Investment Incentives in Comoros

When it comes to incentives, the Investment Code of 2007 provides for two systems of incentives:

Incentive system ‘A’

Incentive system ‘A’ – aimed at enterprises with:

a) An investment programme ranging between 5,000,000 KMF (approx. 10,000 Euros) and 100,000,000 KMF (approx. 200,000 Euros);

b) A significant job creation programme which favours the recruitment of nationals.

Approval under system ‘A’ bestows the following rights and benefits:

a) The application of a maximally reduced rate in the unique administrative royalty (RAU) for the import of equipment and materials destined, in a specific way, to production or exploitation, as part of the approved programme, for a seven-year period.

b) Tax exemption on turnover for the equipment and materials destined, in a specific manner, to production and exploitation, as part of the approved programme, for a seven-year period.

c) For the tax on profits, approved enterprises are authorised to deduct from the amount of the taxable profits, 100% of the amount of the accepted investments. These deductions are spread over five successive fiscal years, at the end of which, the outstanding amount of the authorised but not used tax credit, is neither chargeable nor refundable;

d) Exemption, for two additional years, for enterprises established in rural areas.

e) At the end of the incentive period, the application of a maximum 50% reduction to the ongoing minimum rate for the import of raw materials destined, in a specific way, to production.

Incentive system ‘B’:

System ‘B’ is reserved for enterprises with:

a) An investment programme above 100,000,000 KMC (above 200,000 Euro);

b) A significant job creation programme which favours the recruitment of nationals.

The approval under system ‘B’ bestows the following rights and benefits:

a) The application of a maximally reduced rate in the unique administrative royalty (RAU) on the import of equipment and materials destined, in a specific manner, to production or exploitation, as part of an approved programme, for a ten-year period.

b) Tax exemption on turnover for equipment and materials destined, in a specific manner, to production or exploitation, as part of an approved programme for a ten-year period.

c) For the tax on profits, the approved enterprises are authorised to deduct from the amount of taxable profit, 100% of the amount of the investments. These deductions are spread over 8 successive fiscal years, at the end of which the outstanding amount of the authorised but not used taxation credit, is neither rechargeable nor refundable;

d) Exemption for an additional two-year period, for enterprises established in rural zones.

e) At the end of the incentive period, the application of a maximally reduced rate for the import of raw materials destined, in a specific manner, to production.

Further benefits provided to investors

The following benefits/facilities are provided to enterprises under Article 5 of the 2007 investment code:

  • Right to acquire properties and concessions of any kind, required for their business activities,such as real estate, immovable, industrial or forest properties
  • Right to choose suppliers, service providers and partners
  • Right to take part in tenders in the Union of the Comoros
  • Right to chose management policy and freedom to recruit personnel

 

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John Muhaise-Bikalemesa (JMB), is the founder of Muhaise.com blog and bigdrumassociates.com company. Learn more about him here and connect with him on his social medias below

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