover. The minimum tax must be between F.CFA 2,000,000 (approximately USD 3,500) and F.CFA 15,000,000 (approximately USD 26,000).

Transfer Pricing Under Côte d’Ivoire’s transfer pricing rules, an indirect transfer of profits is presumed when the Ivorian tax authorities can prove that a transaction between a taxable Ivorian entity and a foreign affiliate was not conducted at arm’s length or under equitable conditions. A presumption may arise that the parties are operating in a dependent or controlled manner. Prices between controlled parties must be the same prices that would have been agreed upon between unrelated parties in a comparable transaction and under comparable circumstances. Otherwise, the Ivorian company bears the risks of adjustments and withholding taxes on the presumed transferred profits. Value-Added Tax Value-added tax ( VAT ) is payable on the sales value of a product each time it changes hands. In practice, the tax is levied on the price increment at each stage in the chain. Nevertheless, the charge is effectively borne by the end consumer, and VAT is neutral for intermediary companies. VAT is payable by all manufacturers, wholesalers and retailers, and by most service and transport businesses. Ivorian VAT rates range between 9%and 18%. Excise Taxes Excise taxes at various rates apply to sales of tobacco, alcoholic beverages and fuel. Banking, Finance and Exchange Control The bank account is opened after presentation of the whole documentation related to the entity and its parent company, plus minutes of shareholders meeting or board meeting deciding the creation of the entity in Côte d’Ivoire designating the signatories in the country. The CFA Franc is linked to the Euro at a fixed exchange rate and unlimited convertibility to the Euro is guarantee. The CFA members which are Benin, Burkina Faso, Côte d’Ivoire, Guinee Bissau, Mali, Niger, Senegal, Togo, are agreed to apply exchange control regulations of the WAEMU. Transfer within the CFA zone are no restricted. Dividends paid out of revenue and capital on disinvestment may be remitted.

Dispute Resolution Court Litigation Côte d’Ivoire has adopted the civil law legal system. Commercial disputes are brought before the Commercial Court, which was established in 2013. Its decisions are handed down at the Courts of first and second instance in circumstances where the interests involved in the dispute are lower or equal to CFA franc 1,000,000,000 (approximately USD 1,721,000). Appeals can be brought before either the Supreme Court or the Common Court of Justice and Arbitration of the “Organisation pour l’Harmonisation en Afrique du Droit des Affaires” (OHADA, the Organisation for the Harmonisation of Business Law in Africa). The OHADA Treaty is made up today of 17 African member- states to foster and develop economic development in Central and West Africa. Côte d’Ivoire is home to the Common Court of Justice and Arbitration of the OHADA, which will deal with commercial cases brought in all member-states. Arbitration Côte d’Ivoire is a signatory to the New York Convention and therefore it is possible to enforce foreign arbitration awards in this jurisdiction. The OHADA Uniform Act on Arbitration contains provisions for the settlement of disputes through arbitration. Foreign arbitral awards are enforceable by local courts through the procedure of exequatur. The use of alternative dispute resolution will increase with the adoption of the Law related to Conventional and Judicial Mediation on June 2014.

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Egypt Egypt is one of the three largest economies in Africa and is strategically positioned at a crossroads between the East and West, making the country a significant player in international trade in the Middle East and Africa region. Egypt is home to the Suez Canal which connects the Mediterranean Sea with the Red Sea and is a key artery in global trade. The total area of Egypt is 1,001,450 square kilometres including 995,450 square kilometres of land and 6,000 square kilometres of water. According to the Egyptian Central Agency for Public Mobilization and Statistics, the population reached more than 90 million people in 2016. Egypt is divided into 27 governorates, 217 cities and 4617 villages. Governorates with the highest population are Cairo (10.8%), Giza (8.6%) and Sharqiyya (7.4%). The Egyptian legal system is primarily based on the French civil legal system, various other European codes and religious law. In practice, religious law is applied only to personal and family matters which are governed by the religious law of the individual concerned. The keystone of Egyptian law is the Constitution, which was passed in a referendum in January 2014 (the Constitution ).

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Investment Outlook The Government has been working hard to attract more Foreign Direct Investment ( FDI ) into the country. As a result, Egypt has been recognised by the Financial Times as one of the top 5 destinations globally for greenfield FDI and last year Forbes named Cairo one of the top 10 cities in the world to start a tech start-up. The majority of new investment came in the energy, construction and transportation sectors. The Government has announced developments and plans for a number of “mega projects” that were already made available for investment in 2016. These include: a. the new Administrative capital, the first phase of which will be approximately 44.1 square kilometres and have a total construction value of 20 billion Egyptian Pounds (EGP)(equivalent to approximately USD 2.6 billion; b. a new EGP 4.4 billion line for the third phase of the metro, the fourth phase of the metro with a total value of USD 1.2 billion and the first skytrain with a total value of USD 1.5 billion; and c. power plants being finalised by Siemens with a total value of a USD 9 billion (the largest single order in Siemens’ history). The Government has proposed key amendments to investment-related laws for more than 2 years and has succeeded in obtaining Parliamentary approval of a number of new key laws such as the Industrial Licences Law, the VAT Law and the Food Safety Law. Forms of Corporate Structure There are a number of laws governing business activities and transactions in Egypt including, among others, the Trade Code, the Companies Law, the Executive Regulation, the Investment Law, and the Commercial Registry Law. Non-Egyptians may set up a Representative Office in Egypt for the purpose of studying the Egyptian market and/or potentials of production. However, representative offices are not allowed to trade in Egypt. There are a number of laws governing business activities and transactions in Egypt including, among others, the Trade Code, the Companies Law, the Executive Regulation, the Investment Law, and the Commercial Registry Law.

Non-Egyptians may set up a Representative Office in Egypt for the purpose of studying the Egyptian market and/or potentials of production. However, representative offices are not allowed to trade in Egypt. The Companies Law and Trade Code provide for several legal forms of businesses similar to those available in North Africa and Europe, these include: • A Branch of foreign company, which is commonly used to performworks of contractual nature. • A Joint Stock Company, which resembles a U.S. corporation or a French société anonyme . • A Limited Liability Company, which corresponds to the French société à responsibilité limitée (S.A.R.L.). It is like an incorporated partnership, a U.S. closed corporation or a British private limited company. Egyptian law does not recognise the concept of piercing the corporate veil and, therefore, the liability of shareholders in joint stock companies or allotment holders in limited liability companies is only limited to the paid-up capital. Incorporation Procedure 1

Approximate cost (EGP/USD ) 2 EGP 25 (approx. USD 1.38) EGP 25 (approx. USD 1.38) From EGP 100 (approx.. USD 5.52) to EGP 500 (approx. USD 27.60)

Item

Time

1 Issuance of a non-

One hour

confusion certificate for the company

2 Opening bank account One hour

3 Issuance of a bank

1-3 business days

certificate confirming the deposit of the issued capital or the required percentage (as the case may be)

4 Incorporation application 5 Notarisation of the corporate documents 6 Registration with the Commercial Registrar

These three steps can be made in one step only by using

1 day

From EGP 1,716 (approx. USD 94.90) to EGP 49,565 (approx. USD 2741.11). USD 2741.11

EGP 2,000 (approx. USD 110.61) 3

1 day

the VIP

1 Cost and timeframe are based on typical experiences for the incorporation of limited liability companies. These will vary depending on the specifics of each incorporation and may not be relevant for highly regulated sectors. 2 The USD value is based on the average exchange rate declared by the Central Bank of Egypt on March 21, 2017. Please refer to this hyperlink for further information regarding the declared exchange rates, http://www.cbe.org.eg/en/EconomicResearch/Statistics/Pages/ExchangeRatesListing.aspx 3 This amount shall only be paid if the client is interested in the VIP incorporation services.