Investing in Cameroon

INTRODUCTION
Cameroon has a strategic position in the Gulf of Guinea. The country is also referred to as Africa in miniature owing to its remarkably contrasting relief, made up of high and low lands; its varied vegetation made up of forest, savanna and steppe; its tropical climate which is a combination of all the inter-tropical climates of the continent; and a basically young and dynamic population. Cameroon has a key position which makes the country the entry and exit gate to the sub-region. Indeed, Cameroon is the only country in the sub-region which shares borders with all the other five countries of the Central African. Cameroon is bounded on the South by Congo, Gabon, Equatorial Guinea, on the North by Chad and on the East by the Central African Republic. Besides CEMAC countries, Cameroon also shares a 1 700km-long border with Nigeria. This peculiarity, coupled with her economic performances (50 per cent of CEMAC GDP) makes of the country the leader of the sub-region.

GOVERNING LAWS
Investment in Cameroon is governed by plethora of laws including; November 1990 and its subsequent amendments, Law N° 2013/004 of 18 April 2013 to lay down private investment incentives in the Republic of Cameroon and law N 02006-12 of 29 December 2006 to lay down the rules and regulations governing partnerships contracts, OHADA Laws governing commercial law, commercial companies and economic interest groups just to name a few.
However to properly examine investment in Cameroon we must focus on  Law N° 2013/004 of 18 April 2013 to lay down private investment incentives in the Republic of Cameroon and law N 02006-12 of 29 December 2006 to lay down the rules and regulations governing partnerships contracts. These laws enacted in recent years to encourage investment has reformed the investment sector in Cameroon. Yet, nothing has come easily: so much ground covered, much left to be done.
The reforms undertaken within this context have eased the creation of enterprises, settlement of invoices, tax exemptions, and implementation of business contracts, promotion and protection of investments, and the development of cross-border trade.

COUNTRY STATISTICS
Cameroon has huge hydraulic resources (the 2nd largest in Africa after the DRC) ; – Cameroon has about 52 types of identified minerals. As illustration, Cameroon has one of the world largest deposits of cobalt, nickel, manganese, bauxite, iron ore, uranium, etc.
Cameroon is also referred to as “Africa in miniature” for her geographical diversity; her vegetation, climate and soil are conducive to agriculture. According to census data, Cameroon’s population is 19,406,1 00 inhabitants (2010) with 64 per cent aged under 25. An educated youth, well trained and hardworking, which is synonymous to an available and skilled labour force.
Cameroon has more than 350 km of coasts. With her wildlife and flora Cameroon has one of the most attractive ecosystems. With close to 300 identified touristic sites, Cameroon is potentially a dream destination. So why invest in Cameroon ? Well, simply because natural conditions and the political will are combined to make the country an ideal destination for all types of investments. Cameroon has identified a series of measures in order to improve its attractiveness. Some of these measures have already been implemented while others have been scheduled in the medium term.

LEGAL ANALYSIS
ENTRY INTO CAMEROON: Any foreign national who is willing to set up a business in Cameroon either as a self-employed professional or a promoter of activities in the industry, agriculture, pastoral, trade, handicraft or arts sector should get an entry visa corresponding to the period of the intended stay.
STARTING A BUSINESS IN CAMEROON: Starting a business in Cameroon requires registration into the register of trade names and personal property. Economic operators can get their attestation of business start-up seventy two (72) hours upon submission of the file, thereby conferring a legal foundation on their business in the Republic of Cameroon. After this period, the submission receipt shall serve as attestation.
TAX: A one-stop-shop (GUCE) has been established in order to ensure the physical and virtual grouping of customs clearance formalities. The GUCE therefore contributed towards the reduction of time and costs of transactions at the Port Authority of Douala. Another significant reform is the introduction of the container scanner into the Port Authority of Douala which has as objective to considerably reduce physical visits of goods and the time spent in port. In order to alleviate “fiscal pressure” and streamline procedures for the purpose of improving the business climate, Cameroon has identified and implemented the following tax and administrative policy measures:

Tax policy measures under the above cited enactments to with:  Law N° 2013/004 of 18 April 2013 to lay down private investment incentives in the Republic of Cameroon and law N 02006-12 of 29 December 2006 to lay down the rules and regulations governing partnerships contracts.;
Incentives shall be granted to investors during the establishment and operation phases. The investor shall enjoy the following benefits during establishment phase, which may not exceed 5 (five) years, with effect from the date of issuance of the approval:

• Exemption from stamp duty on establishment or capital increase;
• Exemption from stamp duty on the ease if immovable property used exclusively for professional purposes that from an integral part of the investment programme;
• Exemption from transfer taxes on the acquisition of immovable property, land and buildings essential for the implementation of the investment programme;
• Exemption from stamp duty on contracts for the supply of equipment and construction of buildings and installations essential for the implementation of their investment programme;
• Full deduction of technical assistance fees in proportion to the amount of the investment made, calculated on the basis of the total amount of the investment;
• Exemption from VAT on the provision of services related to the execution of the project and obtained from abroad,
• Exemption from stamp duty on concession contracts;
• Exemption from business license tax;
• Exemption from taxes and duties on all equipment and materials related to the investment programme;
• Exemption from VAT on the importation of equipment and materials;
• Immediate removal of equipment and material related investment programme duringclearance operations.
  The investor may, during the operation phase, which may not exceed 10 (ten) years, according to the scale of investment and expected economic returns, as applicable, enjoy exemptions from or reductions of payment of the following taxes, duties and other fees:
  • Minimum Fee;
  • Corporate tax;
  • Tax on profit;
  • Stamp duty on loans, borrowings, overdrafts, guarantees: increase, reduction, corporate capital repayment and liquidation, or any transfer of activities, real profit Ownership or usufruct, leases or shares;
  • Tax on income from movable assets during the distribution of income in the form of dividends or other from to be specified in the agreement;
  • Special income tax (SIT) on sums paid to foreign companies for services rendered or used in Cameroon during the project design and execution phases,  provided that they are billed at cost price;
  • Taxes, registration and stamp duties on the transportation of processed products;
  • Customs duties as well as all other fees and service taxes on the importation of all types of equipment, building materials, tools, spare parts, intermediate products, supplies and consumables which do not have locally manufactured equivalents, save for duties, taxes and other non-tax fees deemed to be a service fee;
  • Duties on the exportation of construction and processing plant equipment;
  • Any tax, duty or charge of any kind that is calculated on the basis of the turnover realized by the processing company;
  • Any tax on the transfer, purchase or sale of Foreign currency and any indirect consumer tax, including the special tax on petroleum products.

The investor may also enjoy the following benefits:

• Deferral of deficits after five years, with effect from that of their occurrence;
• Exemption from duties, taxes, fees and fees on the importation of capital goods intended and used for the investment programme.
• Exemption from VAT on the importation of equipment and materials;
• Immediate removal of equipment and material related investment programme duringclearance operations.
  The investor may, during the operation phase, which may not exceed 10 (ten) years, according to the scale of investment and expected economic returns, as applicable, enjoy exemptions from or reductions of payment of the following taxes, duties and other fees:
  • Minimum Fee;
  • Corporate tax;
  • Tax on profit;
  • Stamp duty on loans, borrowings, overdrafts, guarantees: increase, reduction, corporate capital repayment and liquidation, or any transfer of activities, real profit Ownership or usufruct, leases or shares;
  • Tax on income from movable assets during the distribution of income in the form of dividends or other from to be specified in the agreement;
  • Special income tax (SIT) on sums paid to foreign companies for services rendered or used in Cameroon during the project design and execution phases,  provided that they are billed at cost price;
  • Taxes, registration and stamp duties on the transportation of processed products;
  • Customs duties as well as all other fees and service taxes on the importation of all types of equipment, building materials, tools, spare parts, intermediate products, supplies and consumables which do not have locally manufactured equivalents, save for duties, taxes and other non-tax fees deemed to be a service fee;
  • Duties on the exportation of construction and processing plant equipment;
  • Any tax, duty or charge of any kind that is calculated on the basis of the turnover realized by the processing company;
  • Any tax on the transfer, purchase or sale of Foreign currency and any indirect consumer tax, including the special tax on petroleum products.

The investor may also enjoy the following benefits:
Deferral of deficits after five years, with effect from that of their occurrence;

• Exemption from duties, taxes, fees and fees on the importation of capital goods intended and used for the investment programme.
• Tax administration measures Supervision of tax payers:
  • Structural reforms that led to the setting up of the Division of Large Enterprises (DGE) responsible for “major” tax payers that is, those who have a turn over equal to at least CFA F 1 billion ;
  • Specialized Centres for self-employed professionals, which are a clear illustration of the tax-payer based management approach ;
  • Functional reforms through the organisation of services per specialized units in order to take the line of activities into account ;
  • Preparation of manuals on procedures and distribution to tax payers and users in order to ensure that they have simple and useful information ;
  • Computerization of almost all the services for increased promptness and efficiency.

STREAMLINING OF PROCEDURES: Legal constitution of e-statement and e-payment; Cancellation of the practice of withholding tax and duties by the private sector, public corporations and parastatals.
PAYMENT AND SETTLEMENT SYSTEMS: In order to facilitate the payment system, the Bank of Central African States (BEAC) helped six Member States to get an efficient and secured regional system for payment and settlement that complies with international standards.
PAYMENT OF CUSTOMS DUTIES: A memorandum of understanding was signed in April 2012 between the Ministry of Finance and 13 major Cameroonian banks. This Memorandum of understanding consists in: Reducing the time spent for customs clearances, promoting improved management of the State treasury, securing financial transactions by reducing money circulation, easing congestion in the one-stop-shop. Business men and women henceforth have to pay their customs clearance operations by bank transfer which is an innovation in this area.
FUNDING OF PROJECTS BY BANKS: About 40 per cent of SMEs request bank support to fund their projects. There are financial establishments and leasing companies that finance the acquisition of professional capital goods. Medium and long term loans are funded by national and international banks as well as funding agencies.
LEGAL GOVERNANCE: Ministers of Justice from 14 Member States of the Organisation for the Harmonisation of Business Law in Africa (OHADA) adopted in April 1 997, series of instruments that laid down the bases for a modernised economic law common to countries of the West African Economic and Monetary Union  (UEMOA) and the Central African Economic and Monetary Community (CEMAC). These new instruments introduced in depth changes into the business landscape by advocating the liberalization of economic activities with solid legal guarantees.
CONFLICT OF LAW RULES: At national level, conflicts are settled in courts of first instance and appeal courts. The Common Court of Justice and Arbitration (CCJA) created within the framework of the OHADA Treaty examines conflicts in the last resort. Its decisions are final.